41-989
1st Session
105-175
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND INDEPENDENT AGENCIES APPROPRIATIONS BILL, 1998
| July 11, 1997- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed | |
| Mr. LEWIS of California, from the Committee on Appropriations, submitted the following | |
| REPORT | |
| together with | |
| ADDITIONAL VIEWS | |
| [To accompany H.R. 2158] |
The Committee on Appropriations submits the following report in explanation of the accompanying bill making appropriations for the Departments of Veterans Affairs and Housing and Urban Development, and for sundry independent agencies, boards, commissions, corporations, and offices for the fiscal year ending September 30, 1998, and for other purposes.
| INDEX TO BILL AND REPORT | ||
| Page number | ||
| Bill | Report | |
| Title I--Department of Veterans Affairs | 2 | 5 |
| Title II--Department of Housing and Urban Development | 16 | 25 |
| Title III--Independent Agencies | 41 | 46 |
| American Battle Monuments Commission | 41 | 46 |
| Community Development Financial Institutions | 42 | 47 |
| Consumer Product Safety Commission | 43 | 48 |
| Corporation for National and Community Service | 43 | 48 |
| Court of Veterans Appeals | 46 | 50 |
| Cemeterial Expenses, Army | 46 | 50 |
| Environmental Protection Agency | 47 | 51 |
| Office of Science and Technology Policy | 53 | 76 |
| Council on Environmental Quality and Office of Environmental Quality | 54 | 76 |
| Federal Deposit Insurance Corporation | 54 | 77 |
| Federal Emergency Management Agency | 54 | 77 |
| Consumer Information Center | 59 | 85 |
| Office of Consumer Affairs | 86 | |
| National Aeronautics and Space Administration | 60 | 87 |
| National Credit Union Administration | 64 | 93 |
| National Science Foundation | 64 | 94 |
| Neighborhood Reinvestment Corporation | 66 | 101 |
| Selective Service System | 67 | 102 |
| Title IV--General Provisions | 67 | 103 |
SUMMARY OF THE BILL
The Committee recommends $91,692,867,000 in new budget (obligational) authority for the Departments of Veterans Affairs and Housing and Urban Development, and 17 independent agencies and offices. This is $9,629,463,558 above the 1997 appropriations level.
The following table summarizes the amounts recommended in the bill in comparison with the appropriations for fiscal year 1997 and budget estimates for fiscal year 1998.
SUMMARY OF BUDGET ESTIMATES AND AMOUNTS RECOMMENDED IN THE BILL
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Fiscal year-- House House compared with enacted House compared with estimates
1997 enacted 1998 estimates
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American Battle Monuments Commission $22,265,000 $23,897,000 $26,897,000 +$4,632,000 +$3,000,000
Cemeterial Expenses, Army 11,600,000 11,815,000 11,815,000 +215,000 0
Community Development Financial Institutions 50,000,000 125,000,000 125,000,000 +75,000,000 0
Consumer Information Center 2,260,000 2,119,000 2,419,000 +159,000 +300,000
Consumer Product Safety Commission 42,500,000 45,000,000 44,000,000 +1,500,000 -1,000,000
Corporation for National and Community Service 402,500,000 549,000,000 402,500,000 0 -146,500,000
Council on Environmental Quality 2,436,000 3,020,000 2,506,000 +70,000 -514,000
Court of Veterans Appeals 9,229,000 9,380,000 9,319,000 +90,000 -61,000
Department of Housing and Urban Development 16,303,809,442 24,573,255,000 25,123,255,000 +8,819,445,558 +550,000,000
Department of Veterans Affairs 40,086,493,000 40,216,150,000 40,359,576,000 +273,083,000 +143,426,000
Environmental Protection Agency 6,799,393,000 7,645,493,000 7,232,077,000 +432,684,000 -413,416,000
Federal Deposit Insurance Corporation 0 (34,365,000) (34,365,000) (+34,365,000) 0
Federal Emergency Management Agency 5,103,556,000 838,558,000 1,088,058,000 -4,015,498,000 +249,500,000
National Aeronautics and Space Administration 13,709,200,000 13,500,000,000 13,648,000,000 -61,200,000 +148,000,000
National Credit Union Administration 1,000,000 0 0 -1,000,000 0
(Limitation on direct loans) (600,000,000) (600,000,000) (600,000,000) 0 0
National Science Foundation 3,270,000,000 3,367,000,000 3,487,000,000 +217,000,000 +120,000,000
Neighborhood Reinvestment Corporation 49,900,000 50,000,000 70,000,000 +20,100,000 +20,000,000
Office of Consumer Affairs 1,500,000 1,800,000 0 -1,500,000 -1,800,000
Office of Science and Technology Policy 4,932,000 4,932,000 4,932,000 0 0
Selective Service System 22,930,000 23,919,000 23,413,000 +483,000 -506,000
Budget scorekeeping adjustments -3,832,100,000 32,100,000 32,100,000 +3,864,200,000 0
Total 82,063,403,442 91,022,438,000 91,692,867,000 +9,629,463,558 +670,429,000
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FISCAL YEAR 1998 RATIONALE
The fiscal year 1998 recommendations for the VA, HUD, and Independent Agencies Appropriations Bill continue down the path begun with the fiscal year 1996 enacted Bill and reflect a fundamental recognition that significant changes are required if the goal of a balanced budget is to be realized.
Last year the Subcommittee conducted a zero-base review of each department, agency, and office under its jurisdiction. The goal of that review was to determine exactly what was being done by the government, why was it being done, how was it being done, and if it was a necessary activity, could it be done cheaper. The following report and accompanying Bill reflects an ongoing commitment to the basic premise of the work which was started in fiscal year 1996. The job was not completed in fiscal year 1996, nor will it be completed in fiscal year 1998, but a substantial amount of progress has been made toward controlling the growth in programs while maintaining essential government activity.
The Subcommittee recognizes that many difficult decisions are still before us and that short-term measures such as `outlay enhancers' will do little to address the long-term goal of a balanced budget. Therefore, to the extent possible, the Subcommittee has avoided the use of `outlay enhancers' and other mechanisms which merely postpone difficult decisions. The reductions contained in the Bill which accompanies this report are real reductions which present real challenges for various government offices if fundamental change is to be realized.
GOVERNMENT PERFORMANCE AND RESULTS ACT
The Committee considers the full and effective implementation of the Government Performance and Results Act, P.L. 103-62, to be a priority for all agencies of government.
Starting with fiscal year 1999, the Results Act requires each agency to `prepare an annual performance plan covering each program activity set forth in the budget of such agency'. Specifically, for each program activity the agency is required to `establish performance goals to define the level of performance to be achieved by a program activity' and `performance indicators to be used in assessing the relevant outputs, service levels, and outcomes of each program activity'.
The Committee takes this requirement of the Results Act very seriously and plans to carefully examine agency performance goals and measures during the appropriations process. As a result, starting with the fiscal year 1999 appropriations cycle, the Committee will consider agencies progress in articulating clear, definitive, and results-oriented (outcome) goals and measures as it reviews requests for appropriations.
The Committee suggests agencies examine their program activities in light of their strategic goals to determine whether any changes or realignments would facilitate a more accurate and informed presentation of budgetary information. Agencies are encouraged to consult with the Committee as they consider such revisions prior to finalizing any requests pursuant to 31 U.S.C. 1104. The Committee will consider any requests with a view toward ensuring that fiscal year 1999 and subsequent budget submissions display amounts requested against program activity structures for which annual performance goals and measures have been established.
TITLE I
DEPARTMENT OF VETERANS AFFAIRS
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Fiscal year 1998 recommendation $40,359,576,000
Fiscal year 1997 appropriation 40,086,493,000
Fiscal year 1998 budget request 40,216,150,000
Comparison with fiscal year 1997 appropriation +273,083,000
Comparison with fiscal year 1998 budget request +143,426,000
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The Department of Veterans Affairs is the third largest Federal agency in terms of employment with an average employment of approximately 210,000. It administers benefits for 26,000,000 veterans, and 44,000,000 family members of living veterans and survivors of deceased veterans. Thus, 70,000,000 people, comprising about 27 percent of the total population of the United States, are potential recipients of veterans benefits provided by the Federal Government.
A total of $40,355,476,000 in new budget authority is recommended by the Committee for the Department of Veterans Affairs programs in fiscal year 1998. The funds recommended provide for compensation payments to 2,585,800 veterans and survivors of deceased veterans with service-connected disabilities; pension payments for 711,100 non-service-connected disabled veterans, widows and children in need of financial assistance; educational training and vocational assistance to 426,630 veterans, servicepersons, and reservists, and 47,500 eligible dependents of deceased veterans or seriously disabled veterans; housing credit assistance in the form of 280,000 guaranteed loans provided to veterans and servicepersons; administration or supervision of life insurance programs with 4,946,144 policies for veterans and active duty servicepersons providing coverage of $511,597,000,000; inpatient care and treatment of beneficiaries in 173 hospitals; 40 domiciliaries, 135 nursing homes and 448 outpatient clinics which includes independent, satellite, community-based, and rural outreach clinics involving 33,213,000 visits; and the administration of the National Cemetery System for burial of eligible veterans, servicepersons and their survivors.
VETERANS BENEFITS ADMINISTRATION
COMPENSATION AND PENSIONS
(INCLUDING TRANSFER OF FUNDS)
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Fiscal year 1998 recommendation $19,932,997,000
Fiscal year 1997 appropriation 19,599,259,000
Fiscal year 1998 budget request 19,932,997,000
Comparison with fiscal year 1997 appropriation +333,738,000
Comparison with fiscal year 1998 budget request 0
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This appropriation provides funds for service-connected compensation payments to an estimated 2,585,800 beneficiaries and pension payments to another 711,100 beneficiaries with non-service-connected disabilities. The average cost per compensation case in 1998 is estimated at $6,417, and pension payments are projected at a unit cost of $4,474. The estimated caseload and cost by program for 1997 and 1998 are as follows:
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1997 1998 Difference
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Caseload:
Compensation:
Veterans 2,256,672 2,278,900 +22,228
Survivors 305,188 304,900 -288
Children 0 2,000 +2,000
Clothing allowance (non-add) (74,540) (74,300) (-240)
Pensions:
Veterans. 409,309 407,600 -1,709
Survivors 319,234 303,500 -15,734
Minimum income for widows (non-add) (800) (793) (-7)
Vocational training (non-add) (110) (85) (-25)
Burial allowances 97,800 97,700 -100
Funds:
Compensation:
Veterans $13,016,590,000 $13,259,558,000 +$242,968,000
Survivors 3,240,100,000 3,273,892,000 +33,792,000
Children 0 21,100,000 +21,100,000
Clothing allowance 38,760,000 38,471,000 -289,000
Payment to GOE (Public Laws 101-508 and 102-568) 2,198,000 2,083,000 -115,000
Medical exams pilot program 7,574,000 15,905,000 +8,331,000
Pensions:
Veterans 2,354,276,000 2,401,380,000 +47,104,000
Survivors 788,380,000 774,453,000 -13,927,000
Minimum income for widows 1,389,000 5,657,000 +4,268,000
Vocational training 300,000 236,000 -64,000
Payment to GOE (Public Laws 101-508, 102-568, and 103-446) 10,078,000 9,201,000 -877,000
Payment to medical care (Public Laws 101-508 and 102-568) 14,241,000 15,096,000 +855,000
Payment to medical facilities 2,254,000 2,322,000 +68,000
Burial benefits 115,436,000 117,534,000 +2,098,000
Other assistance 1,764,000 1,766,000 +2,000
Contingency 15,228,000 0 -15,228,000
Unobligated balance and transfers -9,309,000 -5,657,000 +3,652,000
Total appropriation 19,599,259,000 19,932,997,000 +333,738,000
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The Administration has again proposed dividing the compensation and pensions appropriation into three separate accounts: compensation, pensions, and burial benefits and miscellaneous assistance. The Committee has again disapproved this proposal and recommends a single compensation and pensions appropriation in fiscal year 1998.
The 1998 pension budget request includes funds for a proposed cost-of-living increase of 2.7 percent. Legislation will be proposed to provide a 2.7 percent increase for all compensation beneficiaries. The estimated cost of this compensation adjustment is $330,700,000.
For fiscal year 1998, the Committee is recommending the budget estimate of $19,932,997,000 for compensation and pensions. The bill also includes requested language reimbursing $11,284,000 to the general operating expenses account and $15,096,000 to the medical care account for administrative expenses of implementing cost saving provisions required by the Omnibus Budget Reconciliation Act of 1990, Public Law 101-508, the Veterans' Benefits Act of 1992, Public Law 102-568, and the Veterans' Benefits Improvements Act of 1994, Public Law 103-446. These cost savings provisions include verifying pension income against Internal Revenue Service and Social Security Administration (SSA) data; establishing a match with the SSA to obtain verification of Social Security numbers; and the $90 monthly VA pension cap for Medicaid-eligible single veterans and surviving spouses alone in Medicaid-covered nursing homes. Also, the bill includes requested language permitting this appropriation to reimburse such sums as may be necessary to the medical facilities revolving fund ($2,322,000 estimated in fiscal year 1998) to help defray the operating expenses of individual medical facilities for nursing home care provided to pensioners as authorized by the Veterans' Benefits Act of 1992.
The Administration has proposed language that would provide indefinite 1998 supplemental appropriations for compensation and pension payments. The Committee believes the current funding procedures are adequate and has not included the requested language in the bill. The Committee recognizes that additional funding may be necessary when the final disposition of proposed legislation is known.
READJUSTMENT BENEFITS
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Fiscal year 1998 recommendation $1,366,000,000
Fiscal year 1997 appropriation 1,377,000,000
Fiscal year 1998 budget request 1,366,000,000
Comparison with fiscal year 1997 appropriation -11,000,000
Comparison with fiscal year 1998 budget request 0
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This appropriation finances the education and training of veterans and servicepersons whose initial entry on active duty took place on or after July 1, 1985. These benefits are included in the All-Volunteer Force Educational Assistance Program. Eligibility to receive this assistance began in 1987. Basic benefits are funded through appropriations made to the readjustment benefits appropriation and transfers from the Department of Defense. Supplemental benefits are also provided to certain veterans through transfers from the Department of Defense. This law also provides education assistance to certain members of the Selected Reserve and is funded through transfers from the Departments of Defense and Transportation. In addition, certain disabled veterans are provided with vocational rehabilitation, specially adapted housing grants, and automobile grants with approved adaptive equipment. This account also finances educational assistance allowances for eligible dependents of those veterans who died from service-connected causes or have a total and permanent service-connected disability as well as dependents of servicepersons who were captured or missing-in-action.
The Committee recommends the budget estimate of $1,366,000,000 for readjustment benefits in fiscal year 1998. The estimated number of trainees and costs by program for 1997 and 1998 are as follows:
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1997 1998 Difference
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Number of trainees:
Education and training: dependents 43,952 47,500 +3,548
All-Volunteer Force educational assistance:
Veterans and servicepersons 299,560 291,190 -8,370
Reservists 77,350 80,300 +2,950
Vocational rehabilitation 56,265 55,140 -1,125
Total 477,127 474,130 -2,997
Funds:
Education and training: dependents $108,900,000 $117,539,000 +$8,639,000
All-Volunteer Force educational assistance:
Veterans and servicepersons 742,806,000 769,093,000 +26,287,000
Reservists 97,800,000 99,119,000 +1,319,000
Vocational rehabilitation 416,400,000 419,175,000 +2,775,000
Housing grants 16,100,000 16,100,000 0
Automobiles and other conveyances 4,700,000 4,700,000 0
Adaptive equipment 22,900,000 23,100,000 +200,000
Work-study 29,900,000 31,493,000 +1,593,000
Payment to States 13,000,000 13,000,000 0
Unobligated balance and other adjustments -75,506,000 -127,319,000 -51,813,000
Total appropriation 1,377,000,000 1,366,000,000 -11,000,000
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VETERANS INSURANCE AND INDEMNITIES
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Fiscal year 1998 recommendation $51,360,000
Fiscal year 1997 appropriation 38,970,000
Fiscal year 1998 budget request 51,360,000
Comparison with fiscal year 1997 appropriation +12,390,000
Comparison with fiscal year 1998 budget request 0
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The veterans insurance and indemnities appropriation is made up of the former appropriations for military and naval insurance, applicable to World War I veterans; national service life insurance (NSLI), applicable to certain World War II veterans; servicemen's indemnities, applicable to Korean conflict veterans; and veterans mortgage life insurance, applicable to individuals who have received a grant for specially adapted housing.
The budget estimate of $51,360,000 for veterans insurance and indemnities in fiscal year 1998 is included in the bill. The amount provided will enable VA to transfer more than $42,670,000 to the service-disabled veterans insurance fund, transfer $8,530,000 in payments for the 3,590 policies under the veterans mortgage life insurance program, as well as provide payments for the 1,260 policies under a small NSLI program called `H.' These policies are identified under the veterans insurance and indemnity appropriation since they provide insurance to service-disabled veterans unable to qualify under basic NSLI.
VETERANS HOUSING BENEFIT PROGRAM FUND PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
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Program account Limitation on direct loans Administrative expenses
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Fiscal year 1998 recommendation $192,447,000 $300,000 $160,437,000
Fiscal year 1997 appropriation 1 364,640,000 300,000 139,116,000
Fiscal year 1998 budget request 192,447,000 300,000 160,437,000
Comparison with fiscal year 1997 appropriation -172,193,000 0 +21,321,000
Comparison with fiscal year 1998 budget request 0 0 0
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The purpose of the VA home loan guaranty program is to facilitate the extension of mortgage credit on favorable terms by private lenders to eligible veterans. This appropriation provides for all costs, with the exception of the native American veteran housing loan program, of VA's direct and guaranteed loan programs. This account represents a new fund established this year to consolidate the guaranty and indemnity fund, the loan guaranty fund, and the direct loan fund. This consolidation sums eleven accounts into four accounts under the new veterans housing benefit program fund to achieve administrative efficiencies. All appropriations and income formerly received from the old accounts will be deposited in this new fund. No program or scoring changes result from this action. The Federal Credit Reform Act of 1990 requires budgetary resources to be available prior to incurring a direct loan obligation or a loan guarantee commitment. In addition, the Act requires all administrative expenses of a direct or guaranteed loan program to be funded through a program account.
The Committee recommends the budget requests of such sums as may be necessary (estimated to be $192,447,000) for funding subsidy payments, $300,000 for the limitation on direct loans, and $160,437,000 to pay administrative expenses. The appropriation for administrative expenses may be transferred to and merged with the general operating expenses account.
EDUCATION LOAN FUND PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
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Program account Limitation on direct loans Administrative expenses
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Fiscal year 1998 recommendation $1,000 $3,000 $200,000
Fiscal year 1997 appropriation 1,000 3,000 195,000
Fiscal year 1998 budget request 1,000 3,000 200,000
Comparison with fiscal year 1997 appropriation 0 0 +5,000
Comparison with fiscal year 1998 budget request 0 0 0
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This appropriation covers the cost of direct loans for eligible dependents and, in addition, it includes administrative expenses necessary to carry out the direct loan program. The Federal Credit Reform Act of 1990 requires budgetary resources to be available prior to incurring a direct loan obligation. In addition, the Act requires all administrative expenses of a direct loan program to be funded through a program account.
The bill includes the budget requests of $1,000 for program costs, $3,000 as the limitation on direct loans, and $200,000 for administrative expenses. The appropriation for administrative expenses may be transferred to and merged with the general operating expenses account.
VOCATIONAL REHABILITATION LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
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Program account Limitation on direct loans Administrative expenses
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Fiscal year 1998 recommendation $44,000 $2,278,000 $388,000
Fiscal year 1997 appropriation 49,000 2,822,000 377,000
Fiscal year 1998 budget request 44,000 2,278,000 388,000
Comparison with fiscal year 1997 appropriation -5,000 -544,000 +11,000
Comparison with fiscal year 1998 budget request 0 0 0
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This appropriation covers the cost of direct loans for vocational rehabilitation of eligible veterans and, in addition, it includes administrative expenses necessary to carry out the direct loan program. Loans of up to $815 (based on indexed chapter 31 subsistence allowance rate) are available to service-connected disabled veterans enrolled in vocational rehabilitation programs when the veteran is temporarily in need of additional assistance. Repayment is made in 10 monthly installments, without interest, through deductions from future payments of compensation, pension, subsistence allowance, educational assistance allowance, or retirement pay. The Federal Credit Reform Act of 1990 requires budgetary resources to be available prior to incurring a direct loan obligation. In addition, the Act requires all administrative expenses of a direct loan program to be funded through a program account.
The bill includes the budget requests of $44,000 for program costs and $388,000 for administrative expenses. The administrative expenses may be transferred to and merged with the general operating expenses account. In addition, the bill includes requested language limiting program direct loans to $2,278,000. It is estimated that VA will make 4,952 loans in fiscal year 1998, with an average amount of $460.
NATIVE AMERICAN VETERAN HOUSING LOAN PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
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Administrative expenses:
Fiscal year 1998 recommendation $515,000
Fiscal year 1997 appropriation 205,000
Fiscal year 1998 budget request 515,000
Comparison with fiscal year 1997 appropriation +310,000
Comparison with fiscal year 1998 budget request 0
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This program is testing the feasibility of authorizing VA to make direct home loans to native American veterans who live on U.S. trust land. This program is a five-year pilot program which began in 1993. The bill includes the budget request of $515,000 for administrative expenses, which may be transferred to and merged with the general operating expenses account.
VETERANS HEALTH ADMINISTRATION
MEDICAL CARE
(INCLUDING TRANSFER OF FUNDS)
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Appropriation Collections transferred Total available
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Fiscal year 1998 recommendation $16,958,846,000 $604,000,000 $17,562,846,000
Fiscal year 1997 appropriation 17,013,447,000 0 17,013,447,000
Fiscal year 1998 budget request 16,958,846,000 604,000,000 17,562,846,000
Comparison with fiscal year 1997 appropriation -54,601,000 +604,000,000 +549,399,000
Comparison with fiscal year 1998 budget request 0 0 0
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This appropriation provides for medical care and treatment of eligible beneficiaries in VA hospitals, nursing homes, domiciliaries and outpatient facilities; contract hospitals; State domiciliaries, nursing homes and hospitals; contract community nursing homes; and outpatient programs on a fee basis. Hospital and outpatient care are also provided by the private sector for certain dependents and survivors of veterans under the civilian health and medical programs for the Department of Veterans Affairs. Funds are also used to train medical residents, interns, and other professional, paramedical and administrative personnel in health-science fields to support VA's medical programs.
The VA is requesting an appropriation of $16,958,846,000 for medical care in fiscal year 1998, a decrease of $54,601,000 below the current year appropriation. However, this comparison of the budget request and the fiscal year 1997 appropriation of $17,013,447,000 does not reflect two adjustments with the general operating expenses (GOE) account. In calculating the 1998 medical care request, the 1997 level was (1) increased by $13,399,000 (with a corresponding reduction to GOE) to reflect medical care charges that will be paid directly to the Franchise Fund for services provided by the Austin Finance Center, and (2) decreased by $68,000,000 (with a corresponding increase to GOE) to fund compensation and pension exams directly from Veterans Benefits Administration resources. Thus, the budget request is really the same amount as the appropriation provided in fiscal year 1997.
In addition, the budget includes a legislative proposal to permit the VA to retain the medical care cost recovery program third party and user fee collections as reimbursements to medical care starting on October 1, 1997. Under existing law, these collections, except for administrative costs of collecting the receipts, are deposited in the Treasury. The original estimate of collections in 1998 totaled $590,918,000, of which $123,321,000 would be used to cover the cost of collections and $467,597,000 would be available for veterans' healthcare services. In the recent Bipartisan Budget Agreement and the 1998 Budget Resolution, the estimate of those collections became $604,000,000. A budget amendment (House Document 105-95) requests that language be carried in the medical care appropriation, contingent on the enactment of authorizing legislation establishing a medical collections fund into which such fees would be deposited, requiring all amounts recovered or collected to be made available for administrative costs of debt collection and to cover the full range of VA medical care services.
The bill includes the total request of $17,562,846,000 for medical care in fiscal year 1998--an appropriation of $16,958,846,000 and collections of $604,000,000. This amount is an increase of $549,399,000 above the 1997 appropriation. The Committee notes that this increase in funds is slightly greater than the increase provided in fiscal year 1997. The bill also includes the requested language that, once the authorization is enacted, will allow the transfer of medical collections to the medical care account. In addition, $15,096,000 is to be transferred from the compensation and pensions account for administrative expenses of implementing cost saving provisions required by the Omnibus Budget Reconciliation Act of 1990, and the Veterans' Benefits Act of 1992.
Language has been included in the bill delaying the availability of $565,000,000 of funds in the equipment and land and structures object classifications until August 1, 1998, instead of requested language delaying 8.3 percent of the appropriation until September 30, 1998. The recommended language is similar to that carried in previous appropriations acts.
The Committee recognizes that veterans in East Central Florida are, in many instances, required to travel considerable distances to receive VA hospital care. The VA has developed plans to contract with local hospitals to meet veterans' needs for emergency inpatient care. However, the Committee believes it is important that veterans who are in need of nonemergent inpatient care also be able to receive that care in their own communities. To address this matter, the bill includes language earmarking not to exceed $5,000,000 for a study by the VA on the cost-effectiveness of contracting with local hospitals in East Central Florida to meet veterans' non-emergent inpatient health care needs. In designing this one-year pilot program, the funds for which are to be derived from resources made available to the local network, the VA shall ensure that there is a reasonable balance in the allocation of funds throughout the network. The VA shall report back to the Congress on plans to carry out this requirement and on the results of this study.
Concerns have been expressed that the estimated amount of collections from third party insurers and various copayments will not materialize. The VA estimates that collections will total more than $3,700,000,000 in fiscal years 1998-2002, with approximately $600,000,000 assumed for 1998. Last year, collections totaled $557,000,000. However, the accuracy of each year's estimated collection is unknown. Under current law, VA medical centers have lacked a real incentive to increase collections as the funds, other than those necessary for the administrative cost of collecting the receipts, are returned to the Treasury. The proposed legislation will permit medical centers to retain all collections and should provide incentives to increase collections. Additional funding for health care services is possible if medical centers reduce the administrative costs of collections which currently consumes approximately 20 percent of the total. The Committee expects the VA to develop allocation policies that will increase incentives and intends to review the entire subject of collections and incentives on a yearly basis.
Legislation has been proposed to permit Medicare reimbursements to VA hospitals for care provided to certain Medicare-eligible veterans over the age of 65. This concept, often referred to as Medicare subvention, would provide an estimated $1,093,000,000 in fiscal years 1999-2002. The ultimate disposition of this legislative proposal is unknown, but it does not impact fiscal year 1998 and reimbursements in fiscal year 1999 are estimated to be only $5,000,000.
The budget estimates that 3,071,914 patients will receive health care treatment in 1998, an increase of 134,914 above the number treated in 1996 and estimated for 1997. However, employment is estimated to decrease by 6,153 in 1997 and 1,683 in 1998. Treating a larger number of patients while employment decreases is only possible through various reengineering and reorganization efforts to increase efficiency and effectiveness. The VA should continue its transition from an acute-care, hospital-based system to one that focuses on primary care in an outpatient setting. Consolidating and closing underutilized services will permit a more effective and efficient use of resources. These efforts will improve care for veterans and should help in achieving the goals of a 30 percent reduction in per patient cost and a 20 percent increase in the number of veterans treated over the next five years. The Committee continues to support these efforts to fundamentally change the system.
Quality service to veterans is a commitment that requires continual attention. Requiring veterans to wait several hours for scheduled appointments is not providing quality service. Previous reports have indicated that complaints were heard where veteran patients and their families were treated in an insensitive manner by VA staff. The subjects of these complaints, which are still being heard, cannot be tolerated. Veterans and their families should receive the best, most courteous, and timely medical treatment possible. Top management needs to ensure that local management continues to promptly address all such problems.
The Committee is concerned with continuing sexual harassment problems in the VA. There have been disturbing accounts of alleged sexual harassment and retribution by top management in the field. It appeared that these complaints were addressed when similar concerns were raised four years ago. Clearly, the current system is not working, especially as it applies to the top levels of management at medical centers. The VA needs to reexamine its procedures with a goal of more diligence. The complaint process needs to be removed from local control, at least as it applies to management.
Currently, medical care employment is approximately 185,000, more than 2,000 below the estimated 1998 level of 187,317. As such, buyout authority to reduce employment so as to avoid a reduction-in-force for newer employees is not required. The Committee expects that any use of buyout authority in the fall of 1997 will be targeted to those individuals in positions that will be eliminated in future organizations.
A community based outpatient clinic is currently being established in conjunction with a Vet Center in Williamsport, Pennsylvania. It is expected to be operational by the end of July 1997. The VA is to utilize $400,000 to expand activities at this community based outpatient clinic from the planned part-time service to a five-day-a-week primary medical care professional services operation.
The ambulatory care/environmental improvements construction project at the Wilkes-Barre VA Medical Center was funded in fiscal year 1997. The Committee does not expect that the hospital will absorb activation costs of this project from within medical center funds. A similar situation exists regarding activation costs for the ambulatory care addition project at the Carl T. Hayden VA Medical Center. The Committee does not expect that the hospital will absorb activation costs of this project from within medical center funds.
The Committee notes that 40 percent of the nation's veterans suffer from mental disorders and 60 percent of the nation's leading causes of morbidity and mortality are behavioral in origin. Therefore, the Committee applauds the Veterans Health Administration decision in recent years to expand the psychology internship program to address the behavioral and mental health needs of veterans and urges the VHA to continue to strengthen the psychology training (predoctoral and postdoctoral) programs. This will also have the benefit of reducing the need for hospital-based services.
The Committee is aware of the collaborative work that has been taking place with the Office of the Chief Financial Officer of the Veterans Health Administration (VHA), university health management educators and leading private sector executives to improve the management of VHA facilities. The use of outside experts in health administration is a critically important component in the promotion of systemic improvements. These efforts hold great promise for bringing a new era of cost-effectiveness and efficiency to the VHA. Because of the Committee's strong interest in efficient management and quality service for veterans, the VA is urged to support the continuation and expansion of this relationship.
The Committee supports the Department of Veterans Affairs' efforts to realize efficiencies within the Veteran Health Administration's Veterans Integrated Service Networks (VISN) plan. However, the Committee is concerned that the Veterans Equitable Resource Allocation (VERA) system developed to distribute veterans medical care funds to individual VISNs failed to adequately account for two important factors: (1) the disproportionate number of special needs veterans in northeastern states, and (2) the unknown impact of eligibility reform on the veteran population being served in each VISN. The Committee is also concerned with the quality and accessibility of care that veterans are receiving in these regions. To address these concerns, the General Accounting Office is requested to study and report on the effects of the VISN and VERA process and its implementation. The report should address the quality of care being received by veterans, with attention given to VISN 3 (Bronx) and VISN 4 (Pittsburgh). The Committee expects that the GAO report will be completed within four months. Therefore, until the Committee receives the requested GAO report on VERA and the impact of eligibility reform on individual VISNs is known, the Secretary is directed to fund all VISNs at least at the fiscal year 1996 level. The Committee understands this directive will impact VISNs 1, 2, 3, 12, and 14.
Alcoholism is one of the most costly and devastating problems for veterans. The Committee understands that there has been extensive dialogue between the National Institute for Alcohol Abuse and Alcoholism (NIAAA) and the VA, and supports continued discussions and collaboration between these agencies. This effort will build on the strengths of both NIAAA and the VA, and will extend the outstanding services of the VA's distinguished clinical trials program. The Committee encourages joint clinical trials with alcohol research centers encompassing NIAAA, the VA, and academic medical centers. These projects will capitalize on new research findings that may yield important new treatments for alcoholism and related-diseases.
The VA has established dozens of community based outpatient clinics in the past two years, a number in rural areas. The VA is encouraged to establish an outpatient clinic in Gainesville, Georgia.
The Committee is concerned about the prevalence of hepatitis C among veterans, and the potential impact of liver disease and liver transplants on VA services and facilities. The Department is encouraged to study the feasibility of determining the rate of hepatitis C infection among veterans receiving health services and establish a protocol for screening new entrants to the VA health care system and other groups at high risk for hepatitis C. The Committee further encourages the Department to pay special attention to rates of hepatitis C among veterans of Vietnam and more recent engagements, and to coordinate with the Department of Defense on any approaches for screening and providing treatment for hepatitis C infection among active-duty military.
The Committee is concerned with the plans for the integration of the VA medical centers at Tuskegee and Montgomery, Alabama. Critical information necessary to clearly understand the details of the integration is not available. Also, allegations of mismanagement require a complete investigation. The VA has halted further integration of these two facilities until all concerns have been adequately addressed. The VA should not proceed with further integration activities until a detailed plan of the integration has been submitted to the Congress, the General Accounting Office has had 60 days to issue a report reviewing the plan, and 45 days has lapsed after the GAO report is issued. The Committee believes that because of the unusual circumstances surrounding this matter the aforementioned process is necessary to best serve the interest of veterans and taxpayers.
The Committee remains supportive of VA's effort to reorganize its health care delivery system with the goal of improved management, better quality service, and cost effectiveness and efficiency in a truly integrated health care delivery system. A sophisticated medical information infrastructure is at the heart of an effective reorganization. Current VHA information systems may not be sufficient to address the challenges ahead. To assist in this regard, the VA is encouraged to look into establishing a partnership with a private, not-for-profit, highly integrated health care system. Such a partnership would be with an organization that has established itself as a leader in combining operational data into information. The Committee understands an innovative proposal is underway in Detroit, Michigan which could provide a model through the development of a population and resource management information network. Such a multi-dimensional database could serve as a testbed for health care specific technologies for VHA's newly formed integrated services networks.
GAO recently found that DOD and VA did not have a systematic approach to monitoring the health of Gulf War veterans after their initial examination and consequently could not provide information on the effectiveness of the treatment they had received or whether they were better or worse than when first examined. Consistent with the GAO's findings and recommendations, the Secretaries of DOD and VA should develop and implement a plan to provide: (1) data on the effectiveness of the treatments received by these veterans; and (2) longitudinal information on the health of veterans who reported illnesses after the war in order that efforts may be focused on resolving those conditions that have proven intractable or resistant to current therapies. The application of validated severity indices may be appropriate, but the Departments may suggest other methods. The Departments' plans may make appropriate use of statistical sampling and limit initial focus to individuals who experienced illness during the first years of registry operation or to certain types of therapies. To the extent that current diagnoses do not fully represent the full range of ailments veterans have experienced, the Departments should incorporate data on the persistence of Gulf War veterans' principal health complaints in addition to the status of their diagnosed illnesses. The Departments should consider whether it is beneficial to employ an outside contractor to collect valid and reliable data on these matters and make efforts to maximize the sensitivity of these measures to problems in delivery of care.
MEDICAL AND PROSTHETIC RESEARCH
-------------------------------------------------------------
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Fiscal year 1998 recommendation $267,000,000
Fiscal year 1997 appropriation 262,000,000
Fiscal year 1998 budget request 234,374,000
Comparison with fiscal year 1997 appropriation +5,000,0000
Comparison with fiscal year 1998 budget request +32,626,000
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This account includes medical, rehabilitative and health services research. Medical research is an important aspect of VA programs, providing complete medical and hospital service for veterans. The prosthetic research program is also essential in the development and testing of prosthetic, orthopedic and sensory aids for the purpose of improving the care and rehabilitation of eligible disabled veterans, including amputees, paraplegics and the blind. The health service research program provides unique opportunities to improve the effectiveness and efficiency of the health care delivery system. In addition, budgetary resources from a number of areas including appropriations from the medical care account; reimbursements from the Department of Defense; and grants from the National Institutes of Health, private proprietary sources, and voluntary agencies provide support for VA's researchers.
The Committee recommends $267,000,000 for medical and prosthetic research in fiscal year 1998, an increase of $32,626,000 above the budget request. This amount, together with an estimated $662,416,000 from other sources will provide for a total research program of $929,416,000.
The bill includes language earmarking $20,000,000 of the funds made available for medical research relating to Gulf War illnesses afflicting Persian Gulf veterans. This funding, together with funding provided by the Department of Defense and Health and Human Services, will provide for a more adequate Federal research effort on Persian Gulf War illnesses.
Last year's report strongly suggested that funding for research into Parkinson's disease be increased. A recent joint meeting between representatives of the VA and the Research Advisory Group on Parkinson's Disease and Related Disorders, a distinguished panel of experts from across the country, revealed additional areas of interest for joint research efforts. The Committee believes that the VA can expand its research on this debilitating disease and directs that $10,000,000 of medical and prosthetic research funds be utilized in this effort.
The Research Realignment Advisory Committee recommended the revitalization of the career development program. The VA indicates that those revitalization plans would be delayed at the funding level proposed in the 1998 budget request. The VA is urged to utilize part of the funds provided above the budget request for career development efforts as recommended by the Research Realignment Advisory Committee.
In last year's House report, the Committee recommended that the VA establish a partnership with a private, independent, not-for-profit, research and treatment center that could serve as a Center for Excellence Network in the diagnosis, detection, and treatment of cancer utilizing radioimmunodetection and radioimmunotherapy technology. The Committee urges the VA to continue its effort and finalize this collaborative research effort no later than January 1, 1998.
The Committee is encouraged by VA's decision to increase funding available for prostate cancer research. The Department estimated that it spent $9,200,000 in fiscal year 1996, and that it will spend $12,800,000 in fiscal years 1997 and 1998 on this major health problem for aging males. Because prostate cancer is one of the leading causes of death among veterans, the VA is encouraged to increase funding from within available funds for prostate cancer research.
The Committee is aware of the successful use of proton therapy in treating prostate cancer and other life-threatening diseases. Because of the heightened incidence of this cancer in the veterans' population, the Department is urged to explore research approaches using proton therapy as a treatment option.
The VA is planning a major clinical research trial, Specialized Medication and Revascularization Therapy (SMART), comparing long-term outcomes in coronary heart disease patients. First year VA funding of this tripartite effort--VA, Canada, and other U.S. industrial sources--is estimated to be $3,700,000. The Committee supports the SMART Trial.
In 1996, VA medical centers admitted 55,311 veterans for inpatient hospital care because of renal and associated disorders. Fifty-nine percent of these patients were between the ages of 65 and 84. The Committee supports additional biomedical research into the causes of and cures for renal failure as a way to reduce the cost of this health care.
Previous Committee reports have indicated support for health service research. The Committee supports at least the current funding level for this important research effort.
Previous reports have indicated support for the establishment and development of a Department of Veterans Affairs medical research service minority recruitment initiative in collaboration with minority health professions institutions. The Committee strongly supports the continued development of this program.
Concern has been expressed that at the requested 1998 medical research level, the VA would not continue funding for all of the Environmental Hazards Research Centers. The VA indicates that it would continue funding the Environmental Hazards Research Center at the Louisville VA Medical Center at the recommended medical and prosthetic research funding level. The Committee supports continued funding for this important research effort.
The Committee is concerned that VA plans to reduce the number of middle managers is having an inadvertent, detrimental impact on its research program. Physicians have been exempted from this reduction effort. The VA is urged to consider exempting Ph.D. research scientists from potential reductions in the number of GS 14/15 positions.
The Committee is aware of the Research Realignment Advisory Committee report which recommends the creation of designated research areas (DRAs) as an organizing principle for VA research. While the Committee finds that VA research is meritorious, peer reviewed, and critical to the VA patient population, it is difficult to understand research priorities due to the lack of a structured presentation of the program. The 1999 medical and prosthetic research budget justifications should include tables showing the distribution of funds among the various DRAs.
MEDICAL ADMINISTRATION AND MISCELLANEOUS OPERATING EXPENSES
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Fiscal year 1998 recommendation $60,160,000
Fiscal year 1997 appropriation 61,207,000
Fiscal year 1998 budget request 60,160,000
Comparison with fiscal year 1997 appropriation -1,047,000
Comparison with fiscal year 1998 budget request 0
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This appropriation provides funds for central office executive direction (Under Secretary for Health and staff), administration and supervision of all VA medical and construction programs, including development and implementation of policies, plans and program objectives.
The Committee recommends the budget request of $60,160,000 for medical administration and miscellaneous operating expenses in fiscal year 1998.
GENERAL POST FUND, NATIONAL HOMES
(INCLUDING TRANSFER OF FUNDS)
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Program account Limitation on direct loans Administrative expenses
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Fiscal year 1998 recommendation $7,000 $70,000 $54,000
Fiscal year 1997 appropriation 7,000 70,000 54,000
Fiscal year 1998 budget request 7,000 70,000 54,000
Comparison with fiscal year 1997 appropriation 0 0 0
Comparison with fiscal year 1998 budget request 0 0 0
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This program provides loans to nonprofit organizations to assist them in leasing housing units exclusively for use as a transitional group residence for veterans who are in (or have recently been in) a program for the treatment of substance abuse. The amount of the loan cannot exceed $4,500 for any single residential unit and each loan must be repaid within two years through monthly installments. The amount of loans outstanding at any time may not exceed $100,000.
The bill includes the budget requests of $7,000 for the estimated cost of providing loans for this program, $54,000 for associated administrative expenses, and a $70,000 limitation on direct loans. The administrative expenses may be transferred to and merged with the general post fund.
DEPARTMENTAL ADMINISTRATION
GENERAL OPERATING EXPENSES
-------------------------------------------------------------
-------------------------------------------------------------
Fiscal year 1998 recommendation $853,385,000
Fiscal year 1997 appropriation 827,584,000
Fiscal year 1998 budget request 846,385,000
Comparison with fiscal year 1997 appropriation +25,801,000
Comparison with fiscal year 1998 budget request +7,000,000
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The general operating expenses appropriation provides for the administration of non-medical veterans benefits through the Veterans Benefits Administration and top management direction and support. The Federal Credit Reform Act of 1990 changed the accounting of Federal credit programs and required that all administrative costs associated with such programs be included within the respective credit accounts. Beginning in fiscal year 1992, costs incurred by housing, education, and vocational rehabilitation programs for administration of these credit programs are reimbursed by those accounts. The bill includes $161,540,000 in other accounts for these credit programs. In addition, $11,284,000 is transferred from the compensation and pensions account for administrative costs of implementing cost saving provisions required by the Omnibus Budget Reconciliation Act of 1990 and the Veterans' Benefits Act of 1992. Section 107 of the administrative provisions provides requested language which permits excess revenues in three insurance funds to be used for administrative expenses. The VA estimates that $36,000,000 will be utilized for such purposes in fiscal year 1998. Prior to fiscal year 1996, such costs were included in the general operating expenses appropriation.
The Committee recommends $853,385,000 for general operating expenses in fiscal year 1998. This amount represents an increase of $7,000,000 above the budget request. The additional funds are available, subject to approval in the operating plan, for activities such as retaining Veterans Benefits Administration (VBA) staff to improve the timeliness of processing veterans claims and for higher than anticipated contracting costs of the Year 2000 computer problem. The VA should consider this a one-time adjustment to address on-going concerns. Future budget requests for the general operating expenses account are to include adequate funds for administrative costs.
The VA lacks the authority to pay administrative costs of the Service Members Occupational Conversion and Training Act. The VA estimates that approximately $50,000 may be needed for these expenses. The bill includes requested language to continue allowing such costs to be funded in the general operating expenses account.
The Committee has been concerned for several years with the backlog of claims at the Veterans Benefits Administration and shortcomings in its computer modernization effort. External reviewing agencies and the Congress have criticized VBA for its lack of adequate control over management of the compensation and pension program, including related information technology demands. Recent VBA actions taken and planned may not be sufficient to assure continuing improvement in service to veterans with C&P claims. The Veterans Benefits Administration needs to make further improvements in productivity and services if it is to be turned into a first-class, well-performing institution that provides superb service to the nation's veterans.
The Committee generally supports the improvements in VBA management and information technology as recommended in recent reports, including those of the Veterans' Claims Adjudication Commission and the National Academy of Public Administration (still in draft form). As stated in the NAPA report, unless significant and fundamental changes are made in the way services are delivered in the field, the situation threatens to become worse. Vacancies in VA's top leadership positions provide an excellent opportunity for effecting change to fix the overall C&P process. Developing and implementing a comprehensive reform plan will not be easy--and it will take time. The Committee stands ready to assist the VA and the Administration in developing and implementing leadership and management reforms to accomplish long-term improvement in VBA's performance.
The Veterans Services Network (VETSNET), VBA's future modernized application system, has been under design and development for several years. The VA's recent focus on correcting the Year 2000 computer problem has resulted in the stoppage of most work on VETSNET. The Committee expects the VA to defer further efforts on the existing VETSNET program, pending further development of the program and the successful completion of the Year 2000 computer problem.
The Committee is concerned with VBA's use of buyout authority. Buyouts are to be offered to reduce employment levels so as to avoid reductions-in-force for newer employees. Buyouts are not to be offered to critical employees or employees whose positions will be required in the future. It appears that last year VBA offered buyouts to employees who were necessary for current activities. If VBA plans to offer buyouts this fall, it should first submit a plan to the Committees on Appropriations indicting which positions will be targeted and what the organizational structure will be in the future.
The Committee appreciates the efforts of the VA to consolidate functions. However, there are concerns with VBA's decision to consolidate loan service and claims and loan processing functions from the St. Petersburg Regional Office to Atlanta. In reviewing the VA's analysis, the Committee believes that the weights applied to some of the factors used in determining where consolidated activities would be located were inappropriate and do not accurately reflect cost and performance. As such, the bill includes language prohibiting the VA from proceeding with the relocation of loan guaranty divisions of the Regional Office in St. Petersburg, Florida to Atlanta, Georgia.
NATIONAL CEMETERY SYSTEM
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Fiscal year 1998 recommendation $84,183,000
Fiscal year 1997 appropriation 76,864,000
Fiscal year 1998 budget request 84,183,000
Comparison with fiscal year 1997 appropriation +7,319,000
Comparison with fiscal year 1998 budget request 0
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The National Cemetery System was established in accordance with the National Cemeteries Act of 1973. It has a fourfold mission: to provide for the interment in any national cemetery with available grave space the remains of eligible deceased servicepersons and discharged veterans, together with their spouses and certain dependents, and to permanently maintain their graves; to mark graves of eligible persons in national and private cemeteries; to administer the grant program for aid to States in establishing, expanding, or improving State veterans' cemeteries; and to administer the Presidential Memorial Certificate Program. This appropriation provides for the operation and maintenance of 148 cemeterial installations in 39 States, the District of Columbia, and Puerto Rico.
The Committee recommends the budget request of $84,183,000 for the national cemetery system in fiscal year 1998. These funds will support an average employment in fiscal year 1998 of 1,375, an increase of 52 above the fiscal year 1997 level.
OFFICE OF INSPECTOR GENERAL
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Fiscal year 1998 recommendation $31,013,000
Fiscal year 1997 appropriation 30,900,000
Fiscal year 1998 budget request 31,013,000
Comparison with fiscal year 1997 appropriation +113,000
Comparison with fiscal year 1998 budget request 0
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The Office of Inspector General was established by the Inspector General Act of 1978 and is responsible for the audit, investigation and inspection of all Department of Veterans Affairs programs and operations. The overall operational objective is to focus available resources on areas which would help improve services to veterans and their beneficiaries, assist managers of VA programs to operate economically in accomplishing program goals, and prevent and deter recurring and potential fraud, waste and inefficiencies.
The Committee has recommended the budget request of $31,013,000 for the Office of Inspector General in fiscal year 1998.
CONSTRUCTION, MAJOR PROJECTS
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Fiscal year 1998 recommendation 1 $155,600,000
Fiscal year 1997 appropriation 250,858,000
Fiscal year 1998 budget request 1 79,500,000
Comparison with fiscal year 1997 appropriation -95,258,000
Comparison with fiscal year 1998 budget request +76,100,000
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The construction, major projects appropriation provides for constructing, altering, extending, and improving any of the facilities under the jurisdiction or for the use of the VA, including planning, architectural and engineering services, and site acquisition where the estimated cost of a project is $4,000,000 or more. Emphasis is placed on correction of life/safety code deficiencies in existing VA medical facilities.
A construction program of $79,500,000 is requested for construction, major projects, in fiscal year 1998. The bill includes $155,600,000 for the construction of major projects, an increase of $76,100,000 above the budget request.
The changes from the budget request are as follows:
+$26,300,000 for construction of an ambulatory care addition at the Asheville, North Carolina VA Medical Center.
+$21,100,000 for construction of an ambulatory care addition at the Lyons, New Jersey VA Medical Center.
+$7,700,000 for the ward renovations for patient privacy project at the Omaha, Nebraska VA Medical Center.
+$26,000,000 for the environmental improvements project at the Waco, Texas VA Medical Center.
-$3,500,000 of the $4,933,000 requested for the advance planning fund.
-$1,500,000 of the $3,500,000 requested for the design fund.
The budget proposes changing the major construction cost limitation from $3,000,000 or more to $5,000,000 or more. This would increase the limit of the minor construction appropriation accordingly. The bill includes language changing the current threshold for major construction projects to $4,000,000 or more. The minor construction threshold is modified accordingly.
The specific amounts recommended by the Committee are as follows:
DETAIL OF BUDGET REQUEST
[In thousands of dollars]
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Location and description Available through 1997 1998 request House recommendation
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Medical Program:
Replacement and modernization: Memphis, TN, Seismic correction $73,000 $34,600 $34,600
Outpatient improvements:
Asheville, NC--ambulatory care addition 0 26,300
Lyons, NJ, ambulatory care addition 0 21,100
Subtotal, outpatient improvements 0 47,400
Patient environment:
Omaha, NE, ward renovations for patient privacy 0 7,700
Waco, TX, environmental improvements 0 26,000
Subtotal, patient environment 0 33,700
Advance planning fund: Various stations 4,933 1,433
Design fund: Various stations 3,500 2,000
Asbestos abatement: Various stations 4,000 4,000
Seismic vulnerability studies: Various stations 1,000 1,000
Claims Analyses: Various stations 500 500
Total, major VHA 73,000 48,533 124,633
National Cemetery Program:
Cleveland, OH, new cemetery, Phase I development 1,958 12,642 12,642
Fort Sam Houston, TX, burial area expansion 9,400 9,400
National Memorial Cemetery of Arizona, gravesite development 9,100 9,100
Advance planning fund: Various stations 750 750
Less: Design fund -925 -925
Subtotal, NCS 1,958 30,967 30,967
Total construction, major projects 74,958 79,500 155,600
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CONSTRUCTION, MINOR PROJECTS
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Fiscal year 1998 recommendation $175,000,000
Fiscal year 1997 appropriation 175,000,000
Fiscal year 1998 budget request 166,300,000
Comparison with fiscal year 1997 appropriation 0
Comparison with fiscal year 1998 budget request +8,700,000
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The construction, minor projects appropriation provides for constructing, altering, extending, and improving any of the facilities under the jurisdiction or for the use of the VA, including planning, architectural and engineering services, and site acquisition, where the estimated cost of a project is less than $4,000,000. Emphasis is placed on correction of code and environmental deficiencies in this appropriation request.
The Committee recommends $175,000,000 for the construction, minor projects appropriation in fiscal year 1998. The amount recommended is $8,700,000 above the budget request and is for converting inpatient space to outpatient activity use.
The budget proposes increasing the minor construction cost limitation from projects costing less than $3,000,000 to projects costing less than $5,000,000. The bill includes language increasing the minor construction threshold to $4,000,000. The budget also proposes bill language to allow the use of minor construction funding for capital contribution payments under the enhanced-use leasing program. The bill does not include language for this proposal.
The Committee is concerned that the minor construction account not be used for major construction projects. The cost threshold between major and minor VA construction projects is $3,000,000. Those projects costing $3,000,000 or more are decided on an individual basis in the major construction account. Those projects estimated to cost less than $3,000,000 are funded in the minor construction account. The VA is given discretion as to the type and location of minor projects. The VA planned two minor construction projects at the same location. Each project would have been under $3,000,000, but together they would exceed $3,000,000. This proposal would effectively circumvent the minor construction cost limitation. It was never intended that the minor construction account be used to fund a project which exceeded the cost limitation. In recommending that the threshold for minor projects be raised in fiscal year 1998 to $4,000,000, the Committee does not expect that multiple minor projects at the same location will exceed the new limitation.
Within the amount recommended, the VA is urged to utilize $300,000 for an additional columbarium of 5,000 niches at the National Memorial Cemetery of the Pacific. The additional niches would allow the cemetery to accommodate the cremated remains of veterans for an additional eight years.
PARKING REVOLVING FUND
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Fiscal year 1998 recommendation 0
Fiscal year 1997 appropriation $12,300,000
Fiscal year 1998 budget request 0
Comparison with fiscal year 1997 appropriation -12,300,000
Comparison with fiscal year 1998 budget request 0
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This appropriation provides funds for the construction, alteration, and acquisition (by purchase or lease) of parking garages at VA medical facilities. The Secretary is required under certain circumstances to establish and collect fees for the use of such garages and parking facilities. Receipts from the parking fees are to be deposited in the revolving fund and can be used to fund future parking garage initiatives.
No new budget authority is requested for the parking revolving fund in fiscal year 1998. Leases will be funded from parking fees collected. The bill includes the requested language permitting operation and maintenance costs of parking facilities to be funded from the medical care appropriation.
GRANTS FOR CONSTRUCTION OF STATE EXTENDED CARE FACILITIES
------------------------------------------------------------
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Fiscal year 1998 recommendation $60,000,000
Fiscal year 1997 appropriation 47,397,000
Fiscal year 1998 budget request 41,000,000
Comparison with fiscal year 1997 appropriation +12,603,000
Comparison with fiscal year 1998 budget request +19,000,000
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This program provides grants to assist States to construct State home facilities for furnishing domiciliary or nursing home care to veterans, and to expand, remodel or alter existing buildings for furnishing domiciliary, nursing home or hospital care to veterans in State homes. A grant may not exceed 65 percent of the total cost of the project. Grants for State nursing facilities may not provide for more than four beds per thousand veterans in any State.
The Committee recommends $60,000,000 for grants for construction of State extended care facilities in fiscal year 1998. This amount represents an increase of $19,000,000 above the budget request and is to address the high demand from States for this important program.
Nevada has submitted an application for a 181-bed skilled nursing home in the southern part of the State. Nevada is one of the few States that does not host a skilled nursing facility, and intends to use this federal grant to meet the nursing care needs of the burgeoning veteran population. The Committee urges VA to give priority to Nevada's application, in accordance with established criteria, so that this project can move forward expeditiously in fiscal year 1998.
GRANTS FOR THE CONSTRUCTION OF STATE VETERAN CEMETERIES
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Fiscal year 1998 recommendation $10,000,000
Fiscal year 1997 appropriation 1,000,000
Fiscal year 1998 budget request 10,000,000
Comparison with fiscal year 1997 appropriation +9,000,000
Comparison with fiscal year 1998 budget request 0
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Public Law 95-476 established authority to provide aid to States for establishment, expansion, and improvement of State veterans' cemeteries. States receive financial assistance to provide burial space for veterans which serves to supplement the burial services provided by the national cemetery system. The cemeteries are operated and permanently maintained by the States. A grant may not exceed 50 percent of the total value of the land and the cost of improvements. The remaining amount must be contributed by the State.
The budget proposes legislation to increase the maximum federal share of the costs of construction from 50 percent to 100 percent. The legislation would also permit federal funding of up to 100 percent of the cost of initial equipment for cemetery operations. The State would remain responsible for paying all costs related to the cemetery operations, including the costs for subsequent equipment purchases. Whether or not this revised State grant program will replace the national cemetery construction program, as is proposed by the VA, is a matter to be determined.
The Committee recommends the budget request of $10,000,000 for grants for the construction State veterans cemeteries in fiscal year 1998.
ADMINISTRATIVE PROVISIONS
(INCLUDING THE TRANSFER OF FUNDS)
The bill contains the seven administrative provisions requested by the Administration. These provisions were also carried in the 1997 Appropriations Act.
TITLE II
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
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Fiscal year 1998 recommendation $25,823,255,000
Fiscal year 1997 appropriation 19,453,809,422
Fiscal year 1998 budget request 24,573,255,000
Comparison with fiscal year 1997 appropriation +6,369,455,558
Comparison with fiscal year 1998 budget request +550,000,000
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The Department of Housing and Urban Development (HUD) was established by the Department of Housing and Urban Development Act of 1965. In that Act, the Congress recognized the importance of housing and urban development to the Nation and tasked HUD to administer four major categories of programs: FHA mortgage insurance, subsidized housing, community and neighborhood development, and regulatory functions.
Since 1995, HUD has been scrutinized carefully by the Congress, and in particular, the Committees on VA/HUD Appropriations and Banking and Financial Services. During that time, HUD has made attempts to better focus its mission, to improve management practices and to redefine programs. As in most large bureaucratic organizations, changing past practices is a slow, challenging process. Yet, HUD must change its administrative and programmatic structures if the Department is to retain its relevance in the future.
HUD's new Secretary, Andrew Cuomo, plans to improve management functions at HUD, to improve HUD's ability to monitor programs, to measure performance and to enforce rules and regulations. The Committee agrees that HUD must take these steps as it moves towards downsizing its staff and making major programmatic changes.
In addition to the need for major programmatic reforms, the Department must improve its ability to account for the expenditure of funds by providing accurate assessments of how its programs affect the recipients--for example, how many families benefit from the receipt of housing assistance, what is the cost of developing new homes, how many neighborhoods have been revitalized and at what cost, and how many families have received jobs as a result of neighborhood revitalization efforts.
To the degree a program can show positive results, HUD should study whether its parameters can be applied effectively to other programs. For example, the HOME, CDBG and the Low-Income Housing Tax Credit programs work well throughout the country. They encourage public-private partnerships, local leadership, and proper incentive structures. They leverage federal funding with other resources. Together these principles provide poor neighborhoods with access to both financial and social capital.
Unfortunately, the positive results of these programs and others are overshadowed by problems which continue to plague the Department. For example, the discovery of billions of dollars of unspent section 8 reserves leaves the Committee incredulous and begs the question of why it has taken HUD so long to account for these funds.
In February 1996, HUD began an extensive examination of the section 8 tenant-based reserve accounts at all housing agencies to identify unspent budget authority--called contract reserves. This unexpended budget authority accumulated over the years since the program began in 1974. In the past, HUD entered into multiyear contracts--many for as long as 15 years--with housing agencies to provide rental assistance to low-income families. However, over time, housing agencies did not expend all the funding set aside for these contracts, thus creating contract reserves. HUD's policy has been to view these reserves as a buffer that housing agencies could use against inflation, unanticipated changes in housing markets, and declines in tenant income, thus ensuring that assistance to low-income families would not lapse in the face of economic hardship.
By the end of fiscal year 1996, HUD's reconciliation of its accounts with housing agencies had identified approximately $1,600,000,000 in contract reserves, which HUD used to extend the funding for expiring section 8 tenant-based contracts. This action, which occurred too late in the budget process to be reflected in the fiscal year 1997 budget, appeared for the first time in the fiscal year 1998 budget, when HUD reduced its request by $1,600,000,000.
Because HUD's need for new budget authority to renew section 8 contracts doubled from fiscal year 1997 to 1998, and because requests in succeeding years are projected to continue to rise rapidly, the Committee requested that the General Accounting Office (GAO) review HUD's fiscal year 1998 budget request for section 8 contract renewal funding. GAO briefed the Committee in February 1997 and provided a statement for the record for the Committee's hearing on March 18, 1997. Part of the briefing, as well as GAO's statement, disclosed that HUD was aware of significant unspent project reserves in its tenant-based section 8 program and that once HUD completed its reconciliation of all housing agency accounts, the likely total amount of reserves would far exceed the $1,600,000,000 that HUD had already disclosed in its fiscal year 1998 budget request. However, when HUD initially submitted its budget request to Congress and at the time of the Committee's hearing in March, the total amount of unspent reserves was still unknown. Therefore, based on GAO's testimony and other pertinent information, the Committee directed HUD to identify and to report on the amount of section 8 reserves in all housing agencies.
In response to that recommendation, the Secretary informed Chairman Lewis in April 1997 that the Department had identified an amount of additional reserves--estimated at $5,800,000,000, net of certain deductions--that could be used to offset the $5,600,000,000 increase in the cost of section 8 contract renewals for fiscal year 1998. However, in reporting the net amount of prior years' budget authority available for extending contracts, the Secretary did not disclose the gross amount of contract reserves identified through the reconciliation process, which the Department estimates to be $10,300,000,000.
To arrive at the $5,800,000,000 figure, HUD deducted several amounts for various purposes from the total amount of $10,300,000,000 in unexpended appropriations. Some of the amounts are based on internal policy assumptions still under consideration by the Secretary. The deductions totaled over $4,500,000,000 and include (1) $133,000,000 to fully fund expected budget authority shortfalls in existing multiyear contracts; (2) $1,300,000,000 to cover contingencies for unforeseen increases in subsidy needs, an amount that is equal to 2 months of annual budget authority; (3) $2,200,000,000 for unexpired restricted reserves--the amount of reserves currently set-aside to fund renewals previously extended in fiscal years 1995-97 with no new funding; and (4) $900,000,000 to cover the cost of converting HUD's section 8 payment process from one that operates on a fiscal year basis to one that operates on a calendar year basis. Without further explanation from HUD, the Committee cannot be certain whether these deductions are within HUD's prerogative to exercise or whether statutory authority is needed.
To provide assurance that the amount of excess reserves identified by HUD's process of reconciling housing agency accounts was accurate, HUD hired the accounting firm of Price Waterhouse to audit the reserve numbers. However, because of difficulties encountered in verifying the amounts that HUD used to compute the $5,800,000,000 estimate of available reserves, Price Waterhouse was unable to provide any level of assurance on the excess reserves. As an alternative, Price Waterhouse and HUD developed specific accounting procedures to identify excess reserves. On the basis of these procedures, Price Waterhouse's preliminary estimate of the net excess budget authority minus HUD's proposed uses is $7,200,000,000--$1,400,000,000 more than HUD previously estimated. HUD expects Price Waterhouse to issue its final report on the agreed-upon procedures in late June 1997.
The Committee concurs with HUD that some level of reserves is necessary to ensure that the flow of assistance to program participants continues when unforeseen circumstances arise, such as increases in subsidy amounts or delays in program funding. However, reduced contract terms from 15 years to one year have decreased the need to maintain large reserve accounts at each housing agency. Furthermore, the Committee is concerned with the difficulties HUD encountered in identifying, verifying, and managing contract reserves.
Last year, the Committee stated that HUD must be in a position to account for every dollar provided to it by Congress. Program reserves are no exception. Not only must HUD be able to specify the total amount of program reserves, it must also be able to clearly document and support its policy positions on using reserves. If the program were not so important to millions of families and elderly and disabled persons that depend upon it, the Committee would have recommended an appropriation of $0, pending a full report from HUD and the GAO and an accurate accounting of excess reserve funds.
Therefore, to ensure that the Committee is adequately informed of events and decisions that affect large amounts of unexpended budget authority, the Committee directs HUD to establish more substantial and frequent lines of communication with the Committee and to keep the Committee apprised of its analysis of section 8 budget needs. Until this analysis is complete, the Committee recommends a rescission of $565,000,000 from excess section 8 reserves. This rescission may be adjusted as the House and Senate conference the appropriation bill and as HUD completes its analysis of section 8 budget needs.
PUBLIC AND INDIAN HOUSING
HOUSING CERTIFICATE FUND
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Fiscal year 1998 recommendation $10,393,000,000
Fiscal year 1997 appropriation 3,600,000,000
Fiscal year 1998 budget request 10,676,000,000
Comparison with fiscal year 1997 appropriation +5,703,000,000
Comparison with fiscal year 1998 budget request -283,000,000
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The Housing Certificate Fund consolidates the existing section 8 voucher and certificate rental assistance programs. In addition, it provides funding for activities funded through the Prevention of Resident Displacement account in the 1997 VA/HUD Appropriations measure, including renewal of expiring section 8 contracts, section 8 amendments, the witness relocation program, displaced family relocation, the conversion of section 23 projects to section 8 projects, and the family unification program.
The Committee recommends $10,393,000,000 for the Housing Certificate Fund, which includes $9,200,000,000 for section 8 contract renewals as agreed in the Budget Resolution, $850,000,000 for section 8 contract amendments and $343,000,000 for section 8 relocation assistance. The relocation assistance amount includes funds for the family self-sufficiency program, witness relocation, section 23 conversions and tenant protection set-asides. The bill includes funding to continue a $50,000,000 set-aside for rental assistance to disabled families who are displaced as a result of public housing complexes being designated for elderly only residents. The account does not include funding for new incremental assistance or regional opportunity counseling as requested by the President.
Amounts for Public and Indian Housing's portion (primarily tenant-based assisted housing) of the contract renewal estimate are based on two values: one is the number of expiring housing units in the certificate, voucher, and moderate rehabilitation programs; and the other is the average annual unit cost of $6,386. GAO's March 18, 1997, report to this Committee disclosed that the unit cost included several allowances for contingencies. In addition, on May 13, 1997, the Secretary testified before the Senate Appropriations Subcommittee that HUD was continuing to review issues that GAO raised with respect to the annual unit cost of section 8 contracts.
As a result of HUD's continued review and analysis, HUD's Office of Public and Indian Housing reported that the unit cost included in the budget request could be overstated by several hundred dollars per year for over one million housing units because of duplicate allowances for (1) the section 8 administration fee and (2) a 2-week reserve to allow for unknown contingencies.
Therefore, because HUD has not yet finalized a new estimate for the average unit cost, the Committee recommends that before the appropriations legislation goes to a House-Senate conference, HUD provide the Appropriations Committees an accurate figure for average unit cost of tenant-based section 8 housing and inform the Committees of the resulting impact on the budget request.
Funding for the Preservation program is not included in the Committee's recommendation based upon the findings of the GAO draft report on the program. Last year, this Committee requested GAO to review the costs of this program and its administration. In its draft report, which is not yet final, GAO concludes that the program requires substantial reform to reduce costs to reasonable levels and to ensure that program rules are followed in a consistent manner. These reforms, which are substantial, ought to be considered by the authorizing committee. The Committee remains concerned about preservation of affordable housing, but not at an unacceptable cost to the American taxpayer.
The Committee believes that section 8 tenant-based rental assistance is one of the most effective tools for helping individuals with mental and physical disabilities live integrated lives in their home communities. It is also the program that can most quickly provide alternative resources to individuals with disabilities, who would otherwise have been eligible for Federally assisted housing units now designated as `elderly-only.' Many individuals with disabilities are currently on waiting lists for housing in the community. The Committee intends for these funds set aside within the housing certificate fund for rental assistance for disabled persons to be used to help these individuals and to offset any loss of public and assisted housing that has been designated as `elderly-only.'
Language has been included in pending housing authorization legislation that clarifies that these funds are applicable wherever there has been a loss of assisted or public housing and believes that this clarification will help HUD simplify administration of the program. The Committee strongly encourages housing authorities to work with individuals with disabilities and their advocates to ensure that this critically needed rental assistance get to the people who need it.
The Committee recommends delaying for three months the reissue of section 8 rental assistance, limiting the annual adjustment factor for high cost units and reducing the annual adjustment factor by 1% on those units that do not experience turnover due to attrition.
PUBLIC HOUSING CAPITAL FUND
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Fiscal year 1998 recommendation $2,500,000,000
Fiscal year 1997 appropriation 2,700,000,000
Fiscal year 1998 budget request 2,500,000,000
Comparison with fiscal year 1997 appropriation -200,000,000
Comparison with fiscal year 1998 budget request 0
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The Public Housing Capital Fund consolidates all current public housing capital programs into one account, including public housing development, modernization and amendments.
The Committee recommends funding the Public housing capital fund account at $2,500,000,000, which is the level requested by the President. Though this level of funding is less than the level appropriated in fiscal year 1997, the Indian housing development program, which was funded at $200,000,000 in fiscal year 1997, is now included in the Native American housing block grant account.
Set-asides include $30,000,000 for technical assistance activities under section 6(j) and $5,000,000 is for the Tenant Opportunity Program.
PUBLIC HOUSING OPERATING FUND
(INCLUDING TRANSFERS OF FUNDS)
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Fiscal year 1998 recommendation $2,900,000,000
Fiscal year 1997 appropriation 2,900,000,000
Fiscal year 1998 budget request 2,900,000,000
Comparison with fiscal year 1997 appropriation 0
Comparison with fiscal year 1998 budget request 0
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Operating subsidies are provided to public housing authorities to supplement tenant rental contributions and other income to assist in financing the operation of public housing projects. Operating subsidies are required to maintain operating and maintenance services and to provide for minimum project reserves. The performance funding system (PFS) formula is the primary system for determining operating subsidy amounts.
The Committee recommends funding operating subsidies at the level requested by the President of $2,900,000,000. In deference to the Banking Committee, the Committee has not included reform measures, pending enactment of H.R. 2, the Housing Opportunity and Responsibility Act of 1997. The Committee urges the House and the Senate to resolve their issues quickly as they move through the legislative process in order to make permanent the reforms necessary to enable housing authorities to operate more effectively.
Debate continues about the potential impact of welfare reform on HUD's low-income housing. Despite grave predictions, little substantive, quantifiable data has been presented to the Committee about these impacts. Therefore, the Committee directs HUD's office of Policy Development and Research, along with the General Accounting Office, to study this issue, particularly the effects that welfare reform will have upon PHA's operating costs and the income levels of public housing residents and to report to the Committee on their findings by February 1, 1998.
DRUG ELIMINATION GRANTS FOR LOW-INCOME HOUSING
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Fiscal year 1998 recommendation $290,000,000
Fiscal year 1997 appropriation 290,000,000
Fiscal year 1998 budget request 290,000,000
Comparison with fiscal year 1997 appropriation 0
Comparison with fiscal year 1998 budget request 0
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Drug elimination grants are provided to public housing agencies and Indian housing authorities to eliminate drug-related crime in housing developments. PHAs may use funds to employ security personnel and investigators, provide physical project improvements to enhance security, support tenant patrols in cooperation with local law enforcement agencies, develop innovative programs to reduce drugs, and provide resident groups with funds to develop security and drug abuse prevention programs.
The Committee recommends funding this program at $290,000,000, the level requested by the President. The Committee provides a $10,000,000 set-aside for efforts to combat violent crime in public and assisted housing under Operation Safe Home administered by the HUD Inspector General and $10,000,000 for the Inspector General for other Operation Safe Home activities. The Committee directs HUD to develop a system for maintaining statistics on the impact of the Drug elimination program in subsidized housing, including the incidence of crime and the decrease or increase of criminal activities after receipt of drug elimination grant funds.
The Committee is pleased with the Eisenhower Foundation's youth development and crime prevention program in public housing. This program is based on safe havens, police mini-stations, civilian and police mentoring of youth, stay-in-school counseling and welfare to work initiatives. Crime has been reduced by 20 to 35% in scientific evaluations of community policing mini-stations which share the same space with youth safe havens. The Committee hopes that HUD, which currently administers funding for this program, will continue to support and expand this most worthwhile initiative.
REVITALIZATION OF SEVERELY DISTRESSED PUBLIC HOUSING (HOPE VII)
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Fiscal year 1998 recommendation $524,000,000
Fiscal year 1997 appropriation 550,000,000
Fiscal year 1998 budget request 524,000,000
Comparison with fiscal year 1997 appropriation -26,000,000
Comparison with fiscal year 1998 budget request 0
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The Revitalization of Severely Distressed Public Housing program awards competitive grants to public housing authorities to enable them to demolish obsolete projects, or to redevelop and revitalize the sites on which the projects are located. In addition, the grants may provide replacement housing for those families displaced by demolition to avoid or lessen concentrations of very low-income families.
The Committee recommends funding this program at the requested level of $524,000,000, with a set-aside of $5,000,000 for technical assistance. The Committee requests the GAO to continue their analysis of the HOPE VI program. The Committee is particularly interested in the length of time between award and ground-breaking, obstacles that impede the program, the use of public-private partnerships, the level of leveraging activity, the impact of the project on the surrounding neighborhood, an analysis of whether a matching requirement should be considered and other recommendations to the program. GAO should report to the Committee by February 1, 1998.
The Committee is aware of the Campus Affiliates Program, a unique partnership between HUD, the Housing Authority of New Orleans, higher education and the private sector. This program has begun to meet the needs of public housing residents in New Orleans by providing assistance and activities that foster self-sufficiency. The Committee believes HUD should continue to participate in this initiative.
NATIVE AMERICAN HOUSING BLOCK GRANTS
(INCLUDING TRANSFER OF FUNDS)
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Fiscal year 1998 recommendation $650,000,000
Fiscal year 1997 appropriation 0
Fiscal year 1998 budget request 485,000,000
Comparison with fiscal year 1997 appropriation +650,000,000
Comparison with fiscal year 1998 budget request +165,000,000
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The Native American Housing Assistance and Self-Determination Act of 1996 authorized the Native American Housing Block Grants program. This program provides funds to Indian tribes and their tribally designated housing entities to help them address housing needs within their communities. Until this year, Native American programs have been funded with portions of other public housing funds.
The Committee recommends increasing the funds available for this program above the President's request of $485,000,000 to $650,000,000. HUD's Native American housing program faces serious challenges. These challenges are the result of a number of factors, including the remoteness of Indian reservations, limited resources, land-use restrictions, statutory hiring preferences and scarce maintenance funds.
HUD has not paid adequate attention to Indian housing programs, either in its funding requests or in building tribal capacity and technical expertise to carry out effective affordable housing programs. Other organizations, like the Neighborhood Reinvestment Corporation, Habitat for Humanity and the FNMA are working closely with tribes to extend conventional mortgage financing to tribal trust lands. HUD should be far more proactive in exploring ways to generate capital on Indian reservations and is directed to prepare a report on this issue with recommendations to the Congress by February 1, 1998.
INDIAN HOUSING LOAN GUARANTEE FUND PROGRAM ACCOUNT
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Program account Limitation on direct loans
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Fiscal year 1998 recommendation $3,000,000 $36,900,000
Fiscal year 1997 appropriation 3,000,000 36,900,000
Fiscal year 1998 budget request 3,000,000 36,900,000
Comparison with fiscal year 1997 appropriation 0 0
Comparison with fiscal year 1998 budget request 0 0
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Section 184 of the Housing and Community Development Act of 1992 establishes a loan guarantee program for Native Americans to build or purchase homes on trust land. This program provides access to sources of private financing for Indian families and Indian housing authorities who otherwise could not acquire financing because of the unique legal status of Indian trust land. This program provides the financial vehicle for approximately 20,000 families to construct new homes or purchase existing properties on reservations. The budget requests $3,000,000 to support loan guarantees totaling $36,900,000. The bill includes the requested program subsidy and loan guarantee limitation.
COMMUNITY PLANNING AND DEVELOPMENT
HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS
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Fiscal year 1998 recommendation $204,000,000
Fiscal year 1997 appropriation 171,000,000
Fiscal year 1998 budget request 204,000,000
Comparison with fiscal year 1997 appropriation +33,000,000
Comparison with fiscal year 1998 budget request 0
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The Housing Opportunities for Persons with AIDS (HOPWA) program is authorized by the Housing Opportunities for Persons with AIDS Act, as amended. The purpose of the program is to provide states and localities with resources and incentives to devise long-term comprehensive strategies for meeting the housing needs of persons with HIV/AIDS and their families. Government recipients must have a HUD-approved Comprehensive Plan/Comprehensive Housing Affordability Strategy (CHAS), with funds allocated among eligible grantees based on section 854(c) of the National Affordable Housing Act.
The Committee recommends funding this program at the level requested by the President and has included authority to HUD to make small, noncompetitive grants to nonprofit organizations that provide meals to homebound persons with AIDs. In the report accompanying the 1997 VA/HUD Appropriations measure, the Committee requested GAO to review several aspects of the HOPWA program. Based on recommendations in this report, the Committee directs HUD: (1) to examine changes to the Ryan White funding formulas, determine whether the HOPWA formula should be more reflective of current AIDS cases, and make appropriate recommendations to the Congress and to specify that grantees must include in planning the use of HOPWA funds, similar to the Ryan White Program; (2) to examine the feasibility of requiring a recipient of HOPWA funds to have some level of matching funds or services to stretch the impact of limited HOPWA funding; (3) to implement a tracking system to ensure that all reports are received and processed by HUD in a timely manner; and (4) to issue clear guidance to grantees for updating the information and to establish a means of ensuring that grantees update information as required.
COMMUNITY DEVELOPMENT BLOCK GRANTS
(INCLUDING TRANSFER OF FUNDS)
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Fiscal year 1998 recommendation $4,600,000,000
Fiscal year 1997 appropriation 4,600,000,000
Fiscal year 1998 budget request 4,600,000,000
Comparison with fiscal year 1997 appropriation 0
Comparison with fiscal year 1998 budget request 0
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Title I of the Housing and Community Development Act of 1974, as amended, authorizes the Secretary to make grants to units of general local government and states for local community development programs. The primary objective of the block grant program is to develop viable urban communities and to expand economic opportunities, principally for persons of low- and moderate-income.
The Committee recommends appropriating $4,600,000,000 for community development grants in fiscal year 1998. Set-asides within the CDBG account include: $67,000,000 for Native Americans; $60,000,000 for the Lead-Based Paint Hazard Reduction program; $50,000,000 for the Economic Development and Social Services program; $2,100,000 for the Housing Assistance Council; $1,500,000 for the National American Indian Housing Council; $16,700,000 for the Housing Opportunity Program Extension Act of 1996 (Pub. L. 104-120); and $30,000,000 for Youthbuild. The Committee does not recommend making Youthbuild into a separate program account as requested by the President.
The Committee wishes to reiterate and emphasize the concerns it stated in its report on the fiscal year 1997 VA/HUD appropriations bill regarding the importance of service coordinators in public housing serving elderly and disabled persons. As the executive director of the Milwaukee Housing Authority testified during the fiscal year 1998 hearings, such coordinators `have been a godsend,' have made sustainable the co-existence of elderly and non-elderly disabled persons in that authority's seven high-rise mixed population buildings, and have reversed the decline in applications by needy elderly persons.
As requested by the President, the Committee is providing funding for service coordinators as part of the $50,000,000 set-aside for Economic Development and Supportive Services, and expects the Department to utilize an adequate portion of the set-aside for this purpose. The Committee is also concerned about other conditions that may have been placed by the Department on EDSS funding for service coordinators, such as providing grants only to housing authorities that had not received grants in the past, requiring authorities to enter into partnership agreements with other agencies and organizations before applying, and emphasizing funding only for new or significantly expanded services. These requirements may make sense for other aspects of the EDSS program, but seem counterproductive when the objective is to assist housing authorities in continuing to make available the tested and proven benefits that service coordinators for the elderly and disabled provide. Because of the importance the Committee