Jan. 5, 1996: Congressional Record publishes “VETERANS' MEDICAL BENEFITS”

Volume 142, No. 3 covering the 2nd Session of the 104th Congress (1995 - 1996) was published by the Congressional Record.

The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.

“VETERANS' MEDICAL BENEFITS” mentioning the U.S. Dept of Labor was published in the Senate section on pages S102-S108 on Jan. 5, 1996.

The publication is reproduced in full below:

VETERANS' MEDICAL BENEFITS

Mr. WARNER. Mr. President, I ask unanimous consent that the Senate now turn to consideration of calendar 264, S. 991.

The PRESIDING OFFICER. Is there objection to the immediate consideration of the bill?

There being no objection, the Senate proceeded to consider the bill, which had been reported from the Committee on Veterans' Affairs, with an amendment to strike all after the enacting clause and inserting in lieu thereof the following:

SECTION 1. EXTENSION OF EXPIRING AUTHORITIES.

(a) Authority To Provide Priority Health Care for Certain Veterans Exposed to Toxic Substances.--(1)(A) Effective June 29, 1995, section 1710(e)(3) of title 38, United States Code, is amended by striking out ``after June 30, 1995,'' and all that follows through ``December 31, 1995'' and inserting in lieu thereof ``after December 31, 1996''.

(B) Any hospital or nursing home care or medical services furnished by the Secretary of Veterans Affairs by virtue of section 1710(a)(1)(G) of title 38, United States Code, during the period beginning on June 30, 1995, and ending on the date of the enactment of this Act is hereby ratified.

(2) Section 1712(a)(1)(D) of such title is amended by striking out ``December 31, 1995,'' and inserting in lieu thereof ``December 31, 1996,''.

(b) Drug and Alcohol Abuse and Dependence.--Section 1720A(e) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(c) Pilot Program for Noninstitutional Alternatives to Nursing Home Care.--Section 1720C(a) of such title is amended by striking out ``September 30, 1995,'' and inserting in lieu thereof ``December 31, 1996,''.

(d) Demonstration Project to Guarantee Adjustable Rate Mortgages.--Section 3707(a) of such title is amended by striking out ``fiscal years 1993, 1994, and 1995'' and inserting in lieu thereof ``fiscal years 1993 through 1997''.

(e) Agreements for Housing Assistance for Homeless Veterans.--Section 3735(c) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(f) Use of Data on Compensation for Certified Registered Nurse Anesthetists.--(1) Effective March 31, 1995, section 7451(d)(3)(C)(iii) of such title is amended by striking out

``April 1, 1995'' and inserting in lieu thereof ``December 31, 1999''.

(2) The use of any director of a Department of Veterans Affairs health-care facility of data on rates of compensation paid to certified nurse anesthetists in a labor market area under section 7451(d)(3)(C) of title 38, United States Code, during the period beginning on April 1, 1995, and ending on the date of the enactment of this Act is hereby ratified.

(g) Health Professional Scholarship Program.--Section 7618 of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1996''.

(h) Enhanced-Use Leases of Real Property.--Section 8169 of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof

``December 31, 1997''.

(i) Authority for Community-Based Residential Care for Homeless Chronically Mentally Ill Veterans and Other Veterans.--Section 115(d) of the Veterans' Benefits and Services Act of 1988 (38 U.S.C. 1712 note) is amended by striking out ``September 30, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(j) Demonstration Program of Compensated Work Therapy.--Section 7(a) of Public Law 102-54 (38 U.S.C. 1718 note) is amended by striking out ``fiscal years 1961 through 1995'' and inserting in lieu thereof ``the period beginning on October 1, 1991, and ending on December 31, 1997,''.

(k) Authority To Make Grants for Assistance in Furnishing Services and Assistance to Homeless Veterans.--(1) Section 3(a) of the Homeless Veterans Comprehensive Service Programs Act of 1992 (Public Law 102-590; 106 Stat. 5136; 38 U.S.C. 7721 note) is amended by striking out ``fiscal years 1993, 1994, and 1995,'' and inserting in lieu thereof ``fiscal years 1993 through 1997,''.

(2) Section 12 of such Act (106 Stat. 5142) is amended by striking out ``each of the fiscal years 1993, 1994, and 1995'' and inserting in lieu thereof ``each of fiscal years 1993 through 1997''.

(l) Homeless Veterans' Reintegration Projects.--(1) Section 738(e)(1) of the Stewart B. McKinney Homeless Assistance Act

(42 U.S.C. 11448(e)(1)) is amended by adding at the end the following:

``(D) $10,000,000 for fiscal year 1996.''.

(2) Section 741 of such Act (42 U.S.C. 11450) is amended by striking out ``October 1, 1995'' and inserting in lieu thereof ``October 1, 1996''.

(m) Effective Date.--Except as provided in subsections

(a)(1) and (f)(1), the amendments made by this section shall take effect on October 1, 1995.

Mr. SIMPSON. Mr. President, I am pleased to rise to comment briefly today, as chairman of the Veterans' Affairs Committee, on an important and, I think, non-controversial piece of legislation to extend the effective dates of certain legal authorities under which the Department of Veterans Affairs [VA] operates. Several of these authorities have expired recently. Except as I will discuss in a moment, each of these

``extender'' provisions was approved by the Veterans' Affairs Committee, by a unanimous voice vote, when the Committee marked up S. 991 on September 20, 1995, and ordered that that bill be favorably reported without written report.

In explaining this bill, Mr. President, let me first itemize the provisions of the bill as reported by the Veterans' Affairs Committee on September 20, 1995. Then I will explain the amendments to those provisions contained within a substitute amendment which I have offered today with the concurrence of the committee's ranking minority member, Senator Jay Rockefeller. To summarize, I introduced S. 991 as a ``by request'' bill on behalf of the administration on June 29, 1995. It was reported in amended form by the Veterans' Affairs Committee on September 20, 1995. The bill would be further amended today--to incorporate, for example, extender provisions contained in legislation introduced in the other body--in order to facilitate the other body's approval of this legislation before the current year ends.

As for the bill as approved by the Veterans' Committee on September 20, the first section of that bill would extend through next year extant legal authorities which grant to so-called ``environmental veterans''--specifically, those who were exposed to ionizing radiation during service; those who served in the Republic of Vietnam and who are, therefore, presumed to have been exposed to dioxin; and those who served in the Persian Gulf war and who are thought, therefore, to have been exposed to toxic substances and other environmental hazards--to priority access to VA hospital care services. That section would also extend through this year a similar ``priority access'' provision applicable to outpatient care services that applies to Persian Gulf veterans due to the apparently extraordinary--and, to date, still inadequately understood--maladies suffered by those veterans.

The Veterans' Affairs Committee intends to hold extensive hearings in 1996 on an issue that is commonly referred to as ``eligibility reform,'' that is, the proposed recodification--and, we hope, simplification if possible--of very complex rules which presently govern which veterans shall have priority access to which categories of health care services. A number of eligibility reform proposals have been advanced--by the other body; by the VA; and by Veterans Service Organizations--all of which would, in some way, effect the relative priority given now to ``environmental veterans'' who have priority access to VA health care services under the rules we would extend today.

My thinking on the question of moving now to change substantively the eligibility rules for ``environmental veterans''--an action which the other body would apparently like to take now in isolation from other eligibility reform issues--is this: the committee will be looking into this question, and related questions, in considerable depth in 1996 when it takes up the broader issue of eligibility reform. That being the case, it is appropriate for us now to extend for one year the current rules as they are currently in force until we have a chance to study the House proposal to scale back special eligibility rules for some, or all, ``environmental veterans.'' That study will be part of the analysis which we will undertake on the entire gamut of health care eligibility issues.

While I think it is appropriate to defer consideration of environmental veterans' eligibility rules for a period, I also think it would be wholly inappropriate for the Congress now to allow some or all of these priority access rules to ``die a quiet death'' by simply declining to consider extending them further. Allowing these special access rules to expire--or making significant amendments to them--may be appropriate actions for the Congress to take. But they will not be appropriate until the Senate Veterans Affairs Committee has given such proposals the serious and thoughtful consideration they merit.

The Senate Committee will arrive at its own judgments on eligibility reform matters after it holds hearings, builds a record, and debates the issues. It will not take up such issues prematurely. And it will not take up such issues prematurely. And it will not take them up on a piecemeal basis. There will be time in 1996 to study the current rules governing access to VA health care by Persian Gulf, Vietnam and radiation-exposed veterans. In the interim, we should extend the current standards until such time as that study can take place.

The other provisions of law which we would extend today are far less controversial than those pertaining to the relative access of some classes of veterans to health care services. This bill would also, for example, extend VA's legal authority to contract for drug and alcohol abuse treatment services. It would, in addition, extend a number of legal authorities under which VA either itself provides, or contracts for others to provide, health care and other services to homeless veterans. It would extend VA's current pilot program on noninstitutional alternatives to nursing home care. Finally, it would extend: VA's Health Professional Scholarship Program; VA's authority to use local pay surveys to determine the appropriate level of locality pay for VA nurse anesthetists; and VA's authority to enter into certain property leasing transactions.

As I have noted, Mr. President, these provisions are relatively non-

controversial. All on the Committee were willing, at minimum, to allow the programs authorized by these provisions of law to continue--at least for a period while they are subjected to further analysis. The Senate Committee is unwilling at this time to ``kill'' any such provision of law, through inaction, as opposed to making an affirmative determination that the program ought to be terminated.

There has been, however, one unanticipated exception to the ``rule'' that the Veterans Committee would not terminate programs or benefits by declining to extend legal authorities previously enacted. That exception is the extension of VA authority to guarantee adjustable rate home mortgage loans (so-called ``ARMs'') which was approved by the Committee at markup but which would be excised from the bill under the amendment that I offer today.

The Congress approved a 3-year ``demonstration project'' in 1992 which authorized VA, for the first time, to include adjustable rate mortgages in its home loan guaranty program. It appears that the program has been a success, and I had hoped, therefore, to extend it. As distinguished from the other body, however--which proposed to make VA's authority to guarantee ARMs permanent--I had proposed when I introduced S. 991 to extend the ARM ``demonstration project'' for 2 more years before considering giving it permanent status so that the committee might have an opportunity to view the performance of such loans over a wider range of interest rates. The Veterans' Committee concurred with that judgment when it approved such a 2-year extension on September 20.

When the committee acted, however, it was relying on a preliminary, informal cost estimate provided by the Congressional Budget Office

[CBO]. That informal cost estimate indicated, in effect, that adjustable rate mortgages--at least the relatively conservative adjustable rate mortgages guaranteed by VA--are not significantly more likely than fixed rate mortgages to go into default and that, therefore, an extension in VA's authority to guarantee such loans would not subject the Government to significantly higher exposure to loss--

and, in turn, costs--than fixed rate home loans.

CBO, however, reconsidered its preliminary, informal view on the potential cost of VA guarantees of adjustable rate mortgage loans. By letter issued on October 25, 1995--which I request, Mr. President, be made part of this Record in its entirety--CBO concluded as follows:

Adjustable-rate mortgages involve a greater subsidy cost to the federal government than fixed rate mortgages (FPMs) because they have a higher likelihood of default. ARMs are more risky than FPMs, not only because interest rates can rise, but because home buyers with a given amount of income usually can qualify to borrow more money with an ARM than with a FPM, thereby becoming more financially leveraged. Thus, borrowers with the greatest risk can opt for an ARM over a FPM. This greater risk results in higher delinquency and foreclosure rates.

Based on this analysis, Mr. President, CBO estimated that an extension of VA's authority to guarantee ARMs would cost VA $36 million in fiscal year 1996 and $33 million in fiscal year 1997.

I was surprised, Mr. President, to learn of this cost estimate from CBO, especially since CBO did not so ``cost'' the legislation that enacted the ARM guarantee ``demonstration project'' just 3 years ago. As I understand it, VA guaranteed ARMs have more conservative underwriting standards than other ARMs. In addition, the monthly payments to be made by borrowers using VA guaranteed adjustable rate financing fluctuate less than payments under other ARMs since annual interest rate increases on VA-guaranteed ARMs are ``capped'' at 1 percent, rather than at 2 percent as is common practice. In light of these distinctions, the Veterans Affairs Committee has operated under the belief that VA guarantee ARMs would ``perform'' better than other ARM's--and that the Government, therefore, would not be exposed to inordinate loss. We had hoped to extend this ``demonstration project'' to see, through a review of VA's actual loss data, if that belief was well grounded.

Be that as it may, Mr. President, CBO's cost estimate makes such an extension impossible for all practical purposes. If this legislation were to propose an extension in this ``demonstration project,'' it would also have to propose money-saving legislation to ``offset'' the costs which CBO estimates would be incurred if the ARM extension were to be enacted. The committee has no such legislation to propose at this time; all cost-saving measures the committee was able to approve are already contained in the Veterans' Committee's portion of the budget reconciliation Balanced Budget Act now before the Congress. Accordingly, the chairman's amendment which I have proposed today would remove the ARM extender from S. 991.

There is another aspect of my substitute amendment that merits explanation. As I have discussed, the substitute would remove one home loan provision--the one which would have extended VA's ARM authority--

but one which would have extended VA's ARM authority--but it would also add to the bill four other home loan-related authorities. These provisions are drawn from legislation introduced in the other body. They are not controversial.

First, my amendment would extend for a 2 year period VA's authority to guarantee home loans having interest rates negotiated by the borrower with the lender. Until 1992, VA established, by administrative action, maximum permissible mortgage interest rates to be allowed on VA guaranteed mortgages are a given point in time. VA attempted to

``track'' market-set interest rates, but despite its best efforts, there often were differentials between market rates and VA-set rates, if only due to delays in administrative action.

Such differentials did not necessarily result in veteran-borrowers getting a ``good deal.'' More typically, when VA ceilings were set below prevailing rates, the ``spread'' was offset by the charging of so-called ``points.'' Those points were assessed to the seller--not the veteran-borrower--but again, that did not mean that the veteran got a

``good deal.'' Sellers' points were typically recovered by sellers through increases in the selling prices of homes. In short, they were

``passed through'' to the veteran-buyer; veteran-buyers gained no advantage, typically, even though the interest rates they were being charged appeared to be ``below market.'' Rather, they paid for the interest rate differential ``up front'' through higher purchase prices. My amendment's extension of the allowance of market-set interest rates--as is the result when rates are negotiated by the borrower in today's competitive marketplace--eliminates such distortions.

My amendment, in addition, would extend VA authority to guarantee

``energy efficient'' mortgages. Most would agree that improvements to homes to achieve energy efficiency are desirable. Since 1992, VA has permitted the costs incurred in adding such improvements to a home--

which improvements can, and often do, enhance the value of a property in the marketplace--to be ``rolled in'' to the mortgage loan-financed costs of the home. This program appears to have had some social utility, and insofar as the committee has been able to determine, it has not resulted in losses to the Government. Therefore, I propose today that this program be extended for 2 more years.

My amendment would, in addition, extend for 2 years VA's authority to allow lenders access to appraisals on the properties they finance. This provision, of course, is only reasonable; there is no reason for lenders not to have access to such information.

All three of these extenders--an extension in VA's authority to guarantee marketplace-set interest rate loans; an extension in VA's authority to guarantee ``energy efficient'' mortgages; and an extension in VA's allowance of access to property appraisals by lenders--seem, perhaps, to be ``no brainers'' to use a current vernacular. They are extensions of law, however, that rely on analysis that the Senate Committee has not had opportunity to evaluate. In addition, they are

``extenders'' which VA-proposed legislations--S. 991 as introduced by me on June 29, 1995, on the administration's behalf-did not request. I expect that the committee will study these provisions over the next 2 years. At that time, I expect that the committee will be in better position to consider permanent authorizations. In the meantime, I would suggest that these measures, which CBO has concluded would have no significant budgetary impact when it ``costed'' them for the other body, ought to be extended for 2 years.

My proposed amendment would also extend, for a 1-year period, VA's

``enhanced loan asset sale authority.'' This authority--which, in summary, facilitates the marketing of instruments by which sales of foreclosed VA-owned properties are financed--has already been approved by the committee, and the Congress, as part of the Balanced Budget Act. This provision, which will save the Government $35 million over a 7-

year period, will expire at the end of the year. We surely hope that the Balanced Budget Act will be approved before then, and that that legislation will affect an extension in this authority. Because, however, a lapse in such authority would be disruptive to VA's efforts to ``bundle'' and sell its mortgage-backed securities, my amendment would extend that authority through this legislation while the Congress considers further changes in the Balanced Budget Act.

Finally, Mr. President, my amendment would modify four of the expiration time frames approved by the Senate Committee when it considered this legislation in September. It would propose to extend through 1997--rather than through 1996, as approved by the committee--

VA's pilot program for noninstitutional alternatives to nursing home care. It would extend VA's authority to survey local communities for appropriate comparability pay data for nurse anesthetists through 1997 rather than through 1999. It would extend VA's Health professional Scholarship Program through 1997 rather than through 1996. And it would extend the McKinney Act's Homeless Veterans' Reintegration Project through 1997 rather than through 1996.

The purpose of these modifications, Mr. President, is to conform our bill more closely to the time frames approved by the other body and, thereby, to promote the prospects for agreement. I might also note that the fourth of these time frame modifications--the expansion of the McKinney Act's Homeless Veterans' Reintegration Project extension from 1 year to 2 years--is a matter that I know is one of deep personal concern to my good friend, the Senator from Minnesota.

In closing, Mr. President, let me say that I hope the Senate will approve S. 991 as favorably reported by the Veterans' Affairs Committee on September 20, 1995, and as further amended today. Let me say, as well, that I hope the other body will approve it expeditiously. It is good, sound legislation; there should be no controversy on it. Other matters can be resolved in this new year--and they will be resolved--so long as all who are concerned about the needs of the Nation's veterans continue to approach this serious business in the cooperative spirit that has been so productive in the past.

Mr. President, I appreciate the time that has been afforded me.

I ask unanimous consent a CBO cost estimate and an October 25, 1995, cover letter from June O`Neill be printed in the Record.

There being no objection, the material was ordered to be printed in the Record, as follows:

U.S. Congress,

Congressional Budget Office,

Washington, DC, October 25, 1995.Hon. Alan K. Simpson,Chairman, Committee on Veterans' Affairs, U.S. Senate,

Washington, DC.

Dear Mr. Chairman: The Congressional Budget Office (CBO) has reviewed S. 991, a bill to amend title 38, United States Code, and other statutes to extend VA's authority to operate certain programs, collect copayments associated with provision of medical benefits, and obtain reimbursements from insurance companies for care furnished, as ordered reported by the Senate Committee on Veterans' Affairs on September 20, 1995.

The bill would affect direct spending and thus would be subject to pay-as-you go procedures under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985. The bill would not affect the budgets of state of local governments.

If you wish further details on this estimate, we will be pleased to provide them.

Sincerely,

June E. O'Neill,

Director.

Enclosure.

Congressional Budget Office Cost Estimate

1. Bill number: S. 991.

2. Bill title: A bill to amend title 38, United States Code, and other statutes to extend VA's authority to operate certain programs, collect copayments associated with provisions of medical benefits, and obtain reimbursements from insurance companies for care furnished.

3. Bill status: As ordered reported by the Senate Committee on Veterans' Affairs on September 20, 1995.

4. Bill purpose: The bill would extend certain expiring authorities of the Department of Veterans Affairs. Contrary to the title of the bill, it would not affect copayments or reimbursements from insurance companies.

5. Estimated cost to the Federal Government: The following table summarizes the estimated budgetary impact of S. 991.

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1995 1996 1997 1998 1999 2000

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DIRECT SPENDING

Spending Under Current Law:

Estimated budget authority 37 0 0 0 0 0

Estimated outlays......... 37 0 0 0 0 0

Proposed Changes:

Estimated budget authority 0 36 33 0 0 0

Estimated outlays......... 0 36 33 0 0 0

Spending Under S. 991:

Estimated budget authority 37 36 33 0 0 0

Estimated outlays......... 37 36 33 0 0 0

SPENDING SUBJECT TO APPROPRIATIONS ACTION

Spending Under Current Law:

Budget authority 1,2...... 177 25 0 0 0 0

Estimated outlays......... 190 46 2 0 0 0

Proposed Changes:

Estimated authorization level.................... 0 144 79 13 0 0

Estimated outlays......... 0 117 93 26 0 0

Spending Under S. 991:

Estimated authorization level 1,2................ 177 168 79 13 0 0

Estimated outlays......... 190 163 95 26 0 0

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\1\ The 1995 figure is the amount already appropriated.

\2\ Amounts for fiscal years 1996 through 2000 are authorizations subject to appropriations action.

6. Basis of estimate: The estimate assumes enactment of the bill and appropriation of the authorized amounts for each fiscal year. CBO used historic spending rates for estimating outlays. The following section-by-section cost analysis addresses only those sections of the bill that would have a significant budgetary impact.

direct spending

Section 1(d) would give VA authority to guarantee adjustable-rate mortgages (ARMs) through 1997; previous authority expired on September 30, 1995. CBO estimates that this extension would cost $36 million in 1996 and $33 million in 1997.

Adjustable-rate mortgages involve a greater subsidy cost to the federal government than fixed-rate mortgages (FRMs) because they have a higher likelihood of default. ARMs are more risky than FRMs, not only because interest rates can rise, but because home buyers with a given amount of income can usually qualify to borrow more money with an ARM than with a FRM, thereby becoming more financially leveraged. Thus, the borrowers with the greatest risk can opt for an ARM over a FRM. This greater risk results in higher delinquency and foreclosure rates.

CBO bases its esimate on recent loan delinquencies reported by the Federal National Mortgage Association (Fannie Mae), the federal agency that has the most experience tracking the performance of adjustable-rate mortgages. Although data regarding the rate at which Fannie Mae forecloses on mortgages are not available, the delinquency rate for the ARMs Fannie Mae had purchased has been almost 2.5 times that of fixed-rate mortgages over the past 12 months. Because of VA's supplemental servicing program, the easy conversion option to a fixed-rate program, and the lower cap on annual interest rate increases (1 percent compared to 2 percent for Fannie Mae), the difference in foreclosure rates between VA ARMs and FRMs is likely to be less than the difference in delinquency rates between Fannie Mae ARMs and FRMs. CBO estimates that VA ARMs have a foreclosure rate 1.75 times the rate for VA FRMs. We also assume that the percentage of ARMS guaranteed by VA would be the same as it was in 1994, about 12 percent of all VA originations. Based on a baseline foreclosure rate of 10.3 percent for FRMs for 1996, the estimated foreclosure rate for VA ARMs would be 18 percent. Thus, the subsidy cost for VA ARM loans would be about $36 million in 1996 and $33 million in 1997 based on annual loan volumes of 27,000 and 23,000 in 1996 and 1997, respectively.

VA has had the authority to guarantee ARMs only since 1993, and as a result, the available data are not very useful for projecting defaults. Recent data from the Federal Housing Administration (FHA), the model for the VA ARM program, shows that the ARMs it guarantees have foreclosure rates similar to those of FRMs it guarantees. Nevertheless, there is strong reason to believe that this is a short-term phenomenon and that FHA ARMs, like Fannie Mae ARMs, will prove to have higher foreclosure rates than FRMs. First, the data from FHA are too sparse to use for estimating relative foreclosure rates. FHA has been guaranteeing ARMs for ten years but only in the last few years have these loans made up a significant portion of FHA's originations. Second, during this period, mortgage rates have been quite low by historical standards.

spending subject to appropriations action

This bill contains several provisions that would be subject to appropriations action.

Medical Treatment for Persian Gulf Veterans. Section 1(a) would extend from December 31, 1995, to December 31, 1996, VA's authority to provide medical treatment to veterans who may have been exposed to toxic substances while serving in the Persian Gulf War. Since 1992, about 180,000 veterans have sought outpatient care for ailments believed to have resulted from exposure to toxic substances while serving in the Gulf War.

Based on estimates from VA, the cost of treating and testing these veterans would be $60 million for the final nine months of fiscal year 1996 and $20 million for the first three months of 1997.

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1996 1997 1998 1999 2000

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Estimated authorization level... 60 20 0 0 0

Estimated outlays............... 52 28 0 0 0

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Drug and Alcohol Abuse and Dependence. For about 15 years VA has been authorized to contract with third parties to treat veterans suffering from alcohol and drug abuse. Section 9(b) would extend authority to provide contract care from December 31, 1995 to December 331, 1997. At the discretion of the Secretary of Veterans Affairs, VA would be able to contract with halfway houses and other community-based organizations to provide short-term care and therapeutic services to veterans with alcohol and drug dependencies. In 1994, VA spent almost $9 million on contracts with organizations that helped veterans suffering from substance abuse. Under this section, VA would spend over $6 million in the last three quarters of 1996 and help more than 6,000 veterans during the entire fiscal year.

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1996 1997 1998 1999 2000

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Estimated authorization level... 7 9 2 0 0

Estimated outlays............... 6 9 4 0 0

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Noninstitutional Alternatives to Nursing Home Care. Section 1(c) would extend until December 31, 1996, a pilot program on nursing homes that allows the Secretary of Veterans Affairs to pay for alternatives to nursing home care. At present, VA can contract with private and community providers of non-institutional nursing home care to provide homemaker and home health services to eligible veterans. Certain criteria must be met by veterans in order to qualify for the program. In general, veterans with a service-connected rating of more than 50 percent and veterans needing nursing home care for service-connected disabilities have priority in receiving this care. Participants must be at least 75 years old and meet other specific requirements pertaining to health and ability to live independently. The cost of non-institutional care cannot exceed 65 percent of what it costs VA to provide each individual nursing care at its facilities ($32,371 in 1994).

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1996 1997 1998 1999 2000

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Estimated authorization level... 18 5 0 0 0

Estimated outlays............... 16 7 0 0 0

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In 1994, VA spent almost $10 million and provided noninstitutional care to 1,500 veterans. The number of veterans participating in the program is expected to grow to 2,700 in 1996 and would cost $18 million for that year.

Health Professional Scholarship Program. In 1994, VA awarded scholarships to 374 VA nurses and other health professionals. These competitive scholarships allowed VA health care professionals to enroll in a full-time course of study leading to either an associate, baccalaureate, or master's degree. Award winners receive payments for tuition, educational expenses, and a monthly stipend--all tax free. The program helps VA recruit and retain nurses and other health care professionals, particularly for health care disciplines in which VA is experiencing recruitment difficulties. In return for the award, recipients incur a service obligation of two years to the VA.

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1996 1997 1998 1999 2000

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Estimated authorization level... 8 3 0 0 0

Estimated outlays............... 8 3 0 0 0

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Section 1(g) would extend the authorization of the program from December 31, 1995, to December 31, 1996. For 1996, the cost of the program would be almost $8 million for the last nine months of the year. VA anticipates that this amount of funding would pay for 427 awards.

Enhanced-Use Leases of Real Property. Section 1(h) would extend for two years the authorization for VA to use enhanced-use leases of real property and would result in no significant costs. Enhanced-use leases of real property allow VA to enter into contracts with private companies to develop or employ underutilized land or other assets under the control of VA. In most instances, VA would allow a private developer to build on property owned by VA, and in return the developer would allow VA partial use of the newly developed facility at below market price. In the past, VA has contracted for child care centers and cafeterias where VA received below market prices for its employees who use the facility.

With the exception of leases made to provide child-care services, no more than 20 enhanced-use leases may be entered into at any one time. Current law permits VA to make payments only for those enhanced-use leases that provide space or services for which funds have been appropriated in advance.

Community-Based Residential Care for Chronically Mentally Ill Veterans. In 1994, VA spent just over $24.5 million to provide 9,000 Homeless Chronically Mentally Ill (HCMI) veterans community-based residential care. The HCMI program began in 1987 and has been reauthorized periodically. The program operates out of 71 VA facilities and targets homeless veterans with psychiatric or drug abuse problems. VA estimates that the number of homeless veterans on any given night varies from 150,000 to 250,000. Case workers seek out these veterans at homeless shelters or on the street and help them find appropriate health care and social services. These veterans are usually placed in community programs under contract with VA. The average cost of providing this service was $39 per day per veteran in 1994. The average stay was 71 days.

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1996 1997 1998 1999 2000

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Estimated authorization level... 28 29 8 0 0

Estimated outlays............... 25 28 11 0 0

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VA anticipates that in 1996 it would be able to help almost 9,700 of the several hundred thousand homeless veterans at a cost of over $28 million. Section 1(i) would extend this program through December 1997.

Compensated Work Therapy and Therapeutic Transitional Housing (CWT). Section 1(j) would continue a demonstration program aimed at helping eligible veterans with severe mental illness and drug and alcohol problems return to mainstream society. The program offers veterans treatment while employed in the CWT program. This program differs from therapy programs because veterans pay rent to offset the cost of acquiring and maintaining the property in which they reside. VA has purchased 46 residences which will have 404 beds when fully operational. An additional four residences with a total of 60 beds are planned. Expansion beyond 50 residences would require a change in current law. To serve 316 veterans in 1994, VA spent about $3 million.

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1996 1997 1998 1999 2000

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Estimated authorization level... 4 4 1 0 0

Estimated outlays............... 3 4 1 0 0

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Grants for Assistance in Furnishing Services and Assistance to Homeless Veterans. Section 1(k) expands VA's authority to work with community and public groups to provide services to homeless veterans. This program provides seven comprehensive homeless shelters, authorizes placement of counselors in 12 homeless shelters, allows for grants to public and community organizations to provide transitional assistance to veterans, and authorizes VA to make per diem payments to organizations eligible to receive grants. This program would be authorized until December 31, 1997. Reauthorization of the program is needed only to continue the homeless grant and per diem programs.

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1996 1997 1998 1999 2000

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Estimated authorization level... 9 9 2 0 0

Estimated outlays............... 7 9 4 0 0

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In 1994, $8 million was appropriated for this program, $5.6 million of which was used for the grant program. The number of veterans affected by the program is uncertain, and VA is developing a plan to evaluate its effectiveness. CBO estimates the cost of the program in 1996 would be about $9 million.

Homeless Veterans Reintegration Projects. Section 1(l) would authorize appropriations for Homeless Veterans Reintegration Projects. The provision specifies an authorization level of $10 million in 1996.

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1996 1997 1998 1999 2000

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Authorization level............. 10 0 0 0 0

Estimated outlays............... 1 4 5 0 0

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7. Pay-as-you-go considerations: The Balanced Budget and Emergency Deficit Control Act of 1985 sets up pay-as-you-go procedures for legislation affecting direct spending or receipts through 1998. The bill would have the following pay-as-you-go impact:

------------------------------------------------------------------------

1996 1997 1998

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Change in outlays............................... 36 33 0

Change in receipts.............................. (\1\) (\1\) (\1\)

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\1\ Not applicable.

8. Estimated cost to State and local governments: None

9. Estimate Comparison: None

10. Previous CBO estimate: On October 5, 1995, CBO prepared a cost estimate for H.R. 2289 as ordered reported by the House Committee on Veterans' Affairs (HVAC) on September 20, 1995. The estimate included the cost of extending permanently the VA ARM program and extending for three years the homeless veterans job training program. CBO's cost estimate for H.R. 2353 as ordered reported by HVAC on September 20, 1995, included estimates for several other provisions that are also part of S. 991.

11. Estimate prepared by: Michael Groarke.

12. Estimate approved by: Paul N. Van de Water, Assistant Director, for Budget Analysis.

Mr. ROCKEFELLER. Mr. President, as the ranking minority member of the Committee on Veterans' Affairs, I urge the Senate to give its unanimous support to the pending measure, S. 991, legislation that would extend a variety of veterans programs and authorities that have expired. The proposed extensions are relatively short-term ones--1 or 2 years--to ensure that the program or authority remains in place while the committee takes the opportunity to review the various issues in more detail.

Consideration of this measure was sought late last month so that it might have been enacted before a number of the programs and authorities actually expired, but we were blocked from acting at that time by an objection unrelated to any provision in the bill. I truly regret that the Senate was delayed in considering this measure, but am pleased that we are now about to act on it. My sincere hope is that our colleagues in the House will take it up as soon as possible so as to remove any question about the programs and authorities covered by this legislation.

Mr. President, this measure was ordered reported, without written report, by the Veterans' Affairs Committee on September 20, 1995, and comes before the Senate today with an amendment offered by the committee chairman, Senator Simpson. The chairman's amendment, which I support, deletes one provision from the bill as ordered reported--

relating to VA's authority to guarantee home loans involving adjustable rate mortgages--because of unanticipated costs being attributed to the enactment of that provision by the Congressional Budget Office. In addition, his amendment adds four additional extension provisions--all relating to VA's home loan guaranty program--that came to the committee's attention after the committee meeting in September.

There is no objection as far as I know to any of the provisions in the bill as it will be amended, and I urge its swift enactment so that it can reach the House as soon as possible for action in that Chamber.

SUMMARY OF PROVISIONS

Mr. President, the bill, as amended, contains 16 provisions which would provide for the following extensions of programs and authorities:

First, extend until December 31, 1996, the special eligibility for VA inpatient care which is accorded to certain veterans--those exposed to ionizing radiation from nuclear weapons tests or the occupation of Japan following World War II; Vietnam veterans exposed to herbicides during their service; and Persian Gulf war veterans exposed to environmental hazards during their service. Any care furnished to veterans exposed to radiation or herbicides pursuant to this authority between its expiration on June 30 of this year and the date of enactment of this measure would be ratified.

Second, extend until December 31, 1996, the special eligibility for VA outpatient care accorded to Persian Gulf war veterans.

Third, extend until December 31, 1997, VA's authority to contract for community-based drug and alcohol care.

Fourth, extend until December 31, 1997, VA's pilot program of non-

institutional alternatives to nursing home care.

Fifth, extend until December 31, 1997, VA's authority to guarantee loans which bear an interest rate negotiated between the veteran and the lender.

Sixth, extend until December 31, 1997, VA's authority to guarantee loans that include costs related to making energy efficiency improvements to the dwelling that is the object of the loan.

Seventh, extend until December 31, 1996, VA's enhanced loan asset sale authority pursuant to which VA guarantees the timely payment of principal and interest to purchasers of real estate mortgage investment conduits.

Eighth, extend until December 31, 1997, VA's authority to permit a lender who is authorized to make loans which are automatically guaranteed to review appraisals.

Ninth, extend until December 31, 1997, VA's authority to enter into agreements with nonprofit organizations and State and local governments whereby such entities acquire real property, or the use of such property, from VA in order to furnish services to homeless veterans.

Tenth, extend until December 31, 1997, VA's authority to use data on compensation paid to nurse anesthetists who work on a contract basis for non-VA entities in determining appropriate locality pay for nurse anesthetists who work for VA.

Eleventh, extend until December 31, 1997, VA's Health Professional Scholarship Program.

Twelfth, extend until December 31, 1997, VA's authority to enter into enhanced-use leases with non-VA entities.

Thirteenth, extend until December 31, 1997, VA's program of community-based residential care for homeless chronically mentally ill veterans.

Fourteenth, extend until December 31, 1997, VA's authority to carry out a demonstration program of compensated work therapy and therapeutic transitional housing.

Fifteenth, extend until September 30, 1997, VA's authority to make grants to entities for the purpose of furnishing services and assistance to homeless veterans.

Sixteenth, extend until September 30, 1997, the Department of Labor's homeless veterans' reintegration projects and authorize appropriations of $10 million for this program.

CONCLUSION

Mr. President, this legislation would extend a number of important authorities and programs, and I urge all of my Senate colleagues to support it. As I noted at the outset, our consideration of this bill was delayed because of unrelated concerns and it is vital that we act as quickly as possible to reauthorize the various programs and authorities.

Mr. President, I express my appreciation to the chairman of our committee, Mr. Simpson, and all other members of the committee, for their work on this measure. I look forward to working with my colleagues in the Senate, as well as members of the House Committee on Veterans' Affairs, on its enactment.

Mr. President, I urge the Senate to give its unanimous approval to this measure.

Mr. WARNER. Mr. President, I ask unanimous consent that the amendment I now send to the desk be agreed to, the committee substitute, as amended be agreed to, the motion to reconsider be laid on the table, and the bill then be read a third time.

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment (No. 3116) was agreed to as follows:

Strike out all after the enacting clause and insert in lieu thereof the following:

SECTION 1. EXTENSION OF EXPIRING AUTHORITIES.

(a) Authority To Provide Priority Health Care for Certain Veterans Exposed to Toxic Substances.--(1) Effective June 29, 1995, section 1710(e)(3) of title 38, United States Code, is amended by striking out ``after June 30, 1995,'' and all that follows through ``December 31, 1995'' and inserting in lieu thereof ``after December 31, 1996''.

(2) Section 1712(a)(1)(D) of such title is amended by striking out ``December 31, 1995,'' and inserting in lieu thereof ``December 31, 1996,''.

(b) Drug and Alcohol Abuse and Dependence.--Section 1720A(e) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(d) Negotiated Interest Rates.--Section 3703(c)(4)(D) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(e) Mortgages for Energy Efficient Improvements.--Section 3710(d)(7) of such title is amended by striking out

``December 31, 1995'' and inserting in lieu thereof

``December 31, 1997''.

(f) Enhanced Loan Asset Sale Authority.--Section 3720(h)(2) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1996''.

(g) Authority of Lenders of Automatically Guaranteed Loans To Review Appraisals.--Section 3731(f)(3) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(h) Agreements for Housing Assistance for Homeless Veterans.--Section 3735(c) of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(i) Use of Data on Compensation for Certified Registered Nurse Anesthetists.--Effective March 31, 1995, section 7451(d)(3)(C)(iii) of such title is amended by striking out

``April 1, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(j) Health Professional Scholarship Program.--Section 7618 of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(k) Enhanced-Use Leases of Real Property.--Section 8169 of such title is amended by striking out ``December 31, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(l) Authority for Community-Based Residential Care for Homeless Chronically Mentally Ill Veterans and Other Veterans.--Section 115(d) of the Veterans' Benefits and Services Act of 1988 (38 U.S.C. 1712 note) is amended by striking out ``September 30, 1995'' and inserting in lieu thereof ``December 31, 1997''.

(m) Demonstration Program of Compensated Work Therapy.--Section 7(a) of Public Law 102-54 (38 U.S.C. 1718 note) is amended by striking out ``fiscal years 1991 through 1995'' and inserting in lieu thereof ``the period beginning on October 1, 1991, and ending on December 31, 1997,''.

(n) Authority To Make Grants for Assistance in Furnishing Services and Assistance to Homeless Veterans.--(1) Section 3(a) of the Homeless Veterans Comprehensive Service Programs Act of 1992 (Public Law 102-590; 106 Stat. 5136; 38 U.S.C. 7721 note) is amended by striking out ``fiscal years 1993, 1994, and 1995,'' and inserting in lieu thereof ``fiscal years 1993 through 1997,''.

(2) Section 12 of such Act (106 Stat. 5142) is amended by striking out ``each of the fiscal years 1993, 1994, and 1995'' and inserting in lieu thereof ``each of fiscal years 1993 through 1997''.

(o) Homeless Veterans' Reintegration Projects.--(1) Section 738(e)(1) of the Stewart B. McKinney Homeless Assistance Act

(42 U.S.C. 11448(e)(1)) is amended by adding at the end the following:

``(D) $10,000,000 for fiscal year 1996.

``(E) $10,000,000 for fiscal year 1997.''.

(2) Section 741 of such Act (42 U.S.C. 11450) is amended by striking out ``October 1, 1995'' and inserting in lieu thereof ``October 1, 1997''.

[[Page S108]]

(p) Effective Date.--Except as provided in subsections

(a)(1) and (i), the amendments made by this section shall take effect on October 1, 1995.

(q) Ratification of Actions.--The following actions are hereby ratified:

(1) The furnishing by the Secretary of Veterans Affairs of care and services by virtue of section 1710(a)(1)(G) of title 38, United States Code, during the period beginning on July 1, 1995, and ending on the date of the enactment of this Act.

(2) The furnishing by the Secretary of services in noninstitutional settings by virtue of section 1720C of such title during the period beginning on October 1, 1995, and ending on the date of the enactment of this Act.

(3) The use by any director of a Department of Veterans Affairs health-care facility of data on rates of compensation paid to certified nurse anesthetists in a labor market area under section 7451(d)(3)(C) of such title during the period beginning on April 1, 1995, and ending on the date of the enactment of this Act.

(4) The furnishing by the Secretary of care for homeless chronically mentally ill and other veterans by virtue of section 115 of the Veterans' Benefits and Services Act of 1988 (38 U.S.C. 1712 note) during the period beginning on October 1, 1995, and ending on the date of the enactment of this Act.

(5) The furnishing by the Secretary of work therapy and therapeutic transitional housing by virtue of section 7 of Public Law 102-54 (38 U.S.C. 1718 note) during the period beginning on October 1, 1995, and ending on the date of the enactment of this Act.

(6) Grants made by the Secretary to furnish services to veterans under section 3 of the Homeless Veterans Comprehensive Services Programs Act of 1992 (38 U.S.C. 7721 note) during the period beginning on October 1, 1995, and ending on the date of the enactment of this Act.

The committee amendment, as amended, was agreed to.

The bill was ordered to be engrossed for a third reading, and was read the third time.

Mr. WARNER. Mr. President, I now ask unanimous consent that the Veterans' Affairs Committee be discharged from further consideration of H.R. 2353, that the Senate proceed to its immediate consideration, that all after the enacting clause be stricken, and the text of S. 991, as amended, be inserted in lieu thereof, that the bill as thus amended be passed, and the motion to reconsider be laid upon the table, and S. 991 be then returned to the calendar.

The PRESIDING OFFICER. Without objection, it is so ordered.

So the bill (H.R. 2353), as amended, was passed, as follows:

Resolved, That the bill from the House of Representatives

(H.R. 2353) entitled ``An Act to amend title 38, United States Code, to extend certain expiring authorities of the Department of Veterans Affairs relating to delivery of health and medical care, and for other purposes.'', do pass with the following amendments:

Strike out all after the enacting clause and insert: