Smith Plan for Veterans' Health Heats Already Turbulent Issue
By Niels C. Sorrells, CQ Staff

With the nation so supportive of its troops in the recent Iraq war, one might think it would be politically easy to win guaranteed funding for
veterans' health care. But as Rep. Christopher H. Smith, R-N.J., can attest, it is not so simple.

Smith and a handful of Republicans want to start a debate on shifting health care funding from the discretionary budget, where appropriators set amounts
each year, to an entitlement system in which Congress automatically would provide enough money to satisfy the health care requirements of all needy
veterans.

The issue has the potential to become politically explosive. Democrats have latched on to it as a way to criticize Bush administration budget cuts.
Appropriators are insisting on maintaining their discretionary power over veterans' health care spending. And according to a senior House leadership
aide and other Hill staff aides familiar with the encounter, Speaker J. Dennis Hastert, R-Ill., warned Smith that he stands to be stripped of his
chairmanship of the Veterans' Affairs Committee if he continues his crusade for the new entitlement.

So far, Smith has refrained from introducing the measure. But he and others are still working to persuade Hastert to allow a public debate on the issue.
Legislators are hoping a soon-to-be released presidential task force report, which endorses some form of mandatory funding for veterans' health care,
will give them leverage. Meanwhile, they are looking for allies wherever they can, even as the leadership backs appropriators' demands to keep such
spending discretionary.

Steady Increase in VA Medical Funding
"The leadership is very concerned when it comes to anything that would be adding to entitlement packages," said one Hastert aide.

The argument grew heated during House consideration of the fiscal 2004 budget resolution (H Con Res 95). According to a senior Hastert aide and
several lawmakers, Smith spoke out about the need to guarantee veterans funding at the House GOP budget sessions. After Smith spoke, these sources
said, Hastert cautioned the lawmakers against any proposal that would rapidly add to the growth of the federal budget. Then, according to a
leadership aide and other staff aides, the Speaker pulled Smith aside and warned him that by offering his bill this year he would be risking his
chairmanship.

Hastert's spokesman, John Feehery, would not comment on the episode. But he said Smith's proposal to provide guaranteed funding for veterans' health
care had caused "some consternation."

Rep. Charles W. "Chip" Pickering Jr. of Mississippi, a Republican who supported increased veterans funds in the fiscal 2004 budget resolution,
said his sense is that Smith will work with the leadership to find an agreement.

Pickering said support for Smith's idea might be deeper than the leadership suspects. He added that any move to punish Smith for introducing his bill
"would not go over well."

A Wide Gap
But legislators have a long way to go before they can bridge the differences between the two approaches.

Under the first approach, appropriators annually decide how much money to set aside for VA hospitals and other veterans' health programs. Under the
second, the program would operate much like Medicare: Veterans would be entitled to benefits regardless of how much it cost the federal government
to provide them.

Advocates of mandatory spending say their approach would remove uncertainty from the system, meaning veterans would no longer have to wait months for
their health care. Advocates of the current system say creating an entitlement would be astronomically expensive, given the growth in the
number of veterans.

Moreover, they argue, removing Congress' power of the purse would rob the legislature of its most effective tool for enforcing change at the VA.

"There are a lot of us who have a natural empathy for our veterans," said Sen. Tim Johnson, D-S.D., who has introduced legislation (S 50) that would
create a formula dictating how much money the government must set aside per veteran each year. "I just got tired of ending up annually with this
veterans budget crisis."

About the only thing legislators, the VA and veterans service organizations can agree upon is that the current system needs help. Unprecedented numbers
of veterans are turning to the VA for health care, creating waiting lists that have left Secretary of Veterans Affairs Anthony J. Principi with no
option other than to restrict access for certain groups of veterans with higher incomes and whose medical problems are not related to their military
service.

Advocates of the current system note that Congress routinely has given the VA more than the president requested over the last few years.

"The veterans budget is growing faster than any other agency," said Rep. James T. Walsh, chairman of the House Appropriations VA-HUD Subcommittee.
"That should tell them something."

But those who favor mandatory funding say the discretionary system cannot keep up with the demands of the nation's largest health care system. They
point to the current fiscal year, when the VA had to operate under fiscal 2002 restrictions for more than four months while Congress remained
deadlocked over the bulk of the fiscal 2003 spending bills. (CQ Weekly, p. 393)

"We started to see it last year," said Joy Ilem, assistant national legislative director of the Disabled American Veterans. "It was just overwhelming."

She added: "It always comes back to budget issues. We're going to need a stable, viable health care system."

Not surprisingly, the tensions between appropriators and authorizers over this issue has created an odd patchwork of allies and enemies. Johnson, an
appropriator, is unusual in his support for some form of mandatory spending, which would rob his panel of some of its power. Most appropriators oppose
it, and they are backed by the congressional leadership. On the Senate Veterans' Affairs Committee, Chairman Arlen Specter, R-Pa., and ranking
Democrat Bob Graham of Florida are skeptical of the idea.

But Democrats, sensing political advantage in veterans' growing disenchantment with the funding allocated to their programs, have begun
focusing on the issue in recent months. During the spring recess, Democrats met with veterans' groups across the country to argue that President Bush
would have left discretionary veterans programs at $28.1 billion in fiscal 2004 - $1.8 billion less than Congress ultimately called for in its budget
resolution. (CQ Weekly, p. 316)

"They were dumfounded," said Rep. Lois Capps, D-Calif., one lawmaker who met with veterans.

But Congress' budget increase for the VA came about only through Republican efforts: first when the Senate boosted the budget, and then when a small
group of House Republicans - enough to threaten the budget's defeat - vowed to oppose any fiscal 2004 budget without the extra $1.8 billion.

Those House Republicans, led by Smith, are willing to work with Democrats to push their agenda, but they are counting on the report by the President's
Task Force to Improve Health Care Delivery for Our Nation's Veterans to bolster their argument.

A draft of the report says the federal government needs to find some way to guarantee health care funding for most veterans. The report clearly states
its support for the idea of "full funding," which should occur "through modification to the current budget and appropriations process, by using a
mandatory funding mechanism, or by some other change in the process that achieves the desired goal."

Smith is banking on the fact that a report from a White House-appointed commission might help change some minds and smooth the way for mandatory
funding legislation. So far, at least one administration player - Principi - says he is open to hear more.

"I certainly have a lot of questions," said Principi. "It needs to be thoroughly analyzed."

Practical Problems
Principi said his concerns about mandatory funding require practical answers. For example, current VA funding goes directly to hospitals. If
funding is set up as a per-patient entitlement, Principi wants to know how the VA would pay for its hospitals.

It also is not clear how much mandatory funding would be needed to allow every veteran to access VA health care. The current system relies on the
fact that not every veteran is enrolled. Principi notes that even the presidential task force excluded certain classes of veterans from the idea
of full funding.

"We have this tremendous growth," he said. "We're growing beyond our ability to handle the workload."

If Smith can get Principi into his camp, he still has many hurdles ahead - some of his own making - before he can claim victory on the mandatory
funding issue.

A staunch conservative, Smith is sometimes a little too doctrinaire for the House leadership's tastes. Last year, after the leadership already had
signed off on bankruptcy legislation, Smith successfully led a group of social conservatives in opposing the rule to consider the bill. They were
worried that the measure would prevent anti- abortion groups from claiming bankruptcy to avoid penalties stemming from protests at abortion clinics.

That flap already has won Smith some enemies. But the latest debate about mandatory spending for veterans might yet put him in some of the hottest
water of his political career.

Meanwhile, supporters of mandatory funding have other options. Johnson's legislation is still before the Senate, even though Johnson and his aides
concede that the Senate leadership has shown little interest in the bill.

On the House side, Rep. Lane Evans of Illinois, the ranking Democrat on Smith's committee, stands prepared to offer the mandatory spending bill but
is waiting for a go-ahead from Smith, who wants to take that route only after other options are exhausted.

"We're going to fight to make sure [veterans] are not taken for granted," said Evans. "There is a strong buildup of a coalition right now. The
chairman has done really strong work."

Rep. Rob Simmons, R-Conn., chairman of the House panel's Health Subcommittee, also is considering the introduction of a measure that would
allow VA hospitals to receive Medicare reimbursements for treating eligible veterans. Current law prohibits such reimbursements, meaning the same care
meets different eligibility standards, depending on whether the veteran goes to a VA or a private hospital.

"How does that make sense?" asked Simmons.

As the issue sharpens, veterans might hold the strongest hand they have had in years in negotiations with Congress. With the war in Iraq, a new
generation of veterans is about to enter the system. Both veterans groups and congressional allies such as Smith are counting on the nation's
gratitude toward its returning soldiers to secure more assistance for the veterans of past wars.

Said Richard Fuller of the Paralyzed Veterans of America: "The sacrifices people make on the battlefield are a little more fresh in people's minds
than they were a year ago."

Source: CQ Weekly
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