For Immediate Release:

Wednesday, September 20, 2006

Thank you, Mr. Chairman. I want to thank Commander Morin and all the American Legion members and staff. The American Legion ensures that America's veterans have a voice here in Congress. Frankly, if the Administration had listened to the American Legion over the past few years, we could have avoided the budget shortfalls that veterans have faced. I hope we learn that lesson this year. I want to especially welcome some leaders from my home state of Washington - Bob and Eva Wallace from Snohomish and Kathy Nylen from Seattle. I've been proud to stand shoulder-to-shoulder with the Legion to fight for the benefits and services our veterans have earned, and I look forward to continuing to work with all of you.

GAO Report

That's why this morning I want to discuss a new report from the Government Accountability Office. I requested the report with Senators Akaka, Durbin, Salazar, and Chairman Buyer to find out why the VA was so wrong in its budget projections for FY 2005 and 2006. Frankly, the answers are damning and they cast doubt on whether or not we can rely on the VA for accurate numbers and straight answers. I want to focus on three findings.

GAO's Findings

First, the GAO found that the VA knew it had serious problems with its budget, but failed to notify us in Congress. It suggests that the VA could still be sending us inaccurate information in its quarterly reports. Second, the GAO found that the VA was basing its budgets on "unrealistic assumptions, errors in estimation, and insufficient data." Finally, the GAO found that the VA did not have a plan to meet the needs of all the service members from the conflicts in Iraq and Afghanistan. The report does not comment on the situation today, but looking at the CBO submission and other data, I'm concerned this "lack of a plan" may continue to this day.

VA Misled Congress

For me, I think one of the most disturbing findings is that the VA kept assuring us in Congress that everything was fine – while inside the VA it was clear that shortfalls were growing. The VA became aware it would have problems in October 2004 – but didn't admit those problems until June of 2005. Veterans were telling me of long lines and delays in care, and when I proposed giving the VA more money, the Administration fought me every step of the way. And who paid the price for the VA's deceptions? America's veterans, and that's just wrong.

Timeline of VA Deceptions

Let me walk through some of the deceptions that this report documents because it shows a troubling gap between what the VA knew and what the VA told us. Starting back in October 2004, the VA knew money was tight. It anticipated serious budget challenges, so it created a working group. Two months later, in December 2004, that budget group made internal recommendations like delaying new initiatives and shifting around funding to deal with the shortfall. Two months later, in February 2005, the Bush Administration released its budget proposal for 2006, which the GAO found was based on bad assumptions, bad estimates and bad data.

A week later at a hearing – on February 15th, 2005, I asked the VA Secretary if the President's budget was sufficient. I pointed to the Independent Budget – which called for a $3.5 billion increase – and asked him if the Independent Budget was closer to what we really needed. He told me, "I have many of the same concerns, and I end up being satisfied that we can get the job done with this budget."

Let me remind everyone in this room that it was in February, March, and April of 2005 that I was hearing from veterans groups like the American Legion about they were seeing on the ground – delays in care and a system stretched to capacity. But the VA continued to say everything was fine. On March 8th, Secretary Nicholson told a House committee that the president's FY 2006 budget, "gives VA what it needs."

I was hearing a much different story as I spoke with veterans around the country. That's why on March 10th, I offered an amendment in the Senate Budget Committee to increase veterans funding by 3%. My amendment was voted down. That same month, the VA's internal monthly reports showed that demand for healthcare was exceeding projections. That was another warning sign that the VA should have shared with us, but it didn't.

On March 16th, Senator Akaka and I offered an amendment on the Senate floor to increase veterans funding by $2.85 billion. That amendment was voted down. The next month, on April 5th, Secretary Nicholson wrote to Senator Hutchison saying – quote "I can assure you that the VA does not need emergency supplemental funds in FY 2005."

A week later, on April 12th, I offered two amendments on the Senate floor to boost veterans funding. Senators looked at the Secretary's assurances that everything was fine, and voted against both of my amendments. Veterans didn't get the funding they needed, and the deception continued. On June 9th, I asked Secretary Nicholson at a hearing if he had enough funding to deal with the mental health challenges of veterans returning from Iraq and Afghanistan. He assured me the VA was fine.

So for six months we had happy talk that everything is fine with the VA. Then, in June – just two weeks after the Secretary's latest assurance -- the truth finally came out. On June 23rd, the VA revealed a massive shortfall of $3 billion. I went to work with Senator Craig, Senator Akaka and others and we came up with the funding – but we could have solved that problem much earlier and saved veterans the delays they experienced.

The VA knew about a problem back in October 2004. They saw it getting worse. They kept assuring us everything was fine. They worked to defeat my amendments to provide funding, and they didn't come clean until June 2005. That is unacceptable.

Veterans Deserve Answers

I think America’s veterans deserve real answers. This report shows that the VA was not telling Congress the truth and fighting those of us who were trying to help. Mr. Chairman I hope that this Committee can bring Secretary Nicholson before us and get some real answers, so we can make sure the VA does not repeat the same mistakes of the past two years. We owe that to our veterans who are sacrificing for us today.

And Mr. Chairman, the report also suggests that even in its latest quarterly reports to us – the VA is slow to report and does not provide key information we required – such as the time required for veterans to get their first appointment.

Phony Savings

We certainly deserve an explanation of why the VA lied to us about so-called "management efficiencies" that the GAO found were nothing but hot air. This report clearly shows the VA lied to us for four fiscal years, through four budgets, and four appropriations cycles about efficiencies it was finding. And when they could not make these efficiencies a reality, they took the funds from veterans healthcare. Mr. Chairman, the people in this room deserve answers from the VA.

VA Had No Plan for Iraq, Afghanistan

Finally, and most importantly, the report verifies that the VA had no plan treating veterans coming back from Iraq and Afghanistan. The VA had no plan then – and sitting here today I fear they still don't have plan. And let's remember – we still have not seen the lion's share of Iraq War veterans come back home, separate from the Armed Forces, and seek care from the VA.

Commander Morin – I think this report gives you and the Independent Budget leaders an even larger voice and an even greater measure of credibility because you were right over the past few years. The VA didn't listen to you. The Congress didn't listen to you. The White House didn't listen to you, and America's veterans – who you serve everyday – paid the price. I am committed to making sure we get to the bottom of this – and more importantly – learn from these mistakes so that every veteran can get the respect, healthcare and benefits they have earned.

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