July 18, 2005
Jemarion Jones
(202) 639-6405
[email protected]

Adele Stan
(202) 639-6419

Senate Veterans' Affairs Committee Considers Legislation That Would Divert Scarce Funds From Veterans' Health Care Budget

(Washington)—The American Federation of Government Employees (AFGE) is applauding lawmakers and veterans’ service organizations, including the Disabled American Veterans (DAV), Paralyzed Veterans of America (PVA) and AMVETS, in their efforts to strip language from a Senate bill that would divert funds for veterans’ medical care into the hands of private management consultants for the conduct of expensive cost-comparison studies that set the stage for the outsourcing of federal jobs.

This week the Senate Veterans Affairs (VA) Committee will mark up S. 1182, the Veterans Health Care Act of 2005. The language in question, Section 7, would repeal the cost comparison prohibition in Title 38 [38 USC, Section 8110 (a) (5)], a 24-year-old safeguard that Congress has maintained to protect funds appropriated for veterans medical care from being diverted to pay for private-public cost comparison reviews, the first step in the outsourcing of federal jobs. The language in Section 7 that would repeal the cost comparison prohibition is in the version introduced by VA Committee Chairman Sen. Larry Craig (R-Idaho).

As the law stands, funds appropriated for VA medical care “may not be used for, and no employee compensated from such funds may carry out any activity in connection with, the conduct of any study comparing the cost of the provision by private contractors with the cost of the provision by the Department of commercial or industrial products and services for the Veterans Health Administration unless such funds have been specifically appropriated for that purpose.”

According to the Office of Management and Budget, (OMB), in 2004, $110 million was spent government-wide for public-private competitions to determine whether more than 12,000 jobs could be done more efficiently by private contractors, with in-house federal workers winning 91 percent of the time. Ironically, the efforts to further drain the veterans’ health care funding budget come on the heels of the VA admitting to a $1.5 billion shortfall for fiscal 2005 and an anticipated $1.98 billion shortfall in fiscal 2006 for veterans’ health care.

“Despite warnings from both Democrats and Republicans, the Administration refused to plan for an anticipated influx of veterans from conflicts in Iraq and Afghanistan. However, we promised these brave men and women health care in exchange for their sacrifice no matter the circumstances,” says AFGE National President John Gage. “Now the VA wants to use these hard won health care dollars on programs that would only destabilize the VA healthcare workplace and put veterans in VA facilities out of work. That’s flat-out wrong and our veterans don’t deserve this kind of treatment.”

One in three employees targeted for outsourcing at the Veterans Health Administration is a veteran.

In an effort to keep the prohibition against cost comparison reviews in tact, DAV, PVA and AMVETS have sent letters supporting Sen. Daniel Akaka’s (D-Hawaii) plan to offer an amendment that would strike Section 7 from the Veterans Health Care Act.

“Evidenced by recent Congressional actions regarding the adequacy of VA medical care funding, now is not the time to allow the VA to draw away critical health care dollars when the medical system is already struggling to meet the demand being placed on the system,” writes Joseph A. Violante, national legislative director, DAV, and Richard Fuller, national legislative director, PVA in a joint letter sent to Sen. Akaka.

In a separate letter to Sen. Akaka, AMVETS National Legislative Director Richard Jones writes, “AMVETS does not support the use of critically scarce medical care resources for the purpose of studying private-public competition. We firmly believe these dollars would be better used in the direct provision of actual medical care.”

Additionally, in a letter sent to Chairman Craig, Sen. Patty Murray (D-Wash.), one of the first Senators to anticipate the VA budget shortfalls, urged Sen. Craig to exclude Section 7 from consideration during the Committee mark up. In addition to Murray, the letter also was signed by VA Committee members Sen. John D. Rockefeller (D-W.V.), Sen. Barack Obama (D-Ill.) and Sen. Ken Salazar (D-Colo.).

“[A]s the VA struggles to address a severe funding shortfall, it makes little sense to divert precious health care dollars to pay for an unnecessary and expensive privatization review,” writes Sen. Murray in her letter to Sen. Craig. “…In food, housekeeping and grounds maintenance services, three activities particularly targeted by OMB for privatization reviews, a majority of the affected employees are veterans.”

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