Department of Veterans Affairs

Fact Box

United States Department of Veterans Affairs

Formed on July 21, 1930
Cabinet status- March 15, 1989
Preceding departments- Veterans Administration
Headquarters- 810 Vermont Ave NW, Washington, D.C.
Secretary of Veterans Affairs- Robert McDonald
Employees (2008) 278,565
Annual budget (2014) $149.1 billion

The Department of Veterans Affairs (VA) is responsible for providing vital services to America’s veterans. VA provides health care services, benefits programs and access to national cemeteries to former military personnel and their dependants. The department carries out its duties through three main administrative divisions: Veterans Benefits Administration; Veterans Health Administration; and National Cemetery Administration. All three divisions have run into trouble while carrying out their missions, including controversies involving VA hospitals and longstanding delays in providing services.

The federal government’s first attempts at dispensing benefits to soldiers came during the Revolutionary War. During another war, the War of 1812, the government established the first federal facility for veterans at the Naval Home in Philadelphia. This was followed by two more facilities in Washington, DC: the Soldiers’ Home in 1853 and St. Elizabeth’s Hospital in 1855. In the meantime, US officials established the first administrative unit dedicated to helping veterans: the Bureau of Pensions in 1833.
During the 19th century, government officials expanded benefits and pensions not only for veterans, but also their spouses and dependents. By the end of the Mexican War in 1848, American veterans numbered in the hundreds of thousands. This number ballooned following the conclusion of the Civil War; there were approximately 1.9 million Union Army veterans on the federal rolls. Almost the same number existed in the Confederacy. However, Confederate veterans were not granted benefits by the federal government until 1958, for those still living.
In his second inaugural address in 1865, President Abraham Lincoln called upon Congress “to care for him who shall have borne the battle and for his widow, and his orphan.” This was later adopted as the VA’s motto. Following the end of the Civil War, the number of disabled veterans was so great that Congress created the National Home for Disabled Volunteer Soldiers in 1873. This government organization established individual residences, called branches, which provided mostly room and board to former soldiers. These homes also gave incidental medical care to disabled and indigent veterans, regardless of whether their disabilities were service related. In the years that followed, national homes cared for veterans of the Mexican, Civil, Indian and Spanish-American wars and for non-combat veterans as well. By the late 1920s, the homes provided hospital-level medical care.
The Civil War era also marked the period when the federal government first established national military cemeteries where veterans could be buried. Because of the war’s significant casualties (more than 600,000 deaths), Congress adopted legislation in 1862 for the Army to begin creating a national military cemetery system. Five years later, in 1867, the first National Cemetery Act was enacted by Congress which provided funding ($750,000) for the construction of national cemeteries and other facilities, such as superintendent lodges, perimeter walls, fencing and headstones.
By the war’s end, thousands of Union soldiers were scattered around the country, which prompted Congress to create a reburial program that located the remains of almost 300,000 Union soldiers and officers and had them re-interred in national cemeteries. By 1870, the first period of expansion for the national cemetery system was complete, with 61 cemeteries established, including Alexandria National Cemetery (VA), Antietam National Cemetery (MD), Fort Leavenworth National Cemetery (KS), Philadelphia National Cemetery (PA) and Soldier’s Home National Cemetery (Washington, D.C.).
World War I represented the next great influx of veterans onto federal rolls, with five million returning soldiers and 200,000 wounded. Congress authorized a new program for awarding veterans' benefits that included disability compensation and vocational rehabilitation, as well as insurance for active-duty personnel and veterans. The benefits were administered by the Veterans Bureau, the Bureau of Pensions of the Interior Department and the National Home for Disabled Volunteer Soldiers. In 1930 the functions of all three were folded into the newly created Veterans Administration (VA).
From 1931 to 1941 the VA expanded the number of veterans’ hospitals from 64 to 91, which doubled the number of available hospital beds. It did so because demand for hospital care grew dramatically during the Depression, thanks in part to a rise in tuberculosis among veterans. Another contributing factor was an increase in neuro-psychiatric conditions among World War I veterans who complained of “shell shock,” the precursor to Post-Traumatic Stress Disorder of the Vietnam era and subsequent wars.
After the end of World War II, the federal government implemented the GI Bill, a landmark piece of legislation that helped assist the return of millions of veterans back into society. Drafted by the American Legion, the GI Bill provided: money for tuition, books and living expenses for up to four years of college or vocational schools; low-interest mortgages to homeowners; farm and small business loans at low interest; twenty dollars a week allowance for returning vets looking for employment; and funding to establish veterans' hospitals and to provide vocational rehabilitation for disabled veterans.
The GI Bill had a tremendous impact. More than one million veterans enrolled in college in 1946 alone. By 1956, over 10 million veterans had used the educational benefit. From 1944 to 1949, nearly 9 million veterans received close to $4 billion from the unemployment compensation program. The VA offered insured loans until 1962, and they totaled more than $50 billion. Subsequent legislation extended benefits under the GI Bill to veterans of the Korean and Vietnam wars, and the Readjustment Benefits Act of 1966 extended them to all who served in the armed forces even in peacetime. An updated GI Bill of Rights, called the Montgomery GI Bill, is now in effect.
Veterans returning home from the Vietnam War endured a different set of obstacles from those of previous generations. Because of the war’s unpopularity, many veterans were treated with either indifference or disdain. Medical conditions stemming from exposure to chemicals used by US armed forces, such as Agent Orange, were challenged by the federal government, making it difficult for veterans to receive treatment. Veterans complaining of psychological problems, later termed Post Traumatic Stress Disorder (PTSD), were also ignored by VA officials. Homelessness became a serious problem for many Vietnam veterans unable to receive help or to cope with their conditions.
These problems remain decades later. According to the National Coalition for Homeless Veterans (NCHV), there are almost 300,000 veterans homeless on any given night across the US. Veterans of the Gulf War and Iraq, like their Vietnam brethren, are fighting today for recognition of their medical maladies, such as Gulf War Syndrome, which includes symptoms of fatigue, skin rash, headache, muscle and joint pain, memory loss and difficulty concentrating, shortness of breath, sleep problems, gastrointestinal problems and chest pain. PTSD also continues to be a serious problem. From 1999 to 2007, the number of veterans receiving disability compensation for PTSD increased from 120,000 to more than 280,500.
During the past 20 years, the federal government has implemented two significant changes to the VA system. Following a prolonged lobbying effort by veterans’ organizations, President Ronald Reagan signed legislation in 1988 to elevate the VA to cabinet-level status and turn it into the Department of Veterans Affairs. As reorganized, the department included three main elements: the Veterans Health Services and Research Administration, which was renamed the Veterans Health Administration; the Veterans Benefits Administration; and the National Cemetery System (NCS), later renamed the National Cemetery Administration.
The Army continued to run the cemetery system until Congress adopted the National Cemeteries Act of 1973, which transferred the system to the Veteran’s Administration, which created the Department of Memorial Affairs. Two cemeteries remained under the authority of the Army: Arlington National Cemetery (VA) and Soldiers’ Home National Cemetery. During the administration of President Bill Clinton, a bill was passed that officially changed the NCS to the National Cemetery Administration. The same legislation extended the right of burial in a national cemetery to merchant marines, adding to the inclusion of soldiers, sailors, marines, airmen, National Guardsmen, reservists and ROTC of the armed services, as well as immediate family members of veterans.
The Clinton administration also altered the VA’s delivery of health care to veterans. In 1996, the Veterans Health Care Eligibility Reform Act reorganized the system using the HMO model, focusing it from a “hospital system to a health care system.” The bill also opened up VA health care to all veterans, not just those with service-related illnesses or injuries. Twenty-two Veterans Integrated Service Networks (VISNs) were established geographically around the country to meet all of the health care needs of veterans. While VA hospitals continued to serve an important role in the new system, community-based outpatient clinics grew considerably in size, from fewer than 200 in 1996 to 850 in 2004.
Several studies produced this decade have lauded improvements in veterans’ health care. From the New England Journal of Medicine to the Annals of Internal Medicine, the VHA system was congratulated for improvements in several key areas of patient care. These successes were attributed not only to the 1996 Congressional mandate, but also to Kenneth Kizer, who served as Under Secretary for Health at VHA during the 1990s and was responsible for spearheading changes in VA’s medical bureaucracy.

What it Does
The Department of Veterans Affairs (VA) provides the millions of American veterans and their dependents with health care services, benefits programs and access to national cemeteries. VA employs more than 250,000 people at hundreds of medical centers, nursing homes, benefits offices and national cemeteries throughout the country. The department carries out its duties through three main administrative divisions: Veterans Benefits Administration; Veterans Health Administration; and National Cemetery Administration.
Veterans Benefits Administration: VBA provides a range of services to former members of the US armed forces and their families. These services include education and vocational rehabilitation benefits, pensions, home loans and life insurance. VBA operates 57 regional offices and utilizes nine service delivery networks to provide all of its services to veterans and their families. Providing pensions and disability compensation to veterans represents one of the largest tasks of the VBA. More than 2.7 million veterans each year receive either monthly pension checks or disability payments. Disability compensation is paid to veterans with service-connected disabilities, meaning the disability was a result of disease or injury incurred or aggravated in the line of duty during active service. Veterans with non-service-related disabilities may be eligible for VA pension programs if the veteran served during wartime but became permanently and totally disabled outside of military duty. Pensions may also be paid to the survivors of wartime veterans. In 2001, the VBA paid $22 billion in disability compensation, survivor benefits and disability pensions to 3.2 million people.
The largest education benefit dispensed by the VBA is through the Montgomery GI Bill (MGIB), which provides up to 36 months of funding for veterans to study at colleges, technical or vocational schools. The GI Bill also supports apprenticeships and job training. Participants can receive in excess of $36,000 in tuition. Veterans from the reserve have different eligibility requirements and different rules for receiving benefits. MGIB may also be used by members of the military while still on active duty. MGIB benefits may be used up to 10 years from the date of last discharge or release from active duty. The 10-year period can be extended if the veteran was prevented or delayed due to disability or because they were held by a foreign government or power. Spouses and children of veterans can also receive education benefits through the Dependents’ Educational Assistance program, which offers up to 45 months of education assistance.
Vocational rehab and counseling provides services and assistance necessary to enable veterans with service-related disabilities to gain and keep employment. In the event a veteran's disability prohibits suitable employment, the program offers help so the veteran can achieve independence in living. Program services can include evaluation of rehabilitation needs, employment services, medical and dental care, financial counseling and education or training to develop marketable job skills. Veterans pursuing education or training may also receive a subsistence allowance. In some cases, the VR&E program provides educational and vocational counseling for eligible service members and veterans who don’t have disabilities and their dependents.
VBA’s housing program provides veterans with loans to purchase homes, primarily in cases where private financing is not available. These cases generally involve rural areas, small cities and towns. Veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less. If a veteran needs to refinance, they may borrow up to 90% of the home’s value, where allowed by state laws.
VBA also offers life insurance to service members and veterans who may not be able to get insurance from private companies because of the extra risks involved in military service, or because of a service-related disability.
Veterans Health Administration: VHA is responsible for providing a wide range of medical services to 5.5 million veterans across the US. VHA operates a network of health care facilities that includes 171 medical centers, 340 outpatient clinics, 127 nursing home care units and 196 Vietnam Veterans Outreach Centers. In addition, VHA helps support veterans’ health care in non-VA hospitals and is the country’s largest provider of graduate medical education. Medical and health programs run by the VHA include Agent Orange research, rehabilitation services for blind veterans, care for women veterans, assistance to homeless vets, care for veterans suffering from multiple traumas and research into war-related injuries.
National Cemetery Administration: NCA maintains national cemeteries across the United States for the burial of veterans and their family members. NCA also maintains 33 soldier’s lots and monument sites, marks veterans’ graves with a government-furnished headstone or marker, provides Presidential Memorial Certificates in recognition of veterans’ service and administers grants for establishing or expanding state veterans cemeteries. NCA currently maintains more than 2.8 million gravesites at 125 national cemeteries in 39 states and Puerto Rico. The cemeteries occupy more than 17,000 acres, and just over half of that acreage is undeveloped, allowing for growth to reach in excess of four million gravesites.

Where Does the Money Go?, an information resource provided by the federal government, has reported that from 2000 to 2008, the Department of Veterans Affairs spent $61.2 billion on goods and services from private contractors. The lion’s share of the money that was paid to the VA’s 109,436 contractors went for medicines ($22.4 billion), medical and surgical supplies and equipment ($4.9 billion), hospitals maintenance ($1.8 billion), hospitals supplies ($1.7 billion) and nursing home services ($1.5 billion).
The largest recipients of VA contracts were McKesson Corporation and AmerisourceBergen, both of which specialize in distributing medicines and medical supplies from manufacturers to pharmacies, hospitals and other healthcare outlets. They are followed by notable multinational companies such as General Electric and Siemens and defense contractor Northrop Grumman. The full top 10 list of contractors is as follows:
McKesson Corp.
AmerisourceBergen Corp.
Northrop Grumman
Koninklijke Philips Electronics N.V.
General Electric
Small Business Consolidated Reporting
Cardinal Health, Inc.
Electronic Data Systems
Siemens AG
Examples of VA contracts:
EDS, a leading information technology company founded by Texas entrepreneur and former president candidate Ross Perot, has signed several contracts with VHA to help run its computer systems. The latest contract was part of the VA’s eight-company, $1 billion effort to purchase support for the department’s Veterans Health Information Systems Technology and Architecture.
Another IT giant, Unisys Corp., has held VA contracts to improve patient management, billing and collections capabilities for the VHA. In 2003, the company signed a $139 million deal to provide systems integration and consulting services for Flowcast, a commercial, off-the-shelf software from IDX Systems Corp. Flowcast helps with patient access management, patient financials, document imaging and business intelligence.
VHA also contracts with architecture and engineering firms when it comes time to build new medical facilities. In September 2007, VHA announced that a three-party venture to design the replacement VA hospital for New Orleans. The three companies are NBBJ of Columbus, Ohio, Eskew+Dumez+Ripple of New Orleans and Rozas-Ward Architects, also of New Orleans.

Data for Department of Veterans Affairs