June 23, 2005                                              Media contact: Jeff Schrade (202) 224-9093

(Washington, DC) U.S. Senator Larry Craig, Chairman of the U.S. Senate Committee on Veterans' Affairs, reacted quickly today after learning that a mid-year review of the Department of Veterans Affairs' budget revealed that the agency will need another billion dollars for 2006. Craig said the committee will hold a hearing on the issue this next week.

"I was on the phone this morning with Secretary of Veterans Affairs Jim Nicholson letting him know that I am not pleased that this has happened. I am certain that he is going to take serious steps to ensure that this type of episode is not repeated," said Craig, who less than two months ago fought for and won an additional $410 million over the Department's budget request for medical care, bringing the yearly increase to $1.2 billion.

"I have met with members of the Senate Veterans' Affairs committee and other Senate leaders about this situation. None of us are happy that this happened," Craig said.

According to senior VA finance officials, the VA is now meeting the health care needs of veterans by using approximately $600 million originally budgeted for capital infrastructure projects and drawing on approximately $400 million that was originally budgeted for carry-over into next year's budget.

"When I made the argument for the additional funding, I was assured by the Department that the $410 million in additional money was sufficient to meet the needs of veterans. To find out so soon afterward that I was supplied with inaccurate or dated information is extremely frustrating," Craig said.

"The first thing for veterans to know is that they will continue to receive the same high quality care that they have been receiving. Secondly, we in Congress must fix this financial problem and I am confident that my colleagues and I will be able to do that. Finally, I will bring the VA in to explain why this happened, and work to ensure that this situation does not happen again."

The Chairman noted that the news has come just in the nick of time.

"The House has already passed its VA appropriations bill, which leaves the Senate as the only forum to have the debate on how to address this problem," Craig said.

With a budget of approximately $70 billion, the $1 billion shortfall represents an error rate of approximately 1.5 percent.

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