The CHAIRMAN. Is that because of the cut in appropriation?

Mr. BIGELOW. No, Madam Chairman, not particularly. Of course, the cut added to it.

Mr. MATTHEWS. Madam Chairman.

The CHAIRMAN. The gentleman from Florida.

Mr. MATTHEWS. Was the personnel unavailable due to lack of funds? Was your recruitment problem due to lack of funds?

Mr. BIGELOW. I think personnel could not be recruited, and we did not have ceiling or money to recruit them.

The CHAIRMAN. I think many who voted for the cut in VA appropriation did not realize that the cut affected the medical services. Mr. FRELINGHUYSEN. It was not supposed to affect the medical services.

The CHAIRMAN. They did not understand.

Mr. FRELINGHUYSEN. I am not sure we are being told now these results are due to that cut or not due to the cut.

Admiral BOONE. Some of this was due to scarcity, such as neuropsychiatrists. There are only 7,500 in the United States, and the Veterans' Administration has 676. We are very short in that category. And then in the TB category, TB nursing is very difficult to fill.

Mr. TEAGUE. Could we be told what part is due to the cut by Congress?

Mr. BIGELOW. I cannot break that down, sir.

Mr. TEAGUE. Can you estimate? One-half or two-thirds?

Mr. FRELINGHUYSEN. Is it reasonable to say none is due to the cut? Mr. BIGELOW. No; I would not say that none is due to the cut. We lost 2,250 personnel.

it?

Admiral BOONE. It might be timely to say what that cut did, would

The CHAIRMAN. Yes.

Admiral BoONE. This is the action we had to take.

(a) We were not required by the Congress to make any percentage of cut in the central office, Department of Medicine and Surgery, as we had a 10-percent cut the year before. However, I felt it was only fair and good for morale, if there was a cut in the field, for the central office to take a cut. So I made a 5-percent cut in the central office, Department of Medicine and Surgery staffs.

(b) Twenty-five percent reduction to employee travel funds or $340,000 urgently needed for employee attendants accompanying patients, for the transfer of excess physicians, dentists, nurses, and dietitians to hospitals where their services are needed, and for transfer of trained personnel to staff new hospitals.

I want to say parenthetically, due to having been challenged before a Subcommittee of Appropriations the other day, that Congress had taken the position, in the conference report last year, that we were not to make a reduction in the number of doctors, dentists, nurses, and dietitians, and we did not. If a physician, a dentist, a nurse, or a dietitian could be spared in this cut we had to make, we offered them a position elsewhere. If they refused to go elsewhere, they voluntarily eliminated themselves. That is the only attrition in that group.

I can break down that reduction of 2,250: Physicians, 14; dentists, 3; nurses, 61; dietitians, 2; other medicals, such as orderlies, ward

and mess attendants, 1,301; administration and supply and maintenance people, 869. That made up the 2,250. So you see the big proportion of the reduction was in the other medicals, 1,301, and administrative, 869. The other special group were the 14 physicians, 3 dentists, 61 nurses, and 2 dietitians who refused to go to another station. The law of Congress was applied.

Mr. SPRINGER. Madam Chairman.

The CHAIRMAN. The gentleman from Illinois.

Mr. SPRINGER. This $31,000,000 cut, was that applied to the Department of Medicine and Surgery alone?

Admiral BOONE. Yes, sir, as a result of congressional action, we had a $40,000,000 cut for the Veterans' Administration as a whole, and $31,000,000 was in the Department of Medicine and Surgery.

Mr. SPRINGER. This cut of 2,250 in personnel, they had to be removed?

Admiral BOONE. Yes, sir.

Mr. SPRINGER. When you appeared before the budget, what was their justification for the cut?

Admiral BOONE. This cut was imposed by congressional action. Might I continue with the action we had to take as a result of the cut?

The CHAIRMAN. Yes.

Admiral BOONE. I have stated (a) and (b).

(c) Reduction of 385 beds in Federal contract hospitals to absorb $2,000,000 of the overall cut.

(d) Reduction of more than $10 million or over 25 percent from the $40,000,000 requested for fee-basis medical and dental treatments. (e). Reduction of nearly $3,000,000, or 575 average employment in the regional office outpatient program, critically needed to handle by staff treatment in VA clinics the tremendous backlogs developing in outpatient medical and dental treatments-all service-connecteddue to reductions in fee-basis funds.

(f) Five percent or $500,000 reduction in funds for maintenance and repairs at hospitals which will require additional expense in the long run.

(g) Ten percent or $350,000 reduction in funds for special services recreational and spiritual welfare items.

(h) Reduction of $1,000,000 or 1212 percent of funds for medical consultant and attending services. We have to be very heavily supplemented by these part-time medical consultant people.

(i) General decreases in depot inventories and fund availabilities for all other items of the medical and hospital program, amounting to nearly $7,000,000.

So I think you can see from that how we spread this over throughout the program, but I might add it has been a very, very tough 6 or 7 months.

Mr. SPRINGER. When you applied this spread, who instructed you to divide it up that way?

Admiral BOONE. Administratively, that is my responsibility after we are given the allocation from the budget officer of the Veterans' Administration. How we distribute the cut is my responsibility administratively, and this seemed to be the equitable way and the least painful way, but it was a very severe pain. Mr. AYRES. Madam Chairman.

The CHAIRMAN. The gentleman from Ohio.

Mr. AYRES. Who made the decision that the figure you gave would be applied to medical?

Admiral BOONE. The $31,000,000?

Admiral BOONE. The budget officer of the Veterans' Administration.

Mr. BIGELOW. Proportionately, it was made that way. That was our cut proportionately.

Mr. SPRINGER. As I understood, you said Congress applied this $31 million cut to you. Did they?

Mr. BIGELOW. No. The $40 million cut was to the Veterans' Administration, and the proportionate cut to us, to the Department of Medicine and Surgery, was $31 million.

Mr. SPRINGER. You mean they just divided it up proportionately, depending on how many dollars you got before?

Mr. BIGELOW. That is correct.

Mr. SPRINGER. It was my understanding that that was the thing the Congress did not want to be done. Am I right on that?

Admiral BOONE. The only limitation was that there should be no reduction in the category of physicians, dentists, nurses, and dietitians. Mr. AYRES. When Congress made the cut, they had no authorization to indicate where the cuts were to be made.

Admiral BOONE. After I got the cut, we had $31 million less, and I had to make the determination how I was going to make that distribution.

Mr. AYRES. Who told you you had to reduce your budget $31 million?

Admiral BOONE. That was what was given to us.

Mr. AYRES. Who gave it to you?

Admiral BOONE. The budget officer of the Veterans' Administration.

Mr. AYRES. The story we all get in our mail is that there seems to be a feeling among the veterans that the cut was made where it would hurt most so there would be pressure to restore the cut.

Admiral BOONE. That is not a fair assumption.

Mr. SPRINGER. I do not think the spirit has been complied with. The conference report stated:

Conferees have approved the full amount of the budget estimate for research, including work in connection with prosthetic appliances, and have further agreed that there should be no reduction in the number of doctors, dentists, nurses, and dietitians.

I think the intention was that cut was not to be applied to the medical department.

Mr. TEAGUE. It is just like giving Congress a certain amount and saying, "You will not apply the cut to Congressman, but to the staff." Admiral BOONE. Congress stipulated not to interfere with research. If they had not done that, I would have made research take a proportion of the cut. Research is cut indirectly because we do not have the staff.

Mr. SPRINGER. I remember 3 or 4 years ago I was not here, but I recall reading in the newspapers the Veterans' Administration was urged to take a cut where the reaction would be most serious. I think the conferees put this paragraph in the conference report to avoid

that being done again. It seems the budget officer has done the very thing this conference report did not intend to be done.

I will say this: If this thing comes up this year, I am certainly going to call this to the attention of the House, that this cut should not come from medicine and surgery. Here the Veterans' Administration had a $40,000,000 cut, and over three-fourths of it came from you.

Admiral BOONE. Mr. Baker, senior assistant to Mr. Moore, the budget officer of the Veterans' Administration, I think, can clarify it.

Mr. BAKER. The intent of Congress, to the full extent possible, was followed out. You say three-fourths of the cut was applied to medical. The request for medical was three-fourths of the amount requested. We did not cut research. We tried to follow any guide lines as to how Congress wanted us to apply those reductions. After we had taken care of every indication available to us, then the only course was to apply the reduction proportionately.

The CHAIRMAN. But you did cut the medical disproportionately? Mr. BAKER. Not disproportionately. We cut it proportionately to meet the requirement of Congress.

Mr. SPRINGER. This is certainly something I do not believe Congress realized they were doing. The average fellow did not understand he was cutting $31,000,000 from the medical department. I think that is the last thing a Congressman wants.

The CHAIRMAN. May I interrupt a second? It is a quarter of 12. I think all members of the committee want to know how much the budget cut will affect the medical program in this supplemental appropriation.

Mr. McNamara, can you answer that question? Mr. McNamara ist a Massachusetts man. He should do well for us.

Mr. MCNAMARA. I wish I could do as well for them as you do, Madam Chairman.

The CHAIRMAN. That is very gracious.

Mr. MCNAMARA. The Veterans' Administration received a reduction in the President's budget of $40 million, and the Veterans' Administration proposed to distribute that cut to the extent of $31 million on the medical program.

When the apportionment request was submitted to the Director of the Budget in the latter part of July, we approved the apportionment submitted by the Veterans' Administration, including the amount that the Veterans' Administration proposed for the medical program. In September the Administrator of the Veterans' Administration submitted a request for reapportionment of the appropriation on a deficiency basis, and at that time estimated that he would require $16.7 million additional in order to be able to carry the program of the Veterans' Administration as it was then being carried, which was at a level in excess of the program presented by the President in his budget to the Congress.

The Director of the Budget advised the Administrator of the Veterans' Administration he had no basis upon which to approve a deficiency apportionment, in the light of the legislative history of the appropriation for the medical program. Congress had made it clear that in reducing the President's 1953 budget request that it did not anticipate a deficiency. The House Appropriations Committee report specifically stated that the amount of the appropriation recom

mended was intended to carry the patient load of 102,000 in Veterans' Administration hospitals contemplated by the President's budget request.

I would be glad to read from the section of the Antideficiency Act which stipulates the only conditions under which the Budget Director may permit an agency to anticipate a deficit, namely, where Congress made it clear that they would appropriate additional funds to cover the cost of legislation enacted subsequent to transmission of the budget to Congress or where an emergency faced the Federal Government involving the safety of human life, the protection of property, or the immediate welfare of individuals in certain cases where benefits are required to be paid by law.

The CHAIRMAN. I understand there are some benefits in this appropriation that are required by law to be paid.

Mr. MCNAMARA. Not in the medical program. This request for $16.7 million supplemental request was related only to the medical program. The Budget Director felt he had no basis on which to authorize the Veterans' Administration to spends its funds at such a rate as to reflect a deficit.

The Administrator appealed to the President direct. The President advised the Administrator neither he nor the Budget Director had any choice under the law, and he felt the Veterans' Administration probably could operate within the funds made available to it by the Congress, and that such steps should be taken as seemed indicated to do that, and if later in the year it appeared a supplemental estimate was necessary, he would consider it.

I might say at the time he appealed to the President, the Administrator changed his estimate from $16.7 million to $23 million, with substantially the same justification as supported the $16.7 million.

On November 28 the Administrator submitted another request— and this was the first time a formal supplemental appropriation estimate was submitted-for $6 million. This was substantially 22 months after his initial request for $16 million.

At that time the Administrator stated this amount would be necessary to enable him to staff the new hospitals scheduled to be opened for the balance of the fiscal year. While he did not request an additional $9 million, he stated that amount would be necessary to restore the level of employment in the old hospitals which he had curtailed through reduction in force between July 1 and November 4, which was in the neighborhood of 5,000 positions.

But he only made a specific request for the $6 million. The $6 million request was in effect approved by the Budget Director and the President, but was reduced from $6 million to $5 million only because between the time of submission of the estimate to the Budget Bureau and its subsequent transmission to Congress, another source of revenue had increased the VA's available funds by $1 million.

The House Appropriations Committee has recommended the full $5 million.

Does that answer your question?

Admiral BOONE. Madam Chairman.

The CHAIRMAN. Yes, Admiral Boone.

Admiral BOONE. I think it would be appropriate if Mr. Baker or Commander Bigelow spoke to the point of General Gray increasing