September 14, 2001

Mr. Tim McClain
General Counsel
Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. McClain:

     For the reasons described below, we are returning to you for reconsideration a draft proposed rule from the Department of Veterans Affairs (VA) entitled, "Evidence of Permanent and Total Disability" submitted to the Office of Management and Budget (OMB) under Executive Order (E.O.) No. 12866 on April 16, 2001.

     This rule would create three new presumptions in the VA non-service connected pension program for certain veterans. In order to be eligible for such a pension, a veteran must have wartime service, meet certain income and net worth requirements and be "permanently and totally disabled." This proposed rule would create three categories of veterans who were presumed to be "permanently and totally disabled." The three new categories are: 1) the veteran is age 65 or older; 2) the veteran is a patient in a nursing home, and 3) the Social Security Administration (SSA) determines that the veteran is disabled for the purposes of any benefits administered by that agency.

     In discussions with VA staff on this rule, several concerns have arisen about each of the individual presumptions that VA is creating. The first presumption, that veterans age 65 or older are permanently and totally disabled, was specifically eliminated by Congress in 1990 from the statutory authorization for the pension program. To reinstate this presumption would contradict the statutory authority and intent of the program. With regards to the second presumption, veterans in nursing homes may be there for temporary convalescence whereas the pension program is clearly intended for veterans who are expected to be disabled for life, not for intermittent periods of disability. Finally, VA is required by law to provide pensions only to permanently disabled veterans. SSA requires a person only to be continuously disabled for 12 months and designates some beneficiaries as "medical improvement expected."

     In addition, the stated purpose of the proposed rule is to increase efficiency in claims processing. However, in both the rulemaking document and supporting analysis, VA fails to account for the fact that additional claims will be filed as a result of these new presumptions. VA's assessment of costs is based solely on existing claims data.

     Due to the concerns identified above, we are returning this rule for your reconsideration. Our staff is available for further discussion with you on these issues.



John D. Graham
Office of Information and   Regulatory Affairs