Congressional Record Statement of Senator Daniel K. Akaka
Mr. President, I am pleased that the Senate is acting on S. 3023, the proposed Veterans' Benefits Improvement Act of 2008 , as reported by the Committee on Veterans' Affairs. This omnibus veterans' benefits bill will provide much needed support to our Nation's veterans . It contains six titles and 34 provisions that are designed to enhance compensation, housing, labor and education, and insurance benefits for veterans . A full explanation of the bill is available in the committee's report accompanying this legislation, Senate Report 110-449.
I believe that it is important that we view veterans' compensation, and indeed all benefits earned by veterans , as a continuing cost of war. This legislation reflects that perspective.
I will highlight a few of the provisions that I have sponsored in the legislation that is before us today.
This legislation would result in improved notices being sent to veterans concerning their claims for VA benefits. Following a number of decisions by the U.S. Court of Appeals for Veterans Claims and the U.S. Court of Appeals for the Federal Circuit, VA's notification letters to veterans about the status of their claims have become increasingly long, complex, and difficult to understand. These notification letters must be simplified, as veterans , VA, veterans' advocates, and outside review bodies have all recommended. The notices should focus on the specific type of claim presented. They should use plain and ordinary language rather than bureaucratic jargon. Veterans should not be subjected to confusing information as they seek benefits .
To further improve the VA compensation system, this legislation would end the prohibition on judicial review in the United States Court of Appeals for the Federal Circuit of matters concerning the VA rating schedule. VA issues regulations which are used to assign ratings to veterans for particular disabilities. Under current law, actions concerning the rating schedule are not subject to judicial review unless a constitutional challenge is presented. This legislation would amend the law to treat actions concerning the rating schedule in the same manner as all other actions concerning VA regulations.
I expect VA to comply with all laws passed by Congress in developing and revising the Rating Schedule. However, justice to our Nation's veterans requires that actions concerning the rating schedule be subject to the same judicial scrutiny as is available for the review of actions involving other regulations.
VA's home loan guaranty program may exempt homeowners from having to make a down payment or secure private mortgage insurance, depending on the size of the loan and the amount of the VA guaranty. In general, eligibility is extended to veterans who served on active duty for a minimum of 90 days during wartime, or 181 continuous days during peacetime, and have a discharge other than dishonorable. Members of the Guard and Reserve who have never been called to active duty must serve a total of six years in order to be eligible for the benefit . Certain surviving spouses are also eligible for the housing guaranty.
Public Law 108-454 increased VA's maximum guaranty amount to 25 percent of the Freddie Mac conforming loan limit determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a single family residence, as adjusted for the year involved.
The Economic Stimulus Act of 2008 , Public Law 110-185, temporarily reset the maximum limits on home loans that the Federal Housing Administration may insure and that Fannie Mae and Freddie Mac may purchase on the secondary market to 125 percent of metropolitan-area median home prices, but did so without reference to the VA home loan program. This had the effect of raising the Fannie Mae, Freddie Mac, and FHA limits to nearly $730,000, in the highest cost areas, while leaving the then-VA limit of $417,000 in place. On July 30, 2008 , the Housing and Economic Recovery Act of 2008 was signed into law as Public Law 110-289. That law provided a temporary increase in the maximum guaranty amount for VA loans originated from July 30, 2008 through December 31, 2008 to the same level as provided in the Stimulus Act .
S. 3023, as amended, would extend the temporary increase in the maximum guaranty amount until December 31, 2011. This would enable more veterans to utilize their VA benefit to purchase more costly homes.
The committee bill would also increase the maximum guaranty limit for refinance loans and increase the percentage of an existing loan that VA will refinance under the VA home loan program.
Under current law, the maximum VA home loan guaranty limit for most loans in excess of $144,000 is equal to 25 percent of the Freddie Mac conforming loan limit for a single family home. Public Law 110-289 set this value at approximately $182,437 through the end of 2008 . This means lenders offering loans of up to $729,750 will receive up to a 25 percent guaranty, which is typically required to place the loan on the secondary market. Under current law, this does not include regular refinance loans.
Current law limits to $36,000 the guaranty that can be used for a regular refinance loan. This restriction means VA will not guarantee a regular refinance loan over $144,000, essentially precluding a veteran from using the VA program to refinance his or her existing FHA or conventional loan in excess of that amount.
VA is also currently precluded from refinancing a loan if the homeowner does not have at least 10 percent equity in his or her home.
The committee bill would decrease the equity requirement from 10 percent to 5 percent for refinancing from an FHA loan or conventional loan to a VA-guaranteed loan. This would allow more veterans to use their VA benefit to refinance their mortgages. Many veterans do not have 10 percent equity and thus are precluded from refinancing with a VA-guaranteed home loan.
Given the anticipated number of non-VA-guaranteed adjustable rate mortgages that are approaching the reset time when payments are likely to increase, the committee believes that it is prudent to facilitate veterans refinancing to VA-guaranteed loans. In light of today's housing and home loan crises, additional refinancing options will help some veterans bridge financial gaps and allow them to stay in their homes and escape possible foreclosures. These provisions would allow more qualified veterans to refinance their home loans under the VA program.
The omnibus benefits bill would also make crucial updates to the Uniformed Services Employment and Reemployment Rights Act , which protects servicemembers' rights to return to their prior jobs with the same wages and benefits . The provisions in the committee bill are derived from S. 2471, the proposed ``USERRA Enforcement Improvement Act of 2007,'' which Senator KENNEDY and I introduced on December 13, 2007. This legislation would ensure that federal agencies assist servicemembers in a more effective manner, by requiring the Department of Labor to investigate and refer cases in a more timely manner, and by requiring reports from the Department of Labor on their compliance with the deadlines.
Finally, the omnibus benefits bill includes a provision derived from S. 3000, the proposed ``Native American Veterans Access Act of 2008 ,'' which I introduced on May 8, 2008 . This provision is intended to improve VA's ability to understand and respond to the needs of Native American veterans . While Native Americans are more likely to serve in uniform than the general population, many of them find cultural and geographical barriers between themselves and the benefits they earned through service. In addition, those returning to traditional homelands, especially reservation communities, frequently come home to dismal job opportunities and starved economies. The proposed bill would require a study to help us understand the employment needs of Native American veterans and how best to address them.
I thank the committee's ranking member, Senator BURR, for the agreements we have been able to reach. I truly appreciate his cooperation and that of the other members of the committee that have aided our work. I look forward to working with all those on the committee and our colleagues in the House in order to bring this legislation to final action before the end of this month.
I urge colleagues to support this important legislation that would benefit many of this Nation's nearly 24 million veterans and their families.
September 16, 2008