The Budget Battles

In June 2005, Jimmy Norris and several high-ranking Department of Veterans Affairs (VA) officials testified before angry members of the House Committee on Veterans Affairs. The lawmakers were looking into a funding gap at the Veterans Hospital Administration (VHA) — a $1.3 billion underestimate of the money needed to provide medical services to vets that year.

It's not entirely clear what caused the shortfall. Officials at the VHA blamed much of the gap on a larger-than-predicted increase in demand caused by returning veterans of the Global War on Terrorism. For his part, Norris, who was the VHA's CFO at the time, says some of the problems stemmed from overly optimistic projections about cost savings in the agency's long-term-care operations.

But VA critics insist that the budgeting process itself is partly to blame. They note that the agency's annual appropriation is generally subject to an intense amount of political posturing and behind-the-scenes wrangling. Members of Congress are often eager to divert funds to home states, say the critics, while White House officials typically attempt to keep spending increases from spiraling out of control. Notes Quentin Kinderman, deputy director of the national legislative service at the Veterans of Foreign Wars: "Initial figures come out of an Administration intent on keeping numbers lower than needed."

As with managers in the private sector, VA officials generally try to stay within the budgets set by their boss — in this case, the President of the United States. Says Steve Smithson, deputy director of claims services, Veterans Affairs and Rehabilitation Division, at the American Legion: "The Secretary [of Veterans Affairs] says, 'Yes sir, Mr. President, we can handle this.'"

Norris refuses to lay blame for the snafu. — J.G.

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