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“Putting Veterans First: Is the Current VA Disability System Keeping Its Promise?”

Senate Veterans Affairs Committee

October 29, 2025 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked):

• The Honorable Cheryl Mason: Inspector General, U.S. Department of Veterans Affairs

• Jeremy Villanueva: Associate Legislative Director, Paralyzed Veterans of America

• Jon Retzer: Deputy National Legislative Director, Disabled American Veterans

• Ryan Gallucci: Executive Director, Veterans of Foreign Wars of the United States

• Daniel M. Gade, PhD: Lieutenant Colonel, U.S. Army (Ret.)

• Elizabeth Curda: Director, Education, Workforce, and Income Security Issues, Government Accountability Office

Keywords mentioned:

• Benefits, disability claims, fraud investigation, PACT Act, veterans service organizations (VSOs), disability compensation, Washington Post article, mental health, quality control, legislative reforms, government oversight

IN THEIR WORDS

OPENING STATEMENTS FROM THE COMMITTEE

• Chairman Jerry Moran said the hearing would explore whether the current VA disability claims system ensures timely, accurate, and fair outcomes for veterans or if it inadvertently creates barriers to their success. He criticized recent Washington Post articles that, in his view, unfairly portrayed veterans as engaging in widespread fraud, asserting that such claims misrepresent the vast majority of veterans who serve honorably. The Chairman stated that the Committee’s goal was to ensure the system fulfills its obligation to help veterans lead successful, fulfilling lives after military service.

• Ranking Member Richard Blumenthal focused on the nation’s obligation to those who became ill or injured due to service. He criticized the current administration’s policies, such as hiring freezes and return-to-office mandates, for demoralizing VA employees and damaging claims processing capacity. The Ranking Member condemned portrayals of disability compensation as overly generous or fraudulent, calling such claims misleading and harmful to veterans. He also accused VA leadership of politicizing its operations, vowed to fight for improvements to earned benefits, and urged bipartisan accountability to ensure the VA serves all veterans fairly.

SUMMARY OF KEY POINTS

• Ms. Cheryl Mason committed to combating fraud, waste, and abuse while safeguarding the benefits veterans have earned. She expressed dismay at claims that veterans are defrauding the system, noting that only about 3.7% of active Office of Inspector General (OIG) fraud investigations involve veterans. Ms. Mason emphasized that most fraud targets the VA itself rather than being perpetrated by veterans and that her office works to prevent, not just prosecute, such wrongdoing.

• Mr. Jeremy Villanueva testified that many veterans with spinal cord injuries depend on a range of VA services, including health care, adaptive housing, and financial compensation. He condemned portrayals of disabled veterans as fraudsters, noting that actual cases of fraud are rare. Mr. Villanueva advocated for improvements to the VA’s compensation and pension (C&P) exams, arguing that examinations should be conducted by qualified VA physicians in accessible facilities and that contracted examiners often lack appropriate expertise. He also recommended stronger quality-assurance reviews of Disability Benefits Questionnaires (DBQs) to detect fraud early and ensure veterans receive fair compensation.

• Mr. Jon Retzer stressed that every disability claim represents a personal sacrifice, not a statistic. He criticized a recent Washington Post article for grossly misrepresenting veterans and the disability system, saying that fraud convictions are exceedingly rare and the process is legally rigorous. Mr. Retzer recommended sustained VBA funding, simplification of the claims process, integration of new technology with veteran service organizations, and modernization of presumptive rules for toxic exposure.

• Mr. Ryan Gallucci claimed that veterans’ benefits are part of a solemn contract between the nation and those who serve, not an act of charity. He denounced media portrayals suggesting widespread fraud, comparing them to past efforts to strip veterans of benefits in the 1930s and 1950s. Mr. Gallucci argued that invisible wounds like PTSD and toxic exposure are real and that simplifying claims processes and improving technology are key reforms. He also condemned illegal “claim shark” companies exploiting veterans and stressed that Congress must protect honest advocates and uphold the nation’s promise to its veterans.

• Dr. Daniel Gade stated that the current disability compensation system harms veterans by incentivizing illness and idleness rather than recovery and purpose. Drawing on his own combat injuries and academic research, he argued that paying veterans to be “sick” worsens mental health and employment outcomes. Dr. Gade called for structural reforms that encourage meaningful employment and eliminate compensation for non-disabling, age-related, or lifestyle conditions.

• Ms. Elizabeth Curda from the Government Accountability Office (GAO) testified that her office had placed the VA’s disability compensation program on its High-Risk List due to longstanding management weaknesses and outdated processes. She said that the VA has struggled to update its medical rating schedule, implement quality controls for medical exams, and provide adequate training for claims processors. Ms. Curda highlighted GAO recommendations to improve oversight of contracted exam quality and enhance workforce development, pointing out that several remain unimplemented.

• Sen. Tommy Tuberville asked whether it was time to establish a commission, similar to the 2014 Commission on Care for the Veterans Health Administration, to review and improve the VBA. Dr. Gade agreed that a commission would be appropriate and necessary to assess and reform the VBA process. Mr. Gallucci expressed caution, recalling that past commissions failed to produce meaningful change and instead led to unintended consequences. He believed a forum like the current hearing was a better venue for progress and agreed with parts of Dr. Gade’s perspective on reforming incentives for veterans seeking benefits.

• Sen. Tuberville then asked how the strain caused by the PACT Act’s implementation could be reduced. Dr. Gade responded that the law had created moral and administrative challenges, citing hypertension as an example of a condition that affects older populations regardless of service but is now presumptively compensated. He argued that this shifts responsibility for lifestyle conditions onto taxpayers. Mr. Gallucci added that the system must accelerate scientific research to more quickly identify toxic exposures, illustrating his point with the ongoing health challenges faced by those who served at K2 Air Base in Uzbekistan.

• Ranking Member Blumenthal asked whether planned workforce reductions at the VA would affect disability claims processing. Ms. Curda explained that the VA’s ability to manage workloads was already on GAO’s High-Risk List due to longstanding struggles with backlogs. She admitted that reducing staff while workloads rise would logically slow processing and increase errors and said that the VA should conduct workforce planning to assess these effects.

• The Ranking Member then inquired about proposals from the administration to means-test disability benefits. Mr. Gallucci strongly opposed the idea, arguing that service-connected compensation is not a welfare program but part of a contractual obligation to those who served. He claimed that means testing contradicts the principles of Title 38 and would penalize veterans for conditions tied to military service.

• Ranking Member Blumenthal also asked about reports that veteran service officers were being denied access to space in VA regional offices during the government shutdown. Mr. Retzer confirmed that DAV officers had been restricted from performing normal duties, even though time-sensitive materials required their attention. He claimed this created security concerns and inefficiencies, as officers had to handle personally identifiable information outside of secure VA systems. Both Mr. Gallucci and other witnesses confirmed that their organizations were facing the same restrictions nationwide.

• Sen. Mazie Hirono understood that while fraud can occur in any large system, she wanted to learn more about the VA’s capacity to investigate it. Ms. Mason replied that her office investigates fraud in collaboration with the Department of Justice and local law enforcement, emphasizing that intent and corroborating evidence are required for prosecution. She clarified that her team does not adjudicate claims but oversees investigations and department-wide oversight, rejecting the Washington Post’s implication of “massive fraud” among veterans.

• Sen. Hirono then asked the VSO panelists whether they believed the VA had implemented GAO’s prior recommendations to improve oversight. Mr. Gallucci responded that quality-control weaknesses remained, citing an example from the Washington Post story in which benefits were awarded for an injury linked to a DUI. He said the VA needed stronger internal safeguards to prevent such improper awards and agreed that quality controls still required improvement.

• Sen. Marsha Blackburn told Ms. Mason that PACT Act implementation had caused confusion and asked how well VA leadership was following OIG recommendations. Ms. Mason replied that her office had identified major oversight and compliance problems within VBA, particularly scattered guidance and outdated manuals, and said she had not yet seen evidence of corrective action.

• Sen. Blackburn then asked what Congress could change to prevent veterans from being trapped by the disability system. Dr. Gade answered that the definition of “disability” itself should be narrowed to align with standards used by the Social Security Administration or Census Bureau, allowing more funds to go toward rehabilitation, employment, and medical care rather than “transfer payments” that perpetuate dependence. When Sen. Blackburn asked Ms. Curda if she agreed, Ms. Curda replied that GAO’s past reviews had analyzed various reform proposals, stating that each option carried trade-offs and costs but that the VA clearly needed to update its outdated compensation schedule.

• Sen. John Boozman shared that many veterans still face lengthy waits for disability decisions, sometimes dying before their claims are resolved. He asked how Congress and the VA could support his principle that “meaningful employment is powerful medicine” without discouraging veterans from using their benefits. Dr. Gade cited findings from the Independence Project, a randomized trial that showed veterans who received incentives to pursue work achieved lasting improvements in employment, income, and health.

• Sen. Boozman then inquired about GAO’s findings on VA reform management, and Ms. Curda reported that GAO found the VA often launched major initiatives without clear goals, oversight, or performance metrics, which hindered success. When Sen. Boozman asked if this reflected a cultural or leadership problem, Ms. Curda replied that the VA’s “firefighting” culture often led to rushed fixes instead of strategic planning, and GAO had recommended requiring structured management practices for all major reforms.

• Sen. Tim Sheehy condemned what he called the Washington Post’s “poisonous and disgusting rhetoric” portraying veterans and VSOs as fraudsters. He said that veterans are not victims but patriots who want meaningful new missions after service, and he asked whether current incentive systems drive dependence rather than success. Dr. Gade responded that during his own transition, he was taught to “claim everything you can,” encouraging exaggeration for higher disability ratings, which can separate veterans from the workforce and leave them disempowered.

• Sen. Sheehy agreed that disability recognition should not preclude employment and asked how to restructure the system to promote new careers while acknowledging lasting injuries. Dr. Gade suggested stopping compensation for non-disabling conditions, such as those rated under 60%, and redirecting savings to job programs and higher benefits for severely injured veterans. Mr. Retzer added that rehabilitation and compensation must be complementary, with the VA strengthening programs like Veterans Readiness and Employment (VR&E) and integrating vocational, health, and education services to help veterans reintegrate into the workforce.

• Sen. Tammy Duckworth sharply criticized the hearing for amplifying the Washington Post’s “flawed attack” on disabled veterans and for including a witness who, she said, shared those views. She claimed that fraud among veterans should be prosecuted, but redesigning the system to treat all applicants with suspicion would harm those who deserve benefits. Addressing Dr. Gade, she expressed personal disappointment in his rhetoric, saying it risks shaming veterans and portraying them as “moochers” instead of acknowledging their sacrifices.

• Sen. Duckworth asked the VSO leaders whether disabled veterans should receive worse treatment or be presumed fraudulent. Mr. Gallucci answered that veterans deserve full access to their earned benefits and that portraying them as exploiters pits them against other Americans. He said that veterans face real occupational hazards that justify service connection and argued that VA reforms rightly aim to make the process easier, not adversarial. Sen. Duckworth and Mr. Gallucci agreed that demonizing the system would discourage eligible veterans from seeking help and risk repeating historical injustices toward past generations of veterans.

• Chairman Moran turned to whether any pending OIG reports on disability issues required VA attention. Ms. Mason replied that her office had several pending audits related to disability quality review, automation accuracy, and fraud oversight, and that OIG audit and investigative teams coordinate to close oversight gaps.

• The Chairman invited Mr. Gallucci to explain what veterans believe their contract with the nation entails. Mr. Gallucci responded, saying that when service members take the oath, they understand that if they are injured “on the government’s time and dime,” they will be cared for. He added that even seemingly minor conditions, like chronic fungal infections, can become serious occupational hazards due to military environments. Chairman Moran agreed that veterans expect to be cared for when they serve under dangerous conditions.

• Chairman Moran then revisited the topic of employment and asked how the VA could better promote meaningful work for veterans. Mr. Villanueva believed that every veteran who wants to work should have the opportunity to do so, and he advocated for the expansion and promotion of programs like VR&E in the transition process. He pointed out that many veterans do not learn about VR&E or education benefits until years after separation and urged the VA to remove time limits and increase outreach to medically retired veterans.

• Sen. Jim Banks described the VA disability-claims process as slow and outdated, with initial decisions taking months and appeals lasting years, and he asked how improvement efforts were progressing. Ms. Curda replied that appeals remain a high-risk area because surges in claims create delays at every stage, especially for cases requiring hearings before judges. She claimed the VA has recently improved its ability to model workloads and plan resources but still lacks full capacity to meet timeliness goals.

• Sen. Banks then asked which parts of the VA rating schedule were most outdated. Ms. Curda pointed to four categories (mental disorders, respiratory illnesses, ear and auditory conditions, and neurological disorders) as yet to be comprehensively updated, saying that the system still reflects a 1940s-era understanding of disability. She stated that this creates inequities, especially for mental health, which was poorly understood when the schedule was created.

• Sen. Banks then questioned how widespread disability-compensation fraud truly is, citing cases from the Washington Post article. Dr. Gade replied that outright fraud is rare, but lax oversight allows exaggeration and manipulation of DBQs. He described online communities that share instructions for self-filling DBQs to obtain higher ratings, calling it a widespread but under-discussed issue. Ms. Mason added that DBQs present ongoing risks both publicly and internally due to weak controls and oversight. She said OIG reports have repeatedly flagged VBA for failing to monitor its own contracted exam processes and recommended that Congress consider setting DBQ standards to close those gaps.

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