‘This Is How We Modernize’: Nancy Mace Suggests Using Blockchain Technology For VA Benefits

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In a House Committee on Veterans’ Affairs markup meeting before the Congressional recess, Rep. Nancy Mace (R-SC) proposed legislation to explore using blockchain technology in VA ledgers and benefit distribution.

Transcript

00:00H.R. 3455. I now call up H.R. 3455, the Veterans Affairs Distributed Ledger Innovation Act.

00:15The clerk shall report. H.R. 3455. To direct the secretary. The bill was circulated in

00:20advanced pursuant to committee rules without objection. The first reading is dispensed with,

00:25and the bill is open to amendments at any point. I now recognize myself for five minutes to speak in

00:30favor of this legislation. I'm glad to see my colleague, Representative Mace, introduced the VA

00:41Distributed Ledger Innovation Act. I admire Representative Mace's commitment to spearheading

00:49this innovation legislation and move VA from the Stone Age into the New Age. This legislation would

00:59direct VA to study how blockchain technology can modernize and improve the veterans benefits claims

01:06process. VA must continue to be an innovative organization to deliver quality, advanced health

01:15care, and benefits to our veterans. This bill would ensure VA stays on track. It has my full support

01:23and I yield back. Does any other member wish to comment on the bill? Representative Mace, you're not

01:29recognized. Thank you, Mr. Chairman. The VA runs on a patchwork of decades-old legacy systems which are

01:35slow and efficient and prone to security vulnerabilities. These systems often stand in the way of veterans

01:40receiving their benefits in a timely manner, leaving veterans to navigate a maze of outdated portals and

01:46paperwork. These outdated legacy systems also serve as a target for waste, fraud, and abuse, siphoning

01:51crucial resources away from our veterans who earned them. Our veterans and the American taxpayer deserve

01:57better. Distributed ledger technology such as blockchain has the potential to transform how veterans

02:02access their benefits by providing greater efficiency, greater security, and greater transparency.

02:07My bill, HR 3455, the Veterans Affairs Distributed Ledger Innovation Act, is an important step to

02:14bringing the VA into the 21st century. This bill would direct the Secretary of Veterans Affairs to

02:19conduct a comprehensive study on how blockchain technology can be used to improve the clarity,

02:23traceability, and reliability of veterans benefits claims, reduce the risk of fraudulent and inaccurate

02:28claims, and improve the accountability and the handling of claims and identify irregularities and benefits

02:34delivery. To keep the promises this country has made to veterans and to prevent fraudsters from diverting

02:39crucial resources away from our veterans, our technology must adapt with the times and come into

02:44the 21st century. Blockchain technology creates an unchangeable, auditable trail of interactions. It's

02:50time-stamped and tamper-proof, decentralized and secure, and authenticity can be verified instantaneously.

02:58In the financial services industry, we have seen blockchain-based solutions reduce processing times

03:02from days down to seconds. Imagine the applications within the VA on modernizing claims processing.

03:09If the VA adopts this technology, the days of waiting weeks for verification letters could be over.

03:15We owe it to our veterans to ensure outdated technology doesn't stand between them and the

03:19benefits that they've earned. And we owe it to the American taxpayer to ensure benefits are not a

03:23target for waste, fraud, or abuse. So I ask unanimous consent, Mr. Chairman, to enter into the record a

03:29letter of support of my bill, the Veterans Affairs Distributed Ledger Innovation Act from the Digital

03:33Chamber into the record. Without objection. This bill is not a mandate to adopt blockchain overnight.

03:39It is a directive to study the technology, assess its value, and report back to Congress on findings and

03:44next steps. This is how we modernize thoughtfully. New technologies can help us build systems which are

03:50efficient, secure, and transparent. This bill is a step towards bringing the VA into the 21st century

03:55in a way which is deliberate and veteran-focused. So I urge all members on both sides of the aisle

04:00to support this common-sense modernization effort to help ensure veterans have timely access to the

04:05benefits they were promised, and I yield back. Does any other member wish to comment on the bill?

04:11I now recognize Ranking Member Tucano to offer an amendment to H.R. 3455.

04:16I have an amendment at the desk to H.R. 3455 at the desk.

04:22Clerk will report the amendment.

04:23Amendment to H.R. 3455.

04:24As unanimous consent that further reading of the amendment is dispensed with without objection,

04:28so order the gentleman is recognized for five minutes to explain his amendment.

04:31Thank you, Chairman Bost. Similar to Representative Budzinski's remarks on H.R. 3494 on supply chain

04:39management, supply chain modernization effort, I worry that the passage of this bill may accelerate

04:46VA's involvement in an unvetted technology. My amendment would make meaningful changes to

04:52ensure that this study does not just become a check-in-the-box exercise and would ensure that

04:59VA is in fact ready to take on this technology if analysis supports that approach. While the study

05:09would assess whether blockchain technology might improve operations, my amendment would ensure it

05:15also addressed how it may also create security vulnerabilities, data privacy concerns, or undue

05:23pressure on an already constrained OIT workforce. Further, VA should also take the time to consider if

05:30other potential solutions like databases or cloud solutions may be a better fit for VA in its budget.

05:39I'm not offering this amendment here today to say that blockchain definitively has no place at VA.

05:46I cannot tell the future on that. I am simply here noting that before it rolls out such technology,

05:57it should have internal regulations that provide guidelines for its use, a governance structure to

06:04ensure that the right stakeholders are involved with its implementation and organization, and an overall

06:11strategy that takes into consideration staffing across the department, particularly within VA's

06:18modernization workforce, as well as the myriad other substantial projects that VA is undertaking,

06:25such as the electronic health record, FMBT, and supply chain to name a few. VA told us that it was not

06:36ready to implement distributed ledger technology in the oversight and investigation subcommittee

06:40legislative hearing on this bill, where it did not offer a position on the bill. So VA did not offer a position

06:48on this bill. VA also has not provided technical assistance for this piece of legislation.

06:55So as of today, we really don't know where VA stands in terms of assessing blockchain. Ultimately,

07:02many of the bills on today's agenda, HR 3455 included, seem to be pushing forward modernization efforts without

07:10performing the legwork to ensure that VA's workforce and systems are able to handle such efforts,

07:18and that the necessary support structures are in place. I urge my colleagues to join me in helping

07:24VA modernize itself, not throw away, not throw money out the door at fixes that are half-baked and may

07:32impair VA's ability to deliver on its mission. I urge my colleagues to support additional accountability

07:40measures in my amendment, and I ask them to support it. Thank you, and I yield back, Mr. Chairman.

07:45I recognize myself in opposition to the amendment. In order to modernize VA, we need to understand new

07:53technology that can make VA a more secure and efficient organization. The underlying bill does

07:59not require VA to use distributed ledger technology. It simply directs VA to study what the benefits and risks

08:10are. Yet this amendment puts roadblocks on the implementation, implementing this technology

08:16before it's even been studied. The amendment would also expand the study to look at alternative solutions

08:25like database cloud solutions and other subjects beyond the purpose of the study, whether the technology

08:32could be useful. I urge my colleagues to reject the amendment to keep the bill focused on the intended

08:38purpose. And does any other member wish to comment on the amendment? Yes, Mr. Chairman. The gentlelady

08:43is recognized. Thank you. And with all due respect to the ranking member, he laid out the reasons why

08:48we should support this amendment. This is why the VA is stuck. This is why China is eating our lunch,

08:53is because we refuse to modernize. And every time we have a chance to modernize technology and systems to

08:59prevent waste, fraud, and abuse, etc., Congress has a great ability to stifle that innovation, to slow it down.

09:07And that's why we have legacy systems built on COBOL from 30, 40, 50 years ago that we just can't move

09:13forward. We have a VA website that veterans can't navigate. And so this bill does not roll out any

09:21technology. It is simply a comprehensive study and will determine if and how and where, if at all,

09:28blockchain technology can be used at the VA to help our veterans first and foremost. And so I would ask my

09:37colleagues on both sides of the aisle to support this. Thank you, Mr. Chairman. I yield back.

09:42Anyone else seeking recognition on the Takano Amendment?

09:48Seeing none. The question now occurs on agreeing to the Takano Amendment to H.R. 3455. All those in

09:54favor, say aye. Aye. Those opposed, no. No. In the opinion of the Chair, the noes have it.

10:00The noes do have it. And without objection, the motion to reconsider is laid on the table. Any further

10:08amendments to H.R. 3455? I now recognize General Berkman for a motion.

10:16Mr. Chairman, I move that the committee favorably report H.R. 3455 to the full House.

10:23The question is on favorably reporting H.R. 3455. All those in favor, say aye. Aye. Those opposed,

10:31no. No. In the opinion of the Chair, the ayes have it. The motion to reconsider is laid on the table.

10:41The motion is agreed to and H.R. 3455 is reported favorably to the House. Mr. Chairman,

10:48pursuant to House Rule 11, Clause 2, I give notice of intent to file minority supplemental

10:52additional or dissenting views on H.R. 3455 as amended. Without objection.

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