WASHINGTON - Congressional leaders demanded yesterday that the Veterans Affairs secretary explain hefty bonuses for senior department officials involved in crafting a budget that came up $1 billion short and jeopardized veterans' health care.

Rep. Harry E. Mitchell (D., Ariz.), chairman of the House Veterans' Affairs subcommittee on oversight, said he would hold hearings to investigate after the Associated Press reported that budget officials at the Veterans Affairs Department received bonuses ranging up to $33,000.

Sen. Daniel K. Akaka (D., Hawaii), who heads the Senate Veterans' Affairs Committee, said the payments pointed to an improper "entitlement for the most centrally placed or well-connected staff." He has sent a letter to VA chief Jim Nicholson asking what the department plans to do to eliminate any bonuses based on favoritism.

Mitchell said: "No government official should ever be rewarded for misleading taxpayers, and the VA should not be handing out the most lucrative bonuses in government as veterans are waiting months and months to see a doctor."

One House committee member, Rep. Phil Hare (D., Ill.), called for Nicholson to resign.

A list obtained by AP of bonuses to senior career officials in 2006 documents a generous package of more than $3.8 million in payments by a financially strapped agency straining to help care for thousands of injured veterans returning home from Iraq and Afghanistan.

Among those receiving payments were a deputy assistant secretary and several regional directors who crafted the VA's flawed budget for 2005 based on misleading accounting. They received performance payments up to $33,000 each, a figure equal to about 20 percent of their annual salaries.

Also receiving a top bonus was the deputy undersecretary for benefits, who helps manage a disability-claims system that has a backlog of cases and delays averaging 177 days in getting benefits to injured veterans.

The bonuses were awarded even after government investigators had determined the VA repeatedly miscalculated - if not deliberately misled taxpayers - with questionable methods used to justify Bush administration cuts to health care amid the burgeoning Iraq war.

Annual bonuses to senior VA officials now average more than $16,000 - the most lucrative in government. All bonuses are proposed by division chiefs, then approved by Nicholson.

A VA spokesman, Matt Burns, said the payments were necessary to retain hardworking career officials. "Rewarding knowledgeable and professional career public servants is entirely appropriate," he said.

Several veterans groups questioned the practice. They cited short-staffing and underfunding at VA clinics that have become particularly evident after recent disclosures of shoddy outpatient treatment of injured troops at Walter Reed Army Medical Center in Washington.

"Rewarding bureaucrats for failure while veterans wait for care is inexcusable," said Paul Rieckhoff, executive director of the Iraq and Afghanistan Veterans of America.

In a letter to Nicholson, Akaka also asked the department to outline steps to address disparities in which Washington-based senior officials received higher payments than their counterparts elsewhere.

"Awards should be determined according to performance," he said.

Burns, who said the department was reviewing Akaka's request, said many of the senior officials have the kind of experience that would be hard to replace.

VA officials characterized the agency's Washington-based jobs as more difficult, often involving management of several layers of divisions that would justify the higher payments.

In July 2005, the VA stunned Congress by announcing it faced a $1 billion shortfall after failing to take into account the additional cost of caring for veterans injured in Iraq and Afghanistan.

The admission, which came months after the department insisted it was operating within its means and did not need additional money, drew harsh criticism from both parties and some calls for Nicholson's resignation.

In urging Nicholson to step down, Hare cited problems with accounting as well as data security that contributed to the loss of 26.5 million veterans' sensitive personal information last year.

VA spokesman Burns said, "Nobody cares more about veterans than Secretary Nicholson."