Jim Nicholson (search), President Bush's nominee to head the Veterans Affairs Department (search), promised Monday to look into reported disparities in disability compensation from state to state.

Nicholson, a Vietnam War veteran and former chairman of the Republican National Committee, told a Senate panel that disability benefits should not vary based on where a veteran lives.

Freshman Sen. Barack Obama (search), D-Ill. , a new member of the Senate Veterans Affairs Committee, question Nicholson about a report in the Chicago Sun-Times earlier this month about compensation disparities.

Obama said that his state is 50th among 52 states and territories for the average amount of disability compensation. A veteran in Illinois can expect to receive $5,000 less than a veteran in Puerto Rico, he said.

"If a veteran has lost a leg and lives in Illinois, he should get the same disability as a veteran who lost a leg and lives in Puerto Rico," Obama said.

The VA inspector general is investigating the disparities. Nicholson said he was unaware of any incentives being offered to VA disability compensation adjudicators for refusing benefits or keeping them low, as some veterans have suggested to Obama.

"Veterans' entitlement to federal benefits is the same regardless of where in this country they may reside," Nicholson said. "This is really a high priority for me, to really get my arms around this."

Nicholson's nomination was approved by the Senate panel. He still faces a confirmation vote before the full Senate.

Other committee members questioned Nicholson on services to veterans returning from Iraq, particularly in mental health; the effect of military base closures on veterans' health care and how he'll balance veterans' needs with an anticipated tight budget proposal next month from Bush.

"It now appears clear that the fiscal environment that you will inherit will be less friendly than the relatively flush times the VA has enjoyed over the past four years," said Sen. Larry Craig, R-Idaho, the committee's chairman.