In January 2001, Smith became chairman of the Veterans' Affairs Committee and pushed for policies Republican leadership opposed, including voting against the Republican and for the Democratic budget resolution because the latter included more spending on veterans programs. In 2004, Smith refused to endorse the Republican budget proposal unless it included more money for veterans. In a congressional hearing, Smith articulated his belief that the Bush Administration's budget request was $1.2 billion less than the Department of Veterans Affairs actually required, embarrassing the administration and Republican congressional leadership. During his four years as committee chair, Smith wrote 22 bills addressing veterans' issues. His unwillingness to follow the party line resulted in the House Republican Caucus removing him from his chairmanship (and from the committee altogether) in January 2005, at the beginning of the 109th Congress, with the chairmanship going to Steve Buyer instead, two years short of the normal six-year term. Veterans' groups such as the Veterans of Foreign Wars and Paralyzed Veterans of America praised Smith and criticized the decision to remove him.