VA Budgetary Shortfall Threatens Veteran Benefits

Overview

As Congress shifts from negotiating positions on appropriations bills to building a continuing resolution (CR) for the rest of the calendar year, the Department of Veterans’ Affairs (VA) has been left facing a nearly $15 billion budgetary shortfall. According to the VA, the shortfall is largely due to an expansion of benefits claims and resource requirements from the passage of the PACT Act. As a result, VA benefits accounts are expected to fall $2.9 billion short this year and $12 billion next year. If Congress does not find a way to provide the VA budgetary assistance before Sept. 20, millions of veterans’ benefits are likely to be delayed in October.

VA Committees’ Responses

Congress is well aware of the issue but failed to remedy it before the August recess. On July 17, House Committee on Veterans’ Affairs Chairman Mike Bost (R-IL) released a letter calling attention to the shortfall and seeking more information from the VA on its causes. In it, the chairman emphasizes that this is the largest budgetary shortfall the VA has ever experienced and criticizes the Biden-Harris administration for mismanaging the department by not planning for the increased costs resulting from the PACT Act. Members of the Senate Committee on Veterans’ Affairs have been similarly shocked by the shortfall. Committee Member Sen. Sherrod Brown (D-OH) expressed surprise regarding the immense popularity of the PACT Act and joined Ranking Member Jerry Moran (R-KS) in the introduction of a bill seeking an immediate $2.8 billion in supplemental funding to address this year’s shortfall and calling the Government Accountability Office to conduct a review of the VA to understand the causes and solutions of the shortfall. This was followed by a letter to Senate Committee on Veterans’ Affairs Chairman Jon Tester (D-MT) from six of its Republican members expressing concerns and requesting the VA secretary testify to the committee on the issue before Congress takes any budgetary action concerning the issue. The Senate supplemental bill ultimately failed to pass before members left for the August recess. After returning, House VA Committee Republicans introduced the Veterans Benefits Continuity and Accountability Supplemental Appropriations Act which includes $2.9 billion in funding to address this year’s shortfall and requires the VA secretary to report to Congress on methods to enhance budgeting forecasting moving forward.

Next Steps

The Senate Committee on Veterans’ Affairs has scheduled a hearing with the VA to address the shortfall and the PACT Act on Sept. 18. While the hearing will occur before the Sept. 20 funding deadline, legislative action is unlikely to occur in time to avoid delays to veterans’ benefits in October. September negotiations on the Hill are already set to focus on the building and enacting of a continuing resolution to fund the government through December in light of the election. Both parties are also prepared to utilize the VA shortfall for political positioning with Republicans expected to continue emphasizing the Biden-Harris administration’s mismanagement of funding and Democrats to accuse Republicans of blocking funding to prevent delays to veterans’ benefits. At the earliest, congressional budgetary action may occur during the lame duck session following the election but it is more likely to be an issue resolved by the next executive administration and Congress.

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING A BUDGETARY SHORTFALL IN THE VA. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.