Veteran Affairs FY 2013 Budget
DEPARTMENT OF VETERANS AFFAIRS FISCAL YEAR 2013 BUDGET
The Administration’s budget request for fiscal year (FY) 2013 includes funding increases for
Department of Veterans Affairs (VA) health care and benefits programs. In light of tight
budgetary constraints throughout the federal government, DAV is pleased with the increase, but
some concerns remain.
Medical Care: The Administration requested $55.7 billion, which is a $2.3 billion increase over
the FY 2012 enacted level, a 4.3% increase. Alternatively the Independent Budget (IB)
recommends $57.2 billion for these accounts, a $3.8 billion increase over the FY 2012 enacted
appropriations level, and $1.5 billion higher than the Administration’s request for FY 2013.
Medical and Prosthetic Research: The Administration requested $583 million, an increase of
$1.7 million from the current year. The IB recommended $611 million to cover biomedical
research inflation, to continue currently-funded research projects, and to allow VA to develop
new treatments for the unique injuries, illnesses and diseases prevalent in veterans.
Benefits Processing: The $2.2 billion budget request for the FY 2013 activities of the Veterans
Benefits Administration is $145 million more than the FY 2012 enacted level and $54 million
more than the IB recommendation. However, the request falls short on funding for the IB-
recommended overall staffing level of 585 FTEE for the Board of Veterans Appeals and
recommendation for an additional 195 FTEE for Vocational Rehabilitation and Employment
Major and Minor Construction: The Administration requested $532 million and $604 million
for Major and Minor Construction, respectively, amounts that nearly mirror last year’s request
($590 and $550 million). Contrasted to the IB’s recommendations, the Administration is
requesting $2.2 billion less for Major Construction and $461 million less for Minor Construction.
This continued underfunding trend is deeply concerning to DAV and all those who rely on VA
for safe, contemporary facilities for delivery of health care to sick and disabled veterans.
Operational Improvements: The Government Accountability Office (GAO) examined VA’s
advance appropriations process and reported those results in June 2011. GAO found that VA had
reduced its FY 2012 and FY 2013 budget requests by more than $2.5 billion based on the
assumption that VA could save this same amount through “operational improvements”. GAO has
reported that such assumptions have often failed to materialize in the past, leading to medical
care budget shortfalls.
Advance Appropriations: The budget proposal includes a request for $57.5 billion in advance
appropriations for VA health care accounts in FY 2014, including projected medical care
collections, which would be a $1.8 billion, or 3.3% increase over the FY 2013 budget request.
Congress should match or exceed The Independent Budget’s recommended total
discretionary funding levels for FY 2013, without budget gimmicks or unrealistic assumptions,
a total increase of $4.1 billion above the Administration's request
Veteran Affairs FY 2013 Budget
Medical Care should be increased to at least $57.2 billion for FY 2013.
Major and Minor Construction should be increased to at least $3.8 billion.
PROTECTING ADVANCE APPROPRIATIONS FOR VA HEALTH CARE
One of DAV’s primary legislative goals is to ensure sufficient, timely and predictable funding
for veterans’ health care, and the enactment in 2009 of advance appropriations was a major step
towards accomplishing that goal. With our veterans service organization partners, DAV led the
charge to pass the Veterans Health Care Budget Reform and Transparency Act (Public Law 111-
81) in October 2009, and now we must continue to work with Congress to ensure it is fully and
As a result of the new law, Congress is now required to approve funding for the Department of
Veterans Affairs (VA) medical care programs one year in advance of the next fiscal year. VA’s
annual budget requests must provide two-year budget estimates for veterans health care
programs, to include specific explanations and rationales for these estimates. To further ensure
that VA is provided sufficient health care funding, the law also requires the Government
Accountability Office (GAO) to examine and report on these budget requests and compare them
to VA’s internal actuarial model estimates in order to identify if any funding was cut below the
model’s projections or if budget gimmicks were used to reduce the request.
Although approval of the advance appropriations law was a major step towards accomplishing
our goal, we must remain vigilant to ensure that Congress and VA fully and faithfully implement
and comply with the law. In June 2011, GAO presented their first annual report (GAO-2011-11-
622) on VA’s budget estimates and found that the FY 2012 medical care budget request had been
reduced as a result of projected savings from “operational improvements” by $1.2 billion for FY
2012 and by $1.3 billion for the FY 2013 advance appropriation. GAO also found that the FY
2012 request for non-recurring maintenance was cut $900 million below the model’s estimate for
FY 2012 and $1.3 billion below the model’s estimate for the FY 2013 advance appropriation. On
top of that, GAO found that VA’s budget request for medical equipment purchases was cut $400
million below the model’s estimate for FY 2013. Overall, these changes reduced VA’s budget
request by over $5 billion compared to their own internal actuarial model’s estimate of the
funding required to provide timely, quality health care to veterans in FY 2012 and FY 2013.
One of the principal purposes of enacting advance appropriations was to ensure that the VA
health care system has an uninterrupted funding mechanism to plan and operate its delivery of
medical services. The advance appropriations mechanism is specifically designed to let VA
operate its medical system at full capacity regardless of whether the rest of the federal
government is under continuing resolution restrictions or threat of government shutdown.
However, despite the clear intention of the law, Congress last year approved several short-term
continuing resolutions that forced VA’s advance appropriation to be reduced below what had
already been approved.
Veteran Affairs FY 2013 Budget
Congress must carefully scrutinize VA’s health care budget requests and aggressively oversee
the full and faithful implementation of the advance appropriations process in order to ensure
that funding for veterans medical care is and remains sufficient, timely and predictable.
Concurrent Receipt for Longevity Military Retirees
Military retired pay is earned by virtue of a service member’s long service to the nation;
disability compensation is awarded to a veteran for disabilities incurred during active military
service. Yet, because of an unfair offset, some service members who retire from the military after
20 or more years of service must forfeit a portion of the retirement pay earned through that very
faithful service in order to receive VA compensation for service-connected disabilities.
Once separated from active military service the majority of non-disabled military retirees pursue
second careers; justly enjoying their full retirement pay earned through completion of 20 or more
years of faithful military service, and service to this nation, along with post-military pay received
from civilian employment. Longevity military retirees who suffer from service-connected
disabilities should be on equal footing with nondisabled retirees. Currently, longevity military
retirees are able to receive VA compensation for service-connected disabilities rated 50 percent
or higher without offset to military retired pay. Longevity military retirees in receipt of VA
compensation for service-connected disabilities rated 40 percent or lower should also receive full
military retired pay and VA compensation to account for reduction in their earning capacity.
Disabled veterans should not suffer financial penalties for choosing military service rather than
civilian careers, especially where in all likelihood a civilian career would have involved fewer
sacrifices and greater rewards. If a veteran must forfeit a dollar of retired pay for every dollar of
VA disability compensation otherwise payable, our government is, in effect, compensating the
veteran with nothing for the service-connected disability he or she suffered. Any offset between
longevity military retired pay and VA compensation is unjust because no duplication of benefits
DAV supports legislation (H.R. 303 and S. 344) that would authorize concurrent
receipt of longevity military retired pay and full VA disability compensation for
military retirees whose disabilities VA rates at 40 percent disabling or less, to account
for reduction in earning capacity and quality of life.
Survivor Benefit Plan and Dependency and Indemnity Compensation
Unlike many other public and private retirement plans, survivors of military retirees are not
entitled to any portion of a retiree’s annuity following death of that retiree. Under the military’s
Survivor Benefit Plan (SBP), however, a survivor’s annuity may be purchased through
deductions from retirement pay. These SBP annuities are offset by the amount of any benefit
payable under the Department of Veterans Affairs’ (VA) Dependency and Indemnity
Compensation (DIC) program. SBP is not a gratuitous benefit; rather, it is purchased out-of-
Veteran Affairs FY 2013 Budget
pocket by military retirees. Thousands of survivors of military retirees are adversely affected by
this unfair offset between SBP and DIC benefits.
Upon the retiree’s death, the SBP annuity is paid monthly to eligible beneficiaries; however, if a
surviving spouse is also entitled to DIC, the SBP benefit is reduced by the amount of the DIC
benefit (currently $1,195 per month). When DIC benefits are payable but the monthly rate is
equal to, or greater than, the monthly SBP payment amount, beneficiaries forego the entire SBP
annuity. If a survivor is not eligible for DIC benefits, then that individual receives the full SBP
amount monthly. We believe any offset between SBP and DIC payments is inequitable,
primarily because no duplication of benefits is involved.
DAV supports legislation (H.R. 178; S. 260) that would provide surviving spouses of
disabled veterans their full survivor and compensation benefit as otherwise authorized by
IMPROVING VA’S ABILITY TO PROVIDE EMPLOYMENT ASSISTANCE
The task before VA’s Vocational Rehabilitation and Employment (VR&E) VetSuccess Program
of helping veterans find meaningful employment once they leave the military is critical, and the
need becomes clearer in the face of unemployment statistics as well as the deployment statistics
from the current conflicts. The latest unemployment statistics show that there remains a
significant gap between civilian and military employment, with 9.1 percent of veterans
unemployed versus 8.7 percent of civilians. Additionally, since September 11, 2001, there have
been over 2.2 million service members deployed with more than 941,000 deployed two or more
times. As a result, many of these service members may be eligible for disability benefits and
VR&E services if they are found to have an employment handicap. Specifically, 43 percent may
actually file claims for disability. VR&E’s VetSuccess program offers essential tools to eligible
veterans that can positively impact these statistics by providing them the necessary tools to find
Due to the increasing number of service members returning from Iraq and Afghanistan with
serious disabilities, VR&E must be provided sufficient resources to strengthen its program. Yet,
the current constraints placed on VR&E as a result of an average client to counselor ratio of
145:1 compared to the VA standard of 125:1 make delivering the best of care daunting.
The current 12-year eligibility timeline for vocational assistance places an unnecessary burden
on VR&E. Eliminating this delimiting date would allow veterans to access the VR&E program
as needed for the duration of their employable lives. This arbitrary timeline must be removed.
Congress must provide sufficient resources for VR&E to establish a maximum client to
counselor standard of 125:1
Congress must eliminate the 12-year delimiting period for VR&E services to ensure
that veterans with employment barriers or problems with independent living qualify
for services for the entirety of their employable lives