THE VETERANS BUDGET IN PERSPECTIVE The President's proposed budget for the Department of Veterans Affairs for fiscal year 1993 is $34.3 billion. This is $424 million (1.2 percent) above the amount estimated to be needed by VA programs in 1992. The President's budget proposes legislation to provide a 3.0 percent COLA for compensation recipients. Pension benefits will automatically rise with inflation, while no increase is proposed for benefits paid under the Montgomery GI Bill. The proposed budget also includes legislation which would reduce mandatory programs or increase revenues by a total of $1.2 billion. (A more detailed explanation of the estimated cost of the President's proposed legislation may be found in table 2). Table 1-Administration's Proposed Budget for Department of Veterans Affairs for 1993 Budget Authority (In thousands) While the entire VA budget falls in the category of domestic spending, it is split between spending for mandatory and discretionary programs. Under the Budget Enforcement Act, both types. of spending are subject to specific caps. Discretionary spending is controlled by annual appropriations. The cap for all domestic discretionary spending rises from $203 billion for fiscal year 1992 to $206 billion for fiscal year 1993, a 1.6 percent increase. According to the Congressional Budget Office (CBO), the Budget Enforcement Act calls for total spending for all discretionary programs (domestic, international, and defense) to fall by 2 percent in 1994. As shown in Table 1, proposed spending for discretionary VA programs increases by $1.022 billion (6.5 percent) in fiscal year 1993. However, in order to reduce the total spending contained in the VA's appropriation measure, OMB proposes that certain user fee authorizations (which will generate revenue of $293 million) be enacted as part of the VA's appropriation Act. The balance of the savings measures (Table 2) would reduce spending for mandatory VA programs by $930 million. Mandatory program changes total: 1. 3.0% COLA. Table 2-Details of Proposed Legislation 2. Increase contribution from $100 to approximately $117 per month for Montgomery GI Bill. 3. Lift sunset for IRS/SSA pension match 4. Lift sunset for $90 rate for pensioners receiving Medicaid-covered nursing home care. + 312,777 - 42,500 - 13,900 - 147,000 - 615,908 - 43,805 - 550,719 - 162,671 84,558 -46,442 Other: Subtotal 1. Limit Beneficiary travel to veterans who live more than 50 miles from VA Medical Centers.. Subtotal TOTAL PROPOSED LEGISLATION - 293,671 - 67,000 - 67,000 - 911,390 Mandatory programs are subject to "pay-as-you-go" spending limits, which basically permit spending for entitlement programs to continue at currently authorized rates and to increase or decrease as authorized by current law. The mandatory program cap assumes that veterans drawing compensation will get a cost-ofliving adjustment every year, but it also assumes a slow decline in the number of veterans drawing compensation and pension benefits. Similarly, it permits spending for veterans readjustment benefits to grow to match the number of veterans receiving training. However, it does not assume that the benefit level will rise with the cost of living. The cost of legislation to increase benefits must be offset by reductions in other mandatory programs (or increases in revenues) in order to avoid across-the-board sequestration in all mandatory programs. Mandatory spending (excluding deposit insurance, which CBO estimates will cost $68 billion in 1993) is estimated by CBO to rise from $708 billion in 1992 to $752 billion in 1993, a 6.2 percent increase. Chart 1 compares the requested increase in budget authority for various research and development programs in the Federal government. The proposed increase of $15 million for VA medical research is well below the percentage increases requested for Transportation, the National Science Foundation, and NASA. Chart 1 R&D Funding Proposed Increases from 1992 to 1993 for Research and Note: Defense figures include all military-related programs of Defense and Energy Departments. 52-339 92 - 2 24% Chart 2 compares projected Federal outlays for major building construction and other public physical capital projects. It portrays the effects of appropriations for public buildings in 1992 and earlier years. Outlays for veterans hospital construction are projected to increase slightly in 1993 from 1992 levels, but declining budget requests will reverse this trend in future years. Even so, the increase in spending for veterans hospital construction is well below the average for direct Federal programs, and is lower than virtually every other department which has a significant construction budget. Direct Federal Chart 2 Federal Outlays for Major Public Physical Capital 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Budget for Fiscal Year 1993, OMB. |