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REPORT OF THE COMMITTEE ON VETERANS' AFFAIRS

ON BUDGET MATTERS UNDER ITS JURISDICTION

The Committee on Veterans' Affairs is submitting this report on estimates of budget matters under its jurisdiction pursuant to section 301(c) of the Congressional Budget and Impoundment Control Act of 1974, which states:

On or before March 15 of each year, each
standing committee of the House of

Representatives shall submit to the Committee
on the Budget of the House,...

(1) its views and estimates with respect to
all matters set forth in subsection (a) which
relate to matters within the respective
jurisdiction or functions of such committee or
joint committee; and

(2) except in the case of such joint
committees, the estimate of the total amounts
of new budget authority, and budget outlays
resulting therefrom, to be provided or
authorized in all bills and resolutions within
the jurisdiction of such committee which such
committee intends to be effective during the
fiscal year beginning on October 1 of such
year.

This report is based on the best information that is now available to the Committee. It is hoped that the report will be helpful to the Committee on the Budget in preparing its budget targets for the first concurrent resolution.

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Throughout the more than 200-year history of the United States, nearly 38.3 million men and women have served in the Armed Forces during wartime. Nearly 1.1 million servicepersons sacrificed their lives in the defense of our country during periods of armed conflict. At the close of fiscal year 1984 there were approximately 22.8 million living war veterans, all of whom saw service in wars fought in the 20th century (i.e., Spanish-American War, World War I, World War II, Korean conflict, and Vietnam era). A total of 35. 3 million served during these five wars and 697,000 died in service to their country. In addition to the 22.8 million living war veterans, there were about 3 million veterans who served only during the peacetime period between the Korean conflict and the Vietnam era, as well as 1.8 million peacetime veterans who entered military service after May 7, 1975, and have since returned to civilian life.

The total number of veterans living in the United States and Puerto Rico has been declining for several years. The number of living veterans decreased during fiscal year 1984 to 28.0 million, a loss of 174,000 from the end of fiscal year 1983. This contraction of the veteran population resulted from the addition of 269,000 service personnel discharged from active duty, and was more than offset by the reentry into active duty service of approximately 36,000 who had previously returned to civilian life and the loss of 407,000 veterans who died during fiscal year 1984.

The median age of all veterans in civilian life as of September 30, 1984 was 52.3 years.

By the

Veterans 65 years of age or older totaled about 4.6 million (or nearly 1 of every 6 living veterans) at the end of September 1984. Their numbers are expected to peak at about 9 million by the year 2000, then decline to some 5.7 million by 2030. year 2000, approximately two of every three males 65 and over will be veterans. Those veterans presently 60-64 years old (3,863,000) will enter the older population group in the next five years. Similarly, the surviving veterans among those presently in the 55-59 year age group (3,734,000) will enter the 65 years and older veteran population during fiscal years 1989 through 1994. By the end of fiscal year 1994, nearly one of every three veterans will be 65 years old or older.

While the total number of male veterans continues to decline, the female veteran population is growing. Female veterans in the United States and Puerto Rico totaled 1,163,000 at the close of fiscal year 1984. By the year 2000 their numbers are expected to increase to 1,268,000.

This country has historically provided the veterans of its wars and their survivors with certain aid and benefits in expression of gratitude for their sacrifices and hardships.

In order to effectively carry out the intent of a grateful nation, the VA was established as an independent agency under the President by Executive Order 5398 of July 21, 1930, in accordance with the act of July 3, 1930 (46 Stat. 1016). This act authorized the President to consolidate and coordinate Federal agencies especially created for or concerned in the administration of laws providing benefits to veterans. mission of the VA is to administer veterans' laws effectively, expeditiously and with sympathetic understanding, and to exercise constructive leadership in the field of veterans' affairs. The laws related to veterans benefits are contained in title 38, U.S.C.

The

Programs available to veterans and their dependents or survivors (Office of Management and Budget (OMB) function 700), are for the most part based on long traditions of compensating former servicepersons for hardships incurred in the course of military service. Most programs in this function are administered by the VA in support of these former members of the armed services and their survivors and dependents. The major veterans programs discussed below provide benefits that are similar in many respects to other human resource programs now available to those in the general population.

Compensation. Payment to veterans who have incurred disabilities in military service. Payments vary with the extent of disability and the amount of income foregone because of that disability. The severely disabled also received fixed statutory awards and dependents' allowances. Dependency and indemnity compensation (DIC) is paid to survivors of veterans who died from service-connected causes.

Pensions. Payment to non-service-connected disabled and aged wartime veterans and their dependents or to their survivors if the recipients' income falls below certain levels. However, there are several income exclusions in determining eligibility for pensions.

Readjustment benefits. Financial assistance for education, training, and rehabilitation to veterans and to certain of their dependents or survivors.

Hospital and medical care.

Provided, usually in VA facilities, to service-connected disabled veterans, former prisoners of war, veterans exposed to Agent Orange and/or nuclear radiation, veteran pensioners, veterans 65 and over, and any other veteran who is unable to pay for the cost of care. Dependents of 100 percent service-connected disabled veterans and survivors of veterans who died from a service-connected disability are provided care through an insurance-type program administered for the VA by the Department of Defense, the Civilian Health and Medical Program of the Veteran's Administration (CHAMPVA).

Other veterans' programs. Include direct and guaranteed housing loans, life insurance, and burial benefits. The VA also operates programs such as research and health manpower training to support its medical care delivery system.

II. ANALYSIS OF THE PRESIDENT'S BUDGET REQUEST

The President's fiscal year 1986 budget for the VA provides for benefits and services to the country's 28.0 million veterans, the 51.3 million members of their families, and the 2.2 million survivors of deceased veterans.

For the period October 1, 1985 through September 30, 1986, budget authority of $27.12 billion is requested, consisting of appropriations of $26.3 billion, $-61.8 million for proposed legislation and an estimate of $851 million through permanent authorizations. Budget outlays for 1986 are estimated at $26.7 billion. The requested budget authority is a decrease of $123.5 million below 1985, caused primarily by the 5 percent reduction in 1986 employee pay, implementation of third party reimbursement for medical insurance coverage and a $156.4 million reduction in construction funding.

59.3 percent of the fiscal year 1986 budget's projected outlays ($15,601,150) are for benefits programs. The fiscal year 1986 budget requests $10.529 billion for the compensation program, which is $306.3 million higher than the fiscal year 1985 level. This increase includes a proposed 4.1 percent rate increase effective December 1985. $3.838 billion is requested for pensions, an increase of $26.6 million from the fiscal year 1985 level, which includes a 4.1 percent cost-of-living increase effective December 1, 1985. $1.026 billion is requested for readjustment benefits, which is $156 million less than the fiscal year 1985 level, and is caused by a reduction in the number of Vietnam era trainees. No funds are requested for the Emergency Veterans' Job Training program. The 1986 Budget requests $404.6 million to help fund obligations of $1,910.1 million for the Loan Guaranty program. Legislation will be proposed to increase the user fee from 1 percent to 5 percent on both guaranteed and vendee (direct) loans, and to allow the purchaser of VA properties the option of paying the 5 percent fee or, as an alternative, paying a 1 percent fee with a minimum 5 percent down payment and the purchase of private mortgage insurance. $9.355 billion is requested for medical programs; $611.8 million is requested for construction programs; and, $752.4 million is requested for General Operating Expenses.

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