Veteran Benefits in Jeopardy? VA Faces $3 Billion Budget Problem
The Department of Veterans Affairs faces a major budget shortfall that could affect the processing of veteran benefits. The VA budget gap estimated to be nearly $15 billion over the current and following fiscal years.
What Could Happen
If a fix isn’t found, that budget gap could negatively affect VA benefits payments and other operations. Why the financial strain? The VA blames a surge in benefits enrollment and increased costs associated with staffing and prescription drugs.
- VA Secretary Denis McDonough disclosed that the 2024 shortfall is primarily within the Veterans Benefits Administration (VBA), thanks to a successful campaign encouraging veterans to apply for benefits.
- McDonough emphasized the higher-than-anticipated claims volume, stating the agency may be responsible for “somewhere north of 2.5 million claims this year.”
- The projected 2025 deficit is even bigger, and is linked to anticipated growth in veterans’ utilization of VA healthcare services. Over the past year, some 413,000 veterans enrolled in VA health services. That is a 27% increase in new enrollments compared to the previous year.
- This growth, plus a set of increasing costs for staffing and prescription drug costs, is a serious issue for the Department of Veterans Affairs.
- The VA wants more funding to manage the increases in compensation, pension, and readjustment benefit claims at the VA.
Read next: Disabled Veteran Benefits Guide
At least one member of the House Veterans Affairs Committee has gone on the record accusing the VA of “fiscal mismanagement,” but as mentioned at the start of this article, the VA Secretary says these budget issues are due in part to the “successful implementation of the PACT Act,” which, according to some sources, has led to a dramatic increase in VA claims.
Response From Washington
In response to these VA budget issues, lawmakers in Washington have tried to make progress:
- Senators introduced legislation to address the projected $3 billion shortfall in disability and education benefits in 2024.
- The proposed legislation has support from Senators Sherrod Brown, Patty Murray, Susan Collins, Jon Tester, Jerry Moran, Kyrsten Sinema, and John Boozman.
- There is a VA warning to Congress that “without a legislative solution by September 20, benefit payments to millions of veterans and survivors could be jeopardized” starting October 1 2024.
What’s At Stake
Some sources report that without congressional action, “Compensation and pension payments to over 7 million veterans and survivors and readjustment benefit payments to over 500,000 individuals that are scheduled to be delivered on Oct. 1, 2024” could be deemed “at risk” but at press time it’s not clear what that means for beneficiaries.
Some sources note that at press time, there is no government funding bill for fiscal year 2025. This gives legislators an opening to address next year’s VA funding problems as part of the 2025 VA spending bill. But there is much bipartisan work to be done ahead of that option.
The VA Secretary reaffirmed the VA’s commitment to working with Congress to resolve the funding issues without adversely affecting veterans’ access to care and benefits. Those promises have been delivered before about other issues with varying results. This is a developing story.
Read next: Disabled Veteran Benefits Guide
About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.