From left, Lasheeco Graham, chief financial officer for the Veterans Benefits Administration, Joshua Jacobs, under secretary for benefits at the Department of Veterans Affairs, Shereef Elnahal, VA’s under secretary for health, and Laura Duke, chief financial officer for the Veterans Health Administration, are sworn in during a House Veterans’ Affairs Committee hearing on Thursday, Dec. 5, 2024, in Washington. (Eric Kayne/Stars and Stripes)

WASHINGTON — House lawmakers castigated leaders at the Department of Veterans Affairs for providing Congress inaccurate financial information as VA leaders request another $6.6 billion this month to supplement a $369 billion budget for fiscal 2025.

Shereef Elnahal, the VA under secretary for health, told lawmakers on Thursday that if the agency does not receive the supplemental funds in December, the VA will be “forced to make difficult decisions to remain within its current budget.” He indicated veterans health care services could be curtailed, reduced or delayed.

Rep. Mike Bost, R-Ill., chairman of the House Veterans’ Affairs Committee, opened the hearing on VA finances by slamming agency leaders for miscalculating a $15 billion budget shortfall through fiscal 2025 and unnecessarily alarming veterans that their monthly benefits were at risk if Congress did not deliver emergency funding.

“Over the last six months, we have not been able to get a straight answer. But VA leaders have not been shy about asking for billions of dollars. All the estimates we’ve been given are wrong. And large parts of VA budget requests seem to be made up,” Bost said.

The request for $6.6 billion is about half the amount that VA leaders had testified in September they needed in fiscal 2025 to avoid a cutback in veterans medical services. The shortfall was attributed to a greater demand for prescription drugs and a record number of veterans qualifying for benefits. The fiscal budget year runs from Oct. 1 to Sept. 30.

Rep. Mike Bost, R-Ill., chairman of the House Veterans’ Affairs Committee, leads a House Veterans’ Affairs Committee hearing titled “Fact and Fiction: Getting to the Bottom of the VA Budget Shortfall” on Thursday, Dec. 5, 2024, in Washington. (Eric Kayne/Stars and Stripes)

Shereef Elnahal, under secretary for health at the Department of Veterans Affairs, testifies Thursday, Dec. 5, 2024, during a House Veterans’ Affairs Committee hearing in Washington. (Eric Kayne/Stars and Stripes)

Rep. Matt Rosendale, R-Mont., questions witnesses Thursday, Dec. 5, 2024, during a House Veterans’ Affairs Committee hearing in Washington. (Eric Kayne/Stars and Stripes)

Joshua Jacobs, under secretary for benefits at the Department of Veterans Affairs, testifies Thursday, Dec. 5, 2024, during a House Veterans’ Affairs Committee hearing in Washington. (Eric Kayne/Stars and Stripes)

“The VA stoked real fear among veterans and their families. It is unacceptable to me that an error like this was made. I fear major errors like this may set us back. This hearing and future discussion need to focus on solutions to ensure this does not happen again,” said Rep. Nikki Budzinski, D-Ill.

Bost added “weaponizing” the VA should be off limits.

“These are people who have fought, died and sacrificed so we can have the freedoms we have. They do not have to be scared half to death about their benefits,” he said.

Rep. Greg Murphy, R-N.C., said he wants to see an external audit of VA finances by a major accounting agency. Elnahal indicated an audit could benefit the agency.

He explained the projected shortfall for 2025 is lower than what the VA estimated three months ago because the costs for private community care were less than anticipated.

The agency also delayed the purchase of equipment and has not increased its workforce at the pace expected. Workforce costs also have been lower because the VA did not hire as many staff members as originally planned, Elnahal said.

“However, we recognize some of these strategies are not sustainable in the long run. For example, VA cannot continue to delay medical equipment purchases year over year. As we briefed Congress last year, we still need to hire approximately 5,000 additional employees compared to the level we had in mid-June 2024, especially in high growth areas such as mental health,” he said.

Congress provided the VA with emergency funding in mid-September after the agency reported a $3 billion shortfall for fiscal 2024 put veterans’ monthly benefits at risk. Lawmakers later learned the VA finished the budget year on Sept. 30 with a $5.1 billion surplus.

“We were mindful a funding shortfall would prevent the VA from processing payments to 7 million veterans and survivors,” said Joshua Jacobs, the VA undersecretary for benefits.

He said the VA acted with caution in its projections, which contributed to the inaccurate estimates.

“Slowing benefit delivery is not an option. We know the transformative benefit these benefits have for veterans and their families,” Jacobs said.

Lawmakers on Thursday also pressed VA leaders about how much money the agency had on hand in September when it projected the 2024 shortfall. But leaders said they did not have that information available.

But Elnahal did outline what he described as a record number of benefits provided to veterans in fiscal 2024 that are driving up costs.

Since the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act, or PACT Act, passed in 2022, nearly 800,000 veterans have enrolled in health care for treatment of illnesses and injuries caused by toxic exposures during military service, he said.

Nearly 7 million veterans and their survivors received $187 billion in benefits in fiscal 2024 that included disability compensation and pensions. The VA also processed 2.5 million claims for disability compensation in 2024, a 27% increase from the previous year’s “all-time record” of 1.9 million claims, Elnahal said.

“These important results for veterans, caregivers and survivors have exceeded even the most aggressive projections and expectations,” he said. “Because of that, VA has identified a need and has asked Congress to provide $6.6 billion in fiscal 2025 in additional VA medical care funding.”

But Rep. Matt Rosendale, R-Mont., said he is concerned the VA is not properly managing growth for services and demand for benefits.

“Unfortunately, this whole budget shortfall has shaken my trust in VA leadership. If you spend more in one area you have to spend less in another,” he said.

Elnahal also cautioned costs for non-VA medical care has grown each year since the MISSION Act passed in 2018, allowing veterans to seek private health care services in their communities when appointments are not readily available at the VA.

“In fiscal year 2024, VA set a record for community care appointments for the sixth year in a row, and we project continuing to need additional resources in 2025 to deliver community care for veterans,” he said.

Also driving costs is greater demand for prosthetics, eyeglasses, hearing aids and weight loss medications, he said. The VA estimates 78% of veterans are overweight or obese, leading to a big push for injectable weight-loss drugs. The VA has estimated it would cost $3 billion annually to cover the millions of veterans who would qualify.

Prescription drug costs rose 13% in fiscal 2024, which was four points higher than the rate the VA projected.

“We continue to expect further escalation in fiscal 2025,” Elnahal said.

Bost cautioned VA leaders not to make threats about delays to veterans’ benefits and a reduction in services without an infusion of funds.

“We have always funded our veterans’ health care benefits, and I am confident we always will. But we need to get the truth from VA — not more spin and pressure tactics,” he said.