Department of Veterans Affairs Secretary Denis McDonough testified Wednesday, April 6, 2022, before a House Appropriations Committee subpanel about the VA’s budget proposal for fiscal 2023. House lawmakers debated a White House proposal to separate funding for veterans’ medical care from the rest of the federal budget — an action that would treat it the same as defense spending and could allow it to grow beyond current limits. (Sarah Silbiger/AP)
WASHINGTON — House lawmakers began a debate Wednesday about a White House proposal to separate funding for veterans’ medical care from the rest of the federal budget — an action that would treat it the same as defense spending and could allow it to grow beyond current limits.
Discretionary spending, which is subject to the congressional appropriations process, is divided into two categories: defense and nondefense. Congress provided $1.5 trillion in discretionary spending for fiscal 2022, with $782 billion toward defense and $730 billion going to other areas of the government. Of the $730 billion in nondefense spending, about $117 billion went to the Department of Veterans Affairs.
In President Joe Biden’s budget request for fiscal 2023, he proposed removing veterans’ health care from the nondefense category and giving it its own funding stream. The change would free the veterans’ health budget from caps on nondefense spending and allow more money to go toward other nondefense areas, such as education, transportation and homeland security, said VA Secretary Denis McDonough.
“For us to continue to grow at the rates we’re growing, that’s coming at the expense of the rest of nondefense discretionary [spending and] makes us less effective overall,” he said.
McDonough testified Wednesday before a House Appropriations Committee subpanel about the VA’s budget proposal for fiscal 2023. The proposal, released in March, would push the agency’s overall budget to more than $300 billion.
About $161 billion of the $300 billion is mandatory spending, which includes entitlement programs, such as disability compensation. Mandatory spending does not go through the congressional appropriations process.
The remaining amount, $139 billion, is part of the nondefense discretionary budget, and approximately $120 billion of that amount is dedicated to veterans’ medical care. The White House proposed the VA get a 20% increase in funding for medical care in fiscal 2023. McDonough attributed the significant jump to health care inflation and an increase in demand for services.
To address the growing costs of medical care, the White House suggested VA health care be given its own stream of funding, sending a message that veterans’ medical care should be treated with the same significance as national defense.
“I thought it was a very important, innovative idea from the White House, from [the Office of Management and Budget], to separate veterans’ health care,” McDonough said. “I think it makes sense to separate this from the broader account to underscore, as we do with defense, the unique nature and unique importance of investments in veteran health.”
The separation could be more necessary if Congress approves a sweeping measure that aims to expand eligibility for health care and benefits to veterans exposed to burn pits and other toxins, McDonough said. The bill has the potential to significantly increase the number of enrollees in VA health care.
According to estimates from the Congressional Budget Office, the bill could increase spending by about $318 billion during the next decade. It was passed by the House earlier this year and is now under consideration in the Senate.
Lawmakers expressed mixed feelings about separating VA medical care from the rest of the nondefense budget.
Rep. Debbie Wasserman Schultz, D-Fla., the chairwoman of the military construction, veterans affairs, and related agencies appropriations subcommittee, suggested a change needed to be made, given the historical growth of the VA’s budget.
The VA described its proposal for 2023 as a “historic increase in total funding.” If the budget were approved as is, the VA’s overall funding would have increased by $104 billion, or 53%, since 2018, according to agency data.
The agency is the third largest federal department in terms of budget. Only the Defense Department and the Department of Health and Human Services are slated to receive more in discretionary funding in 2023.
“There really is a lot of good news in this budget, but we can’t ignore the elephant in the room, and that’s the ever-growing cost of veterans’ medical care,” Wasserman Schultz said. “We must provide for our veterans, and we’re passionate about that, but if we’re going to keep seeing these exponential increases year after year, we need to build a consensus on an allocation adjustment so other discretionary priorities are not affected.”
Rep. Judge Carter of Texas, the ranking Republican on the subcommittee, described the VA’s budget proposal as an “eye-popping request” and said he was skeptical about giving the agency its own funding stream.
Carter said the change would allow for more funding toward other nondefense agencies, which he argued could lead to an increase in the budget deficit.
“The rate we’re spending right now is driving us over a cliff,” he said. “Setting up a situation where we inadvertently create more mandatory spending, to me, is not a good idea. It could move us closer to that time when we can’t pay our bills.”
Wasserman Schultz suggested the subcommittee hold a “deep-dive conversation” soon on the potential change.
