FACT SHEET | February 19, 2008

The President's Budget Shortchanges Our Nation's Veterans

The President’s proposed Fiscal Year 2009 budget for the Department of Veterans Affairs (VA) fails to provide adequate funding to meet the needs of our nation’s veterans. Once again, the Administration’s budget asks veterans to pay more out of their own pockets for health care, underestimates the needs of service members returning from Iraq and Afghanistan, and calls for shortsighted cuts in key medical research programs, funding for the construction and maintenance of VA facilities, and important oversight efforts. 

Overall, the President’s budget contains $91.3 billion for the VA for Fiscal Year 2009. While it would provide an increase of $2 billion over the Fiscal Year 2008 funding level for medical care accounts, including $1.6 billion for VA Medical Services, the proposal represents a minimal funding boost after basic factors such as medical care inflation, increases in VA operational costs, and rising patient utilization rates are taken into account. At a time when the aging veteran population and a growing number of veterans returning from the battlefields of Iraq and Afghanistan are seeking VA medical care, the President’s budget proposal falls significantly short. Specifically, the President’s budget would: 

Underestimate the needs of veterans from Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF).The President’s request includes just $216 million more than Fiscal Year 2008 levels to provide for the care of Iraq and Afghanistan war veterans, a level that is projected to fall significantly short of real demand. According to the VA’s data, 299,585 Iraq and Afghanistan war veterans had accessed VA health care through the end of Fiscal Year 2007. The President’s budget is based on the assumption that 333,275 OEF/OIF veterans will access VA care in Fiscal 2009, which means that it assumes that just 33,690 new OEF/OIF veterans would seek VA services over two years –Fiscal Years 2008 and 2009. These projections are significantly out of step with trends from previous years, including the VA’s own Health Care Utilization Report that shows that 37 percent of OEF/OIF veterans seek VA health care after separating from service. More realistic projections based on VA trend data, as estimated by the Senate Veterans’ Affairs Committee Majority staff, suggests at least double the number of new veterans projected by the Administration will seek VA services through Fiscal Year 2009. 

Cut funding for medical research.The Administration’s request would cut the VA research budget by $38 million from the Fiscal Year 2008 level, to provide a total of $442 million for medical and prosthetic research in Fiscal Year 2009. These cuts would jeopardize research programming initiatives in critical areas and areas of growing importance, including traumatic injury and mental illness. Further, the proposed cuts are likely to have a negative impact on the VA’s ability to recruit and retain medical researchers and, in turn, to maintain the quality of its overall care. 

Nearly halve funding for long-term care facilities. The President’s proposal would cut funding for State Home grants by $80 million, to provide a total of just $85 million in funding for Fiscal Year 2009. These grants provide vital funds to states that are building long-term care facilities, which is an area in need of additional investments given the growing demand for such care from veterans. 

Flatline funding for certain benefits and incentive programs for VA health care workers. Although the VA anticipates that it will face a shortfall of health care personnel in the coming years, the Bush budget fails to take action to improve recruitment and retention programs. The President’s proposal generally maintains Fiscal Year 2008 funding levels for education assistance, debt reduction, and scholarship programs at a time when additional investments should be made in these key areas. 

Continue a ban on new “middle-income” veterans enrolling for care.Since the ban on Priority 8 veterans was enacted in Fiscal Year 2003, the VA estimates that nearly 1.6 million veterans have been turned away from VA hospitals and clinics nationwide. Unfortunately, the President’s proposal would extend this ban. 

Require an estimated 1.4 million veterans to pay more for their care. For the sixth year in a row, the President’s budget contains legislative proposals that would substantially increase health care fees for Priority 7 and 8 veterans. The proposals would nearly double the cost of prescription drug co-payment fees from $8 to $15 per month for “middle income” veterans, whose annual earnings are as low as $28,000 and would levy a new annual enrollment fee on veterans whose family income is above $50,000. The enrollment fees would be calculated on a graduated scale of $250-$750 per year, based on veterans’ family income level. 

Further, rather than using the revenues generated from these fee increases – an estimated $2.1 billion over the next five years –to reinvest in VA services, the Administration has proposed to redirect these revenues to the U.S. Treasury. In effect, this transfer of funds appears to be an effort to help balance the overall budget at the expense of our nation’s veterans. 

Significantly cut funding for the VA’s Office of the Inspector General (IG). The President’s budget proposal includes a $4 million cut for the IG, at a time when oversight of the Department is critically important. The IG conducts regular assessments of each of the VA’s health care facilities, reports on timely issues such as traumatic brain injury care, and uncovers waste, fraud, and abuse within the VA system. 

Reduce funding for State Cemetery Grants (SCGP).The budget proposal would cut funding for the SCGP by $8 million, to provide a total of $32 million for Fiscal Year 2009. 

Move slowly to effectively reduce the claims backlog and inefficiencies at the Veterans Benefits Association (VBA).Even while the Bush Administration has failed to provide adequate budget requests in previous years, Congress has taken the lead to address the claims backlog and improve management at the VBA. Through the Fiscal Year 2007 regular and supplemental appropriations as well as the Fiscal Year 2008 appropriations bill, Congress provided funding to boost staff levels at the VBA by 713 new full-time employees. The President’s Fiscal Year 2009 budget supports these efforts by providing a $55 million increase over Fiscal Year 2008 for pay raises, inflation, and increased employee benefit costs for the new personnel, however it does not make investments in training and technology initiatives which could further improve the timeliness and quality of service at the VBA. While the VBA is moving in the right direction, additional funding would help the agency move better address the claims backlog that is quickly approaching one million and to mitigate the effects of anticipated baby boom retirees from the federal service. 

Provide a minimal increase for the Veterans’ Employment and Training Service (VETS) budget.The Administration’s request includes a $10.3 million, or 4 percent increase over Fiscal Year 2008 levels for the VETS account. This represents a very modest increase for VETS, which funds a variety of programs, including grants to states for employment services, enforcement of the Uniform Services Employment and Reemployment Rights Act (USERRA), homeless veterans’ programs, as well as community-based grant initiatives.

DPC