[Budget of the United States Government]
[VI. Investing in the Common Good: Program Performance in Federal Functions]
[26. Veterans Benefits and Services]
[From the U.S. Government Publishing Office, www.gpo.gov]
26. VETERANS BENEFITS AND SERVICES
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Table 26-1. FEDERAL RESOURCES IN SUPPORT OF VETERANS BENEFITS AND SERVICES
(In millions of dollars)
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Estimate
Function 700 1997 -----------------------------------------------------------
Actual 1998 1999 2000 2001 2002 2003
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Spending:
Discretionary Budget Authority.......... 18,908 18,973 18,941 18,939 18,925 18,927 19,584
Mandatory Outlays:
Existing law.......................... 20,705 24,010 24,409 25,391 26,742 30,820 31,904
Proposed legislation.................. ........ ........ -188 -356 -915 -4,311 -3,903
Credit Activity:
Direct loan disbursements............... 1,341 1,950 174 220 198 154 112
Guaranteed loans........................ 24,287 24,844 23,440 22,895 23,399 22,786 23,287
Tax Expenditures:
Existing law............................ 2,966 3,136 3,310 3,505 3,710 3,930 4,160
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The Federal Government provides benefits and services to veterans (and
their survivors) of conflicts as long ago as the Spanish-American War
and as recent as the Gulf War, recognizing the sacrifices of wartime and
peacetime veterans during their military service. The Federal Government
spends over $40 billion a year on veterans benefits and services, and
provides over $3 billion in tax benefits, to compensate veterans and
their survivors for service-related disabilities, provide medical care
to low-income and disabled veterans, and help returning veterans prepare
for reentry into civilian life through education and training. In
addition, veterans benefits provide financial assistance to needy
veterans of wartime service and their survivors.
About six percent of veterans are military retirees, who can receive
both military retirement from the Department of Defense (DOD) and
veterans benefits from the Department of Veterans Affairs (VA). Active
duty military personnel are eligible for veterans housing benefits, and
they can contribute to the Montgomery GI Bill (MGIB) program for
education benefits that are paid later. VA employs about 20 percent of
the non-Defense workforce of the Federal Government--almost 250,000
people, about 217,000 of whom deliver or support medical services to
veterans.
VA's mission is ``to administer the laws providing benefits and other
services to veterans and their dependents and the beneficiaries of
veterans. To serve America's veterans and their families with dignity
and compassion and be their principal advocate in ensuring that they
receive medical care, benefits, social support, and lasting memorials
promoting the health, welfare and dignity of all veterans in recognition
of their service to this Nation.''
The veteran population is declining, with most of the decline among
draft-era veterans, meaning that a rising share of veterans comes from
the All-Volunteer Force (see Chart 26-1). Thus, the types of needed
benefits and services will likely change. Further, as the veteran
population shrinks and technology improves, access to, and the quality
of, service should continue to improve.
Medical Care
VA provides health care services to 3.1 million veterans through its
national system of 22 integrated health networks, consisting of 172
hospitals, 439 ambulatory clinics, 131
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nursing homes, 40 domiciliaries 1, and 206 readjustment
counseling centers. VA is an important part of the Nation's social
safety net because over half of its patients are low-income veterans who
might not otherwise receive care. It also is a leading health care
provider for veterans with substance abuse problems, mental illness,
HIV/AIDS, and spinal cord injuries because private insurance usually
does not fully cover these conditions.
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\1\ Domiciliaries serve homeless veterans and veterans who require
short-term rehabilitation.
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VA's core mission is to meet the health care needs of veterans who
have compensable service-connected injuries or very low incomes. The law
makes these ``core'' veterans the highest priority for available Federal
dollars for health care. However, VA may provide care to lower-priority
veterans if resources allow and if the needs of higher-priority veterans
have been met.
In recent years, VA has reorganized its field facilities from 172
largely independent medical centers into 22 Veterans Integrated Service
Networks, charged with giving veterans the full continuum of care.
Recent legislation eased restrictions on VA's ability to contract for
care and share resources with Defense Department hospitals, State
facilities, and local health care providers.
To move further toward improving the health care of our Nation's
veterans, VA will continue to enhance the efficiency, access, and
quality of care. Through 2002, VA will pursue its ``30/20/10'' goal:
reduce the cost per patient by 30 percent (and by 11 percent
in 1999);
increase the number of patients treated by 20 percent (and by
nine percent in 1999); and
increase resources from outside sources to 10 percent (and by
five percent in 1999).
In addition, VA has formed a national partnership with the American
Hospital Association, the American Medical Association,
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the American Nurses Association, and other national associations to
ensure patient quality of care.
By 2003, VA plans to:
increase the number of patients with high volume common
disease entities who are treated using clinical guidelines to
90 percent (and to 60 percent in 1999);
increase the scores on the Chronic Disease Index to 95
percent (and to 91 percent in 1999); and
increase the scores on the Prevention Index to 95 percent
(and to 87 percent in 1999).
Medical Research: VA's research program provides about $300 million to
conduct basic, clinical, epidemiological, and behavioral studies across
the entire spectrum of scientific disciplines, seeking to improve
veterans medical care and health and enhancing our knowledge of disease
and disability. VA is reorganizing its research to ensure that all
projects clearly relate to the health care of veterans. In 1999, VA will
focus its research efforts on aging, chronic diseases, mental illness,
substance abuse, sensory loss, trauma related impairment, health systems
research, special populations (including Persian Gulf veterans), and
military occupational and environmental exposures.
At least 99 percent of funded projects will be relevant to
VA's mission in 1999, achieving the VA's goal.
Health Care Education and Training: The Veterans Health Administration
is the Nation's largest trainer of health care professionals, with about
107,000 students a year who get some or all of their training in VA
facilities through affiliations with over 1,000 educational
institutions. The program trains medical, dental, nursing, and
associated health professions students to ensure an adequate supply of
clinical care providers for veterans and the Nation as a whole. The
program will continue to realign its academic training and update its
curriculum, focusing more on primary care to better meet the needs of
the Veterans Health Administration and its patients, students, and
academic partners.
In 1999, VA will train 44 percent of its residents in primary
care and, in 2003, increase that figure to 48 percent.
Veterans Benefits Administration (VBA)
VBA processes veterans claims for benefits in 58 regional offices
across the country. Its workload peaked in 1993 and 1994, when it needed
214 days to process a claim. As the veteran population declines, the
number of new claims and appeals will also likely decline. In 1997, the
number of days to process a new claim averaged 133. VBA is developing a
comprehensive strategic plan to further improve processing performance.
Its current strategic goals include:
improving responsiveness to customer needs and expectations;
improving service delivery and benefit claims processing;
ensuring best value for the available taxpayers' dollar; and
ensuring a satisfying and rewarding work environment.
Income Security
Several VA programs help veterans and their survivors maintain their
income when the veteran is disabled or deceased. The Federal Government
will spend over $21 billion for these programs in 1999, including the
funds Congress approves each year to subsidize life insurance for
veterans who are too disabled to get affordable coverage from private
insurance. Veterans can receive these benefits along with the income
security that goes to all Americans, such as Social Security and
unemployment insurance.
Compensation: Veterans with disabilities resulting from, or coincident
with, military service receive monthly compensation payments, based on
the degree of disability. The payment does not depend on the veteran's
income or age, or on whether the disability is the result of combat or a
natural-life affliction. It does, however, depend on the average fall in
earnings capacity that the Government presumes for veterans with the
same degree of disability. Survivors of veterans who die from service-
connected injuries receive payments in the form of dependency and
indemnity com
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pensation. Benefits are indexed annually by the same cost-of-living
adjustment (COLA) as Social Security, which is an estimated 2.2 percent
for 1999.
The number of veterans and survivors of deceased veterans receiving
compensation benefits will total an estimated 2.7 million in 1999. While
the veteran population will decline, the compensation caseload will
remain relatively constant due to changes in eligibility and better
outreach efforts. COLAs and increased payments to aging veterans will
increase compensation spending by about $3 billion from 1999 to 2003.
In 1999, VA will process original compensation claims in 106
days, dropping to 53 days in 2002.
Pensions: The Government provides pensions to lower-income, wartime-
service veterans, or veterans who became permanently and totally
disabled after their military service. Survivors of wartime-service
veterans may qualify for pension benefits based on financial need.
Veterans pensions, which also increase annually with COLAs, will cost
over $3 billion in 1999. The number of pension recipients will continue
to fall from an estimated 673,000 in 1999 to less than 600,000 in 2003,
as the number of veterans drops.
In 1999, VA will process original pension claims in 80 days,
dropping to 29 days in 2002.
Insurance: VA has provided life insurance coverage to service members
and veterans since 1917 and now directly administers or supervises eight
distinct programs. Six of the programs are self-supporting, with the
costs covered by premium payments from the policyholders and earnings
from investments in Treasury securities. The other two programs,
designed for service-disabled veterans, require annual congressional
appropriations to meet the costs of claims. Together, these eight
programs will provide $488 billion in insurance coverage to over 4.7
million veterans and service members in 1999. The program is designed to
provide insurance protection and best-in-class service to veterans who
can't purchase commercial policies at standard rates because of their
service-connected disabilities. To reach this goal, the program is
designed to provide disbursements (death claims, policy loans, cash
surrenders) quickly and accurately, meeting or exceeding customer
expectations.
In 1999, VA will pay insurance claims in three and a half
days, dropping to 2.8 days in 2002.
Veterans Education, Training, and Rehabilitation
Several Federal programs support job training and finance education
for veterans and others. The Labor Department runs several programs just
for veterans. In addition, several VA programs provide education,
training, and rehabilitation benefits to veterans and military personnel
who meet specific criteria, including the Montgomery GI bill (the
largest of these programs), the post-Vietnam-era education program, the
Vocational Rehabilitation program, and the Work-Study program. Spending
for all VA programs in this area will total an estimated $1.5 billion in
1999.
The Montgomery GI Bill: The Government originally created MGIB as a
test program, with more generous benefits than the post-Vietnam-era
education program, to help veterans move to civilian life as well as to
help the armed forces with recruitment. Service members who choose to
enter the program have their pay reduced by $100 a month in their first
year of military service. The VA administers the program, paying basic
benefits once the service member leaves the military. Basic benefits now
total over $16,000 (about 13 times the original reduction in the service
member's pay).
MGIB beneficiaries receive a monthly check based on whether they are
enrolled in school on a full- or part-time basis. They can get 36 months
worth of payments, but they must certify monthly that they are in
school. DOD may provide additional benefits to help recruit certain
specialties and critical skills. Nearly 310,000 veterans and service
members will use these benefits in 1999. The MGIB also provides
education benefits to reservists while they are in service. DOD pays
these benefits, and the VA administers the program. In 1999, over 76,000
reservists will use the program. Over 90 percent of MGIB beneficiaries
use their benefits to attend a college or university. The Administration
will propose
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legislation to enact a one-time, 20-percent rate increase for all MGIB
beneficiaries, dependents, and survivors.
In 1999, VA will increase the participation rate of eligible
veterans in the MGIB from its current 37 percent to 45
percent, and increase the figure to 69 percent in 2003.
Veterans Housing
Along with the mortgage assistance that veterans can get through the
Federal Housing Administration insurance program, the VA-guaranteed loan
program in 1999 will help an estimated 222,000 veterans get mortgages,
totaling almost $24 billion. The Federal Government will spend an
estimated $264 million on this program in 1999, reflecting the Federal
subsidies implicit in loans issued during the year. Slightly over 40
percent of veterans who have owned homes have used the VA loan guaranty
program. To increase veteran home ownership and the program's
efficiency, VA will cut its administrative costs.
In 1999, VA will reduce the servicing cost of each loan to
$193, from its 1997 level of $334.
National Cemetery System
The VA provides burial in its National Cemetery System for eligible
veterans, active duty military personnel, and their dependents--with the
VA managing 115 national cemeteries across the country. VA will spend
over $90 million in 1999 for VA cemetery operations, excluding
reimbursements from other accounts. Over 73,000 veterans and their
family members were buried in National Cemeteries in 1997. The system is
working to ensure that all eligible veterans have reasonable access to a
burial option. The program will complete construction of four new
national cemeteries, expand existing cemeteries, develop more effective
use of available burial space, and encourage States' participation in
the State Cemetery Grants Program.
In 1999, VA will increase the percentage of veterans served
by a burial option within a reasonable distance to 75 percent.
Related Programs
Many veterans get help from other Federal income security, health,
housing credit, education, training, employment, and social service
programs that are available to the general population. In addition, a
number of these programs have components specifically designed for
veterans. Some veterans also receive preference for Federal jobs.
Starting in 1999, the children of Vietnam veterans will receive
compensation if they are afflicted with spina bifida, which the
Government will presume was caused by a veteran parent's exposure to
herbicides.
Tax Incentives
Along with direct Federal funding, certain tax benefits help veterans.
The law keeps all cash benefits that the VA administers (disability
compensation, pension, and GI bill benefits) free from tax. Together,
these three exclusions will cost about $3 billion in 1999. The Federal
Government also helps veterans obtain housing through veterans bonds
that State and local governments issue, the interest on which is not
subject to Federal tax. In 1999, this provision will cost the Government
an estimated $75 million.