[Budget of the United States Government]
[VI. Investing in the Common Good: Program Performance in Federal Functions]
[27. Veterans Benefits and Services]
[From the U.S. Government Publishing Office, www.gpo.gov]
27. VETERANS BENEFITS AND SERVICES
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Table 27-1. FEDERAL RESOURCES IN SUPPORT OF VETERANS BENEFITS AND SERVICES
(In millions of dollars)
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Estimate
Function 700 1998 -----------------------------------------------------------
Actual 1999 2000 2001 2002 2003 2004
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Spending:
Discretionary Budget Authority.......... 18,943 19,282 19,282 19,279 19,274 19,292 19,293
Mandatory Outlays:
Existing law.......................... 23,280 24,322 24,680 25,313 25,851 26,981 27,628
Proposed legislation.................. ........ ........ 269 644 964 569 947
Credit Activity:
Direct loan disbursements............... 1,344 1,959 672 N/A N/A N/A N/A
Guaranteed loans........................ 39,862 32,635 31,244 N/A N/A N/A N/A
Tax Expenditures:
Existing law............................ 2,990 3,120 3,265 3,415 3,560 3,715 3,875
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N/A = Not available
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The Federal Government provides benefits and services to veterans and
their survivors of conflicts as distant as the Spanish-American War and
as recent as the Persian Gulf War, recognizing the sacrifices of war-
and peacetime veterans during military service. The Federal Government
spends over $42 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
to reenter civilian life through education and training. In addition,
veterans benefits provide financial assistance to needy veterans of
wartime service and their survivors.
About seven 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 21 percent of the
Federal Government's non-DOD workforce--approximately 240,000 people,
about 192,000 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 continues to decline and age (see Chart 27-1).
The types of benefits and services needed by veterans likely will change
as the population ages. 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 3.2 million veterans through its
national system of 22 integrated health networks, consisting of 166
hospitals, 544 ambulatory clinics, 132
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nursing homes, 40 domiciliaries \1\, and 206 vet 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 rehabilitation
with special needs.
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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. By law,
these ``core'' veterans are the highest priority for available Federal
dollars for health care. However, VA may provide care to lower-priority
veterans if resources allow after it meets the needs of higher-priority
veterans.
In recent years, VA has reorganized its field facilities from 172
largely independent medical centers into 22 Veterans Integrated Service
Networks, charged with providing veterans the full continuum of care.
Recent legislation eased restrictions on VA's ability to contract for
care and share resources with DOD hospitals, State facilities, and local
health care providers.
To improve veterans health care further, VA will continue to enhance
the efficiency of, access to, and quality of care. Between 1997 and
2002, VA is pursuing its ``30/20/10'' goal to:
reduce the cost per patient by 30 percent from the 1997 level
of $5,458 (by 18 percent in 2000);
increase the number of patients treated by 20 percent from
the 1997 level of 3,142,065 (by 16 percent in 2000); and
increase resources from outside sources (primarily private
insurers) to 10 percent of the total operating budget from
less than one percent in 1997 (to five percent in 2000).
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Also, VA formed partnerships with the National Committee on Quality
Assurance, the American Hospital Association, the American Medical
Association, the American Nurses Association, and other national
associations to ensure quality patient care. The Chronic Disease Care
Index measures VA physicians' adherence to established industry practice
guidelines for key diseases affecting veterans. Similarly, the
Prevention Index measures adherence to disease prevention and screening
guidelines. VA plans to:
increase the scores on the Chronic Disease Care Index to 95
percent by 2001 from the 1997 level of 76 percent (to 93
percent in 2000); and
increase the scores on the Prevention Index to 95 percent by
2003 from the 1997 level of 67 percent (to 89 percent in
2000).
The budget includes a legislative proposal to authorize VA to cover
the cost of out-of-network emergency care for enrolled veterans with
compensable disabilities related to military service. Under law, these
veterans have top priority for VA medical services. This legislation
would ensure that these veterans have access to emergency care when
treatment in VA facilities is not an option.
The budget also proposes a new smoking cessation program for any
honorably discharged veteran who began smoking in the military. In
addition, increased funding is proposed for evaluting, testing, and
treating Hepatitis C in the veteran population and for programs that
directly assist homeless veterans.
Medical Research: VA's research program provides $316 million to
conduct basic, clinical, epidemiological, and behavioral studies across
the spectrum of scientific disciplines, seeking to improve veterans
medical care and health and enhance our knowledge of disease and
disability. In 2000, 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 War veterans), and military occupational and
environmental exposures.
In 2000, at least 99 percent of funded research projects will
be reviewed by appropriate peers and selected through a merit-
based competitive process (1997 base of 99 percent).
Health Care Education and Training: The Veterans Health
Administration (VHA) is the Nation's largest trainer of health care
professionals. About 91,000 students a year get some or all of their
training in VA facilities through affiliations with over 1,200
educational institutions. The program trains medical, dental, nursing,
and related health professionals to ensure an adequate supply of
clinical care providers for veterans and the Nation. The program will
continue to realign its academic training and update its curriculum,
focusing more on primary care to meet more effectively the needs of the
VHA and its patients, students, and academic partners.
By 2000, 46 percent of VA's residents will be trained in
primary care and, in 2004, that figure will increase to 48
percent (from the 1997 level of 39 percent).
Veterans Benefits Administration (VBA)
VBA processes veterans' claims for benefits in 58 regional offices
across the country. As the veteran population declines, the number of
new claims and appeals is expected to decline. VBA is implementing a
``balanced scorecard,'' a tool that will help management to weigh the
importance of and measure progress toward meeting VBA's strategic goals,
which include:
improving responsiveness to customers' needs and
expectations;
improving service delivery and benefit claims processing; and
ensuring best value for the available taxpayers' dollar.
VBA monitors its performance in deciding disability benefits claims
through measures of accuracy, customer satisfaction, processing
timeliness, and unit cost. The following key measures have been
established for disability claims requiring a rating:
In 2000, VA will process rating-related disability claims in
95 days, improving to 74 days by 2004 (from 128 days in 1998).
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In 2000, VA will improve its rating accuracy (for core rating
work) to 81 percent, improving to 96 percent by 2004 (from 64
percent in 1998).
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 $23 billion for these programs in 2000, including the
funds the Congress approves each year to subsidize life insurance for
veterans who are too disabled to get affordable coverage from private
insurers. Veterans may receive these benefits in addition to the income
security benefits available to all Americans, such as Social Security
and unemployment insurance. VBA is developing strategic goals for the
compensation and pension programs.
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 a
veteran's income or age or whether the disability is the result of
combat or a natural-life affliction. It does depend, however, 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 compensation. Compensation benefits are indexed
annually by the same cost-of-living adjustment (COLA) as Social
Security, which is an estimated 2.4 percent for 2000.
The number of veterans and survivors receiving compensation benefits
will total an estimated 2.6 million in 2000. While the veteran
population will decline, the compensation caseload is expected to 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 2000 to 2004.
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
2000. The number of pension recipients will continue to fall from an
estimated 650,000 in 2000 to less than 585,000 in 2004 as the number of
veterans drops.
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 policyholders' premium payments and earnings from
Treasury securities investments. The other two programs, designed for
service-disabled veterans, require annual congressional appropriations
to meet the claims costs. Together, these eight programs will provide
$460 billion in insurance coverage to over 4.5 million veterans and
service members in 2000. The program is designed to provide insurance
protection and best-in-class service to veterans who cannot purchase
commercial policies at standard rates because of their service-connected
disabilities. To reach this goal, the program is designed to provide
disbursements (e.g., death claims, policy loans, and cash surrenders)
quickly and accurately, meeting or exceeding customers' expectations.
Veterans' Education, Training, and Rehabilitation
Several Federal programs support job training and finance education
for veterans and others. The Department of Labor runs several programs
for veterans. In addition, several VA programs provide education,
training, and rehabilitation benefits to veterans and military personnel
who meet specific criteria. These programs include the Montgomery GI
bill (MGIB)--which is the largest--the post-Vietnam-era education
program, the Vocational Rehabilitation and Counseling (VR&C) program,
and the Work-Study program. Spending for all these VA programs will
total an estimated $1.5 billion in 2000. One of the program's strategic
goals is:
In 2000, VA will increase to 50 percent the number of VR&C
participants who acquire and maintain suitable employment and
are considered to be rehabilitated, and
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further increase it to 55 percent in 2004 (from the 1998 level
of 41 percent).
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 and 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. VA administers the program and pays basic benefits
once the service member leaves the military. Basic benefits now total
over $19,000 per recipient.
MGIB beneficiaries receive a monthly check based on whether they are
enrolled as full-or part-time students. 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 284,000 veterans and service members will use
these benefits in 2000. The MGIB also provides education benefits to
reservists while they are in service. DOD pays these benefits, and VA
administers the program. In 2000, over 72,000 reservists will use the
program. Over 90 percent of MGIB beneficiaries use their benefits to
attend a college or university. In 1999, MGIB beneficiaries, dependents,
and survivors got a one-time 20 percent increase in their benefit rate.
VA has set the following goal:
In 2000, VA will increase the usage rate of eligible veterans
in the MGIB from to 57 percent, and increase the figure to 70
percent in 2004 (from 53 percent in 1997).
Veterans' Housing
Along with the mortgage assistance that veterans can get through the
Federal Housing Administration insurance program, in 2000 the VA-
guaranteed loan program will help an estimated 280,000 veterans get
mortgages totaling almost $31.2 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. Improving loan
servicing to avoid veteran foreclosures also is a key goal.
In 2000, of the loans headed for foreclosure, VA will be
successful 40 percent of the time in ensuring that veterans
retain their homes (from the 1998 level of 37 percent).
National Cemetery Administration (NCA)
VA provides burial in its national cemetery system for eligible
veterans, active duty military personnel, and their dependents. VA
manages 119 national cemeteries across the country and will spend over
$97 million in 2000 for VA cemetery operations, excluding reimbursements
from other accounts. Over 76,700 veterans and their family members were
buried in national cemeteries in 1998. In addition, VA has jointly
funded 38 state veterans cemeteries through its State Cemetery Grants
Program (SCGP). The program will open four new national cemeteries in
1999 and 2000, expand existing cemeteries, make more effective use of
available burial space, and encourage States' participation in the SCGP.
VA has established this measure:
In 2000, VA will increase the percentage of veterans served
by a burial option within a reasonable distance of the
veteran's place of residence to 77 percent (from the 1998
level of 69 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. A number of these
programs have components specifically designed for veterans. Some
veterans also receive preference for Federal jobs.
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Tax Incentives
Along with direct Federal funding, certain tax benefits help
veterans. The law keeps all cash benefits that VA administers (i.e.,
disability compensation, pension, and MGIB benefits) free from tax.
Together, these three exclusions will cost about $3.2 billion in 2000.
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 2000, this provision will cost
the Government an estimated $40 million.