[Congressional Record Volume 141, Number 183 (Friday, November 17, 1995)]
[Senate]
[Pages S17360-S17361]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     CLARIFICATION OF VA AUTHORITY

 Mr. ROCKEFELLER. Mr. President, earlier this week, I heard the 
Senator from Texas [Mrs. Hutchison], both on the floor and elsewhere, 
express her view that VA has existing authority to pay veterans' 
benefits during this time of the shutdown of the Federal Government. In 
some of those statements, she indicated that she had received legal 
opinions, including from the Congressional Research Service, which 
supported this position.
  Because I was vitally interested in this issue, I asked Veterans' 
Affairs Committee staff to acquire copies of these opinions and advise 
me of their content. Initial inquiries found that CRS had not issued 
any opinion on this issue. However, today, an opinion, authored by 
Morton Rosenberg, Specialist in American Public Law in the American Law 
Division of CRS, was issued. In the most relevant passage, the opinion 
states--

       Veterans' benefits are entitlements, but since they are 
     entitlements that require annual appropriations, the absence 
     of spending authority, either through an appropriations 
     measure or a continuing resolution, appears to preclude the 
     scheduled payments by VA or by the Treasury Department 
     through the tapping of a trust fund.

  This certainly seems clear to me and should resolve any lingering 
confusion over VA's authority to pay benefits during this period when 
there is no appropriation in effect.
  Mr. President, I ask that the full text of the opinion be printed in 
the Record.
  The material follows:

[[Page S 17361]]

                                   Congressional Research Service,


                                      The Library of Congress,

                                Washington, DC, November 17, 1995.
     Subject: Necessity of Appropriations Legislation to Pay 
       Compensation and Pension Benefits By The Department of 
       Veterans' Affairs on December 1, 1995.
     Author: Morton Rosenberg, Specialist in American Public Law.

       The Department of Veterans Affairs (VA) has advised that if 
     a continuing resolution is not enacted into law by November 
     22, 1995, compensation and benefit checks scheduled to be 
     mailed on December 1 would be delayed. Two questions are 
     raised. First, are veterans' compensation and premium 
     benefits entitlements? Second, if they are entitlements, 
     isn't the government obligated to pay them on time, even if 
     appropriations for the payments have not been passed, such as 
     by tapping the civil service retirement fund?
       Veterans' benefits are entitlements, but since they are 
     entitlements that require annual appropriations, the absence 
     of spending authority, either through an appropriations 
     measure or a continuing resolution, appears to preclude the 
     scheduled payments by VA or by the Treasury Department 
     through the tapping of a trust fund.
       Both the Constitution and federal statutory law place 
     specific limits on what government entities may do in the 
     absence of appropriated funds. The Constitution prohibits the 
     withdrawal of any money from the Treasury ``but in 
     Consequence of Appropriations made by the Law,'' U.S. 
     Constit. art. I, sec. 9, cl. 7. By the terms of this clause, 
     government entities may continue to obligate funds during a 
     temporary lapse in appropriations, but they may not pay out 
     any monies. This gap has been closed by the Antideficiency 
     Act which prohibits the obligation of funds under such 
     circumstances. Under that Act, it is a crime for an official 
     or employee of the United States Government or of the 
     District of Columbia to make expenditures in excess of 
     appropriations or involve the Government ``in a contract or 
     obligation for the payment of money before an appropriation 
     is made unless authorized by law.'' 31 U.S.C. 1341(a)(1) 
     (1988). The Act also prohibits any officer from accepting 
     ``voluntary services,'' or ``employ[ing] personal services 
     exceeding that authorized by law except for emergencies 
     involving the safety of human life or the protection of 
     Property''. 31 U.S.C. 1342. The exceptions clause was amended 
     in 1990 to specifically preclude ``ongoing, regular functions 
     of the government the suspension of which would not 
     imminently threaten the safety of human life or the 
     protection of property.'' Id. Thus on its face the Act 
     appears to leave little room for the continuance of most 
     government functions in advance of appropriations.
       It is clear that veterans' compensation and pension 
     benefits are ``entitlements''. See, e.g., 38 U.S.C. 310. 
     However, there are two types of entitlements: (1) Those that 
     have permanent appropriations contained in authorizing 
     legislation. These do not require funding through annual 
     appropriation acts. The leading example is social security 
     legislation and its trust funds mechanism. See 42 U.S.C. 401. 
     (2) Also, there are those entitlements authorized in basic 
     legislation for which funding is provided in annual 
     appropriations acts. Veterans' compensation and pension 
     benefits fall within this latter category. See Departments of 
     Veterans' Affairs and Housing and Urban Development, and 
     Independent Agencies Appropriations Act, 1995, Pub. L. 103-
     327. As a consequence, the congressional failure to enact an 
     annual appropriation act or a further continuing resolution 
     constrains the VA's authority to spend, both with respect to 
     the benefits themselves and the personnel necessary to 
     administer the programs. VA therefore appears to be acting 
     within the parameters of the Department of Justice and Office 
     of Management and Budget guidelines for funding lapses. There 
     are no ``no-year or multi-year or other funds available''. 
     However, if funding legislation is passed, even after 
     November 22, VA would then be properly authorized to issue 
     checks and personnel necessary to issue them would be 
     available.
       The coincidence of the current debt limit situation 
     provides no additional option for payment of the benefits. 
     Reaching the debt limit and the failure to provide 
     appropriations are distinctly different problems that are 
     accompanied by different consequences and solutions. By law 
     the total amount of government debt that may be outstanding 
     is limited to $4.9 trillion. 31 U.S.C. 3101(b). When that 
     limit is reached, if Congress has not increased it, the 
     government must rely on taxes and miscellaneous receipts such 
     as loan deposits and fees to replenish its operating 
     balances. In essence, it must go on a cash basis. The 
     statutory debt ceiling, therefore, limits the ability of 
     government agencies to exercise spending authority that they 
     have received in a appropriations measure because the 
     Treasury will, at some point, not take in sufficient receipts 
     to pay for all appropriated actions.
       In contrast, a funding lapse involves the authority of 
     agencies to spend money. Thus appropriations lapses and 
     reaching the debt ceiling limit present distinct budgetary 
     and legal issues for VA. The Department's decision to delay 
     payments rests upon its lack of spending authority in the 
     first place. There is no question of inability to pay. 
     Indeed, in the absence of appropriations we are not aware of 
     any legal basis for making the benefits payments by tapping, 
     for instance, the civil service retirement fund for such and 
     unfunded purpose. Stated differently, the lack of VA spending 
     authority leaves Treasury without any apparent legal 
     authority to use retirement trust fund resources or any other 
     available monies for activities which have not been 
     authorized ``in Consequence of Appropriations made by the 
     Law''. What the Treasury is doing now is paying obligations 
     that have come due either by using current revenues or by 
     tapping the civil service retirement fund or the G fund, as 
     authorized by statutes governing those funds. These 
     obligations--unlike the VA entitlements--arise from 
     activities for which appropriations have been 
     enacted.

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