[Senate Report 105-341]
[From the U.S. Government Publishing Office]
Calendar No. 593
105th Congress Report
SENATE
2d Session 105-341
_______________________________________________________________________
VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 1998
_______
September 21, 1998.--Ordered to be printed
_______________________________________________________________________
Mr. Specter, from the Committee on Veterans' Affairs, submitted the
following
R E P O R T
[To accompany S. 2273]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to which was referred
the bill (S. 2273) to increase, effective December 1, 1998, the
rates of disability compensation for veterans with service-
connected disabilities and the rates of dependency and
indemnity compensation for survivors of certain service-
connected disabled veterans, and for other purposes, having
considered the same, reports favorably thereon and recommends
that the bill, as amended, do pass.
Committee Amendment
The amendment is as follows:
On page 3, line 12, strike out ``1998,'' and insert in lieu
thereof ``1999,''.
Thus, the text of the bill (strike out the material in
brackets and insert the material in italics) as reported is as
follows:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Veterans' Compensation Cost-of-
Living Adjustment Act of 1998''.
SEC. 2. INCREASE IN COMPENSATION RATES AND LIMITATIONS.
(a) In General.--(1) The Secretary of Veterans Affairs shall, as
provided in paragraph (2), increase, effective December 1, 1998, the
rates of and limitations on Department of Veterans Affairs disability
compensation and dependency and indemnity compensation.
(2) The Secretary shall increase each of the rates and limitations
in sections 1114, 1115(1), 1162, 1311, 1313, and 1314 of title 38,
United States Code, that were increased by the amendments made by the
Veterans' Compensation Rate Amendments of 1997 (Public Law No. 105-98;
111 Stat. 2155). This increase shall be made in such rates and
limitations as in effect on November 30, 1998, and shall be by the same
percentage that benefit amounts payable under title II of the Social
Security Act (42 U.S.C. 401 et seq.) are increased effective December
1, 1998, as a result of a determination under section 215(i) of such
Act (42 U.S.C. 415(i)).
(3) In the computation of increased dollar amounts pursuant to
paragraph (2), any amount which as so computed is not an even multiple
of $1 shall be rounded to the next lower whole dollar amount.
(b) Special Rule.--The Secretary may adjust administratively,
consistent with the increases made under subsection (a), the rates of
disability compensation payable to persons within the purview of
section 10 of Public Law 85-857 (72 Stat. 1263) who are not in receipt
of compensation payable pursuant to chapter 11 of title 38, United
States Code.
(c) Publication Requirement.--At the same time as the matters
specified in section 215(i)(2)(D) of the Social Security Act (42 U.S.C.
415(i)(2)(D)) are required to be published by reason of a determination
made under section 215(i) of such Act during fiscal year [1998,] 1999,
the Secretary shall publish in the Federal Register the rates and
limitations referred to in subsection (a)(2) as increased under this
section.
Introduction
On July 8, 1998, Committee Chairman Arlen Specter
introduced S. 2273, the proposed ``Veterans' Compensation Cost-
of-Living Adjustment Act of 1998.'' S. 2273 would provide for a
December 1, 1998, cost-of-living adjustment (COLA), equal to
the December 1, 1998, COLA in Social Security benefits, in the
rates of compensation for veterans who have service-connected
disabilities and in the rates of dependency and indemnity
compensation (DIC) for the survivors of those who died from
service-connected causes.
Committee Meeting
On July 28, 1998, the Committee met in open session and
voted by unanimous voice vote to report S. 2273, as introduced,
favorably to the Senate.
Summary of s. 2273 as Reported
S. 2273 (hereinafter referred to as the ``Committee bill'')
contains freestanding provisions that would require the
Secretary of Veterans Affairs to increase, effective December
1, 1998, the rates of and limitations on compensation paid to
veterans with service-connected disabilities, and the rates of
dependency and indemnity compensation (DIC) paid to certain
survivors of certain deceased veterans who had had service-
connected disabilities. The COLA would apply to:
1. basic compensation rates for veterans with
service-connected disabilities and the rates payable
for certain severe disabilities;
2. the allowances for spouses, children, and
dependent parents paid to service-connected-disabled
veterans rated 30 percent or more disabled;
3. the annual clothing allowance paid to veterans
whose compensable disability requires the use of a
prosthetic or orthopedic appliance (including a
wheelchair) that tends to tear or wear out clothing, or
requires the use of a medication prescribed by a
physician for a service- connected skin condition if
the medication causes irreparable damage to the
veteran's outer garments; and
4. the DIC rates paid to:
(a) surviving spouses of veterans whose
deaths were service connected;
(b) surviving spouses for dependent children;
(c) surviving spouses who are so disabled
that they need aid and attendance or are
permanently housebound; and
(d) the children of veterans whose deaths
were service connected if no surviving spouse
is entitled to DIC, the child is age 18 through
22 and attending an approved educational
institution, or the child is age 18 or over and
became permanently incapable of self-support
prior to reaching age 18.
The Committee bill would require the Secretary of Veterans
Affairs to increase the rates of compensation, allowances, and
DIC paid by the same percentage as the COLA provided to Social
Security recipients and VA pension beneficiaries that becomes
effective on December 1, 1998. The Congressional Budget Office
(CBO) estimates that the FY 1999 COLA will be 1.6 percent.
Background
Disability compensation
The service-connected disability compensation program under
chapter 11 of title 38, United States Code, provides monthly
cash benefits to veterans who have disabilities incurred or
aggravated during active duty in the Armed Forces.
The amount of compensation depends on the nature of the
veteran's disability or combination of disabilities and the
extent to which the disability impairs earning capacity. VA
rates compensable disabilities according to its Schedule for
Rating Disabilities on a graduated scale ranging from 0 to 100
percent, in 10-percent increments. VA pays higher monthly rates
(known as ``special monthly compensation'') to totally disabled
veterans with certain specific, very severe disabilities or
combinations of disabilities.
As of July 1, 1998, VA was providing disability
compensation to 2,273,999 veterans with service-connected
disabilities. Among the veterans receiving such compensation
were 168 World War I veterans; 584,054 World War II veterans;
179,297 Korean-conflict veterans; 728,340 Vietnam-era veterans;
and 233,808 veterans of the Persian Gulf War era.
A veteran with a disability rated at 30 percent or more may
receive additional compensation on behalf of the veteran's
spouse, children, and dependent parents. These dependents'
allowances are prorated according to the percentage of
disability. As of March 31, 1998, 692,501 veterans received
additional compensation on behalf of 1,048,985 dependents.
Dependency and indemnity compensation
Under chapter 13 of title 38, VA pays dependency and
indemnity compensation to the survivors of service members or
veterans who died on or after January 1, 1957, from a disease
or injury incurred or aggravated during military service.
Survivors eligible for DIC include surviving spouses, unmarried
children under the age of 18, certain helpless children age 18
or older, children between the ages of 18 and 22 who are
enrolled in school, and certain needy parents. Under section
5312 of title 38, parents' DIC rates are adjusted automatically
at the same time and by the same percentage as Social Security
and VA pension benefits. Surviving spouses, children, and
parents who are receiving death compensation based on deaths
before January 1, 1957, may elect to receive DIC instead of
death compensation.
For deaths prior to January 1, 1993, surviving spouses
received DIC at rates determined by the pay grade (service
rank) of the deceased veteran. For deaths on or after January
1, 1993, surviving spouses currently receive $850 per month
and, if the deceased veteran was totally disabled for 8 years
prior to death, an additional $185 per month. Surviving spouses
who had been receiving benefits under the prior DIC program are
paid under whichever program will pay the higher benefit.
A surviving spouse who is so disabled as to be housebound
or in need of regular aid and attendance is eligible to receive
an additional amount. A surviving spouse also may receive
additional allowances on behalf of the veteran's surviving
children.
Children are entitled to DIC if there is no surviving
spouse, if they are 18 years or older and became permanently
incapable of self-support before reaching age 18, or if they
are 18 to 22 years old and pursuing an approved course of
education.
As of August 1, 1997, VA was paying DIC benefits to, or on
behalf of, 281,157 surviving spouses, 33,054 children, and
13,083 needy surviving parents.
Under section 1318(b) of title 38, VA pays benefits at DIC
rates to the surviving spouses and children of veterans whose
deaths are not service connected if the veteran, immediately
prior to his or her death, had been receiving (or had been
entitled to receive) compensation at the 100-percent rate
continuously for 10 or more years or for at least 5 years from
the date of discharge or release from active duty.
History of cost-of-living increases
The Committee periodically reviews the service-connected
disability compensation and DIC programs to ensure that the
benefits provide reasonable and adequate compensation for
disabled veterans and their families. Based on this review, the
Congress acts periodically to provide a cost-of-living
adjustment in compensation and DIC benefits. In fact, the
Congress has provided annual increases in these rates for every
fiscal year since 1976. The following table shows the
percentage increases since 1975.
HISTORY OF SERVICE-CONNECTED DISABILITY COMPENSATION INCREASES, 1975 TO PRESENT
----------------------------------------------------------------------------------------------------------------
Increase Cumulative
Fiscal year Effective date (percent) (1969=$100)
----------------------------------------------------------------------------------------------------------------
1976........................................... August 1975....................... 11.8 158.55
1977........................................... October 1976...................... 8.0 171.23
1978........................................... October 1977...................... 6.6 182.53
1979........................................... October 1978...................... 7.3 195.86
1980........................................... October 1979...................... 9.9 215.25
1981........................................... October 1980...................... 14.3 246.03
1982........................................... October 1981...................... 11.2 273.58
1983........................................... October 1982...................... 7.4 293.82
1984........................................... April 1983........................ 3.5 304.11
1985........................................... December 1984..................... 3.2 313.84
1986........................................... December 1985..................... 3.1 323.57
1987........................................... December 1986..................... 1.5 328.42
1988........................................... December 1987..................... 4.2 342.22
1989........................................... December 1988..................... 4.1 356.25
1990........................................... December 1989..................... 4.7 372.99
1991........................................... December 1990 \1\................. 5.4 393.13
1992........................................... December 1991..................... 3.7 407.68
1993........................................... December 1992..................... 3.0 419.91
1994........................................... December 1993..................... 2.6 430.83
1995........................................... December 1994 \2\................. 2.8 442.89
1996........................................... December 1995 \2\................. 2.6 454.41
1997........................................... December 1996..................... 2.9 467.59
1998........................................... December 1997 \2\................. 2.1 477.41
1999........................................... December 1998 \2\................. 1.6 \3\ 485.05 \3\
----------------------------------------------------------------------------------------------------------------
\1\ Payment of the December 1990 increase was delayed until January 1992 by section 8005(b) of Public Law 101-
508.
\2\ December 1994, 1995, 1997 and 1998 increases are rounded to the next lower dollar amount pursuant to
sections 2(c)(2) of Public Law 103-418 and Public Law 104-57, and section 8031 of Public Law 105-33.
\3\ Estimate.
Committee Bill
The Committee bill would direct VA to compute and provide
increases in the monthly rates of compensation and DIC,
effective December 1, 1998. The rates would be increased by the
same percentage as the Social Security and VA pension COLA that
will take effect on that date. In accordance with section 8031
of the Balanced Budget Act of 1997 (Public Law 105-33), amounts
of compensation so computed that are not even multiples of $1
will be rounded down to the next lower whole dollar amount.
The increases in DIC automatically would result in
identical percentage increases in benefits paid at DIC rates
under section 1318 of title 38 to the surviving spouses and
children of veterans who had a service-connected disability at
the time of death for which they continuously were rated
totally disabled for at least either (1) 10 years, or (2) 5
years from the date of discharge from active duty.
Under section 156(e)(1)(A) of Public Law 97-377, the DIC
increases also automatically would result in the same
percentage increases in Social Security benefits that were
terminated by section 2205 of the Omnibus Budget Reconciliation
Act of 1981 (OBRA 1981) (Public Law 97-35). Prior to OBRA 1981,
those benefits had been paid to certain surviving spouses of
those who died on active duty or from a service- connected
disability on behalf of their children under 18 and children
over age 19 who were secondary-school students; OBRA 1981
reduced the eligibility cutoff age from 18 to 16 years old.
Section 314 of Public Law 100-322 amended section 156(a)(1)
of Public Law 97-377 to restore the benefits eliminated by the
OBRA 1981. The DIC increase also would apply to these restored
benefits, effective December 1, 1998.
CBO, in its most recent baseline, estimated that the fiscal
year 1999 Social Security COLA, and thus the COLA provided for
by the Committee bill, will be 1.6 percent. The actual Social
Security COLA could differ from this estimate. Rather than
selecting any particular percentage adjustment at the time the
Committee ordered the bill reported, the Committee followed its
prior practice of setting the COLA by reference to the Social
Security increase. The Committee believesthis is the most
equitable means of providing increases in these important service-
connected benefits.
cost Estimate
In compliance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate, the Committee, based on
information supplied by CBO, estimates that, compared to the
CBO baseline, there would be no costs or savings resulting from
enactment of the Committee bill.
The cost estimate provided by CBO follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 30, 1998.
Hon. Arlen Specter,
Chairman, Committee on Veterans' Affairs, U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office (CBO)
has prepared the enclosed cost estimate for S. 2273, the
Veterans' Compensation Cost-of-Living Adjustment Act of 1998.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Charles
Riemann.
Sincerely,
June E. O'Neill, Director.
Enclosure.
S. 2273--Veterans' Compensation Cost-of-Living Adjustment Act of 1998
S. 2273 would increase the amounts paid to veterans for
disability compensation and to their survivors for dependency
and indemnity compensation by the same cost-of-living
adjustment (COLA) payable to Social Security recipients. The
increase would take effect on December 1, 1998, and the results
of the adjustment would be rounded to the next lower dollar.
However, the COLA is assumed in the baseline, pursuant to
section 257 of the Balanced Budget and Emergency Deficit
Control Act of 1985, and savings from rounding it down were
achieved by the Balanced Budget Act of 1997 (Public Law 105-
33). As a result, the bill would have no budgetary effect
relative to the baseline. Relative to current law, enacting
this bill would increase spending for these programs by about
$316 million in 1999 and about $415 million a year thereafter.
The bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
This estimate was prepared by Charles Riemann. This
estimate was approved by Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Statement
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee on Veterans'
Affairs has made an evaluation of the regulatory impact that
would be incurred in carrying out the Committee bill. The
Committee finds that the Committee bill would not entail any
regulation of individuals or businesses or result in any impact
on the personal privacy of any individuals and that the
paperwork resulting from enactment would be minimal.
Tabulation of votes cast in committee
In compliance with paragraph 7 of rule XXVI of the Standing
Rules of the Senate, the following is a tabulation of votes
cast in person or by proxy by members of the Committee on
Veterans' Affairs at its July 28, 1998, meeting. On that date,
the Committee, by unanimous voice vote, ordered S. 2273
reported favorably to the Senate.
Changes in Existing Law Made by S. 2273, as Reported
Since the Committee bill would not repeal or amend any
provisions of current law, this report does not contain the
material described in clauses (a) and (b) of paragraph 12 of
rule XXVI of the Standing Rules of the Senate.