House Report 113-62 - AMERICAN HEROES COLA ACT

[House Report 113-62]
[From the U.S. Government Publishing Office]

113th Congress Report
} HOUSE OF REPRESENTATIVES {
1st Session } { 113-62
======================================================================

AMERICAN HEROES COLA ACT

_______

May 17, 2013.--Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed

_______

Mr. Miller of Florida, from the Committee on Veterans' Affairs,

submitted the following

R E P O R T

[To accompany H.R. 570]

[Including cost estimate of the Congressional Budget Office]

The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 570) to amend title 38, United States Code, to
provide for annual cost-of-living adjustments to be made
automatically by law each year in 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,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.

CONTENTS

Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Subcommittee Consideration....................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 4
Statement of General Performance Goals and Objectives............ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Earmarks and Tax and Tariff Benefits............................. 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 6
Advisory Committee Statement..................................... 6
Constitutional Authority Statement............................... 6
Applicability to Legislative Branch.............................. 6
Statement on Duplication of Federal Programs..................... 6
Disclosure of Directed Rulemaking................................ 7
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill as Reported............. 7

Purpose and Summary

H.R. 570, the American Heroes COLA Act, was introduced on
February 6, 2013, by Representative Jon Runyan of New Jersey.
H.R. 570 would provide for automatic annual cost-of-living
increases in the rates of veterans' disability compensation and
dependency and indemnity compensation. This is accomplished by
indexing these veteran benefit increases to increases in
benefit amounts payable under title II of the Social Security
Act.

Background and Need for Legislation

The basic purpose of the disability compensation program is
to provide relief from the impaired earning capacity of
veterans disabled as the result of their military service. The
amount of compensation payable varies according to the degree
of disability. This amount in turn is required by law to
represent, to the extent practicable, the average impairment in
earning capacity in civilian occupations resulting from such
disability or combination of disabilities.
To be eligible to receive disability compensation, a
veteran must have a disability incurred or aggravated during
military service, which is not the result of willful
misconduct, and must have been discharged under other than
dishonorable conditions. The responsibility for determining a
veteran's entitlement to service-connection for a disability
rests with VA.
Surviving spouses and dependent children of veterans who
died of disabilities determined by VA to be service-connected
(including veterans who died while on active duty) or who had a
service-connected disability rated at 100 percent for certain
periods of time prior to death are entitled to receive monthly
DIC benefits. Additional amounts are paid to survivors who are
housebound, in need of aid and attendance, or who have minor
children. The purpose of DIC benefits authorized under chapter
13 of title 38, United States Code, is to provide partial
compensation to the appropriate survivors for the loss in
financial support due to the service-connected death. Income
and need are not factors in determining a surviving spouse's or
child's entitlement because the Nation, in part, assumes the
legal and moral obligation of the veteran to support the spouse
and children.
Each year, the Committee approves and reports legislation
that sets the cost-of-living adjustment (COLA) by reference to
the yet-to-be-determined Social Security increase. Although the
Committee typically passes such legislation each year, veterans
must wait for Congress to act before they are granted such an
increase.
In contrast, Social Security beneficiaries receive an
automatic and annual COLA if there is an increase in the
Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI-W) from the third quarter of the last year a COLA
was determined to the third quarter of the current year.
Accordingly, service-disabled veterans who are receiving
disability benefits from the Department of Veterans Affairs
(VA) should also automatically see their benefits increase,
particularly in light of the current economic climate. To right
this inequity, rather than being subject to the uncertainty of
an annual COLA bill, this section makes compensation to
veterans and their dependents subject to the same COLA as
Social Security recipients permanently. By making such an
increase automatic, veterans would not have to wait for
Congress to pass an annual COLA bill before receiving the COLA
increase in benefits. Further, because a COLA is assumed in
CBO's baseline, there is no projected increase in mandatory
spending relative to the baseline projected for this provision.

Hearings

On April 16, 2013, the Subcommittee on Disability
Assistance and Memorial Affairs conducted a legislative hearing
on various bills introduced during the 113th Congress,
including H.R. 570. The following witnesses testified at the
hearing:
The Honorable Bill Johnson, U.S. House of Representatives;
The Honorable Chellie Pingree, U.S. House of Representatives;
The Honorable Timothy Walz, U.S. House of Representatives; Mr.
Jeff Hall, Assistant National Legislative Director, Disabled
American Veterans; Mr. Raymond Kelley, Director of National
Legislative Service, Veterans of Foreign Wars; Colonel Robert
F. Norton, USA (Ret.), Deputy Director of Government Relations,
Military Officers Association of America; Heather Ansley, Esq.,
MSW, Vice President of Veterans Policy, VetsFirst, a program of
United Spinal Association; Mr. Michael D. Murphy, Executive
Director, National Association of County Veterans Service
Officers; Mr. Richard Hipolit, Assistant General Counsel, U.S.
Department of Veterans Affairs; Mr. David R. McLenachen,
Director, Pension and Fiduciary Service, U.S. Department of
Veterans Affairs, accompanied by Ms. Mary Ann Flynn, Deputy
Director, Policy and Procedures, Compensation Service, U.S.
Department of Veterans Affairs. The following groups submitted
statements for the record: The American Legion; Iraq and
Afghanistan Veterans of America; National Organization of
Veterans Advocates; and Wounded Warrior Project.

Subcommittee Consideration

On April 25, 2013, the Subcommittee on Disability
Assistance and Memorial Affairs met in an open markup session,
a quorum being present, and favorably forwarded to the full
Committee H.R. 570 by voice vote.

Committee Consideration

On May 8, 2013, the full Committee met in an open markup
session, a quorum being present and ordered H.R. 570 reported
favorably to the House of Representatives by voice vote.

Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report the legislation and amendments thereto.
There were no record votes taken on amendments or in connection
with ordering H.R. 570 reported to the House. A motion by
Ranking Member Michael H. Michaud of Maine to report H.R. 570
favorably to the House of Representatives was agreed to by
voice vote.

Committee Oversight Findings

In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.

Statement of General Performance Goals and Objectives

In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.

Earmarks and Tax and Tariff Benefits

H.R. 570 does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI of the Rules of the House of
Representatives.

Committee Cost Estimate

The Committee adopts as its own the cost estimate on H.R.
570 prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.

Congressional Budget Office Cost Estimate

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
for H.R. 570, provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:

May 14, 2013.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs, U.S. House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 570, the American
Heroes COLA Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Wright.
Sincerely,
Douglas W. Elmendorf, Director.
Enclosure.

H.R. 570--American Heroes COLA Act

Summary: H.R. 570 would provide a permanent annual cost-of-
living adjustment (COLA) to the amounts paid to veterans for
disability compensation and to their survivors for dependency
and indemnity compensation, and would round down that
adjustment to the next lower whole dollar. The effective date
of those provisions would be December 1, 2014. CBO estimates
that enacting H.R. 570 would decrease direct spending by $26
million in 2015 and by about $1.4 billion over the 2015-2023
period.
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending. Enacting H.R. 570
would not affect revenues.
H.R. 570 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the federal government: The estimated
budgetary impact of H.R. 570 is shown in the following table.
The costs of this legislation fall within budget function 700
(veterans benefits and services).

--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
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CHANGES IN DIRECT SPENDING

Estimated Budget Authority.................. 0 -26 -55 -84 -112 -144 -177 -212 -252 -290 -277 -1,351
Estimated Outlays........................... 0 -26 -55 -84 -112 -144 -177 -212 -252 -290 -277 -1,351
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Basis of estimate:

Automatic COLA

Section 2 would provide a permanent annual COLA to the
amounts paid to veterans for disability compensation and to
their survivors for dependency and indemnity compensation. The
COLA would equal the cost-of-living adjustment payable to
Social Security recipients and would take effect on December 1
of each year.
The COLA that would be authorized by this bill is assumed
in CBO's baseline, pursuant to section 257 of the Balanced
Budget and Emergency Deficit Control Act. Because the COLA is
assumed in CBO's baseline, enacting this provision would have
no budgetary impact relative to that baseline. CBO estimates
that the projected COLA for 2015 (1.9 percent), which would
take effect in the second quarter of fiscal year 2015, would
equal $2.2 billion. The full-year cost of that increase would
equal $2.8 billion. Over the 2015-2023 period, CBO estimates
that the COLA would amount to $74.9 billion.

Permanent extension of provision to round-down COLA

Section 2 also would require that increases in the monthly
rates resulting from the COLA be rounded down to the next lower
whole dollar. This provision would apply to both disability
compensation and dependency and indemnity compensation
payments. A similar provision exists under current law and will
expire at the end of 2013. Based on projections of the number
of beneficiaries and payments made each year, CBO estimates
that this section would result in direct spending savings of
about $1.4 billion over the 2015-2023 period.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 570, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON VETERANS' AFFAIRS ON MAY 8, 2013
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By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-2018 2013-2023
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NET DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact........ 0 0 -26 -55 -84 -112 -144 -177 -212 -252 -290 -277 -1,351
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Intergovernmental and private-sector impact: H.R. 570
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal Costs: Dwayne M. Wright;
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Elizabeth Bass.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 570 prepared by the Director of the
Congressional Budget Office pursuant to section 423 of the
Unfunded Mandates Reform Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
570.

Statement of Constitutional Authority

Pursuant to Article I, section 8 of the United States
Constitution, the reported bill is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

Statement on Duplication of Federal Programs

Pursuant to section 3(j) of H. Res. 5, 113th Cong. (2013),
the Committee finds that no provision of H.R. 570, the
``American Heroes COLA Act,'' establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.

Disclosure of Directed Rulemaking

Pursuant to section 3(k) of H. Res. 5, 113th Cong. (2013),
the Committee estimates that H.R. 570 does not require any
directed rulemakings.

Section-by-Section Analysis of the Legislation

Section 1--Short title

This section provides the short title of H.R. 570 as the
``American Heroes COLA Act of 2013.''

Section 2--Automatic annual increase in rates of disability
compensation and dependency and indemnity compensation

Section 2(a) would make the cost-of-living adjustment for
veterans' disability payments automatic whenever there is an
increase in benefit amounts payable under title II of the
Social Security Act. Section 2(a) would also require the
Secretary to publish any such increase in the Federal Register,
and would require that each dollar amount increased, if not a
whole dollar amount, be rounded to the next lower whole dollar
amount. This section would allow the Secretary of Veterans
Affairs to adjust administratively the rates of disability
compensation payable to persons under section 10 of Public Law
85-857 (72 Stat. 1263) who have not received compensation under
chapter 11 of title 38.
Section 2(b) would make the automatic increase in cost-of-
living adjustments effective as of December 1, 2014.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):

TITLE 38, UNITED STATES CODE

* * * * * * *

PART IV--GENERAL ADMINISTRATIVE PROVISIONS

* * * * * * *

CHAPTER 53--SPECIAL PROVISIONS RELATING TO BENEFITS

* * * * * * *

Sec. 5312. Annual adjustment of certain benefit rates

(a) * * *

* * * * * * *

(d)(1) Whenever there is an increase in benefit amounts
payable under title II of the Social Security Act (42 U.S.C.
401 et seq.) as a result of a determination made under section
215(i) of such Act (42 U.S.C. 415(i)), the Secretary shall,
effective on the date of such increase in benefit amounts,
increase the dollar amounts in effect for the payment of
disability compensation and dependency and indemnity
compensation by the Secretary, as specified in paragraph (2),
as such amounts were in effect immediately before the date of
such increase in benefit amounts payable under title II of the
Social Security Act, by the same percentage as the percentage
by which such benefit amounts are increased.
(2) The dollar amounts to be increased pursuant to paragraph
(1) are the following:
(A) Wartime disability compensation.--Each of the
dollar amounts in effect under section 1114 of this
title.
(B) Additional compensation for dependents.--Each of
the dollar amounts in effect under section 1115(1) of
this title.
(C) Clothing allowance.--The dollar amount in effect
under section 1162 of this title.
(D) Dependency and indemnity compensation to
surviving spouse.--Each of the dollar amounts in effect
under subsections (a) through (d) of section 1311 of
such title.
(E) Dependency and indemnity compensation to
children.--Each of the dollar amounts in effect under
sections 1313(a) and 1314 of such title.
(3) Whenever there is an increase under paragraph (1) in
amounts in effect for the payment of disability compensation
and dependency and indemnity compensation, the Secretary shall
publish such amounts, as increased pursuant to such paragraph,
in the Federal Register at the same time as the material
required by section 215(i)(2)(D) of the Social Security Act (42
U.S.C. 415(i)(2)(D)) is published by reason of a determination
under section 215(i) of such Act (42 U.S.C. 415(i)).
(4) Each dollar amount increased under paragraph (1), if not
a whole dollar amount, shall be rounded to the next lower whole
dollar amount.
(5) The Secretary of Veterans Affairs may adjust
administratively, consistent with the increases made under
subsection (a), the rates of disability compensation payable to
persons under section 10 of Public Law 85-857 (72 Stat. 1263)
who have not received compensation under chapter 11 of this
title.

* * * * * * *