House passes bill to plug $3B VA budget shortfall

The House on Tuesday passed an emergency bill to address a roughly $3 billion budget shortfall facing the Department of Veterans Affairs (VA), as officials warn millions of veterans’ benefits are at risk in the coming weeks.

The bill passed with bipartisan support on a voice vote, and now heads to the Senate, where members on both sides are hopeful for swift action this week.

“Thankfully, the House came together in a rare moment of bipartisanship to pass my bill that prevents this disaster and demands accountability with real oversight to make sure every dollar is spent right,” Rep. Mike Garcia (R-Calif.), a member of the House Appropriations Committee who led the legislative effort, said in a statement Tuesday.

“Our veterans deserve better than bureaucratic incompetence, and we’re one step closer to fixing this broken system.”

The measure calls for about $2.9 billion in additional funding for the VA, of which about $2.3 billion would go toward the Veterans Benefits Administration for compensation and pensions. Roughly $597 million would be put toward readjustment benefits.

The bill’s passage comes weeks after the VA warned lawmakers that veterans’ compensation and pension benefit payments, as well as their readjustment benefits, could be delayed next month if Congress doesn’t provide additional funding in the days ahead.

The agency has cited the PACT Act, a landmark law that passed with bipartisan support in 2022, as the key driver behind the budget shortfall, pointing to increases in enrollment in VA health care, appointments and applications benefits. 

The bill, known as the Veterans Benefits Continuity and Accountability Supplemental Appropriations Act, also requires the VA secretary to submit reporting to lawmakers detailing ways to improve forecasting and budget assumptions, and mandates reporting on changes to estimates going forward.

It additionally requires the inspector general of the Department of Veterans Affairs to conduct a review of the circumstances surrounding the budget shortfall and the causes.

Senators on both sides are pushing for speedy approval, particularly as Congress becomes embroiled in another budget showdown to avert a government shutdown ahead of a Sept. 30 deadline.

Sen. Jon Tester (D-Mont.), head of the subcommittee that oversees annual funding for the Department of Defense, told The Hill earlier Tuesday he expects senators to make a push to “get it done” if the House VA bill passes.

“We’ll see. Obstructionists can obstruct, but I think it’s a bad mistake if they do,” he said. 

A bipartisan effort to expedite legislation to address the shortfall before the August recess fell apart amid resistance from conservatives and increased scrutiny on VA funding. 

In remarks Tuesday, Sen. John Boozman (Ark.), top Republican on the subcommittee that crafts annual VA funding, expressed hopes that the Senate could fast-track the bill and pass it via unanimous consent. But that process can also be held up if a single senator opposes passage.

“My hope would be that they send it over here and we do it by unanimous consent,” Boozman told The Hill. “If not, then we need to take whatever time, starting immediately, to get it [passed].”

The VA has been pressing to receive the additional funding by Sept. 20, putting pressure on Congress.

“Every day past the 20th increases the risk that we are not able to pay on time,” Joshua Jacobs, the under secretary for benefits for the VA, said at a recent oversight hearing held by the House Committee on Veterans Affairs, while explaining the steps the agency takes to transmit pay files to the Treasury Department. 

“There are multiple steps that have to occur between us submitting the pay file, the Treasury Department processing it, and those payments being made either through direct deposit, through EFTS to financial institutions, or to the approximately 2 percent of veterans and survivors who receive paper checks to print and send those checks.”

“We do have some room built in, because occasionally there are challenges with those pay files that we have to fix and then correct before we transmit it,” he said, but “it’s very hard to go back and recoup those monies after we’ve submitted it.”

“I will also add we have the ability to accelerate the timeline for direct deposit. It does come with additional risk. The real challenge and the real length and process is those veterans and survivors with checks, because that process is time consuming, and particularly for veterans and survivors in rural areas, there may be delay of up to two weeks.”