[Senate Report 113-87]
[From the U.S. Government Publishing Office]
Calendar No. 165
113th Congress Report
SENATE
1st Session 113-87
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VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2013
September 4, 2013.--Ordered to be printed
Filed, under authority of the order of the Senate of August 1, 2013.
_______
Mr. Sanders, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany S. 893]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs (hereinafter,
``Committee''), to which was referred the bill (S. 893) to
increase, effective as of December 1, 2013, the rates of
compensation for veterans with service-connected disabilities
and the rates of dependency and indemnity compensation
(hereinafter, ``DIC'') for the survivors of certain disabled
veterans, and for other purposes, having considered the same,
reports favorably thereon, without amendment, and recommends
that the bill do pass.
INTRODUCTION
On May 8, 2013, Committee Chairman Bernard Sanders
introduced S. 893, a bill to increase, effective as of December
1, 2013, the rates of compensation for veterans with service-
connected disabilities and the rates of dependency and
indemnity compensation for the survivors of certain disabled
veterans, and for other purposes. Ranking Member Richard Burr
and Committee Members John D. Rockefeller IV, Patty Murray,
Sherrod Brown, Jon Tester, Mark Begich, Richard Blumenthal,
Mazie K. Hirono, Johnny Isakson, Mike Johanns, Jerry Moran,
John Boozman, and Dean Heller are original cosponsors of the
bill, which was referred to the Committee upon introduction.
COMMITTEE HEARING
On June 12, 2013, the Committee held a hearing on
legislation pending before the Committee. Testimony on S. 893
was received from: Curtis L. Coy, Deputy Under Secretary for
Economic Opportunity, Veterans Benefits Administration,
Department of Veterans Affairs; Ian de Planque, Deputy
Legislative Director, The American Legion; Jeffrey Hall,
Assistant National Legislative Director, Disabled American
Veterans; Robert Norton, Deputy Director, Government Relations,
Military Officers Association of America; and Ryan Gallucci,
Deputy Director, National Legislative Service, Veterans of
Foreign Wars of the United States.
COMMITTEE MEETING
On July 24, 2013, the Committee met in open session to
consider legislation pending before the Committee. Among the
measures so considered was S. 893. The Committee voted by voice
vote, without objection, to report favorably S. 893 to the
Senate.
SUMMARY OF THE COMMITTEE BILL AS REPORTED
The Committee bill contains freestanding provisions that
would require the Secretary of Veterans Affairs to increase,
effective December 1, 2013, the rates of certain benefits paid
by the Department of Veterans Affairs (hereinafter, ``VA'') by
the same percentage as the cost-of-living adjustment
(hereinafter, ``COLA'') provided to Social Security recipients
and VA pension beneficiaries that become effective on the same
date. 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 allowance 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 below
the age of 18;
(c) surviving spouses who are so disabled that they
need aid and attendance or are permanently housebound;
(d) surviving spouses covered under section 1318 of
title 38, United States Code (hereinafter, ``U.S.C.'');
and
(e) 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 Congressional Budget Office (hereinafter, ``CBO'')
currently estimates that the COLA to be provided to Social
Security recipients in 2013 will be 1.5 percent.
BACKGROUND AND DISCUSSION
A. Disability compensation
The service-connected disability compensation program under
chapter 11 of title 38, U.S.C., provides monthly cash benefits
to veterans who have disabilities incurred or aggravated during
active duty in the Armed Forces.
The amount of compensation paid depends on the nature and
severity of the veteran's disability or combination of
disabilities. VA rates compensable disabilities according to
its Schedule for Rating Disabilities on a graduated scale
ranging from 10 to 100 percent, in 10 percent increments. VA
pays higher monthly rates (known as ``special monthly
compensation'') to disabled veterans with certain specific,
very severe disabilities or combinations of disabilities.
According to VA, as set forth in its fiscal year 2014
budget submission, the Department estimates that it will
provide compensation to 4,210,582 beneficiaries (3,846,018
veterans and 364,564 survivors) in fiscal year 2014. Among the
veterans estimated to receive such compensation are 136,897
World War II veterans; 140,169 Korean Conflict veterans;
1,327,348 Vietnam era veterans; 1,546,030 veterans of the Gulf
War era; and 695,574 veterans who served during peacetime.
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.
B. Dependency and indemnity compensation
Under chapter 13 of title 38, U.S.C., VA pays DIC to the
survivors of servicemembers 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, children age 18 or older who are permanently incapable of
self-support, children between the ages of 18 and 22 who are
enrolled in school, and certain needy parents. Under section
5312 of title 38, U.S.C., 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 on or after January 1, 1957, but 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, DIC is paid at
a flat rate. Surviving spouses currently receive $1,215 per
month and, if the deceased veteran was totally disabled for
eight years prior to death, an additional $258 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 may also 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 of age 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.
Parents of deceased veterans whose incomes are below
statutorily prescribed income thresholds are eligible for DIC
under section 1315 of title 38, U.S.C. As previously noted,
parents' DIC rates are adjusted automatically at the same time
and by the same percentage as Social Security and VA pension
benefits.
In its fiscal year 2014 budget submission, VA estimates
that it will pay DIC benefits to 364,564 survivors, a total
that includes surviving spouses, children, and needy surviving
parents.
Under section 1318 of title 38, U.S.C., 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 five
years from the date of discharge or release from active duty.
VA also pays DIC benefits to the surviving spouses and children
of veterans who were former prisoners of war whose deaths were
not service-connected if the veterans had been receiving (or
had been entitled to receive) compensation at the 100 percent
rate continuously for not less than one year preceding death.
Committee Bill. The Committee bill would direct VA to
compute and provide increases in the monthly rates of
compensation and DIC, effective December 1, 2013. The rates
would be increased by the same percentage as the Social
Security and VA pension COLA that will take effect on that
date.
The increases in DIC would automatically result in
identical percentage increases in benefits paid at DIC rates
under section 1318 of title 38, U.S.C., 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 (1) 10 years, (2) five
years from the date of discharge from active duty, or (3) one
year if the veteran was a former prisoner of war and whose
death was not service-connected if the veteran had been
receiving (or had been entitled to receive) compensation at the
100 percent rate continuously for not less than one year
preceding death.
Under section 156(e)(1)(A) of Public Law 97-377, the DIC
increases also would automatically result in the same
percentage increases in Social Security benefits that were
terminated by section 2205 of the Omnibus Budget Reconciliation
Act of 1981 (hereinafter, ``OBRA 1981'') (Public Law 97-35).
Prior to OBRA 1981, those Social Security 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, the Further Continuing Appropriations Act
of 1993, to restore the benefits eliminated by OBRA 1981. The
DIC increase also would apply to these restored benefits,
effective December 1, 2013.
The CBO, in its most recent baseline, estimated that the
Social Security COLA affecting fiscal year 2014 payments, and
thus the COLA provided for by the Committee bill, will be 1.5
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
believes this is the most equitable means of providing
increases in these important service-connected benefits.
COMMITTEE BILL 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 the CBO, estimates that enactment of
the Committee bill would, relative to current law, increase
spending by $0.9 million in fiscal year 2014, but that such
increases in spending are assumed in the budget resolution
baseline and thus will have no budgetary effect relative to the
baseline. Enactment of the Committee bill would not affect the
budget of state, local, or tribal governments.
The cost estimate provided by CBO, setting forth a detailed
breakdown of costs, follows:
Congressional Budget Office,
Washington, DC, August 8, 2013.
Hon. Bernard Sanders,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 893, the Veterans'
Compensation Cost-of-Living Adjustment Act of 2013.
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.
S. 893--Veterans' Compensation Cost-of-Living Adjustment Act of 2013
As ordered reported by the Senate Committee on Veterans'
Affairs on July 24, 2013.
S. 893 would increase the amounts paid to veterans for
disability compensation and to their survivors for dependency
and indemnity compensation (DIC) by the same cost-of-living
adjustment (COLA) payable to Social Security recipients. The
increase would take effect on December 1, 2013.
The COLA that would be authorized by this bill is assumed
in CBO's baseline, consistent with section 257 of the Balanced
Budget and Emergency Deficit Control Act. Because the COLA is
assumed in CBO's baseline, the COLA provision would have no
budgetary effect relative to the baseline. Relative to current
law, CBO estimates that enacting this bill would increase
spending for those programs by $0.9 million in fiscal year
2014. This estimate assumes that the COLA effective on December
1, 2013, would be 1.5 percent. (The annualized cost would be
about $1.2 billion in subsequent years. CBO previously
estimated that the COLA change relative to current law would be
about $2.6 billion on an annualized basis in contrast to that
corrected figure of about $1.2 billion.)
Enacting S. 893 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
S. 893 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.
On May 16, 2013, CBO transmitted a cost estimate for H.R.
357, the GI Bill Tuition Fairness Act of 2013, as ordered
reported by the House Committee on Veterans' Affairs on May 8,
2013. Section 12 of H.R. 357 is similar to S. 893 but includes
a provision calling for rounding down the COLA to the next
lower dollar; that ``round down'' provision is not included in
S. 893. As a result of that difference, CBO estimated budgetary
savings of $278 million over the 2014-2023 period for H.R. 357.
On May 14, 2013, CBO transmitted a cost estimate for H.R.
570, the American Heroes COLA Act, as ordered reported by the
House Committee on Veterans' Affairs on May 8, 2013. H.R. 570
would provide a permanent annual COLA to the amounts paid for
disability compensation and DIC starting in 2015. H.R. 570 also
would round down that adjustment to the next lower dollar. That
difference would produce estimated savings of $1.4 billion over
the 2015-2023 period for H.R. 570.
The CBO staff contact for this estimate is Dwayne M.
Wright. The estimate was approved by Peter H. Fontaine,
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 S. 893 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(b) 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 24, 2013, meeting. On that date,
the Committee voted without dissent to order reported S. 893, a
bill to increase, effective as of December 1, 2013, the rates
of compensation for veterans with service-connected
disabilities and the rates of dependency and indemnity
compensation for the survivors of certain disabled veterans,
and for other purposes.
AGENCY REPORT
On June 12, 2013, Curtis L. Coy, Deputy Under Secretary for
Economic Opportunity, Veterans Benefits Administration,
Department of Veterans Affairs, appeared before the Committee
on Veterans' Affairs and submitted testimony on, among other
things, S. 893. Excerpts from this statement are reprinted
below:
STATEMENT OF CURTIS L. COY, DEPUTY UNDER SECRETARY FOR ECONOMIC
OPPORTUNITY, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF
VETERANS AFFAIRS
Good morning, Mr. Chairman and Members of the Committee. I
am pleased to be here today to provide the views of the
Department of Veterans Affairs (VA) on pending legislation
affecting VA's programs, including the following: Sections 101,
102 and 103 of S. 6, S. 200, S. 257, S. 262, S. 294, S. 373,
S. 430, sections 5, 6, 7, and 8 of S. 495, S. 514, S. 515,
S. 572, S. 629, S. 674, S. 690, S. 695, S. 705, S. 748, S. 893,
S. 894, S. 922, sections 103, 104, 201, 202, 301, 302, 303,
304, and 305 of S. 928, and S. 939. VA has not had time to
develop cost estimates for S. 514 and S. 894 and but will work
to provide them. VA has not had time to develop views and costs
on the other sections of S. 928. I cannot address today views
and costs on S. 735, S. 778, S. 819, S. 863, S. 868, S. 889,
S. 927, certain sections of S. 928, S. 930, S. 932, S. 935,
S. 938, S. 944, S. 1039, S. 1042, and S. 1058, but, with your
permission, we will work to provide that information. Other
legislative proposals under discussion today would affect
programs or laws administered by the Department of Labor (DOL),
Department of Homeland Security (DHS), Department of Defense
(DOD), the Office of Personnel Management (OPM), and the
General Services Administration (GSA). Respectfully, we defer
to those Departments' views on those legislative proposals.
Accompanying me this morning are Thomas Murphy, Director,
Compensation Service, Veterans Benefits Administration; Richard
Hipolit, Assistant General Counsel; and John Brizzi, Deputy
Assistant General Counsel.
* * * * * * *
s. 893
S. 893, the ``Veterans' Compensation Cost-of-Living
Adjustment Act of 2013,'' would require the Secretary of
Veterans Affairs to increase, effective December 1, 2013, the
rates of disability compensation for service-disabled Veterans
and the rates of dependency and indemnity compensation (DIC)
for survivors of Veterans. This bill would increase these rates
by the same percentage as the percentage by which Social
Security benefits are increased effective December 1, 2013. The
bill would not, however, account for the expiration at the end
of this fiscal year of the feature in current law that rounds
down to the next lower whole dollar amount those increases not
in whole dollars. The bill would also require VA to publish the
resulting increased rates in the Federal Register.
VA strongly supports annual cost-of-living adjustments
(COLA) for these important compensation programs because they
express, in a tangible way, this Nation's gratitude for the
sacrifices made by our service-disabled Veterans and their
surviving spouses and children and would ensure that the value
of their well-deserved benefits will keep pace with increases
in consumer prices. However, VA recommends the current ``round
down'' statutory provisions be extended. We recommend amending
sections 1303(a) and 1104(a) of title 38, United States Code,
to provide a 5-year extension of the round-down provisions of
the computation of the COLA for service-connected disability
compensation and DIC. Public Law 108-183 extended the ending
dates of these provisions to 2013. The extension for the COLA
round down provision beyond the 2013 expiration date results in
cost savings. The benefit savings to round down the FY 2014
COLA are estimated to be $41.6 million in FY 2014, $712.5
million for 5 years, and $2.3 billion over 10 years as a result
of the compounding effects of rounding down the COLA in
subsequent years.
* * * * * * *
CHANGES IN EXISTING LAW
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.