[Senate Report 114-122]
[From the U.S. Government Publishing Office]
Calendar No. 202
114th Congress } { Report
SENATE
1st Session } { 114-122
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VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2015
_______
August 28, 2015.--Ordered to be printed
_______
Mr. Isakson, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany S. 1493]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs (hereinafter,
``Committee''), to which was referred the bill (S. 1493) to
provide for an increase, effective December 1, 2015, in 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 June 3, 2015, Committee Chairman Johnny Isakson
introduced S. 1493, a bill to provide for an increase,
effective December 1, 2015, in the 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 Blumenthal and Committee Members Jerry Moran,
John Boozman, Dean Heller, Bill Cassidy, Mike Rounds, Thom
Tillis, Dan Sullivan, Patty Murray, Bernard Sanders, Sherrod
Brown, Jon Tester, Mazie K. Hirono, and Joe Manchin are
original cosponsors of the bill, which was referred to the
Committee upon introduction.
Committee Hearing
On May 13, 2015, the Committee held a hearing on
legislation pending before the Committee. Testimony on S. 1493
was received from: David R. McLenachen, Acting Deputy Under
Secretary for Disability Assistance, Department of Veterans
Affairs; Jeffrey E. Phillips, Executive Director, Reserve
Officers Association; and Aleks Morosky, Deputy Director,
National Legislative Service, Veterans of Foreign Wars of the
United States.
Committee Meeting
On July 22, 2015, the Committee met in open session to
consider legislation pending before the Committee. Among the
measures so considered was S. 1493. The Committee voted by
voice vote, without objection, to report favorably S. 1493 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, 2015, 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'')
estimated in its March 2015 baseline that the COLA to be
provided to Social Security recipients in 2015 will be .9
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 2016
budget, the Department estimates that it will provide
compensation to 4,699,871 beneficiaries (4,299,512 veterans and
400,359 survivors) in fiscal year 2016. Among the veterans
estimated to receive such compensation are 84,175 World War II
veterans; 126,193 Korean Conflict veterans; 1,335,527 Vietnam-
era veterans; 2,022,224 veterans of the Persian Gulf War era;
and 731,393 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 $1,254.19 per
month and, if the deceased veteran was totally disabled for 8
years prior to death, an additional $266.32 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 2016 budget, VA estimates that it will
pay DIC benefits to 400,359 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 5 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 1 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, 2015. 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) 5
years from the date of discharge from active duty, or (3) 1
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 1 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, 2015.
The CBO, in its most recent baseline, estimated that the
Social Security COLA affecting fiscal year 2015 payments, and
thus the COLA provided for by the Committee bill, will be .9
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, not affect
direct spending or revenues. 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, July 30, 2015.
Hon. Johnny Isakson,
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. 1493, the Veterans'
Compensation Cost-of-Living Adjustment Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Wright.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 1493, Veterans' Compensation Cost-of-Living Adjustment Act of 2015
As ordered reported by the Senate Committee on Veterans'
Affairs on July 22, 2015
S. 1493 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) that recipients of Social Security receive.
The increase would take effect on December 1, 2015.
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 of 1985. Because the
COLA is assumed in CBO's baseline, authorizing the COLA would
have no budgetary effect relative to the baseline. In CBO's
March 2015 baseline, that COLA was projected to be 0.9 percent.
In that case, enacting this bill would increase spending for
those programs by $662 million in fiscal year 2016. However, in
their recent report, the ``2015 Annual Report of the Board of
Trustees of the Federal Old-Age and Survivors Insurance and
Federal Disability Insurance Trust Funds,'' the Social Security
Trustees estimated that, because inflation has been so low,
there would be no Social Security COLA this year.
Enacting S. 1493 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
S. 1493 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 July 2, 2015, CBO transmitted a cost estimate for
H.R. 675, the Veterans' Compensation Cost-of-Living Adjustment
Act of 2015, as ordered reported by the House Committee on
Veterans' Affairs on May 21, 2015. S. 1493 is similar to
section 101 of H.R. 675, but does not include language that
would require the increased payments to be rounded down to the
next lowest dollar. Differences in the estimated costs reflect
differences in the bills' language.
The CBO staff contact for this estimate is Dwayne M.
Wright. The estimate was approved by H. Samuel Papenfuss,
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 S. 1493 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 22, 2015, meeting. On that date,
the Committee voted without dissent to order favorably reported
S. 1493, a bill to provide for an increase, effective December
1, 2015, in 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 May 13, 2015, David R. McLenachen, Acting Deputy Under
Secretary for Disability Assistance, Department of Veterans
Affairs, appeared before the Committee on Veterans' Affairs and
submitted testimony on, among other things, S. 1493. Excerpts
from this statement are reprinted below:
PREPARED STATEMENT OF DAVID R. MCLENACHEN, ACTING DEPUTY UNDER
SECRETARY FOR DISABILITY ASSISTANCE, VETERANS BENEFITS ADMINISTRATION,
U.S. DEPARTMENT OF VETERANS AFFAIRS
Good afternoon, 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: S. 270,
S. 602, S. 627, the ``21st Century Veterans Benefits Delivery
Act,'' the ``Veterans' Compensation Cost-of-Living Adjustment
Act of 2015,'' and a draft bill concerning VA small business
contracting, Veterans benefits, and burial matters. We will
separately provide views on the following bills: S. 681;
sections 202, 203 and 206 of the ``21st Century Veterans
Benefits Delivery Act;'' the bill associated with legislative
proposals from the Report of the Military Compensation and
Retirement Modernization Commission; the bill associated with
legislative proposals from the Department of Defense (DOD); and
sections 201 and 206 of the consolidated bill related to bills
from the 113th Congress. Accompanying me this afternoon is
Renee Szybala, Assistant General Counsel.
* * * * * * *
DRAFT BILL COST-OF-LIVING-ADJUSTMENT ACT
The Draft bill on the ``Veterans' Compensation Cost-of-
Living Adjustment Act of 2015,'' would require the Secretary of
Veterans Affairs to increase, effective December 1, 2015, the
rates of disability compensation for service-disabled Veterans
and the rates of 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, 2015. The bill would also require VA to publish the
resulting increased rates in the Federal Register.
VA strongly supports this bill because it would 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 benefits
will keep pace with increases in consumer prices.
The cost of the cost-of-living adjustment (COLA) is
included in VA's baseline budget because we assume a COLA will
be enacted by Congress each year. Therefore, enactment of the
draft bill which would extend the COLA adjustment through
November 30, 2016, would not result in costs.
* * * * * * *
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.