[House Report 110-643]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-643
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VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2008
_______
May 15, 2008.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Filner, from the Committee on Veterans' Affairs, submitted the
following
R E P O R T
[To accompany H.R. 5826]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred the
bill (H.R. 5826) to increase, effective as of December 1, 2008,
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, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Discussion........................................ 2
Hearings......................................................... 5
Committee Consideration.......................................... 5
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 5
Statement of General Performance Goals and Objectives............ 5
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Earmarks and Tax and Tariff Benefits............................. 6
Committee Cost Estimate.......................................... 6
Congressional Budget Office Estimate............................. 6
Federal Mandates Statement....................................... 7
Advisory Committee Statement..................................... 7
Constitutional Authority Statement............................... 7
Applicability to Legislative Branch.............................. 7
Section-by-Section Analysis of the Legislation................... 7
Purpose and Summary
H.R. 5826 was introduced by Representative Ciro D.
Rodriguez of Texas on April 16, 2007. This legislation would
provide, effective December 1, 2008, a cost-of-living
adjustment (COLA) to the rates of disability compensation (DIC)
for veterans with service-connected disabilities and to the
rates of DIC for survivors of certain service-connected
disabled veterans. The percentage amount would be equal to the
increase for benefits provided under the Social Security Act,
which is calculated based upon changes in the Consumer Price
Index.
Background and Discussion
Congress has provided annual increases in these rates every
fiscal year since 1976. For fiscal year 2008, the cost-of-
living increase for VA disability compensation and DIC, enacted
in accordance with P.L. 110-111, was 2.3 percent.
The COLA provided in H.R. 5826 would apply to:
1. The 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:
Surviving spouses of veterans whose deaths
were service-connected;
Surviving spouses for dependent children
below the age of eighteen;
Surviving spouses who are so disabled that
they need aid and attendance or are permanently
housebound;
Surviving spouses covered under section 1318
of title 38, United States Code; and,
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.
DISABILTY COMPENSATION
The service-connected disability compensation program under
chapter 11 of title 38, United States Code, provides monthly
cash benefits to veterans who have a disability or combination
of disabilities incurred or aggravated during active duty in
the Armed Forces. The purpose of the disability compensation
program is to represent the average loss in earnings capacity.
The amount of compensation paid depends on the nature and
severity of the veteran's disability or combination of
disabilities and an assessment of the extent to which the
disability impairs earnings capacity. To be eligible to receive
disability compensation, a veteran's disability must not be the
result of willful misconduct, and the veteran must have been
discharged under other than dishonorable conditions. The
responsibility for determining a veteran's entitlement to
service-connection for a disability and the amount of said
compensation rests with the Department of Veterans Affairs
(VA).
Pursuant to section 1155 of title 38, United States Code,
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 totally disabled
veterans with certain specific, very severe disabilities or
combinations of disabilities.
As set forth in its fiscal year 2009 budget request, VA
estimates that it will provide disability benefits compensation
to 3,014,841 veterans with service-connected disabilities.
Among the veterans estimated to receive compensation benefits
are: two World War I and Prior veterans; 267,250 World War II
veterans; 157,690 Korean-conflict veterans; 1,031,410 Vietnam-
era veterans; 956,090 veterans of the Persian Gulf War era; and
602,399 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.
DEPENDENCY AND INDEMNITY COMPENSATION
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. VA pays DIC to the survivors of those
servicemembers or veterans who died on or after January 1,
1957. The purpose of DIC, authorized under chapter 13 of title
38, United States Code, is to provide compensation to the
appropriate survivors for the loss of financial support as a
result of the service-connected death of the veteran.
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, United
States Code, 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. In its fiscal year 2009 budget, the VA estimates
that it will provide compensation benefits to 341,502
survivors.
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 $1,067 per month
and, if the deceased veteran was totally disabled for eight
years prior to death, they receive an additional $228 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.
Parents of deceased veterans whose incomes are below
statutorily prescribed income thresholds are eligible for DIC
under section 1315 of title 38, United States Code. As
previously mentioned, parents' DIC rates are adjusted
automatically at the same time, and by the same percentage, as
Social Security and VA pension benefits.
Under section 1318 of title 38, United States Code, 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 who die after
September 30, 1999, and whose deaths were 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. In its fiscal year 2009
budget, the VA indicates that veteran termination data has
demonstrated that survivors typically access compensation
benefits within three years.
OTHER MATTERS
Pursuant to section 8031 of the Balanced Budget Act of 1997
(Public Law 105-33), increases in amounts of compensation made
by H.R. 5826 that are not even multiples of $1 will be rounded
down to the next lower whole dollar amount. This ``COLA-round-
down'' provision was extended until 2013 by section 706 of
Public Law 108-183.
The increases in DIC automatically would result in
identical percentage increases in benefits paid at DIC rates
under section 1318 of title 38, United States Code, 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) ten
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 who died after September 30, 1999, 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 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 OBRA
1981 (effective December 1, 2000). The DIC increase provided by
H.R. 5826 also would apply to these restored benefits.
The Congressional Budget Office (CBO), in its most recent
baseline, estimated that the Social Security COLA affecting
fiscal year 2009 payments, and thus the COLA provided for by
the Committee bill, will be 2.8 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.
Hearings
There were no hearings held in connection to the bill
reported by the Committee.
Committee Consideration
On April 30, 2008, the full Committee met in open markup
session, a quorum being present, and ordered H.R. 5826
favorably reported 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. 5826 reported to the House. A motion by Mr.
Buyer of Indiana to order H.R. 5826 reported 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. 5826 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) 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.
5826 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. 5826 provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 12, 2008.
Hon. Bob Filner,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5826, the
Veterans' Compensation Cost-of-Living Adjustment Act of 2008.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Wright.
Sincerely,
Robert A. Sunshine
(For Peter R. Orszag, Director).
Enclosure.
H.R. 5826--Veterans' Compensation Cost-of-Living Adjustment Act of 2008
H.R. 5826 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, 2008, and the results
of the adjustment would be rounded to the next lower dollar.
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, and savings from
rounding it down were achieved by the Balanced Budget Act of
1997 (Public Law 105-33) and extended to 2013 by the Veterans
Benefits Act of 2003 (Public Law 108-183).
Because the COLA is assumed in CBO's baseline, the COLA
provision would have no budgetary effect relative to that
baseline. Relative to current law, CBO estimates that enacting
this bill would increase spending for those programs by $857
million in 2009. (The annualized cost would be about $1.1
billion in subsequent years.) This estimate assumes that the
COLA effective on December 1, 2008, will be 2.8 percent.
H.R. 5826 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Dwayne M.
Wright. This estimate was approved by Peter H. Fontaine,
Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 5826 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.
5826.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for H.R. 5826 is provided by Article
I, section 8 of the Constitution 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.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section would provide the short title of H.R. 5826 as
the ``Veterans' Compensation Cost-of-Living Adjustment Act of
2008.''
Section 2. Increase in rates of disability compensation and dependency
and indemnity compensation
Section 2(a) of H.R. 5826 would require the Secretary of
Veterans Affairs to increase, effective December 1, 2008, the
dollar amounts for the payment of disability compensation and
Dependency and Indemnity Compensation.
Section 2(b) of the bill would specify the programs to
receive increased dollar amounts: compensation in effect under
section 1114 of title 38, United States Code; additional
compensation for dependents in effect under sections 1115(1) of
title 38, United States Code; clothing allowance in effect
under section 1162 of title 38, United States Code; Dependency
and Indemnity Compensation to Surviving Spouse under
subsections (a) through (d) of sections 1311 of title 38,
United States Code; and Dependency and Indemnity Compensation
to Children--each of the dollar amounts under sections 1313(a)
and 1314 of title 38, United States Code.
Section 2(c)(1) of the bill would specify that each amount
shall be increased by the same percentage by which benefits are
increased under title II of the Social Security Act (42 U.S.C.
401 et seq.).
Section 2(c)(2) of the bill would round-down to the next
lower dollar amount all compensation and DIC benefits, when the
amount is not in the whole dollar amount.
Section 2(d) of the bill would provide a special rule
authorizing the Secretary of Veterans Affairs to 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 who are not in
receipt of compensation payable pursuant to chapter 11 of title
38, United States Code.
Section 3. Publication of adjusted rates
Section 3 of the bill would require the Secretary of
Veterans Affairs to publish in the Federal Register the amounts
specified in subsection (b), as increased pursuant to that
section.