Department of Veterans Affairs FY2016 Appropriations: In Brief

Contents

• Department of Veterans Affairs Overview
• The VA Budget
• Advance Appropriations
• Funding for the Veterans Access, Choice, and Accountability Act
• The President's Budget Request for FY2016 and Congressional Action
• President's Request
• House and Senate Action
• House
• Continuing Appropriations Act, 2016 (P.L. 114-53)
• Senate
• Consolidated Appropriations Act, 2016 (H.R. 2029; P.L. 114-113)

Department of Veterans Affairs Overview

The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans¹ who meet certain eligibility rules; these benefits include medical care, disability compensation and pensions, education, vocational rehabilitation and employment services, assistance to homeless veterans, home loan guarantees, administration of life insurance as well as traumatic injury protection insurance for servicemembers, and death benefits that cover burial expenses.

The VA carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA).² The Veterans Benefits Administration (VBA) is responsible for, among other things, providing compensation, pensions, and education assistance. The National Cemetery Administration (NCA)³ is responsible for maintaining national veterans' cemeteries; providing grants to states for establishing, expanding, or improving state veterans' cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans through the nation's largest integrated health care system. Inpatient and outpatient care are also provided in the private sector to eligible dependents of veterans under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA).

The VA Budget

The VA budget includes both mandatory⁴ and discretionary funding.⁵ Mandatory accounts fund disability compensation, pensions, vocational rehabilitation and employment, education, life insurance, housing, and burial benefits (such as graveliners, outer burial receptacles, and headstones), among other benefits and services. Discretionary accounts fund medical care, medical research, construction programs, information technology, and general operating expenses, among other things.

Advance Appropriations⁶

In 2009, Congress enacted the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), authorizing advance appropriations for three of the four VHA accounts: medical services, medical support and compliance, and medical facilities.⁷ In 2014, Congress passed the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235), which amended 38 U.S.C §117 and included three more accounts in the advance appropriations list of accounts. This authorizes advance appropriations for three mandatory VA benefits programs within the Veterans Benefits Administration: compensation and pensions, readjustment benefits, and veterans insurance and indemnities. Beginning with the FY2016 Military Construction and Veterans Affairs and Related Agencies Appropriations bill (MILCON-VA appropriations bill), those accounts would also receive advance appropriations for FY2017 in addition to the three VHA accounts already authorized to receive advance appropriations. Congress has authorized advance appropriations of new budget authority for these accounts to prevent potential delays in the delivery of care and benefits to veterans that may arise in the event of a lapse in funding.

Under present budget scoring guidelines, advance appropriations are scored as new budget authority in the fiscal year in which the funds become available for obligation, not in the fiscal year the appropriations are enacted.⁸ Therefore, throughout the funding tables in this report, advance appropriations numbers are shown under the label "memorandum" and in the corresponding fiscal year column. For example, the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235), provides advance appropriations for the medical services, medical support and compliance, and medical facilities accounts for FY2016. Funding shown for FY2015 does not include advance appropriations provided in FY2015 by P.L. 113-235 for use in FY2016. Instead, the advance appropriation provided in FY2015 for use in FY2016 is shown in the FY2016 column under the label "memorandum." Similarly, advance appropriations provided for FY2017 in the FY2016 MILCON-VA appropriations bill appear in the FY2017 column and under the label "memorandum."

Funding for the Veterans Access, Choice, and Accountability Act

The Veterans Access, Choice, and Accountability Act of 2014 (P.L. 113-146), as amended, provided $10 billion in mandatory funding by establishing the "Veterans Choice Fund" to provide care outside the VA health care system if veterans meet certain eligibility requirements.⁹ In addition, P.L. 113-146 as amended provided $5 billion in mandatory funding to hire primary care and specialty care physicians and other medical staff in order to augment VA's health care workforce; to improve VHA's capital infrastructure; to acquire information technology (IT) infrastructure to support new medical facility activations and provide IT equipment for newly hired medical staff; and to increase payments under the Education Debt Reduction Program, among other things.¹⁰ Although these mandatory funds are not part of the regular annual appropriations provided in the MILCON-VA appropriations bill and not shown in the tables of this report, these funds are in addition to the funds provided in the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235), and the House-passed FY2016 MILCON-VA appropriations bill and the Senate Appropriations Committee-recommended amounts in its version of the FY2016 MILCON-VA appropriations bill. For more details on the VHA's request to Congress to authorize the use of approximately $3.3 billion provided for the Veterans Choice Fund (Section 802 of P.L. 113-146, as amended) for Veterans' Care in the Community programs, including up to $500 million for Hepatitis C pharmaceutical expenses, and Congress's passage of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (H.R. 3236; P.L. 114-41), see the text box titled "FY2015 Budget Shortfall."

The President's Budget Request for FY2016 and Congressional Action

President's Request

The President submitted his FY2016 budget request to Congress on February 2, 2015. The President requested $164.6 billion for VA. This amount includes $70.1 billion for VA discretionary programs and $94.5 billion for mandatory benefits and services (see Table 1). The President's request for the VHA is approximately $60.6 billion (without collections), an additional $1.3 billion (for the three medical care accounts) above the enacted 2016 advance appropriations for VHA, which was $58.7 billion. When the $622 million request for the medical and prosthetic research account is taken into consideration, the total amount requested for VHA is a $1.9 billion increase over the FY2015 amount. As required by P.L. 111-81, the Administration requested $63.3 billion in advance appropriations for VHA for FY2017, and as required by P.L. 113-235 the Administration requested $104 billion in advance appropriations for three mandatory (compensation and pensions, readjustment benefits, and insurance and indemnities) accounts for FY2017. Among other appropriations highlights, the President's FY2016 budget requested $1.1 billion for VA's major construction programs, an increase of $582 million above the FY2015-enacted level. Lastly, the Administration requested $4.1 billion for VA's Information Technology (IT) programs, an increase of $230 million above FY2015-enacted level of $3.9 billion (see Table 2).

House and Senate Action

This section of the report provides a chronological overview of the House and Senate action on the FY2016 Military Construction and Veterans Affairs appropriations bill (MILCON-VA appropriations bill). It begins with House action in April 2015, followed by the continuing resolutions (CRs) that funded the VA at the beginning of FY2016 (because none of the appropriations bills were enacted by October 1, 2015), which was then followed by Senate action in November, and finally the enactment of the Consolidated Appropriations Act, 2016 (P.L. 114-113), in December 2015. In the intervening period, and outside of the regular FY2016 appropriations process, Congress addressed a budget shortfall at the VA. This is described in the text box below under the heading "FY2015 Budget Shortfall."

House

The House Appropriations Committee approved the FY2016 Military Construction and Veterans Affairs appropriations bill (MILCON-VA appropriations bill) on April 22, 2015. The House passed the measure (H.R. 2029, H.Rept. 114-92) on April 30. The House-passed measure provides $163.2 billion for the VA for FY2016, approximately $1.4 billion less than the President's request of $164.6 billion. However, compared with the FY2015-enacted level ($159.1 billion), the House-passed measure provides an overall increase of 2.6% for FY2016. Of the total amount provided for the VA for FY2016, approximately $60.3 billion is for the VHA (without collections). This amount includes advance appropriations ($58.7 billion) enacted in FY2015 and an additional $971.6 million above that amount for the medical services account for costs associated with Hepatitis C treatment, Family Caregivers Program stipends, and care for eligible Camp Lejeune veterans and family members, among other things (see Table 2), and $621.8 million for the medical and prosthetic research account, an increase of $32.9 million above the FY2015-enacted amount and same as the President's request.

Among other major highlights, the MILCON-VA appropriations bill provides the same level of funding as the President's request for the VBA mandatory benefit programs (see Table 2) and approximately $561.8 million for VA construction major projects, a decrease of $582 million from the President's request of $1.1 billion. According to the committee report (H.Rept. 114-92), "the construction mismanagement with the VA Aurora, Colorado hospital project [Denver Replacement VA Medical Center campus], in particular, the cost overruns that are now estimated at $930,000,000,"¹¹ is part of the rationale for this reduction in funding.¹²

Lastly, the House-passed measure provides approximately $63.3 billion in advance appropriations for the three medical care accounts (medical services, medical support and compliance, and medical facilities) and $104 billion for mandatory benefits programs (compensation and pensions, readjustment benefits, and veterans insurance and indemnities) for FY2017, the same amount as the President's request.

Continuing Appropriations Act, 2016 (P.L. 114-53)¹³

None of the FY2016 regular appropriations bills, including the MILCON-VA appropriations bill, were enacted by the start of FY2016 on October 1, 2015. On September 30, Congress passed and the President signed into law a continuing resolution (CR) for the period October 1, 2015, through December 11, 2015. The Continuing Appropriations Act, 2016 (P.L. 114-53), funded most VA programs through a formula using the FY2015 level of appropriations minus an across-the-broad rescission of 0.2108%. Furthermore, Section 144 of P.L. 114-53 authorized the VA to transfer up to $625 million from unobligated balances in FY2015 and FY2016 advance appropriations discretionary accounts to the construction major projects account to fund the Denver Replacement Medical Center construction project.¹⁴ This CR was further extended by H.J. Res. 78; P.L. 114-100.

Senate

Following the Bipartisan Budget Act of 2015 (P.L. 114-74), which increased the discretionary spending caps for FY2016 and FY2017, on Thursday, November 5, 2015, the Senate agreed to consider the MILCON-VA appropriations bill, 2016 (H.R. 2029). Senator Kirk then proposed S.Amdt. 2763 in the nature of a substitute to H.R. 2029.¹⁵ The Senate passed the S.Amdt. 2763 in the nature of a substitute to H.R. 2029, as amended, on November 10, 2015. It should be noted that the Senate Appropriations Committee had approved its version of the MILCON-VA appropriations bill (H.R. 2029; S.Rept. 114-57) on May 21, 2015. S.Amdt. 2763, as amended, provided additional funding of approximately $3.1 billion over the previously appropriated advance appropriation of $47.6 billion for the medical services account for FY2016 (see Table 2). S.Amdt. 2763 to H.R. 2029, as amended, directed that of the total amount provided for the medical services account for FY2016, $900 million shall be for Hepatitis C Virus treatments. Furthermore, the Senate-passed MILCON-VA appropriations bill provided $8.9 million more than the President's request of $621.8 million for the medical and prosthetic research account, required the VA to spend not less than $10 million to hire additional caregiver support coordinators for the Comprehensive Assistance for Family Caregivers program, and required the VA to use not less than $5 million from the medical services account for FY2016 to carry out a pilot program to assess the feasibility and advisability of establishing a grants program to provide furniture, household items, and other assistance to formerly homeless veterans who are moving into permanent housing. All other amounts reflected the Senate Appropriations Committee-approved version of the MILCON-VA appropriations bill (H.R. 2029; S.Rept. 114-57) (see Table 1 and Table 2).

Consolidated Appropriations Act, 2016 (H.R. 2029; P.L. 114-113)

On December 18, 2015, the President signed the Consolidated Appropriations Act, 2016, completing the FY2016 appropriations process. Division J of the Consolidated Appropriations Act, 2016, contained the MILCON-VA appropriations act. The enacted measure provides $162.7 billion for the VA for FY2016. Of this amount, $91.4 billion is for veterans' benefits, including disability compensation and pensions and readjustment benefits; $61.8 billion is for veterans' health and research programs; and $9.2 billion is for information technology, construction programs, and general operations and administrative expenses. Based on new lower estimates provided in the Administration's mid-session budget review, the compensation and pensions account and the readjustment benefits account received lower funding levels than what was proposed by the President and passed in the House and Senate versions of the MILCON-VA appropriations bills (see Table 2). Furthermore, the MILCON-VA appropriations act, 2016 (P.L. 114-113) provides $1.2 billion for the construction major projects account, which is $100 million above the President's request, and withholds some funding until the VA enters into an agreement with a non-Department of Veterans Affairs federal entity to serve as the design and/or construction agent for each major construction project with a total estimated cost of $100 million or above. This requirement to contract with a non-VA federal entity was included in Section 502 of the Department of Veterans Affairs Expiring Authorities Act of 2015 (P.L. 114-58).¹⁶ Furthermore, Section 1096 of the FY2016 National Defense Authorization Act (P.L. 114-92) required the VA to enter into an agreement with the Army Corps of Engineers or another federal entity to serve, as the construction agent for the construction, alteration, or acquisition of any VA medical facility that involves a total expenditure of more than $100 million.

Author Contact Information

Footnotes

1.	In general, payments of benefits made to, or on account of, a beneficiary under any law administered by the VA are exempt from federal taxation. Furthermore, benefits are exempt, in most cases, from "attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary" (38 U.S.C. §5301(a)(1)).
2.	The BVA is part of the Department of Veterans Affairs, located in Washington, DC, and makes the final determination on an appeal within the VA. The BVA reviews all appeals for entitlement to veterans' benefits, including claims for service connection, increased disability ratings, pension, insurance benefits, educational benefits, home loan guaranties, vocational rehabilitation, dependency and indemnity compensation, health care services, and fiduciary matters.
3.	Established by the National Cemeteries Act of 1973 (P.L. 93-43).
4.	Mandatory programs funded through the annual appropriations process are commonly referred to as appropriated entitlements. In general, appropriators have little control over the amounts provided for appropriated entitlements; rather, the authorizing statute establishes the program parameters (e.g., eligibility rules, benefit levels) that entitle certain recipients to payments. If Congress does not appropriate the money necessary to meet these commitments, entitled recipients (e.g., individuals, states, or other entities) may have legal recourse. For an overview of mandatory spending, see CRS Report RL33074, Mandatory Spending Since 1962, by [author name scrubbed], [author name scrubbed], and [author name scrubbed].
5.	Funding for discretionary programs is provided and controlled through the annual appropriations process. For more information, see CRS Report R41726, Discretionary Budget Authority by Subfunction: An Overview, by [author name scrubbed].
6.	In general, an appropriations act makes budget authority available beginning on October 1 of the fiscal year for which the appropriations act is passed ("budget year"). However, some types of appropriations do not follow this pattern; among them are advance appropriations. An advance appropriation means appropriation of new budget authority that becomes available one or more fiscal years beyond the fiscal year for which the appropriations act was passed (i.e., beyond the budget year). For more information on advance appropriations, see CRS Report R43482, Advance Appropriations, Forward Funding, and Advance Funding: Concepts, Practice, and Budget Process Considerations, by [author name scrubbed].
7.	Codified at 38 U.S.C. §117.
8.	Executive Office of the President, Office of Management and Budget (OMB), OMB Circular No. A–11, Section 20- Terms and Concepts, 2015, p.15, available at https://www.whitehouse.gov/omb/circulars_a11_current_year_a11_toc; also see OMB Circular No. A–11, Appendix A -Scorekeeping Guidelines, 2015, p. 2, available at https://www.whitehouse.gov/omb/circulars_a11_current_year_a11_toc.
9.	For more information, see CRS Report R43704, Veterans Access, Choice, and Accountability Act of 2014 (H.R. 3230; P.L. 113-146), by [author name scrubbed] et al., and CRS In Focus IF10224, Implementation of the Veterans Choice Program (VCP), by [author name scrubbed].
10.	Department of Veterans Affairs, Funding Plan for Section 801 of the Veterans Access, Choice, and Accountability Act of 2014, November 24, 2014, pp. 4-9.
11.	U.S. Congress, House Committee on Appropriations, Military Construction, Veterans Affairs, and Related Agencies Appropriations Bill, 2016, report to accompany H.R. 2029, 114th Cong., 1st sess., April 24, 2015, p. 63.
12.	The Department of Veterans Affairs Expiring Authorities Act of 2015 (P.L. 114-58) provided additional authorization of up to $1.675 billion for the major medical facility construction project in Denver, Colorado. The Continuing Appropriations Act 2016 (P.L. 114-53) authorizes the VA to transfer up to $625 million in discretionary unobligated balances appropriated for FY2015 and discretionary advance appropriations for FY2016 to fund the increased authorization.
13.	For more information, see CRS Report R44214, Overview of the FY2016 Continuing Resolution (H.R. 719), by [author name scrubbed].
14.	The Department of Veterans Affairs Expiring Authorities Act of 2015 (P.L. 114-58) provided additional authorization of up to $1.675 billion for the major medical facility construction project in Denver, Colorado.
15.	"Amendments Submitted and Proposed," Congressional Record, daily edition, vol. 161, No. 165 (November 5, 2015), pp. S7823-S7832.
16.	Explanatory Statement Submitted By Mr. Rogers of Kentucky, Chairman of The House Committee On Appropriations Regarding House Amendment No. 1 To The Senate Amendment on H.R. 2029—Continued, Congressional Record, daily edition, vol. 161, Book III (December 17, 2015), p H10399.