Congress races to patch $3B Veterans Affairs shortfall

Lawmakers are moving quickly to pass emergency legislation to plug a roughly $3 billion shortfall facing the Department of Veterans Affairs (VA), as officials warn veterans' and survivors' benefits payments are at risk absent congressional action in the coming days.

The House passed legislation with bipartisan support Wednesday night, and members on both sides of the aisle are pressing the Senate to fast-track the bill.

“We're all in agreement on the four corners to move it as quickly as possible,” House Veterans' Affairs Committee Chair Mike Bost (R-Ill.) told The Hill on Wednesday, referring to the top leaders on his committee and the Senate Veterans Affairs Committee. 

“We're gonna have enough votes to get it through both the House and the Senate, onto the president's desk, and nobody's gonna lose their pay,” Bost said, adding that Friday remains “the day we're targeting.”

Officials have warned veterans’ compensation and pension benefit payments, as well as their readjustment benefits, could be delayed if Congress doesn’t act by Sept. 20. 

The bill 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.

Senators on both sides are hopeful that the chamber will be able to expedite consideration of the bill this week, but there has been increased scrutiny on the VA’s finances in light of the shortfall.   

Members on the Senate Veterans Affairs Committee grilled VA officials Wednesday afternoon over the causes of the shortfall and its budgetary management during a hearing.

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

Joshua Jacobs, the under secretary for benefits for the VA, said during the hearing that, since the law’s implementation, the agency has seen “about 340,000 veterans who now are getting PACT benefits that would not have been eligible, 60,000 of whom have cancer.”

But the agency has been facing heat from lawmakers. 

“I don't know that I need to have a conversation about providing benefits. We're for that. Veterans are entitled to benefits. We want them to receive them. But here's what troubles me is the lack of budgeting, accountability, the knowing the facts and time to make better decisions,” Sen. Jerry Moran (Kansas), the top Republican on the Senate Veterans Affairs Committee, said at the top of the hearing Wednesday.

Other Republicans also grilled officials on previous reporting that the VA improperly awarded executives millions of dollars in bonuses last year.

As pressure mounts on Congress, Moran said during the hearing that he’s asked colleagues on both sides of the aisle to be “supportive of reaching a conclusion today or tomorrow in regard to the additional funding necessary.”

“And I want to make certain that that happens, and my expectation is it will happen tomorrow.”

A bipartisan effort to expedite similar 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.), the top Republican on the subcommittee that crafts annual VA funding, expressed hopes that the Senate could fast-track the House-passed 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].”

Sen. Rand Paul (R-Ky.), a conservative who previously pushed back on efforts to fast-track the Senate version of the bill, told The Hill on Wednesday that he’ll agree “to have a vote” on the House bill in exchange for an amendment vote. Paul says his proposal is aimed at offsetting costs of the bill.

“We will offer an amendment to the House VA bill to pay for it,” he said. “This is, this doesn't fix the problem. … There's an enormous problem going on. This is what happens when you create a bill and say, if you have high blood pressure, you can get burn pit money.”

“I'm 61 years old. Sixty percent of 60-year-olds have high blood pressure. You know, there isn't a real direct causation between high blood pressure and burn pits, but if you take every 60-year-old veteran and say, if you have high blood pressure, we're going to give you a disability, that's what's happened. Millions of people have signed up, and they just depleted all the funds,” he argued. “It's spending at a rate we've never seen before.”