Senate Vets Bill Could Create New $500 Billion Entitlement Program | Committee for a Responsible Federal Budget

Mention the right buzzword and just about anything goes. In this case the word is “veteran.” Everyone wants to do the right thing for veterans, especially those affected by any service connected injury or illness.

However, is writing a blank check appropriate without rethinking which veterans are eligible for what services and without setting priorities? The idea that virtually any veteran can receive health care unrelated to military service needs to be re-evaluated so our priority can be those injured through their service.

The Senate voted 93-3 yesterday on new legislation to expand veterans’ benefits by allowing beneficiaries to seek out private (non-VA) health care paid for by the Department of Veterans Affairs (VA). Although recent events highlight a real need to improve the veterans health system, the Senate-passed legislation provides an unprecedented “blank check” to the VA, violates every principle of good budgeting, and could add substantially to the national debt.

While the fast timeline of the legislation gave the CBO little opportunity to score the cost of the bill, a preliminary partial CBO estimate suggests just one provision of the legislation could cost more than $35 billion through 2016. Importantly, however, that assumes the provision takes time to ramp up and then the new authority expires after 2016. If enacted, there could be tremendous pressure to extend this new benefit beyond 2016. CBO estimates that, if fully phased in, this provision would cost $50 billion per year — more than doubling what is currently spent on VA health care.

If the program were permanently extended, and fully phased-in costs grew with the economy, the total cost could exceed $500 billion over the next decade before interest.1 In other words, the provision could create an entitlement bigger than Medicare Part D when it was enacted, nearly two-thirds the cost of the ACA’s coverage provision when it was enacted, three times as large as the House Research and Experimentation (R&E) credit expansion which the President threatened to veto specifically because it irresponsibly increased the deficit, and about 70 times as large as the military retirement reform that Congress repealed last year. In fact, for the cost of making this new entitlement permanent, policymakers could fully repeal the defense sequester.

The tremendous potential cost of the Senate-passed legislation is a direct result of the unprecedented budget powers it puts in the hands of the VA itself. Ordinarily, legislation giving an agency new authority will leave it to the appropriators to decide how much to spend on this authority. On occasion, Congress will pass what is known as a “mandatory appropriation” where a fixed amount of money is given directly to an agency without going through the normal appropriations process.

But this legislation gives an unlimited mandatory appropriation set at “such sums as are necessary.” It does not limit the VA’s spending in any way, instead giving the agency the authority to spend “such sums necessary” to carry out the provisions of the bill, forgoing any limits or accountability for spending on these activities. That spending would proceed automatically without any further action by Congress or oversight from the Appropriations Committees.

via Senate Vets Bill Could Create New $500 Billion Entitlement Program | Committee for a Responsible Federal Budget.