Department of Veterans Affairs Health Care Budget Deficit Could Reach $2.6B in Fiscal Year 2006
The Bush administration on Tuesday acknowledged that the budget deficit for Department of Veterans Affairs health care programs could reach at least $2.6 billion in fiscal year 2006 and said that "it had vastly underestimated the number of service personnel returning from Iraq and Afghanistan seeking medical treatment" through the programs, the Washington Post reports (Edsall, Washington Post, 6/29).
VA Secretary James Nicholson and other department officials on Tuesday testified before Congress to explain the budget deficit, which they said will reach at least $1 billion in FY 2005. The budget deficit became apparent during an administration mid-year budget review and was addressed in questions to Jonathan Perlin, VA undersecretary for health, at a House Veterans' Affairs Committee hearing on Thursday.
Perlin said VA has used more than $300 million for health care programs from a fund that department officials had expected to extend into the FY 2006 budget. In addition, he said that VA will use as much as $600 million previously allocated for capital expenditures to address the budget deficit.
VA officials told Congress that the unexpected budget deficit occurred because they had used an inaccurate, two-year-old financial model to calculate department spending requests. VA officials said the model underestimated the effect of the wars in Afghanistan and Iraq and led to other miscalculations.
Perlin said that budget estimates are made two years in advance, and, as a result, FY 2005 estimates were made before the 2003 invasion of Iraq. VA had estimated spending growth of 2.5% in FY 2005, but spending has increased by 5% (California Healthline, 6/28).
Senate Republicans on Tuesday said they will propose an amendment that would add $1.5 billion to the FY 2006 Interior appropriations bill (HR 2361) to address the budget deficit for VA health care programs (CQ HealthBeat, 6/28).
Senate Veterans' Affairs Committee Chair Larry Craig (R-Idaho) said he has discussed the amendment, which could pass as early as Wednesday, with Bush administration officials. Craig said, "The message to veterans is very clear, and it is a strong bipartisan message, that they will be served."
House Republicans, who previously said that no action was necessary to address the budget deficit, met Tuesday night to discuss the issue (Stolberg, New York Times, 6/29). House Democrats had sought to provide additional funds for VA health care programs through a supplemental military appropriations bill (PL 109-13) and the FY 2006 Military Quality of Life bill (HR 2528), but the efforts failed before the bills passed last month, according to CQ Today (Starks, CQ Today, 6/28). In a 217-189 procedural vote on Tuesday, House Republicans "prevented Democrats from adding to a spending bill an extra $1 billion for veterans health care" for FY 2005, the AP/Washington Times reports (AP/Washington Times, 6/29).
House Appropriations Committee Chair Jerry Lewis (R-Calif.) said that the decision by the administration to withhold the information on the budget deficit "borders on stupidity," adding, "I think somebody was trying to hide the ball for a while and then talk about it later." (CongressDaily, 6/29).
"It really benefits no one, I think, to fudge the numbers on this," Sen. Barack Obama (D-Ill.) said, adding, "If we're starting to play budgetary games, then it's hard for us to make inevitable choices" (Bell, Boston Globe, 6/29).
However, Nicholson said, "I think that the record shows that VA has been very forthcoming with information regarding both the status of our budget and the responsible management decisions we have made as 2005 unfolds" (Alpert, New Orleans Times-Picayune, 6/29).
According to the Post, efforts by lawmakers to provide additional funds for VA health care programs might "jeopardize administration and congressional efforts to reduce the budget deficit." The budget resolution approved by Congress allocated $31 billion for VA health care programs in FY 2006 -- "a limit that now appears virtually certain to be broken," the Post reports (Washington Post, 6/29).
NPR's "Morning Edition" on Wednesday reported the budget deficit for VA health care programs. The segment includes comments from Craig, Nicholson, Lewis, Obama and Sen. Patty Murray (D-Wash.) (Naylor, "Morning Edition," NPR, 6/29). The complete segment is available online in RealPlayer.