[House Report 111-56]
[From the U.S. Government Publishing Office]



111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     111-56

======================================================================



 
      VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2009

                                _______
                                

 March 26, 2009.--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. 1513]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 1513) to increase, effective as of December 1, 
2009, 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 Need for Legislation..............................     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     6
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. 1513 was introduced on March 16, 2009, by 
Representative Ann Kirkpatrick of Arizona. This legislation 
would increase, effective December 1, 2009, the rates of 
compensation for veterans with service-connected disabilities 
and the rates of dependency and indemnity compensation for the 
survivors of certain disabled veterans. The legislation would 
require the Secretary of the Department of Veterans Affairs 
(VA) to increase, effective December 1, 2009, the rates of and 
limitations on certain benefits paid by VA by the same 
percentage as the cost-of-living adjustment (hereinafter, COLA) 
provided to Social Security recipients and VA pension 
beneficiaries that become effective on the same date.
    The COLA would apply to:
    1. 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 dependency and indemnity compensation (DIC) rates 
paid to:
    (a)  Surviving spouses of veterans whose deaths were 
service-connected;
    (b)  Surviving spouses for dependent children below the age 
of 18;
    (c)  Surviving spouses who are so disabled that they need 
aid and attendance or are permanently housebound;
    (d)  Surviving spouses covered under section 1318 of title 
38, United States Code; and
    (e)  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.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 1513 would increase, effective December 1, 2009, the 
rates of compensation for service-connected disabilities and 
the rates of dependency and indemnity compensation for 
surviving spouses and children of veterans who die of service-
connected causes, as well as the additional amounts for 
dependents and survivors and clothing allowance for certain 
veterans. Congress has provided annual increases in these rates 
every fiscal year since 1976. For fiscal year 2009, the cost-
of-living increase for VA disability compensation and DIC 
compensation, enacted in accordance with Public Law 110-324 
(122 Stat. 3549), was 5.8 percent.

Disability 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 VA.
    VA rates compensable disabilities according to its Schedule 
for Rating Disabilities on a graduated scale ranging from 0 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.
    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. 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.
    VA pays DIC to the survivors of servicemembers or veterans 
who died on or after January 1, 1957, from a disease or injury 
incurred or aggravated during military service. 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. 
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 $1,146 per month and, if 
the deceased veteran was totally disabled for eight years prior 
to death, an additional $246 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.
    Children are entitled to DIC if there is no surviving 
spouse, if they are 18 years of age or older and became 
permanently incapable of self-support before reaching age 18, 
or if they are 18 to 22 years old and pursuing an approved 
course of education.
    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 veterans 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 indicated that veteran termination data has 
demonstrated that survivors typically access compensation 
benefits within three years.

Additional information

    H.R. 1513 would direct VA to compute and provide increases 
in the monthly rates of compensation and DIC, effective 
December 1, 2009. The rates would be increased by the same 
percentage as the Social Security and VA pension COLA that will 
take effect on that date. In accordance with section 8031 of 
the Balanced Budget Act of 1997, Public Law 105-33 (111 Stat. 
251, 668), amounts of compensation so computed that are not 
even multiples of $1 will be rounded down to the next lower 
whole dollar amount. The Veterans Benefits Act of 2003, Public 
Law 108-183 (117 Stat. 2651, 2672), extended this provision for 
an additional two years to 2013.
    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) 10 
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 (96 Stat. 
1830, 1920-1921), 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 
(95 Stat. 483, 837). 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 the Veterans' Benefits and Services Act of 
1988, Public Law 100-322 (102 Stat. 487, 535), amended section 
156(a)(1) of Public Law 97-377 to restore the benefits 
eliminated by OBRA 1981. The DIC increase also would apply to 
these restored benefits, effective December 1, 2000.
    The Committee has followed its prior practice of setting 
the COLA for veterans' benefits by reference to the increase to 
be provided for Social Security recipients. The rate of this 
increase will be established on December 1, 2009. The Committee 
believes that this is the most equitable means of providing 
increases to these important veterans' benefits.

                                HEARINGS

    There were no hearings held in connection to the bill 
reported by the Committee.

                        COMMITTEE CONSIDERATION

    On March 25, 2009, the full Committee met in open markup 
session, a quorum being present, and ordered H.R. 1513 
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. 1513 reported to the House. A motion by Mr. 
Buyer of Indiana to order H.R. 1513 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. 1513 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. 
1513 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. 1513 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, March 25, 2009.
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. 1513, the 
Veterans' Compensation Cost-of-Living Adjustment Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne 
Wright.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

H.R. 1513--Veterans' Compensation Cost-of-Living Adjustment Act of 2009

    H.R. 1513 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, 2009, and the 
resulting 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). Furthermore, based 
on its current economic forecast, CBO does not anticipate a 
cost-of-living increase in 2010 for Social Security; thus, CBO 
estimates that enacting this bill would have no impact on 
spending for those programs.
    H.R. 1513 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Dwayne M. 
Wright. This estimate was approved by Theresa A. Gullo, Deputy 
Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 1513 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. 
1513.

                   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. 1513 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. 1513 as 
the ``Veterans' Compensation Cost-of-Living Adjustment Act of 
2009.''

Section 2. Increase in rates of disability compensation and dependency 
        and indemnity compensation

    Section 2(a) of H.R. 1513 would require the Secretary of 
Veterans Affairs to increase, effective December 1, 2009 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 section 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 section 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. 
Sec. 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 (72 Stat. 1263), 
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 H.R. 1513 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.