[Senate Report 106-398]
[From the U.S. Government Publishing Office]
Calendar No. 788
106th Congress Report
SENATE
2d Session 106-398
======================================================================
VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2000
_______
September 5, 2000.--Ordered to be printed
_______
Mr. Specter, from the Committee on Veterans' Affair, submitted the
following
R E P O R T
[To accompany S. 3011]
The Committee on Veterans' Affairs reported an original
bill (S. 3011), to increase, effective as of December 1, 2000,
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,
and recommends that the original bill do pass.
Committee Bill
The text of the original bill as reported is as follows:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Veterans' Compensation Cost-of-
Living Adjustment Act of 2000''.
SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND DEPENDENCY AND
INDEMNITY COMPENSATION.
(a) Rate Adjustment.--The Secretary of Veterans Affairs shall,
effective on December 1, 2000, increase the dollar amounts in effect
for the payment of disability compensation and dependency and indemnity
compensation by the Secretary, as specified in subsection (b).
(b) Amounts To Be Increased.--The dollar amounts to be increased
pursuant to subsection (a) are the following:
(1) Compensation.--Each of the dollar amounts in effect under
section 1114 of title 38, United States Code.
(2) Additional compensation for dependents.--Each of the
dollar amounts in effect under sections 1115(1) of such title.
(3) Clothing allowance.--The dollar amount in effect under
section 1162 of such title.
(4) New dic rates.--The dollar amounts in effect under
paragraphs (1) and (2) of section 1311(a) of such title.
(5) Old dic rates.--Each of the dollar amounts in effect
under section 1311(a)(3) of such title.
(6) Additional dic for surviving spouses with minor
children.--The dollar amount in effect under section 1311(b) of
such title.
(7) Additional dic for disability.--The dollar amounts in
effect under sections 1311(c) and 1311(d) of such title.
(8) DIC for dependent children.--The dollar amounts in effect
under sections 1313(a) and 1314 of such title.
(c) Determination of Increase.--(1) The increase under subsection
(a) shall be made in the dollar amounts specified in subsection (b) as
in effect on November 30, 2000.
(2) Except as provided in paragraph (3), each such amount shall be
increased by the same percentage as the percentage by which benefit
amounts payable under title II of the Social Security Act (42 U.S.C.
401 et seq.) are increased effective December 1, 2000, as a result of a
determination under section 215(i) of such Act (42 U.S.C. 415(i)).
(3) Each dollar amount increased pursuant to paragraph (2) shall,
if not a whole dollar amount, be rounded down to the next lower whole
dollar amount.
(d) Special Rule.--The Secretary of Veterans Affairs may adjust
administratively, consistent with the increases made under subsection
(a), the rates of disability compensation payable to persons within the
purview of 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.
SEC. 3. PUBLICATION OF ADJUSTED RATES.
At the same time as the matters specified in section 215(i)(2)(D)
of the Social Security Act (42 U.S.C. 415(i)(2)(D)) are required to be
published by reason of a determination made under section 215(i) of
such Act during fiscal year 2001, the Secretary of Veterans Affairs
shall publish in the Federal Register the amounts specified in
subsection (b) of section 2, as increased pursuant to that section.
Introduction
The Committee on Veterans' Affairs (hereinafter, the
``Committee'') hereby reports an original bill to increase,
effective as of December 1, 2000, the rates of compensation for
veterans with service-connected disabilities and the rates of
dependency and indemnity compensation (hereinafter, ``DIC'')
for the survivors of certain disabled veterans.
Committee Hearing
On July 20, 2000, the Committee held a hearing on
legislation pending before the Committee. Among the measures on
which the Committee received testimony was a draft bill to
increase, effective as of December 1, 2000, the rates of
compensation for veterans with service-connected disabilities
and the rates of DIC for the survivors of certain disabled
veterans. The Committee received testimony from, among others,
representatives of the Department of Veterans Affairs
(hereinafter, ``VA''), and from representatives of The American
Legion, the Veterans of Foreign Wars, the Disabled American
Veterans, AMVETS, and the Paralyzed Veterans of America. The
Committee also received written statements for the record from
a number of organizations, including the Vietnam Veterans of
America.
Committee Meeting
On July 27, 2000, the Committee met in open session to
consider legislation pending before the Committee. Among the
measures so considered was an original bill (hereinafter, the
``Committee bill'') to increase, effective as of December 1,
2000, the rates of compensation for veterans with service-
connected disabilities and the rates of DIC for the survivors
of certain disabled veterans. The Committee voted by unanimous
voice vote to report the Committee bill favorably to the
Senate.
Summary of the Committee Bill as Reported
The Committee bill contains freestanding provisions that
would require the Secretary of Veterans Affairs to increase,
effective December 1, 2000, 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 becomes
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 allowances 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 rates
paid to:
(a) surviving spouses of veterans whose
deaths were service connected;
(b) surviving spouses for dependent children;
(c) surviving spouses who are so disabled
that they need aid and attendance or are
permanently housebound; and
(d) 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.
The Congressional Budget Office (hereinafter, ``CBO'')
currently estimates that the COLA to be provided to Social
Security recipients will be 2.4 percent.
Background
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 disabilities incurred or
aggravated during active duty in the Armed Forces.
The amount of compensation paid depends on the nature of
the veteran's disability or combination of disabilities and the
extent to which the disability impairs earning capacity. 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.
As of March 31, 2000, VA was providing disability
compensation to 2,298,737 veterans with service-connected
disabilities. Among the veterans receiving such compensation
were 61 World War I veterans; 522,015 World War II veterans;
172,567 Korean-conflict veterans; 737,798 Vietnam-era veterans;
and 302,572 veterans of the Persian Gulf War era.
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. As of March 31, 1999, 730,642 veterans received
additional compensation on behalf of 1,110,711 dependents.
Dependency and indemnity compensation
Under chapter 13 of title 38, VA pays dependency and
indemnity compensation to the survivors of service members 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, 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 $881 per month
and, if the deceased veteran was totally disabled for 8 years
prior to death, an additional $191 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 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.
As of June 30, 2000, VA was paying DIC benefits to, or on
behalf of, 286,866 surviving spouses, 31,803 children, and
10,670 needy surviving parents.
Under section 1318(b) of title 38, 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 5 years from
the date of discharge or release from active duty.
History of cost-of-living increases
The Committee periodically reviews the service-connected
disability compensation and DIC programs to ensure that the
benefits provide reasonable and adequate compensation for
disabled veterans and their families. Based on this review, the
Congress acts periodically to provide a cost-of-living
adjustment in compensation and DIC benefits. In fact, the
Congress has provided annual increases in these rates for every
fiscal year since 1976. The following table shows the
percentage increases since 1975.
HISTORY OF SERVICE-CONNECTED DISABILITY COMPENSATION INCREASES, 1975 TO
PRESENT
------------------------------------------------------------------------
Increase Cumulative
Fiscal year Effective date (percent) (1969=$100)
------------------------------------------------------------------------
1976......................... August 1975.... 11.8 158.55
1977......................... October 1976... 8.0 171.23
1978......................... October 1977... 6.6 182.53
1979......................... October 1978... 7.3 195.86
1980......................... October 1979... 9.9 215.25
1981......................... October 1980... 14.3 246.03
1982......................... October 1981... 11.2 273.58
1983......................... October 1982... 7.4 293.82
1984......................... April 1983..... 3.5 304.11
1985......................... December 1984.. 3.2 313.84
1986......................... December 1985.. 3.1 323.57
1987......................... December 1986.. 1.5 328.42
1988......................... December 1987.. 4.2 342.22
1989......................... December 1988.. 4.1 356.25
1990......................... December 1989.. 4.7 372.99
1991......................... December 1990 5.4 393.13
\1\.
1992......................... December 1991.. 3.7 407.68
1993......................... December 1992.. 3.0 419.91
1994......................... December 1993.. 2.6 430.83
1995......................... December 1994 2.8 442.89
\2\.
1996......................... December 1995 2.6 454.41
\2\.
1997......................... December 1996.. 2.9 467.59
1998......................... December 1997 2.1 477.41
\2\.
1999......................... December 1998 1.3 483.62
\2\.
2000......................... December 1999 2.4 495.23
\2\.
2001......................... December 2000 \3\ 2.4 \3\ 507.12
\2\.
------------------------------------------------------------------------
\1\ Payment of the December 1990 increase was delayed until January 1992
by section 8005(b) of Public Law 101-508.
\2\ December 1994, 1995, 1997, 1998, 1999, and 2000 increases are
rounded to the next lower dollar amount pursuant to sections 2(c)(2)
of Public Law 103-418 and Public Law 104-57, and section 8031 of
Public Law 105-33.
\3\ Estimate.
committee bill
The Committee bill would direct VA to compute and provide
increases in the monthly rates of compensation and DIC,
effective December 1, 2000. 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), amounts
of compensation so computed that are not even multiples of $1
will be rounded down to the next lower whole dollar amount.
The increases in DIC automatically would result in
identical percentage increases in benefits paid at DIC rates
under section 1318(b) of title 38 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 either (1) 10 years, or (2) 5
years from the date of discharge from active duty.
Under section 156(e)(1)(A) of Public Law 97-377, 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 (hereinafter, ``OBRA 1981'') (Public Law 97-35).
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 Public Law 100-322 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.
CBO, in its most recent baseline, estimated that the fiscal
year 2001 Social Security COLA, and thus the COLA provided for
by the Committee bill, will be 2.4 percent. The actual Social
Security COLA could differ from this estimate. Rather than
selecting any particular percentage adjustment at the time the
Committee ordered the bill reported, the Committee followed its
prior practice of setting the COLA by reference to the Social
Security increase. The Committee believes this is the most
equitable means of providing increases in these important
service-connected benefits.
cost estimate
In compliance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate, the Committee, based on
information supplied by CBO, estimates that, compared to the
CBO baseline, there would be no costs or savings resulting from
enactment of the Committee bill.
The cost estimate provided by CBO follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 3, 2000.
Hon. Arlen Specter,
Chairman, Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for the Veterans'
Compensation Cost-of-Living Adjustment Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Michelle
Patterson, who can be reached at 226-2840.
Sincerely,
Dan L. Crippen,
Director.
Enclosure.
Veterans' Compensation Cost-of-Living Adjustment Act of 2000
The bill 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, 2000, and the results
of the adjustment would be rounded to the next lower dollar.
The COLA that would be authorized by this bill is assumed
in the budget resolution 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). As a result, the bill
would have no budgetary effect relative to the baseline.
Relative to current law, CBO estimates that enacting this bill
would increase spending for these programs by about $349
million in 2001 and $465 million a year thereafter. This
estimate assumes that the COLA effective on December 1, 2000,
would be 2.4 percent.
This bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
On July 21, 2000, CBO prepared a cost estimate for H.R.
4850 as ordered reported by the House Committee on Veterans'
Affairs. Section 101 of H.R. 4850 would provide the same COLA
as this bill would. The estimated costs of this bill and
section 101 of H.R. 4850 are the same.
The estimate was prepared by Michelle Patterson, who can be
reached at 226-2840. It was approved by Robert A. Sunshine,
Assistant Director for Budget Analysis.
regulatory impact statement
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee on Veterans'
Affairs has made an evaluation of the regulatory impact that
would be incurred in carrying out the Committee bill. The
Committee finds that the Committee bill would not entail any
regulation of individuals or businesses or result in any impact
on the personal privacy of any individuals and that the
paperwork resulting from enactment would be minimal.
tabulation of votes cast in committee
In compliance with paragraph 7 of rule XXVI of the Standing
Rules of the Senate, the following is a tabulation of votes
cast in person or by proxy by members of the Committee on
Veterans' Affairs at its July 27, 2000, meeting. On that date,
the Committee, by unanimous voice vote, ordered an original
bill to increase, effective as of December 1, 2000, 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
reported favorably to the Senate.
agency report
On July 20, 2000, the Honorable Joseph Thompson, Under
Secretary for Benefits, Department of Veterans Affairs,
appeared before the Committee and submitted testimony on, among
other things, a draft bill to increase, effective as of
December 1, 2000, 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. Excerpts from this statement are reprinted below:
Statement of Joseph Thompson, Under Secretary for Benefits, Department
of Veterans Affairs
introduction
Mr. Chairman and Members of the Committee, thank you for
the opportunity to testify today on the Department of Veterans
Affairs (sic) disability claims processing. I am pleased to be
here with you to provide a status report on the adjudication of
these claims and to discuss the efforts the Department has made
to improve claims processing.
* * * * * * *
legislation
Mr. Chairman, you have also asked that we comment on
several bills, including S. 1810, S. 2264, S. 2544, S. 2637, S.
2827, and 3 draft bills which your staff provided late last
week. In view of the short amount of time available for the
formulation of this testimony, we are unable to present the
Department's views with respect to certain provisions of the
bills and draft proposals. However, we will be pleased to
provide our formal written views concerning them at a later
date once the necessary executive branch coordination is
completed.
Draft Bill [0:/ARM1/ARM00.242--June 16, 2000]--Compensation Cost-of-
Living Adjustment
Mr. Chairman, this draft proposal is perhaps the most
important matter on today's agenda. It would direct the
Secretary of Veterans Affairs to increase administratively the
rates of compensation for service-disabled veterans and of
dependency and indemnity compensation (DIC) for the survivors
of veterans whose deaths are service related, effective
December 1, 2000. On February 15, 2000, the Secretary
transmitted to Congress similar draft legislation proposing a
cost-of-living adjustment (COLA) for compensation and DIC
recipients at the same rate of increase as the COLA that will
be provided under current law to veterans' pension and Social
Security recipients. We currently estimate that this year's
Social Security adjustment will be 2.5 percent. We believe this
proposed COLA is necessary and appropriate in order to protect
the affected benefits from the eroding effects of inflation.
Therefore, we strongly support this proposal.
We estimate enactment of the proposed COLA would cost $345
million during fiscal year (FY) 2001 and $6.3 billion over the
period FYs 2001-2005. However, this increase is already assumed
in the baseline as required by the Omnibus Budget
Reconciliation Act of 1990 (OBRA); therefore, the proposal
would have a zero pay-as-you-go (PAYGO) impact.
Mr. Chairman, I would also like to take this opportunity to
urge your favorable consideration of another Administration
proposal. Our draft legislative proposal of February 15 also
included a provision to repeal a provision of the Balanced
Budget Act of 1997 that would require VA to defer until October
2, 2000, making veterans-benefit payments which would otherwise
be delivered by mail or transmitted for credit to the payee's
account by Friday, September 29, 2000. We strongly believe that
veterans should not be financially burdened by this provision
and ask that you take action to correct this situation. This
proposal is subject to the PAYGO requirements of the OBRA. The
PAYGO effect will be an increase in outlays of $1.8 billion in
FY 2000, with a corresponding decrease in FY 2001.
* * * * * * *
changes in existing law made by the committee bill, as reported
Since the Committee bill would not repeal or amend any
provisions of current law, this report does not contain the
material described in clauses (a) and (b) of paragraph 12 of
Rule XXVI of the Standing Rules of the Senate.