Extra $12B for VA Medical Budget in Limbo After Exclusion from Short-Term Spending Bill

The Department of Veterans Affairs' request for an extra $12 billion from Congress to cover medical care costs is in limbo after lawmakers did not include the money in a short-term funding bill approved this week.

Congress passed what's known as a continuing resolution, or CR, on Wednesday to ensure the government stays open after the fiscal year ends next week. While CRs typically just extend existing funding levels, VA officials asked Congress to include extra funding for the department to make up for an expected shortfall in its medical budget, warning that failing to provide the funding could mean staffing cuts and increased wait times for veterans.

Lawmakers did not include the requested VA funding in the CR -- and are so far not committing to including the money in the next government funding bill that they will need to pass when the CR expires in December.

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"I think a lot of what's in the future funding depends on who wins the election, honestly," House Appropriations Committee Chairman Tom Cole, R-Okla., told reporters Wednesday when asked by Military.com whether the extra VA funding would be included in the next government funding bill.

In July, VA officials informed Congress that the department was short about $3 billion of what it needed for veterans benefits payments this year and about $12 billion of what it will need for its health care budget next year.

Last week, lawmakers approved the $3 billion for veterans benefits, ensuring that disability and education benefits checks can be sent to veterans uninterrupted.

Earlier this month, VA officials confirmed they were asking for the $12 billion in medical funding to be included in the CR. While officials acknowledged there would be other opportunities for Congress to provide the money since it will still need to pass a comprehensive government funding bill for fiscal 2025, they argued getting the money sooner would allow them to plan to avert worst-case scenarios.

President Joe Biden is expected to sign the CR to prevent a government shutdown, but the White House also lamented in a Tuesday statement that excluding the VA funding is "creating a risk that the agency would slow hiring and reduce health care services to veterans."

The benefits funding garnered bipartisan support from lawmakers unwilling to risk veterans getting their payments on time. But Republicans have shown more skepticism toward the requested $12 billion for medical costs.

"Getting $12 billion surprises at the end is probably not very good governance," Cole said. "I think we'll sit down and take a look at it. But right now, I think getting out of town as quickly as possible was the right thing to do."

Immediately after approving the CR, Congress left Washington, D.C., for a six-week break to campaign for November's elections.

VA officials have largely attributed the medical budget shortfall to record enrollment resulting from the PACT Act, which expanded VA eligibility to millions of veterans exposed to toxins during their military service. Higher-than-expected staffing levels, pharmacy and prosthetics costs, and community care costs have also contributed to the shortfall, officials have said.

But Republicans blasted what they have described as "mismanagement" contributing to the shortfall and said they have unanswered questions about the funding.

"It has been a battle getting clear information from VA about the [Veterans Health Administration] budget shortfall," House Veterans Affairs Committee Chairman Mike Bost, R-Ill., said at a hearing Wednesday, adding that he's heard from veteran caregivers that services have slowed down since the shortfall was announced despite caregiver accounts not being included in the shortfall. "I understand that the administration and VA leaders are urging Congress to immediately approve the VHA $12 billion budget shortfall without us asking questions."

At a news conference Thursday, VA Secretary Denis McDonough said the department is working to answer lawmakers' outstanding questions about the shortfall and expressed hope the $12 billion would be included in any government funding bill approved in December.

"In the meantime, we'll continue to provide world-class care. And we will continue to be very discerning about hiring decisions," McDonough said.

For now, he added, concerns about the budget shortfall are "manageable."

One complication for giving the VA an extra $12 billion is budget caps that Congress approved last year.

The VA has asked for the money to be included in the PACT Act-created Toxic Exposures Fund, or TEF, which is considered what's known as mandatory spending and therefore not subject to the budget caps. Republicans have traditionally been resistant to adding money to the fund, which was a flashpoint during the debate over the PACT Act as some Republicans argued the TEF could become a slush fund.

But if Congress were to provide the VA with $12 billion in what's known as discretionary spending, the budget caps would apply, and lawmakers would need to either agree to raise the caps or find $12 billion to cut elsewhere in the federal budget

At a hearing earlier this month about the budget shortfall, Bost pressed VA officials on whether they are "accurately" calculating TEF funding needs.

"We are very confident, Mr. Chairman, that we can use all of the $12 billion that we requested in the Toxic Exposures Fund for direct care to veterans exposed to toxic substances," Shereef Elnahal, the VA under secretary for health, told Bost at the hearing.

Despite the potential hurdles, Senate Veterans Affairs Committee Chairman Jon Tester, D-Mont., expressed optimism that lawmakers will find a path forward on the funding.

"We'll take care of that," Tester said Tuesday.

Related: $12 Billion More for VA Medical Budget Urgently Needed, Department Says