Lawmakers play blame game but had role in VA budget fiasco

Lawmakers have fingered the Department of Veterans Affairs (VA) as a scapegoat for using outdated estimates that led to an estimated $1.3 billion shortfall in the agency’s 2005 budget, but they are at least partially to blame for the embarrassing snafu.

Despite warnings that federal funding was insufficient, Congress passed up several chances last year to increase appropriations for veterans healthcare programs.

Congressional debate over VA funding historically has been contentious, but relations between legislators and the agency have become even more acrimonious since new VA Secretary Jim Nicholson announced last month that his budget was short $2.6 billion for both 2005 and 2006. After House appropriators quickly passed a $975 million supplemental to cover what the department had said were its needs for 2005, it attracted more bad press when it admitted that the House’s figure was $300 million short.

Though House Appropriations Committee Chairman Jerry Lewis (R-Calif.) told Nicholson that VA use of improper budget projections “borders on stupidity,” former House Veterans Affairs Committee Chairman Chris Smith’s (R-N.J.) 2005 budget request included nearly the exact amount of the shortfall at which some lawmakers are now expressing surprise.

“We, in our letter … to [House Budget Committee Chairman Jim] Nussle [R-Iowa], asked for $2.524 billion” extra for the 2005 VA budget, Smith said. Nussle agreed to an extra $1.2 billion. “Subtract it; you get about $1.3 [billion]. We did lay out in some real detail why we think that number is just.”

Still, Nicholson said the need for new funding was unanticipated and lawmakers readily embraced his point of view.

“Whether it was a Democratic president or whether it was a Republican president, the fact is, they almost always underfunded veterans. It was the Congress in a bipartisan vote that funded [veterans] accurately and adequately,” Senate Veterans Affairs Committee Chairman Larry Craig (R-Idaho) said on the floor three days after the first shortfall was announced.

By all accounts, congressional leadership was inclined not to give Smith the money he was requesting for this year — until then-VA Secretary Anthony Principi acknowledged during a February 2004 hearing that the White House’s Office of Management and Budget (OMB) had given him $1.2 billion less than he had requested. A $1.2 billion boost to veterans healthcare funding was added but then quickly subjected to a series of adjustments that left its final level at less than $400 million.

“It was a way for Congress to say, ‘We’re meeting the needs,’ knowing all the while that some of it was going to be subtracted before the process was over,” one former House GOP aide said.

“Congress is funny,” said Joe Violante, legislative director for Disabled American Veterans. “They don’t want to put enough money into VA to ensure that veterans can get timely, quality care.”

Congress’s first subtraction from the $1.2 billion came in the form of a 0.8 percent across-the-board funding rescission included in the 2005 omnibus appropriations bill, which translated to $228 million less in veterans healthcare funding. A similar rescission in the 2004 omnibus exempted veterans healthcare from across-the-board cuts, but Congress chose not to repeat that exemption pattern in this year’s measure.

When lawmakers gave federal employees a 3.5 percent pay raise in 2005, another chunk was sliced from VA accounts because its healthcare budget still reflected the 1.5 percent pay raise the administration had requested. According to a VA spokesman, that loss was about $154 million.

“Coulda, woulda, shoulda,” said Jeff Schrade, spokesman for the Senate Veterans Affairs Committee, of Congress’s missed opportunities to help the VA shortfall. Schrade acknowledged that Congress could have done more but added, “That’s behind us now. We have to go forward.”

John Scofield, spokesman for the House Appropriations Committee, dismissed the importance of the $228 million rescission, saying it was not connected to the agency’s current shortfall.

Veterans lobbyists such as Richard Weidman, director of government relations for the Vietnam Veterans of America (VVA), disagree. “The billion-dollar shortfall for this fiscal year originated last year,” Weidman said.

Weidman added, “Congress was really mad at Secretary Nicholson because he said there was enough money in April” in a letter to Sen. Kay Bailey Hutchison (R-Texas), head of the Senate Appropriations Subcommittee on Military Quality of Life. “Well, he was saying what he was ordered to say by OMB.”

Rep. Rob Simmons (R-Conn.), who was removed from the Veterans Affairs Committee at the beginning of this session along with Smith and Rep. Rick Renzi (R-Ariz.), agreed with claims that the OMB has a pattern of deflating VA needs: “OMB seemed to frequently underestimate what was needed for veterans healthcare,” he said.

OMB spokesman Scott Milburn said budget season typically requires compromise and adjustment from all corners: “There is, with every agency, a process we go through to decide what the budget requests will be. That often requires back-and-forth, give-and-take.”

But few veterans’ lobbyists and advocates were mollified by congressional shock at the shortfall, and some were openly skeptical of Nicholson’s leadership. Rick Jones, national legislative director for AMVETS, said Nicholson was asked this year whether OMB gave him less money that he requested, just as Principi had.

“[Nicholson] refused to provide those numbers. … This secretary has not done what is traditionally done,” Jones said.

The VA spokesman did not comment by press time on Jones’s claims.