Introduction

The history of the present-day Department of Veterans Affairs (VA) can be traced back to July 21, 1930, when President Hoover issued Executive Order 5398, creating an independent federal agency known as the Veterans Administration by consolidating many separate veterans' programs.¹ On October 25, 1988, President Reagan signed legislation (P.L. 100-527) creating a new federal Cabinet-level Department of Veterans Affairs to replace the Veterans Administration, effective March 15, 1989. The department provides a range of benefits and services to veterans who meet certain eligibility criteria.² These benefits and services include, among other things, hospital and medical care;³ disability compensation⁴ and pensions;⁵ education;⁶ vocational rehabilitation and employment services;⁷ assistance to homeless veterans;⁸ home loan guarantees; administration of life insurance, as well as traumatic injury protection insurance for servicemembers; and death benefits that cover burial expenses.⁹

The department carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA). The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The Veterans Benefits Administration (VBA) is responsible for, among other things, providing compensation, pensions, and education assistance. The National Cemetery Administration (NCA)¹⁰ is responsible for maintaining national veterans cemeteries; providing grants to states for establishing, expanding, and improving state veterans cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. The BVA reviews all appeals made by veterans or their representatives for entitlement to veterans' benefits, including claims for service connection, increased disability ratings, pensions, insurance benefits, and educational benefits, among other things.

Scope and Limitations of This Report

This report provides an overview of the FY2024 President's budget request for VA (Title II of the Military Construction, Veterans Affairs, and Related Agencies [MILCON-VA] appropriations bill) and subsequent congressional action. It begins with a discussion of various appropriations and funds that constitute VA's budget, followed by a brief overview of the FY2023 congressional appropriations process and enacted amounts for FY2023. It then discusses the President's request for FY2024 for care, benefits, and services for veterans and administration of the department, followed by congressional action on the FY2024 request. The report provides funding levels for the accounts as presented in the MILCON-VA appropriations bill; it does not provide funding levels at the subaccount, program, or activity levels. Generally, VA accounts are purpose specific rather than program specific. For example, VHA's supply chain modernization program could include funding from the medical support and compliance account and the information technology account. Table 3 provides account level details of FY2023-FY2024 VA appropriations and FY2025 advance appropriations from the MILCON-VA appropriations bill. Appendix B lists appropriations to VA from FY1995 to FY2023. Funding amounts shown in the appendices may include transfers in and out of accounts, administrative recissions, and exclusion of the Housing Benefit Program Fund Credit Subsidy. Therefore, those amounts may be different from those in Table 3.

The Department of Veterans Affairs Budget

Certain budgetary concepts related to mandatory spending (direct spending), appropriated entitlements, and discretionary spending are useful in understanding the various accounts that fund VA's benefits and services, as well as recent funding provided in the Cost of War Toxic Exposures Fund (TEF)¹¹ established by the Honoring our PACT Act of 2022 (P.L. 117-168).

Mandatory (Direct) Spending

Mandatory spending, also known as direct spending, is generally characterized as spending that is provided or effectively controlled through authorizing legislation.¹² "The fundamental characteristic of mandatory spending is the lack of annual discretion to establish spending levels. Instead, mandatory spending usually involves a binding legal obligation by the [federal government] to provide funding for an individual, program, or activity."¹³ There are several types of mandatory (direct) spending, and one such category is entitlement authority. Entitlement authority generally meets a three-part test:

1. Specified benefits: The program's authorizing legislation specifies particular sums of money to be paid;

2. Specified beneficiaries: The payments are to be made to a class of persons or governments who meet specified eligibility requirements; and

3. Federal government has a legal obligation to pay which is not subject to appropriations: The payment is not discretionary, i.e., the legislation obligates the United States to make the specified payments to the eligible class and the legal obligation to make the specified payments to the eligible class of recipients is not contingent on appropriations being enacted. Therefore, if insufficient appropriations are available, the government may presumably be sued for payment of the benefits.¹⁴

Although the appropriations for some entitlement programs–such as Medicare and Social Security–are provided on a permanent basis in the authorizing laws establishing such programs, some entitlement programs (e.g., veterans disability compensation, veteran survivor's Dependency and Indemnity Compensation [DIC] program, and pensions) require funding provided in annual appropriations legislation. These types of entitlement programs are known as appropriated entitlements and, although provided in appropriations legislation, the budget authority provided to fund them is considered mandatory (or direct) spending.

Appropriated Entitlements¹⁵

Generally, appropriated entitlements receive funding through the annual appropriations process, but they are not subject to annual appropriations decisions of the congressional appropriations committees. "The Appropriations Committees have little or no discretion as to the amounts they provide."¹⁶ "Even though this funding is included in an appropriations bill, it is still considered mandatory spending rather than discretionary spending."¹⁷ For example, through the annual Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, Congress provides monthly, tax-free disability compensation payments to eligible veterans with disabilities due to disease or injury incurred or aggravated during military service. However, the actual funding level for disability compensation is determined by the "entitlement" criteria in Chapter 11, Title 38, of the U.S. Code.¹⁸ The appropriations act appropriates the sums necessary to cover the cost of disability compensation payments.

Discretionary Spending¹⁹

Funding for discretionary accounts is provided and controlled through appropriations legislation. "If the Appropriations Committees decide to lower funding for a [discretionary program] they can simply reduce the annual appropriation, notwithstanding the authorized funding level sought by the authorizing committee. Unlike entitlement programs, no formulas need to be changed to alter funding levels for discretionary spending."²⁰

VA Funding

VA's budget includes both mandatory and discretionary accounts. The accounts for VA's mandatory programs (appropriated entitlements) fund disability compensation for veterans, the survivor's Dependency and Indemnity Compensation (DIC) program, pensions, Veteran Readiness and Employment (VR&E), education programs (such as the Post 9-11 GI Bill), life insurance, housing (guarantee of VA acquired direct home loans), clothing allowances, automobile grants, adaptive equipment, and burial benefits (such as burial allowances, grave liners, outer burial receptacles, and headstones and markers), among other benefits and services.

Discretionary accounts fund medical care (which comprises medical services, medical community care, medical support and compliance, and medical facilities accounts), medical research, construction programs (which comprises major construction, minor construction, grants for state-extended care facilities, and grants for state cemeteries accounts), information technology, Veterans Electronic Health Record (EHR), the Office of Inspector General, BVA, NCA, and general operating expenses, among other accounts. These accounts are further supplemented by revolving funds, such as the Canteen Service Revolving Fund; the Pershing Hall Revolving Fund and Franchise Fund; trust funds, such as the Department of Veterans Affairs Cemetery Gift Fund and the General Post Fund; and special funds, such as the Medical Care Collections Fund, Capital Asset Fund, and Recurring Expense Transformational Fund.²¹

Advance Appropriations²²

VA has advance appropriation authority for specified medical care and benefits accounts. In 2009, Congress enacted the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), authorizing advance appropriations for three of the four VHA accounts: medical services, medical support and compliance, and medical facilities.²³ In 2014, Congress passed the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235), which amended 38 U.S.C. §117 and included three more accounts to the list of accounts identified for advance appropriations. This act authorized advance appropriations for three mandatory VA benefits programs within the Veterans Benefits Administration: compensation and pensions, readjustment benefits, and veterans insurance and indemnities. Beginning with the FY2016 Military Construction and Veterans Affairs, and Related Agencies Appropriations Act (P.L. 114-113), those accounts received advance appropriations for the first time for FY2017, in addition to the three VHA accounts already authorized to receive advance appropriations.

Section 4003 of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (P.L. 114-41) required the establishment of a separate account for medical community care beginning with the FY2017 appropriations cycle. The Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits Improvement Act of 2016 (P.L. 114-315) authorized advance appropriations for the medical community care account.

Congress had authorized (through P.L. 111-81, P.L. 113-235, and P.L. 114-315) advance appropriations of new budget authority for the aforementioned VBA and VHA accounts to prevent potential delays in the delivery of care and benefits to veterans that may have arisen in the event of a funding lapse.

Generally, VA's budget estimates for advance appropriations included in its annual budget request are developed using data that are typically three to four years old.²⁴ For example, the advance appropriations estimates for FY2025 included in the FY2024 annual budget request to Congress were developed by VA from about May through July 2022, using data through 2019 due to the impact of the COVID-19 pandemic.²⁵ The Government Accountability Office (GAO) has stated that the

process to develop these estimates is inherently complex, as it requires making assumptions based on imperfect information to predict obligations for VA health care 3 and 4 years into the future. For this reason, VA's budget estimate is prepared in the context of uncertainties about the future—including changes in veterans' needs, future economic conditions, and shifting leadership priorities.²⁶

Therefore, the department updates its annual budget request each year to reflect the most recent data, actual program experience, and other factors, such as economic trends in unemployment and inflation.²⁷ This "revised request" for the upcoming fiscal year is displayed as additional funding over the 2024 advance appropriations amount.

Under present budget scoring guidelines, advance appropriations are scored as new budget authority in the fiscal year in which they first become available for obligation, not in the fiscal year the appropriations are enacted, and are required to be counted for the purpose of enforcing any statutory discretionary spending limits in effect for the fiscal year they first become available.²⁸ Therefore, the advance appropriations numbers noted in the tables of this report are labeled "memorandum" and appear in the corresponding fiscal year column.

Cost of War Toxic Exposures Fund (TEF)

On August 10, 2022, President Biden signed the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022, or "Honoring our PACT Act of 2022" (P.L. 117-168). Section 805(a) of this act established the Cost of War Toxic Exposure Fund, to be administered by the VA Secretary.²⁹ The Honoring our PACT Act of 2022 appropriated $500 million for the Cost of War Toxic Exposures Fund for FY2022, to remain available until September 30, 2024, and further authorized appropriations (such sums as are necessary) to this fund for FY2023 and each subsequent fiscal year for expenses associated with the delivery of health care associated with exposure to environmental hazards during active military service.³⁰ Additionally, funds from the Cost of War Toxic Exposure Fund may be used for costs associated with medical and other research related to environmental hazards, administrative expenses related to benefits (including information technology), benefit claims processing, and adjudicating appeals from veterans.³¹ The act states that appropriations provided for the Cost of War Toxic Exposure Fund will be considered "direct spending" and will be treated as an "appropriated entitlement." Furthermore, the law states that the fund is exempt from mandatory sequestration provisions in Section 256(h) of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), as amended (also see discussion under the "Budget Request for FY2024 and Congressional Action" and the "The Fiscal Responsibility Act of 2023" sections of this report).

TEF and Future Authorizing Legislation

On December 7, 2022, the Congressional Budget Office (CBO) issued a statement on how certain provisions of the TEF impact how the agency plans to score future veterans' benefits and programs authorizing legislation:

The TEF will provide support for five kinds of activities: health care, processing disability claims, medical research, modernizing information technology (IT) programs, and other services. Some future authorizing bills may affect the costs of those types of activities, both for veterans generally and for veterans with toxic exposures. As a result, some of those costs could now be paid in part from the TEF (thereby increasing mandatory spending) and some could be paid, as they have been previously, from discretionary appropriations (thereby increasing discretionary authorization levels). CBO would therefore include the effects of both types of payments in its cost estimates for such legislation.... CBO would allocate 21 percent of the added costs of subsequent legislation to the TEF in 2023; that amount would grow to 42 percent by 2032. Those amounts would be shown as mandatory spending in CBO's cost estimates.³²

In the 118^th Congress, CBO has scored some measures using the scoring methodologies described above. Examples include the Reinforcing Enhanced Support through Promoting Equity for Caregivers Act of 2023 (S. 216), as ordered reported by the Senate Veterans' Affairs Committee on February 16, 2023, and the H.R. 542, Elizabeth Dole Home Care Act, as ordered reported by the House Committee on Veterans' Affairs on July 26, 2023. In scoring these bills, CBO has stated that some of the costs of implementing these measures would be paid from the TEF and therefore would be scored as mandatory or direct spending.³³

Historical Perspective

Figure 1 illustrates funding trends, in nominal dollars, for mandatory, discretionary, and total VA-enacted appropriations from FY1995 (a year before significant VA health care eligibility reform with the enactment of the Veterans' Health Care Eligibility Reform Act of 1996; P.L. 104-262) through FY2023.³⁴ Between FY1995 and FY2023, total mandatory appropriations grew from $19.45 billion to $167.91 billion, a compound annual growth rate (CAGR) of 8.00%. During this same period, discretionary appropriations grew from $18.02 billion to $129.82 billion, a CAGR of 7.31%. The total VA appropriations from FY1995 through FY2023 grew from $37.47 billion to $297.73 billion, a CAGR of 7.68%.

Figure 1. VA Appropriations, FY1995-FY2023

Source: Prepared by CRS based on figures from the Department of Veterans Affairs, Office of Management, Office of Budget (see Appendix B). Notes: Amounts in nominal, or noninflation-adjusted, dollars. Discretionary funding excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF). Mandatory funding excludes Housing Benefit Program Fund Credit Subsidy Reestimates and includes Cost of War Toxic Exposure Fund (TEF) amounts. FY2009: American Recovery and Reinvestment Act (P.L. 111-5) provided supplemental funding. VHA received $1.0 billion for the medical facilities account, and the $700 million was for the economic recovery payments. The supplemental $700 million is not included in the discretionary subtotal but is included in overall VA total. FY2014: Amounts include $15 billion in mandatory funding provided in the Veterans Choice Act (P.L. 113-146). FY2021: Amounts include American Rescue Plan (ARP) Act (P.L. 117-2) funding. FY2022 and FY2023: Amounts include unobligated balances of expired discretionary funds transferred to the Recurring Expenses Transformational Fund.

Figure 2 illustrates funding trends for mandatory, discretionary, and total VA-enacted appropriations from FY1995 through FY2022, in both nominal and inflation-adjusted dollars. Between FY1995 and FY2023, total mandatory appropriations, when adjusted for inflation, grew from $35.42 billion to $167.91 billion in 2023 dollars, a CAGR of 5.71%. During this same period, discretionary appropriations grew from $32.83 billion to $129.82 billion, a CAGR of 5.03%. The total VA appropriations from FY1995 through FY2023 grew from $68.25 billion to $297.73 billion in 2023 dollars, a CAGR of 5.40%.

Figure 2. VA Appropriations: Nominal and Inflation-Adjusted FY1995-FY2023

Source: Prepared by CRS based on figures from the Department of Veterans Affairs, Office of Management, Office of Budget (see Appendix B). Notes: Nominal (or current) dollar values are adjusted to real (constant) dollars using the Gross Domestic Product (GDP) Price Index Series deflator, where 2023 = 100. U.S. Bureau of Economic Analysis, "Table 1.1.4. Price Indexes for Gross Domestic Product." Discretionary funding excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF). Mandatory funding excludes Housing Benefit Program Fund Credit Subsidy Reestimates and includes Cost of War Toxic Exposure Fund (TEF) amounts.

FY2023 Budget Summary

On March 28, 2022, President Biden submitted his budget request for FY2023. The President's request for VA was $298.61 billion. The request included $135.05 billion in discretionary appropriations and $163.58 billion in mandatory appropriations. Figure 3 provides a breakdown of the FY2023 request. Additionally, the President's FY2024 advance appropriations request included $155.35 billion for VBA mandatory accounts and $128.10 billion for VHA discretionary accounts.

Figure 3. FY2023 VA Budget Request

Source: Prepared by CRS based on U.S. Congress, House Committee on Appropriations, Military Construction, Veterans Affairs, And Related Agencies Appropriations Bill, 2023, report to accompany H.R. 8238, 117th Cong., 2nd sess., June 27, 2022, H.Rept. 117-391. Notes: Total budget authority excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF).

On July 20, 2022, the House passed a six-bill appropriations package (H.R. 8294) consisting of the FY2023 Transportation/Housing and Urban Development, Agriculture/Rural Development, Energy and Water Development, Financial Services and General Government, Interior/Environment, and Military Construction, and Veterans Affairs appropriations bills (House Committee Print 117-55). Division F of H.R. 8294 contained the FY2023 MILCON-VA appropriations bill. The House-passed bill (H.R. 8294) provided $298.56 billion for VA, including $163.56 billion in mandatory appropriations and $135.01 billion in discretionary appropriations.

On July 28, 2022, Senate Appropriations Committee Chairman Senator Patrick Leahy released drafts of 12 appropriations bills and explanatory statements to accompany the draft measures.³⁵ On August 3, the Senate version of the FY2023 MILCON-VA appropriations bill, identical to the majority committee draft, was introduced in the Senate as S. 4759. As introduced, S. 4759 recommended $299.91 billion for VA for FY2023, including $164.96 billion in mandatory appropriations and $134.95 billion in discretionary funding.

On December 20, 2022, the House and Senate Appropriations Committees released the text of the Consolidated Appropriations Act, 2023 (as an amendment to H.R. 2617). After Senate passage on December 22 and House passage on December 23, the bill was signed into law on December 29, 2022 (P.L. 117-328). Division J of P.L. 117-328 contained the MILCON-VA Appropriations Act of 2023. The FY2023 MILCON-VA Appropriations Act provides $303.28 billion for VA for FY2023 (without collections). This includes $168.56 billion in mandatory funding and $134.73 billion in discretionary funding. The act also provides $5.0 billion in mandatory (direct) funding for the Cost of War Toxic Exposures Fund (TEF), to remain available until September 30, 2027. These funds would be used for new costs associated with eligibility expansions authorized in the Honoring our PACT Act of 2022 (P.L. 117-168). According to explanatory statement accompanying the Consolidated Appropriations Act, 2023, there is no shift in discretionary appropriations to the TEF.³⁶ Figure 4 provides a breakdown of the enacted amounts for VA for FY2023.

Figure 4. FY2023 VA Enacted Appropriations (P.L. 117-328)

Source: Figure prepared by CRS based on U.S. Congress, committee print, prepared by House Committee on Appropriations Consolidated Appropriations Act, 2023 (H.R. 2617, P.L. 117-328) [Legislative Text and Explanatory Statement] Book 2 of 2 Divisions G–N],117th Cong., 2nd sess. (Washington: GPO, 2023), pp. 2479-2493. Notes: Total budget authority excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF). Totals may not add up due to rounding.

Budget Request for FY2024 and Congressional Action

President's Request

On March 9, 2023, President Biden submitted his budget request for FY2024. The President's request for VA was $319.76 billion. The request included $137.76 billion in discretionary appropriations and $182.01 billion in mandatory appropriations (see Figure 5). The mandatory appropriations included $20.27 billion for the Cost of War Toxic Exposures Fund (TEF) (also see text box). Similar to its previous budget proposals in FY2022 and FY2023, the President's budget proposed to use the Recurring Expenses Transformational Fund (RETF) to supplement its discretionary appropriations.³⁷ For FY2024, the Administration proposed transferring $600 million in unobligated balances into the RETF for eight major construction projects.

Similar to FY2023, the President's FY2024 budget proposed a new third budget category within the overall federal discretionary budget. The Budget Control Act of 2011 (BCA; P.L. 112-25), as amended, imposed annual statutory discretionary spending limits by categorizing spending by defense and nondefense spending.³⁸ The defense category consists of discretionary spending in budget function 050 (national defense) only. The nondefense category includes discretionary spending in all other budget functions, including a majority of budget function 700 (veterans' benefits and services).³⁹ The statutory limits on discretionary spending were in effect through FY2021.⁴⁰ The Fiscal Responsibility Act of 2023 (P.L. 118-5) "includes provisions that would establish enforceable discretionary spending limits (caps) for FY2024 and FY2025."⁴¹ According to the FY2024 President's budget proposal,

a third category of discretionary spending will allow the Congress to consider the funding needs for VA medical care holistically, taking into account both discretionary and mandatory funding streams together. Setting a separate budget allocation for VA medical care accomplishes three important goals. First, it helps ensure adequate funding for veterans' healthcare without adversely impacting other critical programs, whether inside or outside of VA. Second, it also ensures that other critical priorities—both defense and non-defense—won't adversely impact veterans medical care. And third, it prevents the use of the mandatory TEF funding as a mechanism to shift discretionary resources into the non-VA medical care categories.⁴²

Figure 5. FY2024 VA Budget Request

Source: Prepared by CRS based on U.S. Congress, House Committee on Appropriations, Military Construction, Veterans Affairs, and Related Agencies Appropriations Bill, 2024, report to accompany H.R. 4366, 118th Cong., 1st sess., June 27, 2023, H.Rept. 118-122; and U.S. Congress, Senate Committee on Appropriations, Military Construction, Veterans Affairs, And Related Agencies Appropriation Bill, 2024, report to accompany S. 2127, 118th Cong., 1st sess., June 22, 2023, S.Rept. 118-43. Note: Total budget authority excludes offsetting collections deposited in the Medical Care Collections Fund (MCCF).

House Action—Subcommittee Markup

On May 17, 2023, the House Committee on Appropriations, Subcommittee on Military Construction, Veterans Affairs, and Related Agencies, held a markup of the Military Construction, Veterans Affairs, and Related Agencies (MILCON-VA) appropriations bill and approved the draft bill by voice vote. The draft bill did not recommend the President's requested amount for the Cost of War Toxic Exposure Fund (TEF) of $20.27 billion to be fully funded as a mandatory appropriation. According to the draft bill, $5.54 billion was recommended for TEF, and of this amount, $2.39 billion was for veterans' medical care, $1.77 billion was for VBA general operating expenses, $1.24 billion was for information technology, $90 million was for general administration, $46 million was for medical and prosthetic research, and $4 million was for the Board of Veterans Appeals.⁴⁹ The subcommittee draft bill did not recommend TEF funding for FY2025.

Due to the debt ceiling negotiations during the latter part of May 2023, the full committee markup of the MILCON-VA appropriations bill that was scheduled during the week of May 22 was postponed.⁵⁰

The Fiscal Responsibility Act of 2023 (H.R. 3746; P.L. 118-5)

As part of the deal between President Biden and former Speaker Kevin McCarthy to suspend the debt limit, on June 3, 2023, President Biden signed into law the Fiscal Responsibility Act of 2023 (P.L. 118-5). The act, among other things, established statutory discretionary spending limits (caps) for FY2024 and FY2025.⁵¹ The act also provided funding for the Cost of War Toxic Exposure Fund (TEF). For FY2024, the act provided $20.27 billion, which became available on October 1, 2023, and will remain available until September 30, 2028; for FY2025, it provided $24.46 billion, which will become available on October 1, 2024, and remain available until September 30, 2029, and would be fully funded as a mandatory appropriation.

Furthermore, the Fiscal Responsibility Act of 2023, under the provision "Rescission of Unobligated Funds," did not have any specific references to titles or sections pertaining to VA COVID-19 funds provided in the Families First Coronavirus Response Act (P.L. 116-127); the Coronavirus Aid, Relief, and Economic Security Act, "CARES Act" (P.L. 116-136); or the American Rescue Plan Act of 2021 (P.L. 117-2).

House Action—Full Committee Markup, Floor Debate and Passage

Following the enactment of the Fiscal Responsibility Act of 2023, the House Appropriations Committee resumed markup activities, and on June 13, 2023, the full committee marked up the FY2024 MILCON-VA appropriations bill and the measure was approved by a vote of 34 to 27. The bill was reported to the full House on June 27 (H.R. 4366; H.Rept. 118-122). The committee also directed VA to provide detailed estimates of "incremental costs for implementation of the PACT Act," beginning with the FY2025 congressional budget submissions.⁵²

On July, 27 2023, the House passed its version of the FY2024 MILCON-VA appropriations bill (H.R. 4366). The House-passed bill provided $299.49 billion for VA for FY2024, an amount that included $161.74 billion in mandatory funding and $137.75 billion in discretionary appropriations. During floor debate, several amendments were adopted, including increased funding for the medical and prosthetic research account, Board of Veterans' Appeals account, grants for construction of veterans cemeteries account, and grants for construction of state extended care facilities account, by redirecting funds from the general administration and information technology systems accounts. Table 1 provides a comparative breakdown, by account, of the House-passed amounts for FY2024 and advance appropriations amounts for FY2025.

Senate Action—Full Committee Markup, Floor Debate and Passage

On June 22, 2023, the Senate Committee on Appropriations held a markup of its version of the FY2024 MILCON-VA appropriations bill and reported it out of committee (S. 2127; S.Rept. 118-43). On September 6, 2023, Senator Patty Murray and Senator Susan Collins announced the Senate Appropriations Committee's plans for full Senate consideration of the first package of appropriations bills.⁵³ Among the appropriations bills included in the three-bill package was the FY2024 MILCON-VA bill (S. 2127; S.Rept. 118-43).⁵⁴ On September 7, S.Amdt. 1092 was introduced by Senator Patty Murray and Senator Susan Collins as an amendment in the nature of a substitute to the House-passed H.R. 4366. S.Amdt. 1092 included the text of the Senate Appropriations Committee-reported MILCON-VA bill (S. 2127), among other appropriations bills (S. 2131 and S. 2437). On November 1, 2023, having agreed to S.Amdt. 1092, as amended, the Senate passed its version of the MILCON-VA appropriations bill (Division A of the Consolidated Appropriations bill, 2024; H.R. 4366; S.Rept. 118-43). The Senate-passed version of the MILCON-VA appropriations bill (Division A of H.R. 4366, as amended; S.Rept. 118-43) provided $296.51 billion for VA for FY2024. This amount includes $134.77 billion in discretionary funding, as well as $161.74 billion in mandatory appropriations. Table 1 provides a comparative breakdown, by account, of the Senate-passed amounts (Division A of H.R. 4366 as amended) for FY2024 and advance appropriations amounts for FY2025.

Continuing Appropriations for FY2024 (P.L. 118-15; P.L. 118-22; P.L. 118-35; and P.L. 118-40)

Because none of the regular appropriations bills for FY2024 were enacted by the beginning of the fiscal year on October 1, 2023, Congress passed the Continuing Appropriations Act, 2024 and Other Extensions Act (H.R. 5860; P.L. 118-15) on September 30, 2023.⁵⁵ The act provided continuing appropriations for some VA accounts through November 17, 2023, generally at the same funding levels and under the same terms and conditions as was enacted for FY2023 (Division J of P.L. 117-328). A second continuing resolution (CR), the Further Continuing Appropriations and Other Extensions Act, 2024 (H.R. 6363; P.L. 118-22), was enacted on November 16, 2023, which in part extended the continuing appropriations under P.L. 118-15 through January 19, 2024. A third CR, the Further Additional Continuing Appropriations and Other Extensions Act, 2024 (H.R. 2872; P.L. 118-35), was enacted on January 19, 2024, which in part further extended the continuing appropriations under P.L. 118-15 through March 1, 2024. Lastly, a fourth CR, the Extension of Continuing Appropriations and Other Matters Act, 2024 (H.R. 7463; P.L. 118-40), was enacted on March 1, 2024, which further extended continuing appropriations for some VA accounts through March 8, 2024.

Since seven accounts (compensation and pensions, readjustment benefits, insurance and indemnities, medical services, medical community care, medical support and compliance, and medical facilities) received advance appropriations for FY2024 in the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2023 (Division J of P.L. 117-328), these accounts were not affected by these four CRs.

Consolidated Appropriations Act, 2024 (H.R. 4366; P.L. 118-42)

On Sunday March 3, 2024, the House and Senate Appropriations Committees released the text of the Consolidated Appropriations Act, 2024 (agreed to as a House amendment to a Senate amendment to H.R. 4366 on March 6, 2024 through the adoption of H.Res. 1061). The six-bill appropriations package included regular appropriations for FY2024 as follows:

• Division A—Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2024.
• Division B—Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2024.
• Division C—Commerce, Justice, Science, and Related Agencies Appropriations Act, 2024.
• Division D—Energy and Water Development and Related Agencies Appropriations Act, 2024.
• Division E—Department of the Interior, Environment, and Related Agencies Appropriations Act, 2024.
• Division F—Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2024.

On March 6 and March 8, the House and Senate passed H.R. 4366, as amended, respectively, and President Biden signed the Consolidated Appropriations Act, 2024 (P.L. 118-42), into law on March 9. The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $307.31 billion for VA, including $172.53 billion in mandatory funding and $134.77 billion in discretionary funding. Additionally, the FY2024 MILCON-VA Appropriations Act provides $308.43 billion in advance appropriations for FY2025, which would become available on October 1, 2024. This amount includes $195.85 billion for the Compensation and Pensions, Readjustment Benefits, and Veterans Insurance and Indemnities accounts, and $112.58 billion for Medical Services, Medical Community Care, Medical Support and Compliance, Medical Facilities accounts. Table 1 provides comparative FY2024 funding levels for VBA, VHA, NCA, and Departmental Administration. Table 3 provides account-level details.

The following sections discuss account-level details of the President's budget request for FY2024 and subsequent House and Senate action on regular VA appropriations.

Mandatory Programs Funding

Major mandatory program funding includes (1) Compensation and Pensions (VA's disability compensation program, Dependency and Indemnity Compensation (DIC) for service-connected deaths for surviving spouses, and dependent children pensions to low-income veterans,), (2) Readjustment Benefits (education and vocational rehabilitation assistance), and (3) Veterans Insurance and Indemnities (the provision of life insurance).

Compensation and Pensions

The compensation and pensions account provides payments for benefits such as disability compensation, DIC, pension benefits for low-income disabled or elderly wartime veterans and their survivors, burial benefits (allowances, flags, headstones, etc.), and a clothing allowance for certain disabled veterans.

For FY2024, the President's budget request for the compensation and pension account was $151.43 billion. This included $4.65 billion in additional funding over the FY2024 advance appropriation amount of $146.79 billion. In FY2024, VA estimates that approximately $147.6 billion in compensation payments would go to about 6.1 million veterans, approximately 563,000 survivors, and 1,049 children.⁵⁶

The increase in funding reflects changes made by the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act of 2022 (P.L. 117-168), which significantly expands benefits and services for veterans exposed to toxic substances. The PACT Act directly affects the C&P account due to the addition of 24 categories of presumptive conditions, including 300 diseases and medical conditions related to burn pits and other toxic exposures, and the addition of more presumptive-exposure locations for Agent Orange and radiation.⁵⁷

The PACT Act established certain effective dates, or phased-in applicability dates, for the presumptive service-connected conditions established by the act. Effective dates begin on August 10, 2022, and end on October 1, 2025. The Secretary determined that all presumptions in the PACT Act will be applicable on the date the bill was signed into law. This means that August 10, 2022, is the earliest effective date for establishing entitlement to presumptive service-connected compensation benefits. The VBA began processing PACT Act claims on January 1, 2023. The department estimated compensation and pension costs associated with the PACT Act to be $5.7 billion in 2023 and $9.8 billion in 2024.⁵⁸

Additionally, Section 204 of the PACT Act requires VA to reevaluate previously denied Dependency and Indemnity Compensation (DIC) benefits claims and the award of effective dates "as if the establishment or modification of the presumption of service connection had been in effect on the date of the submission of the original claim" As a result, VA estimated $1.8 billion in DIC retroactive payments to nearly 15,000 survivors in 2023.⁵⁹

The House- and Senate-passed versions of the MILCON-VA bill (H.R. 4366) provided $151.43 billion for the compensation and pension account for FY2024, the same as the President's request. Additionally, the bill provided advance appropriations budget authority of $181.39 billion for FY2025, which would become available on October 1, 2024.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $161.85 billion for the compensation and pension account for FY2024, a 6.47% increase over the FY2023-enacted amount and a 6.88% increase over the FY2024 request (see Table 3). Moreover, the act provides advance appropriations budget authority of $182.31 billion for FY2025, which would become available on October 1, 2024.

Readjustment Benefits

The Readjustment Benefits category reflects several benefits related to the transition of servicemembers from active-duty status to veteran status, as well as benefits for disabled veterans. Some of these programs include education benefits for veterans, survivors, and dependents, such as the Post 9-11 GI Bill;⁶⁰ the survivors' and dependents' educational assistance program; the Veteran Readiness and Employment (VR&E) program;⁶¹ and programs to provide housing, automotive, and adaptive equipment grants for disabled veterans.⁶²

For FY2024, the President's budget request for the readjustment benefits account is $8.45 billion, the same amount provided as advance appropriation budget authority for FY2024 and included in the Consolidated Appropriations Act, 2023 (H.R. 2617; Division J of P.L. 117-328). Additionally, it is estimated that in FY2024, $169.3 million in offsetting collections from the Department of Defense (DOD), and an estimated $6.0 billion in unobligated balances from 2023, would be available for obligation for readjustment benefits.

The House-passed and Senate-passed versions of the MILCON-VA bill (H.R. 4366) provided $8.45 billion for FY2024 for the readjustment benefits account, the same as the President's request, and both versions of the MILCON-VA bill provided $11.52 billion in advance appropriations budget authority for FY2025, which would become available on October 1, 2024.

The FY2024 MILCON-VA Appropriations Act provides $8.45 billion for the readjustment benefits account for FY2024, a 4.44% increase over the FY2024 request. Additionally, the act provides $13.39 billion in advance appropriations budget authority for FY2025, which would become available on October 1, 2024, a 16.29% increase over the $11.52 billion in advance appropriations requested for this account (see Table 3).

Veterans Insurance and Indemnities

The Veterans Insurance and Indemnities account is the mandatory funding stream for several government life insurance programs for veterans. In addition to direct payments made to insured veterans and their beneficiaries, this category includes supplemental funding for National Service Life Insurance (NSLI),⁶³ Service-Disabled Veterans Insurance (S-DVI),⁶⁴ and Veterans Mortgage Life Insurance (VMLI).⁶⁵ The Veterans Affairs Life Insurance (VA Life) program established under the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020 (P.L. 116-315) opened for enrollment on January 1, 2023. This program is funded by the Public Enterprise Revolving Fund and is designed as a self-supporting program.⁶⁶

For FY2024, the President's budget requested $133.83 million for the veterans insurance and indemnities account, which includes $121.13 million in advance appropriation budget authority for FY2024 and included in the Consolidated Appropriations Act, 2023 (H.R. 2617; Division J of P.L. 117-328), and $12.70 million in additional funding for FY2024.

The House- and Senate-passed versions of the MILCON-VA bill (H.R. 4366) provided $133.83 million for FY2024 for the veterans insurance and indemnities account, the same as the President's request, and both versions of the MILCON-VA bill provided $135.12 million in advance appropriations budget authority for FY2025, which would become available on October 1, 2024.

The FY2024 MILCON-VA Appropriations Act provides $133.83 million for FY2024 and $135.12 million in advance appropriations budget authority for FY2025, which would become available on October 1, 2024 (see Table 3).

Medical Care and Medical Research Discretionary Programs Funding

Background

The VA's Veterans Health Administration (VHA) operates the nation's largest public integrated direct health care delivery system.⁶⁷ VHA's primary mission is to provide health care services to eligible veterans.⁶⁸ VHA generally provides care directly through over 1,700 sites of care, including hospitals, clinics, and health care facilities.⁶⁹

VHA is not a health insurance financing program that provides reimbursement to providers for all or a portion of a patient's health care costs. It operates associated facilities and employs clinicians.⁷⁰ This model differs from the predominant health care financing and delivery model in the United States, in which there is a payer for health care services (e.g., Medicare, private health insurance plan), a provider (e.g., hospital, physician), and a recipient of care (the patient).

The VA's health care system is organized into 18 geographically defined administrative regions known as Veterans Integrated Service Networks (VISNs). Although VA headquarters develops policies and guidelines to be applied throughout the VA health care system, management authority for basic decisionmaking and budgetary responsibilities is delegated to the VISNs.⁷¹ As of September 30, 2021, VHA operated 145 hospitals, 135 nursing homes, 702 community-based outpatient clinics (CBOCs),⁷² and 300 Readjustment Counseling Centers (Vet Centers).⁷³ In 2009, VA began a pilot Mobile Vet Center (MVC) program to improve access to services for veterans in rural areas, and the department has deployed 83 MVCs to date.⁷⁴

Although VHA provides most health care services to eligible veterans through its integrated network of facilities, it does pay for care in the community under certain circumstances. The Veterans Community Care Program (VCCP) applies eligibility for care in the community broadly to all enrolled veterans based on specific criteria.⁷⁵ VA is authorized to provide care in the community through individual agreements with community providers, called veterans care agreements. VA is also authorized to reimburse for emergency care visits if specific criteria are met.⁷⁶ Inpatient and outpatient care is provided in the private sector to eligible dependents of veterans under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA).⁷⁷ In addition, VHA provides grants for construction of state-owned nursing homes and domiciliary facilities⁷⁸ and collaborates with the Department of Defense in sharing health care resources and services.

VHA has additional statutory missions besides providing direct patient care to veterans.⁷⁹ It is required to conduct medical research,⁸⁰ serve as a contingency backup to the DOD medical system during a national security emergency,⁸¹ provide support to the National Disaster Medical System and the Department of Health and Human Services as necessary,⁸² and train health care professionals to provide an adequate supply of health personnel for VA and the nation.⁸³

The Veteran Patient Population

VA projects that in FY2024, the overall population of veterans nationwide will decrease, but utilization of the system will remain relatively constant.⁸⁴ In FY2024, approximately 9.0 million of the 17.9 million total veterans were enrolled in VA's health care system.⁸⁵ VA estimates that in FY2024, enrollment will shrink by 79,407 to 9.0 million veterans. In FY2024, VA anticipates treating approximately 6.4 million unique veteran patients and 1.0 million nonveteran patients (see Table A-1).⁸⁶

VHA estimates that outpatient visits will increase from 137.9 million visits in FY2023 to 139.7 million visits in FY2024, an increase of 1.8 million, or 1.3%. VHA anticipates an increase in the total number of inpatients treated in all inpatient facilities from 1.07 million patients in FY2023 to 1.08 million patients in FY2024, an increase of 1.2%.⁸⁷

The change in enrollment and utilization is indicative of a long-term trend. The veteran population is declining—due to the death of World War II and Vietnam-era veterans—while enrollment in the VA health care system and health care utilization is staying relatively constant (see Figure 6). In FY2000, 18.4% of the veteran population was enrolled in the health care system. In FY2024, over 50% of the veteran population will have enrolled in the health care system.

Figure 6. Veteran Population, VA Enrollees, and VA Patients, FY2000-FY2024

Sources: Total "Veteran Population" numbers are from VetPop2020, available at https://www.va.gov/vetdata/Veteran_Population.asp, and archived copies of earlier version no longer available on the website. "Enrolled-VA Veterans" numbers and "Veteran Patients" numbers were obtained from the VA and/or the VA budget submissions to Congress for FY2002-FY2023; the number for each fiscal year is taken from the budget submission two years later (e.g., the FY2021 number is from the FY2023 budget submission). Note: FY2023 and FY2024 veteran enrollee and patient data are estimates.

Some portion of the increase in proportional enrollment among living veterans is likely due to maturity of the modern enrollment system.⁸⁸ However, multiple other factors may be contributing to increased enrollment and utilization of the health care system. For instance, Congress on multiple occasions has expanded qualifying criteria for enrollment in VA health care.⁸⁹ The services provided through VHA have also expanded over time, such as the addition of benefits for family caregivers, expansion of gender-specific care, and expansion of long-term care benefits, thereby increasing the appeal of the VA health care system.

VA anticipates that the veteran population will continue to decline—projecting 11.9 million veterans in FY2050.⁹⁰ In addition, VA projects that enrollment will remain relatively constant through 2031 while the veteran population declines overall.⁹¹

President's Request and Congressional Action

The VA's annual appropriations for the medical services, medical community care, medical support and compliance, and medical facilities accounts include advance appropriations that become available one fiscal year after the fiscal year for which the appropriations act was enacted. Therefore, the Consolidated Appropriations Act, 2023 (Division J; P.L. 117-328), provided FY2024 funding for these four accounts. However, in any given year, the Administration could request additional funding for the upcoming fiscal year and Congress could revise these amounts through the annual appropriations process. Across all four accounts, the President's budget increased by $10.0 billion over the advance appropriations amount in FY2024.⁹² The request reflects implementation of the PACT Act, with $17.1 billion in new mandatory appropriations in the TEF, which is offset by cancellation of $7.1 billion in unobligated discretionary balances.⁹³ The FY2024 budget request for VHA totals $142.5 billion, including medical care collections.⁹⁴

As required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), the President's FY2024 budget requests $112.6 billion in advance appropriations for the four medical care appropriations (medical services, medical community care, medical support and compliance, and medical facilities) for FY2025, a decrease of approximately 12.1% from the FY2024 advance appropriation of $128.1 billion. In FY2025, the Administration's budget request would provide $71.0 billion for the medical services account, $20.4 billion for medical community care, $11.8 billion for the medical support and compliance account, and $9.4 billion for the medical facilities account.

The House-passed version of the MILCON-VA appropriations bill provided a larger VHA appropriation than the President's request. The Senate-passed version of the bill provided a smaller VHA appropriation than the President's request. The House-passed version of the MILCON-VA appropriations bill (H.R. 4366) provided $3 million more, while the Senate-passed version of the bill provided approximately $2.0 billion less.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $120 billion for VHA for FY2024. This is nearly $2 billion less than the President's request. The act provides $112.6 billion in advance appropriations budget authority for FY2025, in line with the President's request and both the House- and Senate-passed bills.

The sections below detail the amounts requested for each VHA account for FY2024, including the funds provided in the House-passed bill and Senate-passed bills for each account. The sections also detail the amounts provided in the FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42).

Medical Services

The medical services account covers expenses for furnishing inpatient and outpatient care and treatment of veterans and certain dependents. It also includes care and treatment in non-VA facilities; outpatient care on a fee basis; medical supplies and equipment; salaries and expenses of employees hired under Title 38 of the U.S. Code; cost of hospital food service operations; grants for adaptive sports programs for disabled veterans and members of the Armed Forces; beneficiary travel; prosthetics; Long-Term Services and Supports (LTSS); aid to state veterans' homes; assistance and support services for family caregivers; and costs associated with activation of newly constructed or leased VA medical care facilities, among other distinct activities.

For FY2024, the President's budget requested $69.1 billion for the medical services account. This amount includes an administrative recission that decreases the FY2024 advance-appropriated amount by $4.9 billion. The House-passed version of the MILCON-VA appropriations bill (H.R. 4366) provided the same amount to the Medical Services account as the President's request. The Senate- passed version of the Consolidated Appropriations Act, 2024, further decreased the FY2024 appropriation to $68.1 billion. VA estimates $9.5 billion in expenditures from TEF to support medical services in FY2024. Both the House-passed bill and the Senate-passed bill provide FY2025 advance appropriations equal to the President's request of $71.0 billion.

The FY2024 MILCON-VA Appropriations Act provides $70.97 billion for FY2024 and $71.0 billion in advance appropriations budget authority for FY2025, which would become available on October 1, 2024 (see Table 3).

Medical Community Care

Section 4003 of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (P.L. 114-41) required the establishment of a separate new account for medical community care, beginning with the FY2017 appropriations cycle. The Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits Improvement Act of 2016 (P.L. 114-315) authorized advance appropriations for the medical community care account. The account consolidates all community care programs in a single appropriation. It is the funding source for care that eligible veterans receive through community health care providers. These programs include the Veterans Community Care Program (VCCP), the Camp Lejeune Family Member Program (CLFMP), CHAMPVA, the Foreign Medical Program (FMP), the Spina Bifida Health Care Program, the Children of Women Vietnam Veterans Health Care Benefits Program (CWVV), and the Indian Health Service (IHS)/Tribal Health Programs (THP) Reimbursement Agreements Program.

The medical support and compliance and the Information Technology accounts fund some expenses related to the community care program. These expenses include administrative expenses related to claims processing performed by the Third-Party Administrators (TPAs) and VHA, and software required for information technology (IT) systems related to the community care program.⁹⁵

The President's budget requested $31.1 billion for the medical community care account. This includes an administrative recission that decreases the FY2024 advance-appropriated amount by $1.9 billion. The House-passed version of the MILCON-VA appropriations bill (H.R. 4366) provided the same amount to the Medical Community Care account as the President's request. The Senate-passed version of the Consolidated Appropriations Act, 2024, further decreased the FY2024 appropriation to $28.9 billion. VA estimates $6.7 billion in expenditures from TEF to support medical community care in FY2024. Both the House-passed bill and the Senate-passed bill provided FY2025 advance appropriations equal to the President's request of $20.4 billion.

The FY2024 MILCON-VA Appropriations Act provides $30.34 billion for FY2024 and $20.4 billion in advance appropriations budget authority for FY20205, which would become available on October 1, 2024 (see Table 3).

Medical Support and Compliance

The medical support and compliance account provides for expenses related to the management, security, and administration of VA's health care system through the operation of VA medical centers (VAMCs) and other medical facilities, such as community-based outpatient clinics (CBOCs) and Vet Centers. This includes, among other things, VAMC leadership teams (Director, Chief of Staff, Chief Medical Officer, and Chief Nurse) and VAMC support functions, such as "quality of care oversight, security services, legal services, billing and coding activities, acquisition, procurement, and logistics activities, human resource management, logistics and supply chain management, and financial management."⁹⁶ This account also funds 18 Veterans Integrated Service Network (VISN)⁹⁷ offices, which include network management activities such as the following network leadership teams within each VISN: Network Director, Deputy Network Director, Chief Financial Officer, Chief Medical Officer, and Chief Information Officer.⁹⁸ This account also provides for expenses related to VHA Central Office (VHACO) operating units, such as offices of the Assistant Under Secretary for Community Care and Deputy Assistant Under Secretary for Community Care, the Office of the Assistant Under Secretary for Health for Clinical Services and the Chief Medical Officer (AUSH/CS), and the Office of Discovery, Education, and Affiliate Networks (DEAN), among other offices and suboffices.

The President's budget requested $12.3 billion for the medical support and compliance account, the same amount as the FY2024 advance-appropriated amount. Both the House-passed and the Senate-passed bills provided the same amount as the President's request and would provide FY2025 advance appropriation amounts equivalent to the President's request of $11.8 billion.

The FY2024 MILCON-VA Appropriations Act provides $10.75 billion for FY2024 and $11.8 billion in advance appropriations budget authority for FY2025, which would become available on October 1, 2024.

Medical Facilities

The medical facilities account funds expenses pertaining to the operations and maintenance of VHA's capital infrastructure. These expenses include utilities and administrative expenses related to planning, designing, and executing construction or renovation projects at VHA facilities. It also funds medical facility leases, including clinical space in CBOCs, engineering and environmental management, grounds maintenance, fire protection, nonrecurring maintenance, recurring maintenance and repairs, textile care processing and maintenance, and operating equipment maintenance and repairs, among others.

The President's budget requested $8.5 billion for the medical facilities account. This amount includes an administrative recission that decreases the FY2024 advance-appropriated amount by $250.5 million. The House-passed version of the MILCON-VA appropriations bill (H.R. 4366) provided the same amount to the Medical Facilities account as the President's request. The Senate-passed version of the bill provided $9.8 billion, which is $1.0 billion over the advance-appropriated amount and $1.251 billion over the President's request.

Both the House-passed version of the MILCON-VA appropriations bill and the Senate Appropriations Committee bill provided the same FY2025 advance appropriation as the President's request of $9.4 billion.

The FY2024 MILCON-VA Appropriations Act provides $8.95 billion for FY2024 and $9.4 billion in advance appropriations budget authority for FY2025, which would become available on October 1, 2024 (see Table 3).

Medical and Prosthetic Research

As required by law, the medical and prosthetic research program (medical research) focuses on research into the special health care needs of veterans. This account provides funding for many types of research, such as investigator-initiated research; mentored research; large-scale, multisite clinical trials; and centers of excellence. VA researchers receive funding not only through this account but also from DOD, the National Institutes of Health (NIH), and private sources. The medical services, medical support and compliance, and medical facilities accounts also provide funds for additional expenses required for VAMCs supporting research activities.

In general, VA's research program is intramural; VA investigators conduct research at VA facilities and in approved off-site space occupied by VA under a legal agreement. Unlike other federal agencies, such as NIH and DOD, VA does not have the statutory authority to make research grants to colleges and universities, cities and states, or any other non-VA entities.

The President's budget requested $938 million for the medical and prosthetic research account, an increase of $22 million, or 2.4%, above the FY2023-enacted amount of $916 million. The VHA's major research priorities in FY2024 include, among others, traumatic brain injury (TBI), military exposures, precision oncology, and mental health.⁹⁹

The House-passed version of the bill provided $3.0 million more than the FY2024 request. The Senate-passed version of the bill provided the same level as the request.

The FY2024 MILCON-VA Appropriations Act provides $943 million for FY2024, which is $5 million more than the President's request (see Table 3).

Nonmedical Discretionary Programs Funding

National Cemetery Administration (NCA)

The majority of NCA's discretionary funding falls into the Operations and Maintenance category. VA requests a total of $480 million in FY2024 for this account, an increase of $50 million over FY2023. In FY2024, NCA would provide 140,472 interments and the perpetual care of 4.3 million gravesites at 158 national cemeteries and 34 other cemetery installations and support 2,331 fulltime equivalent (FTE) employees.¹⁰⁰

NCA continues to pursue its long-range goal of providing 95% of veterans with "access to first interment burial options (for casketed or cremated remains, either in-ground or in columbaria) in a national or state [v]eteran's cemetery within 75 miles of the [v]eteran's place of residence."¹⁰¹

The House version of the MILCON-VA bill (H.R. 4366) provided $482 million for FY2024 for NCA, whereas the Senate version of the MILCON-VA bill (H.R. 4366) provided $480 million, the same as the President's request.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $480 million, the same as the President's request (see Table 3).

In the explanatory statement to accompany P.L. 118-42, the committee states that it supports the "Administration's efforts to construct additional infrastructure at its Rural Initiative national cemeteries"¹⁰² and urges VA to "conduct an assessment at each Rural Initiative National Cemetery site, with feedback from community stakeholders—to include veterans, veterans service organizations, volunteers, local leadership, adjacent landowners, and visitors, to determine if it is advisable to construct permanent support infrastructure."¹⁰³ Furthermore, it encourages VA "to work with State and local entities, and non-profit organizations interested in constructing and donating facilities or donating funding for VA-built facilities, to include funds for construction and future operations and maintenance costs, to help meet location-specific needs, as appropriate."¹⁰⁴

VBA, General Operating Expenses

VBA's General Operating Expenses (GOE) accounts provide for the expenses pertaining to the administration of disability compensation, Dependency and Indemnity Compensation (DIC), pension benefits, fiduciary programs, education benefits, the provision of Veteran Readiness & Employment (VR&E) services, administration of the loan guaranty program, Veteran Transitional Assistance Grant Program, and outreach programs, among others.

For FY2024, the Administration's budget requests $3.90 billion for this account. This funding would be for 25,762 fulltime equivalent (FTE) employees, and would provide for overtime pay to process claims and to implement the Veteran Transitional Assistance Grant Program (VTAGP).¹⁰⁵ The President's request for FY2024 includes an additional $5.0 million for VTAGP over FY2023 to support an increase of three FTEs and approximately $4.5 million in grants awards.¹⁰⁶

The House- and Senate-passed versions of the MILCON-VA bill (H.R. 4366) provided $3.90 billion for FY2024 for VBA's GOE account, the same as the President's request.

Division A of P.L. 118-42 provides $3.87 billion for the VBA General Operating Expenses account. This includes the Section 260 provision in the FY2024 MILCON-VA Appropriations Act rescinding $30 million from unobligated balances in the VBA General Operating Expenses account (see Table 3).

The explanatory statement to accompany P.L. 118-42 states that the appropriations committees "are concerned about a growing disability claims backlog and limited oversight of contracted providers for medical exams…" and "strongly encourages the implementation of special training protocols and oversight of C&P [Compensation and Pension] medical exams, especially for claims related to military sexual trauma."¹⁰⁷ Furthermore, the explanatory statement directs VA to provide a report to the appropriations committees on the use of third-party contractors conducting C&P examinations.¹⁰⁸

Board of Veterans' Appeals

The Board of Veterans' Appeals (BVA) is an agency within VA established in 1933.¹⁰⁹ The BVA's role is to conduct hearings and make final decisions on behalf of the VA Secretary regarding appeals for veterans' benefits and services from VBA, VHA, and NCA, as well as the Office of General Counsel (OGC), that are presented to BVA for appellate review.

The President's FY2024 request for BVA is $287 million, a $2 million increase over the FY2023 enacted amount. The additional funding for FY2024 would be for 124 additional FTEs, including seven Veterans Law Judges (VLJs), 82 decision-writing attorneys, and 35 operational and support staff.¹¹⁰ Additional staff would be for adjudication of the Veterans Appeals Improvement and Modernization Act of 2017 (P.L. 115-55), appeals, and appeals pertaining to the Program of Comprehensive Assistance for Family Caregivers (PCAFC).¹¹¹

The House version of the MILCON-VA bill (H.R. 4366) provided $289 million for FY2024 for BVA, whereas the Senate version of the bill (H.R. 4366) provides $287 million, the same as the President's request.

Division A of P.L. 118-42 provides $272 million for BVA for FY2024. This amount includes a rescission of $15 million from unobligated balances as required by Section 260 of Division A of P.L. 118-42 (see Table 3).

Information Technology Systems (IT Systems)

The IT Systems account provides funding for department-wide IT activities such as IT and telecommunications support, management of data systems, and acquisition of IT systems and department-wide cybersecurity efforts, among other things.

The President's request for IT Systems was $6.40 billion, an increase of $619 million, above the FY2023-enacted amount. The requested amount included $125.7 million for IT development, such as building new software applications; $4.67 billion for operations and maintenance (O&M); and $1.61 billion for staffing and administrative support services.¹¹²

The House version of the MILCON-VA bill (H.R. 4366) provided $6.396 billion for FY2024 for IT Systems, whereas the Senate version of the MILCON-VA bill (H.R. 4366) provided $6.401 billion, same as the President's request.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $6.39 billion for IT Systems. Of this amount, $1.61 billion is for salaries and expenses, $4.67 billion is for operation and maintenance (O&M) of existing IT programs, and $125.65 million is for IT development. The total IT systems amount of $6.39 billion includes a rescission of $15 million from unobligated balances as required by Section 260 of Division A of P.L. 118-42 (see Table 3).

Veterans Electronic Health Record (EHR)¹¹³

On May 17, 2018, VA entered into an indefinite-delivery, indefinite-quantity (IDIQ) contract¹¹⁴ with Cerner Government Services Inc. (Oracle Cerner, after Oracle Corporation completed the acquisition of Cerner on June 8, 2022) for the procurement of an Electronic Health Record (EHR) solution (Cerner Millennium Solution), with the goal of providing seamless care to veterans as they transition from the Department of Defense (DOD) health care system, including the Department of Homeland Security's U.S. Coast Guard, and to replace the legacy EHR system.¹¹⁵

The Veterans Electronic Health Record account provides funding for activities required to plan and deploy the Cerner Millennium electronic health care record system at VA medical facilities. This includes funding for the Electronic Health Record (EHR) contract, infrastructure readiness, and expenses related to the Project Management Office (PMO). Beginning with the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act for FY2018 (P.L. 115-141), Congress established this account, which is "intended to be the single source of funding within VA for the electronic health record effort" (H.Rept. 115-673), and for which "[n]o authority is provided for funds from other VA accounts to be transferred into this account nor for funds from this account to be transferred out to other accounts" (H.Rept. 118-122). The Office of the Deputy Secretary is the only office responsible for administering the funds in this account.

On October 24, 2020, VA began initial deployment of the Cerner Millennium EHR at the Mann-Grandstaff VAMC in Spokane, WA. Due to various implementation challenges, and potential patient safety issues encountered during transition to the new EHR system, as highlighted by the Government Accountability Office (GAO), VA OIG, and medical center staff, on March 19, 2021, Secretary Denis McDonough announced a strategic review of the EHRM program.¹¹⁶ The results of this review were released in July 2021, and a final update was released in November 2021.¹¹⁷ On December 1, 2021, VA announced an updated plan to move forward with the EHRM Program, mitigating challenges documented during the strategic review and implementing lessons learned and feedback from VA medical providers at initial deployment sites.¹¹⁸ It also instituted new management and governance structures to oversee the deployments. After the initial deployment on October 24, 2020, VA deployed the Cerner Millennium EHR at four other medical centers throughout early 2022. In total, the new EHR was deployed at five VAMCs (see Table 2), 22 Community based Outpatient Clinics (CBOCs) affiliated with the VAMCs, the West Consolidated Patient Accounts Center (WCPAC), the North Central Consolidated Patient Accounts Center (NCCPAC),¹¹⁹ and 52 remote sites.¹²⁰

The next deployment site was the Boise VAMC, which was scheduled to go live on July 23, 2022. Due to site deployment readiness issues, deployment was further postponed,¹²¹ and on October 13, 2022, VA announced that it had paused further EHR deployment at all sites until June 2023.¹²² With all further deployments postponed, VA established an EHRM Sprint Project Team to evaluate and recommend solutions to "critical patient safety issues as identified by the National Center for Patient Safety (NCPS) led Patient Safety Team (PST)."¹²³ Then on April 21, 2023, VA once again announced that all future deployments of the new Cerner EHR would be stopped "as part of a larger program reset."¹²⁴ During the reset, VA plans to prioritize improvements at the five sites that currently use the new EHR and fix the issues with the EHR that were identified by health care providers. According to VA,

additional deployments will not be scheduled until VA is confident that the new EHR is highly functioning at current sites and ready to deliver to Veterans and VA clinician at future sites. This readiness will be demonstrated by clear improvements in the clinician and Veteran experience; sustained high performance and high reliability of the system itself; improved levels of productivity at the sites where the EHR is in use … when these criteria have been met and the reset period concludes, VA will release a new deployment schedule and re-start deployment activities.¹²⁵

Meanwhile, on May, 16, 2023, VA finalized renegotiations on a modified contract with Oracle Cerner (Cerner Government Services Inc.) for the next option period of the contract. The contract was renegotiated from a five-year term to five one-year terms, so VA would be able to review Cerner's performance and renegotiate again in one year if needed. The renegotiated contract includes the following key components:

Reliability: Minimizing outages (time when the system crashes completely), incidents (time when one component of the system isn't working), and interruptions (time when the system is operating slowly) of the system.

Responsiveness: Quickly and reliably resolving help tickets and clinician requests.

Interoperability with other health care systems: Ensuring that VA can quickly and reliably access patient health records from private sector hospitals when necessary.

Interoperability with other applications: Ensuring that the EHR system interfaces with VA's website, mobile app, and other critical applications, so Veterans have a seamless and integrated health care experience.¹²⁶

While deployment of the EHR to future sites was paused, on March 9, 2024, VA and DOD launched the new EHR at the Captain James A. Lovell Federal Health Care Center (Lovell FHCC) in North Chicago, IL—the only joint VA and DOD medical facility.¹²⁷ According to VA, "deploying concurrently with DOD at this facility is critical to understanding the extent to which VA has successfully addressed many of the challenges that were identified ... and will also enable VA to prepare for successful future deployments at more complex sites"¹²⁸

The President's request for this account was $1.86 billion, and the House version of the MILCON-VA bill (H.R. 4366) provided the same amount as requested. The Senate version of the MILCON-VA bill (H.R. 4366) provided $894.39 million.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $874.14 million for this account, which includes a rescission of $460 million from unobligated balances as required by Section 256 of Division A of P.L. 118-42 (see Table 3). The explanatory statement to accompany the act directs VA to submit a report on the "earned value analysis of the Veterans Electronic Health Record system, including a graphic performance report, a schedule and cost performance indexes, an estimate of completion and a budget at completion, and a variance analysis for cost and schedule."¹²⁹

Construction, Major Projects

The major construction account provides funding for capital projects where the cost is expected to exceed more than $30 million or where budget authority was previously provided under the major construction appropriation account.¹³⁰ Funding provided in this account could be used for constructing, altering, extending, and improving any VA facilities, including planning, architectural and engineering services, construction management services, offsite utility and storm drainage system construction costs, and site acquisition. Generally, projects are identified through the Strategic Capital Investment Planning (SCIP) process and submitted for congressional authorization.¹³¹ Congress reviews, approves, and funds major construction projects on a project-by-project basis. Typical major construction projects are new or replacements of hospital buildings and new large ambulatory care centers, among others.

For FY2024, the President's budget requested $881 million for this account. In addition, the President's budget included a $1.53 billion mandatory funding proposal for the major construction account and $600 million from the Recurring Expenses Transformational Fund allocated to major construction to supplement the major construction account.¹³² The budget also requested authority for the necessary land acquisition for VHA for major medical facility construction, through the land acquisition line item similar to authority available to NCA to acquire land for establishing new national cemeteries and to expand existing cemeteries. According to VA, if VHA has the authority to begin the land acquisition process as soon as a project was approved, similar to NCA's authority, VHA could avoid land appreciation costs.¹³³

The House and Senate versions of the MILCON-VA bill (H.R. 4366) both provided $881 million, the same amount as requested. The House- and Senate-passed versions of the MILCON-VA bill approved the mandatory construction request of $1.53 billion. H.Rept. 118-122 mentioned that such mandatory construction budget requests should not be included in future fiscal years.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $881 million for the major construction account, which includes a rescission of $80.22 million from unobligated balances as required by Section 260 of Division A of P.L. 118-42 (see Table 3). The act also provides the requested new authority for the VHA land acquisition line item and limits this new authority to projects included on the five-year development plan provided to Congress through the annual budget submission. It also approves VA's request to allocate $600 million of the Recurring Expenses Transformational Fund balances to this account and further approves an additional $46 million for planning and design for a new VA medical facility in St. Louis, MO. Therefore, the total allocation from the Recurring Expenses Transformational Fund balances to this account is $646 million.

Construction, Minor Projects

The major construction account provides funding for capital projects where the cost is equal to or less than $30 million, or where budget authority was previously provided under the minor construction appropriation account.¹³⁴ Funding in this account could be used for constructing, altering, and extending and improving facilities, including planning, architectural and engineering services, and land acquisition and disposition. Minor construction projects are approved by the Office of Capital Asset Management through the SCIP process.

The President's budget requested $680 million for this account and included a $400 million mandatory funding proposal for this account. The House- and Senate-passed versions of the MILCON-VA bill (H.R. 4366) both provided $680 million for this account.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $692 million for the minor construction account (see Table 3). Of this amount, $346.15 million would be for VHA, $182.56 million would be for NCA, $62.07 million would be for VBA, and $101.22 million would be for staff offices.

Grants for Construction of State Extended Care Facilities

VA is authorized to provide grants to participating states (including state homes on tribal lands) as a share of the cost of construction. Specifically, VA provides states up to 65% of the cost to construct, acquire, remodel, or modify state homes.¹³⁵

The FY2024 budget requested $164 million for this account. The House-passed version of the MILCON-VA bill (H.R. 4366) provided $176 million for this account, and the Senate-passed version of the measure (H.R. 4366) provided the same amount as the President's request. The Senate Appropriations Committee requested the VA, when awarding grants,¹³⁶

to consider supplementing established prioritization criteria to take into account: (1) geographic diversity among grant recipients, including the need for a balance in addressing the needs of urban and rural areas; (2) age and condition of the facility, to prioritize facilities over 80 years with an industry standard Facility Condition Index maximum rating of poor; and (3) access to other providers who can appropriately meet the veterans' extended care facilities' needs, to prioritize facilities with limited access to other such providers … and encouraged [VA] to prioritize funding to facilities that have only one State Extended Care Facility.¹³⁷

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $171 million for this account and would be available until expended (see Table 3).

Grants For Construction of Veterans Cemeteries

VA is authorized to makes grants to state and territorial governments for state and territorial veterans cemeteries, as well as federally recognized tribal governments, to establish, expand, improve, operate, and maintain veterans cemeteries. Grant-funded cemeteries (tribal, state, and territorial) must meet VA design and operation standards and must be reserved solely for the interment of qualified veterans and their families.¹³⁸

The President's budget request for FY2024 requested $60 million for grants for the construction of veterans cemeteries. The House-passed version of the MILCON-VA bill (H.R. 4366) provided $62 million for this account, and the Senate-passed version of the measure (H.R. 4366) provided the same amount as the President's request.

The FY2024 MILCON-VA Appropriations Act (Division A of P.L. 118-42) provides $60 million for this account and would be available until expended (see Table 3).

Appendix A. Veteran Population, VA Enrollees, and VA Patients, FY2000-FY2024

Appendix B. VA Appropriations FY1995-FY2023