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110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-56
VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2007
March 20, 2007.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Filner, from the Committee on Veterans' Affairs, submitted the
R E P O R T
[To accompany H.R. 1284]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred the
bill (H.R. 1284) to increase, effective as of December 1, 2007,
the rates of compensation for veterans with service-connected
disabilities and the rates of dependency and indemnity
compensation for the survivors of certain disabled veterans,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
On March 1, 2007, the Honorable John Hall introduced H.R.
1284, a bill to increase, effective as of December 1, 2007, the
rates of compensation for veterans with service connected
disabilities and the rates of dependency and indemnity
compensation for the survivors of certain disabled veterans.
H.R. 1284 was referred to the Committee on Veterans' Affairs.
The Chairman of the Veterans' Affairs Committee, the Honorable
Bob Filner, is an original co-sponsor of H.R. 1284.
On March 13, 2007, the Subcommittee on Disability
Assistance and Memorial Affairs met in open markup session to
consider legislation pending before the Subcommittee. Among the
measures so considered was H.R. 1284. The Subcommittee
subsequently favorably recommended H.R. 1284 to the full
Committee on Veterans' Affairs. The Committee on Veterans'
Affairs met on March 15, 2007, and voted to favorably report
H.R. 1284 to the House of Representatives. The Committee held
no roll call votes on this bill.
The Committee bill contains freestanding provisions that
would require the Secretary of Veterans Affairs to increase,
effective December 1, 2007, the rates of and limitations on
certain benefits paid by VA by the same percentage as the cost-
of-living adjustment (hereinafter, ``COLA'') provided to Social
Security recipients and VA pension beneficiaries that become
effective on the same date. The COLA would apply to:
1. basic compensation rates for veterans with service-
connected disabilities and the rates payable for certain severe
2. the allowance for spouses, children, and dependent
parents paid to service-connected disabled veterans rated 30
percent or more disabled;
3. the annual clothing allowance paid to veterans whose
compensable disability requires the use of a prosthetic or
orthopedic appliance (including a wheelchair) that tends to
tear or wear out clothing, or requires the use of a medication
prescribed by a physician for a service-connected skin
condition if the medication causes irreparable damage to the
veteran's outer garments; and
4. the dependency and indemnity compensation (hereinafter,
``DIC'') rates paid to:
(a) surviving spouses of veterans whose deaths were
(b) surviving spouses for dependent children below the age
(c) surviving spouses who are so disabled that they need
aid and attendance or are permanently housebound;
(d) surviving spouses covered under Section 1318 of title
38, United States Code; and
(e) the children of veterans whose deaths were service-
connected if no surviving spouse is entitled to DIC, the child
is age 18 through 22 and attending an approved educational
institution, or the child is age 18 or over and became
permanently incapable of self-support prior to reaching age 18.
BACKGROUND AND DISCUSSION
A. Disability compensation
The service-connected disability compensation program under
chapter 11 of Title 38, United States Code, provides monthly
cash benefits to veterans who have disabilities incurred or
aggravated during active duty in the Armed Forces.
The amount of compensation paid depends on the nature and
severity of the veteran's disability or combination of
disabilities and the extent to which the disability impairs
earning capacity. VA rates compensable disabilities according
to its Schedule for Rating Disabilities on a graduated scale
ranging from 10 to 100 percent, in 10 percent increments. VA
pays higher monthly rates (known as `special monthly
compensation') to totally disabled veterans with certain
specific, very severe disabilities or combinations of
According to VA, as set forth in its fiscal year 2008
budget, the Department estimates that it will provide
disability compensation to 3,220,031 veterans with service-
connected disabilities in fiscal year 2008. Among the veterans
estimated to receive such compensation are 778 World War I and
Prior; 391,454 World War II veterans; 192,982 Korean-conflict
veterans; 1,142,568 Vietnam-era veterans; 862,975 veterans of
the Persian Gulf War era; and 629,982 veterans who served
A veteran with a disability rated at 30 percent or more may
receive additional compensation on behalf of the veteran's
spouse, children, and dependent parents. These dependents'
allowances are prorated according to the percentage of
B. Dependency and indemnity compensation
Under Chapter 13 of title 38, United States Code, VA pays
DIC to the survivors of servicemembers or veterans who died on
or after January 1, 1957, from a disease or injury incurred or
aggravated during military service. Survivors eligible for DIC
include surviving spouses, unmarried children under the age of
18, children age 18 or older who are permanently incapable of
self-support, children between the ages of 18 and 22 who are
enrolled in school, and certain needy parents. Under Section
5312 of title 38, parents' DIC rates are adjusted automatically
at the same time and by the same percentage as Social Security
and VA pension benefits. Surviving spouses, children, and
parents who are receiving death compensation based on deaths
before January 1, 1957 may elect to receive DIC instead of
For deaths prior to January 1, 1993, surviving spouses
received DIC at rates determined by the pay grade (service
rank) of the deceased veteran. For deaths on or after January
1, 1993, surviving spouses currently receive $1,033 per month
and, if the deceased veteran was totally disabled for 8 years
prior to death, an additional $221 per month. Surviving spouses
who had been receiving benefits under the prior DIC program are
paid under whichever program will pay the higher benefit.
A surviving spouse who is so disabled as to be housebound
or in need of regular aid and attendance is eligible to receive
an additional amount. A surviving spouse also may receive
additional allowances on behalf of the veteran's surviving
Children are entitled to DIC if there is no surviving
spouse, if they are 18 years of age or older and became
permanently incapable of self-support before reaching age 18,
or if they are 18 to 22 years old and pursuing an approved
course of education.
Parents of deceased veterans whose incomes are below
statutorily prescribed income thresholds are eligible for DIC
under Section 1315 of Title 38. As previously mentioned,
parents' DIC rates are adjusted automatically at the same time
and by the same percentage as Social Security and VA pension
Under Section 1318 of title 38, VA pays benefits at DIC
rates to the surviving spouses and children of veterans whose
deaths are not service-connected if the veteran, immediately
prior to his or her death, had been receiving (or had been
entitled to receive) compensation at the 100 percent rate
continuously for 10 or more years or for at least 5 years from
the date of discharge or release from active duty. VA also pays
DIC benefits to the surviving spouses and children of veterans
who were former prisoners of war who die after September 30,
1999, and whose deaths were not service-connected if the
veterans had been receiving (or had been entitled to receive)
compensation at the 100 percent rate continuously for not less
than one year preceding death.
C. History of cost-of-living increases
The Committee periodically reviews the service-connected
disability compensation and DIC programs to ensure that the
benefits provide reasonable and adequate compensation for
disabled veterans and their families. Based on this review, the
Congress acts periodically to provide a cost-of-living
adjustment in compensation and DIC benefits. In fact, the
Congress has provided annual increases in these rates for every
fiscal year since 1976. The following table shows the
percentage increases since 1975.
HISTORY OF SERVICE-CONNECTED DISABILITY COMPENSATION INCREASES, 1975 TO
Fiscal year Effective date Increase (1969 =
1976.......................... August 1975..... 11.8 158.55
1977.......................... October 1976.... 8.0 171.23
1978.......................... October 1977.... 6.6 182.53
1979.......................... October 1978.... 7.3 195.86
1980.......................... October 1979.... 9.9 215.25
1981.......................... October 1980.... 14.3 246.03
1982.......................... October 1981.... 11.2 273.58
1983.......................... October 1982.... 7.4 293.82
1984.......................... April 1983...... 3.5 304.11
1985.......................... December 1984... 3.2 313.84
1986.......................... December 1985... 3.1 323.57
1987.......................... December 1986... 1.5 328.42
1988.......................... December 1987... 4.2 342.22
1989.......................... December 1988... 4.1 356.25
1990.......................... December 1989... 4.7 372.99
1991.......................... December 1990 1 5.4 393.13
1992.......................... December 1991... 3.7 407.68
1993.......................... December 1992... 3.0 419.91
1994.......................... December 1993... 2.6 430.83
1995.......................... December 1994 2 2.8 442.89
1996.......................... December 1995 2 2.6 454.41
1997.......................... December 1996... 2.9 467.59
1998.......................... December 1997 2 2.1 477.41
1999.......................... December 1998 2 1.3 483.62
2000.......................... December 1999 2 2.4 495.23
2001.......................... December 2000 2 3.5 512.56
2002.......................... December 2001 2 2.6 525.89
2003.......................... December 2002 2 1.4 535.88
2004.......................... December 2003 2 2.1 547.13
2005.......................... December 2004 2 2.7 561.90
2006.......................... December 2005 2 4.1 584.94
2007.......................... December 2006 2 3 2.2 3 597.82
2008.......................... December 2007 2 1.5 606.78
H.R. 1284 would direct VA to compute and provide increases
in the monthly rates of compensation and DIC, effective
December 1, 2007. The rates would be increased by the same
percentage as the Social Security and VA pension COLA that will
take effect on that date. In accordance with Section 8031 of
the Balanced Budget Act of 1997 (Public Law 105-33), amounts of
compensation so computed that are not even multiples of $1 will
be rounded down to the next lower whole dollar amount. In 2003,
this provision was extended until 2013 by Section 706 of Public
The increases in DIC automatically would result in
identical percentage increases in benefits paid at DIC rates
under Section 1318 of Title 38, United States Code, to the
surviving spouses and children of veterans who had a service-
connected disability at the time of death for which they
continuously were rated totally disabled for at least (1) 10
years, (2) 5 years from the date of discharge from active duty,
or (3) 1 year if the veteran was a former prisoner of war who
died after September 30, 1999, and whose death was not service-
connected if the veteran had been receiving (or had been
entitled to receive) compensation at the 100 percent rate
continuously for not less than 1 year preceding death.
Under Section 156(e)(1)(A) of Public Law 97-377, the DIC
increases also automatically would result in the same
percentage increases in Social Security benefits that were
terminated by Section 2205 of the Omnibus Budget Reconciliation
Act of 1981 (hereinafter, ``OBRA 1981'') (Public Law 97-35).
Prior to OBRA 1981, those benefits had been paid to certain
surviving spouses of those who died on active duty or from a
service-connected disability on behalf of their children under
18 and children over age 19 who were secondary-school students;
OBRA 1981 reduced the eligibility cutoff age from 18 to 16
Section 314 of Public Law 100-322 amended section 156(a)(1)
of Public Law 97-377 to restore the benefits eliminated by OBRA
1981. The DIC increase also would apply to these restored
benefits, effective December 1, 2000.
The Congressional Budget Office (hereinafter, ``CBO''), in
its most recent baseline, estimated that the Social Security
COLA affecting fiscal year 2008 payments, and thus the COLA
provided for by the Committee bill will be 1.5 percent. The
actual Social Security COLA could differ from this estimate.
Rather than selecting any particular percentage adjustment at
the time the Committee ordered the bill reported, the Committee
followed its prior practice of setting the COLA by reference to
the Social Security increase. The Committee believes this is
the most equitable means of providing increases in these
important service-connected benefits.
Section 1 of the bill would provide that this Act may be
cited as the ``Veterans Compensation Act of 2007.''
Section 2(a) of the bill would require the Secretary of
Veterans Affairs to increase, effective December 1, 2007, the
dollar amounts in effect for the payment of disability
compensation and dependency and indemnity compensation.
Section 2(b) of the bill would specify the programs to
receive increased dollar amounts: compensation in effect under
section 114 of title 38, United States Code; additional
compensation for dependents in effect under sections 1115(1) of
title 38, United States Code; clothing allowance in effect
under Section 1162 of title 38, United States Code; Dependency
and Indemnity Compensation to Surviving Spouse under
subsections (a) through (d) of sections 1311 of title 38,
United States Code; and Dependency and Indemnity Compensation
to Children--each of the dollar amounts under sections 1313(a)
and 1314 of title 38, United States Code.
Section 2(c)(1) of the bill would specify that each amount
shall be increased by the same percentage by which benefits are
increased under title II of the Social Security Act (42 U.S.C.
401 et seq.).
Section 2(c)(2) of the bill would round down to the next
lower dollar amount all compensation and DIC benefits, when the
amount is not in the whole dollar amount.
Section 2(d) of the bill would provide a special rule
authorizing the Secretary of Veterans Affairs to adjust
administratively, consistent with the increases made under
subsection (a), the rates of disability compensation payable to
persons under section 10 of Public Law 85-857 (72 Stat. 1263),
who are not in receipt of compensation payable pursuant to
Chapter 11 of Title 38, United States Code.
Section 3 of the bill would require the Secretary of
Veterans Affairs to publish in the Federal Register the amounts
specified in subsection (b), as increased pursuant to that
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill provides a cost of living increase for specific
veterans benefits. As such, this bill does not relate to
employment or access to public services and accommodations.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives, which include improving the quality of
life for veterans and their dependents, are reflected in the
descriptive portions of this report.
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 1284. Article I, Section 8 of the Constitution
of the United States grants the Congress the power to enact
FEDERAL ADVISORY COMMITTEE ACT
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
UNFUNDED MANDATE STATEMENT
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement whether
the provisions of the reported bill include unfunded mandates.
In compliance with this requirement, the Committee has received
a letter from the Congressional Budget Office that is included
H.R. 1284 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) of rule XXI.
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 1284. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under Section 402 of the Congressional Budget Act.
BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and Section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and Section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 1284 from the Director of
Congressional Budget Office:
Congessional Budget Office,
Washington, DC, March 16, 2007.
Hon. Bob Filner,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1284, the
Veterans' Compensation Cost-of-Living Adjustment Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Peter R. Orszag,
H.R. 1284--Veterans' Compensation Cost-of-Living Adjustment Act of 2007
H.R. 1284 would increase the amounts paid to veterans for
disability compensation and to their survivors for dependency
and indemnity compensation by the same cost-of-living
adjustment (COLA) payable to Social Security recipients. The
increase would take effect on December 1, 2007, and the results
of the adjustment would be rounded to the next lower dollar.
The COLA that would be authorized by this bill is assumed
in CBO's baseline, pursuant to section 257 of the Balanced
Budget and Emergency Deficit Control Act, and savings from
rounding it down were achieved by the Balanced Budget Act of
1997 (Public Law 105-33) and extended to 2013 by the Veterans
Benefits Act of 2003 (Public Law 108-183).
Because the COLA is assumed in CBO's baseline, the COLA
provision would have no budgetary effect relative to that
baseline. Relative to current law, CBO estimates that enacting
this bill would increase spending for those programs by $373
million in 2008. (The annualized cost would be about $500
million in subsequent years.) This estimate assumes that the
COLA effective on December 1, 2007, will be 1.5 percent.
H.R. 1284 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Dwayne M.
Wright. This estimate was approved by Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 1284 is a freestanding provision and as such does not
change positive law.
ADDITIONAL VIEWS OF HON. STEVE BUYER
In my letter of March 8, 2007, objecting to the markup on
the bills, including H.R. 327, H.R. 612, H.R. 797, and H.R.
1284 (letter attached), I strongly urged legislative hearings
on these bills before the markup.
Had the Committee followed regular order in holding a
legislative hearing on H.R. 1284, the Veterans Compensation
Cost-of-Living Adjustment Act of 2007, the Committee would have
heard testimony from veterans' service organizations and other
interested parties on matters and concerns relating to the
authorization of a cost of living adjustment (COLA) for
disability compensation, and dependency and indemnity
compensation. The veterans service organizations and other
interested parties should have had the opportunity to testify
on H.R. 1284 before the committee reports it. This important
annual authorization should not be treated as legislation that
is so routine as to no longer merit a hearing. I support H.R.