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105th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 105-320
VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 1997
October 9, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Stump, from the Committee on Veterans' Affairs, submitted the
R E P O R T
[To accompany H.R. 2367]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 2367) to increase, effective as of December 1,
1997, 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, reports favorably thereon
without amendment and recommends that the bill do pass.
On July 31, 1997, the Chairman and Ranking Member of the
Veterans' Affairs Committee, the Honorable Bob Stump and the
Honorable Lane Evans, along with the Chairman and Ranking
Member of the Subcommittee on Benefits, the Honorable Jack
Quinn and the Honorable Bob Filner, introduced H.R. 2367, which
would provide a cost-of-living adjustment (COLA) in the rates
of service-connected disability compensation and dependency and
indemnity compensation (DIC), effective December 1, 1997.
On September 4, 1997, the Subcommittee on Benefits met and
ordered H.R. 2367 reported favorably to the full Committee by
unanimous voice vote.
On September 11, 1997, the full Committee met and ordered
H.R. 2367 reported favorably to the House by unanimous voice
Summary of the Reported Bill
H.R. 2367 would:
Increase, effective December 1, 1997, the rates of
compensation for service-connected disabilities and the rates
of dependency and indemnity compensation for surviving spouses
and children of veterans who die of service-connected causes,
the additional amounts for dependents and survivors, and the
clothing allowance payable to certain veterans. The rate of
increase would be the same as the percentage increase
automatically provided to Social Security beneficiaries.
Background of the Compensation and Dependency and Indemnity
There were 2.6 million veterans receiving disability
compensation as of July, 1997. The Department of Veterans
Affairs expects expenditures for disability compensation to be
$19.9 billion for fiscal year 1998. The basic purpose of the
disability compensation program is to provide a measure of
relief from the impaired earning capacity of veterans disabled
as the result of their military service. The amount of
compensation payable varies according to the degree of
disability, which, in turn, is required by law to represent, to
the extent practicable, the average impairment in earning
capacity resulting from such disability or combination of
disabilities in civil occupations.
To be eligible to receive disability compensation, a
veteran must have contracted a disease, suffered an injury
which is not the result of willful misconduct, or aggravated an
existing disease or injury in the line of duty during active
duty service, and have been discharged under other than
The responsibility for determining a veteran's entitlement
to service connection for a disability rests solely with the
Department of Veterans Affairs.
Dependency and Indemnity Compensation for Survivors of Veterans Who
Have Died of Service-Connected Causes
As of July, 1997, there were 280,608 surviving spouses and
34,021 children receiving dependency and indemnity compensation
(DIC). The VA expects DIC expenditures of $3.3 billion in
fiscal year 1998. Widows and children of veterans who died of
causes determined to be service-connected are entitled to
receive monthly DIC.
The purpose of this benefit authorized under chapter 13 of
title 38 is to provide partial compensation to the appropriate
survivors for the loss in financial support due to the service-
connected death. Income and need are not factors in determining
a surviving spouse's or child's entitlement since the Nation
assumes, in part, the legal and moral obligation of the veteran
to support the spouse and children.
In 1992, Congress reformed the manner in which payments of
DIC are made. Under current law, for death occurring on and
after January 1, 1993, a base rate of $833 per month is payable
to a surviving spouse. Such amount is increased by $182 if the
veteran suffered from a service-connected disability which was
rated 100 percent for a period of eight years immediately
preceding death and if the veteran and surviving spouse were
continuously married during that period. For service-connected
deaths occurring prior to January 1, 1993, payment of DIC is
made on the basis of the veteran's military pay grade if the
result would be a higher benefit level than under the new
payment structure. Rates for these ``grandfathered'' surviving
spouses range from $833 for the spouse of an E-6 to $1,774 for
the surviving spouse of an O-10. Surviving spouses are
currently entitled to an additional $211 per month for each
There is an additional allowance of $211 monthly which is
payable to eligible surviving spouses who are patients in a
nursing home or who are in need of the regular aid and
attendance of another person.
If there is no surviving spouse receiving dependency and
indemnity compensation benefits, but there is a surviving
child, the child is entitled to $354 monthly with additional
benefits for other children with certain limits due to age,
disability, and status as a student.
History of Cost-of-Living Increases
The Committee annually 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 annually to provide a cost-of-living adjustment
(COLA) in compensation and DIC benefits. The Congress has
provided annual increases in these rates for every fiscal year
Discussion of the Bill
COST-OF-LIVING ADJUSTMENT IN RATES OF COMPENSATION AND DEPENDENCY AND
H.R. 2367 would direct the VA to compute and provide
increases in the monthly rates of compensation and DIC,
effective December 1, 1997. The rates would be increased by the
same percentage as the Social Security COLA that will take
effect on that date. If the increase does not result in a whole
dollar amount, it shall be rounded down to the next lower
dollar amount. The bill would provide a full COLA for both old-
and new-law DIC recipients.
The Committee is following its recent practice of setting
the COLA by reference to the yet-to-be determined Social
Section 1 would be cited as the ``Veterans' Compensation
Cost-of-Living Adjustment Act of 1997''.
Section 2(a) would authorize the Secretary of Veterans
Affairs to increase, effective December 1, 1997, the dollar
amounts in effect for the payment of disability compensation
and dependency and indemnity compensation.
Section 2(b) would specify the programs to receive
increased dollar amounts: compensation, additional compensation
for dependents, clothing allowance, new DIC rates, old DIC
rates, additional DIC for disability, and DIC for dependent
Section 2(c)(1) would increase the dollar amounts for those
specified in subsection (b) based on the amount in effect on
November 30, 1997.
Section 2(c)(2) 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
Section 2(c)(3) would round down to the next lower dollar
amount all compensation and DIC benefits, when the adjusted
amount is not a whole dollar amount.
Section 2(d) 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 within the
purview of section 10 of Public Law 85-857, who are not in
receipt of compensation payable pursuant to chapter 11 of title
Section 2(e) would require the Secretary of Veterans
Affairs to publish in the Federal Register the amounts
specified in subsection (b), as increased pursuant to
No oversight findings have been submitted to the Committee
by the Committee on Government Reform and Oversight.
Statement of Administration's Views
The Administration's proposed fiscal year 1998 budget
request, submitted in February, 1997, recommended a 2.7 percent
rate of increase be given to all compensation beneficiaries,
including DIC spouses and children, effective December 1, 1997.
This is the expected increase in the Consumer Price Index.
Congressional Budget Office Cost Estimate
The following letter was received from the Congressional
Budget Office concerning the cost of the reported bill:
Congressional Budget Office,
Washington, DC, September 12, 1997.
Hon. Bob Stump,
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. 2367, the
Veterans' Compensation Cost-of-Living Adjustment Act of 1997.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mary Helen
Petrus, who can be reached at 226-2840.
June E. O'Neill,
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
H.R. 2367--Veterans' Compensation Cost-of-Living Adjustment Act of 1997
As ordered reported by the House Committee on Veterans' Affairs
on September 11, 1997
For 1998, the bill would increase the amount 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, 1997, and the
results of the adjustment would be rounded to the next lower
dollar. The COLA is assumed in the budget resolution baseline,
pursuant to section 257 of the Balanced Budget and Emergency
Deficit Control Act of 1985, and savings from rounding it down
were achieved by the Balanced Budget Act of 1997 (Public Law
105-33). As a result, the bill would have no budgetary effect
relative to the baseline as modified by the Balanced Budget Act
The bill would affect direct spending and thus pay-as-you-
go procedures would apply. H.R. 2367 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act of 1995 and would not affect the
budgets of State, local, or tribal governments.
This estimate was prepared by Mary Helen Petrus, who can be
reached at 226-2840. This estimate was approved by Robert A.
Sunshine, Deputy Assistant Director for Budget Analysis.
Inflationary Impact Statement
The enactment of the reported bill would have no
Applicability to Legislative Branch
The reported bill would not be applicable to the
legislative branch under the Congressional Accountability Act,
Public Law 104-1, because the bill would only affect certain
Department of Veterans Affairs benefits recipients.
Statement of Federal Mandates
The reported bill would not establish a federal mandate
under the Unfunded Mandates Reform Act, Public Law 104-4.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the U.S. Constitution,
the reported bill would be authorized by Congress' power to
``provide for the common Defence and general Welfare of the