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108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-108
VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2003
May 19, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Smith of New Jersey, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany H.R. 1683]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 1683) to increase, effective as of December 1,
2003, the rates of disability compensation for veterans with
service-connected disabilities and the rates of dependency and
indemnity compensation for survivors of certain service-
connected veterans, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
On April 9, 2003, the Chairman and Ranking Member of the
Veterans' Affairs Committee, Honorable Christopher H. Smith and
Honorable Lane Evans, along with the Chairman and Ranking
Member of the Subcommittee on Benefits, Honorable Henry E.
Brown, Jr. and Honorable Michael H. Michaud, introduced H.R.
1683, which would provide a cost-of-living adjustment (COLA) in
the rates of service-connected disability compensation and
dependency and indemnity compensation, effective December 1,
On May 7, 2003, the Subcommittee on Benefits met and
ordered H.R. 1683 reported favorably to the full Committee by
unanimous voice vote.
On May 15, 2003, the full Committee met and ordered H.R.
1683 reported favorably to the House by unanimous voice vote.
Summary of the Reported Bill
H.R. 1683 would:
Provide effective December 1, 2003, a cost-of-living
adjustment to the rates of disability compensation for veterans
with service-connected disabilities and to the rates of
dependency and indemnity compensation for survivors of certain
service-connected disabled veterans. The percentage amount
would be equal to the increase for benefits provided under the
Social Security Act, which is calculated based upon changes in
the Consumer Price Index.
Background and Discussion
Increase in rates of disability compensation and dependency
and indemnity compensation.-- Section 2 of the bill would
increase, effective December 1, 2003, the rates of compensation
for service-connected disabilities and the rates of dependency
and indemnity compensation (DIC) for surviving spouses and
children of veterans who die of service-connected causes, as
well as the additional amounts for dependents and survivors,
and clothing allowances for certain veterans. The
Administration anticipates the percentage increase to be 2
percent, but it may be higher or lower depending on changes in
the Consumer Price Index. The Committee is following its recent
practice of setting the COLA by reference to the Social
Security increase, which will be determined as of September 30,
2003. Last year's increase was 1.4 percent.
More than 2.4 million veterans were receiving service-
connected disability compensation as of April 2003. 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. This amount in turn is required by law to
represent, to the extent practicable, the average impairment in
earning capacity in civilian occupations resulting from such
disability or combination of disabilities.
To be eligible to receive disability compensation, a
veteran must have a disability incurred or aggravated during
military service, which is not the result of willful
misconduct, and have been discharged under other than
dishonorable conditions. The responsibility for determining a
veteran's entitlement to service-connection for a disability
rests solely with the Department of Veterans Affairs.
As of April 2003, there were 296,684 surviving spouses and
29,953 children receiving dependency and indemnity compensation
(DIC). Widows and children of veterans who died of disabilities
determined by VA to be service-connected (including veterans
who died while on active duty) are entitled to receive monthly
The purpose of DIC benefits, authorized under chapter 13 of
title 38, United States Code, 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 because the Nation in part assumes the
legal and moral obligation of the veteran to support the spouse
The Committee annually reviews the service-connected
disability compensation and DIC programs to ensure such
benefits provide reasonable and adequate compensation for
disabled veterans and their families. Based on this review,
Congress acts annually to provide a cost-of-living adjustment
(COLA) in compensation and DIC benefits. Congress has provided
annual increases in these rates for every fiscal year since
Section would provide that this Act may be cited as the
``Veterans' Compensation Cost-Of-Living Adjustment Act of
Section 2(a) would authorize the Secretary of Veterans
Affairs to increase, effective December 1, 2003, 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 surviving spouses with minor
children, additional DIC for disability, and DIC for dependent
Section 2(c)(1) would increase the dollar amounts for those
programs specified in subsection (b) based on the amount in
effect on November 30, 2003.
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 U.S.C.
401 et seq.).
Section 2(c)(3) would round down to the next lower dollar
amount all compensation and DIC benefits, when the 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
38, United States Code.
Section 3 would require the Secretary of Veterans Affairs
to publish in the Federal Register the amounts specified in
subsection (b), as increased pursuant to that section.
Performance Goals and Objectives
The reported bill would authorize veterans benefits
enhancements under laws administered by the Secretary of
Veterans Affairs. The performance goals and objectives of the
Department of Veterans Affairs are established in annual
performance plans and are subject to the Committee's regular
oversight and evaluation by the U.S. General Accounting Office.
VA also publishes a performance and accountability report for
each fiscal year.
Statements of the Views of the Administration
The Administration's Fiscal Year 2004 budget request,
submitted in March 2003, recommended a cost-of-living
adjustment based on the change in the Consumer Price Index
(CPI) be given to all compensation beneficiaries, including DIC
recipients, effective December 1, 2003. The estimated increase
in the CPI at that time was 2 percent.
Congressional Budget Office Cost Estimate
Congressional Budget Office,
Washington, DC, May 16, 2003
Hon. Christopher H. Smith
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. 1683, the
Veterans' Compensation Cost-of-Living Adjustment Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Melissa E.
Zimmerman, who can be reached at 226-2840.
Congressional Budget Office Cost Estimate
H.R. 1683, Veterans' Compensation Cost-of-Living Adjustment Act of 2003
As ordered reported by the House Committee on Veterans' Affairs on May
H.R. 1683 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, 2003, 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 the budget resolution 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). The authority to round
down the COLA increase was extended to 2011 by the Veterans
Education and Benefits Expansion Act of 2001 (Public Law 107-
Because the COLA is assumed in the baseline, the COLA
provision would have no budgetary effect relative to the
baseline. Relative to current law, CBO estimates that enacting
this provision would increase spending for these programs by
about $420 million in 2004. (The annualized cost would be about
$560 million in subsequent years.) This estimate assumes that
the COLA effective on December 1, 2003, would be 2.2 percent.
H.R. 1683 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.
On April 25, 2003, CBO transmitted a cost estimate for H.R.
1683, as introduced on April 9, 2003. The two versions of the
legislation are identical, as are the two estimates.
The CBO staff contact is Melissa E. Zimmerman, who can be
reached at 226-2840. This estimate was approved by Peter H.
Fontaine, Deputy Assistant Director for Budget Analysis.
Statement of Federal Mandates
The preceding Congressional Budget Office cost estimate
states that the bill contains no intergovernmental or private
sector mandates as defined in the Unfunded Mandates Reform Act.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the United States
Constitution, the reported bill is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''