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109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-521
VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2006
June 22, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Buyer, from the Committee on Veterans' Affairs, submitted the
R E P O R T
[To accompany H.R. 4843]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred the
bill (H.R. 4843) to increase, effective as of December 1, 2006,
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 disabled veterans, and for other purposes, having
considered the same, report favorably thereon with amendments
and recommend that the bill as amended do pass.
The amendments (stated in terms of the page and line numbers
of the introduced bill) are as follows:
In section 2(b), strike paragraph (6) (page 3, lines 1
through 3) and insert the following:
(6) Additional dic for surviving spouses with minor
children.--The dollar amounts in effect under section
1311(b) of such title and paragraph (1) of section
1311(f) of such title (as redesignated by subsection
(e) of this section).
At the end of section 2 (page 4, after line 9), insert the
following new subsection:
(e) Designation Correction.--Section 1311 of title 38, United
States Code, is amended by redesignating the second subsection
(e) (added by section 301(a) of the Veterans Benefits
Improvement Act of 2004 (Public Law 108-454; 118 Stat. 3610))
as subsection (f).
On March 2, 2006, the Chairman and Ranking Member of the
Subcommittee on Disability Assistance and Memorial Affairs,
Honorable Jeff Miller and Honorable Shelley Berkley,
respectively, along with the Chairman and Ranking Member of the
Veterans' Affairs Committee, Honorable Steve Buyer and
Honorable Lane Evans, respectively, introduced H.R. 4843, the
Veterans' Compensation Cost-of-Living Adjustment Act of 2006,
which would provide a cost-of-living adjustment in the rates of
service-connected disability compensation and dependency and
indemnity compensation, effective December 1, 2006.
On April 6, 2006, the Subcommittee on Disability Assistance
and Memorial Affairs held a hearing on seven bills, including
On June 8, 2006, the Subcommittee on Disability Assistance
and Memorial Affairs met and ordered H.R. 4843 reported
favorably to the full Committee by unanimous voice vote.
On June 22, 2006, the full Committee met and ordered H.R.
4843 reported favorably, as amended, to the House by voice
Summary of the Reported Bill
H.R. 4843, as amended, would:
Provide effective December 1, 2006, 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, 2006, 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. Congress has
provided annual increases in these rates for every fiscal year
The Committee is following its longstanding practice of
setting the cost-of-living adjustment (COLA) by reference to
the yet-to-be-determined Social Security increase. At the time
of the filing of this report, the increase is expected to be
2.6 percent, but it may be higher or lower depending on changes
in the Consumer Price Index; the exact percentage is calculated
as of September 30, 2006. Last year's increase was 4.1 percent.
The purpose of the disability compensation program is to
represent, to the extent practicable, the average impairment in
earnings capacity as a result of a disability or combination of
disabilities incurred or aggravated by military service. The
amount of compensation payable varies according to the degree
To be eligible to receive disability compensation, a
veteran's disability must not be the result of willful
misconduct, and the veteran must have been discharged under
other than dishonorable conditions. The responsibility for
determining a veteran's entitlement to service-connection for a
disability rests with the Department of Veterans Affairs (VA).
More than 2.6 million veterans were receiving service-connected
disability compensation as of May 2006.
Surviving spouses and dependent children of veterans who
died of disabilities determined by VA to be service-connected
(including veterans who died while on active duty) or who had a
service-connected disability rated at 100 percent for certain
periods of time prior to death are entitled to receive monthly
DIC benefits. Additional amounts are paid to survivors who are
housebound, in need of aid and attendance, or have minor
children. The purpose of DIC 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
and children. As of May 2006, there were more than 311,000
surviving spouses and more than 29,000 children receiving DIC.
Public Law 108-454 authorized an additional DIC payment of
$250 a month provided for the first 2 years of DIC eligibility
to surviving spouses with minor children. This additional
benefit is aimed at easing the transition following the death
of the servicemember or veteran. Payment is based on the family
unit, not per child, and terminates prior to the end of the 2-
year period if there are no longer children under the age of
18. H.R. 4843, as amended, would provide a cost-of-living
adjustment to this 2-year transitional DIC benefit.
Section 1 of the bill would provide that this Act may be
cited as the ``Veterans'' Compensation Cost-of-Living
Adjustment Act of 2006''.
Section 2(a) of the bill would require the Secretary of
Veterans Affairs to increase, effective December 1, 2006, 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 1114 of title 38, United States Code; additional
compensation for dependents in effect under section 1115(1) of
title 38, United States Code; clothing allowance in effect
under section 1162 of title 38, United States Code; new DIC
rates in effect under paragraphs (1) and (2) of section 1311(a)
of title 38, United States Code; old DIC rates in effect under
section 1311(a)(3) of title 38, United States Code; additional
DIC for surviving spouses with minor children in effect under
section 1311(b) and paragraph (1) of section 1311(f) of title
38, United States Code; additional DIC for disability in effect
under sections 1311(c) and (d) of title 38, United States Code;
and DIC for dependent children in effect under sections 1313(a)
and 1314 of title 38, United States Code.
Section 2(c)(1) of the bill would increase the dollar
amounts for those programs specified in subsection (b) based on
the amount in effect on November 30, 2006.
Section 2(c)(2) 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)(3) of the bill 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) 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 within the purview of 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
Performance Goals and Objectives
The reported bill would authorize benefits and program
enhancements under laws administered by the Secretary of
Veterans Affairs. The Department of Veterans Affairs'
performance goals and objectives are established in annual
performance plans and are subject to the Committee's regular
oversight and evaluation by the U.S. Government Accountability
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 2007 budget request,
submitted in February 2006, 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, 2006. The estimated increase
is 2.6 percent.
Congressional Budget Office Cost Estimate
Congressional Budget Office,
Washington, DC, June 22, 2006.
Hon. Steve Buyer,
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. 4843, the
Veterans' Compensation Cost-of-Living Adjustment Act of 2006.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Donald B. Marron,
H.R. 4843--Veterans' Compensation Cost-of-Living Adjustment Act of 2006
H.R. 4843 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, 2006, 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 these programs by $530
million in 2007. (The annualized cost would be about $710
million in subsequent years.) This estimate assumes that the
COLA effective on December 1, 2006, will be 2.2 percent.
H.R. 4843 would also apply the COLA to a benefit for
surviving spouses with children under age 18. Under current
law, surviving spouses who are eligible for Dependency and
Indemnity Compensation (DIC) and have one or more children
under age 18 have their monthly DIC payment increased by $250
for up to two years from the date that the survivor becomes
eligible for DIC. Section 2 would increase the $250 benefit by
the same cost-of-living adjustment payable to Social Security
recipients on December 1, 2006. Based on an assumed COLA of 2.2
percent, CBO estimates that this monthly benefit would increase
to $255 (after rounding down to the next lowest dollar) for
2007 and each subsequent year relative to current law and CBO's
baseline. Therefore, CBO estimates that enacting this provision
would increase direct spending for veterans compensation by
less than $200,000 in 2007, by $1 million over the 2007-2011
period, and by $2 million over the 2007-2016 period.
H.R. 4843 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 May 11, 2006, CBO transmitted a cost estimate for H.R.
4843 as introduced on March 2, 2006. H.R. 4843, as ordered
reported, is similar to the introduced bill, but also contains
a provision that would increase the additional $250 benefit for
surviving spouses with children under 18 by the same cost-of-
living adjustment payable to Social Security recipients on
December 1, 2006. The differences in the estimates reflect the
differences in the two versions of the bill.
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.
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.''
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SECTION 1311 OF TITLE 38, UNITED STATES CODE
Sec. 1311. Dependency and indemnity compensation to a surviving spouse
(a) * * *
* * * * * * *
[(e)] (f)(1) Subject to paragraphs (2) and (3), if there is a
surviving spouse with one or more children below the age of 18,
the dependency and indemnity compensation paid monthly to the
surviving spouse shall be increased by $250, regardless of the
number of such children.
* * * * * * *