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112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-486

======================================================================
 
      VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2012

                                _______
                                

  May 18, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Miller of Florida, from the Committee on Veterans' Affairs, 
                        submitted the following


                              R E P O R T

                        [To accompany H.R. 4114]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 4114) to increase, effective as of December 1, 
2012, 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, and for other purposes, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Subcommittee Consideration.......................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmarks and Tax and Tariff Benefits.............................     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill as Reported.............     6

                          Purpose and Summary

    H.R. 4114 was introduced on February 29, 2012, by 
Representative Jon Runyan of New Jersey. H.R. 4114 would 
increase, effective as of December 1, 2012, 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.

                  Background and Need for Legislation

    H.R. 4114 would increase, effective December 1, 2012, 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 since 1976.
    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 
1.3 percent, but it may be higher or lower depending on changes 
in the Consumer Price Index.
    The basic purpose of the disability compensation program is 
to provide 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 with the Department of Veterans Affairs (VA).
    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 who have minor 
children. 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 
and children.

                                Hearings

    On March 29, 2012, the Subcommittee on Disability 
Assistance and Memorial Affairs conducted a legislative hearing 
on various bills introduced during the 112th Congress, 
including H.R. 4114. The following witnesses testified:
    The Honorable Frank Guinta, U.S. House of Representatives; 
The Honorable Barney Frank, U.S. House of Representatives; The 
Honorable Mike McIntyre, U.S. House of Representatives; The 
Honorable Joe Donnelly, U.S. House of Representatives; Colonel 
Thomas Moe, Director, Ohio Department of Veterans Services; 
Captain Wilbur Jones, Chairman, World War II Wilmington Home 
Front Heritage Coalition; Daniel Bendetson; Michael Bendetson; 
The Honorable Max Cleland, Secretary, the American Battle 
Monuments Commission; Thomas Murphy, Director of Compensation 
Services, Veterans Benefits Administration, accompanied by 
Richard Hipolit, Assistant General Counsel, Department of 
Veterans Affairs; The Honorable Bruce E. Kasold, Chief Judge, 
United States Court of Appeals for Veterans Claims; Raymond C. 
Kelley, Director, National Legislative Services, Veterans of 
Foreign Wars of the United States; Ms. Verna Jones, Director of 
the National Veterans Affairs and Rehabilitation Commission, 
The American Legion.

                       Subcommittee Consideration

    On April 18, 2012, the Subcommittee on Disability 
Assistance and Memorial Affairs met in an open markup session 
and ordered favorably forwarded to the full Committee H.R. 
4114, by voice vote.

                        Committee Consideration

    On April 27, 2012, the full Committee met in an open markup 
session, a quorum being present and ordered reported favorably 
to the House of Representatives H.R. 4114, by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report the legislation and amendments thereto. 
There were no record votes taken on amendments or in connection 
with ordering H.R. 4114 reported to the House. A motion by Ms. 
Corrine Brown of Florida to order H.R. 4114 reported favorably 
to the House of Representatives was agreed to by voice vote.

                      Committee Oversight Findings

    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 
this report.

         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 are reflected in the descriptive portions 
of this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 4114 does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
4114, prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 4114, provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 9, 2012.
Hon. Jeff Miller,
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. 4114, the 
Veterans' Compensation Cost-of-Living Adjustment Act of 2012.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                              Douglag W. Elmendorf.
    Enclosure.

H.R. 4114--Veterans' Compensation Cost-of-Living Adjustment Act of 2012

    H.R. 4114 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, 2012, and the 
resulting adjustment would be rounded to the next lower dollar.
    The COLA that would be authorized by this bill is assumed 
in CBO's baseline, consistent with 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) as extended 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 the 
baseline. Relative to current law, CBO estimates that enacting 
this bill would increase spending for those programs by $686 
million in fiscal year 2013. (The annualized cost would be 
about $915 million in subsequent years.) This estimate assumes 
that the COLA effective on December 1, 2012, would be 1.3 
percent.
    H.R. 4114 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    Enacting H.R. 4114 would not affect direct spending or 
revenues relative to CBO's baseline projections; therefore, 
pay-as-you-go procedures do not apply.
    The CBO staff contact for this estimate is Dwayne M. 
Wright. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 4114, prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
4114.

                 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.''

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section would provide the short title of H.R. 4114 as 
the ``Veterans' Compensation Cost-of-Living Adjustment Act of 
2012.''

Section 2

    Section 2(a) authorizes the Secretary of Veterans Affairs 
to increase, effective December 1, 2012, the dollar amounts in 
effect for the payment of disability compensation and 
dependency and indemnity compensation.
    Section 2(b) specifies the amounts to be increased.
    Section 2(b)(1) increases the Wartime Disability 
Compensation, under section 1114 of title 38, United States 
Code.
    Section 2(b)(2) increases the Additional Compensation for 
Dependents, under section 1115(1) of title 38, United States 
Code.
    Section 2(b)(3) increases the Clothing Allowance, under 
section 1162 of title 38, United States Code.
    Section 2(b)(4) increases the Dependency and Indemnity 
Compensation to Surviving Spouses, under section 1311 of title 
38, United States Code.
    Section 2(b)(5) increases the Dependency and Indemnity 
Compensation to Children, under section 1313(a) and 1314 of 
title 38, United States Code.
    Section 2(c) addresses how increases shall be determined.
    Section 2(c)(1) specifies 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) rounds down to the next lower dollar amount 
all compensation and DIC benefits, when the amount is not a 
whole dollar amount.
    Section 2(d) provides 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 2(b), as increased pursuant to that section.

         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):

TITLE 38, UNITED STATES CODE

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PART II--GENERAL BENEFITS

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