|Office of Management and Budget
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August 3, 1998
The Administration supports House passage of H.R. 4110, which would provide
a cost-of-living increase for the beneficiaries of veterans' disability
compensation and Dependency and Indemnity Compensation. The bill also
includes a number of Administration proposals as well as other useful
modifications to a variety of veterans' benefits, including education,
cemetery grants, burial benefits, and pension payments.
The Administration, however, has concerns about certain provisions of the bill and will work with the Senate to address these concerns. The Administration believes that the bill's provision to extend permanently Selected Reservists' eligibility for housing loans is premature, since current authority does not expire until October 28, 1999, and an evaluation of VA's home loan guaranty program is not completed. In addition, the Administration is concerned that the bill would (1) limit the activities of retired Court of Veterans Appeals judges in a way that is inconsistent with Executive branch post-employment policies; and (2) penalize them by requiring the forfeiture of their retired pay, a penalty that currently applies only to such heinous acts as treason, sabotage, or spousal homicide.
H.R. 4110 would affect direct spending and receipts; therefore, it is subject to the pay-as-you-go (PAYGO) requirement of the Omnibus Budget Reconciliation Act of 1990. OMB's preliminary scoring estimates are that the bill would result in net budget costs of $9 million in FY 1999 and a total of $20 million during FYs 1999-2003. The bill does not contain provisions to offset fully the increased direct spending. Therefore, if the bill were enacted, its net budget costs could contribute to a sequester of mandatory programs. The Administration will work closely with the Congress on this and other PAYGO legislation to avoid a sequester of mandatory programs.