Blog Post

The VA and DoD Budgets: What You Need to Know
Posted by Tom Tarantino on February 14 2012

On Monday, the President released his proposed budget for fiscal year 2013. In keeping with trends over the last three years, there will be a 4.5% increase to the Department of Veterans Affairs' budget. The Department of Defense budget, on the other hand, is a mixed bag. While the budget proposes a 1.7% increase in military base pay, there will be cost increases to TRICARE and changes to military retirement on the horizon. Read below for a full analysis from our team.

THE VA BUDGET

In 2009, IAVA spearheaded passage of Advance Appropriations, which requires Congress to pass the VA’s budget at least one year in advance, ensuring timely and predictable funding for VA hospitals and clinics which service 6 million veterans nationwide. Here are some of the highlights from what the President is proposing for the VA budget for 2013:

• An increase to VA health care of $2.1 billion from FY 2012 to $52.7 billion.

• $54.5 billion for VA health care in FY 2014 (advance appropriations).

• An additional $32.7 million to help veterans transition to civilian employment through increased programs for employment and educational counseling.

• $64.5 Billion in educational benefits, such as the Post 9/11 GI Bill; an increase of $1.6 Billion from FY 2012. This includes an increase of $197 million for new job training programs from the VOW to Hire Heroes Act.

• $1.06 billion for Vocational Rehabilitation. An increase of more than $50 million from FY 2012.

• An additional $8.8 million to fund 52 new VetSuccess on Campus centers.

• $1 billion to fund the Veterans Job Corps

• $64.5 billion for disability compensation an increase of $8.3 billion from FY 2012

THE DOD BUDGET

The President's proposed budget will reduce Defense Department spending by 1% or $5.1 billion in FY 2013. However, military pay is proposed to increase by 1.7% in 2013. DoD expects to achieve overall savings by terminating low priority weapons systems, reducing production of other systems like the Joint Strike Fighter, and introducing new or increased fees to the military health care system for retirees. These changes are expected to reduce DoD costs by an estimated $17.6 billion over five years. The budget also includes a proposal for a commission to review the military retirement system. This commission will make a recommendation to the President, which he can either reject or send it to Congress for an up or down vote. Here’s how the budget proposal breaks down:

• TRICARE Standard, available to retirees under 65, will incur an enrollment fee of $140 for families and $70 for an individual. Currently there are no enrollment fees.

• Retirees over 65 who use TRICARE-for-Life will incur enrollment fees based on the amount of their military retirement income. See the chart below:

• Servicemembers and retirees may also see increases in pharmacy co-pays:

It is important to note that the President’s proposed budget is not a foregone conclusion. This is a proposal that will have to undergo Congressional review and intense scrutiny over the next year. IAVA is committed to supporting and preserving our status as the best military in the world. We have been and remain opposed to any increases in costs to the military health care system--and we will continue to track on this issue as the budget moves through Congress. We believe that neither the DoD nor the VA should balance their budgets on the backs of the men and women who have spent their lives fighting for our country. In the coming weeks, we will continue to monitor any proposed budget changes, so that our country upholds its promise to care for and support our service members, veterans and their families.

Questions on how the budget impacts you? Join IAVA for a live Q&A inside Community of Veterans this Wednesday, 1pm EST. Click here to sign up as a confirmed member and access the community. Membership is completely free.

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