Blog Post

Dissecting the Debt Deal for Veterans
Posted by Ramsey Sulayman on August 11 2011

The passage of the compromise budget bill last Tuesday was the end of the debt ceiling crisis, but it’s the beginning of speculation on what it actually means. Earlier this week, Senate Veterans Affairs Chairman Patty Murray was selected to co-chair the ‘super-committee’ that will meet in November to discuss the U.S. budget. IAVA Member Veterans, however, still face uncertainty over veterans benefits, health care, the GI Bill and Department of Defense (DoD) funding.

The Budget Control Act of 2011 calls for $1.8 trillion or more in reduced spending between 2012 and 2021. Some of that reduced spending will come from cuts in federal budgets and some from expected savings. For example, the White House expects that $200 billion in reduced spending will come from reduced interest payments. Still, because the BCA only specified targets but not specific cuts or programs, politicians, pundits and the public are left guessing.

So let’s look at what we know. Last week, after the agreement was announced, IAVA participated in a White House conference call outlining what the BCA means. Based on what we learned, $350 billion in savings over 10 years will come from the DoD. Whether that money comes from military pay, programs like TRICARE, or weapons projects like the F-35 second engine program is up to the powers that be at the DoD. According to the White House, the $350 billion figure comes from locking in DoD spending at “firewall” levels (which appears to mean using the 2012/2013 budgets as a baseline) rather than future cuts. The expectation is that reducing America's OND/OEF footprint in Iraq and Afgahnistan will provide some budgetary breathing room.

According to the White House, Social Security, Medicare, and “other low-income programs” are protected from cuts, even from future “Super-Committee” budgets; however, everything else is on the table. Does that include VA funding and programs? Yes. Does that include the GI Bill? Yes, insofar as it’s a VA program. Does that include TRICARE? Yes, TRICARE is a DoD program.

Speculation abounds that savings will come from cuts to military retiree and VA disability cost-of-living allowances (COLA). Changing the way COLA is figured for federal and military retirees, VA benefits and Social Security recipients was suggested by leaders from both sides of the aisle including the White House and Congressional Republicans. It is estimated that doing so would save around $150 billion, but it isn’t certain it will be done. Since military retiree and VA disability are linked to the Social Security COLA, any change is important to veterans.

Should we as veterans be worried? Not frantically. Should we be vigilant? Absolutely. No one can say for sure exactly what will be under the knife. Congress and the “Super-Committee” have a lot of impact on where cuts are felt and federal departments, like the VA, will make the ultimate decisions on how to allocate the funding they receive. IAVA is carefully watching how this all unfolds, and proactively communicating with the Administration, Congress, DoD and the VA to make sure that OIF and OEF vets receive the benefits they deserve for loyal and faithful service.

Veteran of Iraq or Afghanistan? Join the conversation inside Community of Veterans about the implications of the budget deal for the military and veterans.

Ramsey Sulayman is a Marine officer and veteran of Operation Iraqi Freedom, where he served as an infantry platoon commander and company executive officer. A graduate of the University of Toledo, Ramsey also has experience on Capitol Hill as a researcher for the Corporation for Effective Government and as a Congressional intern. He will begin law school in the fall of 2011.

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