VA Secretary Swats Down Idea to Cut VA Disability Pay for Wealthier Vets

Veterans' social media feeds erupted this week over a months-old report from the Congressional Budget Office that listed options for reducing the federal deficit, including the idea that the government could save $253 billion over the next 10 years by eliminating disability compensation for veterans who make more than $170,000.

Each year, the CBO publishes proposals for reducing the federal deficit, which has reached nearly $723 billion since the beginning of fiscal 2023. The latest list, published in December but only garnering attention among veterans this week, called for means-testing for veterans with higher income levels.

But Veterans Affairs Secretary Denis McDonough shot down the idea on Thursday, saying the VA does not "think that's a good idea."

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"We think it's a bad idea, and we're not going to do it. You have my commitment that we won't do it," McDonough said during a press conference with reporters in Washington, D.C.

He added that he had not been approached by anyone on Capitol Hill about the idea.

The CBO assessment proposes a list of options for reducing the deficit, but they are not considered to be recommendations. They are, according to the report, "options derived from many sources" that "reflect a range of possibilities."

This year's list, first published Dec. 7, addressed VA disability compensation, which CBO analysts said has increased substantially faster than inflation, in total spending and per veteran.

According to the CBO, the VA paid four times the amount in disability compensation in 2021, $110 billion, than it paid in 2000, adjusting for inflation, even as the number of vets in the U.S. had dropped by more than 30%.

Under the option, the VA would assess the household income of all veterans now receiving disability compensation, as well as those who file disability claims in the future. Only veterans whose gross household income the year before was less than an established threshold would receive their full disability payments.

Benefits would be phased out for those above the threshold, reduced by one dollar for every additional two dollars of gross household income. Beginning in January 2024, veterans whose income was $170,000 or higher in 2023 would no longer receive disability compensation, and those whose household incomes were between $125,000 and $170,000 would receive adjusted payments.

There would be no adjustment for household size, according to the option.

CBO analysts observed that Americans who work and also receive Social Security disability benefits see a decrease in their government compensation when they demonstrate that they are able to work for extended periods of time.

They added that roughly 1.5 million of 5 million veterans receiving VA disability had household income that exceeded the $125,000 threshold it set for 2023, or the 70th percentile of total household income for the entire country in 2019.

The CBO estimates that reducing or eliminating VA disability benefits for households whose gross household income exceeded the threshold would lower mandatory spending by "$253 billion between 2023 and 2032 relative to CBO's baseline," they wrote.

It's unclear what sparked the circulation on social media this week. Veterans expressed immediate outrage, taking to Twitter to voice their dismay. It appears, however, that the recommendation has no momentum; lawmakers and veterans service organizations did not respond to requests Wednesday for comment on the proposal.

On Thursday, Veteran Warriors Inc., an advocacy group that supports wounded and ill veterans and caregivers, thanked reporters for asking McDonough about the option.

The provision does not appear anywhere in the Biden administration's proposed fiscal 2024 budget. In the report, Options for Reducing the Deficit: 2023 to 2032, the CBO stressed that the idea was not a recommendation.

"Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO," analysts wrote.

Editor's note: This article has been edited to remove a common idiom that could have been construed as ableist out of context.

– Patricia Kime can be reached at Patricia.Kime@Military.com. Follow her on Twitter @patriciakime.

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