Lawmakers accuse VA leaders of exaggerating budget shortfall

House Republican leaders on Friday criticized Veterans Affairs leaders for exaggerating budget shortfall issues earlier this summer after department officials said their future funding concerns are not as serious as they predicted.

In a letter to VA Secretary Denis McDonough, House Veterans’ Affairs Chairman Mike Bost, R-Ill., and the House Appropriations Committee’s veterans panel Chairman John Carter, R-Texas, accused department leaders of “misinforming Congress” and “inciting a panic among veterans about their benefits being delayed or cut.” They said the misleading information undermines public faith in the institution.

In September, lawmakers approved a $3 billion stopgap spending bill for the VA after officials had warned that benefit checks could be delayed or halted on Oct. 1 — the start of the new fiscal year — if additional cash reserves were not made available to the department.

Weeks earlier, VA leaders — including McDonough — said the budget shortfall came as a result of record-high benefits approvals and medical services usage by veterans in the last fiscal year.

Congress moves to fix VA budget gap, but time is running out

They also warned that Congress needed to pass another $12 billion in funding to cover extra costs in fiscal 2025, an issue the two chambers were expected to bring up upon lawmakers’ return after the election.

But earlier this week, in an update provided to congressional leaders, VA officials said they carried over roughly $5 billion in unspent funds related to benefits accounts from last fiscal year to this fiscal year. Even without the cash infusion approved in September, the department would have held more than $2 billion in cash reserves.

Still, VA leaders said in a memo to lawmakers that the budget infusion was needed “because if we had even been $1 short, we could not certify our payment files and more than 7 million veterans and survivors would have had delays in their disability compensation, pension, and education benefits.”

Bost questioned that logic.

“VA leaders repeatedly told us that benefits funding was on the verge of running out and veterans could be harmed,” he said in a statement separate from the letter. “But it turns out that was never true.”

In their update to Congress, VA leaders also said that department health care accounts are not draining as quickly as anticipated, although they anticipate still needing some extra funding to cover the additional workload on the system.

VA saw its highest level of health care appointments ever in fiscal 2024: about 127.5 million, up 6% over the previous fiscal year. More than 796,000 veterans have enrolled in VA health care over the last two years, up 37% over the previous two years.

But it is not clear if that influx of new patients will require the full $12 billion estimated by VA planners earlier this year.

Bost and Carter in their letter lamented the “erroneous” estimates given to lawmakers in recent months and promised a full investigation into the budgeting confusion.

Congress is expected to return to Washington later this month to finish up the current session, before newly elected members are seated in January. Unfinished work includes resolving the federal budget plan for the rest of fiscal 2025. Departments are currently operating under a short-term budget extension set to expire in December.