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Obama Criticizes "Accounting Gimmicks" in Veterans Budget

Location: Washington, DC

Obama Criticizes "Accounting Gimmicks" in Veterans Budget

U.S. Senator Barack Obama (D-IL) Thursday criticized President Bush's budget request for the Department of Veterans Affairs (VA), saying it was rife with accounting gimmicks that inflated the funding Veterans would receive.

"Frankly, I'm disappointed that the VA continues to use the same accounting gimmicks that it has used for years to obscure the real implications of its budget requests," Senator Obama said.

Obama said that while the President was touting his request for $3.4 billion in additional funds for veterans' health, that figure includes as much as $1.9 billion in revenue and savings that did not exist.

"Last year, we found out that the VA was short $1.2 billion dollars for 2005 because of budget tricks and accounting problems," Senator Obama said. "Given the VA's history of stunning budget shortfalls, we owe our veterans an honest accounting of this budget request."

The president's budget includes $1.1 billion in savings from "management efficiencies," that the Government Accountability Office recently reported did not materialize in years past. The budget also includes $795 million in savings and revenue from a proposal to increase fees and copayments that has been rejected three years in a row by Congress. Medical inflation and payroll costs will carve out an additional $1.2 billion of the increase.

"Let's not fool ourselves - or our vets - into thinking that this 'increase' is as large as the White House would like us to think," Senator Obama said.

Senator Obama also criticized specific cuts in the VA budget including:

New Fees for Veterans Making More than $26,000

For the fourth year in a row, the President is proposing higher health fees and drug co-payments for veterans' health care that would drive more than 213,000 veterans out of the VA system. The President would force veterans who do not have service-connected disabilities and make more than an average of $25,842 to pay a new $250 annual enrollment fee for their medical care and would double their drug co-payments from $8 to $15, for a 30 day supply.

Continuing Ban on Middle-Income Veterans

The President' plan continues the ban on new Priority 8 enrollments; this includes veterans making more than $25,842 without a service-related disability. Through this ban, the VA denied health care to 8,944 Illinois veterans last year. Nationally, more than 260,000 veterans were denied access to VA hospitals, clinics and medications last year. The VA's income cutoff varies by county. In Illinois, this averages $36,600 and ranges from a low of $27,350 in 36 rural and low-income counties to $40,250 in the Chicago area. The 2005 national average for a single veteran was $25,842.

Cuts Benefit Claim Staff

The FY 2007 request cuts 149 full-time benefit claims processors, despite an expected hike in claims over the next year. This will increase the time veterans will have to wait to get their claims finalized from 167 days in 2005 to 182 days in 2007.

Flatlines Funding for State Nursing Home Construction

The President's budget flatlines funding for state nursing home construction. Illinois has 391,000 veterans 65 and older, but only four state nursing homes that together have waiting lists topping 920. It is clear that VA does not have the capacity to care for the greatest generation of American veterans.

Cuts Funding for Medical and Prosthetics Research

The President's budget cuts medical and prosthetics research by $13 million, a 3.2 percent cut. The budget proposal would cut 96 VA research projects. Research is a key mission of the VA, helping advance care for veterans and attracting quality doctors into the VA system.

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