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[House Report 115-134]
[From the U.S. Government Publishing Office]

115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {      115-134

======================================================================

 
      VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2017

                                _______
                                

  May 19, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Roe of Tennessee, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1329]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 1329) to increase, effective as of December 1, 
2017, the rates of compensation for veterans with service-
connected disabilities and the rates of dependency and 
indemnity compensation for the survivors of certain disabled 
veterans, to amend title 38, United States Code, to improve the 
United States Court of Appeals for Veterans Claims, to improve 
the processing of claims by the Secretary of Veterans Affairs, 
and for other purposes, having considered the same, report 
favorably thereon with amendments and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
 Amendment.......................................................     2
 Purpose and Summary.............................................     2
 Background and Need for Legislation.............................     3
 Hearings........................................................     3
 Subcommittee Consideration......................................     4
 Committee Consideration.........................................     4
 Committee Votes.................................................     4
 Committee Oversight Findings....................................     4
 Statement of General Performance Goals and Objectives...........     5
 New Budget Authority, Entitlement Authority, and Tax 
  Expenditures...................................................     5
 Earmarks and Tax and Tariff Benefits............................     5
 Committee Cost Estimate.........................................     5
 Congressional Budget Office Estimate............................     5
 Federal Mandates Statement......................................     7
 Advisory Committee Statement....................................     7
 Constitutional Authority Statement..............................     8
 Applicability to Legislative Branch.............................     8
 Statement on Duplication of Federal Programs....................     8
 Disclosure of Directed Rulemaking...............................     8
 Section-by-Section Analysis of the Legislation..................     8
 Changes in Existing Law Made by the Bill as Reported............     9

                               AMENDMENT

    The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans' Compensation Cost-of-Living 
Adjustment Act of 2017''.

SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND DEPENDENCY AND 
                    INDEMNITY COMPENSATION.

  (a) Rate Adjustment.--Effective on December 1, 2017, the Secretary of 
Veterans Affairs shall increase, in accordance with subsection (c), the 
dollar amounts in effect on November 30, 2017, for the payment of 
disability compensation and dependency and indemnity compensation under 
the provisions specified in subsection (b).
  (b) Amounts To Be Increased.--The dollar amounts to be increased 
pursuant to subsection (a) are the following:
          (1) Wartime disability compensation.--Each of the dollar 
        amounts under section 1114 of title 38, United States Code.
          (2) Additional compensation for dependents.--Each of the 
        dollar amounts under section 1115(1) of such title.
          (3) Clothing allowance.--The dollar amount under section 1162 
        of such title.
          (4) Dependency and indemnity compensation to surviving 
        spouse.--Each of the dollar amounts under subsections (a) 
        through (d) of section 1311 of such title.
          (5) Dependency and indemnity compensation to children.--Each 
        of the dollar amounts under sections 1313(a) and 1314 of such 
        title.
  (c) Determination of Increase.--Each dollar amount described in 
subsection (b) shall be increased by the same percentage as the 
percentage by which benefit amounts payable under title II of the 
Social Security Act (42 U.S.C. 401 et seq.) are increased effective 
December 1, 2017, as a result of a determination under section 215(i) 
of such Act (42 U.S.C. 415(i)).
  (d) Special Rule.--The Secretary of Veterans Affairs may adjust 
administratively, consistent with the increases made under subsection 
(a), the rates of disability compensation payable to persons under 
section 10 of Public Law 85-857 (72 Stat. 1263) who have not received 
compensation under chapter 11 of title 38, United States Code.

SEC. 3. PUBLICATION OF ADJUSTED RATES.

  The Secretary of Veterans Affairs shall publish in the Federal 
Register the amounts specified in section 2(b), as increased under that 
section, not later than the date on which the matters specified in 
section 215(i)(2)(D) of the Social Security Act (42 U.S.C. 
415(i)(2)(D)) are required to be published by reason of a determination 
made under section 215(i) of such Act during fiscal year 2018.

    Amend the title so as to read:
    A bill to increase, effective as of December 1, 2017, the 
rates of compensation for veterans with service-connected 
disabilities and the rates of dependency and indemnity 
compensation for the survivors of certain disabled veterans, 
and for other purposes.

                          PURPOSE AND SUMMARY

    H.R. 1329, as amended, the ``Veterans Compensation Cost of 
Living Adjustment Act of 2017,'' was introduced by 
Representative Mike Bost, Chairman of the Subcommittee of 
Disability Assistance and Memorial Affairs, on March 2, 2017. 
H.R. 1329, as amended, would as of November 30, 2017, increase 
the rates of Wartime Disability Compensation, Compensation for 
Dependents, Clothing Allowance, Dependency and Indemnity 
Compensation to Surviving Spouse, and Dependency and Indemnity 
Compensation to Children by the same percentage as the increase 
in benefits provided under title II (Old Age, Survivors, and 
Disability Insurance) of the Social Security Act.

                  BACKGROUND AND NEED FOR LEGISLATION

    Veterans who are disabled as a result of their military 
service are eligible to receive disability compensation. The 
purpose of disability compensation is to provide relief to a 
veteran who is limited in his or her earning capacity due to a 
disability incurred during military service. The amount of 
compensation a veteran receives varies according to the 
veteran's degree of disability.
    To be eligible to receive disability compensation, a 
veteran must have a disability incurred or aggravated during 
military service, which is not the result of willful 
misconduct. Additionally, the veterans must have been 
discharged under other than dishonorable conditions. The 
Department of Veterans Affairs (VA) is responsible for 
determining if a veteran is entitled to service-connection for 
a disability.
    Dependency and Indemnity Compensation (DIC) are monthly 
benefits paid to surviving spouses and dependent children of 
veterans who died while on active duty; or as a result of 
disabilities determined by VA to be serviced-connected or were 
service-connected disability rated at 100 percent for certain 
periods of time prior to death. Survivors who are housebound, 
require aid and attendance, or who have minor children may be 
paid additional amounts. The purpose of DIC benefits authorized 
under chapter 13 of title 38, U.S.C. is to provide partial 
compensation to the disabled veteran's surviving dependents for 
the loss in financial support due to the veteran's service-
connected death. The dependent's income and need are not 
considered when VA determines a surviving spouse's or child's 
entitlement because the nation, in part, assumes the legal and 
moral obligation of the deceased veteran to support his or her 
spouse and children.
    Section 2 of H.R. 1329, as amended, would increase the 
rates of Wartime Disability Compensation, Additional 
Compensation for Dependents, Clothing Allowance, Dependency and 
Indemnity Compensation to Surviving Spouse, and Dependency and 
Indemnity Compensation to Children. Such increase in benefits 
would increase to be the same percentage as the increase in 
benefits provided under title II (Old Age, Survivors, and 
Disability Insurance) of the Social Security Act.
    Section 3 of H.R. 1329, as amended, would require the 
Secretary to publish in the Federal Register the cost-of-living 
as increased under section 2, not later than the date on which 
the matters specified by 42 U.S.C. 415(i)(2)(D) of the Social 
Security Act are required to be published during fiscal year 
2017.

                                HEARINGS

    On April 5, 2017, the Subcommittee on Disability Assistance 
and Memorial Affairs conducted a legislative hearing on various 
bills introduced during the 115th Congress, including H.R. 
1329.
    The following witnesses testified:

          The Honorable Mike Bost, U.S. House of 
        Representatives; The Honorable Julia Brownley, U.S. 
        House of Representatives; The Honorable Jim Banks, U.S. 
        House of Representatives; The Honorable Jack Bergman, 
        U.S. House of Representatives; The Honorable David G. 
        Valadao, U.S. House of Representatives; Ms. Beth 
        Murphy, Director, Compensation Service, Veterans 
        Benefits Administration, U.S. Department of Veterans 
        Affairs, accompanied by Dr. Ralph L. Erickson, Chief 
        Consultant for Post Deployment Health Service, Veterans 
        Health Administration, U.S. Department of Veterans 
        Affairs; Ms. Patricia Watts, Director, Legislative and 
        Regulatory Service, National Cemetery Administration, 
        U.S. Department of Veterans Affairs; Mr. Zachary Hearn, 
        Deputy Director, Veterans Affairs and Rehabilitation 
        Division, The American Legion; Mr. Rick Weidman, 
        Executive Director, Policy and Government Affairs, 
        Vietnam Veterans of America; Mr. Patrick Murray, 
        Associate Director, National Legislative Service, 
        Veterans of Foreign Wars; Mr. LeRoy Acosta, Assistant 
        National Legislative Director, Disabled American 
        Veterans; and, Mr. John B. Wells, Executive Director, 
        Military-Veterans Advocacy Inc.

    Statements for the record were submitted by:

          The Honorable Timothy J. Walz, U.S. House of 
        Representatives and the Paralyzed Veterans of America

                       SUBCOMMITTEE CONSIDERATION

    On April 27, 2017, the Subcommittee on Disability 
Assistance and Memorial Affairs met in open markup session, a 
quorum being present, and favorably forwarded to the full 
Committee H.R. 1329, as amended. During consideration of H.R. 
1329, the following amendment was considered and agreed to by 
voice vote:

          An amendment offered by Mr. Bost of Illinois that 
        revised the long title of the bill.

                        COMMITTEE CONSIDERATION

    On May 17, 2017, the Full Committee met in an open markup 
session, a quorum being present, and ordered H.R. 1329, as 
amended, which reflected the Subcommittee Print of H.R. 1329, 
reported favorably to the House of Representatives by voice 
vote.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report the legislation and amendments 
thereto. There were no recorded votes taken on amendments or in 
connection with ordering H.R. 1329, as amended, reported to the 
House. A motion by Ranking Member Timothy Walz of Minnesota to 
report H.R. 1329, as amended, favorably to the House of 
Representatives was agreed to by voice vote.

                      COMMITTEE OVERSIGHT FINDINGS

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee establishes the 
following performance goals and objectives for this legislation 
to as of December 1, 2017 increase the rates of Wartime 
Disability Compensation, Compensation for Dependents, Clothing 
Allowance, Dependency and Indemnity Compensation to Surviving 
Spouse, and Dependency and Indemnity Compensation to Children 
by the same percentage as the increase in benefits provided 
under title II (Old Age, Survivors, and Disability Insurance) 
of the Social Security Act.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  EARMARKS AND TAX AND TARIFF BENEFITS

    H.R. 1329, as amended, does not contain any Congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate on H.R. 
1329, as amended, prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 1329, as amended, provided by the Director of the 
Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 19, 2017.
Hon. Phil Roe, M.D.,
Chairman, Committee on Veterans' Affairs,
House of Representatives Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2288, the Veterans 
Appeals Improvement and Modernization Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 2288--Veterans Appeals Improvement and Modernization Act of 2017

    Summary: H.R. 2288 would modify the appeals process for 
benefit claims at the Department of Veterans Affairs (VA) and 
would require several reports from VA and the Government 
Accountability Office (GAO). CBO estimates that implementing 
H.R. 2288 would cost about $2 million over the 2017-2022 
period; such spending would be subject to the availability of 
appropriated funds.
    Enacting the bill would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 2288 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 2288 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 2288 is shown in the following table. 
The costs of this legislation fall within budget function 700 
(veterans benefits and services).

----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars--
                                          ----------------------------------------------------------------------
                                             2017      2018      2019      2020      2021      2022    2017-2022
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                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level............         0         1         *         *         *         *          2
Estimated Outlays........................         0         1         *         *         *         *          2
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Note: Annual amounts do not sum to total because of rounding; * = less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
2288 will be enacted near the beginning of fiscal year 2018, 
that sufficient funds will be available each year, and that 
outlays will follow historical spending patterns for the 
affected programs.

Appeals reform

    Section 2 would direct VA to implement a new process to 
handle appeals of claims for veterans' benefits. As described 
below, the current system allows for repeated revisions and 
resubmissions of claims while maintaining an effective date for 
benefits based upon the original filing date of the claim. As a 
result, VA reports that under current law final decisions on 
appeals take an average of three years, with some appeals 
taking more than six years. The current backlog for appeals 
exceeds 470,000 claims and is growing.
    The proposed changes are intended to significantly 
streamline the appeal process, which would allow appeals to be 
finalized in a shorter period of time and require the efforts 
of fewer employees. VA reports that no additional personnel 
would be required for training, modifications to information 
technology, or outreach. VA also expects that the efficiencies 
of the new system would allow the agency to continue processing 
legacy appeals under the current system, very gradually 
reducing the existing backlog, without the need for additional 
employees. (Reducing the backlog in a more expedited manner 
would require more employees and would have a substantial 
cost.) Based on an analysis of information from VA and our 
understanding of the appeals process, CBO expects that VA could 
implement that change without an increase in workload. 
Therefore, CBO estimates that implementing section 2 would have 
no significant cost over the 2017-2022 period.

Comprehensive plan

    Section 3 would require VA to create a comprehensive plan 
to implement the new appeals process. That plan would include 
information about the existing process, including timeliness 
and the number of appeals, and would discuss how that 
information would differ under the new process. VA would be 
required to evaluate the potential costs for all facets of the 
new appeals process as well as to provide quarterly reports on 
VA's implementation of that process. The bill also would 
require GAO to conduct an assessment of VA's comprehensive 
plan. CBO estimates that implementing this provision would cost 
about $2 million to prepare the reports over the 2017-2022 
period.

Pilot program on fully developed appeals

    Section 4 would grant VA the authority to implement a pilot 
program for some appeals until the new appeals process could be 
implemented. VA indicates that it would not use this authority; 
therefore, CBO estimates that implementing section 4 would have 
no budgetary effects.

VA appeals data

    Section 5 would require VA to publish data monthly about 
the new appeals process on their website. CBO estimates that 
implementing section 5 would cost less than $500,000 over the 
2017-2022 period.
    Pay-As-You-Go considerations: None.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 2288 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    Intergovernmental and private-sector impact: H.R. 2288 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal costs: Dwayne M. Wright; 
Impact on state, local, and tribal governments: Leo Lex; Impact 
on the private sector: Paige Piper/Bach.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 1329, as amended, prepared by the 
Director of the Congressional Budget Office pursuant to section 
423 of the Unfunded Mandates Reform Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
1329, as amended.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to Article I, section 8 of the United States 
Constitution, H.R. 1329, as amended, is authorized by Congress' 
power to ``provide for the common Defense and general Welfare 
of the United States.''

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that H.R. 1329, as amended, does not 
relate to the terms and conditions of employment or access to 
public services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act of 1995.

              STATEMENT ON DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that no provision 
of H.R. 1329, as amended, establishes or reauthorizes a program 
of the Federal Government known to be duplicative of another 
Federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                   DISCLOSURE OF DIRECTED RULEMAKING

    Pursuant to section 3(i) of H. Res. 5, 115th Cong. (2017), 
the Committee estimates that H.R. 1329, as amended, contains no 
directed rule making that would require the Secretary to 
prescribe regulations.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 would establish the short title of the Act.

Section 2. Increase in rates of disability compensation and dependency 
        and indemnity compensation

    Section 2 would authorize VA to increase, effective 
November 30, 2017, the dollar amounts in effect for the payment 
of disability compensation and dependency and indemnity 
compensation.
    Section 2(b) would specify the amounts that would be 
increased regarding the Wartime Disability Compensation, under 
section 1114 of title 38, U.S.C., the Additional Compensation 
for Dependents, under section 1115(1) of title 38, U.S.C., the 
Clothing Allowance, under section 1162 of title 38, U.S.C., the 
Dependency and Indemnity Compensation to Surviving Spouses, 
under section 1311 of title 38, U.S.C., and the Dependency and 
Indemnity Compensation to Children, under sections 1313(a) and 
1314 of title 38, U.S.C.
    Section 2(c) would specify that each amount shall be 
increased by the same percentage by which benefits are 
increased under title II of the Social Security Act.\1\
---------------------------------------------------------------------------
    \1\42 U.S.C. 415(i).
---------------------------------------------------------------------------
    Section 2(d) would provide a special rule authorizing VA to 
adjust administratively, consistent with the increases made 
under subsection (a), the rates of disability compensation 
payable to persons within the purview of section 10 of Public 
Law 85-857, who are not in receipt of compensation payable 
pursuant to chapter 11 of title 38, U.S.C.

Section 3. Publication of adjusted rates

    Section 3 would require the Secretary of VA to publish in 
the Federal Register the amounts specified in subsection 2(b), 
as increased pursuant to 41 U.S.C. 415(i)(2)(D).

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    If enacted, this bill would make no changes in existing 
law.

                                  [all]
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