49–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 109–521 

VETERANS’ COMPENSATION COST-OF-LIVING 

ADJUSTMENT ACT OF 2006 

JUNE 22, 2006.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BUYER, from the Committee on Veterans’ Affairs, 

submitted the following 

R E P O R T 

[To accompany H.R. 4843] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Veterans’ Affairs, to whom was referred the 

bill (H.R. 4843) to increase, effective as of December 1, 2006, the 

rates of disability compensation for veterans with service-connected 

disabilities and the rates of dependency and indemnity compensation for survivors of certain service-connected disabled veterans, 

and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill as 

amended do pass. 

The amendments (stated in terms of the page and line numbers 

of the introduced bill) are as follows: 

In section 2(b), strike paragraph (6) (page 3, lines 1 through 3) 

and insert the following: 

(6) ADDITIONAL DIC FOR SURVIVING SPOUSES WITH

MINOR CHILDREN.—The dollar amounts in effect under 

section 1311(b) of such title and paragraph (1) of section 1311(f) of such title (as redesignated by subsection (e) of this section). 

At the end of section 2 (page 4, after line 9), insert the following 

new subsection: 

(e) DESIGNATION CORRECTION.—Section 1311 of title 38, 

United States Code, is amended by redesignating the second subsection (e) (added by section 301(a) of the Veterans 

Benefits Improvement Act of 2004 (Public Law 108–454; 

118 Stat. 3610)) as subsection (f). 


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INTRODUCTION

On March 2, 2006, the Chairman and Ranking Member of the 

Subcommittee on Disability Assistance and Memorial Affairs, Honorable Jeff Miller and Honorable Shelley Berkley, respectively, 

along with the Chairman and Ranking Member of the Veterans’ Affairs Committee, Honorable Steve Buyer and Honorable Lane 

Evans, respectively, introduced H.R. 4843, the Veterans’ Compensation Cost-of-Living Adjustment Act of 2006, which would provide a cost-of-living adjustment in the rates of service-connected 

disability compensation and dependency and indemnity compensation, effective December 1, 2006. 

On April 6, 2006, the Subcommittee on Disability Assistance and 

Memorial Affairs held a hearing on seven bills, including H.R. 

4843. 

On June 8, 2006, the Subcommittee on Disability Assistance and 

Memorial Affairs met and ordered H.R. 4843 reported favorably to 

the full Committee by unanimous voice vote. 

On June 22, 2006, the full Committee met and ordered H.R. 4843 

reported favorably, as amended, to the House by voice vote. 

SUMMARY OF THE REPORTED BILL

H.R. 4843, as amended, would: 

Provide effective December 1, 2006, a cost-of-living adjustment to 

the rates of disability compensation for veterans with service-connected disabilities and to the rates of dependency and indemnity 

compensation for survivors of certain service-connected disabled 

veterans. The percentage amount would be equal to the increase 

for benefits provided under the Social Security Act, which is calculated based upon changes in the Consumer Price Index. 

BACKGROUND AND DISCUSSION

Increase in rates of disability compensation and dependency and 

indemnity compensation.—Section 2 of the bill would increase, effective December 1, 2006, the rates of compensation for service-connected disabilities and the rates of dependency and indemnity compensation (DIC) for surviving spouses and children of veterans who 

die of service-connected causes, as well as the additional amounts 

for dependents and survivors, and clothing allowances for certain 

veterans. Congress has provided annual increases in these rates for 

every fiscal year since 1976. 

The Committee is following its longstanding practice of setting 

the cost-of-living adjustment (COLA) by reference to the yet-to-bedetermined Social Security increase. At the time of the filing of this 

report, the increase is expected to be 2.6 percent, but it may be 

higher or lower depending on changes in the Consumer Price 

Index; the exact percentage is calculated as of September 30, 2006. 

Last year’s increase was 4.1 percent. 

The purpose of the disability compensation program is to represent, to the extent practicable, the average impairment in earnings capacity as a result of a disability or combination of disabilities incurred or aggravated by military service. The amount of 

compensation payable varies according to the degree of disability. 

To be eligible to receive disability compensation, a veteran’s disability must not be the result of willful misconduct, and the vetVerDate Aug 31 2005 02:15 Jun 24, 2006 Jkt 049006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR521.XXX HR521

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eran must have been discharged under other than dishonorable 

conditions. The responsibility for determining a veteran’s entitlement to service-connection for a disability rests with the Department of Veterans Affairs (VA). More than 2.6 million veterans were 

receiving service-connected disability compensation as of May 2006. 

Surviving spouses and dependent children of veterans who died 

of disabilities determined by VA to be service-connected (including 

veterans who died while on active duty) or who had a service-connected disability rated at 100 percent for certain periods of time 

prior to death are entitled to receive monthly DIC benefits. Additional amounts are paid to survivors who are housebound, in need 

of aid and attendance, or have minor children. The purpose of DIC 

authorized under chapter 13 of title 38, United States Code, is to 

provide partial compensation to the appropriate survivors for the 

loss in financial support due to the service-connected death. Income 

and need are not factors in determining a surviving spouse’s or 

child’s entitlement because the Nation in part assumes the legal 

and moral obligation of the veteran to support the spouse and children. As of May 2006, there were more than 311,000 surviving 

spouses and more than 29,000 children receiving DIC. 

Public Law 108–454 authorized an additional DIC payment of $250 a month provided for the first 2 years of DIC eligibility to surviving spouses with minor children. This additional benefit is 

aimed at easing the transition following the death of the 

servicemember or veteran. Payment is based on the family unit, 

not per child, and terminates prior to the end of the 2-year period 

if there are no longer children under the age of 18. H.R. 4843, as 

amended, would provide a cost-of-living adjustment to this 2-year 

transitional DIC benefit. 

SECTION-BY-SECTION ANALYSIS

Section 1 of the bill would provide that this Act may be cited as 

the ‘‘Veterans’’ Compensation Cost-of-Living Adjustment Act of 

2006’’. Section 2(a) of the bill would require the Secretary of Veterans 

Affairs to increase, effective December 1, 2006, the dollar amounts 

in effect for the payment of disability compensation and dependency and indemnity compensation. 

Section 2(b) of the bill would specify the programs to receive increased dollar amounts: compensation in effect under section 1114 

of title 38, United States Code; additional compensation for dependents in effect under section 1115(1) of title 38, United States 

Code; clothing allowance in effect under section 1162 of title 38, 

United States Code; new DIC rates in effect under paragraphs (1) 

and (2) of section 1311(a) of title 38, United States Code; old DIC 

rates in effect under section 1311(a)(3) of title 38, United States 

Code; additional DIC for surviving spouses with minor children in 

effect under section 1311(b) and paragraph (1) of section 1311(f) of 

title 38, United States Code; additional DIC for disability in effect 

under sections 1311(c) and (d) of title 38, United States Code; and 

DIC for dependent children in effect under sections 1313(a) and 

1314 of title 38, United States Code. 

Section 2(c)(1) of the bill would increase the dollar amounts for 

those programs specified in subsection (b) based on the amount in 

effect on November 30, 2006. 


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Section 2(c)(2) of the bill 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 (42 U.S.C. 401 et 

seq.). 

Section 2(c)(3) of the bill would round down to the next lower dollar amount all compensation and DIC benefits, when the amount 

is not a whole dollar amount. 

Section 2(d) of the bill would provide a special rule authorizing 

the Secretary of Veterans Affairs 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 (72 Stat. 1263), who are not in receipt of compensation payable pursuant to chapter 11 of title 38, 

United States Code. 

Section 3 of the bill would require the Secretary of Veterans Affairs to publish in the Federal Register the amounts specified in 

subsection (b), as increased pursuant to that section. 

PERFORMANCE GOALS AND OBJECTIVES

The reported bill would authorize benefits and program enhancements under laws administered by the Secretary of Veterans Affairs. The Department of Veterans Affairs’ performance goals and 

objectives are established in annual performance plans and are 

subject to the Committee’s regular oversight and evaluation by the 

U.S. Government Accountability Office. VA also publishes a performance and accountability report for each fiscal year. 

STATEMENTS OF THE VIEWS OF THE ADMINISTRATION

The Administration’s fiscal year 2007 budget request, submitted 

in February 2006, recommended a cost-of-living adjustment based 

on the change in the Consumer Price Index (CPI) be given to all 

compensation beneficiaries, including DIC recipients, effective December 1, 2006. The estimated increase is 2.6 percent. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, June 22, 2006. 

Hon. STEVE BUYER, 

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. 4843, the Veterans’ Compensation Cost-of-Living Adjustment Act of 2006. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Dwayne M. Wright. 

Sincerely, 

DONALD B. MARRON, Acting Director. 

Enclosure. 


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H.R. 4843—Veterans’ Compensation Cost-of-Living Adjustment Act 

of 2006 

H.R. 4843 would increase the amounts paid to veterans for disability compensation and to their survivors for dependency and indemnity compensation by the same cost-of-living adjustment 

(COLA) payable to Social Security recipients. The increase would 

take effect on December 1, 2006, and the results of the adjustment 

would be rounded to the next lower dollar. 

The COLA that would be authorized by this bill is assumed in 

CBO’s baseline, pursuant to section 257 of the Balanced Budget 

and Emergency Deficit Control Act, and savings from rounding it 

down were achieved by the Balanced Budget Act of 1997 (Public 

Law 105–33) and extended to 2013 by the Veterans Benefits Act 

of 2003 (Public Law 108–183). 

Because the COLA is assumed in CBO’s baseline, the COLA provision would have no budgetary effect relative to that baseline. Relative to current law, CBO estimates that enacting this bill would 

increase spending for these programs by $530 million in 2007. (The 

annualized cost would be about $710 million in subsequent years.) 

This estimate assumes that the COLA effective on December 1, 

2006, will be 2.2 percent. 

H.R. 4843 would also apply the COLA to a benefit for surviving 

spouses with children under age 18. Under current law, surviving 

spouses who are eligible for Dependency and Indemnity Compensation (DIC) and have one or more children under age 18 have their 

monthly DIC payment increased by $250 for up to two years from 

the date that the survivor becomes eligible for DIC. Section 2 

would increase the $250 benefit by the same cost-of-living adjustment payable to Social Security recipients on December 1, 2006. 

Based on an assumed COLA of 2.2 percent, CBO estimates that 

this monthly benefit would increase to $255 (after rounding down 

to the next lowest dollar) for 2007 and each subsequent year relative to current law and CBO’s baseline. Therefore, CBO estimates 

that enacting this provision would increase direct spending for veterans compensation by less than $200,000 in 2007, by $1 million 

over the 2007–2011 period, and by $2 million over the 2007–2016 

period. 

H.R. 4843 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

On May 11, 2006, CBO transmitted a cost estimate for H.R. 4843 

as introduced on March 2, 2006. H.R. 4843, as ordered reported, is 

similar to the introduced bill, but also contains a provision that 

would increase the additional $250 benefit for surviving spouses 

with children under 18 by the same cost-of-living adjustment payable to Social Security recipients on December 1, 2006. The differences in the estimates reflect the differences in the two versions 

of the bill. 

The CBO staff contact for this estimate is Dwayne M. Wright. 

This estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 


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STATEMENT OF FEDERAL MANDATES

The preceding Congressional Budget Office cost estimate states 

that the bill contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act. 

STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to Article I, section 8 of the United States Constitution, 

the reported bill is authorized by Congress’ power to ‘‘provide for 

the common Defense and general Welfare of the United States.’’

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

SECTION 1311 OF TITLE 38, UNITED STATES CODE 

§ 1311. Dependency and indemnity compensation to a surviving spouse 

(a) * * * 

* * * * * * * 

ø(e)¿ (f)(1) Subject to paragraphs (2) and (3), if there is a surviving spouse with one or more children below the age of 18, the 

dependency and indemnity compensation paid monthly to the surviving spouse shall be increased by $250, regardless of the number 

of such children. 

* * * * * * * 

Æ 


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