United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

B-323157

May 21, 2012

The Honorable Patty Murray

Chairman

The Honorable Richard Burr

Ranking Member

Committee on Veterans’ Affairs

United States Senate

The Honorable Jeff Miller

Chairman

The Honorable Bob Filner

Ranking Member 

Committee on Veterans’ Affairs

House of Representatives 

Subject: The Budget Control Act and the Department of Veterans Affairs’ Programs 

This responds to the request for a legal opinion on the effect of the Budget Control 

Act1 on the Department of Veterans Affairs (VA). Letter from Chairman, Committee 

on Veterans’ Affairs, United States Senate, to Comptroller General (Feb. 16, 2012) 

(Request Letter). The Budget Control Act, which amended the Balanced Budget 

and Emergency Deficit Control Act of 1985 (BBEDCA),2 provides that the Office of 

Management and Budget (OMB) shall calculate, and the President shall order, a 

sequestration of discretionary and direct spending on January 2, 2013, to achieve 

the necessary deficit reduction for fiscal year 2013.3

 1 Pub. L. No. 112-25, 125 Stat. 240 (Aug. 2, 2011).

 The request arises because of 

an apparent conflict between two provisions of BBEDCA. Section 255(b) exempts 

all programs administered by the Department of Veterans Affairs from sequestration. 

However, section 256(e) provides for a reduction in one VA account, the veterans’ 

2 Pub. L. No. 99-177, title II, 99 Stat. 1037 (Dec. 12, 1985). BBEDCA, as amended, 

is classified at 2 U.S.C. §§ 900–907d. 

3 Pub. L. No. 112-25, § 302. 
Page 2 B-313157 

medical care account, of up to two percent. The request asked for our opinion on 

how to resolve the “legal ambiguity . . . if sequestration is imposed.” Id.

We conclude that all programs administered by the Department of Veterans Affairs, 

including veterans’ medical care, are exempt from sequestration. Section 255(b) 

and section 256(e) cannot be reconciled, and consequently, the more recently 

enacted provision should be given effect as the latest expression of congressional 

intent. Section 255(b), which was enacted in the Statutory Pay-As-You-Go Act of 

2010 (Statutory PAYGO), therefore takes precedence over section 256(e), which 

was enacted as part of BBEDCA in 1985. We note, however, that it appears 

administrative expenses incurred in connection with VA programs may be subject to 

sequestration under another section of BBEDCA.

Our practice when issuing decisions and opinions is to obtain the views of the 

relevant agencies. GAO, Procedures and Practices for Legal Decisions and 

Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006), available at 

www.gao.gov/legal/resources.html. Accordingly, we solicited the views of both the 

Department of Veterans Affairs, which administers the programs at issue, and the 

Office of Management and Budget (OMB), which is responsible for implementing 

sequestration under the Budget Control Act. OMB responded on behalf of both 

agencies. Letter from Deputy General Counsel, OMB, to Assistant General 

Counsel, GAO (Apr. 23, 2012) (OMB Letter). 

BACKGROUND

The Budget Control Act of 2011, amending BBEDCA, established limits on 

discretionary spending for fiscal years 2012 through 2021 and automatic reductions 

in direct spending because legislation was not enacted by January 15, 2012, that 

would reduce projected deficits by at least $1.2 trillion by the end of fiscal year 2021. 

Pub. L. No. 112-25, § 302, 125 Stat. 240, 256-59 (Aug. 2, 2011). Among other 

things, the Budget Control Act requires OMB to calculate, and the President to order, 

a sequestration of discretionary and direct spending on January 2, 2013, to achieve 

the calculated reduction for fiscal year 2013. Id. Sequestration will reduce each 

nonexempt account by a uniform percentage. Id. 

Section 255 of BBEDCA provides a list of programs and activities that are exempt 

from sequestration. Section 256 of BBEDCA provides a list of exceptions, 

limitations, and special rules for implementing sequestration. With respect to VA 

programs, section 255(b), as originally enacted in 1985, exempted veterans’ 

compensation and veterans’ pension accounts. Pub. L. No. 99-177, title II, 99 Stat. 

1037, 1083 (Dec. 12, 1985). In the 1985 act, section 256(e)4

 4 This section, originally designated as section 256(k), was redesignated as 

section 256(e) in 1990. Pub. L. No. 101-508, title XIII, § 13101(d)(2), 104 Stat. 

1388-573 (Nov. 5, 1990). 

subjected the veterans’ 
Page 3 B-313157 

medical care account to sequestration, but limited any reduction to two percent. 

In 2010, 25 years later, the Statutory Pay-As-You-Go Act amended section 255(b) to 

exempt from sequestration “all programs administered by the Department of 

Veterans Affairs.” Pub. L. No. 111-139, title I, § 11, 124 Stat. 8, 23 (Feb. 12, 2010). 

The amendment left unchanged the language of section 256(e) pertaining to the 

maximum two percent reduction of veterans’ medical care. 5

 

DISCUSSION

This opinion addresses the conflict between sections 255(b) and 256(e) of BBEDCA. 

When two laws appear on their face to conflict, the Supreme Court strives to

harmonize the laws to give the maximum possible effect to both. See Posadas v. 

National City Bank of New York, 296 U.S. 497, 503 (1936); B-307720, Sept. 27, 

2007; B-193282, Dec. 21, 1978. However, when two, equally specific provisions are 

in irreconcilable conflict, the Supreme Court views the later act as an implied repeal 

of the earlier one to the extent of the conflict. Posadas, 296 U.S. at 503; B-203900, 

Feb 2, 1989.6

enactment . . . ”). For example, in Eisenberg v. Corning, a federal appeals court 

considered two incompatible provisions – (1) a provision in the D.C. Code waiving 

“tutelage charges” for nonresident pupils in District of Columbia (D.C.) public schools 

if their parents paid specified taxes to D.C., and (2) a later provision in a D.C. 

appropriations act prohibiting the use of D.C. appropriations to provide “free 

instruction” to nonresident pupils. 179 F.2d 275, 277 (D.C. Cir. 1949). The court 

concluded that the “statutes [were] thus in conflict, the earlier permitting and the later 

prohibiting,” so the court concluded that the later appropriations act provision 

controlled. Id.

 This is because the more recent enactment is the latest expression of 

Congress. See B-226389, Nov 14, 1988 (“[T]he second enactment is taken to 

represent a purposeful intention by Congress to supersede its earlier 

We are faced with a similar situation here. In this case, section 256(e) permits a 

limited sequestration of the veterans’ medical care account, while section 255(b) 

 5 Section 256(e) provides the following budget identification code for veterans’ 

medical care: 36-0160-0-1-703. Pub. L. No. 99-177, § 256(e). That code currently 

refers to VA’s “Medical Services” appropriation. See, The Appendix, Budget of the 

United States Government, Fiscal Year 2013, “Department of Veterans Affairs,” 

(Feb. 13, 2012) at 1123-25. 

6 See also Morton v. Mancari, 417 U.S. 535, 550 (1974) (“In the absence of some 

affirmative showing of an intention to repeal, the only permissible justification for a 

repeal by implication is when the earlier and later statutes are irreconcilable.”); 

Lockhart v. United States, 546 U.S. 142, 149 (2005) (Scalia, J., concurring) (“When 

the plain import of a later statute directly conflicts with an earlier statute, the later 

enactment governs . . . .”). 
Page 4 B-313157 

prohibits sequestration of all VA programs. The language in section 256(e) was 

enacted as part of BBEDCA in 1985. The amendment to section 255(b) exempting 

all VA programs was enacted in Statutory PAYGO in 2010, 25 years later. The two 

provisions are in irreconcilable conflict. An alternative reading that tries to give effect 

to both, e.g., all VA programs are exempt except for veterans’ medical care, which 

would be limited to a two percent sequestration, ignores the totality of the word “all.” 

We think the better view is that because the conflict is irreconcilable, the more 

recently enacted law, Statutory PAYGO, should be given effect as it is the latest 

expression of congressional intent. We conclude, therefore, that section 255(b) 

takes precedence over section 256(e), and all programs administered by the 

Department of Veterans Affairs, including those within veterans’ medical care, are 

exempt from sequestration under the Budget Control Act. OMB reached this same 

conclusion: “all programs administered by the VA, including Veterans’ Medical Care, 

are exempt from sequestration.” OMB Letter at 1.

It appears, however, that administrative expenses incurred in connection with VA 

programs may be subject to sequestration. With regard to administrative expenses, 

section 256(h)(1) of BBEDCA provides: 

“Notwithstanding any other provision of this title, administrative 

expenses incurred by the departments and agencies, including 

independent agencies, of the Federal Government in connection with 

any program, project, activity, or account shall be subject to reduction 

pursuant to an order issued under section 254, without regard to any 

exemption, exception, limitation, or special rule which is otherwise 

applicable with respect to such program, project, activity, or account 

under this part.”

Pub. L. No. 99-177, § 256(h)(1), as amended (emphasis added). 7 BBEDCA 

does not define “administrative expenses.” The conference agreement 

accompanying the original BBEDCA legislation provides that federal 

administrative expenses “incurred in connection with any program, activity, or 

account shall be subject to reduction under a sequester order.” H.R. Conf. 

Rep. No. 99-433, at 92 (1985). The conferees explained that the term 

“administrative or operating expenses is intended to include obligations for 

items such as personnel compensation, travel, transportation, 

communication, equipment, supplies, materials, and other services.” Id. 

The Budget Control Act instructs OMB to implement sequestration. Pub. L. 

No. 112-25, § 302. In its letter to us, OMB did not address the application of 

section 256(h)(1) to VA programs or “other potential sequester questions 

under BBEDCA.” OMB Letter at 2. The execution and impact of any 

 7 This section was originally enacted as section 256(b)(1), but was later 

redesignated as section 256(h)(1). Pub. L. No. 101-508, § 13101(d)(2).
Page 5 B-313157 

spending reductions will depend on the legal interpretations and actions taken 

by OMB. 

CONCLUSION

As discussed above, we conclude that all programs administered by the Department 

of Veterans Affairs are exempt from sequestration under the Budget Control Act. 

We trust that this opinion is responsive to the request. If you have questions, please 

call Thomas H. Armstrong, Managing Associate General Counsel, at 

(202) 512-8257, or Julia C. Matta, Assistant General Counsel, at (202) 512-4023. 

Sincerely yours,

Lynn H. Gibson

General Counsel