29–010 

Calendar No. 165 

113TH CONGRESS REPORT " ! SENATE 1st Session 113–87 

VETERANS’ COMPENSATION COST-OF-LIVING 

ADJUSTMENT ACT OF 2013 

SEPTEMBER 4, 2013.—Ordered to be printed 

Filed, under authority of the order of the Senate of August 1, 2013. 

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

submitted the following 

R E P O R T 

[To accompany S. 893] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Veterans’ Affairs (hereinafter, ‘‘Committee’’), 

to which was referred the bill (S. 893) to increase, effective as of 

December 1, 2013, the rates of compensation for veterans with 

service-connected disabilities and the rates of dependency and indemnity compensation (hereinafter, ‘‘DIC’’) for the survivors of certain disabled veterans, and for other purposes, having considered 

the same, reports favorably thereon, without amendment, and recommends that the bill do pass. 

INTRODUCTION

On May 8, 2013, Committee Chairman Bernard Sanders introduced S. 893, a bill to increase, effective as of December 1, 2013, 

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. Ranking Member Richard Burr and Committee Members 

John D. Rockefeller IV, Patty Murray, Sherrod Brown, Jon Tester, 

Mark Begich, Richard Blumenthal, Mazie K. Hirono, Johnny Isakson, Mike Johanns, Jerry Moran, John Boozman, and Dean Heller 

are original cosponsors of the bill, which was referred to the Committee upon introduction. 

COMMITTEE HEARING

On June 12, 2013, the Committee held a hearing on legislation 

pending before the Committee. Testimony on S. 893 was received 


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from: Curtis L. Coy, Deputy Under Secretary for Economic Opportunity, Veterans Benefits Administration, Department of Veterans 

Affairs; Ian de Planque, Deputy Legislative Director, The American 

Legion; Jeffrey Hall, Assistant National Legislative Director, Disabled American Veterans; Robert Norton, Deputy Director, Government Relations, Military Officers Association of America; and Ryan 

Gallucci, Deputy Director, National Legislative Service, Veterans of 

Foreign Wars of the United States. 

COMMITTEE MEETING

On July 24, 2013, the Committee met in open session to consider 

legislation pending before the Committee. Among the measures so 

considered was S. 893. The Committee voted by voice vote, without 

objection, to report favorably S. 893 to the Senate. 

SUMMARY OF THE COMMITTEE BILL AS REPORTED

The Committee bill contains freestanding provisions that would 

require the Secretary of Veterans Affairs to increase, effective December 1, 2013, the rates of certain benefits paid by the Department of Veterans Affairs (hereinafter, ‘‘VA’’) by the same percentage as the cost-of-living adjustment (hereinafter, ‘‘COLA’’) provided 

to Social Security recipients and VA pension beneficiaries that become effective on the same date. The COLA would apply to: 

1. Basic compensation rates for veterans with service-connected 

disabilities and the rates payable for certain severe disabilities; 

2. The allowance for spouses, children, and dependent parents 

paid to service-connected disabled veterans rated 30 percent or 

more disabled; 

3. The annual clothing allowance paid to veterans whose compensable disability requires the use of a prosthetic or orthopedic appliance (including a wheelchair) that tends to tear or wear out clothing or requires the use of a medication prescribed by a physician 

for a service-connected skin condition if the medication causes irreparable damage to the veteran’s outer garments; and 

4. The DIC rates paid to: 

(a) surviving spouses of veterans whose deaths were serviceconnected; 

(b) surviving spouses for dependent children below the age of 

18; 

(c) surviving spouses who are so disabled that they need aid 

and attendance or are permanently housebound; 

(d) surviving spouses covered under section 1318 of title 38, 

United States Code (hereinafter, ‘‘U.S.C.’’); and 

(e) the children of veterans whose deaths were service-connected if no surviving spouse is entitled to DIC, the child is age 

18 through 22 and attending an approved educational institution, or the child is age 18 or over and became permanently incapable of self-support prior to reaching age 18. 

The Congressional Budget Office (hereinafter, ‘‘CBO’’) currently 

estimates that the COLA to be provided to Social Security recipients in 2013 will be 1.5 percent. 


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BACKGROUND AND DISCUSSION

A. Disability compensation 

The service-connected disability compensation program under 

chapter 11 of title 38, U.S.C., provides monthly cash benefits to 

veterans who have disabilities incurred or aggravated during active 

duty in the Armed Forces. 

The amount of compensation paid depends on the nature and severity of the veteran’s disability or combination of disabilities. VA 

rates compensable disabilities according to its Schedule for Rating 

Disabilities on a graduated scale ranging from 10 to 100 percent, 

in 10 percent increments. VA pays higher monthly rates (known as 

‘‘special monthly compensation’’) to disabled veterans with certain 

specific, very severe disabilities or combinations of disabilities. 

According to VA, as set forth in its fiscal year 2014 budget submission, the Department estimates that it will provide compensation to 4,210,582 beneficiaries (3,846,018 veterans and 364,564 survivors) in fiscal year 2014. Among the veterans estimated to receive 

such compensation are 136,897 World War II veterans; 140,169 Korean Conflict veterans; 1,327,348 Vietnam era veterans; 1,546,030 

veterans of the Gulf War era; and 695,574 veterans who served 

during peacetime. 

A veteran with a disability rated at 30 percent or more may receive additional compensation on behalf of the veteran’s spouse, 

children, and dependent parents. These dependents’ allowances are 

prorated according to the percentage of disability. 

B. Dependency and indemnity compensation 

Under chapter 13 of title 38, U.S.C., VA pays DIC to the survivors of servicemembers or veterans who died on or after January 

1, 1957, from a disease or injury incurred or aggravated during 

military service. Survivors eligible for DIC include surviving 

spouses, unmarried children under the age of 18, children age 18 

or older who are permanently incapable of self-support, children between the ages of 18 and 22 who are enrolled in school, and certain 

needy parents. Under section 5312 of title 38, U.S.C., parents’ DIC 

rates are adjusted automatically at the same time and by the same 

percentage as Social Security and VA pension benefits. Surviving 

spouses, children, and parents who are receiving death compensation based on deaths before January 1, 1957, may elect to receive 

DIC instead of death compensation. 

For deaths on or after January 1, 1957, but prior to January 1, 

1993, surviving spouses received DIC at rates determined by the 

pay grade (service rank) of the deceased veteran. For deaths on or 

after January 1, 1993, DIC is paid at a flat rate. Surviving spouses 

currently receive $1,215 per month and, if the deceased veteran 

was totally disabled for eight years prior to death, an additional 

$258 per month. Surviving spouses who had been receiving benefits 

under the prior DIC program are paid under whichever program 

will pay the higher benefit. 

A surviving spouse who is so disabled as to be housebound or in 

need of regular aid and attendance is eligible to receive an additional amount. A surviving spouse may also receive additional allowances on behalf of the veteran’s surviving children. 


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Children are entitled to DIC if there is no surviving spouse, if 

they are 18 years of age or older and became permanently incapable of self-support before reaching age 18, or if they are 18 to 22 

years old and pursuing an approved course of education. 

Parents of deceased veterans whose incomes are below statutorily prescribed income thresholds are eligible for DIC under section 1315 of title 38, U.S.C. As previously noted, parents’ DIC rates 

are adjusted automatically at the same time and by the same percentage as Social Security and VA pension benefits. 

In its fiscal year 2014 budget submission, VA estimates that it 

will pay DIC benefits to 364,564 survivors, a total that includes 

surviving spouses, children, and needy surviving parents. 

Under section 1318 of title 38, U.S.C., VA pays benefits at DIC 

rates to the surviving spouses and children of veterans whose 

deaths are not service-connected if the veteran, immediately prior 

to his or her death, had been receiving (or had been entitled to receive) compensation at the 100 percent rate continuously for 10 or 

more years or for at least five years from the date of discharge or 

release from active duty. VA also pays DIC benefits to the surviving spouses and children of veterans who were former prisoners 

of war whose deaths were not service-connected if the veterans had 

been receiving (or had been entitled to receive) compensation at the 

100 percent rate continuously for not less than one year preceding 

death. 

Committee Bill. The Committee bill would direct VA to compute 

and provide increases in the monthly rates of compensation and 

DIC, effective December 1, 2013. The rates would be increased by 

the same percentage as the Social Security and VA pension COLA 

that will take effect on that date. 

The increases in DIC would automatically result in identical percentage increases in benefits paid at DIC rates under section 1318 

of title 38, U.S.C., to the surviving spouses and children of veterans 

who had a service-connected disability at the time of death for 

which they continuously were rated totally disabled for at least (1) 

10 years, (2) five years from the date of discharge from active duty, 

or (3) one year if the veteran was a former prisoner of war and 

whose death was not service-connected if the veteran had been receiving (or had been entitled to receive) compensation at the 100 

percent rate continuously for not less than one year preceding 

death. 

Under section 156(e)(1)(A) of Public Law 97–377, the DIC increases also would automatically result in the same percentage increases in Social Security benefits that were terminated by section 

2205 of the Omnibus Budget Reconciliation Act of 1981 (hereinafter, ‘‘OBRA 1981’’) (Public Law 97–35). Prior to OBRA 1981, 

those Social Security benefits had been paid to certain surviving 

spouses of those who died on active duty or from a service-connected disability on behalf of their children under 18 and children 

over age 19 who were secondary-school students; OBRA 1981 reduced the eligibility cutoff age from 18 to 16 years old. 

Section 314 of Public Law 100–322 amended section 156(a)(1) of 

Public Law 97–377, the Further Continuing Appropriations Act of 

1993, to restore the benefits eliminated by OBRA 1981. The DIC 

increase also would apply to these restored benefits, effective 

December 1, 2013. 


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The CBO, in its most recent baseline, estimated that the Social 

Security COLA affecting fiscal year 2014 payments, and thus the 

COLA provided for by the Committee bill, will be 1.5 percent. The 

actual Social Security COLA could differ from this estimate. Rather 

than selecting any particular percentage adjustment at the time 

the Committee ordered the bill reported, the Committee followed 

its prior practice of setting the COLA by reference to the Social Security increase. The Committee believes this is the most equitable 

means of providing increases in these important service-connected 

benefits. 

COMMITTEE BILL COST ESTIMATE

In compliance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate, the Committee, based on information supplied 

by the CBO, estimates that enactment of the Committee bill would, 

relative to current law, increase spending by $0.9 million in fiscal 

year 2014, but that such increases in spending are assumed in the 

budget resolution baseline and thus will have no budgetary effect 

relative to the baseline. Enactment of the Committee bill would not 

affect the budget of state, local, or tribal governments. 

The cost estimate provided by CBO, setting forth a detailed 

breakdown of costs, follows: 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 8, 2013. 

Hon. BERNARD SANDERS, 

Chairman, 

Committee on Veterans’ Affairs, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 893, the Veterans’ Compensation Cost-of-Living Adjustment Act of 2013. 

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

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

Sincerely, 

DOUGLAS W. ELMENDORF, 

Director. 

Enclosure. 

S. 893—Veterans’ Compensation Cost-of-Living Adjustment Act of 

2013 

As ordered reported by the Senate Committee on Veterans’ Affairs on July 24, 2013. 

S. 893 would increase the amounts paid to veterans for disability 

compensation and to their survivors for dependency and indemnity 

compensation (DIC) by the same cost-of-living adjustment (COLA) 

payable to Social Security recipients. The increase would take effect on December 1, 2013. 

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

CBO’s baseline, consistent with section 257 of the Balanced Budget 

and Emergency Deficit Control Act. Because the COLA is assumed 

in CBO’s baseline, the COLA provision would have no budgetary 

effect relative to the baseline. Relative to current law, CBO estiVerDate Mar 15 2010 23:43 Sep 04, 2013 Jkt 029010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\SR087.XXX SR087

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mates that enacting this bill would increase spending for those programs by $0.9 million in fiscal year 2014. This estimate assumes 

that the COLA effective on December 1, 2013, would be 1.5 percent. (The annualized cost would be about $1.2 billion in subsequent years. CBO previously estimated that the COLA change relative to current law would be about $2.6 billion on an annualized 

basis in contrast to that corrected figure of about $1.2 billion.) 

Enacting S. 893 would not affect direct spending or revenues; 

therefore, pay-as-you-go procedures do not apply. 

S. 893 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. 

On May 16, 2013, CBO transmitted a cost estimate for H.R. 357, 

the GI Bill Tuition Fairness Act of 2013, as ordered reported by the 

House Committee on Veterans’ Affairs on May 8, 2013. Section 12 

of H.R. 357 is similar to S. 893 but includes a provision calling for 

rounding down the COLA to the next lower dollar; that ‘‘round 

down’’ provision is not included in S. 893. As a result of that difference, CBO estimated budgetary savings of $278 million over the 

2014–2023 period for H.R. 357. 

On May 14, 2013, CBO transmitted a cost estimate for H.R. 570, 

the American Heroes COLA Act, as ordered reported by the House 

Committee on Veterans’ Affairs on May 8, 2013. H.R. 570 would 

provide a permanent annual COLA to the amounts paid for disability compensation and DIC starting in 2015. H.R. 570 also 

would round down that adjustment to the next lower dollar. That 

difference would produce estimated savings of $1.4 billion over the 

2015–2023 period for H.R. 570. 

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

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

REGULATORY IMPACT STATEMENT

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee on Veterans’ Affairs has made 

an evaluation of the regulatory impact that would be incurred in 

carrying out the Committee bill. The Committee finds that S. 893 

would not entail any regulation of individuals or businesses or result in any impact on the personal privacy of any individuals and 

that the paperwork resulting from enactment would be minimal. 

TABULATION OF VOTES CAST IN COMMITTEE

In compliance with paragraph 7(b) of rule XXVI of the Standing 

Rules of the Senate, the following is a tabulation of votes cast in 

person or by proxy by members of the Committee on Veterans’ Affairs at its July 24, 2013, meeting. On that date, the Committee 

voted without dissent to order reported S. 893, a bill to increase, 

effective as of December 1, 2013, 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. 


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AGENCY REPORT

On June 12, 2013, Curtis L. Coy, Deputy Under Secretary for 

Economic Opportunity, Veterans Benefits Administration, Department of Veterans Affairs, appeared before the Committee on Veterans’ Affairs and submitted testimony on, among other things, 

S. 893. Excerpts from this statement are reprinted below: 

STATEMENT OF CURTIS L. COY, DEPUTY UNDER 

SECRETARY FOR ECONOMIC OPPORTUNITY, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS 

Good morning, Mr. Chairman and Members of the Committee. I am pleased to be here today to provide the views 

of the Department of Veterans Affairs (VA) on pending legislation affecting VA’s programs, including the following: 

Sections 101, 102 and 103 of S. 6, S. 200, S. 257, S. 262, 

S. 294, S. 373, S. 430, sections 5, 6, 7, and 8 of S. 495, 

S. 514, S. 515, S. 572, S. 629, S. 674, S. 690, S. 695, S. 705, 

S. 748, S. 893, S. 894, S. 922, sections 103, 104, 201, 202, 

301, 302, 303, 304, and 305 of S. 928, and S. 939. VA has 

not had time to develop cost estimates for S. 514 and 

S. 894 and but will work to provide them. VA has not had 

time to develop views and costs on the other sections of 

S. 928. I cannot address today views and costs on S. 735, 

S. 778, S. 819, S. 863, S. 868, S. 889, S. 927, certain sections of S. 928, S. 930, S. 932, S. 935, S. 938, S. 944, 

S. 1039, S. 1042, and S. 1058, but, with your permission, 

we will work to provide that information. Other legislative 

proposals under discussion today would affect programs or 

laws administered by the Department of Labor (DOL), Department of Homeland Security (DHS), Department of Defense (DOD), the Office of Personnel Management (OPM), 

and the General Services Administration (GSA). Respectfully, we defer to those Departments’ views on those legislative proposals. Accompanying me this morning are 

Thomas Murphy, Director, Compensation Service, Veterans Benefits Administration; Richard Hipolit, Assistant 

General Counsel; and John Brizzi, Deputy Assistant General Counsel. 

* * * * * * * 

S. 893

S. 893, the ‘‘Veterans’ Compensation Cost-of-Living Adjustment Act of 2013,’’ would require the Secretary of Veterans Affairs to increase, effective December 1, 2013, the 

rates of disability compensation for service-disabled VetVerDate Mar 15 2010 23:43 Sep 04, 2013 Jkt 029010 PO 00000 Frm 00007 Fmt 6604 Sfmt 6969 E:\HR\OC\SR087.XXX SR087

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erans and the rates of dependency and indemnity compensation (DIC) for survivors of Veterans. This bill would 

increase these rates by the same percentage as the percentage by which Social Security benefits are increased effective December 1, 2013. The bill would not, however, account for the expiration at the end of this fiscal year of the 

feature in current law that rounds down to the next lower 

whole dollar amount those increases not in whole dollars. 

The bill would also require VA to publish the resulting increased rates in the Federal Register. VA strongly supports annual cost-of-living adjustments 

(COLA) for these important compensation programs because they express, in a tangible way, this Nation’s gratitude for the sacrifices made by our service-disabled Veterans and their surviving spouses and children and would 

ensure that the value of their well-deserved benefits will 

keep pace with increases in consumer prices. However, VA 

recommends the current ‘‘round down’’ statutory provisions 

be extended. We recommend amending sections 1303(a) 

and 1104(a) of title 38, United States Code, to provide a 

5-year extension of the round-down provisions of the computation of the COLA for service-connected disability compensation and DIC. Public Law 108–183 extended the ending dates of these provisions to 2013. The extension for the 

COLA round down provision beyond the 2013 expiration 

date results in cost savings. The benefit savings to round 

down the FY 2014 COLA are estimated to be $41.6 million 

in FY 2014, $712.5 million for 5 years, and $2.3 billion 

over 10 years as a result of the compounding effects of 

rounding down the COLA in subsequent years. 

* * * * * * * 

CHANGES IN EXISTING LAW

Since the Committee bill would not repeal or amend any provisions of current law, this report does not contain the material described in clauses (a) and (b) of paragraph 12 of rule XXVI of the 

Standing Rules of the Senate. 

Æ 


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