Department of Veterans Affairs

Recommendations and Actions

DVA13: Eliminate "Sunset" Dates in the Omnibus Budget Reconciliation Act of 1990

Background

The Omnibus Budget Reconciliation Act of 1990 (OBRA), as amended in 1993, contains several provisions affecting veterans. These provisions achieve savings but are scheduled to sunset (i.e., expire) in 1998. They have operated to:

--- limit to $90 the monthly benefit paid to veterans and their survivors who are in Medicaid-covered nursing homes and have no dependents;

--- authorize the Department of Veterans Affairs (VA) to verify with the Internal Revenue Service (IRS) and the Social Security Administration (SSA) incomes reported by veterans, to establish eligibility for pensions and other needs-based benefits;

--- authorize VA to collect the reasonable costs of medical care provided by VA to veterans for treatment of nonservice-connected disabilities from any third party that insures veterans with service- connected disabilities;

--- authorize VA to charge copayments to veterans with nonservice- connected disabilities who receive inpatient care, outpatient care, and outpatient medication from VA facilities;

--- increase the fee on most guaranteed home loans by 0.75 percent;

--- increase the fee for multiple use of the home loan guaranty benefit to 3 percent when there is less than a 5 percent down payment; and

--- allow VA to include the costs of expected losses on the resale of foreclosed property in the formula that determines whether it is more cost-effective to acquire the property and sell it, or pay the guarantee to the lender.(1)

Action

Congress should eliminate the statutory sunset dates in the Omnibus Budget Reconciliation Act relating to programs administered by VA.

By removing the sunset dates, these cost-saving measures would become permanent. Health insurance companies would continue to be required to reimburse VA for medical care provided to certain veterans. Among other things, this recommendation would also grant VA permanent authority to verify incomes of beneficiaries with the IRS and SSA to prevent overpayments of benefits and other errors.

Implications

Generally, Congress has extended these provisions one year at a time. Permanently enacting these provisions would convert temporary savings into ongoing savings.(2)

Fiscal Impact

The estimated cumulative effect of this proposal would be $1.2 billion, considering its effects on both increased revenues and projected cost savings.

 Budget Authority (BA), Outlays, and Revenues (Dollars in Millions) 
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Fiscal Year
               1994   1995   1996  1997  1998  1999    Total
                      ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 BA             0.0     0.0     0.0     0.0     0.0    -704.8   -704.8
 
 Outlays      0.0     0.0     0.0     0.0     0.0    -704.8   -704.8
 
 Revenues   0.0     0.0     0.0     0.0     0.0     490.0    490.0
 
 Change 
 in FTEs        0        0        0        0       0          0          0
 

Endnotes

1. U.S. Congress, Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options (Washington, D.C., February 1993), p. 331.

2. Ibid., p. 332.

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