Legal Ambiguity With Sequestration Raises Questions for Veterans Panel

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Legal Ambiguity With Sequestration Raises Questions for Veterans Panel


By Frank Oliveri, CQ Staff

The chairman of the House Veterans' Affairs Committee is raising concerns that the 2011 deficit reduction law inadvertently could lead to a 2 percent cut to Department of Veterans Affairs health care.

Jeff Miller, R-Fla., has asked the White House to clarify what he called a "legal ambiguity" surrounding how VA health care spending could be affected if automatic budget cuts, known as sequestration, take effect.

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The 2011 debt ceiling and deficit law (PL 112-25) charged a new joint committee with proposing at least $1.2 trillion in deficit reduction over 10 years to avoid the automatic cuts. The panel did not complete its task, and the sequester is set to begin in 2013.

Miller has a bill (HR 3895) that would explicitly exempt the entire VA from sequester.

The law exempted VA accounts from sequestration, but it also restored a 1985 law that — depending on the interpretation — might allow veterans' health care programs to be cut, anyway.

"I personally believe that any such ambiguity ought to be resolved in favor of a wholesale exemption of all VA programs," Miller wrote in a January letter to President Obama. He wrote that only the White House Office of Management and Budget could resolve the matter.

The Obama administration has yet to respond directly to Miller's concerns, which are shared by ranking Democrat Bob Filner of California. A White House aide said the administration is still sorting out the law's implications.

"Details of sequester implementation are still in development, so it's premature to know precisely how it would be applied," the aide said.

In November, the VA's chief financial officer, W. Todd Grams, told the House Committee on Veterans' Affairs that he was awaiting a decision by the OMB regarding sequestration.

Grams told the panel that he would provide lawmakers with the date that the VA's own legal review regarding the sequestration law was sent to OMB. The panel requested the information be provided by Jan. 11, but the deadline passed without response.

With partisan political friction expected during an election year, many lawmakers are concerned that sequestration is inevitable.

"Mr. President, I am hopeful, as you are, that sequestration will never be necessary," Miller said. "However, all Americans, especially our veterans, deserve to understand the ramifications if sequester is ever imposed."

Filner and other Democrats also want answers. "This has been a concern of every member of the committee that I know of," a Democratic aide said.

Veterans' Exemption

There is precedent for precluding veterans' programs from budget-cutting mechanisms. A senior GOP House aide familiar with the issue said that under the 2010 "pay as you go" law (PL 111-139), "the intent was that everything under the VA is exempt."

The 2011 deficit reduction law specifically exempts federal retirement and disability programs from sequester, according to a report published in August by the Congressional Research Service.

But that law also restored portions of the Balanced Budget and Emergency Deficit Control Act of 1985 (PL 99-177), also known as the Gramm-Rudman-Hollings law, which created a process for sequestration. The current sequestration plan essentially amends that process.

Therein lies the legal conflict, the senior GOP aide said. The 1985 law "permits under sequestration certain accounts to be subject up to a 2 percent cut in budget authority," the aide said, which would include veterans' medical care. The exceptions in the 2011 law, then, might not matter.

OMB has not responded directly to the Veterans' Affairs Committee's queries. But Meg Reilly, an agency spokeswoman, said the White House is working on the issue.

"The sequester will not take effect until January 2, 2013, so Congress still has plenty of time to do its job and achieve the necessary deficit reduction," Reilly said. "The administration has been clear about the fact that we do not believe that the sequester is ideal policy. If Congress fails to meet these deficit-reduction requirements, the administration will provide sequester implementation guidance later in the year."

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