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cost estimate
May 9, 2012
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As ordered reported by the House Committee on Veterans’ Affairs on April 27, 2012
H.R. 4114 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, 2012, and the resulting adjustment would be rounded to the next lower dollar.
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, and savings from rounding it down were achieved by the Balanced Budget Act of 1997 (Public Law 105-33) as extended 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 the baseline. Relative to current law, CBO estimates that enacting this bill would increase spending for those programs by $686 million in fiscal year 2013. (The annualized cost would be about $915 million in subsequent years.) This estimate assumes that the COLA effective on December 1, 2012, would be 1.3 percent.
H.R. 4114 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.
Enacting H.R. 4114 would not affect direct spending or revenues relative to CBO’s baseline projections; therefore, pay-as-you-go procedures do not apply.