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cost estimate
August 8, 2013
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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 estimates 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.)