Mandatory Spending

Function 700 - Veterans' Benefits and Services

Narrow Eligibility for Veterans' Disability Compensation by Excluding Certain Disabilities Unrelated to Military Duties

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
Change in Outlays 0 -2.1 -2.5 -2.3 -2.1 -2.3 -2.3 -2.2 -2.4 -2.2 -9.0 -20.4

Note: This option would take effect in October 2014.

Veterans may receive disability compensation from the Department of Veterans Affairs (VA) for medical conditions or injuries that occurred or worsened during active-duty military service (excluding those resulting from willful misconduct). Disabilities that are deemed to be connected to military service in that sense range widely in severity and type, from the loss of limbs to migraines and treatable hypertension. VA also provides dependency and indemnity compensation—payments to surviving spouses or children of a deceased veteran whose death resulted from a service-related injury or disease. The Department of Defense (DoD) has a separate disability compensation system for those service members who can no longer fulfill their military duties because of a disability.

Some medical conditions and injuries that are deemed to be service-connected disabilities were incurred or exacerbated in the performance of military duties, but others were not. For example, a qualifying injury can be something that occurred when a service member was at home or on leave, and a qualifying medical condition can be something, such as diabetes, that developed independently of military activities while the service member was on active duty. In 2012, VA paid 520,000 veterans a total of $2.9 billion, the Congressional Budget Office estimates, to compensate for seven medical conditions that, according to the Government Accountability Office (GAO), are generally neither caused nor aggravated by military service. Those conditions are chronic obstructive pulmonary disease, arteriosclerotic heart disease, hemorrhoids, uterine fibroids, multiple sclerosis, Crohn’s disease, and osteoarthritis.

This option would cease veterans’ disability compensation for the seven medical conditions identified by GAO. Under the option, veterans currently receiving compensation for those conditions would have their compensation reduced or eliminated following a reevaluation, and veterans who applied for compensation for those conditions in the future would not be eligible for it. The option would not alter DoD’s disability compensation system, which focuses on fitness for military duties rather than compensation for disabilities.

By CBO’s estimates, this option would reduce outlays by $20 billion from 2015 to 2023. About 80 percent of the savings in the last year of that period (and an even larger share in earlier years) would result from curtailing payments to current recipients of disability compensation. A broader option could eliminate compensation for all disabilities unrelated to military duties, not just the seven conditions identified by GAO. For a condition such as arthritis, for instance, which may or may not result from military duties, the determination of whether the condition was related to military activities could be left up to VA. An option with that broader reach would generate significantly larger savings but would be more difficult to administer.

An argument in support of this option is that the disability compensation system for military veterans should be more comparable to civilian systems. Few civilian employers offer long-term disability benefits, and among those that do, benefits do not typically compensate individuals for all medical problems that developed during a period of employment.

An argument against this option is that military service is not like a civilian job; instead, it confers unique benefits to society and imposes extraordinary risks on service members. By that logic, the pay and benefits provided to service members should reflect the hardships of military life, including compensating veterans who become disabled in any way during the period of their military service.