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 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
Change in Outlays 0 -2.0 -2.9 -2.9 -2.9 -3.2 -3.0 -2.7 -3.0 -3.1 -10.7 -25.7

This option would take effect in January 2018.

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. Such service-connected disabilities range widely in severity and type, from migraines and treatable hypertension to the loss of limbs. VA also provides dependency and indemnity compensation—payments to surviving spouses or children of a veteran who died from a service-related injury or disease. The Department of Defense (DoD) has a separate disability compensation system for service members who can no longer fulfill their military duties because of a disability.

Not all service-connected medical conditions and injuries are incurred or exacerbated in the performance of military duties. For example, a qualifying injury can occur when a service member was at home or on leave, and a qualifying medical condition, such as multiple sclerosis, can develop independently of a service member’s military duties. In 2015, VA paid 716,000 veterans a total of $3.7 billion, the Congressional Budget Office estimates, to compensate for seven of the medical conditions that, according to the Government Accountability Office (GAO), military service is unlikely to cause or aggravate. Those conditions are arteriosclerotic heart disease, chronic obstructive pulmonary disease, Crohn’s disease, hemorrhoids, multiple sclerosis, osteoarthritis, and uterine fibroids.

Beginning in January 2018, this option would cease veterans’ disability compensation for those seven medical conditions GAO identified. Under the option, veterans now receiving compensation for those conditions would have their compensation reduced or eliminated, 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 $26 billion from 2018 to 2026. Most of the savings 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 those conditions GAO identified. For arthritis, for instance, which may not result from military duties, VA could determine whether the condition was related to military activities. An option with that broader reach could generate significantly larger savings but could be harder to administer depending on how VA sets its eligibility criteria.

An argument in support of this option is that it would make the disability compensation system for military veterans 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 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 that service members receive should reflect the hardships of military life, including compensating veterans who become disabled in any way during their military service.