The VA Budget Clears As A Government Shutdown Is Averted

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The fiscal 2024 budget for the Department of Veterans Affairs (VA) was included in the six-bill, $460 billion funding package that President Joe Biden recently signed, averting a partial government shutdown.

The move, which also covers military construction and related agencies, secures the VA’s budget until the end of September, when the next fiscal year begins. The other agencies covered under this funding package are Agriculture; Commerce, Justice; Energy; Interior; and Transportation, Housing and Urban Development.

The Defense Department appropriations bill is part of a second batch of six bills that Congress has yet to pass.

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Lawmakers have been arguing about all 12 appropriations bills since last September. Until recently, they have only been able to clear a series of short-term stopgap measures on the bills to keep the government temporarily funded, each time coming within hours of tripping the deadline for a shutdown.

They now have until midnight March 22 to approve the second batch of bills or face the possibility, once again, of a partial government shutdown. Besides Defense, the second package covers Financial Services; Homeland Security; Labor, Health and Human Services; the Legislative Branch; and State and Foreign Operations.

The VA budget

Under its fiscal 2024 budget, the VA will receive $134.77 billion in non-defense discretionary funding as well as $172.5 billion in mandatory funding. The VA will also receive advance appropriations for fiscal 2025, including $112.6 billion for veterans’ medical care and $195.8 billion for veterans benefits.

In fiscal 2024, military construction and family housing projects will receive $18.7 billion. Some $121 billion of the budget will go toward VA medical care, which includes $16.2 billion for mental health services and $559 million for suicide prevention outreach programs.

Also included in the funding package is $3.9 billion for benefits administration including disability compensation benefits; $943 million for medical and prosthetics research; and $6.4 billion for information technology systems.

Commenting on the budget, Sen. Patty Murray, chair of the Senate Appropriations Committee, said in a statement that it fully funds veterans’ medical care and benefits and delivers essential resources that the VA needs to operate.

"Of critical importance to me, we make record investments in women veterans’ health care, mental health services for our veterans, and resources to help end veteran homelessness — long-time priorities of mine,” said Murray, who is also chair of the Senate Military Construction, Veterans Affairs and Related Agencies Subcommittee.

How a shutdown would affect the VA

Although final funding for the VA is secured for this fiscal year, the agency (along with a number of other agencies and programs) may, once again, face the prospect of a shutdown come this fall when fiscal 2025 begins.

That is, a shutdown would occur if Congress fails to either pass new funding legislation or a short-term stopgap measure for the new fiscal year.

A government shutdown would impact veterans by pausing some programs and services. Last September, VA Secretary Denis McDonough told reporters at a press conference that there "would be no impact on Veteran healthcare,” in the event of a shutdown.

“Burials would continue at VA national cemeteries. VA would continue to process and deliver benefits to veterans, including compensation, pension, education and housing benefits, and the board would continue to process appeals,” McDonough said.

However, he added, outreach services to veterans would be stopped, public-facing regional offices would be closed, and many regular operations such as career counseling, transition assistance and cemetery grounds maintenance would not be available.

Under the VA’s fiscal 2024-25 shutdown contingency plan, updated in January 2024, the agency said that 96% of its employees would either be fully funded to work or required to perform certain functions during a shutdown and that significant services including certain benefit functions under the Veterans Benefits Administration (VBA) would continue.

Some services would be paused

According to the plan, significant activities that would cease during a shutdown include VBA Education Call Center; all public and intergovernmental affairs functions such as national programs, special events and Tribal Government relations; as well as VBA's Transition Assistance Program (TAP).

Other activities that would stop during a funding lapse include VBA administrative functions such as data analytics; human resources; budget activities; as well as investment planning and customer support.

When asked during the press conference last year about whether the Veterans Health Administration (VHA) would continue to hire and onboard new employees since some of the agency’s human resources personnel would be furloughed, McDonough said that the VA would look closely at that.

The VHA, part of the VA and the country’s largest integrated healthcare system, has been aggressively hiring to reach a goal of increasing its workforce by 52,000, or 3%, in preparation for a wave of veterans under the Promise to Address Comprehensive Toxics (PACT) Act, the new law that expands healthcare and benefits for those exposed to burn pits, Agent Orange and other toxic substances.

Under the VA's contingency plan, veteran medical care and critical services within the VHA — including suicide prevention programs, homelessness programs and the Veterans Crisis Line and caregiver support — would continue, as they are financed with advance appropriations.

Tens of thousands of other “non-essential” federal workers from various agencies would be expected to be furloughed in the event of a shutdown as some agencies partially close and some services reduced.

The Social Security Administration, for example, would be impacted by a government shutdown as about 8,512 of its 61,869 workforce would be furloughed. The agency would, however, continue to send Social Security checks.

Likewise, the Centers for Medicare and Medicaid would be affected by a government shutdown but would continue to provide essential services, albeit with a reduced staff. That means that in the event of a funding lapse, Medicare and Medicaid programs and services, including the sending of Medicare payments would continue.

DOD funding bill awaits a vote

The Department of Defense is among the remaining federal agencies and departments waiting on Congress to approve the second batch of appropriations bills.

Without that funding, the DOD would furlough about 800,000 civilian employees but require some 2 million U.S. military members to continue to perform their duties without pay, although they would receive back pay once the government reopens, according to the DOD’s shutdown contingency plan. The agency would not award new contracts during a shutdown, but contracts already in place would continue.

“The department will continue to defend the nation and conduct ongoing military operations,” according to the DOD’s plan. “It will continue activities funded with any available budgetary resources that have not lapsed, as well as excepted activities such as those necessary for the safety of human life and the protection of property.”

Here's a look at the remaining appropriations bills for fiscal 2024 that have yet to be passed. Congress has until midnight on March 22 to meet their funding deadline.

The six appropriations bills still pending

Defense
Financial Services and General Government
Homeland Security
Labor, Health and Human Services, Education, and Related Agencies
Legislative Branch
State, Foreign Operations, and Related Programs

Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.