Plan to avert government shutdown does not include extra VA funds

Congressional leaders included a new mandate on quarterly finance reports from Veterans Affairs leaders but no additional department funding in their year-end budget extension package unveiled this week.

VA leaders had asked for roughly $6.6 billion in extra funding for fiscal 2025 as part of the appropriations package, and said they could face problems with medical system hiring and program operations if the money is not approved by the end of the year.

But Republican lawmakers, who will control both chambers of Congress next session, have been critical of department planners for inaccurate estimates in recent months regarding potential budget shortfalls.

The short-term spending bill, expected to be voted on later this week, would fund federal agencies at fiscal 2024 levels through March 14. The new fiscal year started on Oct. 1.

Without a budget extension, government departments will run out of funding at midnight on Friday and be forced into a partial shutdown. Most VA operations would not be impacted by a shutdown, because the department gets the bulk of its budget a year in advance.

But VA leaders have said in recent months that increased use of the department’s health care system and increased filing of benefits claims over the last 12 months has drained some of those resources, creating a need for a budget boost.

Over the summer, they lobbied lawmakers to pass a $3 billion emergency funding package ahead of October to ensure that benefits would not be disrupted by an appropriations shortfall. They also estimated they’d need $12 billion of additional funds above their original budget projections for fiscal 2025.

Congress approved the $3 billion funding boost. But in late October, VA officials acknowledged that they did not use any of the extra money because their projections of a shortfall did not pan out.

That prompted several tense hearings with House lawmakers in recent weeks, where VA officials were accused of playing politics with their budget estimates. Members of the House Veterans’ Affairs Committee had promised closer oversight of department budget projections in the future.

The language in the continuing resolution under consideration this week would require quarterly briefings for the next three years “on the budget of the Department of Veterans Affairs and any shortfall the department may be experiencing.”

Those meetings would also include any plans to address the budget gaps.

Lawmakers would also bar senior executives at VA Central Office from receiving any critical skill bonuses, following problems last year with senior officials improperly receiving the incentives. And the legislation mandates yearly reports from the VA secretary on the number of senior staffers employed by the department.

House and Senate leaders are expected to review VA’s request for extra money next year, after the new session of Congress begins. Whether that delay will hurt operations at the department is unclear.

Last month, VA Under Secretary for Health Dr. Shereef Elnahal said that the extra $6.6 billion is needed for overdue equipment purchases and continued hiring efforts at department medical centers. Without it, he said, “we do think we’ll run into problems.”

Whether Congress can pass the budget extension in time to prevent a shutdown is also unclear. Both chambers are expected to hold votes on Friday and possibly into the weekend in an effort to finalize the plan.