House Passes COLA Bill for Vets

The House on Tuesday passed a cost-of-living adjustment bill for veterans that guarantees a raise each year. However, the American Heroes Cost of Living Adjustment Act still contains some provisions that veterans groups don’t like.

Veteran advocates feared that the legislation could tie future increases to a more conservative Consumer Price Index (CPI) formula. Before the bill passed, those fears were resolved.

Lawmakers introduced what is often called “chained CPI” as a measure to lower Social Security spending. Chained CPI more conservatively calculates inflation. The Congressional Budget Office has estimated that a chained CPI could reduce the deficit by about $340 billion.

Along with Social Security, CPI is also used to determine a veteran's COLA. Veterans groups worried that the American Heroes Cost of Living Adjustment Act would protect the COLA from political interference, but it could also lock them into a lower rate. But before the bill was passed, a compromise was struck.
 
If the so-called “chained CPI” formula becomes the new CPI for Social Security -- and so linked to the increase -- veterans’ COLAs would be subject to annual discussion or tied to a different formula, said Joe Violante, National Legislative Director for the Disabled American.

The bill had been criticized as recently as earlier this month when the House Committee on Veterans Affairs voted it to the floor for a vote. Five veterans groups opposed the bill because of the possibility it would tie increases to the chained CPI formula advocated by the administration and many lawmakers.

Another provision that remains in the bill requires that any future increase be rounded down to the nearest dollar. Over time, veterans advocates said, this would have the net effect of keeping increases lower.

The veterans groups have accepted the compromise offered by Rep. Jeff Miller, R-Fla., chairman of the House Committee on Veterans Affairs. His compromise would do two things -- eliminate the rounding down in five years and use the money saved through the formula to increase the amount of money given for aid and assistance to the most severely disabled vets.

These are disabled veterans who require round-the-clock care, Violante said.

“Obviously, we’d rather not see savings from disabled veterans’ [disability payments] used to enhance or expand existing programs … but it’s not permanent and it is being used to help the most severely disabled veterans,” he said.

The original legislation was introduced by Rep. Paul Runyon, R-NJ, who argued it would protect annual disability increases from political gamesmanship by making them automatic, not subject to budget debates.

Last year, a Republican senator placed a “secret hold” on a veterans COLA bill, presumably as leverage while GOP and Democratic lawmakers haggled over other aspects of the budget. The hold finally was lifted, as secretly and as anonymously as it was placed, and the legislation went onto the floor.

During a House Veterans Affairs Committee hearing on Runyon’s bill, representatives from the DAV, The American Legion, AMVETS, the Paralyzed Veterans of America and the Veterans of Foreign all went on record supporting the idea behind the measure except for the provision that could link future raises to chained CPI.

Sen. Bernie Sanders, I-Vt., who chairs the Senate Veterans Affairs Committee, is a strong opponent of chained CPI and has spoken out several times against it, noting that it will have an adverse impact on veterans and Social Security recipients.