GOP Accepts Biden's Spending Boosts for VA, Pentagon in Debt Ceiling Deal

Spending on defense and veterans health care would both see bumps next year under a deal between the White House and House Republicans reached over the weekend aimed at preventing an unprecedented default on U.S. debts next week.

Hurdles still remain in getting the deal passed before the Treasury Department's stated June 5 deadline for when it will run out of money, but the agreement puts Congress on the path to avert delays on veterans benefits and service member pay, among other fallout from a default.

Under the agreement, Pentagon and other national security spending in fiscal 2024 would be set at $886 billion, which is a 3% increase over this year and the amount the Biden administration requested from Congress in March.

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The bill would also put $20 billion into the Toxic Exposures Fund, the pot of money the Department of Veterans Affairs created last year to pay for benefits granted by the PACT Act. That matches the Biden administration's request for the fund and staves off a fight that had been brewing between Democrats and Republicans after the GOP proposed putting just $5 billion into the fund.

The text of the bill does not explicitly set broader VA spending for 2024, but both the White House and House Republican leadership say they agreed to fund the VA's medical budget at $121 billion -- which also aligns with the Biden administration's budget request and represents a 2% bump over this year.

"We cut spending year-over-year for the first time in over a decade while fully funding national defense and veterans' health benefits," House Speaker Kevin McCarthy, R-Calif., and other House Republican leaders said in a joint statement Sunday.

The White House similarly touted that the bill would "fully fund veterans' health care and our obligations under the historic PACT Act" in a statement Tuesday urging Congress to pass the bill "as soon as possible to protect the full faith and credit of the United States."

At the heart of the agreement is a deal to raise the so-called debt ceiling through 2025. The debt ceiling or debt limit is the amount of money the Treasury Department can borrow in order to pay the nation's bills. Last week, Treasury Secretary Janet Yellen warned that the Treasury will run out of money on June 5, adding more specificity to her earlier warning that a default could come as early as the first of the month.

Republicans and Democrats have approached fiscal cliffs multiple times over the last decade, but have always eventually passed deals to avoid what experts say would amount to economic calamity by undermining confidence in the stability of the U.S. financial system.

Administration officials have warned that a default could mean delays on $12 billion in veterans benefits, along with $13 billion in other VA bills and $4 billion in military salaries.

The agreement on veterans health care spending comes after a bitter fight between the Biden administration and House Republicans over whether the GOP desire to cap government spending would mean a cut to the VA budget.

In a tweet Sunday, VA Secretary Denis McDonough threw his support behind the deal.

"This bipartisan budget agreement delivers on our nation's promise to care for Veterans, their families, caregivers, and survivors," McDonough said. "I thank @POTUS and Congressional leaders for getting this deal done -- and I urge its swift passage."

The agreement would also newly exempt veterans from having to work in order to receive government food aid known as SNAP, informally known as food stamps, even as it raises the age at which most Americans would have to work in order to receive the assistance from 50 to 55.

While the agreement on defense spending represents an increase over this year, GOP defense hawks are grumbling that it is not high enough to compete with U.S. adversaries such as China and Russia.

Republicans on key panels including the House Armed Services Committee had argued that Biden's budget request for defense, which the debt limit deal matches, is actually a cut when accounting for inflation. Leaders on the Armed Services Committee signaled they had planned to go above $886 billion in the annual defense policy bill -- plans that would now run afoul of the debt limit deal.

"We're accepting Biden's defense budget, which is actually a cut," Rep. Michael Waltz, R-Fla., chairman of the Armed Services Committee's readiness subpanel, said Tuesday on Fox News in announcing he plans to vote against the debt limit deal. "That's cutting ships while you have a massive military buildup from China. You can't do this on the back of our troops."

In addition to setting top-line spending figures for 2024, the bill would also establish spending in 2025 as $895 billion for defense and $711 billion for nondefense, including for the VA.

The House is expected to vote on the debt limit deal Wednesday. The timing of the vote in the Senate could be drawn out for days as senators unhappy with the deal take advantage of chamber rules to put up procedural roadblocks, meaning there is still a chance Congress could brush up against the June 5 debt ceiling deadline even as the bill is ultimately expected to pass.

-- Rebecca Kheel can be reached at rebecca.kheel@military.com. Follow her on Twitter @reporterkheel.

Related: Veterans Health Care and Benefits Become Flash Points in Debate over Debt Ceiling and Spending Cuts