The Veterans Affairs Budgeting Experiment

Earlier this week, the House passed an unusual bill that authorizes advance appropriations for Veterans Affairs (VA) funding.  HR 1016 [1] means that Congress will create two budgets this year, one for the current 2010 appropriations cycle, and a future budget for 2011.  Subsequent years will produce budgets that are at least a year ahead.  For the VA department, which has been plagued in recent years by reports of patient neglect and poor management, this will hopefully be the first step towards better service delivery.

Unlike Medicare and Medicaid, VA funding must be appropriated annually and in recent history, Congress rarely delivered a budget on time.  Year after year, a delayed budget adversely affected the program staff’s ability to plan ahead or move forward with capital projects.  Veterans already face a complicated medical system that often exposes the lack of coordination between the military and VA.  This was particularly evident during the Walter Reed scandal [2] and a separate and no less embarrassing loss of private electronic health data [3] in 2006.

The Department of VA will now submit budgets at least a year ahead of time for the following categories: Medical Services, Medical Support and Compliance, Medical Facilities, Information Technology Systems, and Medical and Prosthetic Research.  Similar to multi-year budgets, the ability to submit budgets ahead of time will allow for more strategic planning and program execution.  This should allow the Department to more accurately project costs, assuming there are no major programmatic changes.

This budgeting mechanism differs from a traditional multi-year budget because the Department of VA is not required to forecast tax revenues. As a result, while program managers at VA may propose a spending budget that they feel is adequate for program needs, changing economic conditions might make the figures irrelevant by the time the fiscal year rolls around. A strong monitoring mechanism is necessary to ensure that each budget’s projected costs are appropriate. In this case, the Comptroller General will be responsible for assessing the budget each year. While this isn’t truly a multi-year budget, this is the beginning of a more thoughtful approach to appropriations.

Congressional Quarterly: House Passes Bill For Two-Year Budget Cycle for Some Veterans' Programs [4]

Image by Flickr user wallyg [5], used under a Creative Commons license.