President Cuts Claims Processing Staff as Thousands Wait for Benefits

"Secretary Principi is conducting a top-to-bottom review of the claims processing. Currently, there are about 600,000 pending applications, of which 53,000 have been pending over a year...That's not right. I have given Secretary Principi the clearest of clear mandates. He must bring those claims to a speedy and fair resolution. We must move as quickly as possible on the backlog, and we will."

- President Bush, Address to VFW Annual Convention, 8/20/01

Current backlog forces veterans to wait months for benefits. Despite President Bush's promise to reduce the disability claims backlog to 250,000, 348,000 veterans are currently waiting for a decision regarding their eligibility for benefits - 39 percent above the President's goal. President Bush has asserted that his goal is an average waiting period of 74 days for a decision on claims (Fiscal Year 2003 Budget Message). Yet, three and a half years into his term, veterans are waiting an average of 187 days - 6 months - to receive a decision. During the waiting period, not only do veterans not receive any disability compensation for which they may be eligible, they also may not be able to obtain priority treatment at health care facilities. For severely disabled veterans, this delay can create serious health concerns.

Table 1: President Bush Fails to Reduce Claims Backlog

The Bush Administration's Fiscal Year 2005 Budget claims that "When President Bush took office, the number of claims waiting to be processed had soared to over 600,000." As the following table demonstrates, the backlog was hovering around 400,000 when the President took office, and reached its peak over a year into his term. Moreover, as the table exhibits, the Bush Administration has failed to make significant progress toward its stated goal of reducing the claims backlog below 250,000 and, in fact, has failed to achieve and maintain a caseload lower than that bequeathed to President Bush by the previous Administration.

Source: "Monday Morning Report," Veterans Benefit Administration.

Disability claims projected to rise. The Independent Budget, a nonpartisan assessment of VA needs published annually by leading veterans' organizations, projects that an additional 391,000 new disability claims will be filed over the next five years, 30 percent more than the current level of roughly 300,000 claims per year. In Fiscal Year 2005 alone, the Bush Administration projects that new disability claims will rise by 30,000. Moreover, the Independent Budget estimates that there will be an additional 52,869 appellate decisions needed on disability claims, many as a result of the newly passed Combat-Related Special Compensation (CRSC) and concurrent receipt legislation, as well as 48,000 claims that will need to be reworked in order to comply with recent court decisions.

Operation Iraqi Freedom places additional strain on Veterans Benefits Administration. Roughly 150,000 troops will have returned from Iraq by the end of Fiscal Year 2004, and more than 100,000 more will return during Fiscal Year 2005. This newest generation of veterans will create a tremendous strain on an already overstretched VA. Every National Guard and Reserve soldier returning from Iraq will be eligible for two years of health care from the VA. Moreover, more than 3,100 soldiers have been injured to date in Iraq, and these service members will be eligible to file disability claims upon their release from active duty.

Although Democrats, led by Senator Bob Graham, set aside $100 million in 2003 to provide the VA with the resources necessary to ensure returning soldiers receive the health care for which they are eligible, the VA has redirected this money toward other functions, including addressing the existing claims backlog, which is critically underfunded. This decision not only leaves Operation Iraqi Freedom veterans at risk of being placed on waiting lists that delay other veterans from receiving health care for up to six months, it also may leave the VA with insufficient resources for processing the claims of these new veterans in future months.

In the face of increasing claims, President Bush has proposed cuts to the veterans claims processing staff. Instead of devoting the resources necessary to address the current claims backlog and ensure that the VA is prepared to meet the needs of new veterans returning from Iraq, President Bush's Fiscal Year 2005 budget would make the situation worse. The President proposes cutting 540 members of the Veterans Benefits Administration staff charged with processing disability claims. Of this number, 35 will come from the Disability Compensation Administration, a year after the Bush Administration cut 254 staff from this office. Moreover, between 2004 and 2005, the Bush Administration plans to cut 383 staff from the Pensions Administration, another office integral in claims processing. These cuts could drastically exacerbate the claims backlog, particularly given the sharp increase in demand expected as a result of new legislation and new veterans returning home from Iraq.

Table 2: President Bush Slashes Veterans Benefits Administration Staff

The chart below shows the number of full-time employees cut by the Bush Administration in each of its last two budgets. In addition to 289 staff cut in Fiscal Year 2004, the Bush Administration will cut 540 staff in Fiscal Year 2005, all from programs vital to disabled veterans.

Source: Department of Veterans Affairs FY 2005 Budget Request briefing, 2/2/04