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This option consists of two alternatives. Under the first, VA would stop making IU payments to veterans age 67 or older (the full retirement age for Social Security benefits for those born after 1959). That restriction would apply to both current and prospective recipients. When veterans reach age 67, all VA disability payments would revert to the amount associated with the rated disability level; veterans age 67 or older who are already receiving IU payments would no longer receive them after the effective date of the option. Under the second alternative, veterans who began receiving the IU supplement after December 2023 would no longer receive those payments once they reached age 67, and no new applicants age 67 or older would be eligible for IU benefits after that date. Veterans who are currently receiving IU payments and who would reach age 67 or older after the effective date of the option would continue to collect the IU supplement.
Veterans with medical conditions or injuries that occurred or worsened during active-duty service receive disability compensation from the Department of Veterans Affairs (VA). By law, VA's disability ratings (the basis for disability payments) are to be based, as far as practicable, on the average earnings that veterans would be expected to lose given the severity of their service-connected medical conditions or injuries. Those ratings do not depend on whether a particular veteran's conditions reduced the person's earnings. Disability compensation is not means-tested: Veterans who work are eligible for benefits, and most working-age veterans who receive such compensation are employed. After veterans reach Social Security's full retirement age, VA's disability payments continue at the same level. By contrast, the income that people receive from Social Security or private pensions after they retire usually is less than their earnings from wages and salary before retirement.
Under this option, veterans who start receiving disability compensation payments in 2024 or later would have those payments reduced by 30 percent at age 67. (Social Security's full retirement age is 67 for people born after 1959.) Social Security and pension benefits would be unaffected by this option. Veterans who are already collecting disability compensation would see no reduction in their VA disability benefits when they reached age 67.
Under this option, spending for certain large mandatory programs without dedicated trust funds would be reduced. Specifically, this option would reduce spending on the two components of such spending that are projected to be the largest over the 2023–2032 period: disability compensation paid by the Department of Veterans Affairs (VA) and income security programs. For VA disability compensation, the reduction would be achieved by applying a means test to VA disability payments (that is, by limiting eligibility for households with higher income). For income security programs, this option would involve a 15 percent reduction in spending that could be achieved in different ways. Refundable tax credits and unemployment compensation would not be affected.
Veterans' social media feeds erupted this week over a months-old report from the Congressional Budget Office that listed options for reducing the federal deficit, including the idea that the government could save $253 billion over the next 10 years by eliminating disability compensation for veterans who make more than $170,000.
Each year, the CBO publishes proposals for reducing the federal deficit, which has reached nearly $723 billion since the beginning of fiscal 2023. The latest list, published in December but only garnering attention among veterans this week, called for means-testing for veterans with higher income levels.
But Veterans Affairs Secretary Denis McDonough shot down the idea on Thursday, saying the VA does not "think that's a good idea."
"We think it's a bad idea, and we're not going to do it. You have my commitment that we won't do it," McDonough said during a press conference with reporters in Washington, D.C.
Targeting veterans is a seriously bad idea. Seriously... Let's try this... 1. Train many thousands of Americans to be the best killing machines on the planet. 2. Send them to war after war, fighting at the whims of the government that trained them to kill. 3. Bring them home broken... 4. Screw them over. This will not end well.
History
Founded in 1974, The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. The Congressional Budget Office is nonpartisan and produces “independent analyses of budgetary and economic issues to support the Congressional budget process.” Each year, the agency releases reports and cost estimates for proposed legislation without issuing any policy recommendations. The CBO was created as a nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974.
The CBO is an agency of the federal government and funded by the government through the U.S. budget.
On March 28, 2022, the Administration submitted its annual set of budgetary proposals to the Congress. In this report, the Congressional Budget Office examines how those proposals, if enacted, would affect budgetary outcomes in relation to CBO’s most recent baseline budget projections. Those projections extend from 2022 to 2032 and reflect the assumption that current laws governing federal spending and revenues will generally remain in place. CBO’s baseline budget projections and its analysis of the President’s proposals are based on the agency’s economic forecast published in May that reflects developments through early March.