OMB says VA should be exempt from sequestration cuts

Tuesday - 4/24/2012, 9:45am EDT

The Veterans Affairs Department should be exempt from the automatic across-the-board cuts — or sequestration — laid out in last summer's Budget Control Act, according to an April 23 letter from the Office of Management and Budget.

OMB Deputy General Counsel Steven Aitken was responding to a March 15 letter from the Government Accountability Office requesting analysis of how sequestration would impact VA programs.

Under BCA, unless Congress can agree on ways to cut $1.2 trillion in spending over the next decade, automatic cuts will go into effect Jan. 2, 2013. Half of the cuts — or $55 billion — will impact the Defense Department. VA — along with Homeland Security, the National Nuclear Security Administration and intelligence community — would have been part of the DoD cuts.

Aitken cites previous legislation to make the argument for VA's exemption. The 1985 Balanced Budget and Emergency Deficit Control Act exempted VA programs but did not list medical care accounts as exempt. A provision in the 2010 Statutory Pay-As-You-Go Act (PAYGO, however, specifically exempts veterans' benefits from sequestration.

"Therefore, in answer to the question that you posed to OMB and VA, the conclusion that we have reached is that all programs administered by the VA, including Veterans' Medical Care, are exempt from sequestration," Aitkin wrote.

Also, a bill introduced in the Senate in February aims to amend the 1985 legislation to clarify that all veterans programs are exempt from sequestration.

In response to the OMB letter, the Veterans of Foreign Wars said the exemption would allow VA's services to "continue unabated." Richard DeNoyer, national commander of VFW, said veterans can "breathe a sigh of relief," according to a statement.

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