Last month, a bill was introduced in the House of Representatives which, if enacted, would substantially increase the compensation for Veterans with the most serious injuries. While the proposed legislation received unanimous bipartisan support from lawmakers at a hearing of the House Veterans’ Affairs Committee, the committee members were sharply divided over how to pay for the expansion of benefits.
The Sharri Briley and Eric Edmundson Veterans Benefits Expansion Act, introduced by Representative Tom Barrett (R-MI).and Representative. Mike Bost (R-IL) would add an additional $10,000 each year to the compensation for Veterans with serious disabilities connected to their military service such as traumatic brain injuries and paralysis. It would also increase benefits for spouses of service members killed in the line of duty or whose death was caused by their combat injuries. Their benefits would increase by one percent per year for the next five years.
It is estimated that this bill could affect more than 500,000 Veteran families and comes with a high price tag— estimates range from $7 to $10 billion. To cover the cost, House Republicans have proposed that Veterans who purchase a second home through the VA’s mortgage program and have a 70% or lower disability rating pay a loan funding fee. The VA funding fee is already required for many borrowers of VA-backed home loans. But disabled veterans who have qualified for VA disability benefits are exempt.
Funding fee amounts vary based on loan type, prior VA loan use, and other factors, but Representative Bost says that the average amount of the new fee would be $35 a month. “Opening the funding fee is a realistic way to get this done,” he explained. Representative Nikki Budzinski (D-IL) pushed back on the fee funding plan saying, “I cannot allow those benefits to be paid for on the backs of other Veterans, even though there is a fierce urgency that this [legislation] is long overdue.” Using that $35 a month average over a 30-year mortgage, this fee would add nearly $13,000 to the cost of buying a home.
Representative Greg Murphy (R-NC) encouraged committee members to work together to advance the legislation to the full House for adoption. “I hope we can sit down like adults and figure this out,” Murphy said.
