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In March of 2024, the White House submitted their proposed budget for the 2025 fiscal year. It included the proposed spending levels for the Department of Veterans Affairs. In total, the budget would allocate more than $369 billion to the VA for a variety of services and functions. While this represents a notable increase in the total funding, the VA will also be forced to make some difficult cuts in certain areas.
It is important to remember that the budget process is ongoing, and the document submitted by the President is always altered dramatically along the way. While it is impossible to know with certainty how this budget might impact veterans or their health, it is worth noting that there are always resources when it comes to applying for VA claims.
The Budget is Set to Increase in 2025
Overall, the VA will see an increase in funding if the 2025 fiscal year budget is passed. The recommendations from the White House include proposed spending of $369 billion for the VA in 2025, which is an increase of more than 11 percent. While it is described as “robust funding” for the VA’s top priorities, not all programs will benefit. What’s more, a reduction in the workforce is also factored into these figures.
Of the additional $33 billion in funding, much of it is intended to provide additional money for VA disability compensation. The number of claims filed each year since the pandemic has only grown, and the increased funding levels are intended to ensure there is enough to pay for these expenses.
Another major expense in this budget involves toxic exposure funds. This money is used to provide health services and financial compensation to veterans who were exposed to harmful substances during their service. The Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022—or PACT Act—provides a path to financial compensation for veterans or their surviving relatives who were harmed by exposure to harmful chemicals, like those who served at Camp Lejeune. This funding represents $25 billion of the total budget, which is an increase of $5 billion above what was requested in the 2024 budget.
The budget is also expected to cover a growing number of veterans and their surviving family members. This includes compensation benefits to more than 7 million veterans and their survivors. Pension benefits will also be paid out to approximately 224,000 people who have previously served. Additional funding is included for home veteran services, increased access to mental health care, and the establishment of a suicide prevention line for veterans.
Larger Budget, Smaller Workforce
Despite the promise of additional funding for toxic exposure and standard disability claims, the VA is tightening its budget elsewhere. One of the primary sources of increased budget space comes from the proposed elimination of 10,000 positions. This is coming off of a period of historic growth in the workforce, with the VA seeing a net increase in staff of 28,000 in fiscal year 2023 alone. This reflects a reduction of around two percent of the 458,000 people employed by the VA across the country.
However, VA management also claims that this reduction will largely be handled by attrition instead of layoffs. According to Laura Duke, the VA’s chief financial officer, most of the workforce reduction will result from not filling vacancies. They expect most of the eliminated positions to be supervisors and support staff.
Duke went on to say that these changes will be handled on a region-by-region basis in order to ensure needs are met. The VA will reduce staff in individual markets based on how often they are used and what kind of specialists they employ.
The reason for this reduction—beyond the intent of cutting money from the budget—is twofold. First, the VA points to the increased hiring they have done since the early days of the pandemic to address the increase in claims. Second, they highlight an increased retention rate that has led to far fewer employees exiting than they had predicted.
When speaking to the press, Duke reiterated that these reductions were necessary because the hiring boom of the previous years was enough to remain in a ready state throughout 2025 without much additional hiring. As opposed to making these cuts out of desperation, the goal is to maintain the status quo while avoiding any layoffs.
The statement also made clear that there was no hiring freeze. While a number of positions will not be filled when employees move on from the VA this year, there will be growth in some situations. This will be based on need, both for specific locations and medical specialties. For example, the VA expects to continue hiring mental health experts in order to meet growing needs. This is especially important given that a section of the budget was dedicated to an expansion in mental healthcare for veterans.
The Electronic Health Record Rollout Remains Paused
One of the troubling aspects of the budget was the lack of additional funding for the rollout of the VA’s electronic health record (EHR) system. Despite already sinking billions into this system, the White House has not committed additional resources to attempt to get over the numerous roadblocks that stand in its way.
The system was first deployed in 2020. It represented an ambitious restructuring of the way the VA keeps and maintains medical records. After several years of cost overruns, the system was paused in 2023. The VA found that the unfinished system cost far more than expected while also potentially putting patient safety at risk. The intention of the VA was to “refresh” its approach to electronic records and eventually complete the task of transitioning to a functional EHR system.
The 2025 budget suggests that getting the EHR system up and running is not a top priority for the White House. In order to restart the program, additional funding would need to be allocated. As written, the budget only provides $894 million for modernizing medical records, which is a decrease of close to $1 billion from what was proposed in 2024.
Notably, most of the money allocated for the EHR system would go to keeping current sites online and paying for upkeep. There is zero money invested in expanding the system beyond the five test sites that currently use it. Veterans should not expect to take advantage of the promised benefits of modernized medical records this fiscal year.
How Will Budget Changes Impact Veterans?
How the 2025 budget impacts veterans remains to be seen. Any reduction in the workforce seems ominous, but the VA is adamant that these cuts will not impact physicians or critical nursing staff. The VA points to their numbers in the first quarter of 2024 to highlight improvements in service. While 70 percent of VA centers have reported an increase in patients, they also enjoy reduced wait times compared to last year.
While a reduction in the VA workforce has the potential to negatively impact veteran care, it is worth remembering that the overall budget is increasing by approximately 11 percent in 2025. That works out to an increase of $33 billion compared to last year alone. Much of that increase is targeted at improvements and upkeep for VA facilities, which will only make the process go more smoothly for veterans.
Much of the spending in the budget is mandated by law. The VA is required to spend most of its money directly on medical care. This includes health care costs, disability benefits, pensions, and facility leases. More than $210 billion of the budget is locked in for this mandatory spending.
The single largest increase is for toxic exposure funds, which will also directly impact the lives of many veterans. This includes not just spending on health care and compensation benefits but also for environmental research to reduce the risk of toxic exposure in the future.
Let Gang & Associates VA Disability Lawyers Assist You
While the proposed budget set out by the White House is an important starting point, negotiations with Congress are unpredictable. While the VA and Congress have made promises that they will increase funding for disability claims, that does not mean getting the compensation you deserve will be simple. The support of our team could be what you need to get the best possible outcome in your VA disability case.
At Gang & Associates, we are focused on fighting for veterans. We understand the claims process, and we are ready to help you if your claim is denied. You do not have to go through this process on your own. If you are ready to discuss how to appeal an unfavorable outcome, contact us as soon as possible.