Primer: Burn Pits Disability Compensation Legislation is Excessively Costly and Dramatically Increases U.S. Debt
Summary
The House and Senate are poised to pass the Honoring Our PACT Act (H.R. 3967), legislation that attempts to address potential health impacts on veterans from so-called “burn pits.” Burn pits were areas the U.S. military and associated contractors designated to burn trash and other debris while deployed in Iraq and Afghanistan. These pits were frequently little more than shallow holes. While the overall health impacts from exposure to burn pits remains undetermined, the legislation is estimated to add $277 billion to deficits through 2031 and $667 billion to direct spending over a decade.
Background
The PACT Act increases disability compensation and expands health care services to a large group of veterans who were exposed or presumed to have been exposed to toxic substances while operating in specific locations during their military service. The core principle of providing care to veterans, especially when they suffer a service-related injury, is paramount and one American taxpayers rightly support. However, it is essential in a nation facing 9.1 percent inflation and over $30 trillion in debt that Congress at a minimum prioritize this new–and exorbitant–funding by cutting spending elsewhere or ensure that the service is provided in the most cost-efficient manner possible. Neither the House nor the Senate made any attempt to do either.
The bill would cover 24 specific illnesses as presumed to have resulted from exposure to burn pits used to dispose of waste during the wars in Iraq and Afghanistan. According to a Congressional Budget Office (CBO) estimate, the costs of expanded coverage would be $63.1 billion in mandatory spending and $18.8 billion for discretionary spending. The primary cost-driver is the eligibility criteria embedded within the legislation and the fact that it goes well beyond burn pits in Iraq and Afghanistan. However, according to the latest CBO estimate, most of the bill’s hefty cost results from shifting hundreds of billions from discretionary to mandatory, an astounding $667 billion over a decade.
Section 103 of the bill outlines which members of the military are eligible to receive taxpayer-funded care under the new Cost of War Toxic Exposure Fund to include any service member who deployed in support of operations in Iraq or Afghanistan from 2001 through 2021.
According to data published by the RAND Corporation in 2018, well over 2.7 million Americans deployed to Iraq and Afghanistan from 2001 through 2015. This means the legislation would extend new spending on toxic substance medical care to an estimated 3 million Americans and include anyone involved in operations in Iraq or Afghanistan.
The PACT Act increases spending beyond covering illness derived from service in Iraq and Afghanistan. The bill includes language that would cover hypertension (high blood pressure) and monoclonal gammopathy for Vietnam veterans. The CBO estimate of those costs would be $37.4 billion in mandatory spending and $21.5 billion in discretionary spending increases over ten years. In other words, the bill far exceeds the health impacts of serving near burn pits to illnesses that may not have been closely tied to a veteran’s military service.
The latest CBO score also understates the cost, which is very likely to be far higher than official estimates, because of the incorporation of phase-in dates for certain benefit conditions. Additionally, the assumed enactment date in the current version of the bill shifted to a later date from the original House-passed version, so CBO outright states that they lowered the cost estimates in comparison to the original bill. These are not real savings.
The creation of a new mandatory spending entitlement for every service member who deployed in support of operations in Iraq and Afghanistan, combined with cost evaluations derived from artificially-constrained budget windows, mask the true cost of this proposal. Indeed, using budget estimates that backload the cost of a program at the end of the 10-year budget window is a common budget gimmick designed to create the appearance of restrained spending when the reality tells a far different story. This is a favorite practice of both political parties, but it is not a real attempt to pay for anything. Indeed, it is a deception intended to increase spending across the board.
Mandatory spending–also called direct spending–is not subject to the annual appropriations process, so there is a near-zero chance Congress will address the program again, no matter how expensive it becomes.The elimination of the yearly appropriations component of the PACT Act removes the incentive to hold costs of veteran care to any specific level. Once spending is set on auto-pilot it is much harder to reform when problems arise.
Furthermore, transitioning the provisions in the PACT Act over to mandatory spending clears the way for additional discretionary spending since that line item no longer appears in the appropriations baseline. Shifting costs from the discretionary to mandatory side of the ledger will only hasten America’s economic crisis, compound inflationary pressure, and deepen both our short-term and long-term fiscal instability–thus jeopardizing the nation’s ability to provide benefits and services that veterans deserve.
Conclusion
CBO’s estimate of the PACT Act is $667 billion in direct spending over ten years. Shifting the bill’s costs to mandatory spending outside of the annual appropriations process attempts to absolve Congress of its duty to scrutinize every dollar and provide for our veterans in the most efficient manner, while freeing up hundreds of billions to spend on governmental bureaucracies. Our nation’s veterans deserve far better than to have their healthcare needs politicized into mammoth spending bills that contribute to the wreckage of our nation’s fiscal situation, especially when cheaper alternatives exist.
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