Gov. Kim Reynolds and members of her cabinet oversaw parts of northwest Iowa impacted by flooding in a helicopter tour June 21, 2024. (Photo courtesy of Gov. Kim Reynolds' office)
While the Senate passed a measure this week that allowed the U.S. Department of Veterans Affairs to pay veterans’ benefits to make up for a budget shortfall, Iowa Sens. Chuck Grassley and Joni Ernst said the VA needs to be held accountable to ensure similar situations don’t happen in the future.
The $2.9 billion funding bill was approved by the Senate Thursday , and is expected to be signed by President Joe Biden Friday — the deadline for approving the measure to ensure veterans’ benefits are not delayed beginning in October.
VA officials told Congress that the stopgap was needed because because there has been record-high benefits approvals and medical services usage by veterans in the past year — in part due to expanded coverage under the 2022 PACT Act for veterans exposed to toxic substances like burn pits and Agent Orange during their service.
Of the approved funding, roughly $2.3 billion will go toward compensation and pensions through the Veterans Benefits Administration, and $597 million to readjustment benefits. While the measure passed both chambers with bipartisan support, Republicans including Grassley and Ernst criticized the veterans affairs office for not bringing up the issue earlier, and for not properly budgeting for expected increased needs.
Grassley said he would work to ensure veterans receive timely benefits, but the budget problems show the VA “grossly mismanaged taxpayer dollars.”
“We won’t leave our nation’s veterans in limbo, hard stop,” Grassley said in a news release. “The VA, on the other hand, has major explaining to do: Veterans, Congress and the public deserve answers to basic questions. Namely, what led to this egregious financial shortfall and how will the agency fix the mess it created. Our legislation institutes needed accountability measures to prevent the VA from squandering taxpayer dollars intended to benefit those who’ve honorably served our nation.”
At a Wednesday hearing, Josh Jacobs, VA undersecretary for benefits, told senators that the budget shortfall came because “our workforce has over-delivered on what were already aggressive projections.” The department found during a midsession review the end of June that their projections of 2.2 million claims decisions had the potential to increase to 2.5 million, which Jacobs said was communicated to Congress as soon as they verified the projections.
However, the Senate appropriations subcommittee had already passed its VA funding bill for fiscal year 2025 by the time Congress was notified of the updated estimates and expected needs. According to Government Executive , Jacobs said that moving forward, the department plans to provide monthly comparisons for benefits projections for fiscal years 2025 and 2026.
“One of my lessons here, and one of our lessons, is that we will provide earlier communications. I will also say we didn’t have a high level of confidence. We were working to get independent verification that the estimate was, in fact, real and that the needs were verified,” Jacobs said.
Some Republican lawmakers have called for further budget oversight measures to be implemented for the VA. Grassley and Ernst joined Sen. Dan Sullivan, an Alaska Republican, to introduce the Protecting Regular Order (PRO) for Veterans Act Thursday in response to the budget shortfall. The legislation would require the VA to submit quarterly, in-person budget reports to Congress for the next three years and would stipulate that some senior personnel at the VA and Office of Management and Budget would have their bonuses withheld in the event of budget shortfalls.
The two Iowa Republican senators joined Sen. Dan Sullivan, an Alaska Republican, to introduce the Protecting Regular Order (PRO) for Veterans Act Thursday in response to the budget shortfall. The legislation would require the VA to submit quarterly, in-person budget reports to Congress for the next three years and would stipulate that some senior personnel at the VA and Office of Management and Budget would have their bonuses withheld in the event of budget shortfalls.
Ernst said the legislation would improve accountability at the VA and prevent future situations where veterans’ benefits could be at risk.
“Our veterans have served and sacrificed and deserve the benefits they have earned,” Ernst said in a news release. “Every Iowa family has to manage their household’s budget, but the VA refuses to abide by the same rules as hardworking Americans. This is a failure of leadership. I’m taking action to ensure these VA bureaucrats manage taxpayers dollars and veteran benefits more responsibly or else their own paychecks should have to face the consequences, not our nation’s heroes.”
Ernst says Iowans frustrated with SBA disaster response
Iowans in areas hit by severe flooding and tornadoes have been frustrated by problems accessing federal disaster programs, Ernst said Thursday at a Senate Committee on Small Business and Entrepreneurship hearing.
The Red Oak Republican thanked the U.S. Small Business Administration and Federal Emergency Management Agency for their work in the days and weeks following recent disasters in areas like Greenfield, hit by a tornado in May , as well as northwest Iowa communities like Rock Valley and Spencer that faced major flooding and storm damages in June .
Through presidential Major Disaster Declarations , residents and businesses in many of the counties affected by these severe weather events have access to financial aid and loans through FEMA, the SBA and the U.S. Department of Agriculture. However, Ernst said that as Iowans and small businesses seek to recover in the aftermath of these disasters, she’s heard multiple stories about people who are frustrated by errors and delays in accessing these resources — specifically, SBA and USDA loans.
SBA Economic Injury Disaster Loans are available to Iowa small business owners in counties designated as disaster areas. These loans for businesses have a 4% interest rate, lower than typical average business bank loan rates. Loans are also available through the USDA’s Emergency Loan Program for farmers in counties named in declarations by the U.S. Secretary of Agriculture.
“Small business owners who lose their livelihoods in a natural disaster have no time to spare,” Ernst said at the hearing. “It’s incredibly frustrating to repeatedly hear from those seeking SBA assistance that they thought it was such a waste of their time. So much so that many walked away and didn’t complete applications. For those who stuck it out, SBA loan processing times were incredibly slow.”
Iowa Deputy Secretary of Agriculture Grant Menke and First Community Bank President and CEO Verlin Barker were among the speakers to testify at the Thursday hearing. Barker said many Iowans rely on local community banks instead of federal programs to provide “vital resources” like loans in the wake of disasters because of “bureaucratic obstacles” and other issues encountered trying to access government aid.
“SBA direct lending and other federal disaster recovery programs have always played a critical role in the survival of disaster stricken businesses,” Barker said. “Unfortunately, these programs are mired in bureaucratic red tape. Disaster victims are in no position to complete that excessive paperwork.”
Ernst linked the problems in receiving federal funding to the Biden-Harris administration.
“Simply put, the Biden-Harris administration — in particular the SBA — is leaving these communities behind,” Ernst said. “SBA’s lending in rural areas is abysmal, at just around 15% in the agency’s two main programs. That’s a slap in the face to hardworking Americans who are the ones paying for these programs. The Biden-Harris team must stop picking winners and losers and make this assistance accessible to all Americans.”
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