VA Still Unsure How Budget Cuts Will Affect Agency

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Despite assurances the Veterans Affairs Department would be exempt from sequestration spending cuts, VA Secretary Eric Shinseki acknowledged on Wednesday the department could face some sequestration trimming.

“We have been informed that VA is exempt from sequestration – except for administrative costs,” Shinseki told a joint hearing of the House Veterans Affairs and Armed Services committees.

The White House Office of Management and Budget released a letter in April, assuring that veterans’ benefits and health care would not be hit by sequestration as laid out by the Budget Control Act of 2011. All government agencies will be automatically cut by an additional $1.2 trillion over the next 10 years if Congress can’t agree on a new deficit reduction plan.

Under law, however, the VA’s budget can’t be slashed by more than 2 percent – much less than the 8 percent to 10 percent cuts laid out under sequestration. A 2-percent cut of administrative-related funds would be about $60 million.

The VA is the rare government agency not facing massive budget cuts this year. And Shinseki said he hoped to avoid them altogether.

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