During its March 23 hearing on the assessment of the Biden administration’s funding proposal for 2024—and advance appropriations request for 2025—members of the House Committee on Veterans’ Affairs gave particular focus to a $20 billion item in the $325.1 billion 2024 budget.

And they questioned Department of Veterans Affairs (VA) Secretary Denis McDonough over plans to pull the $20 billion from the fund created as part of the landmark PACT Act passed into law last August which expands benefits and services to veterans exposed to toxins while serving.

A central component of the PACT Act, into which Congress rolled the Cost of War Toxic Exposures Fund (TEF), is $300 billion in financial benefits.

Members of the committee explained that they thought that the VA, as reflected in its budget proposal, looked at the TEF fund as a new and massive resource from which money could be allocated to pay for broad VA medical and healthcare spending, rather than only for the specific purpose and group for which it is intended—veterans harmed by exposure to toxic chemicals and their survivors.

“I have some concerns about how this budget request is structured,” said Committee Chairman Mike Bost (R-Ill.), a Marine Corps veteran in his opening statement.

“It has far too many gimmicks. And today’s gimmicks are tomorrow’s headaches.”

Bost added, “There has been a process for a long time, called the Second Bite, where VA revises its medical care request during the year. It exists for a reason, and it works. Why should we get rid of it?

“I don’t believe anyone intended the Toxic Exposure Fund to replace it. The more complex a budget is, the harder it is to manage and have transparency. And these complexities make VA less accountable to the veterans they serve.”

Ranking Member Mark Takano (D-Calif.), in his opening remarks, also dug into the issue of the VA budget and the use of TEF money.

“For fiscal year ‘24, I want to highlight a concern of mine regarding VA not requesting a second bite,” said Takano.

“It has been the custom in previous budgets that we have a second bite. VA healthcare is funded through an advance appropriations process—and the so-called second bite allows VA to adjust its previous ask to Congress to address unexpected changes to healthcare costs, such as new prescription drugs coming to market or increased costs for labor and materials.

“Instead, this year’s budget relies on a request of over $21 billion to the Toxic Exposure Fund, which was only appropriated $5 billion for fiscal year ‘23. That is a significant difference. Relying on the toxic exposure fund as a means to address increasing demands is a risky proposition.”

Bost kept after McDonough and the TEF and PACT segment of the VA’s budget request, although the figure he referenced for the VA’s TEF budget item was $1 billion less than the number Takano cited.

“Mr. Secretary, you’re asking for $20 billion for Toxic Exposure funds for next year,” said Bost. “But you aren’t even planning on spending at least $3 billion of that. Why are you requesting money that you can’t or won’t spend?”

McDonough responded to the questions and challenges on the use of TEF money.

He emphasized the frequent reporting and accounting of the VA to the Committee on Veterans’ Affairs, that he has recently corresponded with the Inspector General, and asked him to apply particular scrutiny to the VA’s use of TEF.

“But the PACT Act is a new way of doing business,” said McDonough. “And, importantly, you gave us authority in there that said any dollars for toxic exposure-related care and benefits above the F21 baseline can be moved into the TEF.

“We’ve done exactly that and no more in this budget.”