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Obama seeks to hike veterans' funding despite budget pressure

U.S. President Barack Obama speaks about tighenting gun regulations during a visit to the Denver Police Academy in Denver, Colorado April 3,
U.S. President Barack Obama speaks about tighenting gun regulations during a visit to the Denver Police Academy in Denver, Colorado April 3,

By Phil Stewart

WASHINGTON (Reuters) - President Barack Obama will request a 4 percent increase in discretionary spending next year for the Department of Veterans Affairs, a move officials said on Friday demonstrated his commitment to veterans and their families despite intense fiscal pressure.

Obama will also seek to make permanent two tax cuts for businesses that hire veterans, an effort meant partly to help drive down unemployment among former service members from the Iraq and Afghanistan wars. Their jobless rate has been higher than the national average.

The announcements by White House Chief of Staff Denis McDonough and VA Secretary Eric Shinseki came before Obama's formal budget rollout next week and could signal the VA will be among a small group of areas in which discretionary spending rises.

For example, Obama is expected to offer cuts to Social Security and other benefit programs.

"The budget lays out in pretty stark detail ... the president's commitment to our vets and their families," McDonough said, adding the increase in funding would be fully paid for and add "zero" to the deficit.

The proposed funding increase comes at a delicate moment for Shinseki's VA, which is under intense scrutiny from Congress as it struggles to cope with fallout from 11 years of non-stop war.

Notably, the agency is wrestling with years of surging disability claims by veterans seeking compensation for their injuries from Iraq and Afghanistan, but also past wars, as Shinseki widened eligibility.

Veterans have seen a four-fold increase in the backlog of claims pending more than 125 days since 2009, even as the VA processed more and more of them.

Obama has pledged to eliminate the backlog by 2015, a goal both Shinseki and McDonough recommitted themselves to on Friday. Still, they acknowledged the backlog may grow in the coming months before finally starting a firm trend downward - all the way to zero, they said, by sometime in 2015.

Shinseki said any veteran waiting for a claim decision was "waiting too long," adding, "There's nobody more impatient about this than I am."

The number of backlogged compensation claims actually dropped to 569,547 as of March 30, down from 588,959 the previous week, according to VA data.

Shinseki said he hoped that was because of advances in the VA's efforts to move from paper to electronic claims processing, which U.S. officials hope will ultimately end the backlog.

"The effects of automation are going to begin to show themselves," Shinseki said.

Next year's discretionary spending at the VA would amount to $63.5 billion, higher than the roughly $61 billion requested by Obama and approved by Congress last year, officials said. Discretionary spending amounts to a little less than half the VA budget.

Those figures do not including collections from veterans' health insurers and copays from higher-income, non-service connected veterans, which can drive up the funding requests when presented to Congress, a VA spokesman said.

(Editing by Peter Cooney)

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