VA budget tops $488B as workforce stays above DOGE target

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(The Center Square) – The Department of Veterans Affairs is requesting $488.2 billion for fiscal year 2027, a 7.7% increase over current spending levels, as VA Secretary Doug Collins defended a budget that expands private-sector care while trimming staffing for oversight and appeals operations.

Testifying before the Senate Appropriations Subcommittee on Military Construction and Veterans Affairs, chaired by Sen. John Boozman, R-Ark., Collins said the proposal prioritizes performance over bureaucracy.

"For too long, this Department measured success by how much money it spent and how many people it employed – not by how well it served veterans," he told lawmakers.

In written testimony, Collins added that the VA "is not a federal jobs program, but in the past, it acted like one."

Collins pointed to a 70% reduction in the disability claims backlog, a record 51,936 homeless veterans permanently housed in fiscal year 2025, and the rollout of a long-delayed electronic health records system in Michigan as evidence of progress. He also highlighted the opening of 35 new health care clinics, 82 million direct-care appointments completed in fiscal year 2025 and more than 125,000 new VA enrollees added in 2026.

The budget would support 443,327 full-time equivalent VA employees in fiscal 2027, according to the Budget in Brief. That's down from 452,410 in fiscal 2025 but up 6,183 from the fiscal 2026 enacted level. In March 2025, VA set an initial target of returning to 399,957 employees in partnership with the Department of Government Efficiency, but by July 2025, the department announced a large-scale reduction in force was "off the table" after attrition and voluntary departures reduced headcount by nearly 30,000 employees without forced cuts.

The VA's $180.1 billion health care request would fund inpatient and outpatient care, pharmacy services, prosthetics, mental health treatment, long-term care and readjustment counseling. The proposal's largest shift, however, is in how care would be delivered.

Funding for direct care – treatment provided by VA-employed physicians and nurses at VA facilities – would total $95.1 billion under the proposal, according to the VA. Community care, in which the VA pays private providers to treat veterans outside the VA system, would total $56.1 billion.

Senate Democrats questioned the disparity, citing VA data showing veterans' outcomes are often equal to or better within the VA system than through private-sector care.

"The department's own public-facing data shows that outcomes for veterans are either the same or better through direct VA care compared to privatized outside care," Ranking Member Jon Ossoff, D-Ga., said at the hearing. "We have this huge imbalance in the requested funding for outsourced privatized care versus direct care through the VA."

In response to questions from The Center Square, VA Assistant Secretary Pete Kasperowicz said the allocation is required by law and reflects veteran demand. The VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act, known as the MISSION Act, requires VA to provide for both direct and community care, Kasperowicz said.

"The allocation for fiscal year 2027 reflects anticipated demand by veterans in both categories," he told The Center Square.

Republican members of the subcommittee did not directly challenge the community care allocation at the hearing.

An August 2025 VA Office of Inspector General report found that all 139 VA medical centers reported severe occupational staffing shortages, drawing additional scrutiny during the hearing.

Ossoff noted the fiscal year 2027 request would fund fewer physicians and registered nurses than the administration requested for fiscal year 2026, figures that are accurate when comparing the two budget requests.

Kasperowicz told The Center Square that, compared with enacted fiscal year 2026 funding levels, the proposal would actually fund 354 additional physicians and 1,115 more registered nurses.

Under the request, the VA projects staffing totals of 24,779 physicians and 79,674 registered nurses across the medical system, according to budget documents.

Collins said recruitment remains difficult in some specialties because VA physician salaries trail private-market compensation by $300,000 to $400,000 annually.

"They're not going to come to the VA if they can make $400,000 down the street," he said.

The proposal would also reduce funding for several oversight and adjudication offices. The VA Office of Inspector General would receive $284 million, a $12 million reduction, and lose 46 staff positions. The Board of Veterans' Appeals would see its budget cut by $12 million and staffing reduced by 137 positions, or roughly 10.5%.

Veterans groups pushed back on the administration's funding levels. In their joint Independent Budget released in March, Disabled American Veterans and Veterans of Foreign Wars recommended $223.3 billion in operational funding for the VA, compared with the administration's comparable request of $205.6 billion, and urged Congress to fully fund unmet needs such as long-term care.

Overall, VA funding has increased 58% since fiscal year 2023, driven largely by mandatory spending increases tied to the PACT Act, which expanded benefits for veterans exposed to burn pits and other toxic substances.

The fiscal year 2027 budget proposal assumes no civilian federal pay raises.