WASHINGTON — Nearly a month after the U.S. Department of Veterans Affairs shocked Congress — and Colorado — with the admission that it needs an extra $830 million to finish construction of a new hospital in Aurora, the Obama administration says it has a plan to cover the cost.
The proposal would not require new spending and instead would shuffle money inside the VA budget, an approach that increases the likelihood of attracting congressional support — a major potential hurdle.
But because the plan would tap new money meant for needed reforms systemwide, the move is hardly free of controversy.
Under the proposal, the VA would reroute money to the Aurora project from a special fund created to make the VA more efficient.
The $5 billion coffer was established last year as part of a reform bill passed by Congress to address systemic problems within the agency that contributed to deadly consequences at VA operations in the Phoenix area.
VA officials there, swamped with demand, put hundreds of sick veterans on a secret waiting list for care, and at least 35 veterans died while awaiting treatment — a scandal that sparked national outrage.
According to an administration official and confirmed by the staff of U.S. Sen. Michael Bennet, VA officials want to use money from this one-time $5 billion fund to pay for the Aurora hospital, which now is expected to cost $1.73 billion — more than five times its initial $328 million estimate.
By taking this route, the Obama administration has a better chance of steering money to the Aurora project without having to jump through too many congressional hoops, which could take months and is not guaranteed — especially since lawmakers already have put conditions on the payment of an additional $830 million.
The conditions include firing VA officials responsible for problems and cost overruns at the Aurora facility.
But the new strategy has its drawbacks.
For one, it has the potential to draw congressional skepticism. Aides to Bennet — one of the first lawmakers to hear of the proposal — said the Colorado Democrat still is reviewing it to see if he agrees with the approach. Bennet also wants the VA to be more forthcoming with the reason for the sharp price increase.
“It’s encouraging that the VA appears to be identifying real dollars to complete this hospital for Colorado’s veterans,” said Bennet spokesman Adam Bozzi. “Now we need to ensure there is full accountability and transparency for this project and others moving forward.”
Other lawmakers, including U.S. Rep. Mike Coffman, R-Aurora, have concerns too. Coffman has put forward legislation that would prohibit the VA from doling out bonuses until the Aurora project is fully operational. According to his office, the VA is authorized to spend $360 million in bonuses for fiscal year 2015.
VA officials are opposed to his suggestion because they say the money is needed to pay employees who put in long hours, such as doctors and nurses. But Coffman has said it’s imperative that VA leaders have some skin in the game.
“For anyone familiar with the VA’s allergy to accountability, the fact that they want to take money appropriated to fix one mistake to pay for another should be no surprise,” Tyler Sandberg, a Coffman spokesman, said in a statement.
Depending on how much Congress wants to fight the VA, federal lawmakers can put roadblocks in front of the move or pass legislation prohibiting the use of the $5 billion fund for this purpose.
Then there’s the viability of the $5 billion fund itself. Taking $830 million from the coffers would sap almost 20 percent of its total.
According to the law that created the fund, the money is intended for a wide range of purposes, from nursing home maintenance to the hiring of physicians and social workers to carrying out “minor construction projects.”
Yet the VA has only a few options. The VA budget — in spite of its size — has limited flexibility.
For fiscal year 2015, the VA budget is about $163.5 billion, though less than half that amount — roughly $65.1 billion — is discretionary. The remainder includes mandatory spending such as burial benefits, disability payments or education funding.
Funding isn’t the only uncertainty surrounding the Aurora facility. In a recent response to congressional questions, VA officials said the Aurora team was “striving for construction completion” in 2017 — but that nothing was guaranteed.
Mark K. Matthews: 202-662-8907, mmatthews@denverpost.com or twitter.com/mkmatthews
