Bill Summary

H.R. 2605 would require the Department of Veterans Affairs (VA) to establish a pilot program to award grants to nonprofit entities to provide service dogs to eligible veterans over the 2027-2031 period. The bill also would require VA to provide veterinary insurance for those dogs. Finally, the bill would extend a temporary limitation on certain pension payments through February 2033.

Estimated Federal Cost

The estimated budgetary effects of H.R. 2605 are shown in Table 1. The costs of the legislation fall within budget functions 550 (health) and 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 2605 will be enacted near the beginning of fiscal year 2026 and that outlays will follow historical spending patterns for affected programs.

Provisions that Affect Spending Subject to Appropriation and Direct Spending

Section 2 of H.R. 2605 would require VA to establish a five-year pilot program to provide grants to nonprofit entities for the provision of service dogs to eligible veterans beginning in 2027. The program also would require VA to provide veterinary insurance for dogs acquired under the program, including during the period after the pilot program expires.

The bill authorizes the appropriation of $10 million annually over the 2027-2031 period. CBO expects that the authorized amounts would cover the costs of awarding grants to nonprofit entities and providing veterinary insurance for dogs acquired through the program. Based on information from VA and similar programs, CBO estimates that approximately 1,000 veterans would receive dogs under the program. Under the bill, VA would be required to continue providing veterinary insurance for those dogs after the pilot ends. CBO estimates that the cost of providing insurance coverage over the 2032-2035 period would total $4 million, assuming an average annual cost of $1,100 per dog. In total, CBO estimates that implementing section 2 would cost $54 million over the 2025-2035 period.

CBO expects that some of the costs of implementing the bill would be paid from the Toxic Exposures Fund (TEF) established by Public Law 117-168, the Honoring our PACT Act. The TEF is a mandatory appropriation that VA uses to pay for health care, disability claims processing, medical research, and IT modernization that benefit veterans who were exposed to environmental hazards.

Additional spending from the TEF would occur if legislation increases the costs of similar activities that benefit veterans with such exposure. Thus, in addition to increasing spending subject to appropriation, enacting section 2 would increase amounts paid from the TEF, which are classified as direct spending. CBO projects that the proportion of costs paid by the TEF will grow over time based on the amount of formerly discretionary appropriations that CBO expects will be provided through the mandatory appropriation as specified in the Honoring our PACT Act.[1]

CBO estimates that over the 2025-2035 period, implementing section 2 would increase spending subject to appropriation by $42 million and direct spending by $12 million.

Direct Spending

In addition to expanding benefits that would partly be covered by the TEF, enacting H.R. 2605 would affect direct spending by extending a statutory limitation on VA pension payments. In total, enacting the bill would decrease net direct spending by $48 million over the 2025-2035 period (see Table 2).

Under current law, VA reduces pension payments to veterans and survivors who reside in Medicaid nursing homes to $90 per month. That required reduction expires November 30, 2031. Section 3 of H.R. 2605 would extend that reduction for 15 months, through February 28, 2033. CBO estimates that extending that requirement would reduce VA benefits by $10 million per month. As a result of that reduction in beneficiaries’ income, Medicaid would pay more of the cost of their care, increasing spending for that program by $6 million per month. Thus, enacting section 3 would reduce net direct spending by $60 million over the 2025-2035 period.

Spending Subject to Appropriation

The discussion above in “Provisions that Affect Spending Subject to Appropriation and Direct Spending” describes the costs of implementing a program to provide service dogs to eligible veterans and covering the cost of veterinary insurance for those dogs. Establishing that program would increase spending subject to appropriation by $42 million over the 2025‑2035 period, CBO estimates.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 2605 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2036.

CBO estimates that enacting H.R. 2605 would not increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2036.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Federal Costs:

Noah Callahan (for veterans’ health care) 
Logan Smith (for pensions and Medicaid)

Mandates: Lucy Marret

Estimate Reviewed By

David Newman
Chief, Defense, International Affairs, and Veterans’ Affairs Cost Estimates Unit

Kathleen FitzGerald 
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis