S. 2392 would increase the amounts paid to veterans for disability compensation and to their survivors for dependency and indemnity compensation by the same cost-of-living adjustment (COLA) that recipients of Social Security receive in 2026. The increase would take effect on December 1, 2025.

CBO estimates that the new COLA will be 2.4 percent. CBO estimates that enacting S. 2392 would increase spending for those programs by about $5.1 billion in calendar year 2025 and by similar amounts in subsequent years relative to amounts that would be provided under current law. However, section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985 requires that CBO’s baseline projections incorporate the assumption that the COLA will be provided. Thus, authorizing that increase would have no budgetary effect relative to the baseline.

The CBO staff contact for this estimate is Logan Smith. The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.