The Department of Veterans Affairs is asking Congress for a substantial budget increase for 2025, but also looking to decrease its overall health care workforce headcount through attrition.

The VA is asking for $369.3 billion in fiscal 2025, a nearly 20% increase from enacted spending levels.

The department is counting on those funds to handle one of the biggest expansions of VA health care and benefits in its history, which is happening under the PACT Act.

Under an accelerated PACT Act implementation timeline, all veterans exposed to toxic substances and other hazards during military service — at home or abroad — became eligible to enroll directly in VA health care without first applying for VA benefits on March 5.

VA Assistant Secretary for Management and Chief Financial Officer Jon Rychalski told reporters on Monday that the budget request “comes at a critical moment for VA.”

The MISSION Act, COVID-19 pandemic and the PACT Act have all led to record growth in community care year-over-year.

“They’ve put us on a path where we cannot sustain the rapid growth and community care in addition to the fixed costs that support our massive direct care system,” Rychalski said.

Rychalski said VA Secretary Denis McDonough has described this moment in VA history as the department being “on a seam,” and that the following years will determine whether or not veterans continue to receive most of their health care within the VA system.

“This year and the next several years — ’24, ‘25 and ‘26 — will be instrumental in determining what side of the seam we end up on, what the VA will look like, and how we will deliver care in the future,” he said.

Rychalski said 70% of VA medical centers this year have already seen more patients and lowered wait times, compared to last year’s levels. VA facilities, he added, have delivered 11% more appointments in specialty care, compared to the the same period last year.

“We are committed to delivering care to veterans where and when needed,” Rychalski said. “We will not take away choice from any veteran, whether in the community or in the direct care that we provide. But our driving imperative this year is to reliably offer a VA option for care to any veteran who wants it, because that’s how our veterans do better.”

VHA plans to cut headcount by 10,000 jobs through attrition

The Veterans Health Administration is looking to reduce its overall headcount in 2025 through attrition.

The VA’s 2025 budget request supports more than 448,000 employees, a more than 10,000 decrease from the 2024 estimated workforce levels — with most of the workforce reduction coming from VHA.

VHA Chief Financial Officer Laura Duke told reporters on Monday that the workforce reduction is necessary, because the agency far exceeded its hiring goals last year, and because it’s seeing higher-than-expected retention rates.

“We don’t have to keep hiring, in order just to stay steady state, the way that we did during the pandemic,” Duke said. “We brought on the adequate workforce to deliver the care that we anticipate delivering in 2025, so we’ll just be attriting back down, so that we can continue to hire in certain priority care areas — focusing, for example, on mental health.”

Duke said VHA expects to easily meet this workforce target by not filling some positions when employees retire or leave the agency.

“With an enterprise as large as ours, we don’t anticipate not being able to arrive at that target,” she said.

No new deployment funds for new EHR

The 2025 budget request seeks $894 million for the VA’s ongoing rollout of a new Electronic Health Record from Oracle-Cerner. But the budget request doesn’t include any funding for additional deployments. The funding would go toward contract payments to Oracle-Cerner, and infrastructure support for VA sites already using the new EHR.

Neil Evans, acting program executive director of VA’s EHR Modernization Integration Office, said the funding levels are not indicative that a pause of EHR go-lives will continue through 2025.

“The budget, as it is currently laid out, does not include deployment dollars. However, we anticipate that we’ll be moving towards restart, and considering that over the course of the summer, as we move towards 2025. And I’m hopeful that we will be restarted at that point in time, but the funding for deployments would come from prior year dollars,” Evans said.

‘Just-the-basics’ budget for VA OIT

VA’s Office of Information and Technology is requesting $7.6 billion for IT systems and telecommunications support. It would also receive $1.4 billion to modernize IT systems through the Toxic Exposures Fund authorized by the PACT Act.

VA OIT’s total FY 2025 budget request is a $49 million, or 0.6%, reduction from enacted levels. The tech shop expects to grow its workforce from 8,382 employees to 8,544.

The budget request continues to support the VA’s implementation of a Special Salary Rate for its employees. VA says nearly a third of the OIT workforce are retirement-eligible, and 46% will be retirement-eligible in the next 3-5 years.

“VA must continue investing in the IT workforce, developing career tracks, establishing apprenticeship programs, and evolving talent acquisition strategies to deliver world-class IT products and services to millions of Veterans, their families, and caregivers,” VA wrote.

The 2025 VA OIT budget request rolls back spending on IT modernization by more than 80%, compared to enacted levels — but expects significantly higher spending on cybersecurity, digital-first customer experience and data as a strategic asset.

Rychalski said the department’s 2025 IT spending request is a “covers-the-basics budget.”

However, he added that the department is asking Congress for “broader transfer authority,” to move funds from other accounts into IT, “to support the work they are doing in the respective portfolios.”

“This broader transfer authority is a key attribute in our 2025 budget request,” Rychalski said. “We have got to have more flexibility to get funds into OIT, as needs emerge.”

VBA seeks much higher overtime budget

The Veterans Benefits Administration is asking for more than $4 billion for its general operating expenses — a more than 4% increase from enacted levels.

VBA is asking for $95.9 million to support employee overtime in 2025 — a $43 million increase compared to 2024.

VBA Chief Financial Officer Lasheeco Graham said the agency this year has seen a record number of days where it’s processed over 10,000 claims a day.

The 2025 budget request, she added, translates into $0.05 of operating costs for every $1 of benefits VBA delivers with a workforce of more than 25,700 full-time employees

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