In the coming days or weeks, the Department of Veterans Affairs says it will need to furlough thousands of additional employees, part of a cascading series of effects the agency and veterans will endure as the government shutdown drags on.

Beyond further workforce reductions, the shutdown already has turned around the progress VA has made toward reducing its disability claims backlog and reduced the department’s ability to oversee construction and acquisition projects; soon it will scale back the number of burials at cemeteries.

And by the end of this month, disability payments to veterans and their survivors will grind to a halt, VA Secretary Eric Shinseki told the House Veterans Affairs Committee Wednesday.

Because of some unique funding arrangements, nearly 80 percent of VA, the government’s second largest department, continues to operate during the shutdown. The system of healthcare facilities run by the Veterans Health Administration mainly is unaffected because it receives its appropriations from Congress a year in advance. But the Veterans Benefits Administration and the array of support services that sustain operations in both divisions are not immune.

VA continued many of its functions in the benefits and support arenas in the opening days of the shutdown because Congress lets it carry forward a small percentage of its unspent funding in various accounts from one fiscal year to the next. But those funds already have begun to run dry. On Monday, VA furloughed nearly 2,800 people in its Office of Information Technology, and the next day, it sent home another 7,800 from the benefits administration.

Around half those employees are veterans themselves, Shinseki said.

“There are about 100,000 of them in the VA. If they’re furloughed and they also lose their disability checks, their resources go to zero,” he said. “Then I have the responsibility to try and figure out how to keep them from becoming homeless. This is going to be a major challenge for us.”

Backlog increasing

The scaling back of manpower in the benefits administration and the IT office already has begun to reverse the progress VA’s made recently on reducing its backlog of disability benefits. Since the shutdown began, the backlog has increased by 2,000 claims. That’s after the prior six months in which VBA reduced the backlog by 193,000 claims through a combination of process improvements, mandatory overtime and the introduction of the electronic Veterans Benefits Management System (VBMS).

“Lots of folks wondered whether they were gonna be able to do it. VBMS will be important to that effort, but VBMS is just coming online,” he said. “So all of this work was done by the good folks in the benefits administration. I would speak for them. They’re disappointed that the ground they gained is being lost day by day.”

Shinseki said VBA’s capability to carry out its mission will continue to deteriorate the longer the shutdown continues. For now, it’s continuing to pay benefit claims from mandatory spending accounts that still have funds available. But even those will run dry soon — VA currently estimates that will happen sometime between now and Nov. 1, depending on the volume and speed of the benefits it’s able to issue with a shorthanded staff.

When the accounts are empty, VBA would be legally required to furlough more than 10,000 additional employees.

“We have these folks processing claims, and where it’s appropriate to make a decision today and pay today, retroactive claims, for example, we are doing that,” Shinseki said. “But every payment we make reduces the amount of mandatory funds. And before the end of the month, this account will be exhausted. At that point, these 13,000 or so people who are doing this will have no reason to continue to function because the necessary implication clause that allows them to work will be exceeded when the mandatory account is exhausted. And at that point, they will be furloughed, and our Veterans Benefits Administration will be reduced to maybe less than 1,500 folks.”

Modified burial schedule

At that point, VA says about 5 million people, including veterans and their surviving spouses and children will stop receiving their benefit checks. Those 1,500 employees will be excepted from furlough for the sole purpose of meeting the legal requirement that VA record the time and date when new benefit claims are received, but won’t be able to act on them. Tuition and stipends for half a million military and veteran students who receive funds under the GI Bill would stop as well.

In the shorter term, Shinseki said the department is just days away from needing to furlough a large portion of the workforce that operates and maintains its system of 131 national cemeteries.

“Our cemeteries will go into a modified burial schedule, which means we will continue taking care of families and burying our honored,” he said. “But it won’t be at the rate that we have planned or would like. Our cemeteries will be open for our normal hours, which is sunrise to sunset. You may see some of our maintenance standards go a bit, because we won’t be able to maintain the high standards we would like to have.”

Several committee members pointed out that the annual appropriations bill that funds VA actually is one of just four the House has passed for 2014. Republicans in particular said the Senate and President Barack Obama should agree to either that legislation or a short-term continuing resolution for VA.

VA dependent on other agencies

“In years past, the House and the Senate and the White House, regardless of party, have always come together and tried to find a way to prioritize how money would be spent, who would be at the top of the list as we started to shut the government down and run out of money. Today, we don’t have that,” said Rep. Jeff Miller (R- Fla.). “Even back in the shutdown of 1995, there was a prioritization, and DoD and veterans were taken off the table.”

The Obama administration continues to oppose a piece-by-piece approach to reopening the government. And Shinseki said even if Congress fully funded VA, it’s not an island unto itself. For example, its claims processors still couldn’t do their jobs if the IRS and the Social Security Administration were still in shutdown mode, because they rely on those agencies for the information they need to process benefits.

“VA’s care for veterans — and by that I mean health care, education, employment, insurance, housing for both the homeowner and the homeless — does not occur without significant coordination with DoD, with Housing and Urban Development, HHS, Social Security, Treasury, Education, Labor, the IRS, and the Small Business Administration. And frankly, it is this collaboration amongst and across the government that allows us to be effective,” he said. “These are not insignificant connections for this department.”

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