WASHINGTON — Administration officials ruled Monday that the Department of Veterans Affairs will be exempt from massive federal budget cuts scheduled to go into effect early next year.

In response to congressional inquiries, officials from the Office of Management and Budget said that “all programs administered by the VA, including Veterans’ Medical Care, are exempt from sequestration.”

The decision prevents potentially tens of billions being cut out of veterans programs in coming years. But it also means that, barring a new deal being worked out on by lawmakers this year, the Defense Department will suffer the brunt of $500 billion in spending reductions over the next decade.

Last summer, lawmakers approved a massive debt-reduction plan including the creation of a bipartisan panel charged with trimming at least $1.2 trillion in federal spending. In an effort to force a compromise among the panel members, the law also included a sequestration mechanism that would automatically slash billions in spending starting in 2013 if no plan was passed.

The panel failed in its work last November. Leaders from both parties have promised to find alternatives to the massive spending cuts — roughly $500 billion from defense and another $500 billion in social welfare programs over the next 10 years — before the end of the year, but so far have made no progress.

Members of the House and Senate Veterans Affairs committees for months have asked for a ruling from the OMB on whether veterans programs could be impacted in the defense cuts, saying it could cripple the VA.

Lawmakers have said they did not intend the Department of Veterans Affairs to be included in the deficit reduction plan, but the wording of the law left that determination up to administration officials.

Officials from the OMB said the White House still hopes to avoid sequestration and is urging Congress to find an alternative plan. Defense Department officials have said that such drastic, untargeted funding cuts could severely impact military end strength and capabilities for years to come.

In a statement, House Veterans Affairs Committee chairman Rep. Jeff Miller, R-Fla., called the announcement "long overdue."

"Unfortunately, this move demonstrates the Administration’s penchant for political brinksmanship even when it concerns those who have served this nation with honor," he said. “It’s about time OMB issued this decision and got serious about sequestration and VA."

But Veterans of Foreign Wars National Commander Richard DeNoyer said the news was a welcome relief.

“Today’s decision means the healthcare plans and programs the VA currently provides to millions of disabled veterans will continue unabated, as will claims processing and veterans’ burial benefits,” he said. “Protecting the VA is exactly what President Obama told me he would do during a meeting in the Oval Office in March, and now he has come through for America’s veterans and survivors.”

shanel@stripes.osd.milTwitter: @LeoShane

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