VA Releases Details on its FY 2026 Discretionary Budget Request

After a delay, VA this week released additional details surrounding its FY 2026 budget request. Though the department previously released initial topline totals, Congress and the public are now able to view the stories behind those totals.

VA requests $140.0B in total FY 2026 discretionary funding, which includes $5.5B for the Medical Care Collections Fund (MCCF), and $580M for the Recurring Expenses Transformational Fund (TF). VA also requests $52.7B for the Cost of War Toxic Exposures Fund (TEF), an increase of $22.1B over FY 2025, bringing the total request for the department to $187.2B.

“The budget levels reflect the reforms necessary to enable VA to fulfill its statutory responsibilities in the most cost-effective manner possible. The budget provides increased funding for health care services tailored to Veterans’ needs, both at VA medical centers and in the community. The budget ensures that the Nation’s Veterans are provided with the world-class health care they deserve,” according to VA Secretary Doug Collins’ testimony before the Senate Committee on Appropriations.

Below is a breakdown of VA discretionary budget by major mission areas:

Source: VA budget

Note that mission areas in the “Other” category include Medical and Prosthetic Research ($942M), NCA ($497M), General Administration ($440M) and the Office of Inspector General ($296M), among others.

Key Elements in the FY 2026 VA Request:

• A 2027 Medical Care Advance Appropriation (AA) request of $122.3B
• Distribution of the FY 2026 VA Medical Care discretionary authority among four components: Medical Services at $57.1B (-$12.0B from FY 2025), Medical Community Care at $34.0B (+$11.4B), Medical Support and Compliance at $12.1B (+$371M), and Medical Facilities at $11.7B (+$2.2B).
• Establishment of the new Bridging Rental Assistance for Veteran Empowerment (BRAVE) Program with $1.1B.
• An increase of $2.2B for the Electronic Health Record Modernization (EHRM) initiative for a total of $3.5B. Breakout of EHRM funding includes:
  •  $2.2B for the EHR contract with Oracle to sustain 6 live sites and deploy at 13 additional sites in 2026.
  • $660M for infrastructure readiness to prepare 26 additional sites for EHR deployment through increased interface development and sustainment.
  • $658M to support the personnel for increased deployments in 2026.
• A request of $1.8B for major construction projects, an additional $910M increase over FY 2025, to address aging VA facilities. VA requests $232M for minor construction projects, a $460M decrease from FY 2025.
• A request of $492M, a $17M increase above FY 2025, for National Cemetery Administration (NCA) operations and $60M in grants for states and localities.

Information Technology Details in the FY 2026 VA Budget

VA requests a total of $7.3B to support enterprise IT operations and combines $5.9B in discretionary authority and $1.4B from the TEF. FY 2026 totals reflect a $298M reduction, or 4% decrease, from the FY 2025 level. The department’s budget documents emphasize that IT reductions are driven by decreased spending on duplicative legacy systems and a response to VA’s current pause on the procurement of new systems pending full review. Moreover, the budget documents retain a slogan for VA IT funding, “Smarter, Not Bigger: A Modern IT Budget for a Modern VA Mission.”

Additional details for IT funding include:

• $1.4B in TEF IT funding (+$21M over FY 2025) will target mission critical technology solutions that support PACT Act implementation.
• $762M (-12% from FY 2025) in cybersecurity, including $187M (+108%) for zero trust architecture.
• $277M (+94% over FY 2025) for the Infrastructure Readiness Program to modernize aging infrastructure that limits system performance.
• $135M (+50% over FY 2025) for the Financial Management Business Transformation (FMBT) to accelerate deployment of VA’s integrated financial and acquisition system.
• $29M (+130% over FY 2025) to scale mission-aligned AI use cases such as automating claims decisions, triaging digital interactions, and analyzing operational data.
• Proposal to remove three statutory subaccounts: Development, O&M, and Pay & Associated Costs, to allow the department to shift resources quickly where needed the most.
• Petitions to have a three-year funding window for IT to align IT funding to project timelines, improve procurement and reduce technical debt on aging systems.

Stay tuned as the Federal Market Analysis team here at Deltek continues to unpack the FY 2026 federal budget. For an initial overview of the budget, refer to FY 2026 President’s Budget Request – GovWin FMA’s First Take.