Phelan is the first service secretary pick announced by the president-elect for his second term in the White House.
Department leaders had warned of funding gaps of up to $18 billion but now believe those estimates were too high.
Congress approved $3 billion in emergency VA funding in September, but officials now say they did not need the money to cover immediate bills.
With John Kinsel Sr.'s death, only two Navajo Code Talkers from World War II are still alive.
