Panel Urges Significant Boost in Military Benefits

A congressionally appointed panel recommended a sweeping overhaul of military and veterans benefits Thursday, including proposals to let former service members attend expensive private colleges and buy homes with no money down.

Warning that America’s all-volunteer military may be in jeopardy, the panel said existing benefit programs devised in the World War II era have eroded badly. As a result, the services are finding it increasingly difficult to attract and retain the kind of bright young people needed for highly technical military jobs.

In addition, the commission said military health care and job assistance programs in some cases are poorly managed and ineffective.

“The system is broken,” said Anthony Principi, chairman of the Congressional Commission on Servicemembers and Veterans Transition Assistance, and a veterans affairs official during the Bush administration. “Benefits haven’t kept up with the times and simply are not adequate.”

The panel’s wide-ranging proposals are designed to draw young people from all classes of society. But they may have special appeal to poorer Americans, including those from immigrant backgrounds that the military has been working hard to recruit but who often cannot swing a college education with the partial subsidies offered now.

The proposals appear to be well-timed. The White House and key members of Congress already have expressed support for the first long-term surge in military spending since the Reagan administration.

Principi, a lawyer from Rancho Santa Fe, Calif., and a Vietnam War veteran, said he believes the commission’s ideas “have real momentum” in the current environment.

Even so, there is likely to be resistance to the cost of some proposals, as well as opposition to suggestions to merge parts of the military and veterans health care systems, analysts and congressional aides said.

The commission said its package of 100 proposals would cost $2.6 billion during the first five years it is in effect, with the expense expanding in later years. Panel members acknowledged that it is unclear how much those future costs are likely to be.

The GI Bill, which helped build the middle class by providing aid to 8 million World War II veterans, covered the full cost of an education. Its housing programs were sufficient to allow veterans to buy homes, and health care benefits were generous.

In recent years, however, benefits have dwindled as tuition, housing and health care costs have surged. Young people have looked to other programs for tuition and housing benefits and appear to have seen less reason to go into the military.

Today’s GI Bill, the main educational program for enlistees, requires troops to kick in a $1,200 co-payment and pays no more than $528 a month in tuition aid for up to 36 months. Fewer than half of eligible veterans have taken advantage of the assistance.

By contrast, the commission’s proposal would cover all tuition, fees and books and throw in a $400 a month stipend, for veterans who serve four years of active duty. Veterans could use the money for the most inexpensive community college or for a $30,000-a-year private institution.

Veterans once could buy a home with a veteran’s loan that required no money down. Now they must chip in 2% of the purchase price to cover transaction costs. The commission would eliminate that fee, though for the first time it would limit veterans to one loan.

The commission proposed offering troops a tax-deferred savings program along the lines of the 401(k) program common in the private sector. The government would not contribute, as private employers generally do. But service members could save as much as 5% of their pay, tax deferred. They also could add reenlistment bonuses to those savings.

The bonuses are substantial for many in the service. Fliers, for example, may receive more than $50,000 to reenlist.

The commission also proposed to sweeten health care benefits for veterans. It suggested extending their health care benefits for the four months that it takes, on average, to find a job. It said the government should allow veterans to buy an extra 18 months’ coverage for a low price.

The commission also said some of the cost of these programs could be offset from savings gained by partly combining the military and veterans health care systems. By consolidating procurement of pharmaceuticals, medical and surgical supplies and equipment, it predicted, the government could save as much as $2 billion over five years.

Officials of the American Legion praised the proposals. “This is all upside,” said Legion spokesman Phil Budahn. The tuition benefits, he said, would be a boon to recruiters who have struggled to lure young people into the services.

Nonetheless, even commission members predicted that some aspects of the plan would be controversial.

Principi said the commission likely would hear negative reactions to its proposal to merge parts of the military and veterans health care systems.

“We’ve broken some pottery here,” he said.

One congressional aide, who asked to remain unidentified, said the education proposals actually could set back the military’s efforts to retain skilled people, since full tuition would be offered after only four years of active duty.

“That’s an incentive for people to get out,” this aide said.

He noted that the future-year costs of the program also would come under close scrutiny from Congress. “This program is easy to like--and maybe hard to pay for,” the aide said.

The program is likely to be received warily by deficit hawks inside and outside Congress.

Bob Bixby, of the Concord Coalition, a nonpartisan group that promotes fiscal responsibility, said the military has a legitimate need for more resources but noted that his group is leery of spending more money on military benefits, particularly if it is not sufficient to significantly enhance recruitment and retention.