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Veteran’s Benefits

July 2024
12min read

Three fourths of all the men who have served in the nation’s military forces since 1775 are alive today. They number 29.4 million, which means that two out of every five males over the age of 18 are veterans. Together with their 66 million dependents they constitute nearly half—47 percent—of the current population of the United States. All of them are potential clients of the veterans’ benefits system that over the last two hundred years has cost an estimated $280 billion.

This year alone veterans’ benefits total $19 billion, an increase of nearly $3 billion over 1975. The bulk of the money will be spent on veterans of twentieth-century wars, but nearly $34 million will be shared by survivors and surviving dependents of nineteenth-century campaigns.

For instance, in 1976 the federal government will disburse $528,000 to some 450 surviving beneficiaries of Civil War pensions, even though the last Union soldier died twenty years ago at the age of 109, and the last Confederate was buried in 1959 at the age of 113. The current expenditures will bring the benefits cost of the Civil War to more than $8.5 billion.

In the current fiscal year the federal government will pay out nearly $100,000 to about ninety dependents of veterans who served in the Indian-fighting armies of the nineteenth century, even though the last veteran died three years ago at the age of 101. Total benefits to date have cost about $80 million.

Approximately $33 million in the current federal budget will go to about 1,200 veterans and 27,000 surviving dependents from the Spanish-American War of 1898. Postwar pension costs now total an estimated $5.6 billion.

All of this is the result of a comprehensive benefits program by which Congress has committed later generations to the care of soldiers from the past. Thus the last pension claims of the Revolution were not settled until 1911, a hundred and twenty-eight years after the armies had left the field. The final benefit payment for the War of 1812 came in 1946, a hundred and thirty-one years after the Treaty of Ghent. The accounts were not closed on the Mexican War until 1962, a hundred and fourteen years after it ended.

By conservative estimates, the wars of our own time (World War II, Korea, and Vietnam) will not be fully paid for until the second half of the twenty-first century. In fact, the majority of living veterans are still some years away from being eligible for many of the benefits Congress has provided in the past thirty-five years—as this profile from 1975 suggests:

Since 1930 the Veterans Administration has been responsible for all veterans’ programs. An independent agency established by Congress, the VA is now the third largest element of the federal government, exceeded in size only by the Defense Department and the Postal Service. It currently employs about 210,000 men and women, or 7.4 per cent of the federal bureaucracy. Approximately four fifths of all VA employees are medical, dental, or paramedical personnel. Overall, the VA since 1960 has annually accounted for between 3.8 and 5.1 per cent of all federal outlays. Costs for 1976 are about 5.1 per cent. This does not include the cost of retirement pay and certain other benefits provided for career men and women in the regular services. Such costs are borne by the Defense Department as part of its annual budget and are not charged to the VA .

What lies behind these expenditures for veterans is a military tradition that reaches back to the seventeenth century. Long suspicious of a standing army—and in the beginning unable to afford one—the American people, from the first settlements onward, have customarily relied upon volunteer, rather than professional, armies for protection. The bulk of our wars have been fought by civilians drawn briefly to the military life.

In recognition of this “minuteman” or militia tradition, various governments over the years have used veterans’ benefits essentially for two purposes: as inducements to enlistment in times of crisis, and as tangible expressions of the nation’s responsibility for those injured or killed in its service. As early as 1636, for example, the colonists at Plymouth addressed themselves to the problem of men who were disabled because they had been sent out by the colony on some military venture. In what may be the first piece of veterans’ legislation enacted in the New World, they voted that any man “mamed & hurt” in such circumstances was to be “maytayned competently by the colony duringe his life.”

From that relatively modest beginning, veterans’ benefits have steadily expanded in cost and in scope. The moral commitment to provide custodial care for the war-injured, the widowed, and the orphaned remains the central principle behind the work of the VA . But other social and political elements have come to play a part as well, as can be seen in a review of veterans’ benefits from past wars.

The Revolution (1775-83) was fought by about 350,000 men, of whom 4,000 lost their lives in serviceconnected deaths. The last veteran died at the age of 109 in 1869. The total cost of pensions and benefits, exclusive of land grants, was $70,045,000.

Beginning in 1775 the Continental Congress and the thirteen states each made use of bounties, bonuses, and the promise of pensions to speed recruitment. These were time-honored benefits that had been employed throughout the colonial period to raise armies against the Indians and the French.

Bounties were of two kinds: cash payments and land grants, both tendered on enlistment. Initially Congress offered $10 in cash and 100 acres of land for three-year enlistments or re-enlistments, but by September, 1776, the cash portion had doubled to $20. Three years later the cash bounty was $200; the land bounty remained constant. The reason for the increase was the spirited bidding of the states, which were competing with Congress for troops. By 1779 Virginia, for example, was offering $750 in cash and 100 acres of land to men who joined her militia rather than the Continental service. At one point the next year New Jersey provided a bounty of $1,000 per man.

Not unexpectedly, bounty jumping was widespread as men enlisted in one unit, took their bounty money, and then disappeared, to repeat the process elsewhere. Despite this drawback bounties continued to be the preferred way of securing men for the armies well into the next century. Recruits in the War of 1812, for example, were offered $124 and 320 acres of land. By 1860 more than 600,000 land warrants had been issued to war veterans for 68 million acres of land—the equivalent of New York, New Jersey, Pennsylvania, and Delaware.

Bonuses were offered by Congress and the states midway in the Revolutionary War in a desperate effort to keep their armies intact. In 1778 Congress promised all officers an extra seven years of half pay if they served until the end of the war. Enlisted men were offered a flat grant of $80. By 1780 Congress had enlarged the officers’ bonus to half pay for life, but in 1783 a compromise was struck whereby the officers received five years’ full pay.

Because of the emptiness of the national treasury and the straitened circumstances of the states, most bonuses remained unpaid for some time. A majority of veterans sold off both their land warrants and their bonus certificates to speculators, many of whom reaped windfall profits when the Hamiltonian Funding Program began to pay off the national debt at par in the 1790’s.

Pensions were provided by Congress as early as 1776 for all volunteers who lost a limb in battle or who were so disabled they were no longer capable of earning a living. Since Congress lacked any real taxing power, the financing of these disability pensions fell to the separate states. In general, the southern states met their obligations; the northern states did not. However, as part of the Hamiltonian Funding Program the federal government assumed the state debts and, with them, the responsibility for the pensions.

Until 1818 only disabled veterans whose injuries were service-connected were eligible for federal money. Each case was investigated by the Secretary of War, who would then recommend to Congress that payment be authorized or refused. In 1818 Congress approved a general pension of $20 a month for Revolutionary officers and $8 a month for enlisted men who could demonstrate a financial need.

In 1828 the means test was removed for officers, and Congress awarded them their full military pay for the remainder of their lives. Four years later Congress extended a similar pension to enlisted men who had served two years or more and lesser amounts to those who had served for shorter periods. In 1836 full pensions for widows were made available.

Virtually all of the pension rights, bonus provisions, and bounties provided for the men of the Revolutionary armies were extended to the veterans of the War of 1812 and the Mexican War (1846-48). Between them the two later wars cost a total of $166 million in benefits.

The Civil War (1861-65) had a notable impact on the history of veterans’ benefits by adding 1.9 million men from the Union army to the veterans’ pool. (By terms of the Fourteenth Amendment to the Constitution, Confederates were barred from federal programs.) The ex-soldiers very quickly recognized that they were an important political minority (roughly 5 per cent of the population) and through the Grand Army of the Republic soon brought pressure to bear on Congress for special consideration. Their lobbying efforts bore fruit that substantially increased the size and scope of pension programs.

As in the earlier wars, enlistment bounties were offered by both the federal government and the states. No land grants were made, although veterans were assigned a special status in the Homestead Act of 1862, which opened up the West to settlement. Cash bounties established in July, 1861, ranged upward from $25 for nine months’ service to $100 for three-year men. Some state volunteers received as much as $1,000.

At such prices bounty jumping was common; one man was eventually found guilty of enlisting thirty-two times. In the end the federal government paid out some $300 million and the states perhaps $450 million in bounty claims. This was the last war to make use of them; in 1917 Congress expressly prohibited any bounty payments on enlistment.

Several innovations appeared in the pension laws, all of which applied to later wars. In 1862, for example, Congress established uniform pensions for death and disability for both the regular forces and the volunteers. In addition, certain specific disabilities—for example, the loss of two limbs—were pensioned at higher rates than others.

At the outset of peace in 1865 the pension rolls were already swollen by virtue of the ghastly carnage of the war. Union deaths in service were about 360,000, one third of which occurred in battle; another 275,000 men had sustained wounds. All were entitled to compensation, and because of the generosity of Congress over the next thirty years, all of them or their dependents received it.

Pension applications and payments were now the responsibility of the Pension Office, set up in the War Department on a temporary basis in 1833 and made a permanent part of the Department of Interior in 1849. By the end of the century the bureau employed 6,300 persons to process pension claims. For the time it was an extraordinarily large agency, its growth in part a function of a law in 1890 that granted pensions to Civil War veterans with disabilities not related to military service. In 1920 all Union survivors of the war were made eligible for payments. In 1958 Congress extended coverage to the few remaining Confederate veterans. The total cost of benefits to date is $8.5 billion.

World War I (1917-18) produced a force numbering 4,744,000. About 116,000 men died in service; another 204,000 sustained wounds. At the outset of the war Congress provided the usual pension and medical protections for the dependents of men killed in action and for the disabled.

In addition, Congress went a step further and established a voluntary life-insurance program at preferential rates for all inductees. It also announced that each man would receive a $60 discharge allowance at the war’s end. Both acts represented a new approach to veterans’ benefits— or at least a recognition of what has since remained the prevailing philosophy in Congress’ approach to veterans’ programs: that all veterans, the able-bodied as well as the disabled, are entitled to special consideration as a result of their military service.

The most remarkable display of this attitude among World War I veterans was seen in the seventeen-year-long struggle to secure a bonus. After the Civil War the government abandoned both bounties and bonuses as enlistment lures, but in 1919 certain members of the newly formed American Legion called for their revival on the ground that the nation owed its ex-soldiers the difference between their military pay and what they could have earned had they spent the war years as working civilians. Calling their bonus adjusted compensation, they sought $1 for each day of domestic service and $1.25 for each day overseas.

After Harding vetoed one bonus measure in 1922, Congress overrode Coolidge’s veto of a second in 1924. All veterans whose service exceeded fifty days were given twenty-year paid-up endowment life-insurance certificates, the principal of which was payable in 1945. Some 3.5 million policies were issued, with a face value of $3.5 billion.

The matter might have ended there, but in the depths of the Depression the Legion and other veterans’ groups lobbied successfully for the right to borrow against the certificates for as much as 50 per cent of their value. Hardly had Congress passed that measure over Hoover’s veto in 1931 when veterans now demanded that Congress not wait until 1945 to pay the full bonus. By late May, 1932, some 15,000 veterans were on their way to Washington to lobby in person for a lump-sum payment.

Camping in public buildings and in hastily erected shacks, the Bonus Expeditionary Force—or Bonus Army, as it came to be known—was an embarrassment to the administration. Although the men were unarmed and generally peaceful, talk circulated to the effect that they were radicals bent on violence. After Congress failed to pass the relief measure they sought, many of the 15,000, aided by special government funds, went home; but at least 2,000 remained behind, determined, they said, to wait until justice was done the veterans.

In one of the most grievous political errors ever committed by an American head of state, President Hoover sent infantry, tanks, and cavalry against the squatters. Under the direction of General Douglas MacArthur, the troops used bayonets and tear gas—and more violence than Hoover apparently had anticipated—to drive the remnants of the B.E.F. from the city.

Four years later, in 1936, Congress once again overrode a veto—this one from Franklin Roosevelt—and immediately made available the lump-sum bonus the veterans had so long been seeking. In all, $2.5 billion was disbursed, the largest single payment in a benefits program for World War I that now totals approximately $53 billion.

World War II (1941-45) ushered in a new era of benefits, in part because Congress was determined to avoid the mistakes and difficulties that had marked the demobilization of forces in World War I. Influenced as well by the social-welfare policies of the New Deal, Congress by 1945 had created the most comprehensive benefits program in our history. Since then subsequent legislation has expanded the original program for the 16.1 million veterans of World War II and extended those benefits to 6.7 million Korean veterans, 3.1 million veterans of the officially designated Cold War (1955-64), and 6.6 million veterans of Vietnam, at a cost since 1945 of $250 billion.

Under the direction of the Veterans Administration, a broad range of benefits and services is available to veterans from the moment of discharge until death and even beyond, for in certain circumstances benefits continue for survivors. As in World War I, most of these benefits are extended to the able-bodied as well as the disabled.

Compensation and pensions account for about 44 per cent of current veterans’ outlays; they are at present extended to nearly 5 million veterans and surviving dependents. Compensation (for service-connected disabilities and death) ranges from $948 annually for dependents of the Indian Wars to $2,144 for Vietnam widows.

Nearly 2.2 million veterans are receiving monthly compensation for service disabilities. Amounts start at $32 for a minor disability and reach a maximum of $584 for total disability. For certain specific severe disabilities—determined on a case-by-case basis—compensation may reach $1,454 per month.

Eligibility for pensions is dependent upon income and other criteria, principally any disability (service-connected or not) that prevents the veteran from working. Age 65 is considered a permanent and total disability. Annual income levels are set at $3,000 or less for single persons and $4,200 or less for veterans with dependents. Pensions range from a high of $182 monthly to $5.

As of 1974, the last full year for which figures are available, compensation and pension programs cost $6.6 billion annually.

Medical and dental care constitute the second major service of the VA . They are available on a priority basis, first to service-disabled veterans, then to pensioners, veterans over 65, and indigent veterans. They account for roughly 20 per cent of the agency’s budget. In 1974 this translated to nearly $3 billion, up from $1.9 billion in 1971.

The VA runs the largest hospital system in the nation—currently 171 hospitals, 213 clinics, and 84 nursing homes in 176 towns and cities. The hospitals account for 96,960 beds, or about 6 per cent of all hospital beds in the country. In 1974 hospital admissions totaled 992,000, about 150,000 of which were for psychiatric treatment. In the same year outpatient cases numbered 12.2 million.

In addition, some 12,000 to 13,000 veterans are cared for annually in VA domiciliaries (soldiers’ homes). And the disabled who were injured or lost a limb in the service may qualify for a special annual clothing allowance or an automobile allowance of up to $3,300. Blind veterans may be entitled to a guide dog.

The GI Bill for Education, first established in 1944, may be the most socially significant piece of all recent veterans’ legislation. At a cost of $30.8 billion through 1974, nearly 13 million veterans from all recent wars have been afforded an opportunity to complete their education from the secondary level through graduate school.

The original GI Bill assisted 7.8 million veterans of World War II, many of whom would have been denied a college degree without such support. Because of its demonstrated success, the measure was extended first to Korean veterans and then to veterans of Vietnam.

The VA ’S Vocational Rehabilitation Program provides job training for persons with service-connected disabilities. Some 618,000 World War II veterans were assisted under this program. The current enrollment is 15,000. The total cost through 1974 was $2.8 billion.

Insurance and guaranteed loans—like the GI Bill—have been most useful to the majority of veterans. As of 1974 the VA managed some 4.8 million insurance policies with a total value of $33 billion in coverage.

Since 1945 the VA has supervised more than 8.9 million loans for home purchase, for farms, and for businesses. Total value: $110.5 billion. Almost 95 per cent of all loans have been for GI mortgages.

Beginning with the Selective Service Act of 1940, the VA has also directed certain legal services that protect the re-employment rights of veterans. No such protection existed in earlier wars, and the resulting unemployment of returning veterans, notably in 1919-20, was considered a national disgrace. In addition, the VA cooperates with the states in administering special unemployment compensation available to veterans on a state-by-state basis.

Among other lesser-known benefits, veterans of wartime service may be eligible for burial in one of 103 national cemeteries. Or they may receive $250 for burial expenses and an additional $150 for the purchase of a cemetery plot. Headstones and memorial markers are available from the VA .

By any measure this is an impressive list. Equally impressive is our apparent willingness to accept both the comprehensive range and the steadily rising costs these programs entail, for veterans’ benefits are only rarely challenged in Congress and only rarely cut. Indeed, a remarkable feature of the veterans’ benefits system is the absence of sustained, informed criticism. As costs mount it would seem that some re-examination of both programs and principles is called for. Mr. Ford has already proposed a $2 billion cut in veterans spending for fiscal year 1977. Whether the proposal will survive in Congress during an election year remains to be seen.

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