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Give Disabled Veterans Their Due: Concurrent Pay

Author: Lawrence J. Korb, Senior Fellow, Center for American Progress
November 26, 2002
Lexington Herald-Leader

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Most Americans would be surprised, and possibly shocked or outraged, to learn that even severely disabled military veterans who receive a disability pension because of a service-connected wound or injury must forfeit part of their retired pay.

Americans would be more surprised to learn that President Bush and Defense Secretary Donald Rumsfeld and his top lieutenants are actively resisting congressional efforts to rectify this injustice. But, unfortunately, this is the case.

In the fiscal year 2003 defense authorization bill, Congress stipulated that disabled veterans would no longer have to give up part of the retirement pay they have earned. In other words, they would receive retired pay and disability pay concurrently.

Rumsfeld and his undersecretaries have not only complained publicly about this but also have said that they have recommended to Bush that he veto the authorization bill if the offending provision, known as concurrent receipt, is not removed. (Bush has threatened to veto the bill if it includes concurrent receipt.)

A reasonable person would have to conclude that in a near-$400 billion defense budget -- which has increased by nearly $100 billion, or 25 percent, in the last two years and exceeds Cold War levels even when adjusted for inflation -- the Pentagon could afford to absorb the cost of giving the disabled veterans their just compensation.

Not so. The Pentagon's civilian leaders claimed that the additional cost, which they estimate at $1.8 billion to $5 billion a year, would hinder readiness and investment. According to the Pentagon comptroller, concurrent receipt is a disaster.

What they do not say is that the Defense Department has essentially been getting a fiscal free ride in this area for several decades. Since compensation for disability is paid for by the Veterans Administration, the Pentagon in effect can reduce the amount that it is obliged to pay people who have qualified for military retirement but have a service-connected disability. In effect, VA has been providing a subsidy to the Pentagon budget for a long time.

Pentagon leaders also argue that they must prevent concurrent receipt from becoming law because this is the latest in a slew of personnel benefits that Congress has enacted in the last couple of years without weighing the long-term consequences.

They note that in the 1999 defense bill, Congress increased from 40 percent to 50 percent the percentage of the base pay that military retirees who joined after Aug. 1, 1986, will receive after 20 years of service. And in the 2001 budget, Congress passed a program called Tricare for Life, in which the government agreed to pay the cost of Medicare Part B and to subsidize prescription drug coverage after military retirees reach age 65.

While it's true that Congress passed both of these laws, it did so only at the request of the Pentagon without any real justification or debate.

For example, the Joint Chiefs of Staff argued that increasing the retirement benefit from 40 percent to 50 percent would help retention. The chiefs said this even though all of the studies done by the Pentagon and its associated think tanks demonstrated that the increase would not be an important factor in a person deciding whether to re-enlist. This provision and Tricare for Life will cost far more than giving disabled veterans what is theirs.

Moreover, the Pentagon and its leaders supported both provisions when the defense budget was 25 percent lower.

Finally, the disabled retirees have a much better claim on Pentagon resources than the two groups that were helped.

To govern is to choose. Giving disabled veterans what is rightfully theirs could easily be done by buying fewer Cold War relics, such as the $200 million F-22, by canceling the troubled $80 million V-22 Osprey, by putting the $250 billion missile defense program on a reasonable development pace or by canceling the sweetheart deal with Boeing to lease 100 transport aircraft.

It is hoped that the Bush administration will make the right choice. After all, this is an administration that promised military people in its campaign that help was on the way.


Lawrence J. Korb is director of National Security Studies at the Council on Foreign Relations.

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