The Economist: American Vets benefits are too rich
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Find fraud but never cut disability benes for cops, military, firefighters, etc
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Donald Trump delights in projecting strength, meaning he loves America’s armed forces. During his first term, the president-elect signed legislation to spend more on defence, before proclaiming that he had “accomplished the military”. On the campaign trail, he doubled down, vowing further increases in defence spending and promising to tackle a recruitment shortfall. Yet he also wants to cut government waste, and has hired Elon Musk to lead a Department of Government Efficiency (DOGE).
When it comes to the Department of Veterans Affairs, these two instincts may be in tension. The department’s budget has surged over the past two decades, rising from $86bn in today’s dollars (then equivalent to 2.6% of the federal budget) in 2000 to $336bn (5% of today’s budget) this year. It now receives almost three times as much as the Department of Transportation. Remarkably, this boom has occurred despite a nearly one-third decline in the veteran population, which has fallen from 26m to 18m. Annual spending per veteran, as a consequence, has risen six-fold.
Chart: The Economist
Mr Musk is zeroing in on discretionary spending, which includes programmes such as the department’s medical services. But the main driver of its spending surge is mandatory outlays for disability compensation. Between 2000 and 2024, such payments ballooned from $26bn, in today’s prices, to $159bn. Last year alone saw a 17% jump. And the department’s latest budget request forecasts that compensation will soar to $185bn over the next two years.
The current system was introduced during the first world war. It provides tax-free monthly payments to soldiers who are injured or sick owing to their service. From 1960 to 2000, roughly 9% of veterans qualified for payments, typically for ailments such as hearing loss or burns. The department assigns a rating from zero to 100% based on the severity of disabilities. In 2000 the average rating was 30%; monthly payments averaged the equivalent of $975 today. Few qualified for the top tier.
The modern programme bears little resemblance to its original form. This year 6m veterans—or a third of the total—qualified for payments, with an average monthly benefit of $2,200. Veterans may file claims for an unlimited number of disabilities and appeal against decisions as often as they wish. The average rating has climbed above 60%, and one in four disabled veterans now receives the once-rare 100% rating. Such a designation ensures a generous $4,000 monthly payment for life, with no conditions attached. Starting at the age of 25, a former soldier could earn well over $2m in present-value terms.
Why has this happened? From 2001 the department began to broaden its list of presumptive conditions—where officials automatically assume the problem is service-related—to include ailments such as type-2 diabetes, allowing any veteran with the disease to qualify for compensation. The reasoning for such expansion is not always robust. For instance, a department-funded study found only “limited evidence” linking herbicide exposure in Vietnam to type-2 diabetes. In 2022 President Joe Biden’s PACT Act expanded eligibility further, with illnesses such as asthma and chronic rhinitis gaining approval, as some soldiers had picked up the conditions from “burn pits” in Afghanistan and Iraq.
It is unclear if the spending is even benefiting veterans. Research by Mr Duggan and co-authors finds that disability compensation has reduced employment, with one in five new recipients leaving the workforce after the change in 2001. As nearly 2m additional working-age men have gone on the rolls since then, this implies 400,000 may have been discouraged from work. A study in 2022 by David Silver, then of Princeton University, and Jonathan Zhang, then of McMaster University, found that extra compensation had failed to boost veterans’ mental and physical health. Indeed, suicide rates have increased relative to comparable non-veterans.
To rein in costs and focus the department’s mission, policymakers could take a page from the Congressional Budget Office’s recommendations. The non-partisan scorekeeper advises narrowing eligibility for disability compensation to veterans with severe service-connected conditions, lowering benefits for some veterans and introducing a means test. Reducing payments to former soldiers will never be popular, but it would be wise. America’s veteran obsession has gone too far. ■
Donald Trump delights in projecting strength, meaning he loves America’s armed forces. During his first term, the president-elect signed legislation to spend more on defence, before proclaiming that he had “accomplished the military”. On the campaign trail, he doubled down, vowing further increases in defence spending and promising to tackle a recruitment shortfall. Yet he also wants to cut government waste, and has hired Elon Musk to lead a Department of Government Efficiency (DOGE).
When it comes to the Department of Veterans Affairs, these two instincts may be in tension. The department’s budget has surged over the past two decades, rising from $86bn in today’s dollars (then equivalent to 2.6% of the federal budget) in 2000 to $336bn (5% of today’s budget) this year. It now receives almost three times as much as the Department of Transportation. Remarkably, this boom has occurred despite a nearly one-third decline in the veteran population, which has fallen from 26m to 18m. Annual spending per veteran, as a consequence, has risen six-fold.
Mr Musk is zeroing in on discretionary spending, which includes programmes such as the department’s medical services. But the main driver of its spending surge is mandatory outlays for disability compensation. Between 2000 and 2024, such payments ballooned from $26bn, in today’s prices, to $159bn. Last year alone saw a 17% jump. And the department’s latest budget request forecasts that compensation will soar to $185bn over the next two years.
The current system was introduced during the first world war. It provides tax-free monthly payments to soldiers who are injured or sick owing to their service. From 1960 to 2000, roughly 9% of veterans qualified for payments, typically for ailments such as hearing loss or burns. The department assigns a rating from zero to 100% based on the severity of disabilities. In 2000 the average rating was 30%; monthly payments averaged the equivalent of $975 today. Few qualified for the top tier.
The modern programme bears little resemblance to its original form. This year 6m veterans—or a third of the total—qualified for payments, with an average monthly benefit of $2,200. Veterans may file claims for an unlimited number of disabilities and appeal against decisions as often as they wish. The average rating has climbed above 60%, and one in four disabled veterans now receives the once-rare 100% rating. Such a designation ensures a generous $4,000 monthly payment for life, with no conditions attached. Starting at the age of 25, a former soldier could earn well over $2m in present-value terms.
Why has this happened? From 2001 the department began to broaden its list of presumptive conditions—where officials automatically assume the problem is service-related—to include ailments such as type-2 diabetes, allowing any veteran with the disease to qualify for compensation. The reasoning for such expansion is not always robust. For instance, a department-funded study found only “limited evidence” linking herbicide exposure in Vietnam to type-2 diabetes. In 2022 President Joe Biden’s PACT Act expanded eligibility further, with illnesses such as asthma and chronic rhinitis gaining approval, as some soldiers had picked up the conditions from “burn pits” in Afghanistan and Iraq.
Oh dark hundred
Once on the payroll, veterans usually remain beneficiaries for life. The stigma around collecting payments has faded in recent decades. Online videos with tips about how to boost your disability rating are widespread. It is common for veterans to start on the programme at a 50% disability rating for, say, sleep apnea linked to service stress, only to then add more disabilities and have the rating increase to 100% within a few years. “It’s a programme that helps a lot of people who deserve it, but getting on the programme becomes an escalator to higher disability ratings and compensation,” says Mark Duggan of Stanford University. “Once you qualify you have an incentive not to get better.”It is unclear if the spending is even benefiting veterans. Research by Mr Duggan and co-authors finds that disability compensation has reduced employment, with one in five new recipients leaving the workforce after the change in 2001. As nearly 2m additional working-age men have gone on the rolls since then, this implies 400,000 may have been discouraged from work. A study in 2022 by David Silver, then of Princeton University, and Jonathan Zhang, then of McMaster University, found that extra compensation had failed to boost veterans’ mental and physical health. Indeed, suicide rates have increased relative to comparable non-veterans.
To rein in costs and focus the department’s mission, policymakers could take a page from the Congressional Budget Office’s recommendations. The non-partisan scorekeeper advises narrowing eligibility for disability compensation to veterans with severe service-connected conditions, lowering benefits for some veterans and introducing a means test. Reducing payments to former soldiers will never be popular, but it would be wise. America’s veteran obsession has gone too far. ■
I think there's some truth there.
At one of the local restaurants, there was a VFW table set up and I was talking to the guys and they asked me what I did in the Army. I told them I listened to Russians. They asked if I had any disabilities. I laughed and said no, by job didn't require too much physical activity.
Honest-to-God, they said "How's your hearing?" I said fine. They said are you sure? You hearing may have been affected by your job (we wore headphones). I laughed and they said no, really - I could get disability from the VA if I failed a hearing test (wink, wink). Evidently, a hearing disability is easy to get, espcially if you were on a flight line or were firing off artillary or such jobs.
My nieces father-in-law was in at the same time and has like 70% disability from some back problems, yet I've never seen the guy have any issues at all.
I think it's pretty easy to claim a disability if you were in the military in almost any era or locality. It's all percentages. It just pisses me off so many are clearly not in a 'disability' situation.
Take that money for the questionable ones and give it to the guys who lost limbs or suffer real mental issues.
I used to know a guy through work we worked with some similar clients... He was in his late 60s at the time and this was a decade ago. But he talked about getting his VA disability check. Also while bragging about the thousands of acres Iowa farmland he owned. He kept working into his 70s as he didn't like retirement. But he was probably worth $10m but was still getting $3k/mo VA disability or whatever it was.
Your data here inspired me to look up the process. Very interesting. Very different than social security disabilityListen to this story.
Donald Trump delights in projecting strength, meaning he loves America’s armed forces. During his first term, the president-elect signed legislation to spend more on defence, before proclaiming that he had “accomplished the military”. On the campaign trail, he doubled down, vowing further increases in defence spending and promising to tackle a recruitment shortfall. Yet he also wants to cut government waste, and has hired Elon Musk to lead a Department of Government Efficiency (DOGE).
When it comes to the Department of Veterans Affairs, these two instincts may be in tension. The department’s budget has surged over the past two decades, rising from $86bn in today’s dollars (then equivalent to 2.6% of the federal budget) in 2000 to $336bn (5% of today’s budget) this year. It now receives almost three times as much as the Department of Transportation. Remarkably, this boom has occurred despite a nearly one-third decline in the veteran population, which has fallen from 26m to 18m. Annual spending per veteran, as a consequence, has risen six-fold.
Chart: The Economist
Mr Musk is zeroing in on discretionary spending, which includes programmes such as the department’s medical services. But the main driver of its spending surge is mandatory outlays for disability compensation. Between 2000 and 2024, such payments ballooned from $26bn, in today’s prices, to $159bn. Last year alone saw a 17% jump. And the department’s latest budget request forecasts that compensation will soar to $185bn over the next two years.
The current system was introduced during the first world war. It provides tax-free monthly payments to soldiers who are injured or sick owing to their service. From 1960 to 2000, roughly 9% of veterans qualified for payments, typically for ailments such as hearing loss or burns. The department assigns a rating from zero to 100% based on the severity of disabilities. In 2000 the average rating was 30%; monthly payments averaged the equivalent of $975 today. Few qualified for the top tier.
The modern programme bears little resemblance to its original form. This year 6m veterans—or a third of the total—qualified for payments, with an average monthly benefit of $2,200. Veterans may file claims for an unlimited number of disabilities and appeal against decisions as often as they wish. The average rating has climbed above 60%, and one in four disabled veterans now receives the once-rare 100% rating. Such a designation ensures a generous $4,000 monthly payment for life, with no conditions attached. Starting at the age of 25, a former soldier could earn well over $2m in present-value terms.
Why has this happened? From 2001 the department began to broaden its list of presumptive conditions—where officials automatically assume the problem is service-related—to include ailments such as type-2 diabetes, allowing any veteran with the disease to qualify for compensation. The reasoning for such expansion is not always robust. For instance, a department-funded study found only “limited evidence” linking herbicide exposure in Vietnam to type-2 diabetes. In 2022 President Joe Biden’s PACT Act expanded eligibility further, with illnesses such as asthma and chronic rhinitis gaining approval, as some soldiers had picked up the conditions from “burn pits” in Afghanistan and Iraq.
Oh dark hundred
Once on the payroll, veterans usually remain beneficiaries for life. The stigma around collecting payments has faded in recent decades. Online videos with tips about how to boost your disability rating are widespread. It is common for veterans to start on the programme at a 50% disability rating for, say, sleep apnea linked to service stress, only to then add more disabilities and have the rating increase to 100% within a few years. “It’s a programme that helps a lot of people who deserve it, but getting on the programme becomes an escalator to higher disability ratings and compensation,” says Mark Duggan of Stanford University. “Once you qualify you have an incentive not to get better.”
It is unclear if the spending is even benefiting veterans. Research by Mr Duggan and co-authors finds that disability compensation has reduced employment, with one in five new recipients leaving the workforce after the change in 2001. As nearly 2m additional working-age men have gone on the rolls since then, this implies 400,000 may have been discouraged from work. A study in 2022 by David Silver, then of Princeton University, and Jonathan Zhang, then of McMaster University, found that extra compensation had failed to boost veterans’ mental and physical health. Indeed, suicide rates have increased relative to comparable non-veterans.
To rein in costs and focus the department’s mission, policymakers could take a page from the Congressional Budget Office’s recommendations. The non-partisan scorekeeper advises narrowing eligibility for disability compensation to veterans with severe service-connected conditions, lowering benefits for some veterans and introducing a means test. Reducing payments to former soldiers will never be popular, but it would be wise. America’s veteran obsession has gone too far. ■
