4,150 veterans here lose from old law, study says

By Derrick DePledge
Advertiser Washington Bureau

WASHINGTON — Hawai'i veterans are losing $21 million a year because a century-old federal law prevents veterans from getting full retirement and disability benefits at the same time, House Democrats charge.

Veterans who serve at least 20 years in the military are eligible for retirement benefits, but those payments are reduced on a dollar-for-dollar basis when veterans also collect service-related disability. The lawmakers cite a report estimating that in Hawai'i, 4,150 veterans are losing retirement benefits because of the 1891 law.

Lawmakers have tried to change the law for years, but the Bush administration recently threatened a veto because of the potential cost, which could exceed $58 billion over 10 years.

Republican leaders are working with Democrats on a compromise as part of a defense authorization bill for the next fiscal year, but many Democrats and veterans advocates are demanding that veterans receive full retirement and disability benefits.

"The Bush administration's position is just incredible," said Rep. Neil Abercrombie, D-Hawai'i, who serves on the House Armed Services Committee. "They're sending people to Iraq to be in harm's way, and then shortchanging them if they get injured. The president wants another $87 billion for Iraq, but there's no money for the veterans who put their lives on the line."

The Democratic staff of the House Government Reform Committee prepared the report and conducted state-specific analysis for Democrats such as Abercrombie who asked for the information. Nationally, the study estimates, 565,000 veterans lose $3 billion in retirement benefits annually because of the law. Other estimates put the number of veterans higher.

The House and Senate dropped the issue last year after the Bush administration threatened a veto and instead agreed to give both retirement and disability benefits to about 33,000 veterans who were awarded the Purple Heart for combat injuries or had severe combat-related disabilities.

This year, Republican lawmakers are discussing a compromise that may provide both retirement and disability benefits gradually over five years but could require the Department of Veterans Affairs to set new guidelines for what qualify as service-related disabilities. The new guidelines could exclude injuries that occur outside of official military duties.

"That's just something we can't accept," said Steve Thomas, a spokesman for the American Legion.

House and Senate Democrats, and some leading Republicans, have strongly opposed such changes to disability standards. In a letter to President Bush, Senate Minority Leader Thomas Daschle, D-S.D., and Senate Minority Whip Harry Reid, D-Nev., described the compromise talks as a "radical plan to end disability benefits for thousands of veterans."

But aides to House Majority Whip Roy Blunt, R-Mo., who is working on a compromise, said Republican leaders have not agreed to a final proposal.