Fund a Veterans Trust Fund before the war’s aftermath

For America’s elected leaders, the warnings of history loom over one of the most important decisions they can ever make: we must never again send our troops to fight and die without a reason and plan worthy of their sacrifice. And that plan should include honoring President Abraham Lincoln’s pledge to “care for him who shall have borne the battle, and for his widow, and his orphan.”

The problem, according to Professor Linda J. Bilmes at the Harvard Kennedy School, is making good on the passionate political rhetoric about honoring our veterans. As she explains

“While much political energy is devoted to ensuring the long-term viability of other entitlement programs, our leaders are almost completely silent on how to pay for the accrued benefits we have only recently promised to veterans. Kicking the can down the road will put veterans’ funding in competition with all the other future claims on federal tax dollars—including paying back the trillions of dollars of debt we incurred to finance the wars in the first place.”

The issue carries broader implications about America’s approach to war and peace:

“The consequences of essentially ignoring the cost of caring for veterans are threefold. First, it understates the true cost of going to war. Second, it is poor financial management to be paying for a 40-year-long pension and benefit obligation from annual budget revenues. Third, it inevitably will lead to the possibility that veterans’ needs will not be funded adequately in the future. But the issue here is not merely fiscal. A widening gap has opened between the tiny percentage of the American population from whom the bulk of the nation’s volunteer army is drawn and the rest of us, who have neither served nor borne the financial burden of the conflict.”

To illustrate the point that waging war entails very long-term financial costs, consider the fact that the United States is still paying pension benefits to survivors of Civil War veterans!

The solution she proposes is to establish a Veterans Trust Fund to pay for veterans benefits and claims on an ongoing basis as they come due. The Trust Fund itself could be financed by increasing taxes, as America did during the two World Wars, or by “imposing a surcharge (say, 20 percent) on all future war spending, designated for the Veterans Trust Fund.”

In fact, Congress and the President should be pressed to pin down and pay into this funding stream for veterans programs before starting a war, not after. As Prof. Bilmes explains, “the merit of establishing a trust fund for veterans, however, is that it creates an awareness of the magnitude of the funding challenge ahead. Today’s taxpayers need to shoulder some of this burden.”

For more information, see “A Trust Fund for Veterans,” Democracy: Journal of Ideas (2016).