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The Long-Term Costs of Providing Veterans Benefits

In Soldiers Returning from Iraq and Afghanistan: The Long-Term Costs of Providing Veterans Medical Care and Disability Benefits, Linda Bilmes of Harvard University’s Kennedy School of Government asks, “President Bush is now asking for more money to spend on recruiting in order to boost the size of the Army and deploy more troops to Iraq. But what about taking care of those same soldiers when they return home as veterans?”

Bilmes presented the paper January 5 at an Allied Social Sciences Associations panel hosted by Economists for Peace and Security, is a follow-up to her February 2006 paper with Joseph Stiglitz, The Economic Costs of the Iraq War: An Appraisal Three Years After the Beginning of the Conflict. That paper estimated that the United States’ war in Iraq will eventually cost more than $2 trillion.

Bilmes and Stiglitz believe that making the public more aware of the costs of the war can help end the war. And one way to do that is to make sure that long-term costs, like treating and supporting injured and disabled veterans, are included when the cost of the war is discussed. To leave them out is shady business, says Bilmes. “In this country, no enterprise larger than a corner grocery store is allowed to use cash accounting. But that’s what the government is doing. It’s not counting accrued costs.”

The Bilmes and Stiglitz paper estimated that lifetime benefits (both health care and disability benefits) to U.S. veterans of Iraq would cost between $77 billion and $179 billion. Bilmes says that immediately after she released her paper, leaders of veterans’ grooups began calling her to thank her for writing the paper—and also to tell her that they thought her numbers were too low. That feedback prompted her new study.

Bilmes’ new research estimates the minimum cost at almost twice the previous study’s maximum: $350 billion. This low-end estimate assumes no new deployments (which seems unlikely with the Bush regime in power until 2009), and it assumes that the average benefit will be similar to the average benefit resulting from the first Gulf War—although Department of Defense sources indicate that the rate of serious injury has been much higher. If those assumptions do not hold, Bilmes offers a high-end estimate of $663 billion.

Congress and the Veterans Administration would do well to pay attention to Bilmes’ estimates and the concerns of veterans’ organizations: in fiscal year 2005, the VA had a budget shortfall of $1 billion, and in FY2006, $2 billion. The Government Accounting Office says that this is because the VA used 2002 (pre-Iraq) figures to estimate its costs for those years.

But even budgeting for the veterans’ care costs we know are accruing won’t solve the many the problems that the Veterans Administration is experiencing right now—a backlog of between 400,000 and 600,000 claims, and claim processing times that “render care virtually inaccessible,” according to VA Undersecretary for Health Frances Murphy. Bilmes suggests that these problems could be solved by changing the VA’s claims system—which eventually approves 88% of all claims—so that all claims are automatically approved, with the possibility of a later audit (much the way the IRS works) and by placing the 1000 new employees that the VA has recently requested not in claims processing but in the direct care of veterans. She encourages Iraq veterans and their organizations to turn their activism and political access to these tasks. Unfortunately, although the Bush administration made war with Iraq seem inevitable, making sure that the government pays for the care of its veterans is certain to take work.


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  1. Great comments, and so true. Unfortunately, it is what it is for now, but hopefully will all change in due time. By the way, someone mentioned this site the other day: http://www.dmaseniors.com. They help secure the benefits that Veterans deserve, and they are super nice. Again, great blog! Be well…Tom.

  2. Great post – you make a good point in saying that veterans need as much support as current soldiers. another good resource for info on < HREF="http://www.veteranslaw.com" REL="nofollow">veterans compensation benefits<> is veteranslaw.com. You have a very insightful blog, keep up the great work. Best,Sam

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