The GI Bill, the Phoenix Scandal and the Long Fight to Fix the VA

Walk into any veterans' hall in America and say this: "The government is great at promising things and terrible at delivering them." Then watch the room. Half the people will nod. The other half will point out, correctly, that a veteran with a prosthetic arm may get better care from the VA than from anyone on earth. Both groups are right, which is what makes this subject so interesting and so infuriating.

My argument today is simple, and I think the record backs it. When the country has kept its promises to veterans well, it has usually done so by giving the veteran a choice. When it has kept them badly, it has usually done so by becoming both the payer and the only provider, with a waiting list as the rationing device. The GI Bill is the example of the first. The wait-list scandal of 2014 is the example of the second. Everything since is the fight over which model wins.

The thesis in four steps

1. A promise to a veteran is a debt, and debts get paid in the form the creditor can use.
2. The most successful veterans' program in American history, the 1944 GI Bill, paid the veteran and let him decide where to use the benefit.
3. Where the government became the sole provider of care, the system was vulnerable to delay, hidden lists, and bureaucratic self-protection.
4. The reforms since 2014 have moved, haltingly, toward choice, and the evidence of why is in the history.

Let me take it in order.

Before the VA: a patchwork and a march

America has been promising things to its soldiers since the Revolution, and breaking some of the promises nearly as long. After the Civil War, pensions became a large federal commitment. After World War I, the arrangement was a mess of separate agencies: the Veterans Bureau, the Bureau of Pensions, and the National Home for Disabled Volunteer Soldiers.

The Veterans Bureau had its own scandal in the Harding years. Its director, Charles Forbes, was investigated for corruption in hospital construction and supply contracts and left the job in 1923. That is worth remembering: this is a Republican-era scandal, and an honest history includes it.

In 1930 President Herbert Hoover consolidated the three agencies by executive order, on July 21, into the new Veterans Administration. Two years later, in the summer of 1932, thousands of World War I veterans, with their families, marched on Washington to demand early payment of a bonus that had been promised for 1945. The Bonus Army camped in the capital. The government, under Hoover, sent in the Army to clear the camps. It was a public-relations disaster and a human one, and it left the memory of a country that had told its soldiers to come home and wait.

The point is not to score points against Hoover. It is that the model of a promise deferred, to be redeemed by a government agency years later, had a poor track record. It's the context for what came next.

June 22, 1944: a different kind of promise

By 1944 there were millions of Americans in uniform, and policymakers were nervous. Having seen what happened after the first war, they worried about mass unemployment, a flood of returning soldiers into a weak job market, and political unrest. The bill that became the Servicemen's Readjustment Act of 1944 was largely drafted by Harry Colmery, a past national commander of the American Legion, working with the Legion's staff. President Franklin Roosevelt signed it on June 22, 1944, a little over two weeks after D-Day.

What did it do?

• Education and training. The government paid tuition and fees, plus a living stipend, for veterans who wanted to attend college or trade school.
• Home, farm, and business loans. The government guaranteed loans, so a lender would take a chance on a young man with no collateral.
• Unemployment pay. A modest weekly payment for a limited time while the veteran looked for work, which people called the "52-20 club" for the twenty dollars a week for up to fifty-two weeks.

Now look at the design. The money followed the veteran. If he wanted to go to a small Baptist college in the Midwest, he could. If he preferred a large state university or a technical school, that was his call. The government didn't run the colleges. It didn't assign anyone a seat. It set the terms, paid the bill, and let the customer pick.

The results were astonishing. Veterans flooded campuses, and colleges expanded to take them. Home ownership rose. A generation moved up the economic ladder. Historians still argue about the exact numbers, and I leave those for you to look up at the Department of Veterans Affairs and the Census Bureau. The principle is what matters: choice, with a guarantee behind it.

I won't pretend the program was perfect. Its benefits were not shared equally; Black veterans in particular faced discrimination from lenders and schools in many places, and administration was left largely to local institutions. That is an honest part of the record. But the structure was the right one, and later reformers tried to fix its flaws, not to abandon it. For the school-choice version of the same idea, see How a School Voucher Works, From the State Check to the Classroom Door.

Healthcare: the government as payer and provider

Medical care went a different way. Under the Veterans Administration, led after World War II by General Omar Bradley, the government built a huge network of hospitals and clinics that it owned and staffed. In effect, the VA became both the insurer and the doctor. Veterans got their care at VA facilities.

There is a case that this works. For some conditions that are common among veterans, such as traumatic injuries, prosthetics, and post-traumatic stress, the VA has built real expertise. Many veterans prize it, and I do not want to insult them. A system run by people who understand military service has an advantage a private clinic does not always have.

But the structure has a built-in weakness. When one organization is the payer and the only provider, and money is fixed in advance, there is one lever to pull when demand outruns capacity: make people wait. Nobody in the system is paid more for seeing you faster. Nobody loses a customer when you leave. The incentives point toward managing the list, not clearing it.

In 1988 President Reagan signed the Department of Veterans Affairs Act, elevating the agency to a Cabinet-level department. The change took effect on March 15, 1989. Supporters argued that veterans deserved a seat at the table. The change is worth noting for one reason: it gave the VA more standing, and that does not by itself fix a model.

Phoenix, 2014

In the spring of 2014, news reports out of Phoenix, Arizona, described allegations that staff at the VA medical center there had kept secret waiting lists to hide long delays in scheduling appointments. A retired physician from the facility, Dr. Sam Foote, was among those who spoke out. Reports said veterans had died while waiting, though the facts of individual cases were disputed and investigators were careful about claims of causation. The VA's Inspector General looked into it, and in August 2014 issued a report confirming serious problems with scheduling and the manipulation of wait-time data in Phoenix. Further investigations found similar problems at other facilities.

Secretary Eric Shinseki resigned on May 30, 2014. Congress moved quickly.

I want to be careful about what the scandal does and doesn't show. It does not show that every VA employee is dishonest. Most are not, and many are veterans themselves. It does show that a system that measures its staff on wait times and gives them no real way to meet the targets will produce reports that meet the targets. A hidden list is what you get when the incentive is to look good, not to be good.

The Choice Act

The result was the Veterans Access, Choice, and Accountability Act, signed by President Obama on August 7, 2014. It was a bipartisan compromise, negotiated by Senator Bernie Sanders, then chair of the Senate Veterans' Affairs Committee, and Representative Jeff Miller, a Republican who chaired the House committee. It did two main things.

First, it created a program that let veterans who faced a long wait or lived far from a VA facility get care from private providers, paid for by the VA. The trigger was a wait of more than thirty days for an appointment, or living more than forty miles from a facility. Second, it made it easier to discipline or remove senior executives at the department.

The program was a patch. Veterans and providers complained about confusion, delays in payment, and rules that were hard to understand. The accountability provision ran into legal trouble: a federal appeals court later limited how the department could use one part of the process for demoting senior executives. In 2017 President Trump signed a new law, the Department of Veterans Affairs Accountability and Whistleblower Protection Act, aimed at making it easier to remove employees while protecting whistleblowers.

The lesson is mixed. Choice was the right direction, but a temporary program running alongside a government monopoly produced friction. The next step was to make the choice permanent and simpler.

The MISSION Act of 2018

On June 6, 2018, President Trump signed the VA MISSION Act, which stands for Maintaining Internal Systems and Strengthening Integrated Outside Networks. It consolidated the VA's various community-care programs into one and set access standards, based on drive time and wait time, that determine when a veteran may choose a community provider. The details of those standards are set by regulation and have been adjusted, so check the VA's website for the current rules.

Critics from the left worry that expanding outside care will drain resources from the VA and weaken it. Their steelman is a fair one: a department that loses patients may lose funding, may lose staff, and may lose the specialized expertise that private care cannot easily match. Those who cheer the change counter that the money should follow the patient, just as the GI Bill's money followed the student, and that competition makes the VA better, not worse.

I come down on the side of choice, and here is why. The argument for the VA as it was is an argument that the institution is more important than the person it serves. A veteran who has to wait months in a system that does not hurry has little use for a defense of the system's expertise. If the VA is as good as its defenders say, it should be able to win veterans' business when they have a real alternative. If it can't, the veterans deserve the alternative.

For a plain-spoken tour of how a veteran navigates this system, see A Veteran's Playbook for Filing a VA Claim the Right Way.

The PACT Act of 2022

The last piece is about a different kind of broken promise: toxic exposure. Veterans of the Vietnam era had fought for years to get the government to acknowledge illnesses linked to Agent Orange. Veterans of the wars in Iraq and Afghanistan came home with respiratory and other illnesses that many linked to burn pits, the open-air fires used to dispose of waste on bases, and other exposures.

In August 2022 President Biden signed the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act, known as the PACT Act. Its main change was to establish presumptions: for listed conditions and listed service, the government presumes the illness is service-connected, so the veteran does not have to prove the link himself. It expanded the list of conditions and service periods covered.

Notice the logic. The earlier system put the burden of proof on the sick veteran, who often could not produce records that no one had kept. The presumption flips the burden to where it belongs. That's the same principle as the GI Bill: make it simple, make it clear, and don't force the veteran to fight his own government to collect on a promise. Whether the VA can handle the claims that follow is a question of capacity, and you should watch how Congress funds the processing. I leave current claim counts and backlogs to the department's own reports.

What the history teaches

1. Money that follows the person works. The GI Bill is the proof, and the Choice and MISSION Acts are attempts to apply the lesson to healthcare.
2. A monopoly invites hidden lists. When one agency is judged on numbers and cannot lose a customer, it will find a way to meet the numbers.
3. Burden of proof should rest with the government. The PACT Act's presumptions apply that.
4. Accountability has to be real, and has to be fair. The 2014 and 2017 laws show how hard that is to write.
5. Bipartisanship is possible. The Choice Act was negotiated by Bernie Sanders and a Republican chairman. The best veterans' legislation tends to be written that way.

For a framework for judging the readiness side of the same promise, see Seven Tests of Whether the Military Is Really Ready for a Fight. For how to read the numbers in a defense budget without being fooled, see A Worksheet for Reading Any Defense Budget Number Without Being Fooled. And for the story of a Republican senator who carried a war wound for the rest of his life, see Bob Dole came home wounded from Italy and became a master of the Senate.

The bottom line

• The 1944 GI Bill worked because the benefit followed the veteran and he chose where to use it. Every honest reform since has tried to recapture that.
• Phoenix showed what happens when an agency is the payer and the only provider and is judged on numbers. Hidden lists are an incentive problem, not just a character problem.
• Choice is not an attack on the VA. A VA worth defending should be able to compete for veterans' business.
• If you or a family member is a veteran, learn the current community-care rules on the VA website and get a copy of every decision in writing.
• Ask your representative how Congress is funding claims processing and whether the money follows the veteran. A promise is only as good as the system that pays it.