Pentagon Spends Nearly $1 Billion a Year on Unemployment

WASHINGTON (AP) -- Even as it faces budget cuts and forced employee furloughs, the Pentagon is spending nearly a $1 billion a year on a program that sends unemployment checks to former troops who left the military voluntarily.

Unemployment Compensation for Ex-Servicemembers, a Labor Department program, is a spinoff of the federal-state unemployment insurance program. The Labor Department says the overall program is meant to help "eligible workers who are unemployed through no fault of their own" such as during layoffs.

But eligibility for the military compensation requires only that a person served in uniform and was honorably discharged. In other words, anyone who joins the military and serves for several years, then decides not to reenlist, is potentially eligible for what could amount to more than 90 weeks of unemployment checks.

The program's cost rose from $300 million in 2003 to $928 million last year.

"It eats away at other parts of the budget, and is for people they no longer have control of," said Air Force veteran Joe Davis, a spokesman for the Veterans of Foreign Wars.

"Why are we spending so much on (the program) at a time when we can't afford to build a new fighter jet?" said Samuel Wright, a former Navy lawyer who helps troops with employment and other legal issues. The Pentagon is facing across-the-board cuts because of automatic spending reductions that took effect this month.

Defense officials and outside experts have become increasingly concerned about the rising cost of the compensation program. And some believe it's evidence of weaknesses in other programs, such as those designed to help veterans find jobs. Some military experts suspect the availability of the money may be discouraging some veterans from actively looking for work and thus falsely inflating data on their unemployment -- data that shows higher joblessness for Iraq and Afghanistan vets than for older ones and for society in general.

Navy Lt. Cmdr. Nathan Christensen, a Pentagon spokesman, said a factor in the higher costs is the increased use of National Guard and Reserve units over the past decade for the wars in Iraq and Afghanistan. That is, once they were activated, came home and were deactivated, they were added to the rolls of ex-active duty troops.

Another factor could be the recession, which resulted in higher overall national unemployment rates, he said.

The program for former military members started under a 1958 law aimed partly at helping troops transition from life in uniform to the private sector. Unlike the larger U.S. unemployment insurance program, there is no paycheck deduction from troops to fund the military one. In the private sector, employers pay a tax to fund compensation checks; in the military program, the service branches are the employer.

Claims are filed with the states. The Labor Department then tallies compensation sent to former military members and sends the bill to their individual service branches, as well as to the National Oceanographic and Atmospheric Administration and U.S. Public Health Service Commissioned Corps, where a smaller number of former employees also are covered.

Former military members are subject to the same state requirements as others when they apply to a given state for the money. All states have a requirement of some kind that recipients search for work while getting compensation, the Labor Department says. States vary in the types of search activity needed and the effort required, with some, for instance, requiring two job interviews within a certain period or different types of documentation on the search.

Nearly 120,000 people filed first-time claims for money in the military program over the last budget year, compared with 71,000 in 2008, the Labor Department says. Well over 515,000 have gotten compensation since 2008.

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