The Veterans’ Administration Has Been a Disaster Since Its Inception

In her modern, exceptional biography of President Calvin Coolidge, Amity Shlaes (Coolidge, HarperCollins, 2013) documents the very blemished history of today’s U.S. Department of Veterans Affairs (VA), illustrating the trite, but nevertheless very true old saw that the more things change the more they remain the same.

That department of the federal government, now embroiled in controversy for falsifying records about the excessive times the veterans of the wars in Iraq and Afghanistan are required to wait for appointments to treat their combat-related injuries, both physical and psychological, was born during the administration of President Warren G. Harding. At the time, “bonuses for veterans dominated all budget talks” (p. 230). In order to deflect pleas for spending taxpayers’ money on American soldiers returning from the trenches in mud of Belgium and France — “a new commitment to such a large group [that] would be ‘a disaster to the Nation’s finances’ — President Harding negotiated a compromise with Congress to abolish the existing War Risk Bureau and replace it with a new Veterans Bureau. Headed by Harding’s friend, Charles Forbes, the bureaucratic reorganization doubled federal budget outlays from $300 million a year to $600–$700 million. Harding’s Veterans Bureau, among other things, was supposed to “build hospitals in fourteen regional offices to serve the vets all over the country” (p. 231).

Soon thereafter, “the bureau was expanding at an alarming rate”, but unsurprisingly “the veterans were finding that they “were not getting what was promised”, in part because “the prices in the contracts for the buildings Forbes was constructing seemed inflated”  (p. 233). Nevertheless, “the Veterans Bureau continued to spend and [in 1923] was set to outgrow the navy in size, with a budget of $455 million” (p. 236), representing about one-seventh of the total federal budget of that long-ago time.

As is true nowadays, evidence of corruption at the Veterans Bureau was widespread: “At one hospital in Washington, Mount Alto Veterans, a dental aide was even caught stealing gold allocated for veterans’ teeth…. One man, the new director of the Veterans Bureau, General Frank Hines, had been paid $4,800 a year for two hours of work” (p. 268). More “incredible news” was that “Forbes’s bureau had paid nine times the appraised value for a site in Excelsior Springs, Missouri, and then built a hospital on such shabby plans that no veterans were being served there” (p. 269). For more recent evidence on the VA’s failings, see Ronald Hamowy’s Independent Policy Report, Failure to Provide: Healthcare at the Veterans Administration.

Many people, including me, think that caring for the veterans of America’s foreign wars, no matter how ill conceived they may be, is a national responsibility. (Truth in advertising: I am a veteran of the U.S. Navy). Quite plainly, though, that responsibility should not be delegated to a distant, inefficient and often corrupt federal bureaucracy. Such responsibilities should be devolved to state and local levels of government — or, more ideally, to the private sector (under a voucher scheme) — whereby the taxpayers who finance veterans’ benefits are better equipped than the federal government to monitor the charitable and patriotic purposes for which their hard-earned incomes are spent.

William F. Shughart II is Research Fellow and Senior Fellow at the Independent Institute, the J. Fish Smith Professor in Public Choice at Utah State University, past President of the Southern Economic Association, and editor of the Independent book, Taxing Choice: The Predatory Politics of Fiscal Discrimination.
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