The Bush administration has endorsed a House bill that would improve the Montgomery GI Bill education benefits in several ways, including a 31 percent jump in monthly benefits and a new $500-a-month stipend to help cover living expenses.

The administration’s aim is not only to improve veterans’ benefits in wartime but to derail a far more costly GI Bill reform package that Virginia Democrat Jim Webb, in just his second year as a senator, is shepherding toward likely enactment with tenacity and timely compromises.

No matter who wins this showdown, current and future GI Bill users are almost assured that their benefits will be more valuable by next year.

Webb’s bill, the Post-9/11 Veterans Educational Assistance Act (S 22), would be available to any active or reserve member who served at least three months on active duty since Sept. 11, 2001. Maximum benefits would cover tuition costs up to an amount equal to tuition payments at a state’s most expensive public university. Payments to full-time students would jump to about $1,900 a month, from $1,100 under the MGIB.

Webb’s bill also would pay a monthly stipend to cover living expenses. That payment would be set locally based on military housing allowances payable in the college area to a married enlisted member in grade E-5.

To win the influential support of Sen. John Warner, R-Va., Webb added a provision to entice private colleges to accept more veterans. The government will pay half of any tuition costs in excess of the new GI Bill ceiling if colleges agree to absorb the other half. So a veteran, in effect, could attend most any college that accepted him, or her, on scholastic merit.

Sen. Daniel Akaka, D-Hawaii, chairman of the Senate Veterans Affairs Committee, became a new and vital co-sponsor last week after Webb accepted his changes. The housing stipend would not be paid to veterans who are part-time students. Also the new GI Bill’s effective date would be Aug. 1, 2009, rather than the date of the bill’s enactment, to allow the Department of Veterans Affairs time to prepare. VA also would get an extra $95 million to hire more people and to develop new information technology for administering this new GI Bill for a new generation students.

Webb also agreed with Akaka that in August 2008, MGIB benefits should be raised 20 percent so that veterans who don’t qualify for the new GI Bill, and those who have to wait another year for the new program, can still receive some immediate help with education costs.

Rep. Harry Mitchell, D-Ariz., introduced a companion bill, HR 5740, on April 9. Before a week had passed, it had attracted 196 co-sponsors.

Webb, an aide said, hopes these changes have lowered the cost of his GI Bill below $3 billion a year. Regardless, Senate Majority Leader Harry Reid, D-Nev., will allow Webb to clear conventional funding hurdles over entitlement spending by attaching his bill an amendment to the wartime supplemental budget to be taken up by the Senate at the end of April.

Webb’s press aide, Kimberly Hunter, said Webb will argue that, with the Iraq war costs running at up to $15 billion a month, it’s only appropriate to spend “a few billion dollars a year” from the same pot to give returning veterans better education benefits for transitioning to civilian life.

Defense officials fear Webb’s GI Bill not only would be costly in dollars but it would threaten the viability of an all-volunteer force by enticing thousands of members to leave service after a single tour to use education benefits.

Arizona Sen. John McCain, soon to be the Republican nominee for president, told reporters on his campaign plan that he’s working with others to find an alternative to S 22 that won’t harm service retention rates.

That alternative might have been introduced in the House on April 2 by Rep. Stephanie Herseth Sandlin, D-S.D. She chairs the House veterans’ affairs subcommittee on economic opportunity and is a fiscal conservative.

Sandlin’s bill, the Veterans Education Improvement Act of 2008 (HR 5684), drew mixed reviews from veterans’ service associations when called to testify this week on her education bill and a of other veterans’ initiatives. VSO representatives hinted that they favor Webb’s bill.

But Curtis Gilroy, director of recruiting policy for DOD, praised Sandlin’s bill as if the department itself had helped to write it. Gilroy said DOD supported its call to raise MGIB payments from $1,100 a month to $1,450 for full-time students. Payments then would be enough so that MGIB covers the “average cost” of attending a public four-year college, Gilroy said.

If payments were made any larger, he said, it could harm retention.

Sandlin’s call for a $500-a-month stipend is “a little more generous than we would like,” Gilroy said, but “we do support some level of increase.”

Gilroy endorsed provisions in Sandlin’s bill that would: allow veterans to use MGIB benefits to pay off student loans; extend the 10-year window for using benefits after separation to 15 years; exclude MGIB benefits from counting as “income” when applying for other student aid; allow recruits to make their $1,200 MGIB contributions over 24 months rather than 12.

Though Sandlin’s bill is “less generous” than S 22, Gilroy said, it “addresses all of the significant issues as we see them.” It is simpler than Webb’s bill, doesn’t add bureaucracy and doesn’t strain retention, he said.

The only missing initiative, which the department considers an MGIB reform priority, Gilroy said, is language to allow current members to transfer unused education benefits routinely to spouses or children. The Department is expected to send a proposed plan to Congress later this year.

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