President Bush’s plan to reform the disability compensation system, which he sent to Congress on Tuesday, includes a four-part payment scheme targeted exclusively at a newer generation of servicemembers and veterans.

The plan is ambitious in scope and more generous than the current disability system. As proposed by the White House, it would be applied automatically only to future disabled veterans. It would be offered as an alternative to current disability benefits only for veterans separated or retired from service since Oct. 7, 2001, the day of the U.S. invasion of Afghanistan.

Former Sen. Robert Dole, an architect of the plan as co-chairman of the President’s Commission on Care of America’s Returning Wounded Warriors, said he is getting “push back” from veterans’ service organizations. Lawmakers will feel it too, he said, but it shouldn’t deter them from giving newly-disabled vets and the current force a better disability package.

“I think we passed the baton to this generation” as being “the greatest,” Dole told the Senate Veterans’ Affairs Committee on Wednesday. “If they do a little better than we did, that’s OK. These are the grandsons and sons of Vietnam veterans and World War II veterans.” Improving their benefits, he said, “shows we’re making progress” and honoring their sacrifice.

As described by Donna Shalala, Dole’s co-chair and a former cabinet member under President Clinton, the Bush plan would totally restructure how disability compensation levels are set.

The military’s role would be reduced to conducting a thorough physical and, from that, determining if an ill or injured servicemember is unfit for duty. Those found unfit would be retired with a lifetime annuity based on final rank and time in service. Annuities would set at 2.5 percent of basic pay multiplied by years served.

The VA then would award a disability rating based on any service-related injury or ailment found. In addition to the military annuity, veterans would get a three-part VA payment: (1) transition money to help adjust to civilian life; (2) a monthly payment for loss in earnings capacity, the same rationale for current disability pay; (3) a new quality-of-life payment to compensate for limits on day-to-day activities resulting from the disabilities.

The Bush administration rejected a Dole-Shalala recommendation that the VA pay for lost earnings stop when veterans begin to draw social security.

Veterans’ groups strongly opposed a drop in compensation in old age. The White House removed it before sending the package to Capitol Hill.

Less clear is the administration’s position on whether all veterans separated as medically unfit should be eligible for lifetime benefits under Tricare Standard, the military’s fee-for-service health insurance plan. The White House proposal says that anyone who gets a DOD annuity for being medically unfit should be considered “retired” and thus should be eligible for retiree benefits such as base shopping privileges.

But to win eligibility for lifetime health benefits brings “an additional requirement,” said a White House background document. The member’s “unfitness for military service” would have to be “due to a combat-related serious injury” or “would have to meet other criteria” set down in regulations by the secretary of defense. The “other criteria” might be, for example, that a servicemember be rated at least 30 percent disabled. That would match the current threshold for Tricare eligibility among disabled veterans.

To some veteran advocates, the White House motive here is to block most veterans discharged as medically unfit from gaining access to Tricare benefits. White House officials prefer a different spin. They have said the intent is to expand Tricare eligibility to more combat-injured veterans.

At the Senate hearing, Shalala said the commission favored providing Tricare to disabled veterans and their families if the disabling conditions “were acquired in combat, supporting combat or preparing for combat.”

Shalala also said that the new qualify-of-life payment also would be tied only to combat-related injuries. Her statement was in conflict with White House documents, however, as well as briefings that officials gave to military associations and veterans’ groups. [Shalala was more than a little off the mark last month too when she testified to the House Veterans Affairs Committee that the White House would be recommending lifetime Tricare to “everyone who is declared unfit for service for health reasons.”]

Congress will be the final arbiter of legislation to help wounded warriors or to revise disability compensation. Many veterans groups believe Congress this year will pass only those initiatives that bring immediate support to wounded warriors and their families, leaving until 2008 or beyond the challenge of overhauling disability pay and the VA ratings schedule.

Some of the “push back” Dole said he felt over his commission’s recommendations surfaced in the Senate hearing with lawmakers and veterans groups criticizing any plan that some portion of disability benefits be tied only to combat or combat-related injuries. Under the Bush plan, that could occur with regard to lifetime Tricare benefits.

Gerald T. Manar of the Veterans of Foreign Wars criticized the Dole-Shalala recommendations on disability compensation as “hollow” and too sketchy to implement. By contrast, he praised the 560-page report of the Veterans Disability Benefits Commission, which White House officials had no time to review before Bush last August endorsed and promised swift action on the Dole-Shalala recommendations.

The VDBC meanwhile is drawing quiet criticism of its own on Capitol Hill with some key staff members expressing frustration that it endorsed almost every costly idea floated by veterans’ advocates in recent years.

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