WASHINGTON (CBSLA.com/AP) — Defense Secretary Ash Carter on Wednesday ordered the Pentagon to suspend its effort to seek repayments of enlistment bonuses given to thousands of California National Guard members who served in Iraq and Afghanistan.
“There won’t be any more collections until we put in place a process that can expeditiously and fairly deal with these issues,” the defense secretary said.
Carter’s decision comes in the wake of angry reaction from congressional Republicans and Democrats who demanded he relieve the burden on Guard members following a news report that soldiers were being asked to repay debts that in some cases totaled more than $25,000.
As many as 6,500 California National Guard soldiers, including Susan Haley, have been told to repay their enlistment bonuses.
While the news came as a relief for many Guard members, Haley said it was too late for her because she has already been paying back part of the $22,000 plus interest she was told she owed.
“Of course, that has a devastating effect on us. We’ve depleted our savings. We’re in a very tight schedule as it was. And now, we’re barely making ends meet,” Haley said.
She does not know when or if she will ever get back the money she had already paid.
The damage was also done for Robert Richmond, who said the National Guard turned him over to collection agencies for not paying back the $15,000 he supposedly owed.
“It felt like betrayal. It was depressing, and I want nothing more than to not resolve it for myself but resolve it for every soldier that’s got that recoupment letter,” Richmond said.
The Department of Defense wrote in an email: “Service members that were in the process of payment or had paid would likely be eligible for review under the process Secretary Carter has ordered to be established by January 1.”
“I’m not ready to accept that’s the truth because the government has not listened for so long,” Haley added.
But Carter’s announcement did not end the reimbursement process. It only postponed collection efforts while the Pentagon and Congress look for a long-term solution.
He also ordered the department to set up a streamlined process by Jan. 1 to help troops get relief from the repayment obligation because the current program has moved too slowly.
“This process has dragged on too long, for too many service members,” he said. “Too many cases have languished without action. That’s unfair to service members and to taxpayers.”
Earlier this week, the White House said President Barack Obama had warned the Defense Department not to “nickel and dime” service members who were victims of wrongdoing by overzealous recruiters.
The Los Angeles Times reported over the weekend that the Pentagon demanded that thousands of soldiers repay their enlistment bonuses after audits revealed overpayments by the California National Guard.
Recruiters under pressure to fill ranks and hit enlistment goals at the height of the two wars improperly offered bonuses of $15,000 or more to soldiers who re-enlisted.
If soldiers refuse to pay the bonus back, they could face interest charges, wage garnishments and tax liens.
While some soldiers “knew or should have known they were ineligible for benefits they were claiming, many others did not,” Carter said, adding that the new process will put “as little burden as possible on any soldier who received an improper payment through no fault of his or her own. At the same time, it will respect our important obligation to the taxpayer.”
The Pentagon hopes to complete all cases by next July.
“I’m glad the Pentagon came to its senses,” said House Speaker Paul Ryan, R-Wis., who had pressed the Pentagon to suspend the program.
House Majority Leader Kevin McCarthy, R-Calif., also welcomed the development, saying he spoke with Deputy Defense Secretary Robert Work Tuesday night and told him that veterans “have already given more than what they owe to this nation. Today’s swift action demonstrates that the department agrees.”
McCarthy said he will work with other members of Congress to provide a legislative solution so the repayment issue does not recur. McCarthy planned to host a bipartisan conference call with Work on Wednesday night to discuss the issue.
Rep. Adam Schiff, D-Burbank, said Carter “made the right call.”
“While this will help some families sleep a bit easier at night, much more needs to be done, starting with congressional legislation to waive these debts and to provide relief to soldiers who have already repaid some or all of the bonuses they accepted in good faith,” Schiff said. “It should not fall on the shoulders of those who serve our country to pay for the mistakes of others that offered these incentives improperly or allowed the error to go undiscovered for so many years.”
Sens. Dianne Feinstein and Barbara Boxer, D-California, issued a joint statement saying they plan to introduce legislation when Congress returns after the election to address the issue.
“The small number of service members who knew they weren’t supposed to receive bonuses will be exempt from the bill,” they said. “We’re hopeful the Pentagon will resolve this issue on its own, but want to ensure those who wore our nation’s uniform that they won’t be punished for the actions of others.”
Rep. Judy Chu, D-Pasadena, also hailed Carter’s decision.
“But this is only temporary relief, not a permanent one,” Chu said. “As I said yesterday, the service members who acted in good faith should not have to pay for the Pentagon’s mistake.”
Paul Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America, called Carter’s announcement a “good step” but “long overdue and far from enough.”
Thousands of veterans have seen their lives “turned upside down” and are “now in financial ruin through no fault of their own,” Rieckhoff said. “The Pentagon needs to do more than just halt” the collection efforts from soldiers, Rieckhoff said: “It needs to pay them back — with interest.”
Carter told reporters Wednesday that “under the law” he has to leave open the possibility that some soldiers may end up having to pay back their bonuses or other aid. But he said “there’s definitely discussion which involves not only the … paramount issue of fairness but there is also the law, and so I think we need to look at that simultaneously.”
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