Facing a public outcry, 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.
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. The announcement does not end the reimbursement process, but postpones collection efforts while the Pentagon and Congress look for a long-term solution.
The White House said earlier this week that President Barack Obama had warned the Defense Department not to "nickel and dime" service members who were victims of wrongdoing by overzealous recruiters.
In a statement issued during a meeting of defense ministers in Brussels, Carter said efforts to collect reimbursement from Guard members should stop "as soon as is practical." Carter said he has 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."
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 1. As many as 6,500 California National Guard soldiers have been asked to repay the enlistment bonuses.
"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.
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."