Everything you need to know about the National Guard’s bonus controversy

The Pentagon is the center of controversy this week after a report revealed it was trying to claw back millions of dollars in bonuses and other incentives erroneously paid to troops over a decade ago for reenlisting at the height of the wars in Iraq and Afghanistan.

{mosads}Here’s everything you need to know about the issue: 

What happened? 

It all started in 2008, when the California National Guard first became aware that bonuses and other reenlistment incentives may have been improperly paid to soldiers. The bonuses were only meant for soldiers with certain jobs but were offered more liberally — and in some cases fraudulently. 

{mosads}Inspectors found that a California National Guard incentive manager, Army Master Sgt. Toni L. Jaffe, was responsible for actions that affected about 13,600 service members, mostly between 2007 and 2008. 

Guard officials then launched an audit of the 13,600 cases, about 4,000 of which were deemed legitimate. Another 1,100 were deemed improper because the service member knew, or should have known, not to take the incentives. 

In about 5,500 more cases, there was a paperwork error or missing documentation. In the approximately 3,100 other cases, the service member had left the service and had not been located. 

Although some soldiers began receiving debt notices as early as 2012, a last round of audits was finally completed last month, prompting a Los Angeles Times report on Monday that sparked nationwide outcry.

The report said soldiers were being hit with interest charges, wage garnishment and tax liens and were under severe financial stress.

The Pentagon has recouped more than $22 million so far. 

How big is the problem? 

It’s not clear. The Pentagon has said there were erroneous payments in every state but have not yet clarified how many cases there are. 

One defense official said there were “dozens” of cases outside of California but said the problem was mostly isolated in the Golden State. 

It’s also not yet clear how much money in bonuses the Pentagon is seeking to take back. 

While the Pentagon has recouped $20–22 million so far, the total amount sought could be much higher. 

“The total amount of money in there is somewhere I think around $40 or $50 million dollars is kind of what they’re looking at, potentially,” National Guard Bureau Chief Air Force Gen. Joseph Lengyel told reporters on Wednesday. 

What did Congress know, and when? 

National Guard officials say Congress knew about the issue as far back as 2012, when the organization began a nationwide audit. 

A California National Guard senior official told the Los Angeles Times on Monday that Golden State lawmakers knew for at least two years and were even offered proposed legislation to mitigate the problem in 2014, but did not act at the time because of cost. 

Lengyel told defense reporters Wednesday that Congress knew about the issue but said the National Guard never proposed a blanket waiver of the debt. 

“It is true. We did tell Congress that we found this. … I think it was in 2012 that we reported, ‘Hey we found this,'” he said. 

House Majority Leader Kevin McCarthy (R-Calif.) on Tuesday said Congress did not know about the clawbacks, while Rep. Mark Takano (D-Calif.) said he was aware of a proposal to halt the clawbacks but that it died since it would have violated budget caps. 

What is Congress doing now? 

Amid reports of some troops having to refinance their homes and take other measures to pay back the bonuses, lawmakers say they will work on a immediate fix when they return to business after the presidential election. 

California Democratic Sens. Dianne Feinstein and Barbara Boxer on Wednesday said they will introduce legislation aimed at waiving debt payments for troops who are not found at fault. 

The House Armed Services Committee leaders said they are working on a solution and expect to take action in the 2017 National Defense Authorization Act (NDAA), which authorizes Pentagon policy and spending. 

Earlier in the week, some lawmakers pointed to a provision that is already in the works as a possible fix. 

The provision in the House’s 2017 NDAA would limit Pentagon collection of overpaid bonuses to a 10-year window but would not go into effect until 2027.

The delay in the NDAA provision was to avoid having to immediately find a mandatory spending offset for the legislation, given that the Congressional Budget Office does not score anything that is 10 or more years away.

The provision would also need to survive going to conference, the process in which the House and Senate merge their respective NDAAs, and return to both chambers for final approval. 

What is the Pentagon doing about it? 

Under mounting pressure from Congress, Defense Secretary Ash Carter announced Wednesday that the Pentagon would suspend collection efforts for the roughly 5,500 cases related to paperwork errors or lack of proper documentation. 

Carter has also appointed the top personnel aide in his office to set up a process to review any cases in which it’s not clear whether the service member knew he or she was ineligible for the incentive. 

The process will also help service members recoup money they may have mistakenly paid back and apply for debt waivers. In cases where the service member is not at fault, the Pentagon will waive his or her debt. 

What happens next?

Carter said the goal for the Pentagon’s new process is to have all cases under question reviewed by by July 17, 2017, so service members know whether they owe money. 

The next administration is not legally obligated to carry out the mandate but is expected to. 

The House and Senate are back in session beginning Nov. 14. A handful of members have said they will introduce new legislation to address the issue. In addition to Feinstein and Boxer, Rep. Adam Schiff (D-Calif.) said he will also introduce legislation in the coming weeks. 

The natural legislative vehicle is the NDAA. The House and Senate Armed Services Committees are currently merging together their respective measures for final passage by both chambers, and it is expected to pass sometime before the end of the year.

Members are expected to continue urging the Pentagon to take additional steps, such as absolving the debt completely. Some are also seeking additional information, such as how many erroneous payments were made outside of California. 

Veterans groups are also urging the Pentagon to waive the bonus repayments and calling on Congress to enact legislation. 

Updated 8:00 a.m.