December 30, 2016

Re-imagining Veteran's Affairs

I've been thinking about Veteran's Affairs quite a bit recently. After all, it has been in the news almost daily as a tiny subset of the many problems President-elect Donald Trump has promised to pro-actively address once he takes office. The current Veteran's Administration is a vast federal bureaucracy that like all government bureaucracies no longer exists to serve veterans. The core problem with any government bureaucracy is that once the bureaucrats develop a taste for power and easy money the bureaucracy becomes self-perpetuating and self-expanding, constantly expanding funds for the bureaucrat's pay and benefits while shrinking funds devoted to providing the services they were set up to provide. Eventually we have the situation we have now, where VA hospitals cannot afford tongue suppressors or toilet paper but every year the bureaucrats get a 4% annual pay raise. Even worse, like all government bureaucracies, the operations have been slowly grinding down to a complete stop. Streamlined services and efficient resource allocation are never a feature of government bureaucracies and the current Veteran's Administration is certain proof.

There are two core problems with the Veteran's Administration: identifying veterans and then providing their services to those veterans. Now it might seem obvious and simplistic to state the problems in this way, but there is a key reality here that must be addressed before genuine reform can take place. The first problem, and the most difficult to address, is correctly identifying who is and who is not a veteran. As a result, elaborate systems are in place to identify veterans, triage those veterans into priority need groups, and then find ways to deliver services to those veterans whose needs are determined to be of the highest priority. In order to prove you are a veteran, you must take your DD214 or a certified copy of it down to a Veteran's Administration office along with identification proving you are the veteran named in the DD214. If you move, you must go through this process again and re-register at the VA office in your new city. Because of poor computerization and communication, your records may or may not manage to follow you from one place to another. If something happens while you are traveling, things rapidly become even more complicated. Worst of all, in an emergency when there is no VA hospital or VA representative, you can find yourself forced into commercial hospitals, private clinics, and so on. It might surprise most people to learn that the Veterans Administration actually offers a huge range of services beyond simple healthcare. The problem is, not all of those services are available in every office and most people within the Veterans Administration itself cannot seem to see beyond providing healthcare. As a result, we wind up with an estimated 50,000 homeless veterans that cannot receive healthcare, financial services, counselling services, or job placement services so we casually dismiss them as having "fallen through the cracks."

There are two key solutions to this mess that have nothing to do with healthcare. In fact, these two solutions have the potential to transform the Veteran's Administration from a massive parasitic bureaucracy into an efficient provider of services that not only reaches every American veteran within our fifty states, it can assist veterans living overseas and might even produce a fund surplus that could some day be used to help expand veterans services into other areas of life or even help repay our national debt.

The first part of this solution is a Veteran's Credit Union with branches in every major city and secure online banking services for every veteran who lives outside the cities. Banking is fundamental to life in our modern world. People love to hate banks. The reason they hate banks is that they feel no ownership of the funds they deposit into the bank and they chafe under the burden of repaying loans they take out from the bank. A Veteran's Credit Union would make every depositor an owner. Participation in the credit union would not only provide access to all the normal banking services, it would also provide the member an annual vote in how the credit union is managed. Because it would be a credit union and not a bank, anyone who has an account could be nominated for any of the management offices and be voted by other members into a paid position within the credit union for a limited term (usually one year, but can be up to ten years depending on the position itself as well as how the credit union is organized). Joining the Veteran's Credit Union would provide the individual veteran with the second key solution: a federal identification card that doubles as a debit/credit card.

The Veteran's Credit Union Bankcard should be a photo identification card with an embedded RFID chip and possibly even a fingerprint (an index finger or thumb perhaps). This card would of course allow the individual veteran access to their credit union services including debit services, credit services, personal loan services, reverse mortgage services, and so on. All of their credit union services would be accessed from the same photo identification card. Because they must be a veteran to participate in the credit union, this card also becomes their Veteran's Administration healthcare services identification card, giving them access to their local Veteran's Administration Hospital or Clinic with no change in their current life beyond a simple deposit in the Veteran's Credit Union. This eliminates the need to register with the Veteran's Administration as well as the need to re-register every time the veteran moves. As a bonus, this would also clear the way for billing the federal government when the veteran seeks healthcare at a private clinic or in an emergency. Billing would happen after the card is presented to the healthcare provider and would occur through the same administrative channels as normal insurance, medicaid, or medicare. This single card would also serve as proof of military service in every federal, state, and local government office, allowing the veteran access to whatever additional services are available through local governments, or from the Veterans Administration after moving to a new city. In private businesses where veterans are provided additional services such as discounts or small premiums, the Veteran's Credit Union Bankcard would provide proof of military service so the veteran does not have to carry around a copy of their DD214 in their wallet. By allowing the card to be issued to anyone who keeps a minimum deposit in the credit union ($1 perhaps, or some other arbitrary amount up to $10), requiring card renewal every five years, and making renewal dependent on maintaining that simple, small deposit, it also provides the credit union with a guaranteed reserve.

If the card is renewed every five years then as time goes on it might even be possible to apply stamps, seals, or special marks to the Veterans Credit Union Bankcard which demonstrate driver's license status, commercial driver's license status, pilot's license status, concealed carry weapon permit status, and so on. Congress, naturally, would have to pass laws ensuring that such additional qualifications are valid in all fifty states. Overseas veterans who participate in the Veteran's Credit Union might even be allowed to use the card as a passport, as official identification at American Embassies worldwide, and so on. Instead of a dozen different credit cards, debit cards, and identification cards, the veteran would be able to carry a single card and have access to their entire banking, licensing, and proof of identification requirements. As long as the card has a photograph, a secure RFID, and a fingerprint, it cannot be used by anyone except the individual veteran if it is lost or stolen. Over time this might even become the model for all sorts of other simplified identification cards such as state-issued driver's licenses, individual bankcards, or perhaps a new form of single card passport issued by governments around the world. There will be some who fear loss of privacy, government intervention in their daily lives, and so on, but this can be countered by pointing out there is no legal requirement to join the Veteran's Credit Union while there are a whole host of benefits to doing so.

Naturally, to participate in the Veterans Credit Union and receive the official identification card, initial identification would have to be established. Presentation of a birth certificate along with a DD214 would serve in the vast majority of cases. For someone who is homeless, who never had a birth certificate, or who has lost their DD214, alternative forms of identification would have to be used such as fingerprints for law enforcement background checks, DNA tests, collaborating testimony from current credit union members, and so on.

In order to insure that this credit union fulfills its primary mission of simplifying Veterans Administration services it should be a joint venture 51% owned by the Veterans Administration and 49% owned by the members, but operated and managed as a private enterprise controlled by the members. This gives Congress final approval over unsafe investment schemes, attempts to bleed off veterans deposits through exorbitant service fees, and other scams common to the banking or credit union industry. It also creates a way for the credit union to provide a revenue stream independent of taxation in the form of dividend payouts to the Veteran's Administration. Hopefully over time this might even allow the Veterans Administration to eventually become self-funding. Possibly the Veteran's Credit Union might some day even generate enough revenue to contribute to the general budget of the federal government. Also, as long as the credit union charter guarantees membership control and management, it prevents Congress from robbing the credit union to fund their deficit budgets in the way they have robbed Social Security. As the credit union expands and becomes more profitable, it could branch into other life services such as legal advice, investment advice, or private insurance (possibly through purchasing or partnering with an existing company such as GEICO or USAA). Expansion would also increase revenue flow to the Veteran's Administration so they could expand their healthcare services into areas such as life maintenance, aging maintenance, rehabilitation services, and so on. The key difference between a Veteran's Credit Union and failed schemes such as Freddie Mac and Fannie May is that the Veteran's Credit Union would be owned and managed by the members, and not by managers hired from outside, presidential appointees, federal bureaucrats, and so on. Nor would it be a burden to the federal government because there would be no provision for government subsidy, government contribution, or even direct Veteran's Administration involvement in the daily operation. A Veteran's Credit Union would be strictly for and by the participating veterans. The only reason for the partnership with the Veteran's Administration is to streamline identification of individual veterans and to provide a legitimizing authority for tying the Veteran's Credit Union Bankcard into the VA healthcare system.

Let me finish by emphasizing that this is a very broad concept, not an action plan and not a business plan. I do believe it neatly solves a huge variety of problems while improving the federal government's ability to identify who is entitled to veteran's benefits. By reducing the vast administrative bureaucracy of the Veteran's Administration into a single card provided by a private credit union, it also paves the way for a reduction in the size and scope of the Veteran's Administration which should lead to a smaller budget. Hopefully, this would help it become self-funding sooner rather than later. Eventually this should also lead to an expansion of available services as well as more efficient delivery of those services. If creation of a Veteran's Credit Union is combined with a similar joint public/private ownership of the healthcare services arm of the Veteran's Administration, there is a very high potential for very rapid reform within the Veteran's Administration itself. Last but not least, the Veteran's Credit Union would take over financial veteran's benefits such as home loans, business loans, and financial advising, moving these services off the federal budget and onto the private credit union's budget while still managing those benefits in accordance with rules and regulations set forth by Congress.