Obama Aims to Put Jobless Veterans to Work

The Jobs Act and Veterans Hiring Initiative announced by President Barack Obama during his address to the nation last week would create substantial tax credits for employers in hopes that employers would then hire more workers.

The Veterans Hiring Initiative provides even more tax credits for employers who hire disabled and nondisabled veterans and military spouses. However, the president is having a hard time convincing congressional Republicans, and even many Democrats, to embrace the proposal.

White House representatives Danielle Lazarowitz and Matt Flavin hosted a conference call Wednesday to explain the American Jobs Act and Veterans Hiring Initiative to community and advocacy group leaders around the country.  

“Veterans bring unparalleled leadership and management abilities that you don’t see in others their age,” said Flavin, White House director for Veterans and Wounded Warrior Policy. “We’ve asked the private sector to hire 100,000 veterans or military spouses. We think the tax credits will help the private sector.”  

As of June, one million veterans were unemployed, and the jobless rate for post-9/11 veterans was 13.3 percent, according to a statement released by the White House. White House officials expect that the rate of unemployed veterans could rise as the wars in Iraq and Afghanistan wind down and more than one million service members return to the civilian workforce.  

Many of these veterans worked in fields hard hit by the recession, such as construction and manufacturing, prior to joining the military and are likely to face difficulty in finding employment, officials say.  

But even a grim unemployment rate in the veteran and general populations may not be enough to win over members of Congress, at least not without making major changes to the bill. Congressional Republicans have bristled at passing a bill that relies on increasing taxes on corporations and wealthy Americans for funding, and even Democrats are nervous to green light a plan that might remind voters of the much-maligned stimulus package.  

Senate Majority Leader Harry Reid has said he will put the bill on the  legislative calendar but he has yet to say when. With votes already scheduled for disaster aid, extensions for the Federal Aviation Administration and a short-term spending plan, it's likely that a Jobs Act vote won't come until after the Senate's recess at the end of September.  

Under the proposed Veterans Hiring Initiative, employers could qualify for two new tax credits: The Returning Heroes Tax Credit, which would provide an incentive for firms to hire unemployed veterans; and the Wounded Warrior Tax Credit, which would double the existing tax credit for long-term unemployed veterans with service-connected disabilities.

Under the Jobs Act, the payroll tax for 98 percent of businesses would be cut in half, freeing up about $140,000 annually for a company that employs 75 people who each earn about $60,000 a year, said Lazarowitz, a special assistant on the National Economic Council.  

The Veterans Hiring Initiative Tax Credits would be in addition to the reduction in payroll taxes. By combining the proposed tax credits for hiring previously unemployed workers who’ve been out of work for more than six months with additional tax credits available for hiring veterans, an employer could receive as much as $9,600 in the form of a tax credit for hiring one veteran, she said.   

Under the proposed law, the tax credits would also be available to nonprofit organizations. Another aspect of the proposal, the Self-Employment Assistance Program, would allow entrepreneurs, both veteran and nonveteran, to use unemployment insurance money as seed money for their start-up businesses for up to 26 weeks, a program that the White House officials said has already been successful in several states.  

Flavin said that another focus of the initiative is to make sure that all veterans are “career ready” before they leave military service.  

Obama has called on the Department of Defense and Department of Veterans Affairs to work with other agencies to insure that every service member receives the necessary training, education, and credentials they need to transition to the civilian workforce or to pursue higher education after leaving the military.  

Obama is also calling on the Department of Labor to establish a new initiative to offer enhanced career development and job search options to transitioning veterans and on the Office of Personnel Management to create a “Best Practices” manual for the private sector to help businesses identify and hire veterans.  

“We want to make sure any training you receive in the military counts for something in the civilian sector,” Flavin said.  

One proposed plan is to create a program that is being called a “Reverse Boot Camp” that would make the transition from military to civilian life easier for veterans. The Secretaries of Defense and Veterans Affairs are currently creating recommendations for that program, Flavin said.  

As the law has not been passed by Congress, many of the details are still being worked out, Flavin said. For example, though “disabled” will be defined using the same definition currently used by the Department of Veterans Affairs, the definition of “veteran” still must be determined by Congress.  

Lazarowitz said that the act defines “short-term unemployed” as someone who has been out of work for less than six months, and “long-term unemployed” as someone who has been out of work for more than six months.  

She said that currently there are 430,000 nondisabled short-term unemployed veterans, and 450,000 nondisabled long-term unemployed veterans. Additionally, she said there are 75,000 disabled short-term unemployed vets and 50,000 disabled long-term unemployed vets.

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