Reviews in American History

In 1997, Christopher Howard coined the term "hidden welfare state" to designate tax expenditures like the home mortgage interest deduction and the Earned Income Tax Credit. Though they accounted for hundreds of billions of dollars in federal spending, the indirect nature of these benefits meant that they drew far less attention than more visible programs such as Medicare or Social Security.¹ While Howard called our attention to the myriad ways in which the state used the tax code as an instrument of social policy, many of his observations also apply to another neglected area of the U.S. welfare state: the veterans' health system. Like tax credits, veterans' healthcare was created with bipartisan support outside of the periods often associated with the expansion of the welfare state (the New Deal in the 1930s and the Great Society in the 1960s) and has proven very difficult to downsize even when other welfare programs were under siege. Indeed, the division of the Department of Veterans Affairs in charge of health benefits has grown to become the nation's largest integrated healthcare system, responsible for over 1,200 medical facilities, an annual budget of more than $68 billion, and a workforce of 300,000 serving over 9 million enrolled veterans every year.² A major federal healthcare program, the veterans' health system constitutes a striking exception to the American tradition of hostility against government intervention in this field, and one that historians—until now—had yet to reckon with.

The two books under review here constitute the first scholarly investigations into the origins of this system. In A Time of Scandal: Charles R. Forbes, Warren G. Harding, and the Making of the Veteran Bureau, Rosemary Stevens provides a revisionist account of the scandals that surrounded Forbes's term as the first [End Page 476] director of the Veterans Bureau (VB), the agency that would later become the Department of Veterans Affairs. Whereas A Time of Scandal is narrative-driven and focused on Forbes, Jessica Adler's Burdens of War: Creating the United States Veterans Health System adopts a broader chronological and analytical perspective, examining the creation of the VB during the post-World War I years and its expansion throughout the interwar period.

While trench warfare raged in Europe, American lawmakers were busy creating a new administrative framework for veterans' benefits. They expanded the authority of the Bureau of War Risk Insurance (BWRI) to include soldiers' life insurance, death and disability compensation, and veterans' medical care. With the BWRI in charge of reimbursing veterans' medical treatment, the Public Health Service oversaw the administration of government hospitals, and the Federal Bureau of Vocational Education managed educational rehabilitation programs for disabled former soldiers. This tripartite division of power struggled to meet the needs of the 4.5 million "Doughboys" who returned home after the armistice. Responding to mounting complaints of red tape and delays, in August 1921 Republican President Warren G. Harding approved the creation of a new independent agency, the VB, to replace the BWRI and assume responsibility for the veteran-related functions of the other two entities. His appointment of Charles Forbes at the head of this new agency was controversial, as Forbes had no other qualification than his own military service and the fact that he had campaigned on Harding's behalf. Following repeated accusations of misconduct, Forbes was forced to resign less than two years later. After a congressional investigation produced enough evidence to damage his reputation, a jury found him guilty of defrauding the federal government.

The standard account of Forbes's term as VB Director has remained virtually the same for over a century, as most historians have accepted the conclusions of the congressional investigation and the verdict of the trial...