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Lawmakers Strike Deal to Help Soldiers Forced to Pay Back Bonuses

Christmas has come early for the thousands of vets who were being forced to pay back the money they got for reenlisting to serve in Iraq and Afghanistan.

California Army National Guard soldiers at Moffett Federal Airfield in 2011. Paul Sakuma / AP file

Lawmakers reached a compromise on Tuesday that allows the Pentagon to forgive the enlistment bonuses of $15,000 or more and student loan benefits that were improperly awarded to thousands of soldiers, mostly in California.

"This largely meets the needs of the soldiers who accepted their bonuses in good faith, as the vast majority of them did," said Rep. Adam Schiff, a California Democrat. "It should give these soldiers peace of mind during the holidays that the Pentagon won't claw them back."

"This is an important fix that ultimately does the right thing," added Rep. Darrell Issa, a California Republican.

The compromise is part of a defense bill that the House is expected to vote on Friday and which the Senate will take up next week, lawmakers said.

Robert D'Andrea, an Iraq war veteran who served with the U.S. Army and the California National Guard, holds a framed photo of his team during his first deployment to Iraq. Al Seib / AP file

It would require that the Defense Department refund any repayments soldiers have already made — as long as they are not guilty of fraud. And it would put the onus on the Pentagon to inform the credit agencies that the debt has been paid.

The scandal goes back a decade to when the Bush administration, which was struggling to find soldiers to fight two unpopular wars, began encouraging state National Guard units to offer sign-up bonuses. Some 9,700 California National Guard soldiers got the bonuses in 2006 and 2007.

Then in 2010, federal investigators discovered that thousands of those bonuses, as well as student loan payments, were improperly approved.

But instead of forgiving the botched bonuses, the California National Guard sicced auditors on the soldiers arguing that the law did not allow them to do otherwise. They concluded that a majority of those soldiers, about 6,500, needed to repay the money because they were not actually eligible for them or the paperwork was riddled with errors.

There was a national outcry when the Los Angeles Times broke the story earlier this year and prompted Defense Secretary Ash Carter in October to order the Pentagon to stop clawing-back the bonuses while lawmakers worked on a fix.