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Obama seeks tax credits to aid veterans in tough job market

President Barack Obama is asking Congress to approve new initiatives to help some of America's 1 million unemployed military veterans find work.
U.S. Air Force veteran Michael McElroy talks to a recruiter during a \"Hiring our Heroes\" job fair aimed at out-of-work military veterans in Ashburn, Virginia
U.S. Air Force veteran Michael McElroy (R) talks to a recruiter during a "Hiring our Heroes" job fair aimed at out-of-work military veterans, sponsored by the Loudoun County Chamber of Commerce in Ashburn, Virginia.Jonathan Ernst / Reuters, file
/ Source: news services

President Barack Obama is asking Congress to approve new initiatives to help some of America's 1 million unemployed military veterans find work, including tax credits for companies that hire out-of-work vets.

The proposal Obama is to outline Friday is part of the president's efforts to return to a focus on jobs after spending weeks mired in the contentious debt-limit debate that consumed the White House for much of the summer.

His announcement was to come shortly after the Labor Department releases a new round of nationwide unemployment data.

Last month's jobs report was dismal, with the country's unemployment rate ticking up to 9.2 percent and job growth slowing nearly to a halt.

The White House says the sluggish economy creates additional challenges for veterans looking to enter the civilian labor market. About 1 million veterans are unemployed, according to the administration, including former 260,000 service members who joined the military after the Sept. 11 attacks.

The administration says the unemployment rate for the post-Sept. 11 service members is 13.3 percent — more than 4 percentage points higher than the national average.

More than 1,000 job applications
Those figures come as no surprise for Army officers like Donna Bachler, who says she has not had a regular paycheck since she left active duty four years ago.

Bachler, 30, helped run the Army's postal service in Kuwait, tackling challenges such as how to crack down on mailed contraband and speeding the flow of mail to troops.

Now back in the United States, she gets by on her husband's salary, which will be cut by more than half when he retires from the military as soon as next year.

"One of the ways I sold (military service) to myself and my parents is 'it looks good on a resume,'" said Bachler, who estimates she has applied for at least 1,000 jobs since 2007. "Sadly, it doesn't."

As U.S. military operations in Iraq and Afghanistan wind down, tens of thousands of veterans are flooding the job market at a time when millions of civilians cannot find jobs.

From 2008 to 2010, the unemployment rate rose from 7.3 percent to 11.5 percent and it is expected to climb as more troops come home this year — 10,000 from Afghanistan and, unless Iraq requests some to stay, the remaining 46,000 from that country.

"There is a sense of abandonment," said Daniel Nichols, former chief of staff for the Labor Department's Veteran Employment and Training Services. He is now director of Military to Medicine, which trains veterans and their spouses for jobs in healthcare.

Obama plan includes tax credits
The main features of Obama's proposal, according to administration officials, are two tax credits for companies that hire unemployed veterans:

  • A "Returning Heroes" tax credit for 2012-2013. Companies that hire unemployed veterans would receive a $2,400 tax credit. That tax credit would increase to $4,800 if the veteran has been unemployed for six months or more.
  • A two-year extension of the "Wounded Warriors" tax credit, which gives companies that hire veterans with service-related disabilities a $4,800 credit. If the veteran has been unemployed for six months of more, the tax credit increases to $9,600.

The tax credits would require congressional approval. Administration officials said the White House would start working with lawmakers on the proposal after Congress returns from its recess in September.

One official said the administration estimates the cost of the tax credits at $120 million.

The officials spoke to The Associated Press on the condition of anonymity in order to discuss the initiatives ahead of the president's announcement at the Washington Navy Yard.

During his remarks Friday, Obama also will challenge private companies to hire or train 100,000 veterans by the end of 2013. He is expected to name some companies that already have committed to taking part in that effort.

The president also will announce a joint initiative between the Defense and Veterans Affairs departments to come up with a "reverse boot camp" program that would help train service members for the civilian workforce as they wind down their time in the military.

Difficult to translate skills 'into civilian terms'
In the tight job market, recent veterans say they are passed over for jobs not because they are unqualified but because they lack required credentials, a formal education or a way to describe their military skills that employers understand.

"I compare myself to civilians I know and I have had leadership opportunities — making the hard choice — that I don't see in my civilian counterparts," said David Nawrocki, a 30-year-old staff sergeant.

He ran an ammunition supply point in Afghanistan and, as a logistics coordinator in Washington, worked out ways to save the Army more than $1 million earlier this year.

"I don't know how to translate it into civilian terms," said Nawrocki, who joined the Army at 17 and has not finished college.

In Virginia, a frustrated Sergeant Nawrocki is starting an online training course in logistics — even though he has 13 years' experience.

"I know I can do the job but I know employers don't understand that and want to see the certification," he said.