Enactment
The American Legion was a principal proponent of the legislation on behalf of World War I veterans, and it objected to the term "bonus", because "bonus has come to mean 'full payment plus,' and there has not yet been full payment, or anywhere near full payment, so there cannot be any plus." The Legion said that the government needed to "restore the faith of men sorely tried by what they feel to be National ingratitude and injustice." The Legion pointed out that the Wilson Administration had made additional payments to government workers in 1917-18 to help offset the effects of inflation, without making any comparable provision for members of the military. It fought President Warren G. Harding as his position changed from supporting payments if paired with a revenue measure to supporting a future pension system. So strongly did Harding feel about the issue that he visited the Senate to make his case against one version of the bill in 1921, and the Senate voted it down 47-29. Harding vetoed another version of the Adjusted Compensation Act on September 19, 1922, and the House overrode his veto 258-54 but the Senate failed to override by 4 votes on a vote that split both Democrats and Republicans. Harding's veto of the popular measure particularly alienated the Senate Republicans, who thought the President's defense of fiscal integrity endangered the party's electoral prospects.
In preliminary negotiations between Congress and President Calvin Coolidge, it became clear that the President would veto any law that proposed immediate cash payments to veterans and that the Senate would sustain that veto. The legislation, popularly called the Insurance Bill, provided the veteran instead with a variety of future payment scenarios rather than cash in the short term.
On May 15, 1924, President Coolidge vetoed a bill granting bonuses to veterans of World War I saying: "patriotism...bought and paid for is not patriotism." Congress overrode his veto a few days later.
The Act was amended with respect to minor details on July 3, 1926.
Read more about this topic: World War Adjusted Compensation Act
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