From its modest beginnings in 1862, the Civil War pension system mushroomed over the ensuing decades. At its peak in 1893, the nation had nearly one million pensioners on the rolls. Pension expenditures soared to $157 million in the year 1893 (about $5.6 billion today), consuming more than 40 percent of the federal budget. By the turn of the century, three-quarters of all surviving Union veterans drew a pension. By the mid-1910s, cumulative pension outlays rivaled total Civil War expenses.

For nearly twenty years after the Civil War, the Republican-constructed pension system functioned as the third rail in post-Reconstruction American politics, not unlike Social Security today. Union pensions were so fundamental to the political identity of the Reconstruction-era United States that Republican lawmakers sanctified pension payments in the Fourteenth Amendment, the charter of national birthright citizenship in the United States. (The fourth section reads: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”)

Pension applicants underwent extensive means-testing of a physical sort. They were scrutinized by federally deputized physicians, who would assign them a disability rating. The ratings were assessed alongside documentary evidence — military records, depositions, and so forth — and applicants were either denied or rewarded pensions in varying amounts. By 1890, there were more than 119 fixed rates of pay, graded according to the degree of physical disability. Medical examinations defied all efforts at standardization and proved notoriously inconsistent.

Still, for two decades after the war, Democratic candidates and policymakers rarely objected publicly to the increasing size and “generosity” of the pension system. That is, until the mid-1880s, when the Pension Bureau became a lightning rod of political controversy and polarized the electoral field. Pension politics made and unmade American presidents.

Weaponizing Welfare

Gilded Age critics of the Pension Bureau objected to the agency’s seemingly unstoppable expansion, which they viewed as draining the Treasury and incentivizing pauperism. It created, they argued, a nation of dependents, perverting the work ethic of its beneficiaries and subsidizing fraud and graft. The avatar of the anti-pension crusade was Democrat Grover Cleveland, president from 1885 to 1889, and again from 1893 to 1897. Cleveland campaigned on reforming the pension rolls to ensure their purity, vowing to strictly limit federal benefits to the most deserving.