Coastie,
That kind of thing isn't new, it's been going on for years. The military hasn't even paid junior enlisted people enough money to support a family in large urban areas. I knew people in similar situations to your friend back in the late 80s/early 90s when I was in the CG. I was always under the impression that it was a way for them to keep people that young from getting married since they could not dictate to them whether or not they could any more (it used to be up to the command whether they could but that changed at some point). If you remember, the Marine Corps tried to do that about 93 or so and the Clinton admin. shot it down.
Heck, I remember my dad being an E-4 with 3 kids back in the 70s (Air Force). Luckily we never had to live in a large city and always got base housing, but we sure lived meagerly. I couldn't imagine what it would have been like had we gotten stationed in DC or San Francisco or something.
As for drug testing, I don't see the big deal. I've been subjected to drug testing for pretty much most of my adult life. First in the Coast Guard and then in the private sector (I worked as a truck driver while putting myself through school). But these are, of course, jobs where safety issues can come in to play.
If they are able to do their jobs while on drugs, why not? Think about this--what would happen if those people showed up to work drunk? More than once? They would probably be fired and would not get anywhere near the bus, plane, office, etc. You're not forced to have random blood alcohol tests at work and alcohol is legal and very dangerous when abused. Why couldn't the same standards for alcohol be used for other intoxicants?
Depends on where you work. Truck drivers and others can be subject to random alcohol tests. The biggest thing here, though, is that there are a few differences between drugs and alcohol.
1. Alcohol does not remain in your system long enough for testing to indicate it's presence other than when you are under the influence.
2. Alcohol tends to be rather more obvious when being used and in safety sensitive jobs and in those situations a "reasonable suspicion" test can be administered by the employer (for alcohol or drugs) at any time. Smell alcohol on the drivers breath? Test him. In California the rules are much stricter than in cars-- .02 to .04 BAL and you can't drive anymore but will not be charged with a crime. Above .04 it's a DUI, and if you are driving HAZMAT (transporting hazardous material) it's a felony and your class A license is revoked for life.
3. Alcohol is currently a legal substance (unlike, say, tobacco here in Ca now

). Any testing that showed long term use would be meaningless.
Also, I'd like to point out that since this thread is about drug testing and welfare and, as I said above, alcohol is legal testing for it would be entirely meaningless for people on welfare. I suspect showing up for a meeting with your case worker drunk would have some repercussions though.
As for your first statement, Wilderness, about people being able to do their jobs on drugs, so why not let them, well, do you really think that people under the inflence of drugs or alcohol should be able to make those decisions? Obviously, every situation where people are hurt or killed by someone in one of those jobs who was using, the person using felt that they were able to do their job just fine while under the influence. That's why the state has made those types of laws, since it is silly to expect good judgement from someone whose judgement is impared.