TESTIMONY
OF
JOE BARNES
MASTER CHIEF, UNITED STATES NAVY (RET.)
CO-CHAIRMAN, PERSONNEL, COMPENSATION AND
COMMISSARIES COMMITTEE
THE MILITARY COALITION
AND
ERIN M. HARTING
CO-CHAIRMAN, GUARD AND RESERVE COMMITTEE
THE MILITARY COALITION
AND
LEE LANGE
COLONEL, UNITED STATES MARINE CORPS (RET.)
CO-CHAIRMAN, SURVIVORS COMMITTEE
BEFORE THE
SUBCOMMITTEE ON TOTAL FORCE
HOUSE
ARMED SERVICES COMMITTEE
UNITED STATES HOUSE OF REPRESENTATIVES
REGARDING
MILITARY PERSONNEL POLICY, BENEFITS, AND
COMPENSATION
March 24, 2004
MISTER CHAIRMAN AND DISTINGUISHED MEMBERS OF THE SUBCOMMITTEE. On behalf of The Military Coalition, a consortium of nationally prominent uniformed services and veterans' organizations, we are grateful to the Subcommittee for this opportunity to express our views concerning issues affecting the uniformed services community. This testimony provides the collective views of the following military and veterans' organizations, which represent approximately 5.5 million current and former members of the seven uniformed services, plus their families and survivors.
. Air Force Association
. Air Force Sergeants Association
. Air Force Women Officers
Associated
. American Logistics Association
. AMVETS (American Veterans)
. Army Aviation Association of
America
. Association of Military Surgeons
of the United States
. Association of the United States
Army
. Chief Warrant Officer and
Warrant Officer Association, U.S. Coast
Guard
. Commissioned Officers
Association of the U.S. Public Health
Service, Inc.
. Enlisted Association of the
National Guard of the United States
. Fleet Reserve Association
. Gold Star Wives of America, Inc.
. Jewish War Veterans of the
United States of America
. Marine Corps League
. Marine Corps Reserve Association
. Military Chaplains Association
of the United States of America
. Military Officers Association of
America
. Military Order of the Purple
Heart
. National Association for
Uniformed Services
. National Guard Association of
the United States
. National Military Family
Association
. National Order of Battlefield
Commissions
. Naval Enlisted Reserve
Association
. Naval Reserve Association
. Navy League of the United States
. Non Commissioned Officers
Association
. Reserve Officers Association
. Society of Medical Consultants
to the Armed Forces
. The Retired Enlisted Association
. United Armed Forces Association
. United States Army Warrant
Officers Association
. United States Coast Guard Chief
Petty Officers Association
. Veterans of Foreign Wars of the
United States
.
Veterans' Widows International Network
EXECUTIVE SUMMARY
RECOMMENDATIONS OF THE MILITARY COALITION
ACTIVE FORCE ISSUES
Personnel Strengths and Operations Tempo. The Military Coalition strongly recommends restoration of Service end strengths consistent with long-term sustainment of the global war on terrorism and fulfillment of national military strategy. The Coalition supports increases in recruiting resources as necessary to meet this requirement. The Coalition urges the Subcommittee to consider all possible manpower options to ease operational stresses on active, Guard and Reserve personnel.
Pay Raise Comparability and Pay Table Reform. The Military Coalition urges the Subcommittee to restore full pay comparability on the quickest possible schedule, and to reject any request from the Administration to cap future pay raises or to provide smaller increases to servicemembers in the US Public Health Service or National Oceanic and Atmospheric Administration. The Coalition believes all members of the uniformed services need and deserve annual raises at least equal to private sector wage growth. The Coalition supports the Department of Defense plan for increased "targeted" raises to align the pay of career servicemembers with earnings in the private sector for civilians with comparable experience and education. However, to the extent that "targeted" raises are needed, the Department of Defense should define the ultimate objective pay table toward which these targeted raises are aimed.
Commissaries. The Military Coalition opposes all privatization and variable pricing initiatives and strongly supports full or even enhanced funding of the commissary benefit to sustain the current level of service for all beneficiaries including Guard and Reserve personnel and their families.
Family Readiness and Support. The Military Coalition recommends a family support structure, with improved education and outreach programs and increased childcare availability, to ensure a high level of family readiness to meet the requirements of increased force deployments for active, National Guard and Reserve members.
Education Benefits for Career Servicemembers. Career servicemembers who have not had an opportunity to sign up for a post-service educational program deserve an opportunity to enroll in the Montgomery GI Bill (MGIB) and The Military Coalition urges the Subcommittee to authorize them to do so.
Basic Allowance for Housing (BAH). The Military Coalition urges an adjustment to grade-based housing standards to more accurately reflect realistic housing options and members' out-of-pocket housing expenses. The Coalition further urges the Subcommittee to eliminate service members' average out-of-pocket housing expenses in FY 2005.
Permanent Change of Station (PCS). The Military Coalition urges continued upgrades of permanent change-of-station reimbursement allowances to recognize that the government, not the servicemember, should be responsible for paying the cost of doing the government's business.
Basic Allowance for Subsistence (BAS). The Military Coalition urges the subcommittee to repeal the statutory provision limiting BAS eligibility to 12 percent of single members residing in government quarters. As a long-term goal, the Coalition supports extending full BAS eligibility to all single career enlisted members, beginning with the grade of E-6 and extending eligibility to lower grades as budgetary constraints allow.
NATIONAL GUARD AND RESERVE ISSUES
Support of Active Duty Operations. The Military Coalition urges continued attention to ensuring an appropriate balance between National Guard and Reserve force strengths and missions and careful Congressional oversight of Defense Department "transformation" initiatives that could threaten the nation's "seamless, integrated total force" policy.
Healthcare for Members of the National Guard and Reserve. The Military Coalition urges permanent authority for cost-share access to TRICARE for all members of the Selected Reserve-those who train regularly-and their families in order to ensure medical readiness and provide continuity of health insurance coverage. As an option for these servicemembers, the Coalition urges authorizing the government to pay part or all of private health insurance premiums when activation occurs, a program already in effect for reservists who work for the Department of Defense.
Guard/Reserve Retirement Upgrade. The Military Coalition urges a reduction in the age when a Guard/Reserve component member is eligible for retired pay to age 55 as an option for those who qualify for a non-regular retirement.
Selected Reserve Montgomery GI Bill (SR-MGIB) Improvements. The Military Coalition recommends a phased increase in SR-MGIB benefits to restore it to its original value of 47 percent of basic benefits under the MGIB and also recommends transfer of the SR-MGIB authority from Title 10 to Title 38 to permit proportional benefit adjustments in the future.
Guard/Reserve Family Support Programs. The Military Coalition urges that adequate funding be made available for a core set of family support programs and benefits that meet the unique needs of geographically dispersed Guard and Reserve families who do not have ready access to military installations or current experience with military life.
Retirement Credit for All Earned Drill Points. The Military Coalition recommends lifting the 90-point cap on the number of Inactive Duty Training (IDT) points earned in a year that may be credited for National Guard and Reserve retirement purposes.
SURVIVOR PROGRAM ISSUES
Age 62 SBP Offset. The Military Coalition strongly recommends elimination of the patently inequitable and highly discriminatory age-62 Survivor Benefit Plan annuity reduction now imposed on military survivors. To the extent that immediate implementation may be constrained by fiscal limitations, the Coalition urges enactment of a phased annuity increase as envisioned in S. 1916 and H.R. 3763.
30-Year Paid-Up SBP. The Military Coalition strongly recommends accelerating the implementation date for the 30-year paid-up SBP initiative to October 1, 2004.
SBP-DIC Offset. The Military Coalition strongly recommends that the current dollar-for-dollar offset of Survivor Benefit Plan (SBP) benefits by the amount of Dependency and Indemnity Compensation (DIC) be eliminated, recognizing that these two payments are for different purposes.
RETIREMENT ISSUES
Concurrent Receipt of Military Retired Pay and Veterans Disability Compensation. The Military Coalition urges Subcommittee leaders and members to be sensitive to the need for further adjustments to last year's concurrent receipt provision and to eliminate the disability offset for all disabled retirees. As a priority, the Coalition urges the Subcommittee to ensure the Veterans' Disability Benefits Commission protects the principles guiding the DoD disability retirement program and VA disability compensation system.
Final Retired Pay Check. The Military Coalition strongly recommends that surviving spouses of deceased retired members should be allowed to retain the member's full retired pay for the month in which the member died.
Former Spouse Issues. The Military Coalition recommends corrective legislation, including the recommendations made by the Department of Defense in their 2001 USFSPA report, be enacted to eliminate inequities in the administration of the Uniformed Services Former Spouse Protection Act.
Tax Relief for Uniformed Services Beneficiaries. The Coalition urges the Subcommittee to support legislation to provide active duty and uniformed services beneficiaries a tax exemption for premiums or enrollment fees paid for TRICARE Prime, TRICARE Standard supplements, the active duty dental plan, TRICARE Retiree Dental Plan, FEHBP and Long Term Care.
OVERVIEW
Mr. Chairman, The Military Coalition (TMC) thanks you and the entire Subcommittee for your unwavering support for fair treatment of all members of the uniformed services and their families and survivors. The Subcommittee's strong support to improve military pay, housing allowances, health care, and other personnel programs has made a significant difference in the lives of active, Guard and Reserve personnel and their families. This is especially true for our deployed servicemembers, and their families and survivors, who are defending this Nation in our global war on terror.
The Subcommittee's support of last year's landmark authority to eliminate the offset of retired pay for veterans' disability compensation for all retirees with disabilities of at least 50 percent, and for all retirees disabled by combat or combat-related training. These and the many other important provisions of the FY 2004 National Defense Authorization Act will enhance and enrich the quality of life of our servicemembers, retirees and their families and survivors in the years ahead.
Congress has clearly made military compensation equity a top priority and has accomplished much over the past several years to improve the lives of men and women in uniform and their families. But, last year we heard recommendations from some in the Administration to return to the failed policies of the past by capping future military pay raises below private sector wage growth. Shortchanging compensation for military personnel has exacted severe personnel readiness problems more than once in the last 25 years, and the Coalition thanks the Subcommittee for rejecting the Administration's advice last year to cap military raises, and staying the course with prior provisions for better than average raises through FY 2006.
But, despite this tremendous growth in military compensation, we are deeply troubled by how hard troops have to work-and their families have to sacrifice-for that compensation.
Today's reality is simple-servicemembers and their families are being asked to endure ever-greater workloads and ever-greater sacrifices. Repeated deployments, often near back-to-back, have stressed the force to the point where retention and readiness would suffer now, if it weren't for the Services' stop-loss policies and massive recalls of Guard and Reserve members. The hard fact is that we don't have a large enough force in the majority of components to carry out today's missions and still be prepared for new contingencies that may arise elsewhere in the world.
Your FY 2004 defense bill provisions authorizing-for the first time ever-the concurrent receipt of retired pay and veterans' disability compensation eliminated a century-old inequity for tens of thousands of severely disabled retirees. We applaud the Subcommittee for this unprecedented and historic legislation and ask the Subcommittee to be sensitive to the tens of thousands who continue to experience unfair reductions in their retired pay.
The Military Coalition appreciates past improvements to the Survivor Benefit Plan (SBP) that extended SBP eligibility to the survivors of those killed on active duty. However, very serious SBP inequities remain to be addressed for older survivors, most of them widows, who see a drastic reduction in their survivor benefit when they reach age 62. Increasing their survivor annuity to at least the level afforded survivors of federal civilians is a top Coalition priority.
In testimony today, The Military Coalition offers its collective recommendations on what needs to be done to address these important issues and sustain long-term personnel readiness.
ACTIVE FORCE ISSUES
Since the end of the Cold War, the size of the force and real defense spending have been cut more than a third. In fact, the defense budget today is 3.8 percent of this Nation's Gross Domestic Product-less than half of the share it comprised in 1986. But national leaders also have pursued an increasingly active role for America's forces in guarding the peace in a very dangerous world. Constant and repeated deployments have become a way of life for today's servicemembers, and the stress is taking a significant toll on our men and women in uniform, and their families and survivors, as well.
The Subcommittee has taken action to help relieve the stress of repeated deployments and last year's authority to extend the temporary increases in Imminent Danger Pay (IDP) and Family Separation Allowance (FSA) is one example of the many notable and commendable improvements made during the last several years in military compensation and health care programs. However, retention remains a significant challenge, especially in technical specialties. While some service retention statistics are up from previous years' levels, many believe those numbers are skewed by post-9/11 patriotism and by Services' stop-loss policies. That artificial retention bubble is not sustainable for the long-term under these conditions, despite the reluctance of some to see anything other than rosy scenarios.
From the servicemembers' standpoint, the increased personnel tempo necessary to meet continued and sustained training and operational requirements has meant having to work progressively longer and harder every year. "Time away from home" has become a real focal point in the retention equation. Servicemembers have endured years of longer duty days; increased family separations; difficulties in accessing affordable, quality health care; deteriorating military housing; less opportunity to use education benefits; and significant out-of-pocket expenses with each military relocation.
The war on terrorism has now intensified with sustained operations in Iraq and Afghanistan. Members' patriotic dedication has been the fabric that has sustained this increased workload, and a temporarily depressed economy and Service stop-loss policies have deterred losses for now. But the longer-term outlook is problematic.
Experienced (and predominantly married) officers, NCOs and petty officers are under pressure to make long-term career decisions against a backdrop of a demand for their skills and services in the private sector, even through the recent economic downturn. In today's environment, more and more servicemembers and their families debate among themselves whether the rewards of a service career are sufficient to offset the attendant demands and sacrifices inherent in uniformed service. They see their peers going home to their families every night, and when faced with repeated deployments, the appeal of a more stable career and family life, often including an enhanced compensation package with far less demanding working conditions, is attractive. Too often, our excellent soldiers, sailors, airmen and Marines are opting for civilian career choices, not because they don't love what they do, but because their families just can't take the stress any more.
On the recruiting front, one only needs to watch prime-time television to see powerful marketing efforts on the part of the Services. But this strong marketing must be backed up by an ability to retain these talented men and women. This is especially true as the Services become more and more reliant on technically trained personnel. To the Subcommittee's credit, you reacted to retention problems by improving military compensation elements. We know you do not intend to rest on your well deserved laurels and that you have a continuing agenda in place to address these very important problems. But we also know that there will be stiff competition for proposed defense budget increases. The truth remains that the finest weapon systems in the world are of little use if the Services don't have enough high quality, well-trained people to operate, maintain and support them.
The Subcommittee's key challenge will be to ease servicemembers' debilitating workload stress and continue to build on the foundation of trust that you have established over the past four years-a trust that is being strained by years of disproportional sacrifice. Meeting this challenge will require a reasonable commitment of resources on several fronts.
Personnel Strengths and Operations Tempo. The Coalition is dismayed at the Department of Defense's reluctance to accept Congress' repeated offers to increase Service end strength to relieve the stress on today's armed forces, who are clearly now sustaining an increased operations tempo to meet today's global war on terror. While we are encouraged by the Army's announcement to temporarily increase their end strength by 30,000, we are deeply concerned that Administration-proposed plans for selected temporary manpower increases rely too heavily on continuation of stop-loss policies, unrealistic retention assumptions, overuse of the Guard and Reserves, optimistic scenarios in Southwest Asia, and the absence of any new contingency needs.
The Department has also responded to your offers to increase end strength with their intention to transform forces, placing non-mission essential resources in core war fighting skills. While the Department's transformation vision is a great theory, its practical application will take a long time-time we do not have after years of extraordinary operational tempo that is exhausting our downsized forces.
In fact, the Joint Chiefs testified that their forces were stressed before 9/11 and end strength should have been increased then. Now, almost three years later, after engaging in two major operations, massive Guard and Reserve mobilizations, and broad implementation of "stop-loss" policies, the only reason end strength has not been increased is because of the Department's "transformation" plan-a plan they have not finalized with Congress.
Administration and military leaders warn of a long-term mission against terrorism that requires sustained, large deployments to Central Asia and other foreign countries. The Services simply do not have sufficient numbers to sustain the global war on terrorism, deployments, training exercises and other commitments, so we have had to recall significant numbers of Guard and Reserve personnel. Service leaders have tried to alleviate the situation by reorganizing deployable units, authorizing "family down time" following redeployment, or other laudable initiatives, but such things do little to eliminate long-term workload or training backlogs, and pale in the face of ever-increasing mission requirements. For too many years, there has always been another major contingency coming, on top of all the existing ones. If the Administration does not recognize when extra missions exceed the capacity to perform them, the Congress must assume that obligation.
The Coalition strongly believes that earlier force reductions went too far and that the size of the force should have been increased several years ago to sustain today's pace of operations. Deferral of meaningful action to address this problem cannot continue without risking serious consequences. Real relief is needed now. There is no certainty that missions will decline, which means that the only prudent way to assure we relieve the pressure on servicemembers and families is to increase the size of the force.
This is the most difficult piece of the readiness equation, and perhaps the most important under current conditions. Pay and allowance raises are essential to reduce other significant career irritants, but they can't fix fatigue and lengthy and more frequent family separations.
Some argue that it will do little good to increase end strengths, questioning whether the Services will be able to meet higher recruiting goals. The Coalition believes strongly that this severe problem can and must be addressed as an urgent national priority, with increases in recruiting budgets if that proves necessary.
Others point to high reenlistment rates in deployed units as evidence that high operations tempo actually improves morale. But much of the reenlistment rate anomaly is attributable to tax incentives that encourage members to accelerate or defer reenlistment to ensure this occurs in a combat zone, so that any reenlistment bonus will be tax-free. Retention statistics are also skewed by stop-loss policies. Over the long run, past experience has shown that time and again smaller but more heavily deployed forces will experience family-driven retention declines.
Action is needed now. Failing to do so will only deepen the burden of already over-stressed troops and make future challenges to retention and recruiting worse.
The Military Coalition strongly recommends restoration of Service end strengths to sustain the long-term global war on terrorism and fulfill national military strategy. The Coalition supports increases in recruiting resources as necessary to meet this requirement. The Coalition urges the Subcommittee to consider all possible manpower options to ease operational stresses on active, Guard and Reserve personnel.
Pay Raise Comparability. The Military Coalition appreciates the Subcommittee's leadership during the last six years in reversing the routine practice of capping servicemembers' annual pay raises below the average American's. In servicemembers' eyes, all of those previous pay raise caps provided regular negative feedback about the relative value the Nation placed on retaining their services.
Unfortunately, this failed practice of capping military raises to pay for budget shortfalls reared its head again last year when the Director of the Office of Management and Budget proposed capping future military pay raises at the level of inflation. The Coalition was shocked and deeply disappointed that such a senior officer could ignore 25 years of experience indicating that pay caps lead inevitably to retention and readiness problems. Not only was the proposal ill timed as troops were engaged in combat operations in Afghanistan and Iraq-it was just bad, failed policy.
The President ultimately rejected his senior budget official's advice; but, while supporting a 4.1 percent pay raise for most of the uniformed services, the Administration's FY 2004 budget proposed to cap the pay of NOAA and USPHS officers at 2 percent. The Military Coalition strongly objected to this disparate treatment of members in those uniformed services and your Subcommittee ensured that NOAA and USPHS personnel received the same 4.1 percent pay raise. We strongly urge the Subcommittee to reject any requests from the Administration recommending treatment of NOAA and PHS commissioned officers that is different from that accorded their fellow comrades-in-arms.
Pay raise comparability with private sector wage growth is a fundamental underpinning of the all-volunteer force, and it cannot be dismissed without severe consequences for national defense.
When the pay raise comparability gap reached 13.5 percent in 1999-resulting in predictable readiness crises-this Subcommittee took responsible action to change the law. Largely because of your efforts and the belated recognition of the problem by the Executive Branch, the gap has been reduced to 5.4 percent as of 2004.
While it would take another 5 years to restore full comparability at the current pace, we sincerely appreciate this Subcommittee's decision to change the prior law that would have resumed capping pay raises at below private sector growth and enacting a new law requiring all raises, beginning in FY 2007, to at least equal private sector wage growth as measured by the Bureau of Labor Statistics ECI.
The Military Coalition urges the Subcommittee to restore full pay comparability on the quickest possible schedule, and to reject any request from the Administration to cap future pay raises for any segment of the uniformed services population.
Pay Table Reform. The Subcommittee also has supported the Department of Defense plan to fix problems within the basic pay table by authorizing special "targeted" adjustments for specific grade and longevity combinations in order to align career servicemembers' pay with private sector earnings of civilians with similar education and experience.
The Coalition supports the DoD plan for targeted raises; but, once again, the Coalition was disappointed with the actions of the Office of Management and Budget (OMB)-this time, by their recently reported denial for a $300 million request from DoD to continue targeted raises for career servicemembers.
While the Coalition is most appreciative of the Administration's support this year to continue ECI-plus raises provided for by the FY 2000 defense bill, we are deeply disappointed that they would deny a request from DoD to complete the plan to fix the pay of career servicemembers, and we strongly urge this Subcommittee to authorize continued targeting of additional increases for career servicemembers to correct shortcomings in their pay tables.
However, the Coalition does request that DoD outline their plan for targeted raises so that servicemembers, and others who are concerned about military pay, know and understand the objectives of such differential raises. To the extent that targeted raises are needed, the Department of Defense needs to identify the ultimate "objective pay table" toward which the targeted raises are aimed.
The Military Coalition believes all members need and deserve at least a 3.5 percent raise in 2005 to continue progress toward eliminating the existing pay raise comparability shortfall. The Coalition also believes additional targeted raises are needed to address the largest comparability shortfalls for career enlisted members and warrant officers vs. private sector workers with similar education, experience and expertise.
Commissaries. The Coalition continues to be very concerned about preserving the value of the commissary benefit-which is widely recognized as the cornerstone of quality of life benefits and a valued part of the servicemembers' total compensation package.
During the past year, the Department of Defense announced plans to close a number of commissaries, replace the traditional three-star officer serving as chairman of the Commissary Operating Board (COB) with a political appointee, and require a study on instituting variable pricing for commissary products. These proposals are apparently intended to save money by reducing the annual appropriation supporting the Defense Commissary Agency (DeCA), which operates 275 commissaries worldwide. The COB recommendation is also viewed as another indicator of DoD's ongoing interest in eventually privatizing the benefit.
The Coalition supports cost savings and effective oversight and management. However, we are concerned about the unrelenting pressure on DeCA to cut spending and squeeze additional efficiencies from its operations-despite years of effective reform initiatives and recognition of the agency for instituting improved business practices.
The Coalition is particularly opposed to the concept of variable pricing, which the Administration acknowledges is aimed at reducing appropriated funding. This can only come at the expense of reducing benefits for patrons.
The commissary is a highly valued quality of life benefit not quantifiable solely on a dollars appropriated basis. As it has in the past, The Military Coalition opposes any efforts to privatize commissaries or reduce benefits to members, and strongly supports full funding of the benefit in FY 2005 and beyond.
The Military Coalition opposes all privatization and variable-pricing initiatives and strongly supports full or even enhanced funding of the commissary benefit to sustain the current level of service for all patrons, including Guard and Reserve personnel and their families.
Family Readiness and Support. Family readiness is a key concern for the approximately 60 percent of servicemembers with families. Allocating adequate resources for the establishment and maintenance of family readiness and support programs is part of the cost of effectively fulfilling the military mission.
Servicemembers and their families must understand and be aware of benefits and programs available to them and who to contact with questions and concerns-both at the command level and through the respective Service or Department of Defense-in order to effectively cope with the challenges of deployment. It is also important to meet childcare needs of the military community including Guard and Reserve members who are being called to active duty in ever-increasing numbers.
The Military Coalition urges improved family readiness through education and outreach programs and increased childcare availability for servicemembers and their families and associated support structure to assist families left behind during deployments of active duty, Guard and Reserve members.
Education Benefits for Career Servicemembers. Career servicemembers who entered active service between 1 January 1977 and 30 June 1985 and declined to enroll in the Veterans Education Assistance Program (VEAP) are the only group of currently serving members (other than service academy graduates and certain ROTC scholarship recipients) who have not been offered an opportunity to enroll in the Montgomery GI Bill (MGIB). There are approximately 90,000 personnel in this situation. Noteworthy is the fact that many were discouraged from signing up for VEAP, as it was acknowledged then to be a woefully inferior program compared to the Vietnam-era GI Bill and the subsequent MGIB that commenced on 1 July 1985. These senior leaders are the backbone of today's force and critical to the success of the war effort and other military operations. When they complete their careers, they should have been afforded at least an opportunity to say "yes or no" to veterans' education benefits under the MGIB.
The Military Coalition strongly recommends authorizing a MGIB sign-up window for careerservicemembers who declined VEAP when they entered service.
Basic Allowance for Housing (BAH). The Military Coalition supports revised housing standards that are more realistic and appropriate for each pay grade. Many enlisted personnel, for example, are unaware of the standards for their respective pay grade and assume that their BAH level is determined by a higher standard than they may in reality be entitled to. This causes confusion about the mismatch between the amount of BAH they receive and the actual cost of their type of housing. As an example, enlisted members are not authorized to receive BAH for a 3-bedroom single-family detached house until achieving the rank of E-9-which represents only one percent of the enlisted force-yet many personnel in more junior pay grades do in fact reside in detached homes. The Coalition believes that as a minimum, this BAH standard (single family detached house) should be extended gradually to qualifying service members beginning in grade E-8 and subsequently to grade E-7 and below over several years as resources allow.
The Coalition is most grateful to the Subcommittee for acting in 1999 to reduce out-of-pocket housing expenses for servicemembers. Responding to the Subcommittee's leadership on this issue, the Department of Defense proposed a similar phased plan to reduce median out of pocket expenses to zero by FY 2005. Through the leadership and support of this Subcommittee, these commitments have been put into law. This aggressive action to better realign BAH rates with actual housing costs is having a real impact and providing immediate relief to many servicemembers and families who were strapped in meeting rising housing and utility costs.
We applaud the Subcommittee's action, and hope that this plan can be completed in 2005. Unfortunately, housing and utility costs continue to rise, and the pay comparability gap, while diminished over recent years thanks to the Subcommittee's leadership, continues. Members residing off base face higher housing expenses along with significant transportation costs, and relief is especially important for junior enlisted personnel living off base who do not qualify for other supplemental assistance.
The Military Coalition urges the Subcommittee to direct gradual adjustments in grade-based housing standards to more adequately cover members' current out-of-pocket housing expenses and to complete the elimination of average out-of-pocket housing expenses in FY 2005.
Permanent Change of Station (PCS). The Military Coalition is most appreciative of the significant increases in the Temporary Lodging Expense (TLE) allowance authorized for FY 2002 and the authority to raise PCS per diem expenses to match those for federal civilian employees in FY 2003. These are very significant steps to upgrade allowances that had been unchanged in over 15 years. Even with these much-needed changes, however, servicemembers continue to incur significant out-of-pocket costs in complying with government-directed relocation orders.
For example, PCS mileage rates have not been adjusted since 1985. The current rates range from 15 to 20 cents per mile-significantly lower than the temporary duty mileage rate of 37.5 cents per mile for military members and federal civilians. PCS household goods weight allowances were increased for grades E-1 through E-4, effective January 2003, but weight allowance increases are also needed for E5s and above and officers as well, to more accurately reflect the normal accumulation of household goods over the course of a career.
The Coalition also greatly appreciates the provisions in the FY 2004 defense bill to provide full replacement value for household goods lost or damaged by private carriers during government directed moves, and the Coalition looks forward to the timely implementation of the Department of Defense comprehensive "Families First" plan to improve claims procedures for servicemembers and their families.
The overwhelming majority of service families own two privately owned vehicles, driven by the financial need for the spouse to work, or the distance some families must live from an installation and its support services. Authority is needed to ship a second POV at government expense to overseas' accompanied assignments. In many overseas locations, families have difficulty managing without a second family vehicle because family housing is often not co-located with installation support services.
Last, with regard to families making a PCS move, members are authorized time off for housing-hunting trips in advance of PCS relocations, but must make any such trips at personal expense, without any government reimbursement such as federal civilians receive. Further, federal and state cooperation is required to provide unemployment compensation equity for military spouses who are forced to leave jobs due to the servicemember's PCS orders. The Coalition also believes continuation of and adequate funding for the Relocation Assistance Program is essential.
We are sensitive to the Subcommittee's efforts to reduce the frequency of PCS moves. But we cannot avoid requiring members to make regular relocations, with all the attendant disruptions in their children's education and their spouse's career progression. The Coalition believes strongly that the Nation that requires them to incur these disruptions should not be requiring them to bear the resulting high expenses out of their own pockets.
The Military Coalition urges continued upgrades of permanent change-of-station reimbursement allowances in FY 2005 to recognize that the government, not the servicemember, should be responsible for paying the cost of government-directed relocations.
Basic Allowance for Subsistence (BAS). The Coalition is grateful to the Subcommittee for establishing a food-cost-based standard for BAS and ending the one percent cap on BAS increases. But more needs to be done to permit single career enlisted members more individual responsibility in their personal living arrangements. In this regard, the Coalition believes it is inconsistent to demand significant supervisory, leadership and management responsibilities of noncommissioned and petty officers, but still dictate to them where and when they must eat their meals while at their home duty station.
The Military Coalition urges the subcommittee to repeal the statutory provision limiting BAS eligibility to 12 percent of single members residing in government quarters. As a long-term goal, the Coalition supports extending full BAS eligibility to all single career enlisted members, beginning with the grade of E-6 and extending eligibility to lower grades as budgetary constraints allow.
NATIONAL GUARD AND RESERVE ISSUES
The Military Coalition applauds the longstanding efforts of this Subcommittee to address the needs of our Nation's National Guard and Reserve forces, to facilitate the Total Force concept as an operational reality, and to ensure that National Guard and Reserve members receive appropriate recognition as full members of the armed forces readiness team.
Support of Active Duty Operations. Since September 11, 2001 more than 350,000 members of the National Guard and Reserve have been mobilized and many thousands more are in the activation pipeline. Today, they face all the same challenges as their active counterparts, with a deployment pace greater than any time since World War II.
Guard/Reserve operational tempo has placed enormous strains on employers and family members alike. Employer support was always strong when National Guard and Reserve members were seen as a force that would be mobilized only in the event of a major national emergency. That support has become less and less certain as National Guard and Reserve members have taken longer and more frequent leaves of absence from their civilian jobs. Homeland defense and war-on-terror operations continue to place demands on citizen soldiers that were never anticipated under the Total Force Policy.
The Coalition understands and fully supports that policy and the prominent role of the National Guard and Reserve forces in the national security equation. Still, we are concerned that ever-rising operational employment of these forces is having the practical effect of blurring the distinctions between the missions of the active and National Guard/Reserve forces. National Guard and Reserve members will likely face stiff resistance with employers and increased financial burdens under the current policy of multiple activations over the course of a reserve career. Some senior reserve leaders are in fact alarmed over likely manpower losses if action is not taken to relieve pressures on Guard and Reserve troops.
The Military Coalition strongly urges immediate attention to the looming crisis that is placing unprecedented stress on National Guard and Reserve manpower and missions.
Healthcare for Members of the National Guard and Reserve. The Military Coalition is most appreciative to Congress for ensuring that the Temporary Reserve Health Care Program was included in the FY 2004 National Defense Authorization Act. This program will provide temporary coverage, until December 2004, for National Guard and Reserve members who are uninsured or do not have employer-sponsored health care coverage. TRICARE officials plan to build on existing TRICARE mechanisms to expedite implementation; however, no one is certain how long this will take. Immediate implementation is required.
The Military Coalition recommends permanent authorization of cost-share access to TRICARE to support readiness, family morale, and deployment health preparedness for Guard and Reserve servicemembers.
Health insurance coverage varies widely for members of the Guard and Reserve: some have coverage through private employers, others through the Federal government, and still others have no coverage. Reserve families with employer-based health insurance must, in some cases, pick up the full cost of premiums during an extended activation. Guard and Reserve family members are eligible for TRICARE if the member's orders to active duty are for more than thirty days; but, many of these families would prefer to preserve the continuity of their health insurance. Being dropped from private sector coverage as a consequence of extended activation adversely affects family morale and military readiness and discourages some from reenlisting. Many Guard and Reserve families live in locations where it is difficult or impossible to find providers who will accept new TRICARE patients. Recognizing these challenges for its own reservist-employees, the Department of Defense routinely pays the premiums for the Federal Employee Health Benefit Program (FEHBP) when activation occurs. This benefit, however, only affects about ten percent of the Selected Reserve.
The Military Coalition urges the authority for federal payment of civilian health care premiums (up to the TRICARE limit) as an option for mobilized service members.
Dental readiness is another key aspect of readiness for Guard and Reserve personnel. Currently, DoD offers a dental program to Selected Reserve members and their families. The program provides diagnostic and preventive care for a monthly premium, and other services including restorative, endodontic, periodontic and oral surgery services on a cost-share basis, with an annual maximum payment of $1,200 per enrollee per year. However, only five percent of eligible members are enrolled.
During this mobilization, soldiers with repairable dental problems were having teeth pulled at mobilization stations in the interests of time and money instead of having the proper dental care administered. Congress responded by passing legislation that allows DoD to provide medical and dental screening for Selected Reserve members who are assigned to a unit that has been alerted for mobilization in support of an operational mission, contingency operation, national emergency, or war. Unfortunately, waiting for an alert to begin screening is too late. During the initial mobilization for Operation Iraqi Freedom, the average time from alert to mobilization was less than 14 days, insufficient to address deployment dental standards. In some cases, units were mobilized before receiving their alert orders. This lack of notice for mobilization continues, with many reservists receiving only days of notice before mobilizing.
The Military Coalition recommends expansion of the TRICARE Dental Plan benefits for Guard and Reserve servicemembers. This would allow all National Guard and Reserve members to maintain dental readiness and alleviate the need for dental care during training or mobilization.
Reserve Retirement Upgrade. The fundamental assumption for the Reserve retirement system established in 1947 is that a Reservist has a primary career in the civilian sector. But it's past time to recognize that greatly increased military service demands over the last dozen years have cost tens of thousands of Reservists significantly in terms of their civilian retirement accrual, civilian 401(k) contributions, and civilian job promotions.
The Defense Department routinely relies upon the capabilities of the reserve forces across the entire spectrum of conflict from homeland security to overseas deployments and ground combat. This reliance is not just a trend-it's a central fixture in the national security strategy. Since September 11, 2001 more than 350,000 reserve component servicemembers have been called to extended active duty. That represents almost 40 percent of the "drilling" reserve force structure-those assigned to military positions and training regularly. And these activations are expected to continue, absent a significant adjustment either in mission allocation or end strength. The Defense Department, however, has shown little interest in reducing the burden on the reserve forces. Inevitably, civilian career potential and retirement plans will be hurt by frequent and lengthy activations.
The time has come to recognize the reserve retirement system as a complement, rather than a supplement to civilian retirement programs. Failing to acknowledge and respond to the changed environment could have far-reaching, catastrophic effects on reserve participation and career retention.
The Military Coalition urges a reduction in the age when a Guard/Reserve component member is eligible for retired pay to age 55 as an option for those who qualify for a non-regular retirement.
Selected Reserve Montgomery GI Bill (SR-MGIB) Improvements. Individuals who first become members of the National Guard or Reserve are eligible for the Selected Reserve Montgomery GI Bill (SR-MGIB).
Unlike the basic MGIB (Chapter 30, Title 38), Chapter 1606 of Title 10 governs the Reserve GI Bill program. The problem is that the Reserve SR-MGIB program competes with National Guard and Reserve pay accounts for funding. During the first fourteen years of the SR-MGIB, benefits maintained 47 percent comparability with the basic MGIB. But, in the last five years, the SR-MGIB has slipped to 29 percent of the basic program. This occurred at a time when the Guard and Reserve have been mobilized and deployed unlike any time since World War II. The Coalition believes that total force equity requires proportional adjustments to the SR-MGIB whenever benefits rise under the regular MGIB. One way to facilitate this objective is to transfer basic funding authority for "chapter 1606" (10 USC) benefits program to Title 38.
The Military Coalition recommends a three-phased increase in SR- MGIB benefits to restore it to its original value at 47 percent of the MGIB rate. The Coalition also recommends transfer of the Reserve SR-MGIB authority from Title 10 to Title 38 to permit proportional benefit adjustments in the future.
Guard/Reserve Family Support Programs. Guard and Reserve families have been called upon to make more and more sacrifices as Operations Iraqi Freedom and Enduring Freedom continue. These families represent communities throughout the Nation-and most of these communities are not close to military installations. As a result, these families members face unique challenges since they do not have access to traditional family support services that their active duty counterparts have on military installations.
Providing a core set of family programs, not bound by geographic location, would help these families meet these challenges. While many programs are already in place, there is a need for uniform availability of these programs to all reserve component families. These programs include, but are not limited to: state and regional family assistance centers; a responsive and flexible child care system to meet the unique needs of reserve families; a family support structure that recognizes that reserve families do not have much experience with military life and need more information about the services available to them and how to access the various support systems; and, finally, funding for staffing since volunteers have been providing these support services, many of them experiencing similar difficulties with their sponsors deployed.
We applaud the support shown to families by community organizations like the American Red Cross, the American Legion, the VFW and local Chambers of Commerce. But with the continued and sustained activation of the Reserve Component, a stronger support structure needs to be implemented and sustained.
The Military Coalition urges that adequate funding be made available for a core set of family support programs and benefits that meet the unique needs of Guard and Reserve component families.
Retirement Credit for All Earned Drill Points. The role of the National Guard and Reserve has changed significantly under the Total Force Policy. During most of the Cold War era, the maximum number of inactive duty training (IDT) points that could be credited was 50 per year. The cap has since been raised on three occasions to 60, 75 and most recently, to 90 points.
However, the fundamental question is why National Guard and Reserve members are not permitted to credit all the inactive duty training (IDT) that they've earned in a given year towards their retirement. The typical member of the National Guard and Reserve consistently earns IDT points above the 90-point maximum. Placing a ceiling on the amount of training that may be credited for retirement serves as a disincentive to professional development and takes unfair advantage of National Guard and Reserve servicemembers' commitment to mission readiness.
The Military Coalition recommends lifting the 90-point cap on the number of Inactive Duty Training (IDT) points earned in a year that may be credited for National Guard and Reserve retirement purposes.
SURVIVOR PROGRAM ISSUES
The Coalition thanks the Subcommittee for past support of improvements to the Survivor Benefit Plan (SBP) including the provision in the FY 2002 Defense Authorization Act that extended SBP eligibility to members who die on active duty, regardless of years of service, and the FY 2004 provision that improved election options for these survivors. These actions helped a great deal in addressing a long-standing survivor benefits disparity.
But very serious SBP inequities remain to be addressed. The Coalition hopes that this year the Subcommittee will be able to support, at the very least, an increase in the minimum SBP annuity for survivor's age 62 and older.
Age-62 SBP Annuity Increase. Since SBP was first enacted in 1972, retirees and survivors have inundated DoD, Congress and military associations with letters decrying the reduction in survivors' SBP annuities that occurs when the survivor attains age-62. Before age-62, SBP survivors receive an annuity equal to 55 percent of the retiree's SBP covered retired pay. At age-62, the annuity is reduced to a lower percentage, down to a floor of 35 percent of covered retired pay. For many older retirees, the amount of the reduction is related to the amount of the survivor's Social Security benefit that is attributable to the retiree's military service. For members who attained retirement eligibility after 1985, the post-62 benefit is a flat 35 percent of covered retired pay.
Although this age-62 reduction, or offset, was part of the initial SBP statute, large numbers of members who retired in the 1970s (or who retired earlier but enrolled in the initial SBP open season) were not informed of it at the time they enrolled. This is because the initial informational materials used by DoD and the Services to describe the program made no mention of the age-62 offset. Thousands of retirees signed up for the program in the belief that they were ensuring their spouses would receive 55 percent of their retired pay for life. Many retirees who are elderly and in failing health, with few other insurance alternatives available at a reasonable cost, are understandably very bitter about what they consider the government's "bait and switch" tactics.
They and their spouses are also stunned to learn that the survivor reduction attributed to the retiree's Social Security-covered military earnings applies even to widows whose Social Security benefit is based on their own work history.
To add to these grievances, the originally intended 40 percent government subsidy for the SBP program-which has been cited for more than two decades as an inducement for retirees to elect SBP coverage-has declined to less 19 percent. This is because retiree premiums were established in statute in the expectation that retiree premiums would cover 60 percent of expected long-term SBP costs, based on the DoD Actuary's assumptions about future inflation rates, interest rates, and mortality rates. However, actual experience has proven these assumptions far too conservative, so that retiree premiums now cover 81 percent of expected SBP benefit costs. In effect, retirees are being charged too much for the long-promised benefit, and the government is contributing less to the program than Congress originally intended.
This is not the first time the subsidy has needed to be addressed. After the subsidy had declined below 28 percent in the late 1980s, Congress acted to restore the balance by reducing retiree premiums. Now that the situation is far worse, the Coalition believes strongly that the balance should be restored this time by raising the benefit for survivors.
The chart below highlights another significant inequity-the much higher survivor annuity percentage and subsidy percentage the government awards to federal civilian (including Members of Congress) survivors compared to their military counterparts.
Because servicemembers retire at younger ages than federal civilians, retired servicemembers pay premiums for a much longer period. The combination of greater premium payments and lower age-62 benefits leave military retirees with a less advantageous premium-to-benefit ratio-and therefore a far lower federal survivor benefit subsidy than their retired federal civilian counterparts.
The FY 2001 Defense Authorization Act included a "Sense of Congress" provision specifying that legislation should be enacted to increase the SBP age-62 annuity to "reduce and eventually eliminate" the different levels of annuities for survivors age-62 and older versus those for younger survivors. But that statement of support remains to be translated into substantive relief.
The Military Coalition strongly supports legislation sponsored by Sen. Mary Landrieu and Rep. Jeff Miller (S. 1916 and H.R. 3763, respectively) that, if enacted, would eliminate the disparity over a ten year period-raising the minimum SBP annuity to 40 percent of SBP-covered retired pay on October 1, 2005; to 45 percent in 2008; and to 55 percent in 2014.
We appreciate only too well the cost and other challenges associated with such mandatory spending initiatives, and believe this incremental approach offers a reasonable balance between the need to restore equity and the need for fiscal discipline. The cost could be partially offset by authorizing an open enrollment season to allow currently non-participating retirees to enroll in the enhanced program, with a late-enrollment penalty tied to the length of time since they retired. A similar system was used with the last major program change in 1991.
The Military Coalition strongly recommends elimination of the age-62 Survivor Benefit Plan annuity reduction. To the extent that immediate implementation may be constrained by fiscal limitations, the Coalition urges enactment of a phased annuity increase as envisioned in S. 1916 and H.R. 3763.
30-Year Paid-Up SBP. Congress approved a provision in the FY 1999 Defense Authorization Act authorizing retired members who had attained age-70 and paid SBP premiums for at least 30 years to enter "paid-up SBP" status, whereby they would stop paying any further premiums while retaining full SBP coverage for their survivors in the event of their death. Because of cost considerations, the effective date of the provision was delayed until October 1, 2008.
As a practical matter, this means that any SBP enrollee who retired on or after October 1, 1978 will enjoy the full benefit of the 30-year paid-up SBP provision. However, members who enrolled in SBP when it first became available in 1972 (and who have already been charged higher premiums than subsequent retirees) will have to continue paying premiums for up to 36 years to secure paid-up coverage.
The Military Coalition is very concerned about the delayed effective date, because the paid-up SBP proposal was initially conceived as a way to grant relief to those who have paid SBP premiums from the beginning. Many of these members entered the program when it was far less advantageous and when premiums represented a significantly higher percentage of retired pay. In partial recognition of this problem, SBP premiums were reduced substantially in 1991, but these older members still paid the higher premiums for up to 18 years. The Coalition believes strongly that their many years of higher payments warrant at least equal treatment under the paid-up SBP option, rather than forcing them to wait five more years for relief, or as many retirees believe, waiting for them to die off.
The Military Coalition recommends accelerating the implementation date for the 30-year paid-up SBP initiative to October 1, 2004.
SBP-DIC Offset. Currently, SBP survivors whose sponsors died of service-connected causes have their SBP annuities reduced by the amount of Dependency and Indemnity Compensation payable by the VA.
The
Coalition believes this offset is not
appropriate, because the SBP and DIC
programs serve distinct purposes. SBP is a
retiree-purchased program, which any
retiring member can purchase to provide the
survivor a portion of his or her
retirement. DIC, on the other hand, is
special indemnity compensation to the
survivor of a member whose service caused
his or her death.
The Coalition believes strongly that the
government owes extra compensation ("double
indemnity compensation," in essence, rather
than "substitute compensation") in cases in
which the member's death was caused by his
or her service.
Although the survivor whose SBP is reduced now receives a pro-rata rebate of SBP premiums, the survivor needs the annuity, not the premium refund. Award of DIC should not reduce award of SBP any more than it reduces payment of SGLI life insurance benefit.
The Military Coalition recommends eliminating the DIC offset to Survivor Benefit Plan annuities, recognizing that the two compensations serve different purposes, and one is not substitutable for the other.
RETIREMENT ISSUES
The Military Coalition is grateful to the Subcommittee for its historical support of maintaining a strong military retirement system to help offset the extraordinary demands and sacrifices inherent in a career of uniformed service.
Concurrent Receipt of Military Retired Pay and VA Disability Compensation. The Military Coalition applauds Congress for the landmark provisions in the FY 2004 National Defense Authorization Act that expand combat related special compensation to all retirees with combat-related disabilities and authorizes-for the first time ever-the unconditional concurrent receipt of retired pay and veterans' disability compensation for retirees with disabilities of at least 50 percent. Disabled retirees everywhere are extremely grateful for this Subcommittee's action to reverse an unfair practice that has disadvantaged disabled retirees for over a century.
While last year's concurrent receipt provisions will benefit tens of thousands of disabled retirees, an equal number were left behind. The fiscal challenge notwithstanding, the principle behind eliminating the disability offset for those with disabilities of 50 percent is just as valid for those with 40 percent and below and the Coalition urges the Subcommittee to extend this principle to the thousands of disabled retirees who were left out of last year's legislation.
We understand that a significant concern among some critics that prevented broader concurrent receipt action was the need for a review of the VA disability system. The Coalition believes much of the concern is misplaced, and that the VA system should be able to withstand reasonable scrutiny. The Coalition stands ready to assist the Veterans' Disability Benefits Commission and participate in the debate with relevant information and data affecting a full spectrum of disabled veterans and their families and survivors. Most importantly, the Coalition urges the Subcommittee to ensure that the Commission remains focused on the fundamental principles that have served as the foundation for both the DoD disability retirement and VA disability compensation processes-principles of fairness, due process, and the unique aspect that military duty is 24/7. We look forward to completion of the review and revalidation of the process as important steps toward resolving concurrent receipt inequity.
The Military Coalition urges Subcommittee leaders and members to be sensitive to the need for further adjustments to last year's concurrent receipt provision and to eliminate the disability offset for all disabled retirees. As a priority, the Coalition urges the Subcommittee to ensure the Veterans' Disability Benefits Commission protects the principles guiding the DoD disability retirement program and VA disability compensation system.
Final Retired Pay Check. The Military Coalition believes the policy requiring the recovery of a deceased member's final retired pay check from his or her survivor should be changed to allow the survivor to keep the final month's retired pay payment.
Current regulations led to a practice that requires the survivor to surrender the final month of retired pay, either by returning the outstanding paycheck or having a direct withdrawal recoupment from his or her bank account. The Coalition believes this is an insensitive policy coming at the most difficult time for a deceased member's next of kin. Unlike his or her active duty counterpart, the retiree will receive no death gratuity. Many of the older retirees will not have adequate insurance to provide even a moderate financial cushion for surviving spouses. Very often, the surviving spouse has had to spend the final retirement check/deposit before being notified by the military finance center that it must be returned. Then, to receive the partial month's pay of the deceased retiree up to the date of death, the spouse must file a claim for settlement-an arduous and frustrating task, at best-and wait for the military's finance center to disburse the payment. Far too often, this strains the surviving spouse's ability to meet the immediate financial obligations commensurate with the death of the average family's "bread winner."
The Military Coalition strongly recommends that surviving spouses of deceased retired members should be allowed to retain the member's full retired pay for the month in which the member died.
Former Spouse Issues. The Military Coalition recommends corrective legislation be enacted to eliminate inequities in the Uniformed Services Former Spouse Protection Act (USFSPA) that were created through years of well-intended, piecemeal legislative action initiated outside the Subcommittee.
The Coalition supports the recommendations in the Department of Defense's September 2001 report, which responded to a request from this committee for an assessment of USFSPA inequities and recommendations for improvement. The DoD recommendations to allow the member to designate multiple survivor benefit plan beneficiaries would eliminate the current unfair restriction that denies any SBP coverage to a current spouse if a former spouse is covered, and would allow dual coverage in the same way authorized by federal civilian SBP programs. The Coalition also recommends that the Defense Finance and Accounting Service (DFAS) be required to make direct payments to the former spouses, regardless of length of marriage; the one-year deemed election period for SBP eligibility be eliminated; if directed by a valid court order, DFAS should be required to deduct SBP premiums from the uniformed services retired pay awarded to a former spouse; and DFAS should be authorized to garnish ordered, unpaid child support payments from the former spouse's share of retired pay. Also, DoD recommends that prospective award amounts to former spouses should be based on the member's grade and years of service at the time of divorce-rather than at the time of retirement. The Coalition supports this proposal since it recognizes that a former spouse should not receive increased retired pay that is realized from the member's service and promotions earned after the divorce.
The Coalition believes that, at a minimum, the Subcommittee should approve those initiatives that have the consensus of the military and veterans' associations, including the National Military Family Association. The Coalition would be pleased to work with the Subcommittee to identify and seek consensus on other measures to ensure equity for both servicemembers and former spouses.
The Military Coalition recommends corrective legislation be enacted to eliminate the inequities in the administration of the Uniformed Services Former Spouse Protection Act (USFSPA), to include consideration of the recommendations made by the Department of Defense in their 2001 USFSPA report.
Tax Relief for Uniformed Services Beneficiaries. To meet their health care requirements, many uniformed services beneficiaries pay premiums for a variety of health insurance programs, such as TRICARE supplements, the active duty dental plan or TRICARE Retiree Dental Plan (TRDP), long-term care insurance, or TRICARE Prime enrollment fees. For most beneficiaries, these premiums and enrollment fees are not tax-deductible because their health care expenses do not exceed 7.5 percent of their adjusted gross taxable income, as required by the IRS.
This creates a significant inequity with private sector and some government workers, many of whom already enjoy tax exemptions for health and dental premiums through employer-sponsored health benefits plans. A precedent for this benefit was set for other Federal employees by a 2000 Presidential directive allowing federal civilian employees to pay premiums for their Federal Employees Health Benefits Program (FEHBP) coverage with pre-tax dollars.
The Coalition supports legislation that would amend the tax law to let Federal civilian retirees and active duty and retired military members pay health insurance premiums on a pre-tax basis. Although we recognize that this is not within the purview of the Armed Services Committee, the Coalition hopes that the Subcommittee will lend its support to this legislation and help ensure equal treatment for all military and federal beneficiaries.
The Coalition urges the Subcommittee to support legislation to provide active duty and uniformed services beneficiaries a tax exemption for premiums or enrollment fees paid for TRICARE Prime, TRICARE Standard supplements, the active duty dental plan, TRICARE Retiree Dental Plan, FEHBP and Long Term Care.
CONCLUSION
The Military Coalition reiterates its profound gratitude for the extraordinary progress this Subcommittee has made in securing a wide range of personnel and health care initiatives for all uniformed services personnel and their families and survivors. The Coalition is eager to work with the Subcommittee in pursuit of these goals outline in our testimony.
Thank you very much for the opportunity to present the Coalition's views on these critically important topics.
2120 Rayburn House Office Building
Washington, D.C. 20515
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