MOAA Legislative Update: President Bush OKs Emergency VA Spending

January 18, 2008

COLA Watch

The Bureau of Labor Statistics announced that the Consumer Price Index edged down 0.1% in December. That leaves inflation at a cumulative 1.1% so far this fiscal year. Visit MOAA's Web site for more information.

House Passes Defense Bill (Again)

The President unexpectedly vetoed the FY2008 Defense Authorization Act just after Christmas when White House lawyers discovered a provision that could have allowed lawsuits against the assets of Iraq for the crimes of Saddam Hussein. The veto reflected the President's belief that the current Iraq government needs all of its assets and shouldn't be held responsible for the crimes of the previous regime.

The veto effectively interrupted certain compensation improvements as of January 1, but most new initiatives are unaffected by the veto (see the January 4, 2008 Legislative Update for details).

Some were concerned that the veto could spark a new round of political infighting that might mean even further delay enacting this important defense bill. But those fears dissipated when the House reconvened this week, adjusted the offending provision, and re-passed the bill by an overwhelming majority.

It's expected that the Senate also will promptly do the same when it reconvenes next week so the legislation can be signed into law and Congress can get on with its important work for 2008.

MOAA Outlines GI Bill Goals at Hill Hearing

MOAA's COL Bob Norton, USA (Ret), presented the association's recommendations for upgrading the Montgomery GI Bill (MGIB) at a hearing before the House Veterans Affairs Economic Opportunity Subcommittee on January 17.

Norton thanked Rep. Vic Snyder (D-AR), a member of the Subcommittee and former Chairman of the Armed Services Military Personnel Subcommittee, for his pivotal role in winning a 10-year post-service readjustment benefit for reservists who earn MGIB benefits for service on active duty. That change will take effect later this month when the FY2008 National Defense Authorization Act is signed into law.

MOAA endorsed the seven legislative proposals under consideration at the hearing, especially bills such as H.R. 2702 that would raise MGIB reimbursement rates. Such increases are MOAA's top education priority this year. The bill also would allow 15 years (vice 10) of post-service use eligibility and extend eligibility to all entering recruits, without the current $1,200 fee. MOAA believes strongly that GI Bill benefits should be raised to cover the average cost of a four-year public college or university. They now cover about 75% of that amount.

MOAA also believes Reservists should be entitled to full active-duty MGIB benefits if they complete a cumulative 36 months on active duty. At present, that only earns them 80% of the full benefit. Norton said the principle should be "same service, same battlefield, same benefits."

Rep. John Hall (D-NY), whose district includes West Point, asked about educational incentives to retain military academy graduates. Norton noted that the Army already has lost more than half of the West Point class of 2002 and has growing shortages of mid-grade officers. He urged making service academy graduates and ROTC scholarship recipients (who are excluded on the rationale that the military funded their undergraduate degrees) eligible for the MGIB if they agree to extend their initial service commitment.

President Bush OKs Emergency VA Spending

MOAA President VADM Norb Ryan, Jr., USN (Ret), participated in a White House conference call on January 17 during which the President announced he had approved the $3.7 billion in emergency supplemental appropriations passed by Congress in the waning days of 2007.

Under the strange rules of appropriations, Congress authorized the extra money, over and above the President's budget request. But because it exceeded the budget authority, Congress designated it as "emergency" supplemental spending.

Under the budget rules, the President has the discretion to decide whether or not to spend that extra money. In this particular case, the extra $3.7 billion to meet VA health care and other needs would only be available if the President sent a special budget notice to Congress by January 18.

VADM Ryan expressed MOAA's great appreciation both to Congress for recommending the much-needed additional VA funding and the President for agreeing to exercise the congressional authority.

WEP/GPO Opponents Testify Before Congress

On January 16, the House Ways and Means Subcommittee on Social Security conducted a hearing on the impact of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), taking testimony from Social Security and Congressional Research Service officials as well as a diverse group of advocates for state government employees and teachers.

Social Security covers approximately 96% of U.S. workers. But 25% of public sector employees (federal, state, and municipal) have unique retirement systems that aren't covered by Social Security. Federal civilian employees who were hired before 1984 also fall under an independent retirement system. In all, about 6.5 million federal, state and local workers aren't covered by Social Security.

If people in this category also held at least one job during their working lives that was covered by Social Security, they find in retirement that they suffer a statutory penalty called the Windfall Elimination Provision. The WEP entails a complicated formula that reduces their Social Security benefit by up to $340 per month.

They may also suffer a penalty if they themselves held Social Security-exempt jobs that provide an independent retirement annuity, but are married to someone who spent a working career under Social Security. If the Social Security-covered spouse dies and the remaining spouse draws a Social Security benefit as a survivor, the spouse runs into a separate penalty called the Government Pension Offset. The GPO reduces the survivor's Social Security benefit by an amount equal to two-thirds of the survivor's federal civilian/state/teacher's retirement pension. According to the National Active and Retired Federal Employees Association (NARFE), the GPO affects 400,000 people, and causes the vast majority to lose their entire Social Security benefit.

When WEP and GPO offsets were enacted decades ago, their intent was to mitigate the progressive nature of Social Security benefits, which were seen as providing disproportional rewards for people who spent a relatively small part of their careers paying into Social Security.

But MOAA and NARFE believe the WEP and GPO impose disproportional penalties, and actively discourage public service just when there's a crying need for more teachers and experienced personnel in state and municipal governments. We believe the GPO and WEP significantly undermine important programs like Troops to Teachers.

But changing the law will be a major challenge, to say the least. Repeal would cost $80 billion over ten years, and more modest reforms would still carry daunting price tags for Congress at a time when long-term financing of Social Security is already a major national issue. But MOAA believes strongly that something needs to be done to ease the current inequity.

You can support this effort by asking your legislators to cosponsor H.R. 82 and S. 206. Just enter your ZIP code in the indicated box at these two links to send them a MOAA-suggested message.

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