Legislation | Agreement will phase out offset for 200,000.

Concurrent Receipt Deal Announced 

In mid-October, House Majority Whip Roy Blunt (R-Mo.), Armed Services Committee Chairman Duncan Hunter (R-Calif.),Veterans Affairs Committee Chairman Chris Smith (R-N.J.), and concurrent receipt champion Rep. Mike Bilirakis (R-Fla.) met with MOAA and other military and veterans’ associations to announce a final concurrent receipt agreement with Senate leaders and the White House.

The proposal will benefit as many as 200,000 disabled retirees in two ways: 

First, all retirees with at least 20 years of service and VA disability ratings of 50 percent or higher will see their military retired pay offsets phased out over a 10-year period starting Jan. 1, 2004.

Second, the recently enacted Combat Related Special Compensation (CRSC) will be expanded to include all combat- or operations-related disabilities from 10 percent to 100 percent ratings, also effective Jan. 1, 2004. Currently, only those with qualifying disabilities rated 60 percent or higher or who have a disability associated with a Purple Heart are eligible.

In both cases, Guard and Reserve retirees with 20 qualifying years of service (including those who have fewer than 7,200 retirement points) will be eligible.

CRSC payments are in the amount of the VA disability compensation paid for whatever percentage of the member’s disability rating is due to combat-related disabilities, as determined by the parent service. Retirees must apply to their parent service for CRSC payments, but full service-approved CRSC payments will start immediately, with no “phase-in.” DoD is discouraging all those not currently eligible for CRSC from applying until this provision is signed into law (likely sometime in November).

Disabled retirees rated 50 percent and higher who do not elect CRSC payments should start seeing their retired offset phased out automatically, starting Jan. 1, 2004. No application is expected to be required. For 2004, qualifying retirees should see their retired pay increase by a flat amount, depending on disability, as follows: 

• $750 for 100 percent disabled; 
• $500 for 90 percent; 
• $350 for 80 percent; 
• $250 for 70 percent; 
• $125 for 60 percent; and
• $100 for 50 percent.

The remaining retired pay offsets would then be phased out over the following nine years. In 2005, retirees would get back an additional 10 percent of any remaining offset; in 2006, they would get back 20 percent of the remaining offset; in 2007, 30 percent of the remaining offset; and so on. By January 2014, disabled retirees with 50 percent and higher ratings will be entitled to full concurrent receipt of military retired pay and VA disability compensation.

Disabled retirees who qualify for both programs will have to choose one or the other.

Because the CRSC program provides full payment immediately versus the 10-year phase-in for concurrent receipt, legislators plan to allow an annual election option for CRSC-eligibles. This recognizes that a retiree who is 100 percent disabled, with only 60 percent of that disability the result of combat-related conditions, might find it advantageous to elect full CRSC payments for a few years until the concurrent receipt payment rises to a level that exceeds the CRSC payment. Because CRSC payments are tax-free and nondisability retired pay is not, this also could figure into qualifying retirees election decisions.

Designing specific procedures for retirees to make such elections is but one of the many administrative challenges DoD will have to address in implementing the new authority. 

The new agreement also calls for the formation of a special commission to review the VA disability system and recommend any needed changes. Of its 13 commissioners, at least seven will have to be highly decorated veterans. 

“This is an extremely gratifying victory for disabled retirees,” said Vice Adm. Norbert R. Ryan Jr., USN-Ret., president of MOAA. “MOAA is extremely pleased that years of lobbying efforts by MOAA and others have paid such great dividends for thousands upon thousands of disabled servicemen and women. This new legislation won’t solve the whole concurrent receipt problem, but it’s a giant step forward that will mean as much as $25,000 a year or more for 100-percent disabled retirees. We deeply appreciate the efforts of legislators who have fought so hard on this issue.”

There is no shortage of heroes who deserve a share of the credit for this historic victory. House Majority Whip Roy Blunt (R-Mo.) and Armed Services Committee Chairman Duncan Hunter (R-Calif.) played key leadership roles in negotiations with the White House. Special thanks also go to longtime concurrent receipt champions Sen. Harry Reid (D-Nev.) and Rep. Mike Bilirakis (R-Fla.) and Senate Armed Services Committee Chairman John Warner (R-Va.).

Particular appreciation is due Rep. Jim Marshall (D-Ga.), whose discharge petition played a significant role in achieving this victory, and to Reps. Thomas Tancredo (R-Colo.) and Walter Jones (R-N.C.), who had the courage to buck party guidance and put their names on the discharge petition.

The new agreement will be one provision of the FY 2004 Defense Authorization Bill. House and Senate leaders were conferring on other parts of the bill at press time. Hunter expected these negotiations would be complete in November so the bill could be sent to the president. “Regardless of other provisions,” said Blunt, the third-most senior House Republican, “I guarantee this concurrent receipt agreement will become law before Congress goes home this year.”

Concurrent Receipt | Why MOAA couldn’t take an all-or-nothing stance.

Glass is Half Full, Not Half Empty 

Understandably, the new agreement on concurrent receipt has caused many members to inquire what it will all mean and what

Legislation | Ryan urges leaders to support tax, health bills.

MOAA Pushes Pentagon Leaders

Secretary of Defense Donald Rumsfeld and Chairman of the Joint Chiefs of Staff Gen. Richard Myers, usaf, invited the leaders of several military and veterans’ organizations, including MOAA President Vice Adm. Norbert Ryan Jr., USN-Ret., to a discussion at the Pentagon in early October.

Deputy Secretary Paul Wolfowitz stood in when Rumsfeld was called away to testify on the Hill. Attendees received a brief on Operation Tribute to Freedom, an update on defense personnel and readiness issues, and an unclassified military operational update and global posture briefing, followed by a roundtable discussion on issues important to our organizations.

Ryan took the opportunity to urge Pentagon leadership to intercede with Congress to push for final passage of military tax relief legislation (H.R. 1307) that has been pending on Capitol Hill for months. He also urged reconsideration of DoD’s opposition to authorizing health care coverage for National Guard and Reserve members and families. (See articles on these subjects on pages 22 and 24.)

Survivor Benefits | New bills designed to increase chance of enactment.

Landrieu to Champion SBP Bill

In a recent meeting with MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., Sen. Mary Landrieu (D-La.) agreed to be the Senate champion in MOAA and The Military Coalition’s fight to increase the sbp benefit to 55 percent after age 62. Landrieu’s bill, S. 401, would phase in increases in the SBP benefit over 10 years. Her bill helps answer the concerns raised last year by Budget Committee members about the cost of phasing in the benefit in just five years, as called for in H.R. 548 and S. 451.

MOAA supports any and all bills that will contribute to progress on SBP. Obviously, we want to get the age 62 SBP benefit cut eliminated as soon as possible. But the hard reality is that we made no progress last year when the budget committees—which run the show—balked at the cost of a five-year phase-in. MOAA supported a 10-year phase-in two years ago, but last year sought to accelerate implementation with a five-year program, as contained in H.R. 548 and S. 451. 

Unfortunately, we lost. Now we need to expand our action to increase our chances of making some progress next year and reduce the risk of coming away with nothing again. We’re here to get action, not just to keep pushing bills that Congress won’t pass.

Ryan also met with Rep. Jeff Miller (R-Fla.), House SBP champion and sponsor of H.R. 548, to discuss strategy for winning SBP next year. MOAA now is working with both Landrieu and Miller to build an aggressive campaign aimed at getting funding authority to raise the SBP benefit in next year’s Budget Resolution. Widows have endured this inequity for too long already, and we’re committed to doing whatever it takes to get action.

Veterans | Key committees push flurry of bills.

Veterans Benefits Update

On Oct. 8, the House unanimously approved H.R. 2297, an omnibus veterans’ benefits bill. The bill authorizes continuation of the VA survivor annuity—Dependency and Indemnity Compensation (DIC)— for qualifying survivors who remarry after the age of 55. DIC is paid to survivors of members who died of service-connected causes. This would bring DIC into alignment with the rules for every other federal survivor program—a long-sought goal of MOAA and The Military Coalition.

Among other provisions, H.R. 2297 also would: 

• allow remarried surviving spouses to be buried in Arlington National Cemetery with the qualifying veteran;
• permanently authorize VA home loans for the Selected Reserve;
• eliminate the requirement that a POW be held for 30 days or more to presume service-connection for certain disabilities; and
• increase specially adapted home and automobile grants for severely disabled veterans.
  Earlier, the Senate Veterans Affairs Committee cleared several bills for Senate action:
• S.1131 would provide a 2.1 percent 2004 cost-of-living adjustment (COLA) to VA disability payment checks and other benefits;
• S.1132, the Veterans’ Survivors Benefits Enhancement Act of 2003, would raise educational assistance rates for surviving spouses and dependents of veterans who died of service-related causes and authorize 45 months (versus 36 months) of eligibility; increase the DIC rate by $250 for qualifying surviving spouses with at least one child under age 18; and make surviving spouses eligible for burial with the veteran in a national cemetery.
• S.1156 would expand VA nursing home coverage to veterans who have service-connected disabilities rated at 50 percent or higher (currently 70 percent or higher); 
• H.R. 1156 would authorize new national cemeteries in five locations: southeastern Pennsylvania; the Birmingham, Ala., area; the Jacksonville, Fla., area; the Bakersfield, Calif., area; and the Greenville and Columbia, S.C. area; and
• S. 1136 would update and clarify legal and economic protections for servicemembers on active duty.

We hope to see final action on most of these measures before the end of the year.

Health Care | Iraq appropriations bill expands Guard, Reserve eligibility.

Uninsured Reserves to Get TRICARE

Despite the vehement objection of the administration, the House and Senate passed a provision in the $87 billion Iraq Emergency Supplemental spending bill that will allow uninsured members of the National Guard and Reserve to participate in the military’s health insurance program, tricare, on a cost-share basis in FY 2004.

This is one major component of MOAA’s and The Military Coalition’s quest for “continuous health coverage” options for members of the Guard and Reserve and their families.

The conferees envision this as a one-year test program to determine the feasibility of permanent authority. But we see little chance that Congress will end this important coverage after one year.

The plan consists of the following elements:

TRICARE Buy-In: Guardmembers who are unemployed or whose employers do not offer health insurance would be able to enroll themselves and their families in the military’s TRICARE program on a cost-share basis. A single reservist would pay an annual premium, about 30 percent of the annual cost of providing care, amounting to about $420 annually for single reservists and $1,450 annually for a reservist and his or her family.

TRICARE Upon Receiving Orders: All guardmembers, reservists, and their families would be eligible to enroll in TRICARE as soon as members receive activation orders, as opposed to when they actually are activated.

Extended TRICARE After Demobilization: All reservists on active duty orders of 30 days or more can stay in TRICARE for six months after completion of their active duty tour. 

Authorization for Additional Medical Screening: The services are authorized to provide medical screening to members of the Guard and Reserve when they receive activation orders.

The final act did not include a Senate proposal to require the government to offset a share of private health insurance premiums at the option of mobilized families. DoD already provides such coverage to its own reservist-employees with Federal Health Insurance when they are mobilized, and MOAA will continue to press this initiative.

Nevertheless, this is an important step forward. MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., expressed his strong appreciation for Congress’ actions on this issue. “Improved health care has been our No. 1 legislative priority for all Guard and Reserve members,” he said. “And we have been strong advocates for these improvements.”

MOAA is particularly grateful to Sens. Tom Daschle (D-S.D.), Lindsey Graham (R-S.C.), Mike DeWine (R-Ohio), and Patrick Leahy (D-Vt.) for their commitment to winning Guard and Reserve health care. We are confident they will lead the charge next year to make these improvements permanent.

Additional provisions: The Iraq Supplemental Appropriations Act (H.R. 3289) also addressed several other important “people programs,” including:

• exemption of wounded servicemembers from paying food charges while hospitalized, retroactive to Sept. 11, 2001;
• full funding for rest and recuperation travel from Iraq to a servicemember’s home;
• barring any reductions in imminent danger pay or family separation allowance in FY 2004; and
• authority to reimburse travel expenses for family members visiting returning wounded from Iraq.

Guard and Reserve | Returning wounded face poor facilities, care.

Reserves Deserve Better

National attention has been drawn to allegations that ill and injured Guard and Reserve servicemembers, many of whom had served in Iraq or Afghanistan, are getting second-class treatment at Fort Stewart, Ga. A squad of Army officials led by Army Secretary Les Brownlee and Army Surgeon Gen. James Peake descended on the post in October to investigate the soldiers’ complaints about housing and medical treatment.

Some reservists are on “medical hold” for line-of-duty determinations and benefit claims. Some say they have been waiting weeks or even months—going to the end of the line, behind active duty soldiers with similar medical problems.

MOAA has asked Army and DoD officials to come up with some answers:

• Why did Army commanders and medical officials apparently overlook or ignore medical access standards required by tricare? (tricare patients are required to be seen in seven days for routine care and within 30 days for specialty care appointments.)
• Are mobilized reservists getting second-class treatment? 
• Why aren’t there enough medical resources for their medical evaluations and administrative processing?
• What is being done to streamline medical benefits determinations?
• Have VA counselors been assigned to assist in developing VA-disability claims?
• Are reservists’ living conditions substandard?

The situation at Fort Stewart prompted Dr. David Chu, the Pentagon’s top personnel policy official, to write to the service secretaries Oct. 29 directing them to adhere to existing TRICARE policy: “If health care services are not available within the medical treatment facility according to [TRICARE] standards, medical commanders shall promptly refer patients to other military, Veterans Affairs, or civilian sources of care, to include both TRICARE network or non-network providers.”

Despite DoD claims of improved predeployment and postdeployment programs, we must ask whether the resources have been committed to provide timely care and quality services to our nation’s deserving servicemembers—active duty and reserve alike. 

At least DoD officials are making an effort to ease the situation by sending extra providers and directing adherence to TRICARE access standards. Better late than never, but there is no excuse for failing to plan adequate troop care, especially as a similar debacle greeted troops returning from the first Gulf War.

Taxes | H.R. 3365 also would double death gratuity.

Congress Completes Military Tax Relief 

House leaders moved quickly during the first week of November to complete action on H.R. 3365, the Military Family Tax Relief Act. First passed by the House Oct. 29, the bill called for an increase in the death gratuity from $6,000 to $12,000. 

Sen. John McCain (R-Ariz.) took the lead in the Senate, and with Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.)—chairman and ranking member, respectively, of the Senate Finance Committee—introduced an amendment to reinstate long-sought Senate provisions of S. 351, The Armed Force Tax Fairness Act. The Senate quickly passed the revised bill by voice vote.

On Nov. 5, after a short debate on the House floor and strong support from Rep. Chet Edwards (D-Texas), the House passed the measure, by a 420-0 vote. The bill now goes to the president for his signature. This major victory for thousands of active duty members, Guard and Reserve members, and military survivors follows a six-year fight by military and veterans service organizations.

There are three primary military tax relief provisions included in the bill:

• Increase the death gratuity for survivors of members killed on active duty from $6,000 to $12,000 and make the full amount tax free;
• restore an above-the-line tax deduction for drilling Guard and Reserve members who incur travel and lodging expenses when drilling 100 or more miles form home; and 
• restore capital gains tax equity for military homeowners by exempting up to 10 years away from home, on military orders, from counting against the requirement to have lived in a primary residence for at least two of the five years preceding sale of the home.

The six years of frustration that led to this victory started when Congress inadvertently passed a law in 1997 that disadvantaged military homeowners. Over the years other issues were included and numerous bills were introduced by various lawmakers, most recently by the House and Senate Committee chairmen responsible for tax legislation, Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, and Grassley.

Both Houses passed legislation by wide margins, but final agreement on a bill that could be sent to the president proved elusive because of minor remaining differences.

In the past two years, McCain in the Senate and Reps. Amo Houghton (R-N.Y.), Walter Jones (R-N.C.) and, later, Rick Renzi (R-Ariz.) and Edwards in the House, pushed for final resolution. They were supported by The Military Coalition, the uniformed services, and the administration, and finally a breakthrough was achieved. These legislators are to be commended for their tireless devotion to this issue and their perseverance in spite of so many near misses.

Military taxpayers have waited years for this relief, which restores tax equity with other Americans. MOAA applauds House and Senate leaders and members of Congress for reaching a final agreement on this important issue.