Retired Pay | House and Senate committees earmark funds.

Historic Action on Concurrent Receipt

The House Budget Committee made history March 13 — and the Senate Budget Committee followed suit March 21 — by including nearly $600 million in its draft of the FY 2003 Budget Resolution as an initial down payment toward ending the dollar-for-dollar offset of military retired pay for any payment of Department of Veterans Affairs (VA) disability compensation. This is the first time that either the House or Senate Budget Committee has allocated a single dollar for this purpose, and it virtually guarantees at least some significant legislative and funding progress on this issue in FY 2003.

House Budget Committee Chairman Jim Nussle (R-Iowa), accompanied by other committee members, announced at a press conference that the budget committee's top priority is to provide the necessary resources to ensure that Americans are free from terror. Other Budget Committee members echoed support for a $398.8 billion defense budget — the largest in 20 years —that funds a wide array of requirements aimed at defending the security of the nation. Rep. Ed Schrock (R-Va.) said the budget resolution "keeps the promise made to our veterans," and he highlighted that the committee is working to keep the promise of the concurrent receipt benefit for disabled retirees.

House Budget Committee members felt strongly that they needed to make a significant commitment to ending the offset and earmarked $581 million in FY 2003, with increasing amounts over the next five years, reaching a cumulative total of more than $6 billion by FY 2007. The committee's proposal was passed by the full House of Representatives March 20.

The next day, the Senate Budget Committee followed the House committee's lead, adopting the same concurrent receipt philosophy and funding schedule.

At press time, all eyes were trained on Sen. Harry Reid (D-Nev.) — the Senate concurrent receipt champion. Reid had announced his hope to amend the Budget Resolution on the Senate floor to provide for immediate and full elimination of the offset. A similar Reid amendment was adopted by the Senate last year but was dropped in subsequent negotiations with the House.

Reid's plan still holds out some hope of winning full funding for concurrent receipt this year. But the House and Senate Budget committees' recommendations now form the new minimum action that Congress has in store for this issue in FY 2003.

If our continuing efforts to win additional funding to provide full concurrent receipt for all retirees ultimately prove unsuccessful, the Armed Services committees will have to decide how to allocate the initial funding among the potential eligibles. Previously, TROA and nearly all other military and veterans' associations have held the view that more severely disabled retirees should have higher priority in such an allocation scheme.

The Budget and Armed Services committees seem sympathetic to this view. As initially envisioned by these committees, the funding provided in the House resolution would allow phasing out the disability offset over five years for disabled retirees who have at least 20 years of qualifying service and who have disability ratings of 60 percent or higher. The committees envision a steady reduction in the retired pay offset each year for such retirees, with full elimination of the offset for 60 percent and more severely rated retirees coming in 2007.

The disability rating threshold under the committee's concept is the same 60 percent level that qualifies for the current $100 to $300 monthly "special compensation for certain severely disabled retirees," but the new concept would differ from the current special compensation in at least two important ways:

Reserve retirees. Those with 20 or more qualifying years of service would be covered under the new plan, whereas only those with the equivalent of 20 years of full-time active duty qualify for special compensation.

"Four-year rule." The plan envisions dropping the current special compensation requirement that the 60 percent or higher disability rating must have been incurred within four years after leaving service.

TROA believes these are very positive developments but remains committed to eliminating the offset for all disabled retirees. We appreciate the Budget Committee's acknowledgement that their current initiative is only a first step as we continue to pursue that goal.

Regardless of the final outcome, the leaders and members of both the House and Senate Budget committees deserve great credit for taking this critically important first step to get concurrent receipt on the table in the budget/authorization cycle. In particular, TROA is deeply appreciative of the leadership shown by all committee members, especially Nussle and Rep. Charles Bass (R-N.H.), who aggressively took the point on the issue in the House.

But none of this would have happened without the tireless and persistent advocacy of the champions of concurrent receipt, Rep. Mike Bilirakis (R-Fla.) and Reid.

Health Care | Access to all earned health care urged.

TROA Testifies Before Veterans' Committees

TROA presented its legislative slate for veterans' health care and benefits at a joint hearing of the House and Senate Veterans' Affairs committees March 20. TROA's Col. Bob Norton, USA-Ret., deputy director, Government Relations, outlined the association's key legislative agenda at the hearing.

In opening remarks, House Veterans Affairs Committee Chairman Rep. Christopher Smith (R-N.J.) emphasized that his committee was pushing for a significant increase in Department of Veterans Affairs (VA) health care funding to accommodate a 700,000 jump in veterans enrolled in VA health care just in the last year — an 18 percent hike in enrollment overall. Smith said he and the committee were strongly opposed to an administration proposal to require lowest priority veterans — means-tested veterans with no va-rated disabilities — to pay an annual deductible of $1,500 for their care.

On VA health care issues, Norton thanked the committees for their rejection last year of an administration proposal that would force military retirees to choose between the VA and the military health care system (TRICARE) for their health care. But, because government officials from the Office of Management and Budget recently testified in favor of forced choice, TROA recommended continued vigilance on the issue. Retirees, Norton emphasized, earned their health coverage through decades of service to their country, and disabled retirees especially must have access to the va's highly regarded specialized health care services.

TROA supports better collaboration between the Department of Defense (DoD) and VA health care systems so long as beneficiaries — "from young active duty servicemembers and families to the severely disabled older veterans" — maintain or enhance their access to high quality health care, Norton said. TROA recommends that DoD-VA partnering be governed by a strategic planning process that lays out national objectives and the means to achieve them. To benefit servicemembers and veterans, Congress should underwrite the early completion and deployment of a common DoD-VA medical record.

Norton also urged the committees' action to:
	support funding for concurrent receipt relief;
	aggressively pursue the backlog of disability claims, especially for older veterans;
	test using Medicare funds in VA facilities to treat older veterans with no disabilities;
	permit survivors of members who died of service-connected causes to keep their VA survivor annuity if they remarry after age 55;
	authorize active duty servicemembers with no post-service education benefits a one-time opportunity to sign up for Montgomery GI Bill benefits;
	proportionally increase National Guard and Reserve GI Bill benefits;
	add HCV (hepatitis-C) to the list of diseases presumed to be service-connected in veterans who contracted it before definitive screening was perfected in the early 1990s; and
	enact into law the rules governing interment in Arlington National Cemetery.

Health Care | Day argues case in court.

Class Act Lawsuit Goes to Round Four

The U.S. Court of Appeals for the Federal Circuit held a 70-minute hearing March 6 on Col. George "Bud" Day's, USAF-Ret., Class Act health care lawsuit against the government. Judges' questions indicated considerable sympathy for the retirees, but the decision still appeared to be weeks away at press time.

Day, wearing the Medal of Honor he received for his heroism as a Vietnam pow, did a fourth round of battle with Justice Department lawyers at the hearing of the Class Act Group's health care lawsuit.

The suit contends that members who entered service before June 7, 1956 (date of the first statutory reference to "space available" care), were wrongly denied lifetime free health care promised to career servicemembers in numerous recruiting and retention materials. Government lawyers didn't deny such promises were made but argued the promises had no standing because no recruiter or other service official has authority to promise such benefits that aren't authorized by law.

In the first round in September 1998, a Florida district court "regretfully" ruled for the government. Day won the second round in February 2001, when a three-judge panel of the U.S. Court of Appeals ruled that the government effectively had made a contract to provide free care and hadn't kept it. In the third round last June, federal lawyers convinced the full Court of Appeals to rehear the case.

If a boxing referee were scoring the judges' jabs at the March 6 hearing, it would have been a clear decision for the retirees, as the judges directed numerous barbed questions and criticism at the government attorney. One judge inquired whether the government's funding of space-available care for older retirees didn't, in effect, validate the promise. Another asked why, if there is to be any exception to the requirement for specific statutory authorization, this shouldn't be the perfect case to apply it.

A court official cautioned afterward that a judge's final decision can't always be predicted from his or her hearing questions during oral argument. But the tone of the hearing and the fact that three of the judges previously ruled for the retirees certainly can't hurt the prospects of a favorable outcome.

Health Care | Integration of DoD, VA facilities opposed.

Joint Committees Hold Health Hearing

On March 6, before an unusual joint hearing of subcommittees from the House Armed Services Committee and the House Veterans Affairs Committee, beneficiary advocates and government witnesses presented testimony on their views for improving cooperation between the Department of Defense (DoD) and Department of Veterans Affairs (VA) health care systems.

The Subcommittee on Military Personnel of the House Armed Services Committee (HASC) and the Subcommittee on Health of the House Veterans Affairs Committee (HVAC) first heard testimony on DoD-VA health care collaboration from HVAC Chairman Chris Smith (R-N.J.). The impetus for the hearing was his bill (H.R. 2667) that would require DoD and the VA to integrate up to five geographically close military and VA health care facilities under a "unified management systems" concept. But the hearing quickly expanded to more resource-sharing issues.

When asked by Military Personnel Subcommittee Chairman John McHugh (R-N.Y.) if the words "integration" and "merger" captured the intent of the legislation, Smith said he favored a "partnership" rather than outright integration or merging of DoD and VA facilities.

On a panel of government witnesses, DoD's Dr. David Chu and VA Deputy Secretary Leo S. McKay testified that they had formed an executive council to explore opportunities for improved DoD-VA collaboration, including developing reimbursement mechanisms between the two departments.

Office of Management and Budget witness Nancy Dorn said the administration still wants to make military retired veterans choose between VA and DoD health care. Virtually all association witnesses, including The Military Coalition (TMC) representative Bob Washington of the Fleet Reserve Association, testified in strong opposition to "forced choice."

TMC testimony stressed greater cooperation between TRICARE and the VA and urged priority development of a common medical record and testing of Medicare subvention (Medicare reimbursement for non-service-connected care of Medicare-eligible veterans in VA facilities). TMC representative Washington said that any DoD-VA collaboration must result in maintaining or enhancing access to high quality care for all beneficiary groups.

Retired Pay | TROA urges action on concurrent receipt, SBP, pay raise.

Military Benefits Hearing

TROA Deputy Director for Government Relations Col. Mike Jordan, USAF-Ret., and several other representatives from The Military Coalition (TMC) presented the coalition's legislative goals for FY 2003 at a March 13 hearing before the House Armed Services Subcommittee on Military Personnel.

Jordan thanked the committee for last year's military pay and allowance improvements and specifically recognized the committee for extending Survivor Benefit Plan (sbp) coverage to survivors of servicemembers who die on active duty. But Jordan said more work is needed on sbp and urged support for Rep. Jeff Miller's (R-Fla.) H.R. 548. This bill would phase out the age-62 sbp annuity reduction — and bring the military sbp benefit up to par with similar benefits provided to survivors of federal civilians, who experience no benefit drop at age 62.

Several TMC witnesses highlighted the importance of translating the overwhelming congressional support for concurrent receipt of retired pay and veterans' disability compensation into significant action this year. Subcommittee Chairman John McHugh (R-N.Y.), along with other committee members, acknowledged that while they supported eliminating the disability offset last year, this was the year to win the funding to make significant progress on concurrent receipt — and the House Budget Committee's action in March to allocate nearly $6 billion over the next five years represented a big step toward that goal.

Other TMC witnesses urged support for the coalition's personnel goals, including:
	upgrading service end strengths to meet today's sustained mission requirements;
	restoring full active duty/Guard/Reserve pay comparability as quickly as possible;
	front-loading remaining housing allowance upgrades in FY 2003 and adjusting grade-based housing standards to cover real expenses; and
	improving education and outreach programs and increasing child care availability to ensure family readiness for all active duty, Guard, and Reserve families.

In earlier testimony, Dr. David Chu, undersecretary of defense for Personnel and Readiness, the services' three-star personnel chiefs, and the chiefs of National Guard and Reserve components testified, with much of the discussion centered on the war on terrorism. The subcommittee and witnesses all applauded the capability and effectiveness of active duty, Guard, and Reserve personnel in this effort, but several committee members noted the painful pressures of repeatedly deploying the same troops in low-density/high-demand skills.

McHugh repeatedly expressed his opinion that the services need more people to fulfill such a high and sustained level of operational commitments and expressed his concern that the administration had requested only a 2,400 "plus-up" for the Marine Corps. Service witnesses indicated they had been tasked by the secretary of defense to scrub possible ways of reallocating forces internally before seeking additional manning.

TROA agrees with McHugh that this process needs to be completed expeditiously so that any additional proposed increases can be undertaken quickly to relieve the troops.

The troops have been doing an amazing job, but they're running on adrenaline, dedication, and patriotism, and their families are paying a price, too. The country needs to get them some help soon.

Benefits | TROA, TMC speak up for commissaries.

House MWR Panel Defends Benefit

The House panel responsible for overseeing commissary and exchange operations and Morale, Welfare, and Recreation (mwr) programs held its only hearing of the year on March 12, receiving testimony from The Military Coalition (TMC) representatives, including TROA's Col. Frank Rohrbough, USAF-Ret.; service witnesses; and the commander of the Defense Commissary Agency (DeCA). Rohrbough cochairs TMC's mwr committee. Panel Chairman Roscoe Bartlett (R-Md.) stressed in his opening remarks that "the value of on-base retail and mwr programs [is] even more important to support [military] families in times of heightened security."

Bartlett said there has been less talk from administration officials about privatizing exchange, commissary, and mwr activities on bases and posts since Sept. 11. With base security tighter, he questioned any privatization of base operations other than family housing. Referring to an earlier defense budget hearing at which Secretary of Defense Donald Rumsfeld testified, Bartlett said his panel "expects the department to live up to Mr. Rumsfeld's promise that there would be no decline in service at commissary stores."

In addition to Rohrbough's testimony, Joe Barnes, director of Legislative Programs for the Fleet Reserve Association, voiced continuing support for the commissary system, and Joyce Raezer of the National Military Family Association addressed special needs for mwr programs.

The panel focused much of its attention on commissary operations. TMC witnesses stated, "The coalition appreciates [DeCA's] continuing commitment to maintain or improve customer service while achieving greater efficiencies but cautions against moving too aggressively so as to negatively impact customer service, store operations, and employee morale. The annual appropriation is a worthwhile and sound investment and must be sustained at the current level to ensure the commissary continues as one of the cornerstones of the military benefit package."

Reserve Issues | H.R. 3831 would lower reserve retirement age.

Spotlight on Reserve Compensation

Legislation (H.R. 3831) introduced by Rep. Jim Saxton (R-N.J.) March 4 would allow reservists to begin receiving reserve retired pay at age 55 instead of 60. The bill is drawing attention as the war on terror highlights a 10-year trend of increased reliance on National Guard and Reserve capabilities. TROA believes a review of total force compensation equity is long overdue and urges early attention to the matter.

Unlike some earlier proposals — most notably a study of military compensation done by the Department of Defense in the late 1980s — the Saxton bill would trigger full reserve retired pay (and presumably other benefits like TRICARE) at age 55 for reservists instead of age 60. Some earlier proposals recommended a reduced annuity for reserve retirement before age 60, similar to federal civilian early retirement programs. Counting the cost of earlier access to TRICARE and other benefits, including full reserve retired pay at age 55, H.R. 3831 is expected to be costly.

Saxton's bill was endorsed by seven of his New Jersey delegation colleagues, but its reception among other lawmakers, including Armed Services Committee members, is uncertain.

TROA supports the modernization of the National Guard and Reserve compensation system to better reflect the current national defense philosophy that relies so heavily on Guard and Reserve forces to meet daily operational needs.

Big increases in mission requirements, together with a smaller force structure for active and reserve components alike, mean the Guard and Reserves are working far harder than were envisioned in building the current Guard/Reserve personnel and compensation systems. TROA and several other witnesses from The Military Coalition testified on this before the House Armed Services Committee March 13.

But we also recognize that Guard and Reserve programs are intertwined with those of the active force and want to make sure that adjusting the balance between the two on a piecemeal basis won't inadvertently hurt the total force.

Lowering the Guard and Reserve retirement age may well be one of the needed changes. But more important than any one particular change, the broader need is to rebalance the overall relationship between the demands on guardmembers and reservists and the way we compensate them while still ensuring recruiting and retention programs are enhanced for high-quality people in all components. That's no small task, all the more reason we think getting it underway should be a matter of national urgency.

TROA welcomes Saxton's introduction of H.R. 3831 as a means to jump-start that process. TROA will seek to raise the sense of urgency on total force compensation with DoD and Congress.

See TROA's 2002 Legislative Tool Kit fact sheet at www.troa.org/legislative/toolkit/pdfs/active_reserve/AR-5G-RCompandBens.pdf.