Survivor Benefits  |  Survivor Benefits House establishes “reserve fund” but no firm funding.

Senate Budgets for SBP Fix

The House and Senate passed their respective versions of the FY 2005 Budget Resolution in late March, and both included provisions aimed at relieving the Survivor Benefit Plan (SBP) annuity reduction imposed on military survivors age 62 and older. The Senate provided real budget authority; the House offered a promise.

The budget resolution establishes budget priorities for the coming year and sets limits on the cost of new initiatives by the armed services committees and other congressional committees.

The Senate acted first, working until 1 a.m., March 12 to consider a final flurry of proposed amendments. One of the last taken up was Sen. Mary Landrieu’s (D-La.) amendment to phase out the SBP “widows tax” that cuts most SBP annuities by one-third after the survivor attains age 62. Landrieu’s amendment proposed paying for the SBP fix by limiting tax breaks for U.S. companies that reincorporate in foreign tax havens and individual expatriates who give up their U.S. citizenship.

Senate leaders didn’t want to have to go on record voting against the SBP fix, but also didn’t want to do the tax changes.

In the end, leadership’s desire to finish the budget resolution won out, and Landrieu’s amendment was adopted by unanimous consent. The unanimous consent procedure allows adoption of a measure without a vote, as long as no senator present objects.

Senators also approved an amendment by Sens. Lindsey Graham (R-S.C.) and Tom Daschle (D-S.D.) to expand Guard and Reserve health coverage and increase benefit levels for the Reserve Montgomery GI Bill.

The Senate then passed the budget resolution on a 51 to 45 vote. The House Budget Committee completed its version of the budget resolution the following week. It put no specific budget authority in the resolution to fix SBP, but senior Republicans and Democrats on the committee each expressed their own brand of determination to accomplish that job this year.

The chairman of the committee, Rep. Jim Nussle (R-Iowa), established a budget “reserve fund” placeholder for SBP in the FY 2005 Defense Authorization Act. But the committee didn’t identify any specific source of funding to cover the cost—$498 million over five years.

Rep. Chet Edwards (D-Texas) then offered an amendment to authorize budget headroom for the SBP fix. Under the minority rules, he had to identify an offset to pay for the amendment, and his offset was to shave part of the proposed tax reduction for Americans with incomes over $1 million. The amendment was defeated on a party-line vote of 23 to 19.

The committee action disappoints MOAA on two counts. First, we’re disappointed SBP wasn’t deemed a high enough priority to receive specific budget authority in the “chairman’s mark.” Second, we’re disappointed the Edwards amendment was not adopted.

The Republicans on the committee said they support the SBP fix but could not vote for the tax offset, which they saw as politically motivated.

From MOAA’s standpoint, almost every budget and legislative proposal offered by any legislator in a presidential election year is in part politically motivated—including both the chairman’s mark and Edwards’ amendment. Regardless of either party’s other political priorities, we expect that both parties will make fair treatment for military widows a top funding priority this year. They need to find a mutually agreeable plan rather than trade party-line votes that continue leaving military widows in the lurch.

In that spirit, we appreciate Nussle’s personal statement during the SBP debate that his intent in establishing the reserve fund for SBP is not an idle one. He expressed a personal commitment to work with the Armed Services Committee to find the necessary offsets to get an SBP fix in law this year.

“I’m not just saying I’m going to cooperate with the Armed Services Committee,” he pledged. “I’m going to be an advocate of this cause.” Budget Committee staffers confirmed separately that this pledge is to help the Armed Services Committee find outside funding sources without merely “robbing Sgt. Peter to pay Mrs. Paul.”

In the hours before the final House vote, SBP champion Rep. Jeff Miller (R-Fla.) re-engaged both Nussle and Armed Services Committee Chairman Duncan Hunter (R-Calif.) in discussions on the need to ensure the House passes an SBP fix. Both chairmen reaffirmed their commitment to get something done this year, and we intend to hold them to their word.

As this went to press, House and Senate leaders were hoping to resolve the differences between their two different versions by April 15.

Survivor Benefits  | Edwards’ effort aimed at forcing action in defense bill.

Democrats Launch Discharge Petition

On March 30, MOAA Chairman of the Board Adm. Jerry Johnson, USN-Ret., joined House Minority Leader Nancy Pelosi (D-Calif.), Rep. Chet Edwards (D-Texas), and Rep. Bob Filner (D-Calif.) at a press conference announcing the launch of a discharge petition to force a floor vote on H.R. 548, Rep. Jeff Miller’s (R-Fla.) bill to phase out the Survivor Benefit Plan (SBP) age-62 annuity reduction over five years.

Citing the success of Rep. Jim Marshall’s (D-Ga.) discharge petition last year in forcing action on concurrent receipt, Pelosi said a similar strategy is necessary this year for SBP. She decried the House Budget Committee’s failure to follow the Senate’s lead in providing specific SBP budget authority. Although the House-approved budget resolution includes a nominal SBP reserve fund, she noted that Budget Committee leaders left the fund empty and offered no alternative after defeating Edwards’ SBP amendment.

Edwards had even stronger words.

“Reducing survivor benefits to those whose spouses have served their nation in the armed services is an insult,” he said. “As an original cosponsor of Representative Miller’s bill, I support his efforts and join my colleagues and The Military Coalition in working to completely eliminate this discriminatory practice. If just 218 of the [304] cosponsors of H.R. 548 will sign the discharge petition, we can respect the sacrifices of our military widows with our deeds, not just our words.”

A discharge petition is a means of forcing a bill out of a committee to the House floor for a vote. A majority of House members (218 of 435) must sign the petition for this to happen.

The practical effect of a discharge petition is to exert pressure for enactment of a bill with a large number of cosponsors that has languished without action. The real vehicle for legislative action on SBP is the FY 2005 Defense Authorization Bill, which Armed Services Committee members will draft in early May.

Last year, almost all House Democrats signed Marshall’s concurrent receipt discharge petition, but very few Republicans were willing to flout strong party leadership pressure against doing so. In the end, House Armed Services leaders passed their own concurrent receipt provision in the defense bill after convincing the Bush administration it had to be done.

Johnson expressed hope for a similar positive resolution on SBP this year.

“This is not a partisan issue,” he said. “A majority of Democrats and Republicans are already SBP cosponsors. Fifty-one of the 60 members of the Armed Services Committee are cosponsors. So we have plenty of support, if those supporters just back their words with real action.

“We’re grateful to Leader Pelosi and Representative Edwards for working to make SBP a leadership priority. We hope all House members will sign this discharge petition. But our greatest hope is that the Armed Services Committee will put an SBP fix in the defense authorization bill and make the discharge petition a moot issue.”

The administration opposes any SBP fix, so we expect there will be great pressure on Republicans not to sign the discharge petition.

Those 50 cosponsors on the Armed Services Committee (and Budget Committee leaders who established the SBP reserve fund) need to back up their stated support with a fix in the defense bill.

Track discharge petition signers on Edwards’ Web site at www.house.gov/edwards.

Survivor Benefits | Senate to consider measure for the first time.

Corzine Pushes Paid-Up SBP

On March 9, Sen. Jon Corzine (D-N.J.) introduced S. 2177, a bill that would implement 30-year paid-up Survivor Benefit Plan (SBP) coverage Oct. 1, 2004, rather than the current 2008 effective date. This represents an important step forward in MOAA’s effort to win equity for older retirees who enrolled in SBP during the first few years of the program. For the first time, we have a Senate champion on this issue and companion legislation to Rep. Jim Saxton’s (R-N.J.) H.R. 1653 in the House.

In 1998, MOAA and its partners in The Military Coalition were successful in winning legislation to let long-term SBP enrollees stop paying premiums, while retaining SBP coverage, after having paid SBP premiums for at least 30 years. For budget reasons, legislators pushed the implementation date to Oct. 1, 2008. This arbitrary effective date discriminates against thousands of older retirees who enrolled in the first six years of SBP’s existence (1972–78), causing them to pay SBP premiums for up to 36 years.

Visit http://capwiz.com/moaa/issues/bills/?bill=5347021 to urge your senators to cosponsor S. 2177. With the late start, enactment appears doubtful this year, but it’s important to build a base of cosponsor support as soon as possible.

Testimony | Coalition witnesses highlight legislative priorities.

TMC Testifies Before House

• ending the Survivor Benefit Plan (SBP) age-62 annuity reduction;
• increased service end strengths consistent with dramatic increases in operations requirements. TMC is concerned that dramatically increased deployment rates will threaten future retention and readiness unless the services add more people;
• a minimum 3.5 percent pay raise in 2005 to continue closing the military pay gap;
• support for military family readiness programs to assist families of deployed members;
• improved health coverage for Guard and Reserve members and families; and
• reduced retirement age for Guard and Reserve members. Because new military policy requires regular, extended deployments that will impair these members’ ability to build a full civilian retirement, there must be some accommodation on the military side.

Lange emphasized the need for the subcommittee to make it a particular priority to pass an SBP fix this year. “These widows have waited long enough. They need our help now,” he said.

Legislation | News on Part B, DIC reinstatement, and CRSC.

Implementation Updates

Veteran Benefits | Health funding, claims processing, GI Bill needs cited.

Joint Committees Hear MOAA

On March 25, MOAA Deputy Director of Government Relations Col. Bob Norton, usa-Ret., testified before a joint hearing of the House and Senate veterans’ affairs committees on MOAA’s legislative priorities for veterans’ health care and benefits.

Norton thanked House Veterans’ Affairs Committee Chairman Chris Smith (R-N.J.) and Ranking Member Lane Evans (D-Ill.) for the committee’s recommendation for a $2.5 billion increase above the administration’s budget request for veterans health care and benefit programs for FY 2005. (The House and Senate ultimately voted to approve a lesser $1.2 billion increase, despite strong support for the higher number from military and veterans’ groups, including MOAA.)

Norton urged the committees to:

• support the recommendation of the Presidential Task Force on VA health care to fully fund the care of all veterans enrolled in priority groups 1–7;
• accelerate initiatives to seamlessly transfer DoD health information to the VA for separating or retiring servicemembers;
• oppose cuts in the VA benefits workforce, so recent improvements in processing VA disability claims can be sustained;
• authorize Montgomery GI Bill (mgib) eligibility for active duty members who declined the much-inferior Veterans Educational Assistance Program in the 1980s;
• restore Guard and Reserve GI Bill benefits to 40 percent of active duty benefits;
• let certain reservists deployed multiple times (totaling at least two years within five years of Sept. 11, 2001) sign up for the active duty MGIB; and
• strengthen reemployment rights of mobilized reservists under the Uniformed Services Employment and Reemployment Rights Act.

Norton expressed MOAA’s appreciation for last year’s concurrent receipt legislation, urged the committee’s support for prompt processing of continuing claims, and expressed the association’s hope for an expeditious opportunity to end the “veterans disability tax” for all disabled retirees.

Health Care | MOAA, FRA offer The Military Coalition’s priorities.

TMC Highlights Health Needs

• full funding of the defense health program—the budget shouldn’t be curtailed in ways that impact delivery of timely care and prescriptions for beneficiaries;
• ensuring prompt DoD action to implement TRICARE Standard improvements directed in last year’s defense authorization act;
• continuing oversight of the new uniform formulary expected to be implemented later this year. The new formulary should contain the most frequently prescribed medications, and administrative processes should be streamlined to avoid unnecessary burdens for patients and providers; and
• prompt implementation by DoD of the Guard and Reserve fee-based TRICARE coverage passed by Congress last year. To date, the Pentagon has offered no timeline for extending this coverage to Guard and Reserve members without private employer health coverage.

Schwartz urged the subcommittee to make the temporary health care enhancements for the selected reserve permanent. “The clock is ticking,” she said. “The authority and funds for this legislation expire at the end of this year, but the call-ups will not.”

Testimony | Senate hearing highlights reserve health coverage.

Coalition Offers Personnel Priorities

On March 4, representatives from The Military Coalition (TMC) testified before the Senate Armed Services Subcommittee on Personnel on priorities for 2004. Preceding the TMC panel and administration witnesses, Sens. Tom Daschle (D-S.D.), the minority leader, and Lindsey Graham (R-S.C.) testified in strong support of their bipartisan legislation (S. 2035) to enact permanent authority for fee-based health care options for reservists and upgrade the reserve retirement system.

MOAA Deputy Director of Government Relations Sue Schwartz,  DBA, RN, and other TMC witnesses offered the same priorities presented to the House, including strong endorsement of the Graham/Daschle proposal (see article above).

Unfortunately, it appears most of these proposals will meet stiff opposition from DoD. At an earlier Senate hearing, Undersecretary of Defense (Personnel and Readiness) Dr. David Chu expressed strong opposition to any further action on retiree benefits. The Pentagon also opposes reducing the reserve retirement age and providing health coverage to drilling Guard and Reserve members.

MOAA and TMC strongly believe that senior administration leaders are seriously underestimating the need for adjustments to ensure sustainment of recruiting retention and readiness in the future, especially for Guard and Reserve forces.

We hope Congress will continue its leadership in ensuring equity issues are addressed for all deserving segments of the military community.

Commissary/Exchange | McHugh to defend against program cuts.

Hearing Addresses Family Concerns

Also in March, the House Armed Services Total Force Subcommittee held a hearing to examine the current state of Morale, Welfare, and Recreation (MWR) and commissary programs.

Panel chairman Rep. John McHugh (R-N.Y.) expressed his belief that MWR programs, especially commissary and exchange benefits, are powerful retention and readiness tools. While some in DoD don’t share his views on the value of the commissary and exchange benefit, he intends to resist any initiatives to curtail those benefits.

Witnesses on the first panel included Deputy Undersecretary of Defense (Personnel and Readiness) Charles Abell, who addressed DoD proposals to consolidate the service exchange systems and study variable pricing options in commissaries. The latter initiative would change pricing methodologies in ways that would save the government money at the cost of higher overall prices to commissary patrons.
Coalition witnesses made a strong case against exchange consolidation and variable pricing, arguing that the minimal cost savings to the government are not worth the negative impact they will have on military families.

McHugh indicated he shares this concern and will not support anything that will raise patron prices or cut their benefits.