Mr. Chairman and other distinguished Members of the Subcommittee: The Fleet Reserve Association (FRA) is grateful for the opportunity to address the panel on military personnel programs. First, however, the Association extends sincere gratitude to the Subcommittee for its outstanding efforts these past four years in enhancing life in the military for the Nation’s service members and their families. The result has been nearly miraculous. Recruiting and retention is at its highest since the advent of the all-volunteer force. The “magic” spun by this subcommittee has enriched quality of life for the men and women who serve or will serve or have retired from the Armed Forces of the United States.
With 135,000 members strong, FRA presents a well-deserved salute to the Subcommittee for, among others, providing “targeted” pay increases for NCOs and Petty Officers in the grades of E5 thru E9 and funding the Tricare for Life health care program for military retirees 65 years of age or older. The Subcommittee’s commitment to service members, their families, and retired military veterans is unmatched. Thanks for doing a superb job.
FY 2004 DEFENSE BUDGET
FRA is acutely aware of the estimated deficits facing the United States in 2004 and succeeding years. Defense build-up is critical to this country that now plays a major role in keeping the United States, as well as other world nations, free from intrusion by an enemy or enemies. The cost of doing business defense-wise leaves little for societal and environmental programs.
FRA supports a strong defense, first and ever more. However, it is a people-oriented organization whose mission is to provide loyalty, protection, and service to its members. To serve its members effectively, the Association has a duty to apprise Congress of the resolutions adopted by them in convention.
For FY 2004, FRA is seeking support from the Subcommittee for the issues and programs addressed in this statement. For the past 12 months the Association, as in almost 76 of its 79 years, renewed its commitment to serve as the premier “watchdog” organization for its members as well as the enlisted men and women serving in the Navy, Marine Corps, and Coast Guard. From that group, as well as other sources dedicated to enhancing quality of life for the Nation’s Sea Services personnel, FRA offers the below recommendations for consideration and, hopefully, the Subcommittee’s endorsement.
QUALITY OF LIFE PROGRAMS
The following recommendations are divided into six (6) major categories. They are:
1. PAY AND ALLOWANCES 2. HEALTH CARE 3. EDUCATION 4. RETIREMENT 5. MILITARY CONSTRUCTION 6. OTHER ISSUES
OVERWORKED U. S. TROOPS WILL ACCEPT THE STRAIN OF CURRENT DEPLOYMENTS — FOR A WHILE — AS LONG AS THEY BELIEVE THEIR FAMILIES ARE CARED FOR BACK HOME
1. PAY AND ALLOWANCES:
COMPENSATION. Recommendation: That Congress holds fast to its commitment of closing the military pay gap by 2006 through the utilization of higher-than-civilian-pay increases to military basic pay and not permit military pay to again fall behind that of the civilian community. To accomplish the task Congress needs to react before 2006 in repealing the law authorizing the capping of annual military pay increases below that of civilian wages. Additionally, to continue its promise to erase the disparity in housing allowances that cause service members to pay higher out-of-pocket costs to reside in the civilian community.
Pay and allowances continue as the top retention choice of military personnel since the beginning of the all-volunteer force. This is substantiated once again in a recent survey conducted by FRA on its web site. More service members are married than ever before in the history of the Nation’s military. Societal and economical customs demand higher incomes for military personnel, the same as for their civilian brothers and sisters. Congress in its wisdom has adopted higher pays for all uniformed members and “targeted pays” for both mid-grade officers and noncommissioned officers to meet that demand in the military. Further, Congress has committed itself to closing the pay gap between military and civilian pay levels.
For FY 2004, the basic pay increase is currently locked in law at 3.7 percent, 0.05 percent higher than the latest ECI figure [37 USC, 1009(c)]. BHA (Basic Housing Allowance), also locked in law, is in for an increase in fiscal year 2004 of four (4) percent. However, the Administration’s budget calls for a mix of basic pay increases beginning at 2 percent for personnel in the grade of E1 to a high of 6 1/4 percent for those in grade E9. With the exception of pay grades E1 and O1, all other grades are set to receive at least a 3.7% increase. FRA is delighted with the Department of Defense for piggybacking on the Association’s 1999 Pay Study and again recommending “targeted” increases for mid-grade and senior noncommissioned and petty officers (NCOs/POs).
FRA supports the Administration’s recommendations on pay and housing allowance increases and urges the Subcommittee to appropriate the necessary funds to affect the authorized increases. However, if Congress believes a higher increase should go to E1s and O1s, the Association suggests no reduction in the design to target pay increases for NCOs and POs who, until recently, have been slighted since the advent of the AVF.
FRA also urges Congress not to buy the Administration’s suggestion to change the current Employers Cost Index (ECI) to the Consumer Price Index (CPI) as a measure to determine future military pay increases. One may recall that it was only a few years ago when the then incumbent Administration urged Congress to adopt the ECI. DOD noted at the time that the ECI was a much superior indicator in matching civilian wages to military pay. In the event the Administration’s suggestion prevails, the Association requests that no funds be appropriated to support the administration of such a change. PAY RAISE FOR USPHS AND NOAA PERSONNEL. Recommendation: FRA urges the funding of comparable basic pay raises in 2004 for Public Health Service (PHS) and National Oceanic and Atmospheric Administration (NOAA) Commissioned Officers.
Both agencies are an integral part of the seven uniformed services and should receive the same consideration as for other commissioned officers in the Armed Forces. FRA is particularly concerned for officers in the PHS who provide health care to members of the U. S. Coast Guard, identical to the care provided by officers of the Armed Services Medical Corps to members of the Army, Navy, Marine Corps and Air Force.
RESERVE COMPENSATION. Recommendation: Support the restoration of tax deductions for expenses expended by reservists in performing military training.
With the United States resolve to maintain worldwide peace, the role of the reservist is more important than ever. Due to extensive mobilization of the reserves, some individuals/units more than once and for undesignated periods of time, it behooves Congress to improve benefits for reserves so that their numbers will meet that which the military services need to support the active forces. One of the benefits would be to allow reservists to deduct non-reimbursable expenses associated with performing monthly drills. It is the Association’s fervent hope the Senate will act on the bill as soon as possible.
DISLOCATION ALLOWANCE. Recommendation: Amend 37 USC , §407, to authorize the payment of dislocation allowances to members of the armed forces retiring or transferring to an inactive duty status such as the Fleet Reserve or Fleet Marine Reserve who perform a “final change of station” move.
Moving households on government orders can be costly. Throughout a military career, service members endure a number of permanent changes of station (PCS). Often each move requires additional expenses for relocating to a new area far removed from the service members’ current location.
Dislocation allowances are authorized for military-ordered moves. To aid service members in defraying these additional costs, Congress in 1955 adopted the payment of a special allowance- termed “dislocation allowance” — to recognize that duty station changes and resultant household relocations reflect personnel management decisions of the armed forces and are not subject to the control of individual members.
Odd as it may appear, service members preparing to retire from the Armed Services are not eligible for dislocation allowances, yet many are subject to the same additional expenses they experienced when effecting a permanent change of station during the 20 or more years of active duty spent earning the honor to retire. In either case, moving on orders to another duty station or to retire are both reflective of a management decision.
FRA recommends appropriating the necessary funds to affect payments of this allowance.
2. HEALTH CARE:
TRICARE. Recommendation: FRA strongly recommends continuation of full funding for the Defense Health Program, to include military medical readiness, TRICARE, and the DOD peacetime health care mission. Additionally, FRA urges the distinguished Subcommittee to provide appropriations to revitalize the Tricare Standard Program and make the Tricare program available for reservists and families on a cost-sharing basis. Funds need to be appropriated for the Defense Health Budget to meet readiness needs and deliver services through both the direct care and purchased-care systems for all uniformed services beneficiaries, regardless of age, status and location. Congressional oversight of the Defense Health Budget is essential to avoid a return to the chronic under-funding of past years that led to shortfalls, shortchanging of the direct care system, and reliance on annual emergency supplemental funding requests. Even though supplemental appropriations for health care were not needed last year, FRA is concerned that the current funding level only meets the needs to maintain the status quo. Addressing Tricare shortfalls will require additional funding.
Access to care is of major concern to the FRA membership. Beneficiaries report that some health providers in their areas are not willing to accept new Tricare Standard patients. The Association believes further distinction must be made between Tricare Standard and Prime in evaluating the Tricare program. Our members report increased problems and dissatisfaction with the Standard benefit.
There are a number of persistent problems with Tricare Standard, a new name for an old program once known as CHAMPUS. First, many beneficiaries have difficulty in locating Health Providers who’ll accept Tricare Standard. The paperwork is extensive and the payments are insufficient. In a FRA survey administered in early February 2003, 15 of 55 service members (27%) attending a military course of instruction complained of the difficulty in obtaining health care providers for their family members. (The remaining 40 were enrolled in Tricare Prime.)
Reservists are rightfully concerned with continuity of health care for their families when called to active duty. Until recently, there was no single coverage for reservists and no coverage for some. Now, reservists called to active duty in excess of 30 days may enroll their families in Tricare Prime and have access to either Military Treatment Facilities (MTF) or civilian providers. To maintain permanence of health care, many reservists and families would just as soon keep their current health care coverage. To improve readiness in the reserves, increase morale, and ease concern for families when reservists are mobilized, Congress should direct and fund DOD to implement a program whereby the reservists’ current health insurance premiums are paid by Tricare.
3. EDUCATION:
MGIB. Recommendation: FRA continues to support increased benefits for participation in the Montgomery GI Bill (MGIB) and to authorize certain service members the opportunity to enroll or reenroll in the MGIB.
FRA advocates the creation of a benchmark for the MGIB so that its benefits will keep pace with the cost of an average four year college education. Even with the forthcoming October 1 increases in basic rates, a MGIB student looking forward to completing the 2003-2004 academic year will have to pay out-of-pocket about one-third the cost of a four year course of education in a public college or university. If married, the shortfall in benefits will place a heavier financial burden on the student.
The Reserve MGIB has failed to maintain a creditable rate of benefits with those authorized in Title 38, Chapter 30. Other than cost-of-living increases, only two improvements in benefits have been legislated since 1985. In that year MGIB rates were established at 47% of active duty benefits. This October 1, the rate will fall to 27% of the Chapter 30 benefits. In support of Guard and Reserve personnel, being mobilized in increasing numbers, FRA seeks the support of Congress is enhancing the MGIB rates for those who choose to participate in the program.
Approximately 40 percent of the Navy’s enlisted force has no educational benefits. It seems ironic that an individual enlisting in the military services is eligible to enroll in the MGIB while another seeking to reenlist does not have the opportunity. Allowing service-members to enroll in the MGIB upon reenlisting in the Armed Forces should be the norm.
4. RETIREMENT:
SURVIVOR BENEFIT PLAN (SBP). Recommendation: To adopt and fund Senate Bill, S. 451, to amend the Survivor Benefit Plan (SBP) [10 USC, 1451(a)] to authorize the repeal of the post-62 annuity over a period of 5 years [35% to 40% in October 2004, to 45% in October 2005, to 50% in October 2006] and to 55% in October 2007. Further to change the date 2008 to 2004 [10 USC, 1452(])] at which time the retiree, attaining the age of 70 years who has paid 30 years of SBP premiums, will be fully insured for the covered amount without further payments to the Plan.
The Survivor Benefit Plan (SBP) provides an annuity to surviving spouses equal to 55 percent of the deceased member’s covered military retirement pay with a reduction to 35 percent when the surviving spouse attains the age of 62. SBP also offers annuities to spouses and children, children only, former spouses, former spouses and children, and insurable interests.
Two-thirds of the total military retired community is in the enlisted grades, most are earning retirement pay in the E6 and E7 pay grades. At the time of their retirement, few are financially able to afford SBP coverage at the full amount of their retirement pay. On retirement, the typical service member may lose nearly 70 percent of the income received while on active duty. As a result, they opt for the basic amount that provides a miniscule annuity for a surviving spouse.
The Plan is perplexing adding to the confusion of what constitutes a “social security offset” when the Social Security Administration (SSA) has nothing to do with computing the SBP annuity? And the question: Why is there a sharp annuity loss suffered at age 62 for some and not for others? Why isn’t Congress adhering to its original intent to cover 40% of the costs of the program? Why, if the SBP is patterned after the Federal Employees’ plans, is FERS subsidized at 33% and 48 percent for CSRS? Additionally, FERS annuitants receive 50% of the employees’ retired pay and CSRS annuitants 55% with no reduction in the annuity at age 62.
Mr. Chairman. Let's fix the program before our retired service members are paying 100 percent for participating in a program that was adopted to replace a previous plan where the participants were required to carry 100 percent of the costs.
AUTHORIZE SURVIVING SPOUSES A FULL MONTH’S PAYMENT OF RETIRED PAY FOR MONTH IN WHICH RETIREES DIE. Recommendation: In consideration of service to the Nation and the trauma surrounding the death of a retired service member, the surviving spouse would be entitled to receive and retain the final retired pay check/deposit covering any month in which the member was alive for any 24-hour period.
Current regulations require survivors of deceased military retirees to return any retirement payments received for the month in which the retiree dies. Upon the demise of a retired service member entitled to retired pay, the surviving spouse or beneficiary is to notify the Defense Department of the death. The Department’s financial arm then stops payment on the retirement check or electronic deposit and subsequently recalculates the payment to cover the actual days in the month the retiree was alive. In other cases where the death is not reported in a timely manner, any payments made for the days the retiree was not alive will be recouped. Retirement and its related activities are most agonizing if not an arduous experience for many military retirees and families transitioning to an unfamiliar civilian-lifestyle. For the average retiree, and most likely the one who is enlisted, will suddenly discover finances will be a principal concern. On leaving active duty, the retiree’s income will drop 60-to-70 percent of what was earned while in uniform. The enlisted retiree, unlike his or her active duty counterpart, will receive no death gratuity and, in the case of many of the older enlisted retirees, would not have had the financial resources to purchase adequate insurance to provide a financial cushion for their surviving spouses. Death is a most traumatic experience for survivors. It is a most painful time when the surviving spouse must accept the task of arranging for the deceased members’ funeral services. The additional cost involved constitutes a major output of scarce family dollars only amplified by the loss of retirement income when needed the most. A final month’s retirement payment will go far in helping to sooth the strain on the survivor’s financial obligations.
To aid in reducing the cost of the proposal, survivor benefit payments may be forfeited for the month in which the retiree dies and the survivor receives the retiree’s final month’s check. In the event the retiree’s final month’s retirement check is less than the SBP annuity, the survivor would receive the one most favorable.
5. MILITARY CONSTRUCTION:
HOUSING. Recommendation: To make every effort to eliminate substandard family and bachelor housing, now referred to as inadequate by DOD, and expedite the construction of new housing to accommodate the Nation’s service members and families. Also, to provide enhanced child care programs to relieve the tension of spouses or working spouses with children whose service member husbands or wives are deployed.
In a recent appearance before the House Appropriations Subcommittee on Military Construction, the Armed Services four top enlisted chiefs voiced concern for the quality and availability of housing and child care. Both are ever-most in the minds of service members deployed or serving outside the United States without their families.
Although there is a threat of base closures in the immediate future, apparently the larger military installations, such as Norfolk Naval Bases, Camp Pendleton, etc., are not at risk. There is no reason not to authorize and appropriate additional funding for both housing and child care.
Both the Navy and Marine Corps have unfunded housing priorities. For example, the Navy has reduced its FY 2004 Family Housing request by 17 percent and the Corps needs $165 million of which $63 million is for family housing. This raises the question of whether the Navy and Marine Corps will meet their 2007 target of ridding both services of “inadequate” housing. Congress is encouraged to purge the Navy and Marine Corps of “substandard housing” (the name it was before DOD changed it to “inadequate”) by authorizing and appropriating additional funding to accomplish the task.
At the same time FRA seeks increased funds for family housing it cannot ignore the need for bachelor quarters. The Association endorses the requests of the Navy’s and Marine Corps’ top enlisted chiefs in their statements of February 26, 2003 before the House Appropriations Subcommittee on Military Construction. (Available upon request to FRA at 703-683-1400 or fra@fra.org.)
FACILITIES. Recommendation: To provide for additional funding to accommodate the construction and modernization of installation facilities at Naval and Marine Corps bases, to include physical fitness and MWR centers.
The value of having adequate facilities cannot be over-stated. The backlog of maintenance to many of the work-stations and other buildings continues to grow along side the need to replace those structures that are beyond repair. It’s shameful as well as wasteful to require our service members to labor in dilapidated buildings on weapons systems and other equipment costing the taxpayers millions of dollars. Again, the Navy and Marine Corps have priorities that should be funded so more secure, cleaner, and healthier work places are available for Sailors and Marines enabling them to perform at their best.
Additionally, community support facilities require congressional attention. Physical fitness centers are much in demand. Not only are they places to relieve tension but to build body strength and improve health, both important to maintaining physical readiness.
6. OTHER ISSUES:
END STRENGTHS. Recommendation: FRA believes this honorable Subcommittee is aware of the need for greater strength authorizations and funding to ease both operational and personnel tempos imposed upon a force not sufficient in numbers to sustain the current demands for manning operational commitments. Although Congress, under the provisions of the FY 2003 NDAA, did allow and fund a small increase in the active component strength of the Marine Corps, it only authorized increases for the Navy, if needed, but without funding. FRA recommends Congress give greater credence to its instincts and authorize appropriations for additional manpower.
Since 1995, when it was obvious the downsizing of strengths in the Armed Forces was causing increased operational and personnel tempos, FRA has annually requested increases in military manpower. It will do so again this session of Congress.
In an appearance before the Senate Armed Services Committee last year, the Chairman, Joint Chiefs of Staff, avowed the Armed Forces will defeat terrorism “no matter how long it takes or where it takes us.” On January 31, 2003, The Washington Times reported Defense Secretary Rumsfeld as alerting his commanders “that troops will deploy for longer periods because of the war on terrorism and potential conflict with Iraq.” Missing from both statements was the promise to succeed only if the Forces had adequate manpower to accomplish the mission.
Previously, a Navy Times editorial of December 12, 2001, warned not to overextend the military: “Time and again, America’s armed forces have shown they’ll do what it takes to serve their country. But history offers a warning: Work them too hard, keep them away from home too long, overlook their welfare and eventually they will walk.” Additionally, The Washington Times of January 31, 2003, noted that a retired Navy Admiral commenting on high military deployment rates stated, …“the chances of keeping a marriage together for 20 years at the current op tempo is approaching zero.”
These warnings are not to be ignored. It doesn’t take a rocket scientist to resolve the question of how the Department of Defense (DOD) can justify no need of increased manpower when the strength of the Forces has been reduced by one-third while the optemp has accelerated dramatically. Operational levels involving uniformed members of the Army, Navy, Marine Corps, Air Force, and Coast Guard have escalated significantly over the past decade to a point where the United States does not have adequate numbers of military personnel to fully accommodate the many commitments ordered by the Department of Defense and area commanders. Early in 2002, it was reported the Army had told the Pentagon it needs 20,000 to 40,000 additional troops in FY 2003, the Air Force 8,000 to 10,000, and the Navy and Marine Corps an additional 3,000 each. However, the Secretary of Defense was not favorable to an increase in manpower. Congress, in its decision, authorized an increase but because of a shortage of funds provided no money to pay the additional manpower.
There are numerous defense officials, both civilian and military, complaining uniformed personnel are doing more with less, over deployed, overworked, and stretched too thin. However, our service members are serving magnificently, but the question is: For how long and if they have to face a determined foe? Operation Iraqi Freedom is no guideline to justify further reductions in military manpower.
SPOUSAL EMPLOYMENT. Recommendation: The Association urges Congress to continue its support of the military’s effort to affect a viable spousal employment program and to authorize sufficient funds to assure the program’s success.
Today’s all-volunteer environment requires the services to consider the whole family. It is no longer adequate to focus only on the morale and financial well-being of the member. Now, his or her family must be considered, too. One of the major considerations is spousal employment which could be a stepping-stone to retention of the service member — a key participant in the defense of this Nation.
In recent years, the Armed Forces have become concerned with the plight of military spouses who lose employment when accompanying their service member husbands or wives to new duty locations. Studies have concluded that many military families suffer significant financial setbacks. Some losses are substantial. Worse, yet, is the lack of equal or even minimal employment opportunities at the new duty locations. The services are continuing to test new programs to assist spouses in finding full or temporary employment to include counseling and training. Other initiatives will help spouses find “portable” employment in companies with customer-service jobs that can be done at remote locations. FRA salutes these efforts and encourages the military departments to continue the march.
IMPACT AID TO SCHOOL DISTRICTS WITH CONCENTRATIONS OF MILITARY SPONSORED STUDENTS. Recommendation: To continue to provide funds to school districts heavily impacted with military personnel-sponsored children.
The President’s Budget request contains a provision to reduce funds earmarked for distribution to school districts heavily impacted with children of military personnel (and civilian employees hired by the service department concerned). The reduction is to be the amount that would be appropriated for children, known as B students, whose parents reside in the civilian community and not on the military installation.
FRA cannot urge this Subcommittee in any stronger terms to support full funding of impact aid. Previous attempts by former Administrations to terminate these payments have met with failure and rightfully so. Impacted schools could not operate efficiently nor provide adequate tutoring to service members’ children with less money. Many of these schools either closed their doors to these children or threatened to do so if funds were cut.
At this time in history FRA believes it to be utterly foolish if the Nation forgets the damage the President’s request, if adopted, will do to our service members’ morale. There are 240,000 school children, whose uniformed service parents live off of military installations, depending on receiving a quality education from local educational facilities. It will not happen unless the funds are provided.
COMMISSARIES. Recommendation: To oppose privatization of commissaries and strongly support full appropriations to fund the current level of service for all commissary patrons. Additionally, to authorize unrestricted access to commissaries to Reservists.
The FY 2003 budget reduced Defense Commissary Agency funding by $137 million and envisioned eliminating over 2,600 positions from stores and headquarters staff by September 30, 2003. While surveys indicate there has been no significant loss in service to the customer, FRA cautions that further initiatives be evaluated with regard to potential negative impacts on quality and service to customers, including additional store closings, reduced hours, longer cashier lines and reduced stock on store shelves. The benefit is widely recognized as a valuable part of the service member’s compensation package and a cornerstone of quality of life benefits. As in the past, FRA opposes any effort to privatize commissaries and strongly supports full funding of the benefit in FY 2004 and beyond.
As in previous years, FRA once again seeks full access to commissaries for selected reservists. The process involved in issuing (annually), checking, and accounting for the current cards required of the reservist to shop in the commissary is costly and unnecessary. Reservists are part of the Total Force. They should receive the same consideration as their active duty comrades-in- arms.
CONCLUSION
FRA is grateful for the opportunity to present its goals for FY 2004. If there are questions or the need for further information, I will be pleased to respond.
