NATIONAL MILITARY AND VETERANS ALLIANCE STATEMENT BEFORE THE SUBCOMMITTEE ON DEFENSE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE BY SETH ALLAN BENGE LEGISLATIVE DIRECTOR RESERVE ENLISTED ASSOCIATION
5 MAY 2004 INTRODUCTION
Mister Chairman and distinguished members of the Committee, the National Military and Veterans Alliance (NMVA) is very grateful for the invitation to testify before you about our views and suggestions concerning defense-funding issues.
The Alliance was founded in 1996 as an umbrella organization to be utilized by the various military and veteran associations as a means to work together towards their common goals. The Alliance’s organizations are:
? American Logistics Association ? American Military Retirees Association ? American Military Society ? American Retirees Association ? American WWII Orphans Network ? AMVETS ? Association of Old Crows ? Catholic War Veterans ? Class Act Group ? Gold Star Wives of America ? Korean War Veterans Foundation ? Legion of Valor (Washington Capital Region) ? Military Order of the Purple Heart ? Military Order of the World Wars ? National Assn for Uniformed Services ? National Gulf War Resource Center ? Naval Enlisted Reserve Association ? Naval Reserve Association ? Paralyzed Veterans of America ? Reserve Enlisted Association ? Reserve Officers Association ? Society of Military Widows ? The Retired Enlisted Association ? TREA Senior Citizen League ? Tragedy Assistance Program for Survivors ? Uniformed Services Disabled Retirees ? Veterans of Foreign Wars ? Vietnam Veterans of America ? Women in Search of Equity
The preceding organizations have almost five million members who are serving our nation, or who have done so in the past and their families.
The overall goal of the National Military and Veteran’s Alliance is a strong National Defense. In light of this overall objective, we would request that the committee examine the following proposals.
The National Military and Veterans Alliance must once again thank this Committee for the great strides that have been made over the last few years to improve the benefits of the Reserve components and their families. The improvements in health care, pay system, family support, mobilization and demobilization problems have been historic. It has been a very successful few years. But there are still many serious problems to be addressed:
MGIB-SR Enhancements
The current Montgomery G.I. Bill dates back to President Franklin Roosevelt signing the “Servicemen’s Readjustment Act of 1944”. The G.I. Bill seeks to fulfill six purposes for the reserve forces: 1) to provide educational assistance program to assist in the readjustment of members of the Armed Forces to civilian life; 2) to extend the benefits of a higher education to qualifying men and women who might not otherwise be able to afford such an education; 3) to provide for vocational readjustment and to restore lost educational opportunities to those service men and women; 4) to promote and assist the All-Volunteer Force program and the Total Force Concept of the Armed Forces and to aid in the recruitment and retention of highly qualified personnel for both the active and reserve components of the Armed Forces; 5) to give special emphasis to providing educational assistance benefits to aid in the retention of personnel in the Armed Forces; and 6) to enhance our Nation's competitiveness through the development of a more highly educated and productive work force.
Approximately 7.8 percent of the enlisted Reservists have a Bachelors degree or higher. This makes the Montgomery G.I. Bill for Selective Reserves (MGIB-SR) an important recruiting and retention tool. With massive troop rotations the Reserve forces can expect to have retention shortfalls, unless the government provides incentives such as those that would counter the negative effects of having placed a college education in abeyance. Education is not only a quality of life issue or a recruiting/retention issue it is also a readiness issue. Education a Reservist receives while either in a university or a trade school enhances their careers and usefulness to the military. The ever-growing complexity of weapons systems and support equipment requires a force with far higher education and aptitude than in previous years.
The problem with the current MGIB-SR is that the Selected 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 past October 1, the rate fell to 27% of the Chapter 30 benefits. While the allowance has inched up by only 7% since its inception, the cost of education has climbed significantly.
Position: The NMVA requests appropriations funding to raise the MGIB-SR and lock the rate at 50% of the active duty benefit.
Bonuses
Guard and Reserve component members may be eligible for one of three bonuses, Prior Enlistment Bonus, Reenlistment Bonus and Reserve Affiliation Bonuses for Prior Service Personnel. These bonuses are used to keep men and woman in mission critical military occupational specialties (MOS) that are experiencing falling numbers or are difficult to fill. During their testimony before this committee the reserve chiefs addressed the positive impact that bonuses have upon retention. This point cannot be understated. The operation tempo, financial stress and civilian competition for these jobs makes bonuses a necessary tool for the Department of Defense to fill essential positions. Though the current bonus program is useful there are three changes that we have identified that need to be made to increase its effectiveness.
The primary requirement for eligibility and payment of a bonus upon reenlistment is that the member must have completed less than 14 years of total military service and not be paid more than one six-year bonus or two three-year bonuses under this section. This 14-year total military service restriction and the limitation on the number of bonuses paid, effectively limits the opportunities for career reservists to obtain bonuses past 20 years of service and may be a disincentive for continuing service in the Reserve component beyond 20 years. Increasing the eligibility for reenlistment bonuses to 20 years of total military service and increasing the number of bonuses that can be paid under this section could expand the available force pool, as mid-level enlisted reserve members could take advantage of the new bonus criteria. Using a 20 year service cutoff instead of a 14 year period would encourage selected experienced mid-level subject matter experts to reenlist to established high year of tenure or mandatory separation dates; should members accept this incentive and reenlist, it could boost each service’s retention effort in critical skill areas. As each Service uses members of the selected reserve in different capacities, each Service Secretary may use this new authority as required as a force management tool.
The law also creates a limit on the amount that can be paid out to reservists. Currently this cap is at $5000 per reservists. This amount in some cases simply isn’t enough. Active duty personnel can receive multiple bonuses in amounts upwards of $20000. The inequity between these two amounts is increased even further when taken into consideration that Guard and Reserve members are not eligible for reserve bonuses while mobilized, but neither are they eligible for active duty bonuses. This “catch 22” means that two members of the Armed Forces, one active one reserve, could be working side-by-side in the Iraq in a mission critical area. The active duty personnel can reenlist and receive a tax-free bonus while the reservist would receive no bonus at all. This is a glaring wrong that needs to be corrected.
Position: The Alliance would like to see the Reserve Chiefs receive the funds and the authority to go above the $5000 limit, an increase in eligibility from 14 to 20 years and the ability for reservists to receive bonuses while on active duty orders.
TRICARE for Reserve Components
A 2002 General Accounting Office (GAO) report indicated that possibly 20 percent of the Guard and Reserves do not have adequate health insurance. This means up to 150,000 enlisted Reservists and their families could be without health insurance. This has a potentially devastating effect on the lives of our Reservists. Lack of continuity of care during mobilization creates a disincentive for reenlistment. In addition, all military members are expected to maintain the same health and physical fitness as Active Duty yet they are required to fund their own medical coverage. Beyond the quality of life issues lays another grave concern. That is the readiness of our Reserve Components. With such a large portion of the reserves without healthcare and physicals that are only required once every five years the number of Guard and Reserve that are unfit for deployment at any given time is uncertain. At this moment the government is paying and training servicemen and women that when called into action could not go.
The FY 2004 National Defense Authorization Act authorized a one-year program to extend premium-based TRICARE coverage to Selected Reserve members (and certain members of the Individual Ready Reserve (IRR) subject to presidential recall) that are not eligible for employer-sponsored health coverage. When it finally takes effect, the temporary TRICARE program will provide health care to many of our Guard and Reserves. The Department of Defense has announced that this program will begin but has not set a start date. When it is finally implemented DoD has only $400 billion to draw on to pay for the start-up and to then cover eligible reservists and their families.
Position: The Alliance urges the Congress to provide the money to make this current temporary program permanent and to extend it to allow all Selected Reserve members and certain IRR members access to premium-based TRICARE coverage when they are not on Active Duty. In addition, these members should have the option of having the government pay some share of any employer-provided health coverage during periods of recall to active service.
BAH vs. BAH II
Under the current pay system there are two Basic Allowances for Housing (BAH) rates, one for active duty and one for reservists that are mobilized for 139 days or less. When reservists reach the 140-day line they start to receive full BAH, reservists that are called for training and other assignments that last less than this artificial barrier lose money. The assumptions that were made when this system was placed into effect in 1983 are no longer valid. Reservists often travel away from home for assignments. Since some of these are short assignments it is not practical for reservists to uproot their families, consequently at times reservists are keeping two residences.
In the Department of Defense Report to Congress “Reserve Personnel Compensation Program Review” the department stated that to completely eliminate the 140-day threshold, it would cost $162M annually. This report acknowledges that as a matter of equity the 140-day threshold should be eliminated. The department’s suggestion to reduce the threshold for payment of BAH, rather than BAH II, to no more than 30 days is a cost saving option, but it does not address the fact that any time based standard for receiving the allowance is artificial in nature and saves money at a cost to the individual servicemen and woman.
Position: The NMVA requests that the funds and language be included that would eliminate this artificial and unreasonable difference in the BAH that reservists are paid.
Reduce Retirement Age Eligibility for Reservists
Over the last two decades, more has been asked of Guardsmen and Reservists than ever before. The nature of the contract has changed; Reserve Component members would like to see recognition of the added burden they carry. Providing an option that reduces the retired with pay age from 60 to 55 years carries importance in retention, recruitment, and personnel readiness. Some are hesitant to endorse this because they envision money would be taken out of other entitlements, benefits, and Guard and Reserve Equipment budgets. The National Military and Veteran’s Alliance recommends that Reserve retirement with pay be allowed prior to age 60, but be treated like Social Security retirement offset, at lower payments when taken at an earlier age. If a Reservist elects to take retired pay at age 55, it would be taken at an actuarially reduced rate, keeping the net costs at zero.
Most of the cost projected by DoD is for TRICARE healthcare, which begins when retirement pay commences. Again following the Social Security example, Medicare is not linked to Social Security payments.
Position: The National Military and Veterans Alliance suggests that TRICARE for Reservists be decoupled from pay, and eligibility remain at age 60 years with Social Security as a model, Reservists understand the nature of offsetting payments. The only remaining expense in this proposal would be the administrative startup costs and adjustments to retirement accrual contributed to the DoD retirement accounts.
CONCLUSION
Mr. Chairman and distinguished members of the Subcommittee the Alliance again wishes to emphasize that we are grateful for and delighted with the large steps forward that the Congress has affected the last few years. We are also very appreciative of recent changes that impact our “citizen soldiers” in the Guard and Reserve. But there is still work to be done to improve health care programs for all qualified beneficiaries, and benefits and mission funding for our Guardsmen and Reservists. We understand that all of these issues don’t fall under the direct purview of your subcommittee. However, we are aware of the continuing concern all of the subcommittee’s members have shown for the health and welfare of our service personnel and their families. Therefore, we hope that this subcommittee can further advance these suggestions in this committee or in other positions that the members hold. We are very grateful for the opportunity to speak on these issues of crucial concern to our members. Thank you.
