Congress Sets 2006 Raise
The Senate in June was expected to join the House in passing a 2006 defense authorization bill that includes a 3.1 percent military pay raise, plus a higher ceiling on bonuses and special pays.
On many other new personnel initiatives, however, the House and Senate versions of the bill differ. The Senate, for example, proposes to increase 20 bonuses and special pays to help wartime recruiting and retention of active and reserve forces.
As a result of the differences, a House-Senate conference committee later this summer will have to decide which of the provisions to include in a final defense policy bill.
The 3.1 percent basic pay increase applies to all grades. It will be the seventh consecutive military raise to exceed private sector wage growth by at least a half percentage point, a measure that House lawmakers say will narrow the military “pay gap” with the private sector from 5.1 percent to 4.6 percent.
Under both the House and Senate versions, total defense spending would be pegged at $441.6 billion, $22.3 billion more than sought by the Bush Administration and $21 billion more than the amount contained in the Fiscal 2005 defense budget.
The Senate was set to consider floor amendments by mid-June, but here’s a rundown of personnel-related initiatives passed by the House or endorsed by the Senate Armed Services Committee:
- Force Strength. The Senate bill proposes increasing the active duty Army end strength by 20,000, to reach 522,400 soldiers by October 2006, assuming recruiters can make the necessary goals. The House recommends an increase of only 10,000 for the Army, plus 1,000 more active duty marines, raising Marine Corps active duty end strength to 179,000. However, the House bill also would give the Defense Secretary the authority to boost the Army by another 20,000 troops in the period 2007-09 and increase Marine Corps strength by 5,000 more marines.
- Reserve Tricare. The House bill would relax in three ways the rigid rules governing the new Tricare Reserve Select program. First, it would allow demobilizing Guard and Reserve members to elect TRS for up to 120 days after leaving active duty. Under current law, they must decide to enroll in TRS before leaving active duty. Second, the House would allow TRS coverage to continue for six months for surviving family members in the event of the covered reservist’s death. Third, TRS coverage would continue for the period contracted even if the reserve component member is involuntarily retired.
- Reserve BAH. The House bill would direct the services to pay Guard and Reserve members mobilized for longer than 30 days the same basic allowance for housing paid to active duty members. Activated reservists now are paid BAH Type II, a lesser amount, if ordered to active duty for more than 30 days but less than 140.
- Danger Pay Extensions. The Senate bill would direct continued payment of imminent danger pay or hostile fire pay to wounded service members for the length of their hospitalizations.
- Hardship Duty Pay. The House would raise the monthly maximum on hardship duty pay from $300 up to $750.
- Bonus Increases. The House proposes to raise maximum active duty enlistment bonuses from $20,000 to $30,000 and reserve enlistment bonuses from $10,000 to $15,000. The ceiling on active duty re-enlistment bonuses would climb from $60,000 to $90,000.
- Reserve Affiliation Bonus. At the urging of Army National Guard officials, the Senate bill would authorize a drilling reserve affiliation bonus of $10,000 a year and a unit affiliation bonus of $50 per drill for members assigned to high-priority units. The Senate bill would require annual physicals of all drilling reservists.
- Transfer Bonus. The Senate would authorize an interservice transfer bonus of up to $2,500 for active and reserve members who transfer to the active or reserve component of another military service.
- Survivors’ Housing. The House bill would extend from six months to one year the length of time dependents of service members who die on active duty can remain in base housing or receive housing allowances. The House also would increase from one year to three the time allowed surviving family members to select a final home for transportation of household goods.
- Commissary and Exchange Protection. The House bill would impose a moratorium until 2011 on studies that compare the cost effectiveness of commissary operations using federal civilian employees with the cost if private sector employees ran the stores.
More Tricare Initiatives
The Senate bill would extend Tricare Prime enrollment eligibility, with no enrollment fee, to children of US military members killed on active duty. They currently are eligible for Prime for three years. The Senate wants these children covered for as long as they are eligible for a military ID card, typically until age 21 or 23.
The Senate bill also would require Tricare regional offices to have a Tricare Standard monitor to help beneficiaries, including Tricare Reserve Select enrollees, to locate health care providers who accept Standard.
And the Senate bill would require the Secretary of Defense to report to Congress by March next year on prospects for offering active duty members access to pretax savings plans to cover health and dental premiums or medical out-of-pocket expenses.
The bills also would extend the substantial increases in military death benefits approved by President Bush as part of the Fiscal 2005 emergency wartime supplemental signed May 11.
Both the House and Senate versions would make permanent the increases in the military death gratuity and Servicemembers’ Group Life Insurance. Those provisions were set to expire Sept. 30.
The death gratuity increase—the payment rises from $12,400 to $100,000—applies only to deaths resulting from wounds, injuries, and illnesses incurred in combat-related circumstances such as armed conflict, hazardous service, or performance of duty under conditions simulating war. It would also be payable if the death occurred in a combat operation or area designated by the Secretary of Defense.
The increase in the death gratuity is retroactive to Oct. 7, 2001, the start of Operation Enduring Freedom in Afghanistan.
The maximum SGLI coverage would rise from $250,000 to $400,000, effective Sept. 1, 2005. The increase will be automatic for all service members, though they can opt out of SGLI to avoid the $26-a-month premiums or elect lesser coverage. The premium for the current $250,000 in maximum coverage is $16.25.
The revised death benefits package contains the controversial requirement that married service members cannot decline maximum SGLI coverage without written consent of their spouses. Also, if an unmarried service member elects not to buy maximum SGLI coverage, the Defense Department is required to notify next of kin of that choice. (See “Action in Congress: Spousal Consent Controversy,” May, p. 34.)
“Traumatic Injury” Rider
US troops severely injured in Iraq and Afghanistan and those who receive traumatic wounds in any future actions in declared war zones will get cash payments of $25,000 to $100,000 under a rider to SGLI enacted as part of the emergency supplemental act.
The law directs the Departments of Defense and Veterans Affairs to establish a “traumatic injury” rider to SGLI by Dec. 1 and make payments retroactive to the start of Operation Enduring Freedom in Afghanistan.
The payments, which will vary based on severity of injuries, are designed to help service members with life-altering injuries, and their families, cope with financial challenges as they recover.
Three soldiers who suffered wounds in Iraq proposed the traumatic injury rider to Sen. Larry Craig (R-Idaho), chairman of the Senate Veterans’ Affairs Committee, who then introduced it as an amendment to the emergency supplemental bill. About a month later, it was law.
Michael Tarzian, chief of the actuarial staff at SGLI headquarters in Philadelphia, said SGLI monthly premiums will rise to pay future costs of the traumatic injury rider. The Defense Department is responsible for retroactive payments to service members who have been severely injured in Iraq and Afghanistan since the fall of 2001.
DOD and VA officials are preparing implementing regulations. Qualifying injuries will include loss of limb, speech, or hearing; severe burns; blindness; traumatic brain injuries; and coma. The law leaves it to DOD and VA officials to determine the size of the payment for each particular category of injury.
Tricare Reserve Reversal
On May 18, the House Armed Services Committee voted 32-30 to open Tricare Reserve Select (TRS) to any drilling Guard or Reserve member. Two days later, however, Rep. Duncan Hunter (R-Calif.), committee chairman, pulled the provision from the bill. Hunter believes the measure violated budget rules.
Reps. Gene Taylor (D-Miss.) and Joe Wilson (R-S.C.) had persuaded a bipartisan group of committee colleagues to support opening TRS to any drilling reservists to recognize their heavy share of the fighting in Iraq and Afghanistan.
TRS, a scaled down version of Tricare Standard, currently can be used only by reservists who have deactivated from post-9/11 deployments. They get TRS coverage in return for remaining in drill status and available for recall. Also, they pay premiums of $75 a month for member-only coverage or $233 for family coverage.
In arguing against opening TRS to any drilling reservist, Hunter and Rep. John McHugh (R-N.Y.), the personnel subcommittee chairman, cited high cost—an estimated $3.5 billion over five years—and the likelihood that civilian employers, on learning of the TRS option, will begin to force their reservists on staff to enroll in TRS to lower their own company medical costs.
Taylor and Wilson had told colleagues that expanded TRS would be paid for with a portion of savings realized from the new round of base closings. But after Taylor’s surprise victory during committee markup, Hunter’s staff asked the Congressional Budget Office to review the cost of expanding TRS.
CBO determined that Taylor’s amendment would increase mandatory government spending by $5 million next year and by $269 million over 10 years—by encouraging at least some of 120,000 reservists working as full-time federal civilian employees to drop their federal health insurance plan in favor of TRS.
In the Senate, Sen. Lindsey Graham (R-S.C.), chairman of the armed services subcommittee on military personnel, has promised to offer his own amendment to offer premium-based Tricare Standard to all drilling reservists.
Help for “IU” Retirees
In its markup of the defense bill, the House Armed Services Committee adopted a measure that would cut by four years and three months the 10-year phase-in schedule of full retired pay for 28,000 military retirees rated IU, for “individual unemployability,” by Veterans Affairs.
The committee approved by voice vote May 18 a proposal from Rep. G.K. Butterfield (D-N.C.) to accelerate full restoration of retired pay for these IU retirees to Oct. 1, 2009, rather than Jan. 1, 2014. Butterfield proposed paying the cost with proceeds from selling surplus defense stockpiles.
IU retirees have disabilities severe enough that they can’t work but not so severe that the VA provides them with a 100 percent disability rating, although they are compensated at the 100 percent level.
Two years ago, Congress agreed to phase out over 10 years the dollar-for-dollar reduction in retired pay that disabled retirees who retire after full careers experience when they accept VA disability compensation. The phaseout applied only to retirees rated at least 50 percent disabled. Last year, Congress accelerated the phaseout plan, fully restoring retired pay for retirees rated 100 percent disabled.
IU retirees were excluded from the accelerated concurrent receipt provision, though defense officials muddied their status by saying last December that they might be eligible based on a preliminary review by department lawyers. However, DOD never released an official legal ruling. Department inaction returned the issue to Congress to decide how IU retirees should be treated regarding concurrent receipt.
It’s unclear whether the Senate will agree to the House proposal when a final defense bill is negotiated. The Bush Administration has been pressuring Congress to curb entitlement growth for veterans and military retirees.