Pay Raise 2008
A 3.5 percent pay raise for military members next January became a near-certainty in late May when the Senate Armed Services Committee voted for an increase of that size in its mark of its Fiscal 2008 defense authorization bill (S 567).
The House earlier had included the same raise in its own version of the bill (HR 1585). A 3.5 percent raise is a half-percentage point higher than recent wage growth in the private sector.
The Bush Administration sought a three percent raise for next year, which would have ended at eight, the number of consecutive annual military raises set at least a half-percentage above private sector wage growth.
The Office of Management and Budget argued for a return to the practice of setting military raises to match wage growth nationwide, as measured by the government’s Employment Cost Index (ECI). It said such raises would be enough to sustain recruiting, retention, and quality of life.
House members and Senators disagreed. In fact the House voted to keep annual military pay raises a half-percentage point above ECI-tracked wage growth through January 2012. The Senate committee’s language deals only with the 2008 raise.
CRSC, Reserve Retirement
The House-passed bill and the Senate committee’s version both include a variety of initiatives for active duty and reserve component members, military retirees, and survivors. Some House and Senate provisions are identical, virtually assuring passage.
For example, both reject the Pentagon’s call for higher Tricare fees, deductibles, and co-payments and would restore $1.9 billion to the health care budget.
Most personnel initiatives appear in only one version of the bill, though more Senate initiatives might be added during floor debate. Here is what will be at stake for military people when conferees go behind those closed doors:
Expansion of CRSC—Both the House and Senate bill would expand eligibility for Combat-Related Special Compensation (CRSC) to Chapter 61 retirees, those forced by disability to leave service short of 20 years. The Senate committee would allow all retirees with combat-related disabilities, regardless of their years of service, to receive both disability compensation and CRSC. The CRSC would be equal in value to military retired pay based on years served. For example, an eligible retiree forced out after 16 years would receive monthly CRSC equal to 2.5 percent of monthly basic pay multiplied by 16 years. The House bill is more limited. It would expand CRSC eligibility only to those Chapter 61 retirees who served at least 15 years and have combat-related disabilities rated 60 percent or higher.
Survivor indemnity allowance—The House bill would establish up to a $40 a month allowance as a modest initial step toward eliminating the so-called SBP-DIC offset that impacts 61,000 surviving spouses. These spouses now see payments under the military’s Survivor Benefit Plan reduced by amounts they receive in Dependency and Indemnity Compensation from the Department of Veterans Affairs. Surviving spouses complain that the offset is unfair, particularly in light of recent actions by Congress to relax a long-standing ban on concurrent receipt of both disability compensation and military retirement for certain categories of disabled retirees. The survivor indemnity allowance would begin Oct. 1, 2008. The Senate bill proposes no such allowance.
Reserve GI bill—The House bill says it is laying the groundwork to improve Reserve Montgomery GI Bill benefits in future years by voting to transfer oversight for the program from the Department of Defense to the Department of Veterans Affairs. Under DOD, Reserve GI Bill rates have been frozen for years. Proponents say they need to be raised to provide a more robust benefits package to all reservists. If the program is turned over to VA, benefits would be raised annually along with active duty MGIB rates. Defense officials oppose the move, saying Reserve MGIB is an important recruiting and retention tool they should manage. Rep. Vic Snyder (D-Ark.), chairman of the House military personnel subcommittee, said once VA has oversight of Reserve GI Bill, the House will move to raise benefits closer to those provided to active duty members. Snyder also wants to see reserve benefits made portable so reservists can use them after they leave drill status. The Senate bill is silent on the issue.
Reserve Retirement—The Senate committee’s bill would lower from age 60 the start date for reserve retirement by three months for every 90 days of active duty mobilization. Because of funding challenges, this change would only take effect for mobilizations after the 2008 authorization bill is signed into law. Senators did not find the funds to make this change retroactive to call-ups that have occurred since the 9/11 attacks. The House bill is silent on this issue.
Survivor benefits—The Senate committee would allow guardians and caretakers of dependent children to receive SBP benefits. This would close a coverage gap brought to light with casualties in Iraq and Afghanistan that left some grandparents who care for surviving children ineligible for SBP benefits to help raise them.
Retail pharmacy discounts—Both the House bill and Senate committee bill would pressure the pharmaceutical industry to provide federal price discounts to medicines bought for dispensing through Tricare retail pharmacies. The discounts already are provided on medicines dispensed at base pharmacies and through the military’s mail order program. The House language would allow the department to exclude drugs from the Tricare retail program if not made available at deep discount. The Senate committee thought that approach could hurt patients. It merely would order the pharmaceutical industry to apply federal discounts to all Tricare outlets. The change would take effect Oct. 1.
Accumulated leave—The number of unused leave days that any service member can carry over from one fiscal year to the next would be raised to 90 under the Senate committee’s bill. The current ceiling for unused leave days is 60. Senators say the pace of operations in recent years has prevented many service members from using their leave. The problem becomes a greater sacrifice if they permanently lose unused leave because of the 60-day rule. The House bill is silent on this issue.
Higher Tricare Fees Backed
The Congressionally created Task Force on the Future of Military Health Care on May 31 delivered its interim report to the Congress, calling for military members to pay higher fees. (See “Action in Congress: Raising Tricare Fees,” March, p. 28.)
The report landed as Congress moved to block for another year higher Tricare fees proposed by the Bush Administration.
The 14-member task force said Tricare fees, deductibles, and co-payments should be raised for under-65 retirees and their families.
It also recommended raising beneficiary co-payments on prescriptions filled in the Tricare retail pharmacy network; indexing Tricare fees and deductibles so beneficiary costs rise automatically each year with health care costs; and establishing a “tiered” Tricare fee structure so that retirees with bigger annuities pay more than retirees with smaller annuities.
The task force is co-chaired by Air Force Vice Chief of Staff Gen. John D.W. Corley and economist Gail R. Wilensky. The interim report doesn’t include specific new fee levels for Tricare. Those will be presented in a final report to Congress and defense leaders in December.
Because Tricare fees haven’t been raised since the program began, defense officials recommended sharp fee increases in a package of proposals first sent to Congress in 2006. That “Sustain the Benefit” package was criticized by lawmakers as trying to raise fees too far and too fast. The task force agreed in part, recommending that changes be phased in over three to five years.
Also, the task force said the higher Tricare fees and deductibles, when fully phased in, should be no more burdensome for retirees and their families than were Tricare fees when set some 11 years ago.
The report says that to soften the impact of fee increases, Congress could consider a one-time increase in military retirement pay.
Veterans’ Gains
The House in May approved a package of bills to strengthen veterans’ health care and other benefits.
The Returning Service Member VA Health Care Insurance Act (HR 612) would extend the period of eligibility for free health care for combat service in the Persian Gulf or future hostilities from two years to five after a veteran’s discharge. This change should help veterans who may have health problems, such as post-traumatic stress disorder, whose symptoms can surface long after they leave service. The bill would apply only to veterans who served in combat during or after the 1991 Gulf War.
The Traumatic Brain Injury Health Enhancement and Long-Term Support Act of 2007 (HR 2199) directs the VA to screen veteran patients for brain injury; develop and implement a long-term care program, through rehabilitation, for traumatic brain injury (TBI) patients; and establish a TBI transition office at each VA polytrauma network site to coordinate health care to those who suffer moderate to severe TBI and are in need of health services not immediately offered by VA. The bill also would establish a TBI health registry to track and notify veterans of new brain injury treatment.
The Early Access to Vocational Rehabilitation and Employment Benefits Act (HR 2239) would expand eligibility for these programs to injured service members before their discharge. Current law doesn’t allow VA to provide VR&E benefits until after discharge, which can delay convalescence and slow their entrance into the job market.
The Veterans Outreach Improvement Act of 2007 (HR 67) would improve VA outreach activities by making grants to state veterans’ agencies larger and more predictable.
HR 1470 would amend the Department of Veterans Affairs Health Care Programs Enhancement Act of 2001 to require VA to provide more chiropractic care and services. No fewer than 75 Veterans Affairs medical centers would have chiropractic care by calendar year 2010.