Mr. Speaker, as the Ranking Democrat on the House Veterans’ Affairs Committee, I rise to express my strong support for the substitute budget resolution offered by the gentleman from South Carolina, Mr. Spratt, the Ranking Democratic Member of our House Budget Committee. The Spratt budget resolution for fiscal year 2001 is a strong pro-veteran proposal. It deserves the support of every Member of the House.

The budget authored by Congressman Spratt provides more discretionary spending in fiscal year 2001 for the Department of Veterans Affairs (VA) than either the budget proposed by the President or the budget resolution reported by the Committee. With these additional funds, VA can better meet the medical care needs of our nation’s aging veterans population. Specifically for fiscal year 2001, the Spratt alternative provides $22.3 billion in appropriations for veterans’ programs, $100 million more than the Republican plan and $200 million more than the President’s request. Over five years (2001-2005), the Spratt alternative provides $1 billion more than the Republican proposal.

Significantly, the Spratt proposal also increases the basic monthly education benefit veterans will receive under the Montgomery GI Bill (MGIB). Educational benefits provided under the MGIB are mandatory spending. This increase in the basic monthly education benefit for veterans who have honorably served our nation in uniform and then pursue post-secondary education is an important first step in restoring our commitment to provide veterans a readjustment benefit for education which is worthy of their service to our nation.

Under the Spratt proposal the basic educational benefit for veterans will increase from the current $536 per month for 36 months to nearly $700 per month. This is a well-deserved and much needed 25% per cent increase in MGIB education readjustment benefit for veterans. As the gentleman from South Carolina knows, I believe the MGIB benefit should be increased more than has been proposed in the resolution which he has authored. This proposed increase, however, is a strong, positive step to achieving the goal of providing a more meaningful education benefit for our nation’s veterans than is provided today.

MGIB enhancements are long overdue. I strongly agree with the report of the Congressional Commission on Servicemembers and Veterans Transition Assistance, which concluded "…an opportunity to obtain the best education for which they qualify is the most valuable benefit our Nation can offer the men and women whose military service preserves our liberty." I applaud the Commission’s bold, new plan for the MGIB. This proposal, however, must be further strengthened and enhanced if the MGIB is to fulfill its purposes as a meaningful readjustment benefit and as an effective recruitment incentive for our Armed Forces. Since the implementation of the Montgomery GI Bill on July 1, 1985, there have been significant economic and societal changes in America that mandate revisions in the structure and benefit level of this program.

In the House, MGIB legislation has been introduced by Mr. Stump, Chairman of the House Veterans’ Affairs Committee, and together with Mr. Dingell, I introduced my own bill, H.R. 1071, the Montgomery GI Bill Improvements Act of 1999, to provide benefits for two tiers of service members, those who enlist for a minimum of 4 years (Tier I) and those who enlist for less than 4 years (Tier II). Benefits for Tier I would pay for full cost of tuition, fees, books and supplies, plus provide a subsistence allowance of $800 per month of full-time college studies for up to 36 months. Tier II would increase the basic benefit under the MGIB to $900 per month.

According to an analysis performed by the Congressional Research Service last year, the mean earnings of workers 18 years or older in 1998 were $23,320 for high school graduates, $27,618 for those with some college or an Associate’s degree and $43,255 for those with a Bachelor’s degree. The analysis then calculated the average federal income tax for these workers, using 1999 tax rates for single taxpayers, and using the standard deduction of $4,300 and the personal exemption of $2,750. These figures are listed in the table below.

This information confirms our common sense understanding of the importance of education. Education is of benefit to individual servicemembers and veterans and to American society in general. Servicemembers and veterans who have earned through their honorable military service a meaningful readjustment benefit which provides the opportunity to obtain a higher education will be more productive, earn more and based on their increased earnings pay higher taxes.

The economic impacts are compelling. Servicemembers and veterans who attain a Bachelor’s degree pay back 36% more in federal tax revenues each year. If the policy rationale for an MGIB benefit increase is not a strong enough argument on its own, it is obvious that an increase would, in essence, be self-funded as well. These calculations, unfortunately, are not given commensurate weight when Congress evaluates cost under pay-as-you requirements.

As illustrated by the Congressional Research Service, the amount of education that individuals receive has an important influence on their experience in the labor market. For example, those who have completed more years of schooling typically experience less unemployment than other workers do. In addition, workers’ earnings generally increase as their level of education increases. These relationships have held up over time, and in some instances, have intensified. Workers with a bachelor’s degree are much better off today, compared to less-educated workers, than they were some two decades ago. The average male college graduate earned about 50% more than the average male high school graduate during the latter half of the 1970s. In contrast, the premium paid to males with college degrees in 1998 was 92%. The average wage advantage of female college graduates over female high school graduates grew from about 41% to 76%.

Of immediate concern is the ineffectiveness of the MGIB as a readjustment program for servicemembers making the transition from military service to a civilian society and workforce. While costs of higher education have soared, nearly doubling since 1980, GI Bill benefits have not kept pace. In fact, during the 1995-96 school year, the basic benefit paid under the MGIB offset only a paltry 36% of average total education costs. A disappointingly low usage rate of 51% for 1998 confirms the inadequacy of the current program’s benefit levels.

Young men and women who serve in our Armed Forces have the option of enrolling in the MGIB when they enter the military. This includes their agreement to a $100 per month pay reduction during the first twelve months of service, for a total contribution of $1,200. Once their initial term of service has been honorably served, a veteran is eligible to receive the basic monthly educational benefit of $536 each month he or she is enrolled in full-time college study. The benefit continues for up to 36 months. Assuming he or she is enrolled for a typical nine-month academic year, the veteran’s total benefit for that year is $4,824. With this modest amount he or she is expected to pay for tuition, fees, room and board.

The average annual cost of tuition and basic expenses at a four-year public college is $8,774 for commuter students and $10,909 for students who live on campus according to the College Board. Not surprisingly, the same annual costs for four-year private colleges are even higher: $20,500 for commuter students and $23,651 for residents. The disparity between these ever-increasing costs and a veteran’s ability to pay for them is clear. This disparity recently prompted key military and veteran organizations to join together with organizations representing colleges to form the "Partnership for Veterans’ Education." The coalition launched an energetic campaign calling for Congress to at least increase the basic benefit under the MGIB to $975 per month, enough to cover the $8,774 average annual cost of attending a four-year public college as a commuter student.

 Higher Education Annual Costs
1999-2000 School Year

Source: Trends in College Pricing, The College Board, 1999

In addition to inadequate benefit levels, the unsatisfactory usage rate is also a result of the inflexible structure of the present program. Under today’s law, benefits are generally paid only on a monthly basis and may not be used for specialized courses, such as computer training; provided by for-profit and nonprofit entities that do not meet the current definition of "educational institution." As a result, veterans’ education and training choices are limited, and they are not permitted to use their GI Bill benefits if they want to take advantage of the many excellent technology-related courses sponsored by companies like Microsoft or Novell. This is precisely the type of training that is important now and will be even more important in the future.

The current structure of the MGIB served the veterans during the second half of the 20^th century very well. However, the MGIB must now be re-examined in the context of a January, 1999 report by the Departments of Commerce, Labor, and Education, the Small Business Administration, and the National Institute for Literacy. This report, entitled "21^st Century Skills for 21^st Century Jobs," has important implications for veterans entering the civilian workforce. Emphasizing the importance to the nation of investing in education and training, the report concluded changes in the economy and workplace are requiring greater levels of skill and education than ever before. It predicted eight of the ten fastest growing jobs in the next decade will require college education or moderate to long-term training, and jobs requiring a bachelor’s degree will increase by 25%. The report also noted workers with more education enjoy greater benefits, experience less unemployment and, if dislocated, re-enter the labor force far more quickly than individuals with less education. It also reports that, on average, college graduates earn 77% more than individuals with only a high school diploma. If America’s veterans are to successfully compete in the challenging 21^st century workforce, they simply have to have the ability to obtain the education and training critical to their success. As noted by the Transition Commission, "…education will be the key to employment in the information age." Although the current GI Bill provides some degree of assistance, it is a key that opens very few doors, and it is my belief that all the doors of educational opportunity must be open to our veterans.

According to the 1997 Department of Defense report entitled "Population Representation in the Military Services," 20 % of the new enlisted recruits for that year were African American, 10% were Hispanic, 6% were other minorities, including Native Americans, Asians, and Pacific Islanders, and 18% were women. The report further notes that, although members of the military come from backgrounds somewhat lower in socioeconomic status than the U.S. average, these young men and women have higher levels of education, measured aptitudes, and reading skills than their civilian counterparts. These young people, most of whom do not enter military service with financial or socioeconomic advantages, have enormous potential, and it is in the best interests of the nation they be given every opportunity to achieve their highest potential. Access to education is the key to achieving that potential. It is also important to remember that, through the sacrifices required of them through their military service, this group of young Americans – more than any other – earns the benefits provided for them by a grateful nation.

Of equal concern to me as a member of the Armed Services Committee is the MGIB’s failure to fulfill its purpose as a recruitment incentive for the Armed Forces. Findings of the 1998 Youth Attitude Tracking Study (YATS) confirm that recruiters are faced with serious challenges, and these challenges are likely to continue. This survey of young men and women, conducted annually by the Department of Defense, provides information on the propensity, attitudes and motivations of young people toward military service. The latest YATS shows the propensity to enlist among young males has fallen from 34% in 1991 to 26% in 1998, in spite of a generally favorable view of the military. In addition to a thriving civilian economy, which inevitably results in recruiting challenges, the percentage of American youth going to college is increasing and the young people most likely to go to college express little interest in joining our Armed Forces. Interestingly, these same youth note that if they were to serve in the military, their primary reason for enlisting would be to earn educational assistance benefits.

The study concluded the propensity to enlist is substantially below pre-drawdown levels and, as a result, the services would probably not succeed in recruiting the number of young, high-ability young men and women they needed in FY 1999. High-ability youth, defined as those who have a high school diploma and who have at least average scores on tests measuring mathematical and verbal skills. The Department of Defense tells us about 80% of these recruits will complete their first three years of active duty while only 50% of recruits with a GED will complete their enlistment. GAO notes that it costs at least $35,000 to replace a recruit who leaves the service prematurely. The report states these findings underscore the need for education benefits that will attract college-bound youth who need money for school, a segment of American young people we conclude are now opting to take advantage of the many other sources of federal education assistance. The current structure and benefit level of the MGIB must be significantly amended if these high quality young men and women are to be attracted to service in our Armed Forces.

The Army missed its enlistment goals in FY 1998 and 1999. Additionally, for the first time since 1979, the Air Force missed its goal in FY 1999, and will likely miss again this year. Although the Navy and Marine Corps are currently meeting their objectives, it is getting more difficult each year. The continuing recruiting and retention challenges necessitate our taking quick and effective action. Even though the Army and Navy are recruiting more GED holders than in the early 1990s, all Services are meeting or exceeding the DoD recruit quality benchmarks of 90% high school diploma graduates and 60% scoring above average on the enlistment test. But this quality does not come inexpensively. The Services have increased their enlistment bonus and advertising budgets and added additional recruiters to meet the challenge. The cost to recruit has grown by over 50% in just the last five years.

Percent of Objective

Many factors have come together to create what may soon become a recruiting emergency. First, our thriving national economy is generating employment opportunities for our young people. Additionally, young Americans increasingly understand a college education as the key to success and prosperity. In 1980, 74% of high school graduates went to college but, by 1992, that percentage had risen to 81% and is increasing. As a result, the military must compete head-to-head with colleges for high-ability youth. As I have mentioned already, the percentage of young Americans who are interested in serving in the Armed Forces is also shrinking. Make no mistake about it – the strength of our Armed Forces begins and ends with the men and women who serve our nation. Just as education is the key to a society’s success or failure, it is also key to the quality and effectiveness of our military forces – and the MGIB increases included in this substitute budget resolution are a step in the right direction toward providing that key.

Veterans are not using the MGIB benefits they have earned through honorable military service, and high-ability, college-bound young Americans are choosing not to serve in the Armed Forces. Significant changes in the MGIB readjustment program will increase program usage and will enable the military services to recruit the smart young people they need. Accordingly, several bills have been introduced in both the House and the Senate during the 106^th Congress that would significantly improve the MGIB. The Senate has twice passed legislation that included numerous changes designed to enhance educational opportunities under the MGIB. In the House, MGIB legislation has been introduced by Mr. Stump, Chairman of the House Veterans’ Affairs Committee. Together with Mr. Dingell, I introduced H.R. 1071, the Montgomery GI Bill Improvements Act of 1999.

The brave men and women who serve in America’s Armed Forces deserve, and have indeed earned, far better than the inadequate educational assistance program now available to them. I strongly urge my fellow colleagues to support this substitute budget resolution and the policy it represents of demonstrating a continued national commitment to our veterans.

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