| STATEMENT OF CHARLES R. JACKSON PRESIDENT AS ENDORSED BY THE NATIONAL MILITARY/VETERANS ALLIANCE BEFORE THE
JOINT SESSION OF THE FEBRUARY 26, 1998 Good morning Mr. Chairman, and distinguished members of the House and Senate Committees on Veterans Affairs. Mr. Chairman, the Non Commissioned Officers Association of the USA (NCOA) welcomes this opportunity to present to the Joint Committee the Association’s concerns and legislative goals for veterans for 1998. The Association is deeply grateful to again be invited to discuss some of the issues that are foremost in importance to veterans, their dependents and survivors. It is the Association’s sincere hope that our thoughts on these important issues will be helpful in the deliberations that both Committees undertake in the upcoming months. I am Charles R. Jackson, retired Force Master Chief Petty Officer, United States Navy, and President of the Non Commissioned Officers Association. Accompanying me today are several members of my national staff, including: Chief Master Sergeant M. Wayne Smith, USAF (Retired), Executive Vice-President; Mr. Richard W. Johnson, a veteran of the U. S. Marine Corps, Executive Director of Government Affairs; Command Master Chief Larry Rhea, USN (Retired), Deputy Director of Legislative Affairs; and, Chief Master Sergeant Richard Schneider, USAF (Retired), Director of State/Veterans Affairs.
THE NON COMMISSIONED OFFICERS ASSOCIATION I am proud to report to the Joint Committee that NCOA is a Total Force organization, unified in commitment to all military members, retirees, their dependents and survivors. Many of the Association’s 160,000 members are on active military service in the United States, at sea and on foreign shores. Some of our members are serving their Nation as members of the National Guard and Reserve Components. Other of our members are military retirees and veterans who have given many years of selfless, dedicated service to the Nation, during peace and war. NCOA is actively involved in military and veteran activities through more than 200 chapters within the United States and abroad. The Association’s chapters form the fraternal foundation of NCOA by contributing time and effort to military and community service, civic involvement, support to military members and veterans, and via other activities such as Special Olympics and the Muscular Dystrophy Association. An International Auxiliary, whose independent chapters enrich and enhance the goals of NCOA, further supports the Association. Collectively, Association members, chapters, the Auxiliary, and NCOA staff are dedicated to:
Throughout the Association’s history, these four principles have been the foundation that has united our members and led to the achievement of many worthwhile and lasting contributions. It is particularly gratifying for me to report to the Joint Committee on a few of NCOA’s recent, notable accomplishments. During the last two years, NCOA chapters raised and returned into their respective communities more than $1.5 million. In that same period, chapter members volunteered in excess of 300,000 man-hours to military and community events that translates into nearly $1.5 million of volunteer community service. Through fund-raising programs and activities, NCOA chapters donate over $40,000 each year in support of the Association’s Scholarship, Medical Trust and Disaster Relief Funds. Each year, NCOA awards more than $75,000 in academic scholarships and vocational training grants to the spouses and children of Association members. The Association supports 140 students on an on-going basis and awards 35 new student scholarships annually. Each year, the International Auxiliary awards 48 Bettsy Ross Educational Grants to its members wishing to expand and enhance their job skills. Medical Trust Fund loans and grants to enlisted families in 1996 and 1997 exceeded $105,000, helping 103 families defray medically-related expenses not covered by medical benefits or other insurance. More than 245,000 greeting cards were provided this past year and more than 1.3 million the past seven years, to hospitalized veterans through the Association’s Operation Appreciation Program. During the past five years, NCOA has contributed over $1.63 million through our National Defense Foundation to the direct benefit of veterans, their families and survivors. NCOA continues to boast one of the most comprehensive and acclaimed Veterans Employment Assistance Programs currently being offered. Each year more than 60,000 people and more than 150 major corporations participate in NCOA sponsored Job Fairs. The Association’s Employment Assistance Program also includes free Career Transition Seminars and Job Seekers Workshops held through the United States and overseas. NCOA’s computerized People Bank/Resume’ Registry, an employer referral service, is available free of cost to all veterans and service members completing their military service. Mr. Chairman, for the past five years, I have been intensely proud to lead an organization comprised of noncommissioned and petty officers who have accumulated such an admirable record. The Association’s entire membership takes immense pride in the Congressional Charter that was granted ten years ago. Our members are equally proud of the services and assistance the Association provides as a National Veterans Service Organization, accredited by the Department of Veterans Affairs. Our day-to-day objective is fulfillment of the expressed and implied responsibilities inherent in each. ENDORSEMENT BY NATIONAL MILITARY AND VETERANS ALLIANCE NCOA is pleased to inform the Joint Committee that our testimony has been endorsed by the National Military and Veterans Alliance (NMVA). The Alliance is comprised of nationally prominent military and veterans organizations that collectively represent over 3 million members of the seven uniformed services – officer, enlisted, active-duty, National Guard and Reserve, retirees, veterans, and their families and survivors. NMVA organizations endorsing this testimony are the: Air Force Sergeants Association; American Military Retirees Association, American Retirees Association; Korean War Veterans Association; Military Order of the Purple Heart; Military Order of the World Wars; National Association for Uniformed Services; Naval Enlisted Reserve Association; Naval Reserve Association; The Retired Enlisted Association; Society of Medical Consultants to the Armed Forces; and, Tragedy Assistance Program for Survivors.
1998 VETERAN’S LEGISLATIVE GOALS VETERANS HEALTH ADMINISTRATION Mr. Chairman and Distinguished Members of the Joint Committee, NCOA believes that the Veterans Health Administration is moving in the right direction – with one exception. Although eligibility reform is a work in progress, this Association believes the effort, as mandated by the enabling legislation, is rightfully focusing attention on the delivery of medical care to the veteran with service-connected disabilities. The emphasis on outpatient versus inpatient care and on preventive care is welcomed. The Veterans Equitable Resource Allocation system holds promise for greater fairness in the distribution of limited resources. Medicare subvention, although still to be enacted, is a common sense initiative in NCOA’s view. The one exception, to the optimism expressed in the preceding paragraph, is the increasing reliance VHA is placing on outside funding, with those estimates then being used to reduce health care appropriations. Certainly, we should be optimistic, but NCOA believes optimism should not cloud reality and common sense. Far too much reliance is being placed on outside funding for veteran’s health care. VHA has never met, or come close to meeting, their estimates for third party recoveries. Already this year, third party collections are falling well short of expectations. Rather than structure a veterans health care budget with consideration given to past performance on third party recoveries, the Administration has, in NCOA’s view, grossly overstated their ability in this area. The accelerated trend in third-party recoveries in the FY99 VA budget – continuing the path started last year – is wrong. NCOA has stated it before but it needs repeated again today, Mr. Chairman. This Association believes VA should be allowed to collect and retain third-party reimbursements, with that money then being used to improve delivery of health care to veterans. Collecting reimbursements and then offsetting appropriations, in an equal or near equal amount, is a zero or negative-sum proposition. It is a shell game that will never allow VHA to make up the ground lost in earlier budgetary cycles. NCOA does not support the unrealistic reliance that is being placed on third party recoveries and urges the Joint Committee to reverse the path the Administration has charted for veteran’s health care in the future. The Association is very pleased that the Administration is supporting Medicare subvention for the Veteran’s Health Administration. Also, NCOA salutes the Distinguished Chairman of the House Veterans Affairs Committee for his untiring work with the Chairman on the House Ways and Means Committee on this issue. Medicare subvention is a common-sense initiative in NCOA’s view and the Association is hopeful that 1998 will be the year that we finally see this project enacted. NCOA looks forward to reviewing, with the aim of fully supporting, legislation that would allow VA authority to be reimbursed for the cost of care provided to Medicare-eligible veterans. The Association urges the Joint Committee to make Medicare-subvention an issue of high priority, this session. In NCOA’s view, this is the next logical step to take following enactment of eligibility reform measures.
MILITARY RETIRED VETERANS AND VA HEALTH CARE As indicated, NCOA supports VA Medicare subvention and the Association is pleased that the outline of Chairman Stump’s plan would give priority for enrollment to Medicare-eligible military retirees at one of the sites selected for the subvention demonstration project. Since the military retired veteran is the only federal retiree that loses virtually all of their health care options at age 65, NCOA is gratified that these beneficiaries are included in the project. NCOA continues to believe, however, that military retired veterans deserve a higher priority within the VA health care system. Virtually every other user of VA health care is given access to the system and provided care without direct out of pocket expense. Even so called high-income veterans, who have private insurance or employers provided coverage, routinely have their co-payments waived by VA. Somehow, collecting deductibles and co-payments from other non-service connected veterans is unthinkable to VA. Yet, for the military retired veteran, it is both fashionable and encouraged. VA routinely waives co-payments for treatment, except for the military retired veteran. Even with the passage of eligibility reform measures, the overwhelming bulk of medical care provided by the Department of Veterans Affairs will continue to be provided to non-service connected veterans, for non-service connected conditions, and without cost to the individual veteran. It remains deeply troubling to this Association that VA views military retirees with such contempt. VA easily justifies imposing out-of-pocket costs on a military retired veteran but considers it outrageous to even suggest a similar requirement for other veterans. The current budget of the Department of Veterans Affairs is promising more health care for more veterans. It seems to NCOA that VA wants their health care system to be akin to the promise made to those veterans who made military service a career. In many respects they are succeeding. Today, a veteran, who served a minimal period of service and has only a 10% service connected disability, has a greater health care benefit in the VA than the individual who served faithfully for 20, 25, 30 or more years. And, the veteran described in the preceding sentence will have virtually all their health care needs provided by VA, without cost. For the military retired veteran, if fortunate enough to gain access to VA, their health care is conditioned with their financial ability to meet deductibles and co-payments. Mr. Chairman, NCOA considers it wonderful that VA wants to reach out to more and more veterans as a health care provider of choice. This Association respectfully suggests that it is long past time for VA to cease looking upon the military retired veteran as the cash source for some of their expansion. Under current arrangements between DOD and DVA, veterans are receiving completely cost-free care in DOD facilities under sharing agreements between the two agencies. The reciprocity in VA for the military retired veteran is not only absent, it seems to be scorned. NCOA wants to be completely clear on this issue, Mr. Chairman. As the Association has stated before, no co-payments should ever be contemplated for treatment of service-connected injuries and illnesses. That clearly, in our view, is a federal obligation that must be met with adequate appropriations. Similarly, NCOA believes it is fundamentally wrong, as a matter of principle and equity, to impose co-payments and deductibles on military retiree veterans for treatment received in a Federal VA facility. It there was a health care commitment made to veterans, it surely was made to those who have service-connected conditions and to those who predicated military career decisions on a health care promise. Mr. Chairman and Distinguished Members of the Joint Committee, military retirees are veterans, too. If the vast majority of health care provided by the VA is to veterans with no service-connected conditions whatsoever, then this Association believes that equity and fairness should accord military retired veterans a higher priority in the system, without cost. Now is the time for the Joint Committee to take action to grant these veterans equal, cost free access to a veterans health care system that is, after all, theirs too.
COMPENSATION BENEFITS FOR TOBACCO RELATED CONDITIONS Mr. Chairman, NCOA is deeply concerned with the position the Administration has taken with regard to compensating disabled veterans whose illnesses may result from the use of tobacco. The policy being sought would deny all benefits for compensation eligibility to veterans whose conditions, in whole or in part, are tobacco-related. NCOA is adamantly opposed to the Administration’s proposal and will strenuously oppose any proposal in this regard. The position the Administration has taken on this issue with regard to veterans is contradictory and illogical. On the one hand, the Administration advocates that the Food and Drug Administration (FDA) be given broad authority to regulate tobacco products as an addictive drug. Yet, their proposal to deny veterans benefits assumes that veterans were somehow immune to the addictive nature of nicotine. Mr. Chairman, the Administration cannot have it both ways. The very premise, upon which the much publicized "tobacco" settlement is based, is that the public was an innocent victim of the evil tobacco industry that conspired to increase nicotine in their products and withhold scientific evidence of its addictive nature. Yet, according to the policy advocated by the Administration, veterans who began smoking in the military were somehow supposed to have greater knowledge of the danger than did the general public and apparently more willpower to resist the addiction. Here again, the Administration cannot have it both ways. If the tobacco industry engaged in a conspiracy, then the federal government aided and abetted the tobacco industry’s grand scheme. No other sector of American society was force-fed tobacco products in the same manner as military veterans. The Department of Defense (DOD) distributed these products to service members free of charge at basic training, with K- and C-rations in the field, and at substantial discount in military exchange stores. The military did much more than tolerate smoking among its ranks – it irrefutably encouraged the activity and Congress, through appropriations, subsidized the activity. If the evil tobacco industry conspired against the American people, then the Federal Government willingly participated in the conspiracy against military members and veterans. For many years, up to this very moment in time, the Federal Government allied itself with Joe Camel through subsidies on tobacco products. Contrary to the position the Administration has taken on this matter, NCOA believes veterans should not be denied disability benefits in cases where the federal government is clearly culpable. Nicotine addiction and related illnesses suffered by veterans are in this category. The Administration and Congress cannot have it both ways. NCOA believes that VA has very likely created a problem where none existed. The impact cited by VA and the Office of Management and Budget (OMB) is totally suspect and based on hypothetical calculations. VA projects that a half million claims will be filed in the next year and assumes most will be granted. VA argues that the very integrity of the disability compensation is at stake. NCOA flatly disagrees. If VA’s integrity was at issue, the Agency would have moved a long time ago to discontinue some of their practices. VA estimates that 25% of their health care budget goes to the treatment of veterans with tobacco-related illnesses. VA, for whatever reason though, has no objection to spending massive amounts of precious health care dollars on alcoholics, drug addicts, and veterans with AIDS. Somehow though, a veteran that smokes is now a threat to their otherwise pristine system. VA cannot have it both ways. In NCOA’s view, the evidence is more persuasive to establish service-connection for some veterans and for some tobacco-related conditions than for any or all of the conditions mentioned in the preceding paragraph. The federal government did not include drug paraphernalia in K- or C-rations or discount, through subsidies, their availability at military exchanges. The one activity that remains the greatest conduit for transmission of the AIDS virus, that of male homosexual activity, was not exactly encouraged or subsidized by the military and Congress. To NCOA’s knowledge, the military never did light a "drinking lamp." If smoking was an act of personal choice with subsequent consequences, why has VA been so silent on these other areas? VA cannot have it both ways. If VA wants the integrity in their benefits system preserved, then let them move to clean house altogether. Otherwise, let them quit the politically correct, smoke and mirrors charade that they are currently engaged in. In the strongest possible terms, NCOA urges the Joint Committee not to act on the administration’s proposal. Certainly, no action should be taken without the benefit of comprehensive hearings.
EDUCATION BENEFIT NCOA was pleasantly surprised when the VA Fiscal Year 1999 budget contained a 20% increase in the Montgomery GI Bill education benefit. That elation turned to disappointment, however, when the Association learned of the conditions attached. NCOA’s disappointment, Mr. Chairman, then turned to anger and frustration. In last year’s budget debate and in the Balanced Budget Act, the veteran education benefit was completely ignored, even though more than $100 billion in combined increases and tax incentives for non-veteran education was approved. Additional new non-veteran education spending is again touted in FY99 by the Administration, but the veteran benefit is conditioned. The 20% increase to the MGIB benefit has a huge "IF" attached to it. "IF" the tobacco suit is settled and "IF" legislation is passed to preclude compensation payments for tobacco related illnesses, the MGIB gets an increase. "IF" either one or both of these do not occur, then pay-go budget rules apply. Plainly stated Mr. Chairman, relying on either one of these two conditions to fund an increase for the veteran benefit is sheer hypocrisy. It is a sham and an easy way to say an increase is being funded while the real increase with appropriated dollars is going elsewhere. If Congress can find $100 billion, as was done last year, and another $26 billion as the President has proposed this year, for non-veteran education, then NCOA believes Congress can fund, and has the moral obligation to do so, a substantial increase in the MGIB. Since its enactment in 1985, the MGIB benefit has increased about 35%. Since 1980, tuition alone has increased more than 230%. Today, the veteran benefit covers less than 40% of the cost of attending a public, four-year collect. Even though 96% of new enlistees participate and pay the required $1200 enrollment fee, less than 40% actually go to college. These are irrefutable facts Mr. Chairman. The MGIB has almost entirely lost its value as a post-service transition benefit and, even more alarmingly in NCOA’s view, it has lost its value as an inducement to military service. Despite claims by the senior civilian and uniformed military leadership to the contrary, military recruiters increasingly tell NCOA that the education benefit no longer persuades people to join the armed forces. It seems to NCOA that the appetite to satiate non-veteran education programs can never be satisfied. It seems like everybody is for education as long as it is not the veteran benefit. It no longer is a matter of following budget rules, pay-go, or anything else. What once was the flagship of education programs in this Nation now has its future tied to the tobacco industry. Incurring an eight-year military service obligation, paying a $1200 enrollment fee, and going in harms way accounts for nothing anymore. It’s sad Mr. Chairman, very sad indeed. As NCOA testified last year, if anything meaningful is going to be done on the veteran education benefit, that initiative will have to originate with the Joint Committee. In addition to the inadequate benefit level, there are still more than 100,000 men and women on active duty who were denied the opportunity to even enroll in the MGIB program. This too needs fixed Mr. Chairman.
ARLINGTON NATIONAL CEMETERY More than five years in testimony before the House Veterans Affairs Committee, NCOA asked Congress to codify the requirements for burial at Arlington National Cemetery (ANC). Even then, this Association was concerned that the sanctity of ANC was being sacrificed. NCOA’s concern at the time dealt with legislation to authorize the placement of a memorial cairn within Arlington to honor the victims of the Lockerbee, Scotland, plane tragedy. It was a difficult issue for NCOA to oppose without subjecting the Association to criticism that we were uncaring and unsympathetic to the families and survivors of individuals who died in that horrible incident. Despite the criticism, NCOA objected to the legislation based on a long-standing principle. We believed then, as we believe now, that it is wrong to inter or memorialize non-veterans at ANC. We believed then, as we believe now, that it is wrong to memorialize non-citizens, who are not veterans of the U.S. Armed Forces, at ANC; in our view, there is no circumstance compelling enough to warrant that action. In recent months, NCOA has received numerous media inquiries regarding the Association’s position on the latest controversy. In each case, this Association chose to remain silent until Chairman Terry Everett and the House Subcommittee on Oversight and Investigations completed its work. The investigation has confirmed for this Association what we have suspected for several years – there are "serious" problems with the burial criteria and the waiver process for ANC. The investigation also revealed that "space reservations" were approved for two non-veterans, despite the Administration’s claims to the contrary. NCOA salutes Chairman Everett and the Subcommittee for their thorough review of ANC. The Association is also pleased that HVAC Chairman Stump took the initiative to introduce legislation, H.R. 3211, to codify the eligibility requirements for burial at ANC. In this Association’s view, it is unfortunate that it took a firestorm of controversy to highlight the problem. That controversy has at least served the useful purpose of identifying the need for strict statutes governing ANC burial criteria. NCOA fervently hopes that we will not miss this opportunity to enact meaningful, concise legislation that removes any and all perception of special treatment or elitism. Now is the time, 1998 is the year and this is the Congress to do so. NCOA asks that the Joint Committee move expeditiously on this issue.
NATIONAL CEMETERY SYSTEM In additional to Arlington National Cemetery, there is also the larger issue of the entire National Cemetery System. Even with the activation of the four national veteran’s cemeteries currently planned, the system is not adequate to meet the burial needs of the WWII population. When one looks at VA’s intentions beyond opening the four cemeteries currently in the pipeline, there are no plans for expansion of the NCS. VA continues to ignore the system’s substantial and growing list of requirements for maintenance and equipment replacement. This, coupled with their proposal on the State Veterans Cemetery Grants Program, makes it clear to this Association that VA wants out of the national cemetery business. In the past, NCOA has supported the state veterans cemetery grant program because appropriations have not been sufficient to expand the capacity of the national system to meet the needs of veterans. Never once though did NCOA look upon the state program as a replacement for the national system. When this area of the budget was briefed, the VA briefer stated that they adopted a "wait and see" position. It is this thinking Mr. Chairman that causes NCOA to oppose VA’s proposal for the state program. From start to actual activation, a new national cemetery can take ten to twelve years. VA’s "wait and see" thinking is not good enough, Mr. Chairman. A properly funded plan needs to be in place that will accommodate future requirements; a plan that includes new cemeteries in the National Cemetery System complimented by the state veterans cemetery program. NCOA urges the Joint Committee to look closely at the long-term implications of the Administration’s plans for the NCS and the state program. NCOA asks that you examine this closely both in terms of cost and in term of the moral principle this Nation should have toward her veterans.
MEMORIAL AFFAIRS On November 7, 1997, Senator Gordon Smith introduced S.1406, a bill that would change public law regarding the presentation of burial flags to the next of kin for certain members of the National Guard and Reserve. Senator Smith’s legislation would fully recognize these members of the Total Force and the service they provide in maintaining our national security. S.1406 would authorize the presentation of a burial flag to the survivors of all reservists and guardsmen, whose service was performed under honorable conditions, and would cost less than $25,000. As the Distinguished Members of the Joint Committee know, current law restricts presentation of a burial flag to the survivors of Reserve component members to those occasions where the member’s death occurred during periods of military duty or the member must be retired or retirement eligible. In NCOA’s view, current law does not reflect the reality of our military forces today. More than half of our military structure and its members now reside in the Reserve components. Many mission capabilities are vested solely in the Reserve Forces. Guard and Reserve units and individual members increasingly share the day-to-day burden of our national defense. Their service is routinely performed in a drill or short active tour status, along side an active component service member. Their status, however, does not make their contribution to our national defense any less important or less critical. Simply put, many defense and national security requirements could not be without the direct involvement of Reserve Forces, either in a drill status or on short active duty tours. In view of this reality, NCOA has been seeking a change in the statute that authorizes presentation of burial flags to deceased veterans. This Association believes that all National Guardsmen and Reservists who have honorably satisfied the terms of their enlistment or period of obligated service, and not otherwise eligible under current law, should be eligible for a burial flag. S.1406 would authorize such a change and NCOA fully supports the measure. S.1406 has been referred to the Senate Veterans Affairs Committee. NCOA understands that Representatives Steve Buyer and Paul McHale are preparing a companion House bill. NCOA urges the Joint Committee to support this initiative. By so doing, the Joint Committee will ensure that a grateful nation fully recognizes and honors the value of Reserve service. It is the right thing to do.
VETERANS STATUS It is appropriate that NCOA follow its comments on Arlington National Cemetery, the National Cemetery System and memorial affairs with an issue that is closely related. The issue is that of conferring veteran’s status and the issuance of a DD214 to non-veterans. As the Joint Committee knows, Public Law 95-202 vested in the Secretary of Defense the administrative authority to make determinations to grant veterans status to civilian groups for service during periods of conflict. For quite some time now, NCOA has been voicing its concern over the vagaries in the law and at the continual attempts to politicize this issue in Congress. By the same standard that makes it wrong to bury non-veterans in Arlington National Cemetery, it is simply wrong to convey veteran status to non-veterans. NCOA holds steadfast in its belief that those who made the choice of service in the Armed Forces should not have their service, and ultimately their benefits, diminished by groups and individuals that opted for something other than military service. NCOA urges the Congress to repeal PL 95-202 and seek other ways to recognize civilian service during periods of conflict. The term veteran and the issuance of a DD 214 for service in the Armed Forces should be reserved solely for those who actually serve in the Armed Forces.
VETERANS PREFERENCE For nearly three years now, NCOA has been working to strengthen veterans’ preference law and the Association is pleased that the Senate Veterans Affairs Committee intends to hold hearings on S.1021, The Veterans Employment Opportunities Act. Introduced by Senators Chuck Hagel and Max Cleland, S.1021 is identical to the measure, H.R.240, passed by the House of Representatives in April of last year. The Association is also pleased to note that S.1021 enjoys bipartisan support and NCOA is hopeful that 1998 will be the year that this much-needed legislation is passed and signed into law. In pushing so hard for this legislation, NCOA is not advocating a federal job for every veteran nor is the association advocating anything for unqualified veterans. The Association has advocated, and the bill to be considered by the Senate Veterans Affairs would: (1) remove the artificial barriers that prevent veterans from even applying for a job; (2) put a stop to the commonly employed practice of designer RIF’s; and, (3) allow veterans who have had their veterans preference rights violated the right to redress and remedy. The Veterans Employment Opportunities Act is a solid bill. NCOA is firmly convinced that this legislation provides the ingredients that have been missing in veteran’s preference law for fifty years – namely, an adequate and fair enforcement mechanism. In the strongest possible terms, NCOA urges this Joint Committee to use its substantial influence to persuade congressional leadership, Democrat and Republican, to act on the measure in an expedient manner.
HOME LOAN PROGRAM NCOA continues to believe that the VA Home Loan Guaranty Program is a valuable benefit. Clearly though, the value of the program has steadily eroded over the years with additional fees, closing costs, and down payment requirements. Rather than efforts to restore the program as a tangible benefit to all veterans, the Administration is proposing to add yet another fee. The Administration in their FY99 VA Budget proposed to charge a $25 fee for each VA home that is guaranteed. That $25 amount, Mr. Chairman, alone is not significant but NCOA is adamantly opposed. That fee represents another chipping away at a benefit that this Association will not support. Another fee does nothing, absolutely nothing, to add value to the program for veterans and NCOA urges the Committee to reject the proposal. Instead of adding more fees, NCOA believes we should be exploring ways to restructure the benefit and the program. There is no reason that the VA home loan program should be a program that attracts only the marginally qualified veteran buyer. Fees, closing costs, and down payment requirements should be restructured to attract all veteran buyers, thereby reducing the overall risk to the program. The best way to attract new veterans is to eliminate fees, not impose additional ones as the Administration proposes. In addition to restructuring the benefit, NCOA believes the program itself needs restructured. If VA is going to remain in the home loan business, NCOA believes they should be able to do so in a competitive manner. This Association believes VA should have authority for direct loans and have the authority to maintain and operate a loan portfolio of income producing loans. In short, NCOA believes that VA should have the authority and ability to manage the home loan program in the same manner as the commercial mortgage industry. Mr. Chairman, it has been several years since the Veterans Committees of the House and Senate have thoroughly examined the home loan benefit. Hopefully, before the Veterans Committees agree to another fee, you will take the opportunity to thoroughly look at both the benefit and program during Committee hearings. In addition to the issue of increased fees as proposed by the Administration, NCOA asks that two other issues be addressed: (1) Selected Reserve Home Loan Program; and, (2) State Veterans Mortgage Programs NCOA believes the home loan program for members of the Selected Reserve has been a success. As the Joint Committee knows, the Reserve home loan program was authorized as a temporary initiative and will expire in 1999. The Association believes the program should be permanently extended and NCOA asks that the Joint Committee undertake to do so this session. Further, the Association sees no logical basis for the disparity in funding fees between the regular program and the Reserve home loan program - funding fees for Reservists are three-quarters of a percentage point higher. In NCOA's view, funding fees should be identical for all home loan participants. The Association also believes that eligibility for the Selected Reserve Home Loan program needs to be clarified and revised. Currently, a Guard or Reserve member can only qualify for the benefit by drilling six years. It seems to NCOA that qualification for the benefit should be established if the member honorably satisfies the terms of enlistment or obligated service. In other words, an enlistment for six or eight years, that requires three or four years of participation in the Selected Reserve, followed by either Individual Ready Reserve or Standby Reserve service, should satisfy the qualification criteria. Today, there are few, if any Guard or Reserve enlistment programs that require a full six years of drilling participation in the Selected Reserve. In NCOA's view, the governing criteria to establish eligibility should be honorably satisfying the terms of the service contract. The Association urges the Committee to adopt this change to the Reserve home loan program. The 1984 Tax Act imposed several restrictions on the issuance by the State of tax-exempt bonds to fund home loan mortgages made to veterans. A major restriction was the narrowing of the class of veterans eligible to receive mortgage loans under a state program. Specifically, the Act provided that a veteran must have served on active duty before 1977 to be eligible for a loan. The rule, requiring pre-1977 active duty, means that fewer and fewer veterans are eligible for loans under state veterans mortgage programs. Obviously, the great majority of the servicemen and women in the Persian Gulf War were not in the armed forces before 1977. In NCOA's view, the pre-1977 active duty rule is unfair in forcing the states to exclude these veterans from mortgage programs. NCOA believes that section 143(l)(4) of the Internal Revenue Code should be deleted and thereby establish eligibility under state veterans mortgage programs for veterans who military service started after 1976. The Association asks that the Joint Committee undertake the initiative to correct this inequity.
CONCURRENT RECEIPT NCOA implores Congress to take action this year to overturn the outright discrimination imposed on military retirees who are entitled to and draw VA disability compensation. The Association’s position and arguments on the Concurrent Receipt issue have been related to both the House and Senate Veterans Affairs Committees on numerous occasions. NCOA restates today our support for concurrent receipt of disability compensation and military retired pay. It is long past time to end this inequity and discrimination against disabled military retired veterans, an inequity and discrimination imposed upon no other group of federal or civilian retirees. Congressman Mike Bilirakis continues to be the strongest advocate in Congress on this issue. Three bills – H.R.’s 44, 65 and 303 – await House consideration. The Senate has before it S.657 by Senator Tom Daschle, a bill identical to H.R. 65. Both Speaker of the House Gingrich and House Budget Committee Chairman John Kasich have promised military and veterans organizations that action would be undertaken this Session.
UNIFORMED SERVICES FORMER SPOUSES PROTECTION ACT During the fifteen years of its existence, it has become clear that the Uniformed Services Former Spouses Protection Act (USFSPA) has produced an outcome far different from what was intended when this law was enacted. Originally intended to protect deserving ex-spouses of retired military members, the USFSPA has created another class of victims; namely, military members themselves and their second families. Moreover, not only has the USFSPA provided a divorce incentive, there is mounting evidence that it may have created a "marriage industry" wherein unprincipled individuals are marrying one or more military members with expectations of one or more USFSPA awards following divorce. The law does not preclude multiple awards. Congress has been very reluctant to amend the USFSPA to correct its inequities. Only once, in 1990, have hearings been held on legislative reform of the Act. The results were the correction of an omission in the original law which had resulted in the wholesale reopening of divorces prior to its enactment and a redefinition of the amount of retirement pay which could be divided as "before taxes." It is interesting to note that, despite its obvious reluctance to reform the USFSPA, Congress has amended the laws pertaining to military divorce 23 times since the USFSPA was enacted in 1982. Eighteen of these amendments have benefited ex-spouses; one has benefited military members and four have equally impacted both sides. All but two of these amendments were added as riders to viable legislation – without public hearings or debate. There now exists over 85,000 military retirees (both male and female) whose lives have been impacted by the USFSPA – many of them disastrously. The list is now growing at the rate of about 600 per month. NCOA and other members of the national community of veteran’s organizations – with memberships aggregating to upwards of twelve million military veterans and their families – have long supported the reform of the USFSPA in order to restore fairness and equity to the military divorce process. NCOA is dismayed that Congress has set the stage to delay, until not earlier than 2001, any action on this issue. Section 643 of the FY98 Defense Authorization Act requires the Department of Defense to review the history of the USFSPA and report to Congress not later than September 30, 1999 – this for an effort which could be completed in six months or less. The intent is obvious. Completion in late 1999 will be too late for legislative action that year. Since 2000 is a presidential election year, the "not in an election year" excuse will prevail. Therefore, Section 643 virtually guarantees that action on USFSPA reform can be delayed until not earlier than 2001. It is hard to understand why divorced military members have to wait at least five more years for relief from a law who inequities are in plain view and which has deprived them of their constitutional right to equal justice under the law. During the First Session of the 105th Congress, House Veterans Affairs Committee Chairman Stump introduced H.R. 2537, the Uniformed Services Former Spouses Equity Act of 1997. This legislation would, if enacted:
Nothing in H.R. 2537 disenfranchises former spouses. None of its four provisions, in an way, would preclude former spouses from receiving a court-awarded share of a military member’s retired pay upon divorce; nor would it preclude the contemporaneous award of alimony, child support and a share of the other assets of the marriage. Rather the purpose of H.R. 2537 is to ensure that those who have devoted their lives to defending our Nation – many of who have gone in harms way – are treated with parity and fairness under federal statutes, and by state divorce courts, in their well-deserved retirement years. NCOA urges the Chairmen of the House Veterans Affairs Committee and the National Security Committee to direct that hearings be held on H.R. 2537 as early as practicable during the Second Session of the 105th Congress. Such hearings can develop, in a matter of hours, information that the Department of Defense will take months to uncover. The history of USFSPA is already in plain view. It is not a pleasant sight. Congress does not have to wait for five (or more) years to restore fairness and equity to the military divorce process. Nor should it!
ACCRUING VA BENEFITS IN DOD In the Department of Defense Fiscal Year 1999 budget, the Administration is proposing a plan regarding the current budgetary treatment of veterans programs. In a measure claimed "to more accurately measure the true cost of national defense and better serve veterans," the Administration wants to create an accrual accounting program for VA benefits in the DOD military personnel accounts.
Mr. Chairman, this proposal could seriously diminish the value of regular military compensation. Additionally, it would vest funding requirements in an agency that has no requirement to provide services. DOD does not have responsibility for VA programs and NCOA does not believe veterans would be accorded the priority and advocacy they deserve. This Association would support accrual accounting and funding of VA programs within the VA budget. The VA budget and this Joint Committee are the appropriate place to address this recommendation, NOT DOD.
CONCLUSION
Mr. Chairman, NCOA’s testimony today has identified many areas of veterans programs and benefits that warrant the attention of this Joint Committee. Many of the Association’s concerns can be corrected without cost, or the cost is inconsequentially small. The Association acknowledges though that some of our concerns and recommendations do have budgetary impact. That impact notwithstanding Mr. Chairman, NCOA believes that this Joint Committee has an obligation to advocate funding for veteran’s benefits and programs without linking any increases to additional fees, conditioning increases to outside sources, or repeal of tobacco payment authority. Increasingly, VA benefits and programs are tied to outside money streams and NCOA believes that trend is wrong and must be reversed. In this regard, this Association trusts that the Joint Committee will examine closely the future implications that are now underway for veterans programs and benefits. For many, many years veterans were asked to do, and did do, their "fair share" to help put the Nation’s fiscal house in order. "Pay Go" was rigidly applied to any veteran initiative. In some cases, COLA’s were frozen or enacted at one-half the legislatively mandated rate. In other programs, fees were added or increased. Federal spending continues to spiral and a new federal program of some sort is proposed on almost a daily basis. Yet in this big mix, veteran’s budgets and programs are essentially a hold-the-line proposition. One of two conditions is always applied to veterans, even when trying to preserve a benefit or correct an egregious inequity. Veterans are told to find a way to pay for it under "pay-go" or an unreliable third party is expected to bear the cost. These conditions Mr. Chairman are unacceptable to NCOA. Veterans were ignored in the 1997 Balanced Budget Act and the Administration has ignored veterans again this year in their budget, even though $200 billion in new spending is proposed. It is time to reverse the shameful course that has been charted for veterans programs and benefits. NCOA is relying on this Joint Committee to do so. Thank you. |