Congress hasn’t given up the idea of changing the status quo on concurrent receipt.
Current law bans receipt of full retired pay and disability pay. Almost 700,000 retirees are affected.

Late last year, Congress created the Combat Related Special Compensation program to help compensate for the offset in retired pay that occurs as retirees, typically with 20 or more years of service, become eligible for VA disability pay. The program began on June 1. (See “CRSC Deluge Hits Pentagon,” below.)

However, some lawmakers continue to press to end the ban entirely, despite the fact that President Bush still threatens to veto any such measure passed by Congress.

The Senate in May voted again to include a “full concurrent receipt” provision in the Fiscal 2004 Department of Defense authorization. It would cost $5 billion a year, by one estimate.

Since Senators set aside no funding, some view the action as political posturing.
Rep. Michael Bilirakis (R-Fla.), author of HR 303, the “Retired Pay Restoration Act of 2003,” hopes to persuade House conferees to support the Senate provision, which would mean adopting his bill. HR 303 has 341 co-sponsors.

CRSC Deluge Hits Pentagon

Large numbers of military retirees with disabilities now are seeking Combat Related Special Compensation payments.

The military services in June were swamped by thousands of retiree applications, but they reviewed and approved only about 100—most of them from USAF retirees—in time for payment in July.

The government estimates that 35,000 to 45,000 retirees qualify for remuneration under CRSC. Monthly payments, of $104 to $2,193 a month, will be made, retroactive to June 1.

To be eligible for CRSC, a retiree must have 20 years of service, a VA disability for which he or she received a Purple Heart, or disability ratings of 60 percent or higher due to combat or combat-related training.

Equity for Military Homeowners

Lawmakers still seem interested in moving this year to correct a tax inequity that hurts military and Foreign Service personnel who realize profits from the sale of a home.
Under federal law, individuals owe no taxes on the first $250,000 in capital gains from a home sale. For married couples filing jointly, the exempt amount is $500,000.

To qualify, however, the selling owner must actually reside in the home for at least two of five years preceding a sale. That requirement harms troops and Foreign Service Officers, many of whom spend consecutive tours of duty away from home.

The key provision of a new military “tax fairness” package would let troops and FSOs suspend running of the two- and five-year periods while they are away on official assignment.

The remedy, if passed, would retroactively apply to any home sales since May 1997, when Congress created the problem.

House and Senate members have punched the military tax measure back and forth. House Republicans in May pulled it from the $350 billion tax bill President Bush signed. However, Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, attached military provisions to a catch-all bill—HR 1308, the All-American Tax Relief Act of 2003.

More Military Tax Relief?

Active duty homeowners are not the only uniformed members who would benefit from the All-American Tax Relief Act of 2003.

Reservists and Guardsmen stand to gain from a provision allowing deductions of up to $1,500 a year for lodging and travel expenses when serving, and staying overnight, more than 100 miles from home.

These reserve expenses would become “above-the-line” deductions from gross income, which would reduce the tax bite for even those reservists who don’t itemize deductions.

The tax bill also would make the $6,000 death gratuity entirely tax free for military survivors. At present, only half is exempt from taxation.

USFSPA Reforms Sought

Military retirees are struggling to “rebalance” the Uniformed Services Former Spouses Protection Act, but with little visible progress so far.

In March, Rep. Cass Ballenger (R-N.C.) introduced the Uniformed Services Divorce Equity Act of 2003 to aid military members in disputes with ex-spouses about sharing retired pay.

Ballenger’s bill would limit the ex-spouse payments to a period of time equal to the length of the marriage itself. The bill also would base any ex-spouse payment on a retired member’s pay grade and service longevity at the time of divorce, not at retirement. The bill also would set a two-year deadline for ex-spouses to apply for division of retired pay.

The latter two provisions apply only to future divorces.

Tricare Standard Gets Attention

Congress has prodded defense health officials into taking several actions next year to help Tricare Standard users locate participating physicians and understand their benefits.

Advocates for almost two million beneficiaries who rely on the traditional fee-for-service insurance, once known as CHAMPUS, testified in March that Standard users are “neglected.”

The House 2004 defense authorization bill directs DOD to create an “outreach” plan for the Tricare Standard beneficiaries to help them understand coverage, obtain provider information, and ease other program challenges. The Senate version directs DOD to ensure “continued viability and adequacy” of Standard.

Edward P. Wyatt Jr., principal deputy assistant secretary of defense for health affairs, said DOD efforts include developing a list of physicians who accept Standard and doing more to educate beneficiaries and physicians. Defense health officials concede that in recent years they have focused on improving Tricare Prime, the military’s managed care program, and starting Tricare for Life, an insurance supplement to Medicare for service elderly.

Beneficiary groups complain that a rising number of doctors won’t accept Standard because reimbursements are too low or paperwork too burdensome.

Tricare Maternity Issue Resolved

DOD health officials say they won’t fight Congress anymore on decisions regarding Tricare maternity practices.

Many expectant mothers want to arrange maternity care with a civilian doctor, using Tricare Standard. However, DOD has required pregnant beneficiaries living within 40 miles of a base to first get a nonavailability statement from a base hospital.

Congress heard so many complaints that, in 2001, it voted to lift the NAS requirement for maternity care, effective December 2003. Expectant mothers who use Standard no longer will have to seek care first from the base hospital.

Pregnant beneficiaries have been a captive population for military obstetricians. Because of the NAS requirement, Standard patients could be pulled in for maternity care.

Military obstetricians worry about losing access to Standard patients. Also, they fear, many female patients with Tricare Prime coverage will opt out of military managed care once they become pregnant.

DOD officials asked Congress to delay lifting the NAS requirement for six months as the services scramble to expand maternity care services. The House and Senate ignored the requests.

Wyatt, DOD’s No. 2 health affairs official, said: “We folded the tent.”

Extra Pay for 109th Is Iced

The General Accounting Office advised Congress against changing the law to let air and maintenance crews of the 109th Airlift Wing, New York Air National Guard, receive hardship duty pay.

The wing provides air logistics support for National Science Foundation activities in Antarctica and the Arctic region.

Unit officers proposed that crews for its 10 LC-130 ski-equipped aircraft draw hazardous duty pay for working in extreme polar weather conditions.

To qualify for such pay, however, members must spend 30 consecutive days in a hardship zone. The 109th crews typically do not stay long enough to qualify.
GAO claimed Congress did not intend for hazardous duty pay to be used in stays of short duration.

Rumsfeld Loses a Round

Secretary of Defense Donald H. Rumsfeld may covet greater authority over flag officer rotations, tour lengths, and age ceilings, but his legislative proposals have landed on Capitol Hill with a resounding thud.

A plan presented by Rumsfeld would allow selected senior officers—active and reserve—to serve up to 40 years and retire at 100 percent of basic pay. It would remove time-in-service ceilings on flag officers, raise age ceilings by several years, and allow the Secretary of Defense to grant even longer age deferments.

It would have relaxed the three-year, in-grade requirement that senior officers now must fulfill to retire at top rank.

Members of the Senate Armed Services Committee declined even to consider flag officer management “transformation.” The House Armed Services Committee carried Rumsfeld’s package only a little farther before chucking it altogether.

Rumsfeld’s flag officer reforms got a cold reception.

Full Funding for VA Accounts?

Rep. Chris Smith (R-N.J.), the chairman of the House Veterans’ Affairs Committee, moved to carry out a key—and controversial—recommendation of a Presidential task force on veterans care.

The President’s Task Force to Improve Health Care Delivery of our Nation’s Veterans recommended giving VA enough money to fully fund care for enrolled veterans in Priority Groups 1 through 7. (See “Aerospace World: Veterans Task Force Issues Report, Sparks Fly,” on p. 15.)

Smith in mid-June introduced the Veterans’ Health Care Full Funding Act, HR 2475. It would create an independent panel of economists to set health care funding levels for the VA, based on needs of patients in Priority Groups 1 through 7.