Lawmakers in both the House and Senate changed Veterans’ Affairs Committee chairmen for the 109th Congress, leaving veterans groups nervous about prospects for legislative gains in 2005 and even worried about a possible rollback in benefits for some categories of veterans.

Sen. Larry Craig (R-Idaho), a former National Guard member serving his third term in the Senate, replaced five-term Arlen Specter (R-Pa.) atop the Senate Veterans’ Affairs Committee.

Of greater concern to veterans groups was the loss of Rep. Christopher Smith (R-N.J.) as chairman of the House committee. He was replaced by fiscal conservative Steve Buyer (R-Ind.), who is a colonel in the Army Reserve and a Gulf War I veteran.

Republican leaders not only ousted Smith as chairman but kicked him off the committee entirely. Smith had defied his party leaders by not slowing the growth of spending on veterans. They also criticized him for being too close to veterans advocacy groups.

Veterans groups quickly condemned the change and lauded Smith for helping to enact legislation that expanded health care and other services, improved the Montgomery GI Bill, and strengthened other VA programs. Smith had resisted Administration proposals to impose some medical user fees and higher co-payments on VA-filled prescriptions.

Buyer wants the VA to refocus on its “core constituency”—the disabled and the indigent.

He does not blame the clogged VA health care system on funding shortfalls but on the “mistake” he and committee colleagues made in 1996 when they voted for open enrollment for all veterans.

Lawmakers adopted the measure as a means to keep new VA clinics full, amid rosy predictions by former committee leaders and veterans groups that the move would be “budget neutral.” In other words, system efficiencies, co-payments collected from nondisabled veteran enrollees, and reimbursement from employer health insurance plans for VA-provided care would fund the increase in VA health care enrollees. The predictions were flat wrong, Buyer said in 2003.

President Bush’s choice to head the VA, Jim Nicholson, was asked during his confirmation hearing Jan. 24 if he supported current Administration policy that blocks VA health care enrollment for those veterans with adequate incomes and no disabilities—the Priority 8 group. Nicholson avoided answering the question directly but said both Congress and VA need “to find that balance in a world of not infinite, but finite, resources.”

Death Benefits

The new Congress appears ready to raise military death benefits sharply this year and to provide some of the increase retroactively to the next of kin of any service members killed in Iraq and Afghanistan. The Pentagon also wants to raise benefits.

Several death benefit initiatives were introduced or reintroduced in the first days of the 109th Congress. Differences surfaced immediately, however, even among prominent Republicans. The contentious issues were the size of the proposed benefit hikes, whether all increases should be effective back to the invasion of Afghanistan, and whether a substantial increase in the lump-sum death gratuity should go only to next of kin of persons killed in war zones.

Sen. Jeff Sessions (R-Ala.), a member of the Senate Armed Services Committee, was first to champion higher death benefits with a mid-January unveiling of an initiative he said he negotiated with David S.C. Chu, undersecretary of defense for personnel and readiness. Sen. Joseph Lieberman (D-Conn.) joined Sessions in sponsoring the bill.

The Honoring Every Requirement of Exemplary Service (HEROES) Act (S. 77) would boost total death benefits by $238,000 for survivors of service members killed in Iraq and Afghanistan.

First, the military death gratuity would be raised from the current $12,400 up to $100,000, but this change would apply only to deaths in a combat area. Second, maximum coverage under the Servicemembers’ Group Life Insurance (SGLI) program would be raised from $250,000 up to $400,000. Any service member could buy the additional $150,000 in coverage by paying higher premiums of $9.75 a month. Premiums would be waived when a member deploys to a combat area. Indeed, even members who declined SGLI would be covered for the first $150,000 while in a combat area to ensure that, in event of their death, families would receive some additional financial help.

Senate Majority Leader Bill Frist (Tenn.) on Jan. 21 unveiled a Republican leadership initiative on death benefits which, he said, would be a legislative priority this year.

Frist said the leadership plan was prepared in a working group that included the chairmen of the Armed Services and Veterans’ Affairs Committees and four other leading Republicans, including Sessions.

But Sessions, through a spokesman, said he would continue to press for his more generous HEROES package. Sessions said he also wants SGLI to include a “no surprises” feature, as used with the military’s Survivor Benefit Plan. Members who opt out of maximum coverage would need to show that their spouse or other next of kin knew of the decision.

Other Approaches

Sen. Carl Levin (D-Mich.) on Jan. 24 introduced legislation that would raise the death gratuity to $100,000. Although the maximum SGLI coverage would rise only to $300,000, there would be no additional cost to members and no automatic war zone coverage. Only the higher death gratuity, not the higher SGLI, would be applied retroactively to war deaths since the fall of 2001. Levin’s bill is called the Standing With Our Troops Act of 2005 (S. 11).

Another bill, Military Death Benefit Improvement Act of 2005 (S. 44), introduced on Jan. 24 by Sen. Chuck Hagel (R-Neb.), is similar to his 2004 legislation and also would raise the death benefit to $100,000. It would apply to all service members on active duty who have died since Sept. 11, 2001.

In the House, Reps. Spencer Bachus (R-Ala.) and Dennis Moore (D-Kan.) introduced H.R. 292 to increase the military death benefit to $100,000. It quickly attracted more than 50 co-sponsors. It too would make the death gratuity increase retroactive but to Sept. 10, 2001. Bachus said a similar bill he introduced in the last Congress had 219 sponsors.

The Pentagon Plan

The Pentagon unveiled its plan to increase the one-time death gratuity to $100,000 but only for those killed in certain areas. In responding to questions about the plan during Senate testimony on Feb. 1, Chu said that the “premier objective here is to provide for [the families of] those who have fallen in Iraq and Afghanistan.”

At the same Senate hearing, top military leaders criticized the distinction raised by the plan. Gen. T. Michael Moseley, USAF vice chief of staff, said, “We have people in advanced composite force training preparing for combat, which in some cases is as lethal as actual combat.”

Moseley went on to say that the services have “mechanisms” to determine whether deaths are actual line-of-duty deaths. He said, “We would welcome the opportunity to work with the department to finesse those details, but I believe a death is a death.”

Ending DIC Offset

Advocates for military widows are urging Congress this year to address the widows’ concurrent receipt issue: the reduction in Survivor Benefit Plan payments that occurs when widows begin drawing Dependency and Indemnity Compensation (DIC) from Veterans Affairs.

The DIC offset lowers or eliminates SBP for nearly 50,000 widows. The Gold Star Wives of America, joined by most service associations, says it’s time to help survivors of duty-related deaths keep their SBP benefits. The Military Coalition, an umbrella group of three dozen service associations including the Air Force Association, lists elimination of the DIC offset as a top priority for the legislative year.

The issue was scheduled to get its first airing this year before the Senate Veterans’ Affairs Committee in February.

Current law requires the Defense Department to reduce SBP payments by the amount VA pays eligible widows in tax-free DIC. Widows argue that reducing SBP is particularly unfair because the decision to participate was voluntary and members bought coverage through monthly premiums. Although a prorated amount of the premiums is returned when SBP payments are stopped, widows don’t receive the income protection planned.

Lawmakers included a measure in the Veterans Benefits Act of 2003 that they believed would not only restore DIC payments to a retiree’s spouse who remarried at age 57 or later, but also would eliminate the dollar-for-dollar offset. However, DOD lawyers interpreted the measure as simply restoring DIC payments.

Sen. Bill Nelson (D-Fla.) introduced a bill that would end the DIC-SBP offset and move up, from 2008 to 2005, the effective date of the SBP “paid-up” law. Rep. Henry Brown (R-S.C.) was to introduce a similar measure in the House.

Congress voted several years ago to end collection of SBP premiums for covered retirees when they turn age 70 or hit 30 years of SBP coverage, whichever came later. But to save money, the effective date of paid-up SBP was delayed until 2008. As a result, those who enrolled in SBP in the early years will have to pay up to 36 years of premiums versus only 30 years for those who signed up after 1978.

Sen. Jon Corzine (D-N.J.) and Rep. Jim Saxton (R-N.J.), who have pressed colleagues to accelerate implementation of paid-up SBP, will join Nelson and Brown as primary co-sponsors.

High-3 Impact

Congress fell short of its goal to raise retroactively the disability benefits for National Guard and Reserve personnel injured while on active duty on or after Sept. 10, 2001. The culprit was imprecise legislative language. The result is that there will still be a disturbing disparity in retired pay between active and some reserve personnel disabled by service in Afghanistan and Iraq.

The law only permits recalculation of pay for reservists awarded disability retirement on or after Oct. 28, 2004. It failed to make the revised pay retroactive for those injured since the war on terrorism began.

Defense lawyers and policy-makers, who reviewed the language carefully over two months, found no way to interpret it more broadly. So in late December, officials issued guidance to military finance centers to apply the more favorable High-3 formula only to disability retirements from Oct. 28, 2004, when the law was signed.

The High-3 retirement formula affects any member who first entered service on or after Sept. 8, 1980. Those who joined earlier, and who serve 20 years, have annuities based on a percentage of final basic pay. Retirees under High-3, however, receive annuities based on average basic pay over their highest-three earning years, usually their last three years of active service, when basic pay was much lower. At DOD’s urging, Congress stipulated in the 2005 defense authorization that disability retirements be computed for High-3 Guard or Reserve members as though their most recent three years had been served on active duty. (See “Action in Congress: Reserve Disability, SBP Awards,” December 2004, p. 22.)

Military Coalition Priorities

In addition to the DIC offset issue discussed above, the Military Coalition lists several other legislative priorities for 2005. They include: