Stolen VA Data Recovered
The government in late June recovered a stolen laptop computer and external hard drive. The hard drive contained sensitive data for up to 26.5 million veterans benefits beneficiaries, including 1.1 million active duty and 1.1 million Guard and Reserve members.
An analyst with the Department of Veterans Affairs had taken the computer home and reported it stolen in a burglary. It was not immediately clear if the sensitive information, which included names, birth dates, and Social Security numbers, had been copied or misused in any way.
Veterans Affairs Secretary R. James Nicholson said at the end of June there had been no reports of identity theft stemming from the burglary. Officials also said no VA health records or detailed financial information were lost.
Nicholson ordered every VA employee to complete privacy and cyber-security training and to sign a statement vowing to protect sensitive and confidential information. He had a letter sent to veterans affected, explaining the incident and what safeguards to take to protect themselves.
Senate Defense Bill Completed
The Senate on June 22 passed its 2007 defense authorization bill. Senate provisions affecting personnel would:
Allow reserve component members to use Montgomery GI Bill education benefits for up to 10 years after leaving service. Reserve MGIB now expires when members complete their service obligations. The restriction crimps the usefulness of the benefit in wartime when lengthy mobilizations and tours limit opportunities to attend college or vocational schools.
Lower the age-60 start of retirement benefits for the National Guard and Reserve. An adjustment would be based on the length of member activation for war or other contingency operations. The amendment would reduce reserve retirement age by three months for every 90 days of activation since September 2001. Retirement could not begin before age 50.
Expand Tricare eligibility for drilling reserve personnel. This amendment would lower member cost shares under a three-tiered premium formula approved last year for the Tricare Reserve Select benefit, available to drilling reservists who continue to serve. (See “Action in Congress: Pay and Benefits,” February, p. 32.)
Accelerate full restoration of retired pay to military retirees rated “unemployable” by the VA. A few years ago Congress voted to end immediately the ban on “concurrent receipt” of both military retirement and VA disability compensation for retirees rated 100 percent disabled. Excluded from that move, and kept under a formula that phases out the retirement offset, were about 20,000 retirees rated “IU” or unemployable. The Senate voted to make the effective date retroactive to Jan. 1, 2005, instead of the currently planned 2009.
Top Conference Items
The House and Senate took different paths on important personnel issues in passing their defense bills. Key differences for a House-Senate conference committee include:
Reserve Tricare—The House would open a premium-based Tricare Standard to all drilling reservists. The Senate would enhance the current triple-option Tricare Reserve Select program.
Reserve MGIB—Only the Senate proposes that reservists be allowed to use education benefits for up to 10 years after leaving service.
Concurrent Receipt—The Senate has a provision to allow full concurrent receipt of IU disabled retirees. The House is silent on the issue.
Survivor Benefit Plan—The Senate proposes to end a dollar-for-dollar “offset” in Survivor Benefit Plan payments that surviving spouses experience when they also qualify for VA Dependency and Indemnity Compensation, and to move the so-called SBP paid-up rule effective date to October 2006 from October 2008. Premiums would end on the effective date for 70-year-old retirees who have paid for at least 30 years.
Thumbs Down
When conferees meet to iron out these differences, they will have the Bush Administration’s positions to consider. In a Statement of Administration Policy sent to Senators in June, the White House’s Office of Management and Budget urged rejection of several personnel initiatives still alive in the defense bill.
OMB criticized the Senate plan to repeal the SBP-DIC offset which exists, it said, to avoid “duplication of two fully funded federal government benefits.”
“The current compensation package for survivors—which includes SBP, DIC, an enhanced death gratuity, and increased life insurance benefits—provides a reasonable level of income,” OMB said. Ending the offset also would cost up to $8 billion over 10 years, the White House estimates.
Vet Housing Benefits
President Bush has signed into law a bill to improve housing opportunities and job benefits for disabled veterans.
The Veterans’ Housing Opportunity and Benefits Improvement Act of 2006 authorizes VA grants of $2,000 to $14,000 to help families adapt their homes for temporary housing of severely disabled veterans.
Previously, such grants were available only to severely disabled veterans who own their own homes. Ignored were young veterans with life-altering injuries who live with their parents, said Sen. Larry Craig (R-Idaho).
IRA Opportunity Restored
The Heroes Earned Retirement Opportunities Act signed by the President May 28 allows service members to make Individual Retirement Account contributions even while assigned to combat zones.
The act changes the tax code to ensure that combat assignments don’t preclude personnel from contributing to IRAs because they have no taxable income.
IRA contributions are limited to $4,000 or an individual’s taxable income, whichever is less. An exception is now allowed, retroactive to tax year 2004. Service members who were unable to make IRA contributions in 2004 and 2005 have three years from the date the bill was signed to do so.
Income earned by enlisted members and warrant officers in combat zones is tax exempt. For commissioned officers, the tax exclusion is capped at the level of maximum enlisted basic pay, plus any imminent danger pay received, for any month in a combat zone.
Officer Promotions
A provision in the Senate defense authorization bill would require automatic removal of officers from service promotion lists one year after promotions are blocked by the Senate Armed Services Committee.
It is one of several changes aimed at ending variations across the services in the way they screen officers for promotion, delay promotions when adverse information surfaces, and remove or keep names on promotion lists after the Senate has declined them.
The Navy for 16 years has kept one officer’s name on its captains’ promotion list. In that status, the officer can remain indefinitely on active duty, protected from force reductions, selective early retirement boards, even mandatory retirement.
Unemployable Veterans
The Government Accountability Office, in a new report and in Veterans Disability Benefits Commission testimony, said VA needs to tighten its awarding of Individual Unemployability, the IU rating.
Because of weak oversight, some veterans get more compensation than warranted, and VA is ineffective in moving seriously disabled veterans toward productive working lives. The number of disabled veterans rated IU had jumped in recent years. From Fiscal 1997 through 2005, veterans rated unemployable tripled from 71,000 to 220,000. Total IU payments during the same period rose from $857 million a year to $3.1 billion.
Time-in-Grade Pay Table
Defense officials are studying ways to redesign the military basic pay table to tilt monetary rewards more toward performance with less emphasis on length of service.
The idea is endorsed by the Defense Advisory Committee on Military Compensation, a panel of pay experts whose final report was released in early June. DACMC recommends that Congress replace the time-in-service pay table, designed in 1949, with a “time-in-grade” table. The change could make basic pay a more effective compensation tool. (See “Washington Watch: Pay and Benefits, Civilian-Style?”, p. 12.)
This and other DACMC recommendations serve as the starting point for a comprehensive look at military compensation being conducted by the Pentagon’s 10th Quadrennial Review of Military Compensation. Retired Air Force Brig. Gen. Jan D. Eakle is the QRMC director.
In an interview, Eakle said a time-in-grade pay table has merit. As “a more permanent recognition’’ of performance, such pay would deepen financial rewards for service members who are advanced ahead of their peers. Under the current time-in-service pay table, officers and enlisted members promoted a year ahead of peers enjoy extra pay—but only for that year. “After that, the difference vanishes,” said Eakle.
A time-in-grade table could double the lifetime pay advantage of early promotion, according to DACMC estimates. Today, an enlistee who advances to E-5 a year ahead of peers, and stays a year ahead through future advancements, will earn an extra $22,000 in basic pay over a 30-year career. If pay table steps were based on time in grade, however, that one-year head start would be worth about $45,000.
The difference would be greater for officers. Under the current pay table, an officer promoted to O-4 a year early would realize a $20,000 difference in basic pay over a career. With time-in-grade pay, the difference would be $64,000.
Every branch of service and the Joint Staff have representatives involved in the QRMC review.