[Senate Hearing 109-296]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-296
 
    DEATH BENEFITS AND SERVICES AVAILABLE TO SURVIVORS OF MILITARY 
     PERSONNEL AND LEGISLATIVE PROPOSALS TO ENHANCE THESE BENEFITS 

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 1, 2005

                               __________

         Printed for the use of the Committee on Armed Services

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                      COMMITTEE ON ARMED SERVICES

                    JOHN WARNER, Virginia, Chairman

JOHN McCAIN, Arizona                 CARL LEVIN, Michigan
JAMES M. INHOFE, Oklahoma            EDWARD M. KENNEDY, Massachusetts
PAT ROBERTS, Kansas                  ROBERT C. BYRD, West Virginia
JEFF SESSIONS, Alabama               JOSEPH I. LIEBERMAN, Connecticut
SUSAN M. COLLINS, Maine              JACK REED, Rhode Island
JOHN ENSIGN, Nevada                  DANIEL K. AKAKA, Hawaii
JAMES M. TALENT, Missouri            BILL NELSON, Florida
SAXBY CHAMBLISS, Georgia             E. BENJAMIN NELSON, Nebraska
LINDSEY O. GRAHAM, South Carolina    MARK DAYTON, Minnesota
ELIZABETH DOLE, North Carolina       EVAN BAYH, Indiana
JOHN CORNYN, Texas                   HILLARY RODHAM CLINTON, New York
JOHN THUNE, South Dakota

                    Judith A. Ansley, Staff Director

             Richard D. DeBobes, Democratic Staff Director

                                  (ii)

  





















                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

    Death Benefits and Services Available to Survivors of Military 
     Personnel and Legislative Proposals to Enhance These Benefits

                            february 1, 2005

                                                                   Page

Allen, Senator George, U.S. Senator from the State of Virginia...     6
DeWine, Hon. Mike, U.S. Senator from the State of Ohio...........    28
Chu, Hon. David S.C., Under Secretary of Defense for Personnel 
  and Readiness..................................................    30
Epley, Robert J., Associate Deputy Under Secretary for Policy and 
  Program Management, Veterans Benefits Administration, 
  Department of Veterans' Affairs................................    38
Cody, GEN Richard A., USA, Vice Chief of Staff, United States 
  Army...........................................................    43
Nathman, ADM John B., USN, Vice Chief of Naval Operations, United 
  States Navy....................................................    48
Nyland, Gen. William L., USMC, Assistant Commandant, United 
  States Marine Corps............................................    50
Moseley, Gen. T. Michael, USAF, Vice Chief of Staff, United 
  States Air Force...............................................    56

                                 (iii)


    DEATH BENEFITS AND SERVICES AVAILABLE TO SURVIVORS OF MILITARY 
     PERSONNEL AND LEGISLATIVE PROPOSALS TO ENHANCE THESE BENEFITS

                              ----------                              


                       TUESDAY, FEBRUARY 1, 2005

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:39 a.m., in 
room SH-216, Hart Senate Office Building, Senator John Warner 
(chairman) presiding.
    Committee members present: Senators Warner, McCain, Inhofe, 
Sessions, Collins, Talent, Chambliss, Graham, Dole, Cornyn, 
Thune, Levin, Lieberman, Akaka, Bill Nelson, E. Benjamin 
Nelson, Dayton, and Clinton.
    Also present: Senators Allen and DeWine.
    Committee staff members present: Judith A. Ansley, staff 
director; and Cindy Pearson, assistant chief clerk and security 
manager.
    Majority staff members present: Gregory T. Kiley, 
professional staff member; Scott W. Stucky, general counsel; 
Diana G. Tabler, professional staff member; and Richard F. 
Walsh, counsel.
    Minority staff members present: Richard D. DeBobes, 
Democratic staff director; Gabriella Eisen, research assistant; 
Gerald J. Leeling, minority counsel; Peter K. Levine, minority 
counsel; and Michael J. McCord, professional staff member.
    Staff assistants present: Catherine E. Sendak, Bridget E. 
Ward, and Pendred K. Wilson.
    Committee members' assistants present: Cord Sterling, 
assistant to Senator Warner; Christopher J. Paul and Marshall 
A. Salter, assistants to Senator McCain; John A. Bonsell, 
assistant to Senator Inhofe; Arch Galloway II, assistant to 
Senator Sessions; Lindsey R. Neas, assistant to Senator Talent; 
Clyde A. Taylor IV, assistant to Senator Chambliss; Meredith 
Moseley, assistant to Senator Graham; Christine O. Hill, 
assistant to Senator Dole; Mieke Y. Eoyang, assistant to 
Senator Kennedy; Erik Raven, assistant to Senator Byrd; Davelyn 
Noelani Kalipi and Darcie Tokioka, assistants to Senator Akaka; 
Amy Akiyama, assistant to Senator Bill Nelson; Eric Pierce, 
assistant to Senator Ben Nelson; and Andrew Shapiro; assistant 
to Senator Clinton.

       OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

    Chairman Warner. The hearing will come to order. We welcome 
all present here today.
    The world witnessed an extraordinary chapter in the history 
of mankind with these elections this weekend, striking a blow 
for freedom in Iraq. Our President, President Bush, addressed 
the Nation shortly after the elections were underway there on 
Sunday morning, and he gave due credit to all of those who made 
this election possible. But the courage of the men and women of 
the Armed Forces of the United States and other coalition 
forces, together with the Iraqi professional military forces 
and the people of Iraq and many others, are owed a great debt 
of gratitude. We gather here this morning to examine, in the 
context of a Senate hearing, the importance of giving greater 
recognition to the sacrifices of those who lose their lives in 
this cause of freedom.
    I particularly welcome this morning the families who are 
present, the Gold Star Mothers, the National Military Family 
Association, and others. We thank you very much for joining us 
here today and not only today, but you are ever-present in your 
mission on behalf of the families. So it is not just today but 
it is 365 days a year, and we thank you very much for that.
    This morning's witnesses are Dr. Chu, Under Secretary of 
Defense for Personnel and Readiness; General Cody, Vice Chief 
of Staff, United States Army; Admiral Nathman, Vice Chief of 
Naval Operations; General Nyland, assistant Commandant of the 
Marine Corps; General Moseley, Vice Chief of Staff for the Air 
Force; and Mr. Epley. We thank you for joining us here this 
morning.
    I will ask unanimous consent that I place into the record 
my opening statement because I feel that there are members of 
this committee and, indeed, in a totally bipartisan manner, 
other Senators who have been in the very forefront of this 
issue. We are privileged to have on our committee our 
distinguished colleague, Mr. Sessions. He teamed up with Mr. 
Lieberman, and at this moment, I would like to recognize 
Senator Sessions for a few comments.
    [The prepared statement of Senator Warner follows:]

               Prepared Statement by Senator John Warner

    The committee meets today to receive testimony on the full 
range of death benefits and services available to survivors of 
military personnel, and on legislative proposals to enhance 
those benefits. We currently have five such proposals referred 
to this committee. I thank our witnesses for being here today, 
and look forward to their views on this timely and important 
subject.
    Based on news reports we began to see last night--in 
advance of receiving your written testimony, Mr. Secretary, 
this hearing would appear to be very timely. It was reported 
that the President has indicated he will support significant 
increases in death benefits, to include increasing the death 
gratuity to $100,000 retroactive to October 7, 2001, and 
raising the insurance available under Servicemembers' Group 
Life Insurance (SGLI) from $250,000 to $400,000. We look 
forward to hearing your testimony about these reports.
    There is, of course, no issue of greater importance to this 
committee than the well-being of the families of the men and 
women who serve in our Armed Forces. These brave individuals 
who make up our superb All-Volunteer Force are able to serve, 
in no small measure, because of the support and encouragement 
of their spouses, children, parents, and other family members. 
Protecting the welfare of these family members--particularly 
the spouses and dependent children--is a sacred trust that the 
Services share with individual servicemembers.
    By their very nature, military operations, military 
training, and military service involve danger and the ever-
present risk of injury and fatalities. While extraordinary 
efforts are made throughout the force each day to ensure all 
personnel are fully trained and ready in every respect for the 
dangers that may await them, casualties are incurred. The 
ongoing operations in Iraq and Afghanistan have underscored 
these dangers, but also the strengths of the All-Volunteer 
Force. Our Nation owes a debt of gratitude to the men and women 
of the Armed Forces and their families. Our prayers go out to 
those who have made the ultimate sacrifice and those who have 
been injured in defense of freedom and for their families.
    Congress and this committee, in particular, have been 
diligent over the years in carefully monitoring and, where 
necessary, enhancing the death benefits and services available 
to military personnel. I am proud of the committee's record in 
constantly working to improve programs under our jurisdiction, 
such as the Survivor Benefit Plan (SBP), the death gratuity, 
TRICARE, and various benefits that assist surviving family 
members of those who die in uniform. I note that there is an 
additional series of benefits which falls under the 
jurisdiction of the Veterans' Affairs Committee. 
    The Department of Defense (DOD) has been a full partner in 
the effort to ensure survivors and next of kin of military 
personnel are adequately provided for. Recent studies by DOD 
and the Government Accountability Office (GAO) concluded that 
the system of benefits provided to survivors of members who die 
on Active-Duty is ``adequate, substantial, and comprehensive,'' 
but these studies provided suggestions for improvements and set 
the stage for the discussions we engage in today and the 
recommendations for change we are about to receive.
    With the start of the 109th Congress, several of our 
colleagues have introduced legislation that would further 
enhance the benefits made available to survivors and next of 
kin of those who die on Active-Duty. For example, the Majority 
Leader introduced S.3, the Protecting America in the War on 
Terror Act of 2005, on January 24. Title II of this bill 
provides for an increase in the death gratuity to $100,000, 
raises the limit on SGLI to $300,000, and enhances the TRICARE 
medical coverage already available to dependent children of 
military decedents.
    Senator Sessions has introduced the (HEROES) Act--S.77, 
which has provisions very similar to those reported last night. 
I note that Senator Lieberman is the primary co-sponsor. This 
legislation would raise the level of SGLI coverage to $400,000 
and also increase the death gratuity to $100,000. I 
congratulate Senator Sessions on his leadership and untiring 
efforts over the past 2 years on this subject.
    Our ranking member, Senator Levin, introduced S.11, which, 
among its various purposes, would enhance death benefits. There 
are others: S.44, introduced by Senators Hagel, Kennedy, and 
Clinton; S.121 introduced by Senator DeWine; and S.42, 
introduced by Senator Allen.
    Clearly, this is a subject of great importance. In 
consultation with Senator Levin, I decided to have an early 
hearing on this issue. The presence here today of all of the 
Service Vice Chiefs, as well as the Under Secretary of Defense 
for Personnel and Readiness, and a representative from the 
Department of Veterans' Affairs (VA) will ensure a 
comprehensive exchange of views. My expectation is that I and 
the members of the committee will come away with a better 
understanding of the actions that need to be taken in the 
future.

    Chairman Warner. I'd also like to insert Senator Roberts' 
statement for the record at the point.
    [The prepared statement of Senator Roberts follows:]
               Prepared Statement by Senator Pat Roberts
    Thank you Mr. Chairman. I would like to thank our distinguished 
panel for being here today and for their service to the country. I know 
your time is valuable, and I appreciate your attention to this matter.
    We are here to discuss an important responsibility borne by the 
Armed Services--how to assist the families of soldiers who make the 
ultimate sacrifice. Fort Riley, in my home State of Kansas, has sent 
thousands of soldiers to Iraq and Afghanistan, and will continue to 
send soldiers until the fight is over. Sadly, not all return. When that 
happens, we all share the responsibility of ensuring that family 
members left behind, spouses and children alike, are provided for 
financially. I am pleased that the administration has announced that it 
will increase the death gratuity as well as the amount of life 
insurance our service men and women will receive in the event they make 
the ultimate sacrifice on behalf of the Nation.
    There is another issue I would like to briefly discuss. Across the 
Nation, civilian employers of members of the Guard and Reserve have 
gone above the call of duty in extending differential pay to the 
reservists called to serve. This differential pay ensures reservists 
that their families will be provided for financially while they are 
serving overseas. However, the Internal Revenue Service (IRS) tells 
employers and their deployed employees that because of an obscure 
revenue ruling made nearly four decades ago, the differential pay 
provided cannot be considered as a wage and, as a result, the 
servicemember who receives this pay will have to file and pay a 
quarterly estimated income tax or face stiff penalties. Congress found 
this practice absurd and adopted a resolution as part of last year's 
Department of Defense authorization bill which essentially told the IRS 
to fix this matter. The IRS, to date, has done nothing except further 
burden the men and women in uniform and their families. I hope you will 
agree with me that this situation needs to be fixed.
    Gentlemen, it seems as though we must prod the IRS into providing 
safe harbor for guardsmen and reservists serving on Active-Duty and, at 
the very least, ensure that the IRS provides the necessary resources to 
our troops and their families so that, between fighting insurgents and 
rebuilding a nation, our troops can file their quarterly estimated tax 
returns.
    I hope you all agree with me that this is an archaic ruling that 
helps no one, and serves only to harm the citizen soldiers who fight 
for freedom around the world. As we continue to explore ways to provide 
the very best for our soldiers and their families, I implore the 
Services to address this matter.

    Chairman Warner. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    As you think about it, for our Nation to be able to be 
effective militarily, there needs to be a bond between the 
people and the soldiers who go out and put their lives at risk 
to execute the policies that the people have asked them to 
execute. There needs to be a deep and abiding bond there.
    In the legislation that Senator Lieberman and I have 
offered, I have just been really impressed with the grass roots 
support and the surge of support that I am seeing from the 
American people, because they want to be involved. They want to 
be sure that the families of soldiers who are serving our 
country and give their lives for their country are well taken 
care of if something happens to them. Soldiers that go and 
serve our country and put their lives at risk, need to know 
that if something happens to them, their families will be well 
taken care of. I think that is the bond that we are involved in 
here.
    It is true that we have done a number of things to take 
care of families, and some have erroneously felt that the only 
benefit that families get is the death benefit of $12,000, 
which was increased by the leadership of Senator Collins to my 
left here just a few months ago or a year or so ago. That is 
sort of where we are. I think the opportunity we have today is 
to step forward as a Nation to be generous to those who have 
given their lives for their country, and to take care of their 
families in an effective way.
    I want to thank Dr. Chu and the Department of Defense 
(DOD). After we put language in last year's National Defense 
Authorization Act (NDAA) asking that you review this situation 
and help us work to achieve it, you have come back to me and 
Senator Lieberman, and you presented ideas, some of which we 
have worked, and drafted what we call the Honoring Every 
Requirement of Exemplary Service (HEROES) Act, which I think 
fundamentally addresses the core problems, which are increased 
death benefits and increased Servicemembers' Group Life 
Insurance (SGLI). There are other ideas out there from other 
Senators that also deserve serious consideration and that we 
can move forward.
    You have said you would put it in the budget. I am also 
pleased that the President has indicated today his support and 
that it would be in the budget.
    So, Mr. Chairman, I will not take any more time. Thank you 
for giving me this opportunity to sum up where we are. I 
believe we have an excellent panel, people who really know 
their business. They know the soldiers, sailors, airmen, and 
marines and what their lives are like, and I look forward to 
that discussion as we go forward.
    Chairman Warner. Thank you very much, Senator Sessions.
    Senator Lieberman, your distinguished colleague said you 
can proceed here on your side of the aisle for a minute.
    Senator Lieberman. Thanks very much, Mr. Chairman. Thanks 
to you and to Senator Levin for giving me this opportunity.
    It has been a great honor to work with Senator Sessions and 
others on both sides of the aisle on this matter. As we worked 
together, Senator Sessions and I, on the Airland Subcommittee, 
we confronted the reality of the death benefits that we were 
providing for those who were giving their lives and risking 
their lives in defense of our freedom and our security. The 
more we knew, the more shocked and outraged we became and the 
more we wanted to do something about it. As we worked together, 
we knew that the more people learned what we had learned, the 
more everybody would agree we had to do something because the 
current situation is simply wrong and unfair, and it is in the 
most fundamental sense of American values, un-American.
    That is how the HEROES Act came together. We have, I think, 
almost 20 co-sponsors from both parties.
    I am very grateful to hear this morning that the President, 
the administration, and the Pentagon are embracing these ideas, 
supporting them, and most important of all putting them in the 
budget. That will make them real, as the witnesses will testify 
to today, they will be generous and retroactive to the fall of 
2001 so that they will cover the survivors of all who have 
given their lives in the conflicts that have occurred since 
then.
    Just to say very briefly, apart from the paltry sum of the 
death benefit itself, even when added to the other benefits it 
is not enough, particularly when compared to the appropriately 
generous compensation we gave to those who lost their lives on 
September 11. When you compare the two, there was an imbalance 
that is not acceptable. I believe the average award for 
survivors of September 11 victims was over $2 million. I 
understand that there are different circumstances, but still, 
it is a measure of America's trust and generosity to those who 
we lose in this and other conflicts.
    The fact is, as you all know better than we, the military 
has changed, and when its original death benefit was set, the 
military was largely young, single men. Today, if I have it 
right, well over half those on Active-Duty are married. They 
have families.
    Look at Iraq today. Is it 40 percent Reserve and Guard now? 
Maybe it is getting close to 50 percent and probably going to 
go down. Any of us who have been over there and seen it know 
our own Reserve and Guard are there. These folks are in their 
30s, 40s, and 50s with families. If, God forbid, they lose 
their lives, we do not want their families to have to live not 
only with the profound pain and loss of having lost their loved 
one, but also in poverty. It is just not our way. That is why 
we are getting together in a very hopeful act, way beyond 
partisan lines, to make this wrong right.
    There is a wonderful line that I saw from Teddy Roosevelt 
who said probably a century ago or more: ``A man who is good 
enough to shed blood for his country is good enough to be given 
a square deal afterward.'' Of course, that is a compelling 
argument for veterans' benefits of all kinds. But, maybe in 
this regard, we should amend the great T.R.'s words and say 
that men and women good enough to risk their lives in defense 
of our country ought to know that if they are called upon to 
make the ultimate sacrifice, that they can be confident that 
their families will be well taken care of. That is what we all 
are going to join together to do today.
    I thank you, Mr. Chairman, Senator Levin, and Senator 
Sessions, again, it is a great pleasure to work with you as 
always.
    I thank the witnesses for the good news that they are 
bringing us and America's service men and women this morning. 
Thank you, Mr. Chairman.
    Chairman Warner. Thank you, Senator Lieberman.
    Senator Allen, you and Senator Nelson put in legislation. 
We are glad to have you join us this morning.

STATEMENT OF SENATOR GEORGE ALLEN, U.S. SENATOR FROM THE STATE 
                          OF VIRGINIA

    Senator Allen. Thank you, Mr. Chairman, and thank you for 
your leadership once again on issues that matter to those who 
are serving our country.
    I have joined with Senator Nelson of Florida in introducing 
S.42.
    I want to commend Senator Collins for, over the years, 
working on this question of death benefits or the death 
gratuity and Senator Sessions' measure as well which has more 
than just the death gratuity.
    I will speak very briefly, first thanking all those 
families who have also made the ultimate sacrifice for the 
advancement of freedom. They ought to feel success and a bit of 
pride with the elections in Iraq because their son or their 
daughter, their husband, their spouse, or maybe one of their 
parents was involved in this effort to bring freedom to Iraq 
and also make our country secure.
    The death gratuity, when I first saw it, was about $6,000, 
which seemed to be a pathetic amount. It was taxed. Senator 
Collins doubled it, and I was cosponsor of that, as well as 
many here to make it nontaxable. Still, $12,000. Someone loses 
their life serving our country. It is a paltry, miserly, and 
indeed in my view, insulting amount.
    So Senator Nelson is signing on this measure, as well as 
Senator Dole, Mike DeWine, Ben Nelson, David Vitter, Senator 
Collins, and Lisa Murkowski. It is to increase the death 
gratuity to $100,000.
    How does one determine what is an appropriate amount? It is 
always hard to value life, but I looked at what our law 
enforcement and fire fighters receive across this country if 
they die, and it is generally between $50,000 and $100,000. In 
Virginia, Mr. Chairman, the average is $75,000. $100,000 will 
not replace that loved one, but I think a grateful Nation, it 
is my sincere sense, wants to provide for those families who 
have also made the ultimate sacrifice.
    So I am glad to hear the administration is on board. Our 
measure is retroactive to October 1, 2001 when the military 
action occurred. It simply increases the death gratuity from 
$12,000 to $100,000, and whether one is in a combat zone or 
not, if one is on duty, they will receive that death gratuity.
    I thank you, Mr. Chairman, for your leadership on this and 
many other issues.
    Chairman Warner. Thank you, Senator Allen.
    Senator Allen. Sorry, Mr. Chairman. I have a Foreign 
Relations Committee meeting right now on Iraq and will have to 
leave.
    Chairman Warner. Thank you very much.
    Senator Bill Nelson.
    Senator Bill Nelson. Thank you, Mr. Chairman, and thank you 
for your leadership.
    We are all of one accord here in modernizing this benefit, 
but there is another inequity that needs to be corrected and 
that is how we treat our widows and orphans. Need I remind any 
of you it is from the Holy Scriptures. The Good Book, both in 
Isaiah, as well as in the New Testament in James, says there is 
no higher priority than the widows and orphans.
    Yet, we have a glaring, unfair inequity in law that people 
purchase their retiree disability benefits. They are entitled 
to survivors' benefits. But under current law, if you happen to 
be the survivor, a widow or orphan, of a disabled person, of 
which you are entitled to those benefits too, in fact, they are 
offset. So we will hear testimony about how much this costs, 
but the fact is it is a glaring unfairness in the way that we 
treat widows and orphans. If one has purchased a certain 
benefit under survivors' benefits and are entitled to another 
benefit because of disability, why under current law should we 
allow it to stand that they offset each other?
    So I am going to keep ringing the bell, Mr. Chairman, for 
fairness that we treat the least of these among us as they 
should be treated.
    [The prepared statement of Senator Bill Nelson follows:]
               Prepared Statement by Senator Bill Nelson
    Thank you, Mr. Chairman. Today I'd like to discuss two glaring 
inequities in how this country treats the survivors of its military 
retirees. It is my belief that we owe a solemn debt to those men and 
women who spend the best years of their lives in military service to 
their country, and who have dedicated themselves to preserving our 
freedom. Quite simply, I cannot think of a nobler life's mission.
    How we treat our veterans and their families is a reflection of our 
esteem for their service. As one newsmagazine recently put it, 
``America's commitment to the survivors of the tsunami is a mark of our 
generosity. The commitment we make to those who voluntarily put 
themselves in harm's way to fight our wars is a mark of our 
character.''
    Last year, Congress and this committee made great progress to 
benefit military retirees and their families by repealing the law that 
prohibits concurrent receipt of military retired pay and Department of 
Veterans' Affairs (VA) disability compensation for our 100 percent 
disabled retirees. I have received hundreds of letters in my office 
from veterans living in my State of Florida, thanking this committee 
and Congress for treating them with the dignity that their service 
demands.
    Mr. Chairman, despite this success, many military retirees and 
their survivors still face unfair treatment in receiving the benefits 
they have earned or purchased. The same sort of unfair benefit 
reduction that we just eliminated in the last Congress for 100 percent 
disabled retirees still exists for their survivors--between payments 
from the Survivors' Benefit Plan (SBP) and the VA Dependency and 
Indemnity Compensation (DIC). This is the first of the two inequities 
that are addressed in legislation that I have introduced in S.185, the 
Military Retiree Survivor Benefit Equity Act of 2005.
    As my colleagues will know, the SBP is a purchased annuity which, 
after years of premium payments, provides income to the survivors of 
100 percent disabled military retirees and those who die in Active 
service. The VA's DIC benefit is received by the surviving spouse of an 
Active-Duty or retired military member who dies from a service-
connected cause. Under current law, even if the surviving spouse of 
such a servicemember is eligible for SBP, that purchased annuity is 
reduced by the amount of DIC she receives.
    Mr. Chairman, I have conducted some research into this matter, and 
neither I nor my staff can find another incidence of a purchased 
annuity benefit being cancelled or reduced on the basis that some other 
source of income exists. It simply is not fair that this benefit can be 
taken away due to cause of death. If military service caused a retired 
member's death, the VA indemnity compensation should be added to the 
SBP the retiree paid for, not substituted for it. For members killed on 
Active-Duty, a surviving spouse can avoid the dollar-for-dollar offset 
only by assigning SBP to children. But that forfeits any SBP claim 
after the children reach adulthood, leaving the spouse with benefits 
less than $1,000 per month in DIC from the VA. Mr. Chairman, brave 
Americans who give their lives for their country deserve fairer 
treatment for those they leave behind.
    Mr. Chairman, the U.S. Government gives DIC to the families of 
military personnel whose death is related to their service because we 
feel that such honorable sacrifices merit something extra. Not because 
we believe that the families of such men and women no longer deserve 
the SBP benefit they have paid for.
    The Military Retiree Survivor Benefit Equity Act of 2005 addresses 
this situation in two important ways. First, it repeals the offset 
language in the law, which is the basis of the problem I have just 
described. Second, it allows those surviving spouses who have assigned 
SBP to their children to switch it back to themselves. Together these 
two changes to the current law will set right the treatment of 
surviving spouses.
    The second serious problem for SBP recipients addressed in the 
Military Retiree Survivor Benefit Equity Act of 2005 is the effective 
date for paid-up status. As my colleagues know, the National Defense 
Authorization Act for Fiscal Year 1999 provided that SBP enrollees may 
stop paying premiums if they have reached 70 years of age and have been 
paying in for 30 years. The problem with this arrangement is that the 
effective date was set at October 1, 2008. The SBP program was started 
in 1972, meaning that there were 36 years between the effective date 
and when the earliest enrollees joined the system. Military enrollees 
who joined SBP between 1972 and 1978 are therefore required to pay for 
more than 30 years to reach paid-up status, whereas everyone who came 
after them is paid-up after just 30.
    Mr. Chairman, this effective date of October 1, 2008, forces 
thousands of ``greatest generation'' retirees who signed up for SBP at 
its beginning to pay premiums for up to 36 years. The intention of the 
law is that retirees will pay into SBP for 30 years, and then reach 
paid-up status. The letter of the law, however, dictates that while 
most retirees will pay premiums for 30 years and reach paid-up status, 
our most aged retirees, many of them World War II combat veterans now 
in their eighties, will be forced to pay up to 20 percent longer. These 
early retirees also paid the highest premiums since they were set at 10 
percent of retired pay until 1990, when they were reduced to 6.5 
percent. I submit to you, Mr. Chairman, that this inequity is not what 
the 105th Congress had in mind when they allowed paid-up status.
    The Military Retiree Survivor Benefit Equity Act of 2005 addresses 
this second problem very directly, by changing the effective date from 
October 1, 2008, to October 1, 2005. This will end the waiting now 
being imposed upon our most aged retirees, beginning in fiscal year 
2006.
    It is time to provide our military retirees and their families what 
they have earned and purchased, and restore basic fairness to military 
widows, widowers, and retirees. I call for support from my Senate 
colleagues for this important legislation.
    Mr. Chairman, my thanks to you and Senator Levin for your 
leadership, to my colleagues on the Armed Services Committee for their 
consideration, and to the leaders of our armed services with us today. 
I look forward to the work we will do together as we move this 
important bill to final passage.

    Chairman Warner. I thank you very much, Senator. We will 
have the opportunity to explore those other options.
    I would like to say the distinguished ranking member of the 
committee, Senator Levin, introduced his own legislation. 
Senator Levin, I would like very much to recognize your 
contribution in this important effort and ask now if you would 
like to make a complete opening statement.

                STATEMENT OF SENATOR CARL LEVIN

    Senator Levin. Thank you, Mr. Chairman. Thank you very much 
for holding this very important hearing.
    I join you first in welcoming our impressive panel of 
witnesses and also a particularly warm welcome to families and 
those who have been fighting for fairness and equity for 
benefits for a long time. We will keep that fight going as long 
as they are here and as long as their families are here to join 
with them.
    I hope this hearing will help the American public to 
understand the current benefit system and to guide us toward an 
enhancement of these benefits because they are simply 
inadequate. No benefit can replace the loss of a life of a 
soldier, sailor, airman, or marine who gives his or her life in 
service to our country. Every survivor would choose to have the 
servicemember alive and healthy rather than any compensation 
that our Government could provide. But that does not mean that 
our benefits should not be full and generous. To say what I 
just did is simply a recognition that we cannot place a 
monetary value on a life that is given in service to our 
Nation.
    Yesterday, the DOD reported that over 1,400 servicemembers 
have given their lives in Iraq, almost 1,100 of them now in 
hostile action. Nearly every day, we learn about servicemembers 
killed in ambushes by improvised explosive devices (IEDs), 
helicopter crashes, including the helicopter crash last week 
that took the lives of 30 marines and 1 sailor. Our men and 
women in the military have opened the door for a democratic 
Iraq. They have made it possible that Iraqis now can walk 
through that door, and there are many steps ahead, and more of 
our lives, as well as Iraqi lives, of course, are going to be 
lost in this effort.
    How does this Nation reach out to survivors of these brave 
servicemembers to express our gratitude and to make sure that 
the survivors are not left on their own to deal with the loss 
of their loved one who in most cases, as Senator Lierberman has 
pointed out, provides the primary financial support for that 
family?
    Survivors currently receive immediate financial assistance 
in the form of a death gratuity, currently at $12,400. It is 
adjusted upward each year to keep pace with increases in 
military pay. That is the immediate tax-free, lump-sum payment 
that is supposed to help survivors cover living expenses and 
other immediate needs until other benefits have time to kick 
in. As has been indicated by everyone who has spoken and, I 
believe, as is felt by every member of this committee, that 
benefit is totally inadequate.
    A number of other benefits kick in later to support the 
survivors. Every Active-Duty servicemember is automatically 
enrolled in the Government-subsidized SGLI for $250,000, unless 
the servicemember specifically and positively elects lesser or 
no coverage. Very few servicemembers opt out of the maximum 
coverage and that benefit is tax-free.
    There are then two annuities that apply. Survivors receive 
Dependency and Indemnity Compensation (DIC), which is a 
nontaxable monthly annuity administered by the Department of 
Veterans' Affairs (VA). Surviving spouses also receive an 
annuity through the military Survivors' Benefit Plan (SBP). The 
amount of this annuity varies by length of service and by the 
rank of the servicemember. It is equal to 55 percent of the pay 
that the servicemember would have been entitled to on the day 
that he or she died, based on 100 percent disability. That is 
the reference that Senator Bill Nelson has made. The amount of 
a spouse's SBP annuity is reduced by the amount of the DIC 
received from the VA.
    I want to repeat that because this is a huge issue. It is 
one that Senator Bill Nelson addresses, and I think all of us 
must take note of and, hopefully, correct it. The amount of a 
spouse's SBP annuity is reduced by the amount of the DIC which 
is received from the VA.
    Now, a number of legislative proposals to increase these 
benefits have been offered by members of this committee and 
Members of Congress. Reacting to the pressure, the Pentagon has 
come around and announced yesterday that it would support an 
increase in the death gratuity to $100,000 and the SGLI benefit 
to $400,000. However, there are a number of problems with the 
Pentagon proposal.
    First, their proposal limits the death gratuity increase to 
members serving in areas of operation (AOs) designated by the 
Secretary of Defense. The increased insurance would be paid for 
by the Government only for members serving in those same areas.
    Now, I obviously support the increases. I think most all of 
us probably do, but I also believe that they should apply to 
survivors of all members who die on Active-Duty. The bill that 
was introduced by the Democratic leadership this week, called 
S.11, The Standing with Our Troops Act of 2005, would increase 
the death gratuity to $100,000 for all servicemembers who die 
on Active-Duty. It would eliminate the requirement that a 
surviving spouse's survivor benefit annuity be reduced by the 
amount of DIC received by the VA. Again, that is the point 
which Senator Bill Nelson has referred to and which he has 
fought to try to correct.
    Now, we received, Mr. Chairman, a statement from the 
National Military Family Association (NMFA) that states the 
following: ``The survivor benefit package should not create 
inequities by awarding different benefits to families who lose 
a servicemember in a hostile zone versus those who lose their 
loved one in a training mission preparing for service in a 
hostile zone. To the family, the loss is the same.''
    Now, that highly respected organization also states that 
``the benefit change that will provide the most significant 
long-term protection to the family's financial security would 
be to end the dependency and indemnity compensation offset to 
the survivor benefit plan.'' So we have to put this in front of 
us as one of the changes to be considered, one that I think 
many of us, including myself, very much support.
    I want to thank that Association and the others who have 
come here today and all who fight and advocate for military 
families. I would request, Mr. Chairman, that the full 
statement of the National Military Family Association be 
included in the record at this time.
    Chairman Warner. Without objection.
    [The prepared statement of the National Military Family 
Association follows:]
     Prepared Statement by the National Military Family Association
    The National Military Family Association (NMFA) is the only 
national organization whose sole focus is the military family and whose 
goal is to influence the development and implementation of policies 
that will improve the lives of those family members. Our mission is to 
serve the families of the seven uniformed services through education, 
information and advocacy.
    Founded in 1969 as the National Military Wives Association, NMFA is 
a non-profit 501(c)(3) primarily volunteer organization. NMFA today 
represents the interests of family members and the Active-Duty, 
National Guard, Reserve, and retired personnel of the Army, Navy, Air 
Force, Marine Corps, Coast Guard, Public Health Service, and the 
National Oceanic and Atmospheric Administration.
    NMFA volunteer representatives in military communities worldwide 
provide a direct link between military families and NMFA's staff in the 
Nation's capital. Representatives are the ``eyes and ears'' of NMFA, 
bringing shared local concerns to national attention. NMFA receives no 
Federal grants and has no Federal contracts. NMFA's Web site is located 
at http://www.nmfa.org.
    Mr. Chairman and distinguished members of the committee, the NMFA 
appreciates your interest in military families, especially the 
survivors of those who have made the ultimate sacrifice. NMFA is 
grateful for the opportunity to present testimony about the needs of 
those families. We believe the focus should be on the total package of 
benefits available for them, immediately and for the long term.
    NMFA is grateful to the committee for the work it has done over the 
past several years to enhance the benefits provided to all survivors of 
those killed on Active-Duty or as a result of disabilities incurred as 
a result of Active-Duty service. The extension of the Survivor Benefit 
Plan (SBP) annuity payment to the survivors of servicemembers killed on 
Active-Duty is an example of those enhancements. We believe that the 
government's obligation as articulated by President Lincoln, ``to care 
for him who shall have borne the battle and for his widow and his 
orphan,'' is as valid today as it was at the end of the Civil War. The 
committee's willingness to provide a forum for discussion of all 
aspects of benefits for survivors of Active-Duty deaths serves an 
important purpose. As seen in media reports and in questions we hear 
from military families and others concerned about military families, 
NMFA believes there is a lot of misinformation and confusion about what 
the complete benefit is for those whose servicemembers have made the 
ultimate sacrifice. We know that there is no way to compensate them for 
their loss, but we do owe it to these families to help ensure a secure 
future.
    NMFA strongly believes that all servicemembers' deaths should be 
treated equally. Servicemembers are on duty 24 hours a day, 7 days a 
week, 365 days a year. Through their oath, each servicemember's 
commitment is the same. The survivor benefit package should not create 
inequities by awarding different benefits to families who lose a 
servicemember in a hostile zone versus those who lose their loved one 
in a training mission preparing for service in a hostile zone. To the 
family, the loss is the same.
    In this testimony, NMFA will focus on the survivor benefits package 
as it pertains to the survivors of those killed in the line of duty 
while serving on Active-Duty including those eligible members of the 
Guard and Reserve. A summary of the Federal benefits provided to 
survivors is provided in Appendix 1.
                      concerns and recommendations
    A scene is becoming all too common as America wages the global war 
against terrorism. Brave servicemembers are sacrificing their lives in 
service to their country. It may happen on a dusty battlefield or 
village in Iraq or Afghanistan or may be the result of an unfortunate 
helicopter crash at Fort Hood, Texas. While specifics vary by Service, 
the overall process is the same. The family is visited by the casualty 
notification team consisting of the chaplain and a member of the 
servicemember's unit. This family will never be the same again. A 
casualty assistance officer is assigned to help the family cope with 
the trying days ahead. Funeral arrangements are made. The memorial 
service is conducted with military honors and the spouse is presented a 
flag on behalf of a grateful nation. The bugler blows Taps and the 
family goes home.
    The spouse encounters a confusing array of decisions that must be 
made, the consequences of which will influences his or her life and the 
lives of the children for years to come. What can be done to alleviate 
the stress and confusion facing the family? What changes can be made to 
the present package of benefits to recognize the service and sacrifice 
of the servicemember and family and provide appropriate compensation 
that promotes the financial stability of the family?
    NMFA believes the benefit change that will provide the most 
significant long-term protection to the family's financial security 
would be to end the Dependency Indemnity Compensation (DIC) offset to 
the SBP. The DIC is a special indemnity (compensation or insurance) 
payment that is paid by the Department of Veterans' Affairs (VA) to the 
survivor when the servicemember's service causes his or her death. It 
is a flat rate payment, which for 2005 is $993 for the surviving spouse 
and $247 for each surviving child. The SBP annuity, paid by the 
Department of Defense (DOD) reflects the longevity of the service of 
the military member. It is ordinarily calculated at 55 percent of 
retired pay. Military retirees who elect SBP pay a portion of their 
retired pay to ensure that their family has a guaranteed income should 
the retiree die. If that retiree dies due to a service-connected 
disability, their survivor is also eligible for DIC.
    Two years ago, surviving spouses of all servicemembers killed on 
Active-Duty were made eligible to receive SBP. The amount of their 
annuity payment is calculated as if the servicemember was medically 
retired at 100 percent disability. The equation is the basic pay times 
75 percent times 55 percent. As seen in the examples included at the 
end of this testimony (pp. 9-12), the annuity varies greatly, depending 
on the servicemember's longevity of service. As the law is written 
presently, if the amount of SBP is less than $993, the surviving spouse 
receives only the DIC payment of $993 per month. If the amount of SBP 
is greater than $993, the surviving spouse receives the DIC payment of 
$993 per month (which is nontaxable) plus the difference between the 
DIC and the SBP. For example, if the SBP is $1,500, the surviving 
spouse receives $993 from DIC (nontaxable) and $507 from SBP that is 
subject to tax each month. The DIC payment of $247 for each child is 
not offset.
    Surviving Active-Duty spouses have the option of several benefit 
choices depending on their circumstances and the ages of their 
children. By law, the SBP benefit is awarded to the spouse. As can be 
seen in the examples, it is paid for the spouse's lifetime unless she 
remarries. Because SBP is offset by the DIC payment, the spouse whose 
SBP payment would be less than the amount of DIC may choose to waive 
her SBP benefit and select the ``child only'' option. In this scenario, 
the spouse would receive the DIC payment and her children would receive 
the full SBP amount until the last child turns 18 (23 if in college), 
as well as the individual child DIC until each child turns 18 (or 23 if 
in college). As shown in the examples, once the children have left the 
house, the spouse who has chosen this option will be left with an 
annual income of $11,916 (in 2005 dollars). If there are no dependent 
children, the surviving spouse whose SBP benefit is less than the $993 
DIC payment will experience this income decline just 6 months following 
the servicemember's death. In each case, this is a significant drop in 
income from what the family had been earning while on Active-Duty. The 
percentage of income loss is even greater for survivors whose 
servicemembers had served longer on Active-Duty. Those who give their 
lives for their country deserve fairer compensation for their surviving 
spouses.
    It has only been since the passage of the National Defense 
Authorization Act for Fiscal Year 2002 that surviving spouses of 
servicemembers who had not been retirement eligible and were killed on 
Active-Duty have been entitled to receive the SBP benefit. This 
eligibility was made retroactive to 10 September 2001. A correction in 
P.L. 108-136 allows spouses to choose ``child only'' SBP benefits. This 
change, effective only for deaths after 24 November 2003, allows some 
families to recover the SBP benefits the spouse would lose because of 
the DIC offset, but only temporarily. When the children's eligibility 
ends because of age, the SBP benefit is lost to the family.
    As we have described, the interaction between SBP and DIC is a 
complex procedure to understand. Consider trying to make decisions 
about this payment distribution a month after losing your spouse, while 
still in a state of shock and denial.
    NMFA recommends that the DIC offset to SBP be eliminated. Doing so 
would recognize the length of commitment and service of the career 
servicemember and spouse and would relieve the spouse of making hasty 
financial decisions at a time when he or she is emotionally vulnerable.
    NMFA believes that the survivor benefits package, as outlined in 
Appendix 1, needs to be viewed as a whole and each individual benefit 
be studied in the context of the whole package. The recent emphasis on 
the death gratuity, for example, leads many of the uninformed to 
believe that it is the only compensation that the surviving family 
receives. The death gratuity, currently $12,420, is paid within 72 
hours to help the families meet immediate expenses related to the death 
of the servicemember. NMFA applauds recent increases to the death 
gratuity, including the indexing of the payment to increases in basic 
pay. As with these previous changes, any further increase should be 
applied equally for all Active-Duty deaths.
    NMFA recommends that any increased funding for the death gratuity 
be applied to increase it across-the-board for all Active-Duty deaths.
    The largest payment provided to surviving families soon after the 
servicemember's death is from the Servicemembers' Group Life Insurance 
(SGLI). The maximum coverage is currently $250,000. NMFA believes the 
Services must educate young servicemembers on the importance of signing 
up for maximum coverage under SGLI and especially on updating 
beneficiary data. Information provided to NMFA indicates that more than 
90 percent of Active-Duty servicemembers sign up for the maximum 
amount. The opt-out system, wherein the servicemember needs to show why 
he or she does not require SGLI, goes a long way in ensuring this 
participation. We are, however, less sure that National Guard and 
Reserve members are signing up at the same high rate. The election of 
insurance is a family decision. Spouses should be included in the 
decision making process and no servicemember should be allowed to opt-
out without the written consent of his or her spouse. We all have heard 
of a few unfortunate instances where the servicemember had opted out of 
SGLI when first offered it, then marries and does not sign up for it. 
There are also cases where the servicemember does not change 
beneficiary or primary next of kin on the paperwork when he or she 
marries. While beneficiary information is supposed to be reviewed 
periodically, in actuality some people fall through the cracks. NMFA 
proposes a trigger mechanism, perhaps tied to TRICARE Defense 
Enrollment Eligibility Reporting System (DEERS) registration, which 
would prompt the servicemember to update survivor information when he 
or she has a change in marital status or adds a dependent.
    NMFA is aware that proposals to increase the amount of SGLI are 
currently under discussion. We believe it is paramount that any 
proposal to increase the maximum SGLI should be designed to create an 
incentive for the servicemember to take the maximum amount. For 
example, NMFA supports the proposal included in the National Defense 
Authorization Act (NDAA) for Fiscal Year 2005, that would provide an 
additional $100,000 in coverage without an increase in the premium for 
servicemembers electing the maximum amount. Any increase in maximum 
coverage should be available to all servicemembers.
    NMFA recommends that spouses be involved in the decision process if 
the servicemember elects to opt-out of SGLI. We also suggest a trigger 
mechanism to prompt the servicemember to update survivor information, 
i.e. designation of primary next of kin, election of SGLI, or change of 
beneficiary, when family status changes. NMFA also recommends that 
proposals to increase coverage be designed to ensure that the 
servicemember take the maximum amount and that the maximum coverage be 
available to all servicemembers on Active-Duty.
    Much of the benefit confusion experienced by surviving families 
could be corrected by educating the servicemember and spouse about the 
total survivor benefit package. While some commanders or family 
readiness group leaders are reluctant to talk about this with families 
because they feel it will induce added stress or concern, the opposite 
is true. If the families have an overview of what benefits are 
available in case of the death of the servicemember, this knowledge can 
help relieve the stress when they go over the ``what if'' scenarios 
during a deployment. NMFA has a concise overview of survivor benefits 
in fact sheet format available on its Web site. We feel, however, that 
DOD should provide a more in-depth overview or explanation, like the 
annually-updated VA benefits, to be made available in pamphlet form and 
on-line to educate servicemembers and their families. The DOD booklet 
should focus on the survivor benefits available from all Federal 
sources and not get caught up in the minutiae of individual Service 
procedures.
    NMFA recommends that DOD create a handbook similar to the annual VA 
Benefits Handbook to provide easy access to survivor benefit 
information to servicemembers and spouses.
    The surviving family is presented with a large payment ($250,000 
SGLI plus the $12,420 death gratuity) when the servicemember dies. The 
management of that large sum of money is a huge responsibility, 
especially if young children are involved. The surviving spouse also 
needs to make decisions that impact the family for many years. The 
bereaved spouse may be especially vulnerable to unscrupulous or 
uninformed advisors, friends or family members who may try to take 
advantage and ``help'' the surviving spouse spend or invest the 
inheritance. The need for unbiased and fair financial counseling has 
never been greater. At the present time, the VA offers the free 
services of a financial counseling service ``Financial Point'' for 1 
year after the servicemember is killed. The access to a long term 
service to counsel the family members about what their options are 
without a financial stake in the outcome could help the surviving 
families establish an investment plan and make sound decisions about 
what they should do that is best for their family.
    NMFA believes that surviving spouses need long-term access to 
counsel and advice concerning the entire benefit package. The surviving 
family will have questions as the years go by and their benefits and 
their need for different benefits changes. The young widow with a 
toddler has too many immediate concerns to think about the child's 
college education 15 years from now. However, she will be looking one 
day for information about those benefits. Will she be able to access 
that information and advice in an easy manner with someone who is an 
expert in benefits for families? Or, will she be forced to walk into an 
office where the counselor is more familiar with VA health benefits for 
veterans than about education benefits for surviving children? The 
surviving spouse needs information unique to her family, not a cookie 
cutter, one size fits all answer.
    Entities that provide this type of survivor-focused service do 
exist. For example, Armed Forces Services Corporation (AFSC) has 
supported the military community for years and is renowned for its 
expertise in government and military survivor benefits and the 
survivorship services provided to their military members and families. 
AFSC's staff provide assistance in matters related to military 
benefits, Social Security, Veterans' Affairs, and the military SBP, 
death gratuity, SGLI/Veteran's Group Life Insurance (VGLI), among 
others. The centerpiece of AFSC's services is their unique software 
program that provides a personalized projection of the family's 
integrated stream of government and military survivor benefits, 
including changes to the benefit amounts throughout the surviving 
family's lifetime. A service such as this would help surviving families 
understand and coordinate their benefits in the years to come. Such a 
service is so valued that presently Army Emergency Relief and the Navy 
Marine Corps Relief Society present all surviving families of those 
killed on Active-Duty with lifetime memberships in the Armed Forces 
Services Corporation to guarantee that they receive the counseling and 
advice they require.
    NMFA recommends the establishment of a survivor office within the 
VA to provide longterm information and support for surviving spouses 
and children and offer individualized information about each surviving 
family's benefit package. A significant element to that support should 
be access to professional financial counseling.
    To a child, the loss of a parent is a life-changing event. As he or 
she goes through the process of grieving for the parent some help may 
be required. The VA states that it offers grief counseling to families 
through its Vet Centers; however, NMFA is concerned about the 
Department's current capacity to provide that counseling for all who 
need it. NMFA hopes the VA and DOD will work together to identify the 
needs of surviving children and promote adequately-resourced programs 
and initiatives to support those needs.
    NMFA recommends that DOD and the VA identify the emotional needs of 
surviving spouses and children, especially in the area of grief 
counseling, and promote programs and initiatives to support those 
needs.
    The military service Casualty Assistance Officer (CAO) has received 
training to help the family through these difficult times. This 
assistance, however, is performed as an extra duty and the officer is 
not an expert in survivor issues or financial counseling. Understanding 
all the benefits and entitlements is a complex process. We have heard 
from surviving families that they greatly appreciated the help and 
support provided by the CAO in those first days as he or she served as 
a representative of their parent service. The presence of the CAO 
demonstrates to the family that ``we take care of our own'' and can be 
a great comfort to the family as they go through the military funeral 
and honors. Sometimes, however, training for this extra duty can be 
hurried or incomplete and may result in misinformation or a missed step 
in a procedure that is not discovered until months down the road with 
consequences that are irrevocable. Family readiness group leaders and 
other volunteer support could also benefit from specific training in 
the area of benefits and support services available for surviving 
family members.
    NMFA recommends improved and consistent training for the CAOs and 
family support providers so they can better support families in their 
greatest time of need. Training and responsibilities of CAOs vary by 
Service. It is only fair to families that they have the best help 
available.
    NMFA has also identified some small fixes to legislation and policy 
that could help surviving families in their transition process. As we 
all know, it is often the small inconvenience that may be the straw 
that breaks the camel's back. Each surviving family has a unique 
situation. The policy as written now allows the surviving family to 
remain in government housing for 6 months after the death of the 
servicemember. This date may come in the middle of a school semester or 
year. When a child has had to cope with the death of a parent, the 
consistency and support of their school is important. NMFA recommends 
that the 6-month limit for occupancy of government quarters or military 
housing privatized by DOD be waived to allow the children to finish the 
school year if the family so chooses. Rent would be charged for the 
extra time.
    Guard and Reserve families may choose to keep their employer-
sponsored health and dental care when their servicemember is activated 
and deployed. The family's eligibility for this care may cease if the 
servicemember is killed on Active-Duty. These families may need 
information and assistance in making the transition into the TRICARE 
health system, but they are eligible for the benefit just as if they 
had been using TRICARE when the servicemember died. However, in the 
case of the TRICARE Dental Program (TDP), the dental insurance for 
Active-Duty families, legislative changes are needed to make these 
families eligible for the benefit available to other survivors. As the 
law is currently written, only those families enrolled in the TDP at 
the time of the servicemember's death are eligible to continue 
enrollment and receive premium free dental insurance for 3 years. NMFA 
recommends that in cases where the family has employer sponsored dental 
insurance they be treated as if they had been enrolled in the TDP at 
the time of the servicemember's death.
    NMFA thanks this committee for your attention to the well-being of 
military families, especially for those who have lost a loved one in 
service to the Nation. Servicemembers killed on Active-Duty have made 
the ultimate sacrifice. Their surviving families deserve the most 
comprehensive package of benefits that a grateful nation can provide. 
This package should reflect the obligation of the government to 
compensate the survivors of all servicemembers killed on Active-Duty. 
It must meet families' short-term needs, provide for their long term 
financial stability, and recognize the commitment and service of the 
servicemember and family. With this focus, a grateful Nation can 
continue to fulfill the promise made to military families by President 
Lincoln.
                               appendix 1
    Benefits paid by the Department of Defense:

         Death gratuity--$12,420, indexed to increases in basic 
        pay. This is paid to the designated next of kin and is not 
        taxable. This is supposed to be paid within 24 hours of 
        notification of death. The purpose of this payment is to help 
        the survivors in their readjustment and to aid them in meeting 
        immediate expenses.
         Burial benefits--DOD will process, transport, and 
        inter remains. A casket, vault, and headstone are provided or 
        costs of up to $6,900 may be reimbursed if the family elects to 
        make private arrangements. Transportation costs for the 
        immediate family are reimbursed if they must travel for the 
        funeral.
         Military Health and Dental Care Benefits--All 
        otherwise eligible spouses and children remain eligible for 
        military health care coverage. For 3 years from the date of 
        death, TRICARE benefits, including co-pays, remain the same as 
        Active-Duty family benefits. After 3 years, the cost of TRICARE 
        and TRICARE co-pays rise to those of retirees. In most cases, 
        the survivors receive dental insurance premium-free for 3 
        years, before becoming eligible for the premium-based Retiree 
        Dental Program. The spouse loses eligibility for medical and 
        dental benefits upon remarriage and it may not be reinstated. 
        Children have benefits until age 18 or 23 if enrolled in 
        college.
         Survivor Benefit Plan--Surviving spouses of 
        servicemembers who die on active duty are entitled to SBP 
        benefits. SBP payments equal 55 percent of what the member's 
        retired pay would have been had the member been retired at 100 
        percent disability, i.e. 75 percent of the basic pay (Basic pay 
        times 75 percent times 55 percent). SBP is automatically 
        adjusted annually for cost of living increases. SBP payments 
        are subject to Federal income taxes. The spouse may decide to 
        waive their payment and have payment made to children only 
        until the children reach age 18 or 23 if enrolled in school. If 
        the spouse remarries before age 55, SBP payments cease. If the 
        subsequent marriage ends in death, divorce or annulment, SBP 
        may be reinstated. If the spouse remarries after age 55, the 
        SBP payments continue. SBP payments are offset by DIC payments.
         Housing benefit--Surviving families may occupy 
        government quarters or be paid housing allowances for 180 days. 
        These allowances vary according to rank and geographic 
        location. In addition, the family is eligible for one move at 
        the cost of the government.
         Servicemember's Group Life Insurance--All 
        servicemembers are automatically enrolled for $250,000 of 
        coverage unless they explicitly decline the insurance or 
        purchase lower levels of coverage. SGLI will be paid to the 
        individual designated on the servicemember SGLI election and 
        certificate form. If no beneficiary is elected by the 
        servicemember, the proceeds are paid first to the surviving 
        spouse; if none, the child(ren) (natural, adopted, or 
        illegitimate) in equal shares; if none, to the parents (natural 
        or adopted).
         Other DOD benefits--Spouses are eligible for 
        Commissary, Exchange, Morale, Welfare, and Recreation 
        activities privileges indefinitely unless they remarry. 
        Children maintain eligibility until age 18 or 23, if still 
        enrolled in college.

    Benefits paid by the Department of Veterans' Affairs

         Transition Assistance--a monthly payment of $250 paid 
        to surviving spouses with children for 2 years from the date of 
        death of the servicemember to help with transition.
         Dependency and Indemnity Compensation--Surviving 
        spouses and children (and some dependent parents) are eligible 
        for DIC. The rate has been adjusted annually for cost of living 
        increases. The 2005 spouse DIC rate is $993 monthly. The DIC 
        payment is non-taxable. Additional amounts, also adjusted 
        annually, are authorized for a surviving spouse with minor 
        children. The current monthly benefit is $247 for each child. 
        Unmarried children are eligible for the benefit until they 
        reach the age of 18 (19 if still in secondary school), between 
        18 and 23 if they are attending a VA approved institution of 
        higher learning or for life if they are disabled while still 
        eligible for the benefit. Children of a deceased member, who 
        did not have a spouse at the time of death, receive a different 
        monthly benefit. If the spouse remarries before age 57, payment 
        of the spouse's DIC ends. The children's DIC payment continues 
        as long as they are eligible. If the subsequent marriage ends 
        in death, divorce or annulment, DIC will be reinstated.
         Survivors' and Dependents' Educational Assistance 
        Program--Surviving spouses and children are eligible for up to 
        45 months of education benefits. Beginning 1 July 2005, the 
        surviving spouse of a servicemember killed on Active-Duty has 
        an extended eligibility for education benefits of up to 20 
        years after the date of the member's death. Children are 
        normally eligible to receive the educational benefits between 
        their 18th and 26th birthdays. The current monthly benefit is 
        $803 per month and increases to $824 on 1 October 2005.
         Home Loan Guarantees--An unremarried surviving spouse 
        is eligible for GI home loans and retains eligibility if 
        remarriage occurs after 57th birthday.

    Benefits paid by the Social Security Administration:

         Social Security monthly benefits are paid to a spouse 
        or a divorced spouse regardless of age if the children of the 
        deceased servicemember are under age 16 or are disabled and 
        meet social security requirements. The amount paid can only be 
        determined by the Social Security Administration.
         Social Security Lump Sum Death Benefit--a payment of 
        up to $255 is paid to the surviving spouse living with the 
        member at the time of death or to the oldest surviving child if 
        there is no spouse. Some States also pay death benefits or 
        provide other support, especially to the survivors of National 
        Guard or Reserve members killed on Active-Duty. The scope of 
        these benefits and eligibility for them varies by State.
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
          
    The National Military Family Association thanks Senator Jeff 
Sessions and Senator Joe Lieberman for their active interest in the 
well being of our military families should the unthinkable happen. NMFA 
is grateful for the recognition in the HEROES Act of 2005 that the 
election of insurance is a family decision and for including a 
provision to ensure that spouses are included in that important 
decision.
    For the family members of a fallen servicemember, NMFA knows that 
there is no way to compensate them for their loss, only to help them 
prepare for their future. We strongly believe that all servicemembers' 
deaths should be treated equally. Servicemembers are on duty 24 hours a 
day, 7 days a week, 365 days a year. Through their oath, each 
servicemember's commitment is the same. The survivor benefit package 
should not create inequities by awarding different benefits to families 
who lose a servicemember in a hostile zone versus those who lose their 
loved one in a training mission preparing for service in a hostile 
zone. To the family, there is no difference. NMFA therefore supports 
proposals for improvements to the survivor benefit package that are 
consistent with our philosophy that all Active-Duty deaths be treated 
equally. We encourage Members of Congress to examine the total package 
with the goal of recognizing the service and sacrifice of the 
servicemember and family and providing compensation that promotes the 
financial stability of the family.
    Kathleen B. Moakler, Deputy Director, Government Relations, 
National Military Family Association, [email protected] www.nmfa.org, 
703.931.6632, 703.931.4600 (FAX).

    Senator Levin. Finally, Mr. Chairman, I would ask that the 
statement of Governor Bill Richardson of New Mexico, who asked 
to testify here today though it could not be worked out, be 
placed in the record. He describes in his statement what New 
Mexico has done for the New Mexico National Guard members who 
are ordered to Active-Duty. They will pay the premium for the 
$250,000 SGLI. It is a good example of what States can do to 
support those who are called to Active-Duty. I would ask that 
Governor Richardson's statement also be included in the record, 
as well as a statement from the Gold Star Wives of America. 
Both of those, Mr. Chairman, would make a real contribution to 
this record.
    Chairman Warner. Senator Levin, I join you in entering 
Governor Richardson's statement and these other statements. It 
has been the intention of the chair to do just that, but I 
thank you very much.
    [The prepared statements of Governor Richardson and the 
Gold Star Wives of America follow:]
               Prepared Statement by Hon. Bill Richardson
    Chairman Warner, Senator Levin, and members of the committee: I 
appreciate the chance to offer written testimony for today's hearing on 
death benefits and services available to survivors of military 
personnel. I would also like to thank Senator Levin for his leadership 
in the United States Senate, his commitment to our troops at home and 
those serving abroad and for his efforts to have me testify before the 
Committee in person today. I believe it's important for today's 
discussion and future discussions, regarding military death benefits 
and services available to survivors of military personal, to have the 
input from our Nation's Governors who serve as the commanders in chief 
of our respective National Guards.
    During this time of war against terrorism, we can all agree that 
few needs are more pressing, or more deserving of our attention, than 
taking care of the men and women of the U.S. Armed Forces. However, 
with longer deployments and meager benefits, the strain on soldiers is 
unimaginable. The pressures on their families can be unsustainable. The 
National Guard and Reserves have been called to Active-Duty throughout 
the world in unprecedented numbers. Few expected to be serving in Iraq 
or Afghanistan, and fewer still had the time or resources to plan for 
long deployments.
    Meantime, soldiers are still dying. Just last week, 37 of our 
troops lost their lives in a helicopter crash and in hostile actions 
while serving in Iraq--the deadliest single day since the war began. 
While both Democrats and Republicans in Congress have introduced 
measures to assist those serving abroad as well as their husbands, 
wives, and children at home, our troops deserve more than speeches. 
They deserve action.
    That is why I have taken it upon myself as Governor of New Mexico 
to put forth a plan to pay for $250,000 in life insurance for all 4,027 
Active-Duty New Mexico National Guard members. New Mexico will become 
the first State in the country to enact the ``Take Care of Our Own'' 
legislation. It comes with an annual cost of $800,000 to the State.
    Many Americans may not realize that the current military death 
benefit pays survivors many already suffering financially during their 
loved one's deployment--just $12,420. Yesterday, it was reported in an 
Associated Press article that the administration plans to increase the 
tax-free ``death gratuity,'' as part of their fiscal year 2006 budget 
proposal to be submitted to Congress next week. I'm glad to see the 
administration finally interested in supporting our troops and their 
families. However, how long will it take before Congress decides to 
act? I have heard too many stories of families and loved ones left with 
nothing when their spouse, son or daughter dies in combat. This will 
never happen again to a family in New Mexico. This is why as the 
commander in chief of the State National Guard--I chose to act now.
    The State Legislature is moving quickly. On Wednesday of last week, 
the Guard provision passed the New Mexico House 70-0. The New Mexico 
State Senate may act as early as today. The administration and Congress 
should follow our lead, doing its part to cover reservists and all 
military personnel. Washington should act now to provide for the 
families of our service men and women who fall. There is already 
national support for such a plan, as we found shortly after launching 
this initiative. Officials from 20 States, both Republicans and 
Democrats, have expressed interest in what we're doing. Those states 
include: Alabama, Arizona, California, Connecticut, Kansas, Kentucky, 
Maryland, Minnesota, Montana, New Hampshire, New Jersey, New York, 
Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, 
and Virginia.
    Mr. Chairman, last May, I attended the funeral service for Marine 
Lance Cpl. Aaron Austin, 21, one of nine New Mexican service personnel 
killed in Iraq. He died near Fallujah in his second tour. Austin, who 
had joined the military after the September 11 attacks, left behind a 
fiancee, family, and friends. At his funeral, I saw proud Americans of 
humble means suffering an unbearable loss. I vowed then to do something 
to at least moderate their pain.
    This somber story is repeated in communities in every State. A 
soldier is killed. Those left behind struggle to pay the bills, raise 
their family, and make ends meet.
    As a Governor, I cannot dictate or control benefits for U.S. 
military personnel, such as the Reserves. But I can help New Mexico 
National Guard members and their families. I hope we can set a standard 
for other states, and for our Federal Government, to match National 
Guard troops and reservists who account for more than 40 percent of our 
forces in Iraq. That number is expected to grow to 50 percent in the 
months ahead. About 160,000 Guard troops and reservists are on Active-
Duty, including 60,000 in Iraq. Thousands more are being mobilized or 
are on their way.
    When those who serve sacrifice everything, we lose a hero. But 
their families and loved ones lose much more. When our service men and 
women are standing vigil on the front lines of the war on terror, they 
should know that we are behind them and that if they fall, we will take 
care of their families.
    Mr. Chairman and members of the committee, we have a 
responsibility--a moral duty--to take care of our own--and we will. I 
look forward to being able to participate in future hearings before the 
committee, or one of its subcommittees, when it comes to the discussion 
of death benefits and services available to survivors of military 
personnel which include our very own National Guard and reservists.
    Thank you Mr. Chairman and Senator Levin for hosting this important 
hearing today.
                                 ______
                                 
       Prepared Statement by the Gold Star Wives of America, Inc.
    ``With malice toward none; with charity for all; with firmness in 
the right, as God gives us to see right, let us strive to finish the 
work we are in; to bind up the Nation's wounds. To care for him who has 
borne the battle his widow and his orphan.''
            President Abraham Lincoln, Second Inaugural Address, March 
4, 1865

    The Gold Star Wives of America appreciates the opportunity to 
participate in this hearing to examine the survivor benefits and the 
quality of services provided to the family members of those who die in 
line-of-duty. Please accept our full statement for the record. My name 
is Edith Smith, and I am the widow of a service connected disabled 
retired marine.
    The new members of Gold Star Wives, represented by our widows here 
today, have expressed frustration in their letters to you with the 
present system of Casualty Assistance as well as unanticipated bills 
they have received for the funerals of their ``Fallen Hero.'' The 
Casualty Assistance Officer (CAO) does not receive training for this 
duty, and their prior knowledge of survivor benefits are generally 
poor. However, our members do express great appreciation for the 
officers themselves. In order to have some uniform information in the 
Department of Defense's (DOD) Casualty Assistance program, we would 
like to acquaint you with the Armed Forces Services Corporation, 
formerly the benefit department of ``Army Air Force Mutual Aid 
Association'' at Fort Myer, Virginia. This group serves as a lifetime 
casualty assistance office with its unique computer program to project 
the family's financial future of integrated government survivor 
benefits from three main sources. They notify their members of all 
changes to these benefits and assist the surviving spouse in applying 
for those benefits. Gold Star Wives suggest that Armed Forces Services 
Corporation be contracted to provide the uniform benefit information to 
the CAO who will continue to represent the military service and assist 
the family.
    Gold Star Wives thanks the Members of the Senate for seeking ways 
to improve survivor benefits for family members of this war. We are 
firm in our belief that ``one death, one benefit'' should be provided 
to all surviving spouses of Active-Duty deaths regardless of the cause 
or place of death. Gold Star Wives is confused to learn that some 
legislation that would provide more generous survivor benefits to 
family members who had not been financially dependent on the fallen 
soldier while denying these same benefits to a financially dependent 
surviving family of the soldier killed in a ``friendly fire'' accident 
in a different location or severely disabled from Iraq.
    Gold Star Wives were not included in the legislation last year 
which improved the survivor benefit payment. My husband paid for me to 
have the Survivor Benefit Plan (SBP) benefit for 18 years before his 
death. Were he alive today, our family income would have the disabled 
retirees offset now eliminated, or if I remarried, my SBP eligibility 
would be restored. We military widows should not be excluded from the 
traditional spousal survivor benefit of the DOD.
    Gold Star Wives believe the purposes of the SBP and Dependency and 
Indemnity Compensation (DIC) have been lost. Military widows want the 
dignity of receiving work-related survivor benefits from our husband's 
employer. We are appreciative of the DIC paid by the Department of 
Veterans' Affairs (VA) in recognition of their heroic military service 
and our great sacrifice.
    Gold Star Wives was asked to focus our remarks on the death 
benefits provided to survivors of the catastrophically disabled 
retiree. Too many soldiers in this war have horrible permanent injuries 
caused by improvised explosive devices (IEDs). My own awareness of this 
often overlooked group rises from my role as the widow of a retired 100 
percent disabled marine who died in 1998.
    Deaths within 120 days of retirement receive the same benefits and 
services provided for an Active-Duty death.
    The disparities in survivor benefits for the catastrophically 
disabled arise after 120 days. These families must rise to very 
difficult challenges that most of us can't begin to imagine. The 
disparities in death benefits that Gold Star Wives have identified are:

         No death gratuity. 
         The VA burial allowance for service-connected deaths 
        of $2,000 plus mileage falls far short of the military's $6,900 
        allowance. It is sad to know these families will pay to bury 
        their own.
         VA's ``special compensation'' disabled retirees 
        receive up to $6,709; the surviving spouse receives $993; that 
        is 15 percent of the family income. The surviving spouse of a 
        100-percent disabled also receives the same indemnity 
        compensation of $993; or 41 percent. My husband lived more than 
        8 years with a 100-percent disability, so I received an 
        additional $213 DIC for assisting with his care. Soldiers who 
        suffer the most may not live 5 years for their surviving spouse 
        to qualify for this extra $213.
         Casualty Assistance Officers not mandated for retired 
        survivors.
         Life Insurance: the Serviceman's Group Life Insurance 
        (SGLI) must be converted to the Veterans' Group Life Insurance 
        (VGLI) within a short time. The higher cost VGLI is a term 
        insurance with premiums actuarily increased by age, 
        unsubsidized by the government, and with no waiver of premium 
        for permanent disability.
         DIC eligibility is not automatic; cause of death must 
        be service related or live 10 years with the disability. It 
        becomes prudent for the retiree to purchase the military's SBP 
        with a cost of 6\1/2\ percent of retired pay to assure his 
        survivor, who has placed her career on hold, of a guaranteed 
        income.
         Surviving family members of retirees are not eligible 
        for 3-year continuation of Active-Duty medical and dental 
        benefits.

    Gold Star Wives suggests that the committee restructure survivor 
benefits for surviving family members of the catastrophically disabled.
                               who we are
    Gold Star Wives of America, Inc., is a congressionally-chartered 
service organization comprised of surviving spouses of military 
servicemembers who died while on Active-Duty or as a result of a 
service-connected disability. Many of our membership of over 10,000 are 
the widows of servicemembers who were killed in combat during World War 
II, the Korean War, the Vietnam War, and all those military operations 
up to today's in Iraq and Afghanistan. Almost all of our members are 
receiving DIC from the VA. Gold Star Wives has been working on Capitol 
Hill to help maintain survivors benefits since it was founded in 1945. 
Today, we continue to fight to maintain those benefits for not only our 
members, but also for the over 330,000 survivors receiving DIC.
    Gold Star Wives has a long history of performing volunteer 
community service as well as volunteer work in our Nation's Veterans 
Hospitals and many other places where they are needed. During 2003, 119 
of our members volunteered in 49 Veterans' Affairs Volunteer Service 
(VAVS) accredited hospitals and medical centers. Gold Star Wives 
volunteered at Veterans Hospitals and Medical Centers 11,537 hours 
valued at $59,416, drove more than 23,866 miles valued at $3,341, and 
donated over $27,000 in cash and goods. We are currently members of the 
National VAVS Committee.
    The National Legislative Committee of The Gold Star Wives of 
America is composed of volunteer members. The committee includes:
         Rose Lee, Chairman, of Arlington, Virginia; widow of 
        U.S. Army Active-Duty death; Korean War, Vietnam War;
         Margaret Murphy Peterson of Remsen, New York; widow of 
        a soldier killed in action (KIA); U.S. Army, Vietnam War;
         Penny Splinter of Dubuque, Iowa; widow of KIA, 
        Operation Iraqi Freedom (OIF);
         Edith Smith, of Springfield, Virginia; widow of 
        retired disabled marine, Vietnam War;
         John Brennan, is our paid Washington Government 
        Relations Representative.
          survivors' legislative highlights in 108th congress
    Gold Star Wives worked closely with the Senate Committee on 
Veterans' Affairs in the 108th Congress to pass legislation that has 
improved military survivors' benefits. We have always found both 
majority and the minority committee staff members to work in a bi-
partisan and collaborative manner. They have always responded promptly 
to our requests for information, as well as meetings to discuss our 
legislative concerns and priorities. Consequently, Gold Star Wives 
would like to express our gratitude for their efforts in working to 
improve survivors' benefits during the 108th Congress.
    Specific survivors' legislative highlights in the 108th Congress 
include:

         The Veterans Improvement Act of 2004 (P.L. 108-352)

                 Increases survivors' DIC benefits by $250 per 
                month during the 2-year period following the death of a 
                veteran to further ease the transition of surviving 
                spouses with dependent children;
                 Allows a remarried spouse to be buried in a 
                national cemetery with his or her deceased veteran-
                spouse and without permission from his or her 
                subsequent husband or wife;
                 Provides for a 10-year extension of delimiting 
                period for Survivors' and Dependents' Educational 
                Assistance (DEA) for spouses of Active-Duty deaths who 
                are now in their first 10-year period of eligibility;

         The Veterans Benefits Act of 2003 (P.L.I08-183)

                 Includes a provision that permits surviving 
                spouses who remarry after attaining age 57 to retain 
                their VA survivors' benefits. Included in that law was 
                a provision that provides for a 1-year period to apply 
                for reinstatement that expired on December 15, 2004, 
                for those who remarried before the law was signed on 
                December 16, 2003. According to the VA, as of last 
                October, 5,794 survivors have applied for reinstatement 
                out of more than 32,000 eligible survivors. 
                Consequently, it does not appear that many were aware 
                of their eligibility to be reinstated. So, we would ask 
                that the law be amended to include those survivors over 
                age 55 as the original legislation requested and to 
                enable those survivors who may not be aware of the 
                legislation to become re-enrolled;
                 Increases the rate of monthly Survivors' and 
                DEA benefits for full time students from $695 to $788 
                for 45 months (the current full time student rate is 
                $803 per month);
                 Provides for the end of the offset of the SBP 
                payments by DIC payments for survivors who remarry 
                after the age of 57. However, the DOD is refusing to 
                recognize this law and is now seeking to recover 
                payments of the SBP benefits made to survivors who are 
                legally eligible to receive both payments. We would 
                request that the committee help us with this unfair 
                interpretation of the law.
            current survivors' benefits monthly compensation
         The VA's Dependency and Indemnity Compensation
    DIC is monthly compensation of $993 paid as indemnity to 
servicemember's surviving spouse. However, this amount is only 41 
percent of the $2,429 paid monthly to the family of a veteran who is 
100 percent disabled as a result of a service-connected injury. 
Additionally, the DIC monthly payment of $993 is only 15 percent of the 
$6,709 monthly payment paid to the catastrophically disabled veteran. 
Consequently, upon the death of a veteran of a service-connected injury 
who falls into either disability category, the veteran's family suffers 
a substantial unanticipated monthly financial setback.

         The DOD's Survivor Benefit Plan
    SBP originally was a military retiree's purchased benefit plan that 
assures a surviving spouse a monthly payment of 55 percent of the 
monthly retirement check. It was expanded in the 108th Congress to 
include all line-of-duty deaths without the requirement of 20 years of 
Active-Duty service after September 10, 2001. However, with the SBP 
reduced by DIC, practically all Active-Duty deaths result in the 
survivor receiving only a DIC payment. After November 24, 2003, the OIF 
survivors have the option to elect the child only SBP. In that case, 
the SBP benefit is provided to the child without offset of DIC. A sad 
consequence of the SBP child option is that the survivor who becomes 
the primary provider for the family, is forced to forego their intended 
survivor benefit and transfer it for a current income at the unjust 
loss of a lifetime benefit intended for surviving spouses. No living 
military retiree is forced to make this option at retirement. We 
therefore suggest that survivor benefit options provided to the living 
servicemember should be provided in a similar and equal manner to the 
deceased member's family. If a divorced spouse is able to obtain SBP 
benefits for herself as a divorce settlement without offset of any 
other income, we ask why the survivor cannot be afforded this same 
benefit as a consequence of their Active-Duty retired spouse's death?
    It is extremely hard to understand, from our survivor's 
perspective, why two wives of one retiree could possibly collect each 
survivor benefit without offset. Children can collect each benefit 
without offset, and their years of SBP payments would be longer than 
the average 7 years a military survivor is expected to live and collect 
SBP. Another sad result of the child option is that children who are 
ages 18-23 and in school are paid directly rather than to the surviving 
parent. Consequently, the survivor has no legal say over this money and 
it is possible that this dependent child in college could have an 
income of some $2,000 per month resulting in a loss of potential 
scholarship and the unusual situation of an unearned income provided 
directly to the surviving ``child.''
                            recommendations
         Ending the SBP/DIC offset
    A servicemember receiving or entitled to receive retirement pay may 
participate in the SBP to ensure a survivor will have some income in 
the event of their spouse's death. However, for those retired 
servicemembers who die as a result of a service-connected disability 
and therefore entitling their survivor to become eligible for DIC, the 
survivor's SBP will then be offset dollar for dollar by their DIC.
    This patently unfair offset currently affects approximately 52,000 
survivors who are dually eligible for both SBP and DIC. While DIC is 
non-taxable income and SBP is taxable, survivors of these disabled 
retirees see little or no SBP funds despite having paid monthly 
premiums equal to 6.5 percent of their retired pay; adding up to 
thousands of dollars over the years. As a consolation for having made 
these payments, the accumulated premiums are returned to them without 
interest. This lump sum refund then becomes a taxable event for the 
survivor. Unfortunately, there was very little tax advantage for the 
disabled retiree when paying SBP premiums because his income was 
predominately non-taxable. Consequently, there is no real advantage to 
SBP for this group of survivors and, in fact, it becomes an unjust 
survivor's burden. There is a great deal of resentment by some 
survivors who see that the Federal Government is collecting taxes on 
refunded SBP contributions for which they gained nothing financially. 
The net effect of their monthly premium payments is that the retired 
disabled veteran's survivor pays taxes for having given the Federal 
Government a tax free loan.
    There is no civilian employer that would be permitted to return 
many years of survivorship premiums, without interest, should it choose 
not to pay purchased benefits. Yet, under current law the survivors of 
a military retiree are denied participation in a cost-sharing benefit 
that was meant to protect them. Again, had the disabled servicemember 
retired from Federal civil service, the survivor would be entitled to 
both the civil service survivor benefit and DIC, with no offset.
    Many SBP/DIC survivors have spent more than 20 years sacrificing 
and supporting their spouse's military career and then years taking 
care of them during their years of disability. Retired pay represents 
deferred compensation for the 20 or more years of military service and 
disability pay that is designed to compensate for a veteran's reduction 
in quality of life and lost future earnings as a result of his 
sacrifice for his country. Just as the disabled military retirees are 
now entitled to both benefits, so should their survivors. Many 
survivors are in their 50s or older and have not had the opportunity to 
develop their own careers. The DIC attempts to indemnify them for the 
loss of a spouse's life and an element of support for their future. The 
SBP represents completely different income that they have paid for and 
made a life of sacrifices for like multiple deployments, constant 
anxiety about their spouse's well being, frequent moves, and no real 
chance to invest in a pension of their own.

         Better training for the Casualty Assistance Officers

    We raise this issue as we have heard of many instances of problems 
that the new survivors of the conflicts in Iraq and Afghanistan have 
experienced. For most survivors, the death of their spouse is the most 
catastrophic event of their lives. Many are literally in shock for many 
months and are unable to cope with the financial decisions and 
bureaucratic tangles that a survivor encounters. The CAOs are 
unfortunately not now adequately trained, nor are any assigned to such 
duty full time. Yet, they must try to help survivors go through the 
maze of the VA and DOD benefits. CAOs cannot provide the kind of 
counseling, both grief counseling and financial counseling necessary to 
meet the needs of a military survivor. There currently is little 
guidance for the CAOs. Without training or some DOD/VA/Social Security 
(SS) integrated brochures, survivors are without proper counseling and 
guidance at a critical time in their lives. All of the services should 
have standardized guides.
    A suggested solution to provide uniform and accurate information to 
all survivors would be for DOD to contract with the Armed Forces 
Services Corporation (AFSC). AFSC specializes in government survivor 
benefits and is renowned for its expertise, outstanding service, and 
its unique computer program that projects the family's future 
integrated stream of government survivor benefits and changes that 
occur to those amounts due to changing ages of the spouse and children. 
They serve as a lifetime casualty assistance office keeping their 
members informed of legislative changes that may affect the family's 
survivor benefits and assist the surviving spouse in applying for those 
benefits. AFSC assists the surviving spouse in dealing with the DOD, 
VA, and the Social Security Administration (SSA).

         Improved upfront information needed for survivors' 
        decisions

    Survivors need to know upfront the following information:

      -Upon remarriage survivors are subject to the following change in 
benefits:

        -Loss of their military ID card and consequent loss of base 
privileges including Exchange and Commissary, morale, welfare, and 
recreation (MWR), and military medical benefits;
        -Their medical benefits can go from TRICARE to CHAMPVA.

      -Military survivors who work for the Federal Government can be 
barred from receiving their spouse's Social Security benefit;
      -Those not enrolled in Medicare Part B are not eligible for 
CHAMPVA. The waiver of penalties and interest assessed for late 
enrollment has been fixed legislatively for TRICARE but not for 
CHAMPVA. Gold Star Wives would like to respectfully suggest that the 
plain language of Title 38, Section 1713 gives these CHAMPVA widows the 
same or similar benefits as TRICARE survivors. We are told that about 
60-100 disabled widows may be suffering a loss of medical care because 
they were unaware of the mandated requirement to purchase Medicare Part 
B as an additional condition to their eligibility for CHAMPVA. We ask 
the committee to inquire as to the welfare of these widows.

         The creation of a Survivors' Office within the VA  
        and/or the DOD
    There currently is no central focus or location within either the 
VA or DOD that a survivor or family member can go to with questions or 
concerns about their benefits. The VA's regional offices are woefully 
inadequate at providing information concerning survivors' benefits. DOD 
likewise has no central location for the new survivor to turn to should 
their CAO be without such information. There is virtually no 
coordination between DOD and VA that survivors can count on. 
Consequently, there is a need for a Survivors' Office that can carry 
out these critical functions from a central location.

         Future changes in survivors' benefits

    There are several bills being introduced concerning proposed 
changes to survivors' benefits, including an increase in the death 
gratuity from $12,000 to $100,000 and an increase in life insurance. We 
strongly recommend that any changes made to survivors' benefits should 
not differentiate between Active-Duty deaths and KIA deaths. Survivors 
of servicemembers who die on Active-Duty have very similar experiences 
and needs following their loss. Also, insurance proceeds should go to 
the servicemember's surviving spouse and any children, rather to other 
family members who may not be dependents.
                        biography of edith smith
    Edith Smith is the widow of a disabled military retiree, Lt. Col. 
Vincent M. Smith, USMC, Ret. He had the misfortune to suffer a 
disabling heart condition in 1987, at age 48. Twenty-nine months later, 
Vince was switched to Medicare and his earned military health benefit 
of retirement, CHAMPUS was unexpectedly terminated simply because his 
disabling condition met the strict requirements for a swift and 
unchallenged Social Security disability determination. With the special 
help of Senator John McCain, Arizona, and Congressman Bill Young, 
Florida, Edith set out in 1991 to change the law with another wife 
(residing in Florida) whose husband suffered a traumatic brain injury 
at about age 50. Within 10 months, legislation restoring CHAMPUS as 
second payer to Medicare was signed into law for about 100,000 retired 
Medicare eligibles under age 65. A July 19, 1992, segment describing 
the mission of Terry Cox and Edith to change the law ran on Tom 
Brokaw's NBC ``Nightly News.'' Mr. Brokaw ended the segment with his 
comment: ``Hell hath no fury like a woman scorned with a phone and a 
fax!''
    Edith has continued her role as a volunteer advocate for Disabled 
Military Beneficiaries by serving as a member of the TRICARE 
Beneficiary Working Task Force at Tricare Management Activity in Falls 
Church, Virginia. In her volunteer capacity, she has prepared and 
presented testimony more than 20 times since 1993 before various 
congressional committees as a citizen advocate working to correct 
unjust problems that surfaced with the implementation and integration 
of the dual Medicare/CHAMPUS/TRICARE benefit for those under age 65. 
Following her husband's death, Edith focused her efforts on changes to 
the ``custodial care'' definition in order to provide medically 
necessary care to children requiring skilled nursing delivered in the 
home setting.
    Edith continues to serve in a volunteer role as a resource on 
disabled issues to the Government Relations Department of The National 
Military Family Association and to The National Association for 
Uniformed Services. In 1998, The National Military Family Association 
honored Edith with their prestigious Margaret Vinson Hallgren Award for 
her efforts on behalf of the disabled members of the military 
community. She served in various positions on The Advisory Social 
Services Board to Fairfax County Board of Supervisors for 7 years. She 
became a member of Gold Star Wives of America shortly after her 
husband's death and assists with their Washington legislative 
activities.
    A native Virginian, Edith graduated from Mary Washington College of 
the University of Virginia in 1962 with a Bachelor of Science degree in 
Home Economics Education. She was married to Vince Smith for 35 years, 
staying at home to assist with his care during the years of his 
disability. They have two children; Karen, her husband Chas, one son 
Steve and two grandchildren.
                          disclosure statement
    Neither Edith Smith nor the Gold Star Wives of America, Inc. have 
received any Federal Grant or contract during the current or previous 2 
fiscal years relative to the subject matter of this testimony.

    Chairman Warner. Senator Levin, this marks our 27th year 
that you and I have been together on this committee. Through 
those years, I can say without any equivocation whatsoever, you 
have been at the very forefront of all these personnel issues, 
and you speak from the heart.
    Senator Levin. You are our leader, Mr. Chairman, and we are 
grateful for that.
    Chairman Warner. I think there have been times when you 
have been the leader of this committee. It seems to me it goes 
back and forth.
    Senator Levin. I am not going there, Mr. Chairman. 
[Laughter.]
    Chairman Warner. The chair also notes that Senator Frist, 
the Majority Leader, has put in legislation, as well as Senator 
Craig and Senator Akaka. On the Veterans Committee, you will be 
having a hearing very shortly on this matter, will you not, 
Senator Akaka?
    Senator Akaka. Mr. Chairman, thank you very much for 
recognizing me.
    I want to pay tribute, Mr. Chairman, to our military 
members and their families serving our country presently.
    I want to take this opportunity to welcome our panel here 
and to thank you for your leadership to our country. Thank you 
for coming today to provide us with information that we 
consider very serious to our Nation with respect to benefits 
and services available to the survivors of our military 
personnel.
    I want to say that this is very important to me, because I 
serve as the ranking member of the Senate Veterans' Affairs 
Committee with my friend and leader and chairman, Larry Craig 
from Idaho. I want you to know that we will also be holding a 
hearing on this issue on Thursday, and we certainly look 
forward to that.
    Thank you very much, Mr. Chairman.
    Chairman Warner. Thank you, Senator Akaka. The chair also 
notes that you proudly served our Nation in World War II as a 
member of the United States Army. We are proud to have you on 
this committee.
    Senators Kennedy and Clinton on this committee likewise, 
Senator Levin, have been very active in this legislation, as I 
had mentioned with Senator Frist, the Majority Leader, and we 
also have Senator DeWine. You took a lead on legislation. The 
committee would like to invite you to address the committee at 
this time.

 STATEMENT OF HON. MIKE DeWINE, U.S. SENATOR FROM THE STATE OF 
                              OHIO

    Senator DeWine. Mr. Chairman, thank you very much. Let me 
thank you and Senator Levin for this hearing. Let me also 
congratulate Senators Sessions, Lieberman, Allen, and Nelson 
for your work.
    I have had the experience I think, Mr. Chairman, that many 
of us have had, the very sad experience, of meeting with and 
seeing children of servicemen who have been killed in Iraq and 
Afghanistan, some of them only 2, 4, and 6 years old. We have 
also seen or read about situations where our young men have 
left children they have never seen. We had that situation in 
Ohio just this past week.
    I think, Mr. Chairman, this causes us to wonder what will 
become of these children financially. We know how sad it is to 
lose a parent. We think about that. I think there is an 
obligation that we all feel as a country to make sure that that 
child is taken care of. So I would ask this committee, as you 
begin to work on formulating legislation, to think about that.
    The proposal that the Pentagon has put forward is good. I 
welcome that. I congratulate the administration for that. But 
quite frankly, I think it is lacking in a couple areas.
    The current monthly payment for the child is $247. I think 
that, if we look at the situation today with families, it is 
inadequate. The bill that I have introduced would raise that to 
$750. There is nothing magical about $750, but I think it is a 
much more reasonable amount of money, and I would ask the 
committee to take a look at that.
    The second thing is education. You wonder about the 
education for these children. Giving a death benefit and 
increasing the death benefit today is interesting. That is 
good. I think we should do that. But some of these children are 
1 and 2 years old. 16 or 17 years from now, I worry about the 
education for the child.
    What the bill that Senator Durbin and I have introduced 
would do is to raise the amount of money available per child 
from $36,000 to $80,000. That is commensurate, frankly, with 
about what it costs to go to a State university. Our bill also 
would allow that money to be spent not only for tuition, but 
also for room and board. That is a rational thing to do. It is 
commensurate and consistent with what a parent would do if you 
were providing for your child or trying to help your child. You 
would not distinguish between room and board and tuition. You 
would allow the money to be used for whatever it took that 
child to go to college.
    I think, Mr. Chairman, that is the least we can do for the 
children of the service men and women who have given their 
lives for our country.
    I thank the chair.
    Chairman Warner. Thank you very much, Senator.
    We have a quorum present and we have to comply with the 
rules of the Senate. So I am going to ask your indulgence. 
Senator Levin and I submit this jointly to our committee.
    I ask the committee to consider a resolution for committee 
funding for the 109th Congress and to adopt committee rules for 
this Congress. Under the Senate rules, each committee is 
required to report out a resolution at the beginning of each 
Congress authorizing the committee to make expenditures of the 
contingent fund of the Senate to defray its expenses, including 
staff salaries and administrative expenses, for a 2-year 
period.
    The committee staff, majority and minority, has worked 
together to prepare this resolution on the committee budget. 
Senator Levin and I reviewed the budget and jointly recommend 
it to the committee. The proposed budget is in line with the 
funding guidelines provided by the Rules Committee and 
consistent with the joint leadership agreement of January 6th, 
2005. The budget represents a freeze at the committee's funding 
level for the 108th Congress, increased only by cost-of-living 
adjustments (COLAs).
    Is there a motion to have this resolution reported out 
favorably?
    Senator Levin. So moved.
    Chairman Warner. Is there a second?
    Senator Lieberman. Second.
    Chairman Warner. The motion is agreed to. All in favor, say 
aye. [A chorus of ayes.]
    Opposed? [No response.]
    The ayes have it.
    In addition, the committee must adopt its rules for the 
109th Congress. Senator Levin and I reviewed the rules and 
recommend only minor technical changes. The corrections are 
before you.
    Is there a motion to adopt the rules?
    Senator Levin. So moved.
    Chairman Warner. Is there a second?
    Senator Lieberman. Second.
    Chairman Warner. Hearing a second, all in favor, say aye. 
[A chorus of ayes.]
    Opposed? [No response.]
    The ayes have it.
    I thank the members, and this will appear in the record.
    The record should also reflect that Senator Hagel has been 
very active in this legislation likewise. He is a veteran of 
the Vietnam conflict, a decorated veteran.
    I think at this point in time, unless other members 
indicate to the chair a need to speak, I would like to 
recognize the witnesses. Dr. Chu, would you proceed.

 STATEMENT OF HON. DAVID S.C. CHU, UNDER SECRETARY OF DEFENSE 
                  FOR PERSONNEL AND READINESS

    Dr. Chu. Good morning, Mr. Chairman, Senator Levin. I want 
to thank you both, and I thank members of the committee for the 
opportunity to appear this morning and to offer an overview of 
how we treat those who are severely wounded in the current 
conflict and the benefits available to those who give their 
lives for our country.
    Chairman Warner. Dr. Chu, I would like to also recognize 
your long service to our Nation in your capacity in the DOD. I 
understand that you may be rejoining your family from this long 
absence in the near future. So we thank you.
    Dr. Chu. Thank you very much, Senator. I appreciate it.
    I want to thank you also, both you and Senator Levin, for 
recognizing the contribution that the coalition forces have 
made in the Middle East, with the opportunity they have given 
Iraq for a first election in decades that was free and open and 
gives the people of that country a real set of choices.
    I am honored to be joined this morning by the Vice Chiefs 
of the military departments and Mr. Epley from the Veterans' 
Affairs Department.
    I do have a statement for the record which I hope I can 
submit.
    Chairman Warner. Without objection, the statement of Dr. 
Chu and other witnesses will be admitted to the record in full.
    Dr. Chu. Thank you, Mr. Chairman.
    I also want to join in the sentiment that the members of 
the committee have expressed, and the Department believes is 
fundamental in how we view the issues before us this morning, 
and that is, there is nothing in the financial sense that we 
can do to replace a lost servicemember. We recognize that.
    We recognize also for those severely wounded we cannot 
necessarily, with financial means, compensate that individual 
for the grievous wound that he or she has suffered. But we can 
make their lives comfortable. We can give them the appropriate 
financial tools with which to move forward, and that really is 
the focus of my comments this morning.
    As this committee is aware, we have transformed medical 
care in this set of conflicts since September 11, 2001. We do 
things very differently from the way we did before, starting 
with how we protect our people, the widespread use of 
lightweight body armor, the change in how we care for the 
wounded, bringing them promptly back to an area, usually the 
United States, where they can receive definitive care. We think 
this has reduced the rate of death. We think it has also 
allowed us to care more appropriately for the wounds that are 
received, although I acknowledge the armor has changed the 
nature of the wounds that are endured in this conflict. We are 
proud of the fact that we have the lowest death and non-battle 
injury rate in the recorded history of our country in any major 
conflict in this ongoing set of operations.
    We have, we believe, a good set of programs to take care of 
those who are severely wounded. Each Service is moving to build 
a case management capability, the marines expanding their 
Marine for Life program, the Army with its Disabled Soldier 
Support System (DS3). We are creating a joint operations center 
to ensure that no one falls through the cracks, and that the 
ability of the families to put together the various programs 
available to them, if a servicemember is grievously wounded, is 
properly sustained. That center will actually be formally 
inaugurated today. If any members of the committee wish to be 
present, I certainly would be delighted to invite you to join 
us.
    We will have a 1-888 number for the family members to call 
if they feel they have questions that they have not yet been 
able to ask. That number is 1-888-774-1361.
    Let me turn, if I may, very briefly to the issue of death 
benefits, which is the focus, I think, of most of the 
discussion in your comments this morning. Congress, as Senator 
Sessions has noted, has asked us to work with them over the 
last 2 years, starting with the National Defense Authorization 
Act of Fiscal Year 2004 which commissioned two studies, one by 
the Government Accountability Office (GAO), and one independent 
study the DOD was asked to inaugurate and that we invited the 
SAG Corporation to complete. Those studies have been submitted 
to you.
    In your National Defense Authorization Act for Fiscal Year 
2005, you requested that we should report, with the President's 
budget, summarizing our conclusions from those studies and our 
own work on this important subject. We are prepared to do so. I 
would like to very briefly this morning summarize our major 
findings.
    First of all, as a number of members have noted, the United 
States Government already provides a significant set of 
programs to help the families of those who give their lives in 
service to the country. We calculate that in the typical case 
of a surviving spouse and young children, the income 
replacement programs approximately substitute, dollar for 
dollar, what the military member was earning on active service, 
and by military compensation we mean what we call regular 
military compensation. That is the sum of basic pay, quarters, 
and subsistence allowances, and the tax advantages thereon. So 
we have a good program, we would argue, of income support for a 
family with young children which loses the servicemember.
    The family is also eligible, as has been noted this 
morning, for a variety of other benefits. We provide 
transitional housing assistance. The family can stay in the 
Government housing and receive an allowance for 6 months. We 
provide access, on a lifetime basis really, for the surviving 
spouse to the TRICARE system and for the children until they 
reach adulthood. We also provide lifetime access to the spouse 
to the commissary and exchange system. We do provide, as 
Senator DeWine has noted already, through the VA, an important 
educational benefit both for the spouse and for the surviving 
children.
    Where we conclude we need to strengthen what we are doing--
and that is the focus of the bill that Senator Sessions has 
introduced, is what you might call a bequest, the single cash 
payment that comes to the family upon the servicemember's 
death. That currently is just over $260,000: That is to say, 
the sum of the SGLI payment of $250,000 and what people call 
the death gratuity, currently set at $12,420. We believe that 
sum ought to be nearer to $500,000, and we propose to change 
that by increasing the amount covered by the SGLI policy, as 
well as increasing what people like to call the death gratuity.
    I might say, as an aside, that I hope we can work with the 
committee to find a different term for what is now called the 
death gratuity. That really, I think, is a bit of an 
anachronism in terms of terminology. It is not really 
indicative, as I listened to the comments this morning and 
elsewhere, of what the country wants to do. The country wants 
to recognize the service of these individuals and express its 
condolences for the loss of the servicemember.
    We look forward to working with the members of this 
committee, as we have already done, as Senator Sessions 
indicated, over the last year-plus or so, in terms of providing 
to our service people and their surviving families what they 
deserve in the difficult circumstances they face today.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Chu follows:]
               Prepared Statement by Hon. David S.C. Chu
                              introduction
    Mr. Chairman and members of this distinguished committee, thank you 
for the opportunity to be here today. It is my privilege to discuss the 
means by which we care for the severely wounded, as well as the 
surviving families of deceased military personnel.
Support to the Severely Wounded:
    Each of the Services has initiated an effort to ensure that our 
seriously wounded servicemembers are not forgotten--medically, 
administratively, or in any other way. To facilitate a coordinated 
response, the Department of Defense (DOD) has established a Joint 
Support Operations Center (JSOC). We are collaborating, not only with 
the military Services, but also with other departments of the Federal 
Government, nonprofit organizations, and corporate America, to assist 
these deserving men and women and their families.
    A number of our severely injured servicemembers will be able to 
return to duty, thanks to their dedication and commitment, and the 
phenomenal quality of military medicine. Some, however, will transition 
from the military and return to their hometowns or become new members 
of another civilian community. These are capable, competent, goal-
oriented men and women--the best of our Nation. We will ensure that 
during their rehabilitation we provide a ``case management'' approach 
to advocating for the servicemember and his or her family. From the 
Joint Support Operations Center here, near the seat of government, to 
their communities across America, we will be with them. This will 
continue through their transition to the Department of Veterans' 
Affairs (VA), and the many other agencies and organizations providing 
support to them.
    I have mentioned that the JSOC is a collaborative effort, both 
inside and outside the government. I recognize and appreciate the 
interest and express desire of Congress to help ensure the success of 
this effort. As we identify the need for statutory changes, we will be 
certain to make you aware and seek your assistance.
    Twenty-four hours a day, 7 days a week, 365 days a year, we are a 
toll-free phone call away. We will provide a venue for each of the 
separate programs to be successful, while ensuring that no one falls 
through a crack. The center will be a one-stop location, providing a 
central point of contact for information and support.
                          preventing injuries
    The DOD actively pursues all methods to prevent our military 
members from bodily harm. As technology has dramatically advanced from 
previous wars, the military has increased its lethality, but our 
equipment is safer, and our warfighter is more highly skilled.
    With your support, we strive to provide the best military equipment 
in the world and ensure that it is safe to operate. For example, we 
believe that body armor, helmets, and protective vests, are reducing 
both hostile and accidental serious injuries. This is supported by 
preliminary analysis, which indicates that most injuries are to the 
body extremities, arms and legs, with less severe injuries to the head 
and torso areas.
    Secretary Rumsfeld's initiative to change how the DOD views the 
safety of its military personnel and civilian employees also has made 
an impact. Our goal is zero preventable mishaps. We have taken a major 
step in that direction. We are succeeding in Operation Iraqi Freedom 
(OIF). Historically, about half of the Army's wartime losses were due 
to accidents; in OIF, about 26 percent of the losses result from 
preventable mishaps.
    When injuries do occur, far-forward medical and surgical 
resuscitation, en route critical care support, and rapid evacuation to 
definitive care have significantly reduced combat-related deaths. This 
is very evident in OIF as we have a ratio of only one battle death for 
every ten wounded in action, compared to ratios for previous wars that 
ran typically around 1 to 3. With improved treatment we are also seeing 
48 percent of the wounded in Iraq return to their units within 72 
hours.
    Similarly, our military health system has made significant advances 
in the prevention of injury and disease. These include public health 
measures, immunization of servicemembers, use of early detection 
techniques against biochemical agents, and pre- and post-deployment 
assessments. These have been particularly beneficial in prevention and 
early detection and treatment of disease and non-battle injuries. 
Consequently, disease/non-battle injury rates have been lower than in 
any other conflict.
                             death benefits
    We realize first that no benefits can replace a human life. The 
lost presence of the family member is what the survivors face. We can't 
provide that, nevertheless, we must try to address the difficult issue 
of how to compensate these survivors. Permit me to offer you an 
overview of what we do in response to the loss of a military member, 
including personal assistance, as well as cash benefits.
    Our system of benefits is generally good, but our recent 
assessment, in response to your direction, concluded that the overall 
package could be improved to honor properly the contributions and 
sacrifices of our servicemembers. We are working within the DOD and 
with other agencies to address these deficiencies, primarily in the 
area of immediate cash compensation, for those whose death is the 
result of hostile actions. We are looking at ways to improve the lump 
sum payments through increased insurance and death gratuity payments. I 
will address these in more detail later.
                      military casualty assistance
    When a military member dies, our first concern is to inform the 
next-of-kin in a manner that is fast, efficient, and highly respectful. 
Our military casualty assistance program is highly developed and well 
suited to perform this difficult task effectively. Notification is made 
in person by Casualty Assistance Officers (CAOs) who are customarily 
accompanied by a chaplain.
    CAOs personnel stay with the family following notification of the 
loss, through funeral preparations, burial, and the entire process of 
determining benefits and compensation. They provide valuable counsel 
and support to the families, arranging for the military funeral (if 
desired), running interference when problems arise, and ensuring that 
the families receive the benefits and compensation due them. The 
families know that they can contact their Casualty Assistance Office 
representative at any time, even long after the servicemember's death. 
We are proud of our Casualty Assistance program. We often hear from the 
families that they consider their Casualty Assistance Office 
representative ``part of the family.''
    The DOD continuously explores how it can better support our family 
members during the most tragic of times, the loss of a loved one in the 
service to our Nation.
    One such initiative is the expedited claims process (ECP) with the 
Social Security Administration (SSA). In March 2003, we partnered with 
the SSA to study the possibility of institutionalizing the ECP that was 
so effective in the tragic aftermath of September 11, 2001. The ECP 
incorporates post-adjudicative development of evidence, as well as the 
use of a special toll free number for applicants and CAOs to call when 
they are ready to file. This process has been extremely successful in 
providing swift financial assistance to our families. The final results 
of the pilot program showed the average claims processing time dropped 
from several weeks to an average of just over 2 days time. Accordingly, 
the ECP was made permanent in January 2004 for surviving family members 
of all Active-Duty casualties. We established a similar arrangement 
with the VA several years ago. That program has also significantly 
expedited the delivery of compensation and benefits to our families.
                         benefits for survivors
    Benefits for survivors vary significantly in purpose and method of 
payment. Some are immediate cash payments or reimbursements for costs 
incurred; others provide long-term monthly income. These benefits are 
typically available whether the death is a result of hostilities, the 
result of non-hostile duty-related activities, or even the result of 
disease or off-duty injuries.
Death Gratuity Benefit
    The first benefit is to provide an infusion of cash to alleviate 
immediate financial requirements. This is accomplished by the death 
gratuity payment (currently $12,420, indexed to inflation). Our intent 
is to provide this payment in conjunction with the notification of 
death or as quickly thereafter as possible. This is done at the local 
level and normally takes place within 24 hours.
Funeral Costs
    One of the first expenses survivors encounter is for the funeral. 
DOD will reimburse some or all such expenses the family pays directly. 
The amount payable varies depending which government services are 
provided. If the family pays all costs, it qualifies for up to $6,900 
in reimbursements for these services.
Insurance Proceeds
    After the funeral, the most substantial benefit is the life 
insurance proceeds from personal policies as well as from 
Servicemembers' Group Life Insurance (SGLI). This is our principal 
insurance program and is under the purview of the VA, operated by the 
Office of Servicemembers Group Life Insurance (OSGLI), an arm of 
Prudential. SGLI provides up to $250,000 of coverage for modest 
premiums paid by the member. The DOD pays any costs associated with an 
increased number of deaths attributable to the extra hazards of 
military service compared to the number of deaths expected in 
peacetime.
Housing-in-kind or Cash Allowance
    A surviving family may continue to live in military housing without 
cost for up to 6 months after the member's death. This enables the 
member's family to reorient their lives without undue pressure to 
relocate immediately. They are able to make choices about the future in 
an orderly manner. Should the family not occupy military housing or 
move out of military quarters before the end of those 6 months, they 
receive a cash allowance in lieu of quarters. In essence, we provide 6 
months of transitional rent.
Medical Benefits
    Surviving family members continue to qualify for military medical 
benefits. For the first 3 years, health benefits remain at the same 
level of care as if the member were still on Active-Duty. Family 
members are then provided medical coverage at the same level as for the 
families of retired members. Children remain qualified until age 23, 
and spouses so long as they do not remarry.
Continued Military Community Privileges
    Surviving family members continue to be eligible for use of the 
Commissary and Exchange, and military morale, welfare, and recreation 
facilities. These privileges continue under the same qualifying 
criteria that otherwise apply if the member were retired.
Monthly Cash Compensation
    The surviving family typically qualifies for one or more monthly 
cash benefits under plans administered by the DOD, the VA, and the SSA. 
Taken together, the surviving spouse with minor children will typically 
qualify for monthly benefits that are equal to or even exceed the 
former income of the member. These payments are reduced in the event of 
remarriage before a certain age. Although Survivor Benefit Plan (SBP) 
payments from DOD are taxable as income, little or any tax will apply 
if the payments are made to the children. The VA Dependency and 
Indemnity Compensation (DIC) benefit is not taxable. Social Security 
payments can be taxable depending on the other income, but would 
probably be minimal for a survivor with little or no other income. 
Thus, the income provided the surviving family would carry little or no 
tax liability.
    VA Monthly DIC
    DIC is provided by the VA to the surviving spouse with additional 
payments for children. For a spouse and two children, this benefit is 
$993 monthly plus $247 per child (plus if there are children under age 
18, $250/month for 2 years). This equates to $20,844 of tax-free income 
annually for the first 2 years, and $17,844 thereafter so long as the 
children are not of age (the benefit for a spouse alone is $11,916 
annually for life or until remarriage if before age 57). The DIC is 
fixed for all veterans regardless of rank in service.
    DOD Survivor Benefit Plan
    The family also qualifies for a monthly payment from DOD equal to 
55 percent of the retired pay the member would have received if he or 
she had retired for total disability on the date of death. This retired 
pay is computed as 75 percent of the member's average basic pay over 
the last 3 years. If the spouse alone qualifies for this benefit, the 
DIC is subtracted from the SBP. However, it may be paid instead to the 
children and the benefits are then additive for as long as the youngest 
child qualifies (about age 22).
Social Security Survivor Benefit
    Military members participate in social security on their basic pay 
and thus qualify for the same benefits as any other covered worker. 
This means monthly payments for children as well as to the surviving 
spouse with young children (up to age 16). These benefits depend on the 
history of covered wages under the Social Security program.
    The table below summarizes these income benefits for married O-3s 
and E-6s with two children as well as a married E-6 with no children, 
and a single E-6. For a married E-6 with two children (8 years of 
service), the total of these three programs pays more than 110 percent 
of the member's final rate of Regular Military Compensation (RMC). For 
a married O-3 with children, the total equates to 96 percent of RMC. In 
both cases, much of the income is tax free. Thus, the family's after 
tax income could actually be higher than RMC.
Education Benefits from the VA
    Education benefits from the VA are quite valuable and are available 
to both the spouse and the children. These benefits are payable for up 
to 45 months of education time and can easily exceed $100,000 for a 
spouse and two children.
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
Financial Counseling
    A final, but important benefit is the financial counseling 
available to survivors. There are many associations that provide such 
benefits, some of them chartered for special status by Congress, for 
example, the Mutual Aid Associations. Each has programs that help 
members and survivors understand their benefits. Anyone who receives 
proceeds under the SGLI program qualifies to receive continuing 
financial counseling service through a program set up by the VA. The 
Beneficiary Financial Counseling Service (BFCS) provides a highly 
valuable benefit for survivors. This program provides a comprehensive 
assessment of the lifetime financial plan of beneficiaries, including a 
full presentation of the benefits described in this paper.
    We are currently in the process of testing a Servicemembers Benefit 
Analysis program through an Army pilot. We are also developing simple 
spreadsheet tools to help describe available benefits for service 
personnel. We expect to see rapid improvement in our capability to 
deliver financial counseling over the next several months.
                          adequacy of benefits
    The National Defense Authorization Act for Fiscal Year 2004 
included a requirement for us to study the totality of all current and 
projected death benefits for survivors of deceased members of the Armed 
Forces. The study was to include a comparison of military with other 
Federal death benefits as well as with commercial and other private 
sector death benefit plans. The GAO was to conduct a similar study.
    To ensure an independent review, we contracted for the study with 
the SAG Corporation. SAG completed the study in June 2004. The study 
concluded that the system of benefits provided to survivors of members 
who die on Active-Duty to be adequate, substantial and comprehensive. 
However, it identified areas where improvements could make the benefits 
more comparable to benefits provided by other employers. For example, 
many large employers provide some insurance at no cost. The rationale 
of providing Federal benefits in recognition of deaths in the 
performance of duty of law-enforcement officers and firefighters, would 
seem to apply as well to military members.
    GAO's report, dated July 2004, ``Survivor Benefits for 
Servicemembers and Federal, State, and City Government Employees'' made 
no recommendations, but reached findings similar to the SAG report. GAO 
found servicemembers almost always obtain higher lump sums than do the 
survivors of 61 civilian government entities, but the survivors of 
civilian government employees in some high-risk occupations may receive 
supplemental benefits. These supplemental payments generally result in 
higher benefits to employees in these high-risk occupations than for 
servicemembers.
    As you can see from the foregoing, the benefits provided are 
substantial. They come from a wide variety of programs and address a 
variety of concerns. They provide significant continuing income and are 
of great help to survivors in making their transition through the 
changes in life that inevitably follow a member's death. A surviving 
spouse with young children has the potential to receive more than $2 
million over her or his remaining lifetime.
    We agree with the findings of the SAG and GAO reports that our 
benefits, while substantial, do not provide specific recognition of 
deaths that occur when our members are sent into harms' way in the 
service of their Nation; so we propose increasing the cash benefits for 
deaths that occur under these circumstances. We support the principle 
that the surviving family of a member killed in combat should receive 
about $500,000. This compares to the approximately $262,000 they are 
able to receive today. We advocate doing this by: (1) Increasing the 
maximum SGLI to $400,000 with $150,000 of insurance funded by the 
Government when the member is serving in an operation or area 
designated by the Secretary of Defense; (2) Increasing the current 
$12,420 death gratuity to $100,000 for deaths occurring in these same 
designated areas; and (3) Applying these improvements retroactively to 
the beginning of Operation Enduring Freedom (OEF) and OIF. We intend to 
fund these enhancements within planned appropriations or budgeted 
levels.
    These improvements I have outlined in benefits are an outgrowth of 
the conclusions in both the SAG and the GAO reports that I discussed 
above. We have drafted language to make these improvement and are eager 
to move this legislation forward. Our bill, while not identical, is 
broadly consistent with other bills already introduced in the 109th 
Congress, such as the HEROES Act of 2005.
    Our objective is to ensure that we fully support our servicemembers 
when we send them in harm's way, and that we properly support the 
family's needs if the servicemember dies on Active-Duty.

    Chairman Warner. Thank you very much, Dr. Chu. I think that 
is an important aside you had. We will study that issue and I 
share the thoughts and will work with you.
    My understanding is that Deputy Secretary of Defense 
Wolfowitz worked actively with you, Senator Sessions, as this 
legislation was drawn up. Am I correct in that?
    Senator Sessions. That is correct. We have gotten good 
support and worked through a lot of different suggestions. We 
still have some good suggestions we will wrestle with and maybe 
this morning we will ask some questions about them.
    Chairman Warner. I personally have worked with Secretary 
Rumsfeld on this issue, and I commend him for his leadership in 
suggesting to the administration to get out very promptly on 
this issue.
    Dr. Chu. Thank you, Mr. Chairman.
    Chairman Warner. Thank you.
    Mr. Epley, we welcome you from the Department of Veterans' 
Affairs. You have the title of Associate Deputy Under Secretary 
for Policy and Program Management, Veterans' Affairs Benefits 
Administration. Thank you, sir.

STATEMENT OF ROBERT J. EPLEY, ASSOCIATE DEPUTY UNDER SECRETARY 
     FOR POLICY AND PROGRAM MANAGEMENT, VETERANS BENEFITS 
        ADMINISTRATION, DEPARTMENT OF VETERANS' AFFAIRS

    Mr. Epley. Good morning, Mr. Chairman. Thank you for the 
opportunity to testify today on this important issue. Providing 
benefits to survivors of our military veterans is one of our 
core responsibilities at the Department of Veterans' Affairs. 
My written testimony describes the benefits provided by VA in 
detail, so I will try to summarize that this morning.
    The VA administers a program already alluded to today 
called DIC. This program pays a monthly benefit to the 
surviving spouse and dependent children of a veteran who died 
in service or as the result of a service-related disability. 
Currently we are paying DIC to the survivors of more than 
318,000 of our veterans. Generally the monthly pay for 
surviving spouses is $993 per month plus $247 for each child. 
If the only beneficiary were a child, if there were no 
surviving spouse, the pay rate would be $421 for that child.
    Chairman Warner. You might mention the tax consequences 
also.
    Mr. Epley. These benefits are not taxable.
    Chairman Warner. That is important to include that in the 
record.
    Mr. Epley. Death pension benefits are also available for 
surviving spouses and unmarried minor children of deceased 
veterans with wartime service. Eligibility is based on 
financial need and is not payable to those with estates large 
enough to provide maintenance.
    The current annual rate for a death pension for a surviving 
spouse with no dependents and no income is $6,814. We are 
currently paying death pension benefits to the survivors of 
over 212,000 veterans.
    The VA provides casualty assistance in partnership with the 
DOD for survivors of servicemembers who die while on Active-
Duty. VA has outlined specific outreach requirements to include 
coordination with the DOD, personal visits with the survivors, 
and assistance with their benefit claims. We have CAOs at each 
of our regional offices around the country, and they are 
responsible for maintaining close contact with their military 
counterparts and to do the outreach as timely as possible.
    In 2002, the VA centralized all of its in-service death 
claims processing. This was done to improve our coordination 
and to expedite the process of paying those benefit claims. Our 
goal is to process these claims within 2 days of receipt at the 
VA. We are meeting that goal for many of our claims now. 
Sometimes it takes us a little longer if there are complicating 
factors.
    Education is also an important benefit for our survivors, 
as was mentioned earlier. The VA administers educational 
benefits for spouses and children of veterans who died or are 
permanently and totally disabled as a result of a disability 
arising from military service. The education benefit is $803 
monthly for full-time training and is graduated down based on 
lesser rates of training. We paid benefits for over 68,000 
beneficiaries last year and most of them were pursuing college 
undergraduate training, although we do pay for other vocational 
training.
    The SGLI has been mentioned extensively already today. It 
is a key component of our survivors' benefits package. SGLI 
provides low-cost term insurance protection to servicemembers 
through a group policy that is issued by the Prudential Life 
Insurance Company. When SGLI was first established in 1965, the 
maximum coverage was $10,000. There have been seven coverage 
increases since that program's inception, resulting in the 
current maximum coverage of $250,000. The participation rate 
for SGLI is 98 percent for Active-Duty members in 2004 and 93 
percent for those in the Ready Reserve.
    Beneficiary financial counseling services are also 
available through the VA Insurance Program. This is one-on-one, 
free, and objective counseling for SGLI beneficiaries provided 
by ComPsych, a vendor under contract with Prudential to help 
them handle the expenses and plan that expense.
    There have been numerous improvements to the VA benefit 
package in the last few years. DIC eligibility requirements 
have been enhanced for surviving spouses of ex-prisoners of war 
(POW) and for those who remarry after the age of 57. Education 
payments have been significantly increased in recent years, and 
surviving spouses of an individual who died on Active-Duty now 
have 20 years to use the benefit instead of 10 years, which it 
was previously. Life insurance has been extended to spouses of 
members covered under SGLI and, as of 2001, up to $100,000 of 
coverage can be purchased for these spouses.
    Mr. Chairman, in summary, a surviving spouse of a deceased 
veteran may be entitled through the VA only--there are other 
benefits sir--to DIC benefits of $993 a month, education 
benefits of $803 a month, a home loan guarantee in place of the 
veteran, and an insurance benefit of $250,000 and possibly 
other benefits as well.
    The VA welcomes review and enhancement of these benefits to 
ensure the fair and compassionate care for survivors of our 
veterans, and we welcome the opportunity to work with the DOD 
and with this committee. I will be happy to answer any 
questions the committee has.
    [The prepared statement of Mr. Epley follows:]
                 Prepared Statement by Robert J. Epley
    Mr. Chairman and members of the committee, thank you for the 
opportunity to testify today on this important issue. Providing 
benefits for survivors of our military veterans is one of our core 
responsibilities at the Department of Veterans' Affairs (VA).
    VA provides a wide range of benefits for the surviving spouses, 
dependent children, and dependent parents of deceased veterans and 
military servicemembers. My testimony will summarize the benefits we 
provide, some of the recent changes to those benefits, and the scope of 
our payment systems. It should be noted that these are not the only 
death benefits a surviving spouse and children are entitled to. They 
are also entitled to an array of Defense and Social Security benefits 
that both complement and in some cases offset each other. As we examine 
the adequacy of these benefits, we must do so in a holistic manner.
                        compensation and pension
    One of our largest survivor programs, Dependency and Indemnity 
Compensation (DIC), is administered by the Compensation & Pension 
Service (C&P). The program pays a monthly benefit to the surviving 
spouse, dependent children, and dependent parents of a veteran who died 
in service or as the result of a service-related disability. Currently 
there are 318,574 cases on the C&P rolls. (A case may include more than 
one beneficiary, such as a spouse and minor children). DIC may also be 
paid when a veteran was receiving or entitled to receive VA disability 
compensation at the total (100 percent) disability rate for one or more 
service-connected disabilities for at least 10 years immediately before 
death, or for at least 5 years and continuously from the date of 
military discharge. Entitlement on this basis may be established 
regardless of the cause of death.
    Recent legislation relating to spouses of former prisoners of war 
(POWs) reduced the time required for the veteran to be evaluated as 
totally disabled. DIC is now payable to the surviving spouse of a 
former POW who died after September 30, 1999, and was rated totally 
disabled due to service-connected conditions for a period of at least 1 
year immediately preceding death. Entitlement on this basis may also be 
established regardless of the cause of death.
    Surviving spouses of veterans who died on or after January 1, 1993, 
receive $993 a month. For a spouse entitled to DIC based on the 
veteran's death prior to January 1, 1993, the amount paid is the 
greater of $993 or an amount based on the veteran's pay grade. In 2001, 
VA completed a DIC Program Evaluation which recommended an increase in 
benefits for survivors with children. As a result, Congress enacted 
legislation last session that provides for a transitional benefit of 
$250 per month payable to a surviving spouse who has a minor child or 
children. It is payable for up to 2 years after DIC entitlement 
commences.
    A surviving spouse who loses entitlement to DIC upon remarriage may 
have eligibility restored if the remarriage later ends in death, 
divorce, or annulment. Under Public Law 108-183, widows entitled to DIC 
may now retain eligibility to receive that benefit if they remarry 
following attainment of age 57.
    Monthly DIC payments for parents of deceased veterans depend on 
their income. The maximum rate payable is $487 per month for a sole 
surviving, unremarried parent or a remarried parent living with spouse, 
and with income of not more than $800 per month.
    Surviving spouses and unmarried children of deceased veterans with 
wartime service who do not qualify for DIC may be eligible for death 
pension benefits. Eligibility is based on financial need and is not 
payable to those with estates large enough to provide maintenance. The 
veteran must have been discharged under conditions other than 
dishonorable and must have had 90 days or more of active military 
service, at least 1 day of which was during a period of war, or have 
been discharged for a service-connected disability and had active 
military service during a period of war. If the veteran died in service 
but not in the line-of-duty, pension may be payable if the veteran had 
completed at least 2 years of honorable service.
    C&P death pension cases total 212,551 as of December 2004. (A case 
may include more than one beneficiary, such as a spouse and minor 
children). The current annual rate of death pension for a surviving 
spouse with no dependents and no income is $6,814. Additional benefits 
may be available if the surviving spouse is in a nursing home, in need 
or regular aid and attendance, or permanently housebound. The maximum 
annual rate for a surviving child who is not in the custody of a 
surviving spouse who is eligible for death pension is $1,734. Payments 
are reduced by the amount of recipients' annual income from other 
sources, such as Social Security.
                      casualty assistance program
    Following the terrorist attacks of September 11, 2001, and with the 
start of Operation Enduring Freedom (OEF), a VA/Department of Defense 
(DOD) Casualty Assistance Task Group was brought together to discuss 
procedures for managing mass casualties and ways to improve processing 
of all in-service death claims. As a result, a Casualty Assistance 
Program was revitalized and streamlined to focus on assistance to 
survivors of servicemembers who die while on Active-Duty.
    This program has worked effectively to streamline both the DIC 
application and claims-adjudication processes for survivors of 
servicemembers who die on Active-Duty. In addition, VA has outlined 
specific outreach requirements, to include personal visits with 
survivors. In 2002, all in-service death DIC claims were centralized to 
the Philadelphia Regional Office for processing. VBA casualty 
assistance officers (CAOs) were assigned to each regional office to 
work closely with military CAOs, and visit survivors to provide 
benefits information and assistance.
                               education
    Education is also an important benefit for survivors. Surviving 
spouses and children can gain eligibility to educational assistance 
based on the servicemember's death or, following Active-Duty, his or 
her permanent and total service-connected disability. Last year, VA 
paid educational assistance to 53,007 dependents of seriously disabled 
veterans and 15,913 survivors.
    Dependents' Education Assistance (DEA) benefits are available to 
spouses who have not remarried and children of: (1) individuals who 
died on Active-Duty or are permanently and totally disabled as the 
result of a disability arising from active military service; (2) 
veterans who died from any cause while rated permanently and totally 
disabled from service-connected disability; (3) servicemembers listed 
for more than 90 days as currently missing in action or captured in 
line-of-duty by a hostile force; (4) servicemembers listed for more 
than 90 days as currently detained or interned by a foreign government 
or power.
    The termination of a surviving spouse's remarriage, either by death 
or divorce, will reinstate DEA benefits to the surviving spouse. 
Additionally, Public Law 108-183 permits surviving spouses entitled to 
DEA benefits to retain those benefits if they remarry after age 57.
    Benefits may be awarded for pursuit of associate, bachelor, or 
graduate degrees at colleges and universities, including independent 
study, cooperative training, and study abroad programs. Courses leading 
to a certificate or diploma from business, technical or vocational 
schools also may be taken. Benefits may also be awarded for 
apprenticeships, on-the-job training programs, and farm cooperative 
courses.
    Today's monthly rate is $803 for full-time pursuit of an approved 
education or training program, with lesser amounts for part-time 
training. This benefit is available for 45 months of full time 
training, and payments to a spouse end 10 years from the date the 
individual is found eligible or from the date of the death of the 
veteran.
    Recent legislation granted an extension in eligibility to the 
surviving spouse of an individual who died while on Active-Duty. They 
now have 20 years to use the benefit.
    VA will also pay a special Montgomery GI Bill (MGIB) death benefit 
to a designated survivor in the event of the service-connected death of 
an individual while on Active-Duty or within 1 year after discharge or 
release. The deceased must either have been entitled to educational 
assistance under the MGIB program or a participant in the program who 
would have been so entitled but for the high school diploma or length-
of-service requirement. The amount paid will be equal to the 
participant's actual military pay reduction, less any education 
benefits paid.
                               insurance
    The Servicemembers' Group Life Insurance (SGLI) program, first 
established in 1965, provides automatic low-cost term insurance 
protection to servicemembers through a group policy purchased by VA 
from Prudential Life Insurance Company of America. The Government pays 
the claim costs resulting from the extra hazards of service. All other 
costs of the program are covered by premiums deducted from the insured 
servicemember's pay.
    When SGLI was first established, the maximum amount of coverage 
available was set at $10,000. There have been seven coverage increases 
since the program's inception. Recent increases include a coverage 
increase in 1996 when the maximum coverage available was raised from 
$100,000 to $200,000, and then again in 2001, when coverage was 
increased to the current maximum of $250,000.
    Unless they decline to participate, basic SGLI coverage is 
automatically provided to those members on Active-Duty in the Army, 
Navy, Air Force, Marine Corps, and Coast Guard, as well as Reserve 
Officers Training Corps (ROTC) members, and uniformed members of the 
Public Health Service and National Oceanic and Atmospheric 
Administration. The Ready Reserve is also insured by SGLI, including 
reservists and members of the National Guard. The participation rate at 
the end of the 2004 Policy Year was 98 percent for Active-Duty 
(including reservists called to Active-Duty) and 93 percent for the 
Ready Reserve.
    As of January 2005, the Office of Servicemembers' Group Life 
Insurance (OSGLI) has issued over 1,900 payments to beneficiaries as a 
result of 1,512 deaths certified by the branches of service in OEF and 
Operation Iraqi Freedom (OIF). Only ten of these members had declined 
SGLI coverage. Of the remaining members, 31 had opted for coverage 
amounts less than the maximum of $250,000. Claims paid to survivors of 
OIF/OEF servicemembers total over $341,857,000.
    The Veterans' Survivors Benefits Improvement Act of 2001 extended 
life insurance coverage to spouses and children of members insured 
under the SGLI program, effective November 1, 2001. Spousal coverage is 
available to the spouses of Active-Duty servicemembers and members of 
the Ready Reserve of a uniformed service. Up to $100,000 of coverage 
can be purchased by the member for a spouse, in increments of $10,000. 
SGLI spousal coverage may not be greater than the amount of the 
servicemember's coverage. The maximum coverage for a child is $10,000.
    In the case where a servicemember is married to another 
servicemember, the potential survivor benefit for this group of 
individuals is $350,000--$250,000 Basic SGLI coverage plus $100,000 
Family SGLI spousal coverage. It is estimated that there are currently 
84,000 such married personnel currently serving on Active-Duty.
    Beneficiary Financial Counseling Services (BFCS) is one-on-one, 
free, objective financial counseling for SGLI beneficiaries provided by 
ComPsych, a vendor under contract with Prudential. Services include 
estate settlement and planning, investment planning, budgeting, and 
income tax planning. BFCS was started as a pilot project in 1999, and 
has now been adopted as a permanent feature of the SGLI program of 
benefits. Over 190 beneficiaries have taken advantage of this service 
since its inception.
                            burial benefits
    To the extent that the DOD benefits would not cover the full amount 
of funeral expenses, VA is authorized to pay up to $2,000 to cover 
burial and funeral expenses in cases of service-connected deaths. In 
addition, VA provides burial in national cemeteries and also provides 
burial flags and markers for the graves of deceased servicemembers.
                             other benefits
    In addition to the benefits described above, VA offers a range of 
additional benefits to survivors, including home loan guaranties, the 
Restored Entitlement Program, and educational or vocational counseling 
services.
                               conclusion
    Mr. Chairman, in summary, a surviving spouse of a deceased veteran 
may be entitled to basic DIC benefits of $993 per month, educational 
benefits of $803 per month, home loan guaranty, and an insurance 
benefit of $250,000.
    As you can see, VA provides a substantial array of benefits to care 
for the survivors of servicemembers and veterans. We continue to strive 
toward enhanced benefits for veterans and their survivors to fulfill 
our mission of world class service. This completes my statement, and I 
will be happy to answer any questions you and other members of the 
committee might have.

    Chairman Warner. Thank you very much.
    For those following the hearing who might not fully 
understand, the very important matters relating to men and 
women of the Armed Forces on Active-Duty and then when they go 
on into their next status following Active-Duty are really 
divided between the DOD where we have jurisdiction over the 
death benefit and the Veterans Benefits Administration where 
you have jurisdiction over other benefits. So it is a composite 
of two Departments of the Federal Government working together 
on behalf of the service persons and the veterans and their 
families. I think you, Dr. Chu, together with Mr. Epley, have 
properly framed how that responsibility is divided.
    We will now turn to our distinguished military witnesses. 
Senator McCain, Senator Levin, others, and I, as we put 
together this hearing, felt it very important that, first and 
foremost, the military Departments be heard through the Vice 
Chiefs because, having had the privilege of serving the 
Department myself many years ago, I know full well the burdens 
on the Vice Chiefs and the personnel issues. While shared 
indeed by the Chief, often the details are left to the Vice 
Chiefs.
    So we will turn first to the distinguished General Cody of 
the senior service of the United States Army. I know, General, 
from our talks you have, I think, two sons who currently have 
either been in Iraq or out of Iraq or both, proudly serving in 
the United States Army. Thank you.

  STATEMENT OF GEN RICHARD A. CODY, USA, VICE CHIEF OF STAFF, 
                       UNITED STATES ARMY

    General Cody. Thank you, Chairman Warner, Senator Levin, 
and distinguished members of this Senate Armed Services 
Committee.
    We are a Nation at war. You recognize it, and our soldiers 
know you are behind them. I thank the members of this committee 
for their continued outstanding support to the men and women in 
uniform who make up our great Army, Active, Guard, and Reserve. 
Your concern, resolute action, and deep commitment to America's 
sons and daughters are widely recognized throughout the rank 
and file of our Service.
    The Army is always willing to address ways to better 
support our soldiers and family members, especially after a 
loss of a soldier who was actively serving this Nation. We are 
very encouraged by the recent interest in raising the death 
gratuity and SGLI for our soldiers, and we fully support these 
efforts to improve compensation to the families of our fallen 
soldiers. Furthermore, we believe these increases should be 
retroactive.
    Caring for survivors is a manifestation of the Army ethos 
to never leave a fallen comrade. The benefits and compensation 
due to survivors only begin with a nontaxable death gratuity, 
but even while there are many other forms of compensation that 
we have heard of today, there is still more I believe we can 
do. Clearly, there are voids in the system, and we are grateful 
to this committee for leading the effort to fill these gaps for 
our soldier survivors.
    Everything we do to support survivors would not be possible 
without this committee's steadfast dedication to the military 
and to America's sons and daughters who are serving selflessly 
around the world to make America safe and free today. Every 
soldier's life is priceless. No benefit can replace those we 
have lost in the defense of this country. We owe it to our 
soldiers who raised their right hand and said, ``America, in 
your time of need, send me,'' to make sure we get this right.
    Thank you again for your continued support, and I look for 
the opportunity to answer all your questions.
    [The prepared statement of General Cody follows:]
             Prepared Statement by GEN Richard A. Cody, USA
    Chairman Warner, Senator Levin and distinguished members of the 
Senate Armed Services Committee, I would like to express our 
appreciation at the opportunity to appear before you to discuss soldier 
death gratuity and survivor benefits. I thank the members of the 
committee for their continued outstanding support to the men and women 
in uniform, who make up our great Army. Your concern, resolute action, 
and deep commitment to America's sons and daughters are widely 
recognized throughout the ranks of our Service.
    Today, our over 1 million strong All-Volunteer Army is supporting 
the National Security Strategy with 650,000 soldiers from all 
components on Active-Duty. Over 300,000 of those soldiers are mobilized 
or deployed in 120 countries worldwide with many engaged in direct 
combat as we fight the war on terrorism. Increased injury and death of 
soldiers is an unfortunate consequence of this war.
    Advanced technology and training has enabled us to improve both the 
protective equipment we provide to soldiers and the medical care 
available when the soldier is wounded. Body armor protecting the 
soldier's torsos is helping prevent many deaths. In previous conflicts, 
soldiers who would have died from massive injury to their torsos are 
now surviving, although many have severe wounds to their arms and legs. 
The current expertise of our combat medics supported by resuscitative 
surgical care available in forward surgical teams and combat support 
hospitals enable soldiers to survive these wounds. Unfortunately, many 
of these wounds have resulted in amputations.
    Some of these soldiers, when they desire, are able to remain on 
Active-Duty and continue to once again contribute through their 
outstanding service. Sergeant First Class Luis Rodriguez, while serving 
in the 101st Airborne Division as a medical platoon sergeant in Iraq, 
lost most of his right leg. Today, he is making a difference by 
instructing combat life saving at Fort Campbell, Kentucky. Captain 
David Rozelle, from the 3rd Armored Cavalry Regiment, after losing the 
lower part of his right leg, has completed the Army 10-Miler and the 
New York City Marathon, and is back in command of his second troop unit 
that is going into combat with this next rotation. But not all soldiers 
are as fortunate as these two men, and the Army is determined to 
provide our disabled soldiers and families the care, support and 
assistance they so rightly deserve for their selfless service and 
sacrifice to our Nation.
    Walter Reed Army Medical Center established the Army Amputee Care 
Program in 2001 to apply revolutionary advances in medical care and 
technology to the military's amputee care protocols. Through the 
innovative spirit of Army health care providers and through generous 
support of Congress we have established a state-of-the art Amputee Care 
Center at Walter Reed that has served as the central site for military 
amputee care for Operations Enduring Freedom and Iraqi Freedom (OEF/
OIF). Two weeks ago, the Army Surgeon General expanded the Amputee Care 
Program by opening a second Amputee Care Center at Brooke Army Medical 
Center at Fort Sam Houston, Texas. This second site will help the Army 
better manage military amputees by allowing soldiers from the western 
half of the United States to receive treatment and rehabilitation in 
closer proximity to their homes.
    On April 30, 2004, the Department of the Army introduced a Disabled 
Soldier Support System (DS3) Initiative that provides its severely 
disabled soldiers and their families with a system of advocacy and 
follow-up with personal support to assist them as they confront the 
stress of their wounds and think through the difficult decision of 
continuing to pursue a military career or transitioning from military 
service to the civilian community. Working closely with the Joint 
Support Operations Center, DS3 incorporates and integrates several 
existing programs to provide holistic support services for our severely 
disabled soldiers and their families throughout their phased 
progression from initial casualty notification to their return to home 
station and final career disposition. The system facilitates 
communication and coordination between severely disabled soldiers and 
their families and the pertinent local, Federal and national agencies 
and organizations, such as the Department of Veterans' Affairs (VA) and 
the many commendable Veterans Service Organizations. In addition, DS3 
will utilize a system to track and monitor severely disabled soldiers 
for a period of up to 5 years beyond their medical retirement in order 
to provide appropriate assistance through an array of existing service 
providers.
    Regrettably, despite our great lifesaving systems and best efforts, 
the Army has soldiers who die for reasons ranging from enemy fire to 
natural causes and we must address this reality in periods of peace and 
war.
    Regardless of the cause of death, when one of our soldiers dies it 
is a tragic loss for the soldier's survivors. Having addressed the 
difficult issue of compensating survivors throughout the Army's 
history, we know very well that no benefit can replace a human life. 
Although there is no substitute for a fallen soldier's survivors, we 
are committed to doing all we can to assist them during their period of 
loss and beyond. Caring for survivors is a manifestation of our ethos 
to never leave a fallen comrade, and one way the Army lives up to this 
commitment is through our Casualty Assistance Program.
    When a soldier dies, a Casualty Assistance Officer (CAO) stays with 
the family following notification of their loss. Families have access 
to their CAO during the days, weeks, months, and, sometimes, even years 
after their servicemember's death. These officers provide valuable 
counsel and support to the families, offering the family important 
advice, running interference when problems arise, arranging for the 
military funeral, and ensuring that the families receive all services 
and compensation due them. The services and compensation due to 
survivors include:
                             death gratuity
    A $12,420 nontaxable death gratuity is intended to provide 
immediate cash to meet the needs of survivors. In general, the death 
gratuity is payable immediately upon the death of a soldier.
                  servicemembers' group life insurance
    Soldiers may elect insurance coverage in multiples of $10,000 up to 
a maximum coverage of $250,000 under the Servicemembers' Group Life 
Insurance (SGLI) Program. SGLI is a Government group life insurance 
program providing coverage to soldiers at rates often lower than those 
available, given the added risk in insuring members of the Armed 
Forces, under normal commercial insurance policies.
                       unpaid pay and allowances
    Unpaid pay and allowances are payable to designated beneficiary to 
include accrued leave.
                 dependency and indemnity compensation
    The VA pays this tax-free monthly benefit to an unremarried 
surviving spouse of a soldier who dies from a service-connected 
disability and to the soldier's dependent children and parents. The 
basic spousal Dependency and Indemnity Compensation (DIC) is currently 
$993 per month. An additional $247 per month is payable to the spouse 
for each dependent child of the deceased soldier under the age of 18. 
Additional amounts are authorized for specific purposes. Spouse 
eligibility for DIC ends upon remarriage before age 58. DIC can be 
restored if the remarriage ends in death or divorce.
    Surviving spouses and unmarried children of deceased veterans with 
wartime service who do not qualify for DIC may be eligible for death 
pension benefits. Eligibility is based on financial need and is not 
payable to those with estates large enough to provide maintenance. The 
veteran must have been discharged under conditions other than 
dishonorable and must have had 90 days or more of active military 
service, at least one day of which was during a period of war, or have 
been discharged for a service-connected disability and had active 
military service during a period of war. If the veteran died in service 
but not in the line-of-duty, pension may be payable if the veteran had 
completed at least 2 years of honorable service.
                      survivor benefit plan (sbp)
    Surviving spouses of soldiers who die on Active-Duty are entitled 
to monthly annuity payments under the SBP. If there is no surviving 
spouse, dependent children are eligible. Also eligible is a former 
spouse of a soldier who has been ordered by a state court to enroll the 
former spouse in SBP at retirement. The amount of the annuity for a 
surviving spouse under age 62 is 55 percent of the retired pay the 
soldier would have been entitled to receive if the soldier had applied 
for retirement on the date of death. The amount of the annuity for a 
surviving spouse age 62 or older is currently 35 percent (DIC offset) 
until October 2005 when it becomes 40 percent and is gradually tiered 
to 55 percent by April 2008. There is no DIC/SBP offset applicable to 
children. A surviving spouse who remarries before reaching age 55 loses 
entitlement to SBP, although SBP is reinstated if the remarriage ends 
in death or divorce.
                            social security
    Social Security death benefits are payable on behalf of a 
``currently insured'' deceased soldier to a surviving spouse caring for 
the deceased soldier's dependent children under age 16 and to eligible 
minor children of the deceased soldier. Social Security old-age 
survivor benefits are payable on behalf of a ``fully insured'' deceased 
soldier to a surviving spouse at least 60 years old. The amount of an 
old age survivor benefit is a percentage of a deceased Soldier's 
Primary Insurance Amount, and depends on the age of the survivor at the 
time of applying for a Social Security old age survivor benefit.
                  va dependents' education assistance
    Dependents' Education Assistance (DEA) benefits are available to 
spouses who have not remarried and children of: (1) individuals who 
died on Active-Duty or are permanently and totally disabled as the 
result of a disability arising from active military service; (2) 
veterans who died from any cause while rated permanently and totally 
disabled from service-connected disability; (3) servicemembers listed 
for more than 90 days as currently missing in action or captured in 
line of duty by a hostile force; (4) servicemembers listed for more 
than 90 days as currently detained or interned by a foreign government 
or power. This benefit is available for 45 months of full time 
training, and payments to a spouse end 10 years from the date the 
individual is found eligible or from the date of the death of the 
veteran. Children have until their 26th birthday to use their education 
benefits.
                       service academy preference
    Children of soldiers who die on Active-Duty (are missing in action 
or who die as a result of a disability rated 100 percent) receive 
Academy preference for appointment in order of merit by competitive 
examination.
                     montgomery gi bill (title 38)
    VA will pay a special Montgomery GI Bill (MGIB) death benefit to a 
designated survivor in the event of a service-connected death of a 
soldier while on Active-Duty or within 1 year after discharge or 
release. The soldier's survivor must apply through the VA.
                              health care
    A surviving spouse less than 65 years old and the minor dependents 
of a deceased soldier are eligible for space-available medical care at 
military medical treatment facilities or are otherwise covered by 
TRICARE. A surviving spouse 65 years old or older is eligible for 
space-available medical care at military medical treatment facilities 
(MTFs) or is otherwise covered by Medicare and TRICARE-for-Life. In 
certain very uncommon situations when survivors of those who die in 
service are not eligible for military medical benefits, VA's CHAMPVA 
Program will provide them with medical benefits.
                       family member dental plan
    A surviving spouse of a soldier and dependents are eligible to 
enroll in a Family Member Dental Plan for a period of 1 year when the 
soldier dies on Active-Duty and the dependents were enrolled prior to 
the death of the soldier.
                   commissary and exchange privileges
    The unmarried surviving spouse and qualified dependents of a 
deceased soldier are eligible to shop at military commissaries and 
exchanges.
                   theater and recreation facilities
    The unmarried surviving spouse and qualified dependents of a 
deceased soldier are eligible to utilize theater and recreation 
facilities.
                              tax benefits
    The next-of-kin of a deceased soldier whose death occurs overseas 
in a terrorist or military action is exempt from paying Federal income 
tax on income received by the decedent during the year of the 
decedent's death.
      continued government housing or an allowance in lieu thereof
    Survivors are provided rent-free Government housing for 180 days 
after the death of a soldier or a tax-free housing allowance for that 
portion of the 180-day period not in Government housing, with the 
amount of the allowance based on the soldier's grade at the time of 
death.
                        guaranteed housing loans
    Surviving spouses of servicemembers who died on Active-Duty from a 
service-connected disability or of veterans who died from a service-
connected disability are granted VA housing loan benefits. This allows 
surviving spouses to obtain home loans on favorable terms without the 
need to make a down payment.
               burial cost and care of remains of soldier
    The DOD reimburses expenses for the soldier's burial, depending on 
the type of arrangements, and provides travel for next-of-kin under 
invitational travel orders in an amount not larger than normally 
incurred by the Secretary in furnishing the supply or service 
concerned. To the extent that the DOD benefits would not cover the full 
amount of funeral expenses, VA is authorized to pay up to $2,000 to 
cover burial and funeral expenses in cases of service-connected deaths. 
In addition, VA provides burial in national cemeteries and also 
provides burial flags and markers for the graves of deceased 
servicemembers.
              burial allowance payable by social security
    Limited to those who have surviving dependents, it pays $255 in one 
lump sum to the spouse. If no surviving spouse, it is paid to children 
who are eligible to draw Social Security benefits.
                       grave and memorial markers
    Headstones and markers are provided by VA for the graves of those 
interred in private, local, State veterans, or National Cemeteries 
without charge and shipped at Government expense to the consignee 
designated. The cost of placing a marker in a State, local, or private 
cemetery must be born by the applicant.
                      burial in national cemetery
    Soldiers who die while in active military, naval, or air service 
are eligible for burial in a National Cemetery. Space may also be 
reserved for a spouse. Minor/handicapped children of such soldiers may 
also be buried in National/Post Cemetery.
                            military funeral
    Soldiers who die while on Active-Duty are eligible for a military 
funeral. The CAO coordinates the funeral with the Army installation 
responsible for the geographic area where the interment is to take 
place.
                      shipment of personal effects
    When a soldier dies on Active-Duty, his or her personal effects are 
shipped to the place of residence of the authorized recipient, if the 
recipient did not reside with the deceased soldier.
   travel of dependents and shipment of household goods and personal 
                     effects at government expense
    The spouse and dependent children of a soldier that dies may move 
one time at Government expense. Household goods will not be moved a 
greater distance than the personal travel. One motor vehicle can be 
shipped at Government expense.
                           other va benefits
    VA also offers a range of additional benefits to survivors, 
including home loan guaranties, the Restored Entitlement Program, and 
educational or vocational counseling services.
    While there are many forms of compensation, there is still more 
that we can do. Clearly there are voids in the system, and we are 
grateful for the numerous organizations that step-up to fill the gaps 
in support of soldiers' survivors. Countless charitable organizations 
are providing an invaluable link between the American people and 
surviving families to channel support. Through large organizations such 
as the Intrepid Foundation's Fallen Heroes Fund and numerous less well-
known organizations and individuals, the American people are making a 
difference. Whether in the form of financial support, counseling, or 
other services, these organizations and their supporters untiringly 
communicate the American people's support for their fallen. As our All-
Volunteer Force continues to stand strong in its most challenging hour, 
the contributions of these charitable organizations are absolutely 
invaluable to the well being of our force. We cannot thank them enough.
    The Army is always willing to address ways to better support our 
family members, especially after the loss of a soldier who was actively 
serving our Nation. We are very encouraged by recent interest in 
raising the death gratuity and other survivor benefits for our soldiers 
and will support any efforts to improve compensation to the families of 
our fallen.
    Everything we do to support survivors would not be possible without 
this committee's steadfast dedication to your military and to America's 
sons and daughters, who are serving selflessly throughout the world to 
make America safe and free. Thank you and your committee for your 
continued support of our soldiers and their families and for your 
leadership in providing better survivor benefits. Thank you again for 
this opportunity to discuss issues surrounding support to our severely 
wounded soldiers as well as the death gratuity and survivor benefits. I 
look forward to the opportunity to participate in this session and 
answering any questions you may have.

    Chairman Warner. Thank you. You said retroactive. If you 
have set a date, I missed it.
    General Cody. I have not set a date, sir. I think that will 
be part of the discussion.
    Chairman Warner. It will be part of the discussion.
    General Cody. Yes, sir.
    Chairman Warner. So you purposely omitted reference to a 
date.
    General Cody. Yes, sir.
    Chairman Warner. Thank you.
    From the United States Navy, Admiral Nathman.

  STATEMENT OF ADM JOHN B. NATHMAN, USN, VICE CHIEF OF NAVAL 
                 OPERATIONS, UNITED STATES NAVY

    Admiral Nathman. Thank you, Mr. Chairman, Senator Levin, 
and the distinguished members of this committee. Thank you for 
the opportunity to address you here today to discuss the 
support and assistance we provide to our surviving family 
members and for the care of our severely injured sailors, 
soldiers, marines, and airmen.
    This is clearly a subject worthy of our collective time and 
debate, and for those of us serving, we are thankful for your 
attention to this important matter. We appreciate the 
continuing support, both in policy and in resources, that 
enables us to provide a continuum of care for our 
servicemembers. Your efforts here today, just deliberating this 
issue, signals your clear concern to our servicemembers and 
their families.
    I also appreciate this committee's efforts in working with 
other committees of Congress to ensure the appropriate balance 
of benefits and the capabilities to meet the needs of the armed 
servicemember. I particularly appreciated the way Senator 
Sessions put it. I believe there is a very strong bond between 
the citizens of the United States and those who serve in 
uniform. That bond is strong. I would call it a covenant bond. 
I think if we are going to talk about benefits for those who 
serve, it should not be just for those who are in a designated 
geographic area.
    So I look forward to working with you and your staffs as we 
move forward and will remain fully engaged and committed in 
delivering the right benefits on behalf of a grateful Nation. 
Thank you, sir.
    [The prepared statement of Admiral Nathman follows:]
             Prepared Statement by ADM John B. Nathman, USN
                              introduction
    Mr. Chairman, Senator Levin, members of this distinguished 
committee, thank you for the opportunity to be here today to discuss 
the ongoing support and assistance we provide our surviving family 
members and the care provided for our severely injured sailors. 
Providing this support and care to our sailors and their families is a 
Navy priority and each case is handled individually by a trained 
professional.
                        navy casualty assistance
    These deliberations today are both important and serious. We go to 
great lengths to recruit and train our servicemembers and to welcome 
them and their families into the great tradition and heritage of the 
United States Navy. Members of the Armed Forces may give their lives 
while serving our country in the line-of-duty. When a sailor dies, our 
sole mission is to render prompt and compassionate assistance to help 
reduce the suffering of the servicemember's family. We have a casualty 
assistance network available 24/7, a group of highly dedicated and 
trained professionals that notify the next of kin as fast as possible 
and then remain with them during the weeks ahead. These Casualty 
Assistance Calls Officers (CACO), who are customarily accompanied by a 
Navy chaplain, make all notifications in person. The Navy's highly 
effective program is staffed by specially selected senior enlisted and 
officers who are well suited to effectively perform this difficult 
task.
    The CACO's full time responsibility is to support the family. The 
CACO will assist with funeral preparations; travel to and from a burial 
site; and attend the burial service. The CACO assists the family with 
various claims to obtain their benefits and entitlements as well as any 
relocation desires. Supporting the CACO are Regional Casualty 
Coordinators and headquarters personnel who personally supervise each 
case to ensure that all families are accorded the highest level of 
attention and assistance. As you might imagine, the needs of individual 
families vary dramatically, but the assigned CACO attempts to 
anticipate and react expeditiously to any issue or concern that may 
arise. This is a well-executed program, and I am proud of our CACOs and 
their selfless devotion to Navy families.
                   survivor benefits and entitlements
    As I mentioned, the CACO assists each family in obtaining the full 
financial support to which they are entitled. Navy centrally manages 
the processing of all death benefits and entitlements. Certification 
proceeds at a good pace. A death gratuity payment is made to the 
designated beneficiary as soon as possible following notification of 
the member's death. Accrued unpaid pays and allowances owed to the 
member, to include any unused leave, reenlistment bonus installments, 
uniform allowances, etc., are generally paid within 7 to 10 days. 
Payment of Servicemember Group Life Insurance (SGLI) generally occurs 
within 7 to 10 days. Basic Allowance for Housing (BAH) is generally 
paid within 30 days. Payment of Dependency Indemnity Compensation (DIC) 
from the Department of Veterans' Affairs (VA) is paid within 6-8 weeks 
and the Survivor Benefit Plan (SBP) annuities are also paid within 6-8 
weeks. I want to add that Navy truly appreciates the strategic 
partnerships formed with the VA and Social Security Administration 
(SSA) to expedite benefits processing partnerships that have 
streamlined submissions and greatly increased processing efficiencies. 
I would like to mention that there are times, however, when this 
process is temporarily--and consciously--halted in order to protect the 
interests of a family member. For example, in the case of a minor child 
named as a beneficiary; we must wait until a legal guardian is 
appointed before making payment. These cases are not systemic problems, 
but systemic protections for the individual receiving benefits.
    The Navy also counsels and encourages our surviving family members 
to utilize the financial counseling offered by the Office of 
Servicemembers' Group Life Insurance (OSGLI) as well as grief 
counseling offered by the VA, both of which have proven reliable and 
available free of charge.
           medical care and support of our critically injured
    The Navy also has a coordinated and tailored response for the men 
and women of our Armed Forces returning from Iraq, Afghanistan, and 
other areas of conflict with severe debilitating injuries. These 
servicemembers and their families are faced with very difficult long-
term challenges. The Navy and Marine Corps team provides a strong 
coordinated and unified approach to assist them and their families to 
recover and reintegrate.
    Our patients and their families deserve excellent health care. 
Severely wounded sailors and marines are almost always transferred from 
overseas to National Naval Medical Center (NNMC) in Bethesda for care. 
NNMC representatives meet with all incoming medical evaluation 
(MEDEVAC) patients and family members upon their arrival. Patients are 
admitted and surgical and/or medical teams make further medical 
assessments and establish the best course of treatment.
    Planning for post-hospital care begins almost immediately upon 
arrival at Bethesda. Because family support is essential to the 
recovery of injured servicemembers, the Navy takes full advantage of 
all resources afforded to them and maximizes these in developing the 
most appropriate care plan for their recovery and rehabilitation. 
Depending on the specific needs of the sailor and marine, their care 
plans could include care at another military treatment facility (MTF), 
a Veterans' Medical Center, or in some cases a specialized civilian 
facility.
    Some examples of our integrated health care delivery team include 
the coordination between the NNMC Social Work and Case Management 
Departments, counselors from the VA, and the Marine Corps Liaison 
Office--all located on the Bethesda campus. Representatives from these 
organizations interact with patients and family members throughout the 
course of treatment. They serve as educators for their respective 
programs and advocates for the needs of the patient and their families.
    Our goal is for every patient to return to Active-Duty. Some of 
those who are injured, and placed in a limited duty status, go on to 
receive specialized care only available through the VA. These 
servicemembers remain on Active-Duty and are closely monitored by Navy 
Medicine. Other sailors or marines, who have fully recovered, but 
sustained permanent injuries, may seek waiver status to remain on 
Active-Duty, and receive their care at MTFs. Regrettably, some 
servicemembers have sustained injuries that will prevent them from 
remaining on Active-Duty. In these cases, the patients and their 
families are supported to the fullest extent possible as they 
transition to veteran's status under the VA.
                               conclusion
    Chairman Warner, I thank you and the members of this committee for 
your continued support and the opportunity to appear before the full 
committee today. All of us serving in the Armed Forces are thankful for 
your attention to this important matter.

    Chairman Warner. Thank you, Admiral Nathman. We welcome 
you. I believe this is your first appearance before the full 
committee.
    Admiral Nathman. Yes, sir.
    Chairman Warner. You will be back.
    Admiral Nathman. Thank you, sir. [Laughter.]
    Chairman Warner. General Nyland.

     STATEMENT OF GEN. WILLIAM L. NYLAND, USMC, ASSISTANT 
             COMMANDANT, UNITED STATES MARINE CORPS

    General Nyland. Thank you, Mr. Chairman, Senator Levin, 
distinguished members of the committee. I appreciate the 
opportunity to address you today to provide my perspective on 
these vital issues associated with the care of our war 
casualties and their families that come as a result of their 
death or injury. Let me open by offering each of you and your 
staffs my deepest appreciation for the financial and moral 
support you have continuously provided to our men and women in 
uniform.
    As marines, we pride ourselves on taking care of our own, 
and we work very hard to mitigate the terrible tragedy of death 
or disabling injury. We have very efficient internal support 
services to assist families in their decisionmaking and, in the 
case of the wounded, to help immediate family members in their 
travel to Bethesda, Walter Reed, or whatever facility their 
loved one might be hospitalized. This is the right thing to do 
considering their sacrifice, and it is critical to the recovery 
process. Your support in that in last year's act is greatly 
appreciated.
    Not long ago, we instituted our Marine for Life program to 
ensure marines returning to civilian life were assisted in that 
transition and to nurture and sustain, once a marine, always a 
marine. Just recently, we have added a new aspect to the 
program, the Injured Support Program, which will focus on 
serving our disabled marines. This project is designed to help 
them with job search, schooling, and generally settling back 
into society. As you well know, it is often very difficult to 
navigate the complicated rules, regulations, and justifications 
associated with big service related organizations. We hope to 
help them cut that red tape, get what the law says they 
deserve, and what they have earned in service to this great 
Nation.
    In this regard, we will place liaison officers with the VA 
and other organizations to facilitate the process. This 
initiative will have marines on the other end of the phone and 
in their communities helping marines and sailors who were 
injured while serving with marines.
    We are here today to talk about the benefits we give the 
families of those who pay the ultimate price on our behalf. I 
do not know what the complete right answer is, but my sense is 
that what we receive or give them today is inadequate, and it 
certainly seems more than appropriate to do more to try and 
mitigate the loss of a loved one.
    Certainly Senator Sessions' proposed HEROES Act and 
multiple other bills and the DOD's approach go a long way 
toward addressing this need. That said, I would worry that we 
would try and distinguish between types of service to this 
great Nation, be it direct combat or not. I firmly believe that 
we would do great harm to our service men and women, all of 
whom serve our great Nation magnificently, if we were to make 
such distinctions in one's service. Whatever we as a Nation do 
in the long run, we must all work together to develop benefits 
that assist the families of those who lose a loved one or have 
a severely disabled member.
    Mr. Chairman, this entire committee and you personally have 
done so much for the casualties of this war and for their 
families. I know each of you feel those losses personally, and 
you have all made it part of your life's work to understand the 
plight of the families left behind.
    I am honored to be here today. I look forward to working 
with the committee and with the Department and also to your 
questions. Thank you, sir.
    [The prepared statement of General Nyland follows:]
           Prepared Statement by Gen. William L. Nyland, USMC
    Chairman Warner, Senator Levin, distinguished members of the 
committee; today, America is at war. The Marine Corps as an institution 
is fully committed to this life-and-death struggle, and in protecting 
the American people and our way of life. The over 35,000 marines and 
sailors serving today in Iraq and Afghanistan are performing superbly 
due to their training and extraordinary courage. They, more than any of 
us sitting protected in this great hall today, fully understand the 
danger to the Nation and what it takes to ensure its survival. We can 
never forget there is a terrible, but necessary, human cost that cannot 
be measured in dollars--it is their sacrifice that we can only stand in 
awe of, particularly when they did not have to serve in the first 
place. Marines, and sailors who serve with marines, and their families, 
are fully aware that if you are wearing the precious Eagle, Globe and 
Anchor today you are either in on the field of battle, just returning, 
or packing your seabag to go. Since our Nation suffered the monstrous 
attack on September 11, 2001, 414 marines have been killed protecting 
every one of us here today, and nearly 4,000 have been wounded. On 
behalf of every marine, and the brave sailors who serve with us, their 
spouses, children, mothers and fathers, I thank this Congress for your 
continued and indispensable support. I thank the committee for the 
opportunity to participate in evolving efforts to insure that our 
protectors, regardless of uniform, and their families are provided for 
whether they are killed or maimed in the defense of this great Nation. 
I would like to begin by framing measures the Marine Corps is 
undertaking to reduce stress on the force and your marines and their 
families.
                      reducing stress on the force
    Currently, the Corps is fully engaged across the spectrum of 
military operations in prosecuting the global war on terrorism. Since 
the watershed events of September 11, 2001, the core competencies, 
capabilities, and our 50-year, nonnegotiable focus on readiness and our 
culture of deployment has served us well in this war. There is no 
operation, no trick, no new tactic or technique, regardless of how 
illegal or despicable, that our enemy has employed against us that we 
have not been able to adjust to. The high state of training and quality 
of our marines along with their warrior ethos--highlighted by our creed 
that every marine is a rifleman--allows Marines to thrive in the 
chaotic, unstable, and unpredictable environment that has always 
characterized warfare and that our very adaptable enemies methodically 
attempt to exploit. We took advantage of the lessons we learned during 
our first 10 months in Iraq--when Baghdad and Tikrit were liberated, 
and we administered the southern half of the country in Phase IV 
operations--amidst a growing insurgency, improvised explosive devices 
(IEDs), and criminal acts against us in the name of extremism, to 
prepare for our return a year ago to the Al Anbar Province where we are 
locked in combat today.
    Since March last year, the I Marine Expeditionary Force (I MEF) of 
over 30,000 has fought the insurgency to a standstill in unconventional 
operations across the zone, as well as in bitter street fighting in 
Fallujah and Ramadi. With one hand stretched out in friendship to the 
majority of the Iraqi people who are the true victims of the 
extremists, and the other with weapon firmly in hand, we have 
endeavored to bring stability and security to the Province. Our 
expeditious and innovative pre-deployment combat skills training 
program, rapid modifications of our equipment to meet an evolving 
threat, and our emphasis on cultural appreciation and language 
capabilities, have all contributed to our considerable accomplishments 
in this complex region. Reinforced by three Marine Expeditionary Units 
(MEUs), I MEF is executing any number of security, urban combat, nation 
building, counterinsurgency, aviation command and control, and force 
protection missions with great confidence and skill. The enemy is 
smart, adaptable, and plays by no rule that civilized men and women 
would recognize; we, however, are smarter, more adaptable, and will 
ultimately win because our efforts are in the interests of precious 
liberties enshrined in our most revered national documents. Battles 
like those in Fallujah, Ramadi, and the Northern Babil Province link 
this generation of marines to the rich legacy of selfless courage and 
warfighting excellence, that has defined marines of every generation.
    In Afghanistan this past spring, we provided, on short-notice, a 
regimental headquarters, an infantry battalion, and a combined arms 
MEU. This Marine Force was a major portion of the combined joint task 
force ``Spring Offensive'' to help set the conditions for the 
successful election that has advanced the process of establishing a 
secure and stable government in Afghanistan. We continue to provide 
both ground and aviation forces--currently an infantry battalion, 
elements of two helicopter squadrons, and training teams--to protect 
and foster this new democracy.
    In addition to these operations, our concurrent support to other 
regions including the Horn of Africa, the Pacific, South Asian Tsunami 
relief, evacuation of noncombatants from Liberia, and the peace 
operation in Haiti, all has demonstrated the almost unlimited range of 
readiness and adaptability resident in this Corps of Marines that 
typically come from the sea, and return with the mission accomplished.
    As on many occasions in the past, naval forces, led by marines 
ashore, responded quickly and were deeply involved in the saving of 
lives and providing comfort to millions in the wake of the Sumatran 
earthquake and Indian Ocean tsunami. We should not underestimate the 
importance of these kinds of humanitarian missions as they are not only 
what decent people do, but are the purest and most giving form of 
engagement in a region critical to the war against extremism. As an 
aside, the marines involved in this relief operation have re-embarked 
on their amphibious ships, and are back on their way to their original 
destination--Iraq.
    Currently, we are also conducting a major rotation of our units and 
headquarters in Iraq. Most of these units have previously deployed to 
the war, but we have matched their training and equipment to take 
advantage of the lessons learned by those on the ground today at such a 
high price. The combatant commander has requested a force of nearly 
22,000 marines organized around 6 maneuver battalions, 3,000 of whom 
are activated from our Reserve component.
    While our readiness remains acceptable in the short term, the 
demand on the force is straining our marines, their families, and our 
equipment and materiel stocks. Operational tempo is high--the entire 
Marine Corps is supporting the global war on terror and no forces have 
been fenced. In the past 2 years, we have gone from a deployment 
rotation of one-to-three (66 months out/18 months back) to our current 
one-to-one ratio (7 months out/7 months back) for our infantry 
battalions and other high demand assets. This means that units in the 
operating forces are either deployed or are training to relieve 
deployed units. Since September 11, we have activated in excess of 95 
percent of our Selected Marine Corps Reserve units. The vast majority 
has served in either Iraq or Afghanistan. Despite this high operational 
tempo, the Marine Corps continues to meet its recruiting and retention 
goals in quantity and quality, but the effort required by individual 
recruiters and career retention specialists has increased 
exponentially.
End Strength
    We truly appreciate authorization to increase our end strength by 
3,000 in the fiscal year 2005 bill. These additional marines will 
assist in reducing stress on the individuals already shouldering such a 
heavy burden. We are looking hard as to whether a further increase will 
be necessary to meet long-term commitments where we are fighting today, 
and for what might come tomorrow. We have also conducted a thorough 
review of internal manpower policies and procedures, completely 
reexamined the force structure, and have made recommendations to the 
Commandant on unit activation and deactivation, ``civilianization,'' 
and a number of realignments. One immediate result of this effort has 
been the recommendation to create additional high demand units, and 
specialties to address pressures within the force. We are also 
enhancing the manning of our infantry units, creating a dedicated 
Foreign Military Training Unit, adding to our recruiting force, our 
training base, and other support for the operating forces. These 
initiatives, coupled with those implemented as part of the overall 
force structure reduce somewhat the personnel tempo and consequently of 
operations. It also reduces the stress on individual marines and their 
families.
Force Structure Review Group
    As mentioned previously we recognized the need to continue 
transforming and rebalancing forces to meet the needs of the 21st 
century. A comprehensive review of our Total Force structure, Active 
and Reserve, was conducted last summer. We are implementing the 
recommended force structure initiatives with the majority achieving 
operational capability in fiscal year 2006, and full operational 
capability by fiscal year 2008. These initiatives are end strength and 
structure neutral--offsets to balance these increases in capabilities 
are internal to the Marine Corps and come from military to civilian 
conversions and the disestablishment and reorganization of less 
critical capabilities. The Marine Corps will continue to evaluate our 
force structure to ensure that it provides the needed capabilities in a 
timely manner to support our national security requirements.
    Major structural changes in the active component include the 
establishment of two additional infantry battalions, three light 
armored reconnaissance companies, three reconnaissance companies, two 
force reconnaissance platoons, and an additional Air-Naval Gunfire 
Liaison Company (ANGLICO). We will also augment our existing explosive 
ordnance disposal, intelligence, aviation support, civil affairs, 
command and control, and psychological operations assets.
    In the Reserve component these structure initiatives will increase 
the capability of Marine Forces Reserve Command as it takes an 
increasingly active role in the war. We will establish an Intelligence 
Support Battalion, a Security/Anti-terrorism Battalion, and two 
additional light armored reconnaissance companies. We will also augment 
existing capabilities in the areas of civil affairs and command and 
control, and we are restructuring some Reserve units to convert them 
into Individual Mobilization Augmentee (IMA) Detachments--allowing the 
Nation more timely access to these Marine reservists to support 
contingency operations. In terms of military to civilian conversion we 
continue to pursue a sensible strategy to increase the number of 
marines in the operating forces. Last year we converted 664 billets, 
and we are on course to achieve an additional 1,697 through September 
2006.
Marine Corps Reserve
    Thanks to strong congressional support in the past, the Marine 
Corps has trained and equipped its Reserve to be capable of rapid 
activation, and deployment. This capability allows Reserve combat 
deployments to mirror those of the active component in duration. These 
reduced duration deployments have helped us to sustain the Reserve 
Force, and avoid untimely extensions. Through this process, the Marine 
Corps has been able to maximize force management of the Reserve, 
maintain unit integrity, and lessen the burden on the families by 
maintaining generally shorter deployments.
    Over 10,000 Marine Reserves are currently serving on Active-Duty in 
support of the war. Well over 8,000 are serving in cohesive ground, 
aviation, and combat support units, led by combat capable Reserve 
officers and noncommissioned officers (NCOs). Another 1,500 are 
individual augmentees in both Marine and Joint commands and headquarter 
elements. A total of almost 30,000 of our Reserve marines have served 
on Active-Duty since that terrible day in September nearly 4 years ago, 
with 95 percent of the units in our Reserve component having been 
activated.
            reducing stress on the marine and their families
    The Marine Corps continues to answer the call because of our 
individual marines, and the support they receive from their families 
and from the Nation. Morale and commitment are high. Marines join the 
Corps to ``fight and win battles'' and we are certainly giving them the 
opportunity to do that. We are an expeditionary force accustomed to 
deployments, but as earlier stated, this fight is not without its costs 
to both marines and their families.
Marine Corps Community Services
    Taking care of marines and their families is essential to the 
operational readiness of the Corps. The relevance of this mission is 
particularly evident when leaders at all levels assess preparedness of 
their command and unit functioning before, during, and after forward 
deployments. As an expeditionary force we are accustomed to frequent 
deployments--it is part of our culture and is one of the key reasons 
why young Americans join the Marine Corps--yet the current environment 
contains elements of personal danger and family risk that must be 
addressed with appropriate and timely support. To date in all our 
worldwide operations, we have been careful to closely monitor our 
programs, adjusting as needed to ensure marines and their families 
receive the necessary care to sustain them through every deployment 
cycle. In this regard, the Marine Corps Community Services (MCCS) 
organizations' combined structure of family services, Morale, Welfare 
and Recreation Programs, voluntary off duty education, and exchange 
operations, allow us to efficiently and effectively help families meet 
the challenges associated with our lifestyle and current operational 
tempo.
Deployment Support
    During the pre-deployment period, families attend to the 
administrative details of wills, powers of attorney, and insurance, and 
family care plans, as they always have. Spouses then connect in both a 
formal and informal way through the commander's Key Volunteer Network 
organized to provide accurate and timely information on the status of 
the deployment. This network also mobilizes to embrace those families 
who receive the dreaded knock on the door to notify them of the death, 
or serious injury, of their loved one serving overseas. This is in 
addition, of course, to the formal assist provided by the casualty 
officer assigned in every case. The spouses involved in this program 
are all volunteers, work day and night without respite, and shoulder 
their own burdens of stress and often grief, while helping others 
through theirs. They are the behind-the-scenes heroes of this war, and 
we love them for what they do.
    We have developed a series of pre-deployment, in-theater (Iraq and 
Afghanistan), return and reunion, and post-deployment awareness and 
support services to mitigate potential problems shaped by traumatic 
combat experiences and associated stress. The assumption we make is 
that none of us are immune from the social tragedies of suicide, 
domestic violence, or sexual assault. We also assume that risk factors 
can be exacerbated by a wide range of factors associated with normal 
deployments and most especially war, and we have implemented a variety 
of active counseling services to address individual and unit concerns. 
Examples include: the Critical Incident Stress Debriefing Program, 
designed to address the symptoms and risks of untreated combat stress, 
its signs, and the resources available for treatment; and our 
Operational Stress Control and Readiness Program (OSCAR), where we 
embed a mental health professional(s) in battalion aid stations. It has 
resulted in a marked decrease in evacuations for mental health reasons. 
Prior to departing a combat zone, and immediately upon return to home 
station, we have instituted a rest and decompression period in which 
small unit commanders, NCOs, and chaplains, provide the a Warrior 
Transition Brief. This series of discussions focuses on preparing 
returning marines and sailors to integrate with loved ones and society. 
A wide array of services is also available at our installations through 
chaplains, medical treatment facilities, and MCCS, to support every 
member of the marine community in the post-deployment phase of their 
lives. For those in need residing a distance from our installations, 
face-to-face counseling services are available through the MCCS 
OneSource Program.
    We recognize that family readiness is integral to unit readiness. 
To help our families through the separation and stress of deployment 
Congress, through Supplemental Appropriations, has provided extended 
childcare services, and we are grateful for this support. Information 
and referral services are offered via different access points to 
include the key volunteers, command Web sites and hotlines, and MCCS 
OneSource, which offers round the clock information and referral 
services via toll-free telephone and Internet access. This program has 
also proven to be an especially valuable resource to assist Reserve 
marines and their families who often experience special challenges as 
they attempt to acclimate to Active-Duty life when called up.
Casualty Assistance
    Every one of us, particularly the families, appreciate recent 
legislative actions that help in the event of a death of serious 
injury. In particular are those funds provided for expanded 
authorization for parents of our deceased to attend funerals when they 
are not the primary next-of-kin, and also for paid travel to the 
bedside of the badly injured, those facing extended hospital and 
rehabilitation stays. This is important to their morale, and critical 
in the recovery of these heroes. We have established internal support 
services, including an extensive network of Casualty Assistance Calls 
Officers (CACOs) throughout the country, that serve as the primary 
point of contact for the families of deceased and severely injured 
marines. We have always done it this way, but it's better than it has 
ever been as we serve these families with a shoulder to lean on, and, 
when it is time and they are ready for help and advice in navigating 
through the complexities of military benefit and entitlement programs, 
and even with offers from benevolent organizations who want to help. 
This support is managed through our Headquarters Casualty Affairs 
section, and has been enhanced by the development and implementation of 
an Office of the Secretary of Defense-funded Injured/Ill Patient 
Tracking Web site. Commanders now have nearly real time visibility of 
their injured marines through all stages in the medical and 
convalescence process.
    In this vein, I would like to thank Congress for the continued 
support of the programs and services so critical to the readiness of 
our Corps, to include provisions of supplemental appropriations; all of 
which directly contribute to quality of life enhancements. Also, for 
your kind and caring visits at hospitals and in homes across the 
country, visits that provide comfort and motivation to those wounded in 
the war that is protecting us here at home in our daily lives.
Marine For Life--Injured Support
    Building on to the organizational network and strengths of the 
previously established Marine for Life Program, we are currently 
implementing an Injured Support Program to assist the disabled after 
they are discharged. The goal is to never forget them or what they have 
done, and to bridge the often difficult and lengthy gap between the 
care we in the Marine Corps and Navy provide, and that which the 
Department of Veterans' Affairs (VA) assumes. The key is to ensure 
continuity of support through transition and assistance for however 
long it might take, and certainly to cover the gap in entitlements that 
sometimes is many months long. Planned features of the program include 
advocacy within the Marine Corps and Navy for the disabled and their 
families, and help getting over the hurdles of any external agencies 
they might interact with. An extremely big part of this will be both 
pre- and post-service separation case management, assistance in working 
with physical evaluation boards, an interactive Web site for 
disability/benefit information, assistance with Federal hiring 
preferences and law, and improved VA handling of marine cases by the 
attachment of a liaison officer embedded within the VA headquarters. 
The program began operations in early January, and it will never stop 
evolving and improving its services. If there is any area that needs 
more interest, it is in the long term help and assistance for our 
disabled personnel and their families.
Death Benefits
    The final topic I must address is perhaps the most difficult, the 
death of a serviceman or woman in the defense of our way of life. While 
their deaths, whether it is in combat or in a training accident here in 
the United States, are tragic, they are heroes . . . not victims. They 
stepped forward to a life of service when they did not have to, and 
even as young as they are, they knew what they were getting into, what 
the dangers were, what the possibilities might be. There are those who 
might not believe this, but it is true. The only experience they cannot 
imagine, because it is unimaginable, is combat itself. They stood tall 
when the country needed them, came when they did not have to, and had 
they not, no one would call them coward. Let me walk you through what 
happens when a family is notified of a death.
    When they open the door a marine officer is always standing there 
to give them the most dreaded news they will ever receive. Details are 
few and will typically only include the time and place of the death, 
and perhaps a little bit of the how. This officer then quite literally 
becomes part of the family for as long as they need him--forever if 
necessary. When appropriate, and it is always awkward, he provides them 
a death gratuity check for $12,000, then helps them through the process 
of making funeral arrangements as the flag-draped coffin with what was 
their son or daughter, brother or sister, husband or wife, is on the 
way home. Only when buried, and we help them with the expenses here as 
well, do the conversations turn to additional monies and benefits. This 
is often pressed by the officer, as the families seldom think in terms 
of what might be their entitlements, and are often surprised at what 
they hear. In addition to the already paid death gratuity, there is the 
Servicemembers' Group Life Insurance (SGLI) policy payment of $250,000, 
some of the premiums of which are paid for by the now dead marine. If 
married at the time of death there are monthly stipends that come in 
from Social Security, the VA, and the Department of Defense, and these 
very frequently are more than what the deceased may have made while 
alive. Something to keep in mind, however, is the burden of combat 
deaths fall most often on the Privates First Class and Lance Corporals; 
whose average yearly wages are $17,000. These benefits of course depend 
on how many children and other specific circumstances, and decrease 
over time due to age or a surviving child's student status.
    I have queried the Marine Corps Legislative Liaison staff members 
who work so closely with your own staffs on a full range of issues, 
about inquiries related to deaths in an attempt to gain some insights 
on how all of these financial arrangements are received by the families 
of the fallen. We really have no trends other than perhaps the issue of 
post-death payments from VA and Social Security that we work to 
expedite. Anecdotally, I can tell you that there are many spouses 
grieving over a death who make the point that it would be very helpful 
to have an increase in the SGLI option to two or even four times its 
current amount, with the cost of buying a home and college the most 
common rationale. They are not bitter, angry, or disappointed at what 
they receive, but in retrospect wish they had taken out more insurance.
    In conclusion, on behalf of your marines and their families, I 
thank this committee for your continued and indispensable support 
during these demanding times as we attempt to defend America, and 
spread the freedoms we enjoy to everyone man, woman, and child in Iraq 
and Afghanistan. I would also add that no recruit that raises his or 
her hand and swears a solemn oath to serve and protect this Nation--
even unto death--joins the Marine Corps for long-term financial 
benefit. They certainly never give a thought to programs that will 
assist them and their families in the event they are severely disabled 
or killed. It is all ultimately part of the recruiting and retention 
package, however, and in an increasingly difficult recruiting 
environment particularly for the two Services shouldering the greatest 
burden of death and injury in this war, we must take a very hard look 
at anything that will set the minds of those in the war and their 
families at ease. Regardless of what uniform they wear, where they 
serve, or what their specialty is, if they move against our enemies in 
this global war they need to be supported in the way they deserve. We 
must also not forget the disabled who have unique financial and mental 
health difficulties those of us who are healthy can never fathom. Their 
obstacles are great, their recovery forever, and we must not let them 
slip into the abyss that comes with being put aside and forgotten.
    I again thank the committee for your unwavering support for your 
Marine Corps and all our great Nation's servicemembers.

    Chairman Warner. Thank you very much, General Nyland, for 
your personal reference to the members of this committee. We 
have worked hard and we will continue.
    General Moseley.

   STATEMENT OF GEN. T. MICHAEL MOSELEY, USAF, VICE CHIEF OF 
                 STAFF, UNITED STATES AIR FORCE

    General Moseley. Mr. Chairman, Senator Levin, distinguished 
committee members, thank you for holding these hearings today 
and for the opportunity to address these critical issues for 
our folks. You, in this committee, have been stalwart stewards 
for the defense of our great republic, and we truly appreciate 
your concern and continued support for our folks.
    In this global war on terrorism, our airmen, Active, Guard, 
Reserve, and civilians are all fighting as one cohesive team 
with an outstanding joint team of soldiers, sailors, marines, 
and coast guardsmen. This global war is not isolated to a 
single geographic location and includes a multitude of 
activities in the execution of these combat tasks, as well as 
the preparation for these combat duties. Today's airmen are 
smart, courageous, and determined. They are doing what they 
have been trained to do, and they do it with excellence.
    It is my opinion that we can do better to address benefits 
and compensation for them and their families. If a 
servicemember is wounded in action, the Air Force will do 
whatever it takes to help them recover, and when a military 
member pays the ultimate price for his country, I believe with 
all my heart that we must take care of those left behind, their 
families, and particularly their children. We cannot lessen 
this pain and we cannot heal this hurt, but we can, for sure, 
help them with the unforgiving demands of continuing their 
lives without a father or without a mother.
    Mr. Chairman, the Department of the Air Force is a part of 
a great joint team fighting a tough fight, a fight that we must 
win. But none of the challenges in that fight are more personal 
for us here at this table or more important than taking care of 
our troops and their families.
    Again, thank you for your continued support of our 
soldiers, sailors, airmen, marines, and coast guardsmen. I, as 
well as my colleagues, look forward to your questions. Thank 
you, Mr. Chairman.
    [The prepared statement of General Moseley follows:]
          Prepared Statement by Gen. T. Michael Moseley, USAF
    Mr. Chairman, Senator Levin, and committee members, thank you for 
holding these hearings today. You have been stalwart stewards for the 
defense of our great Republic.
    In war our top priorities are to accomplish the mission and to take 
care of our people. Back on the home front, the best thing we can do 
for those fighting our wars is to take care of their families. We owe 
our military men and women the certainty that if they are severely 
injured or killed, we will look after them and their loved ones.
    If a servicemember is wounded in action, the Air Force will do 
whatever it takes to help them recover. Our Palace Helping Airmen 
Recover Together (HART) program follows Air Force wounded in action 
until they return to Active-Duty or are medically retired. We work to 
retain them on Active-Duty if it is at all possible. If we are unable 
to return airmen to Active-Duty, we work to get them civilian 
employment within the Air Force. Finally, we also make sure they are 
counseled on all the benefits they are entitled to within the 
Department of Defense (DOD), Department of Veterans' Affairs (VA), and 
the Department of Labor. I am thankful for the work Dr. Chu has done in 
standing up the Joint Support Operations Center. This DOD center is a 
great complement to our own program and will ensure that no injured 
airmen is forgotten or neglected. As of today, 166 airmen have been 
wounded in action; 145 of them have returned to Active-Duty; 1 has 
medically separated; and 20 are on convalescent leave or awaiting a 
medical board.
    At Walter Reed and at Andrews, I've met many of the injured airmen 
and soldiers returning from war. I am proud of them and their courage 
as they travel the hard road to recovery. Every airman I've met wanted 
to return to Active-Duty and their unit. Our skilled medical personnel 
have helped improve the odds of a full recovery far beyond the odds 
available even 10 years ago. We currently have 11 airmen being treated 
on an out-patient basis due to Operation Iraqi Freedom (OIF) and 
Operation Enduring Freedom (OEF) injuries.
    What of the killed in action (KIA)? When a military member pays the 
ultimate price for his country, I believe with all my heart that we 
must take care of those they left behind--their family. We cannot 
lessen their pain, we cannot heal their hurt, but we can help them with 
the unforgiving demands of continuing their lives. Here is where the 
Air Force focuses on the whole experience: from compassionately making 
the initial contact, to gently organizing the transition period and 
funeral, and finally to loyally helping the family adjust to the long-
term loss.
    I am proud of our professional and compassionate Casualty 
Assistance Officers (CAOs). These highly trained volunteers are with 
the families from the point they are initially notified, and stick with 
them for as long as they are needed. This personal relationship is 
crucial to properly taking care of the bereaved.
    The CAO, alongside chaplains and other friends within the 
community, help the family cope with difficult emotions, while also 
helping them navigate complex financial hurdles. Dr. Chu has detailed 
the financial assistance we currently give to the families. In 2003, 
this committee helped change the law; increasing the gratuity and 
providing it to the family of any military member, who died while on 
Active-Duty, and we truly appreciate the full support.
    We continue to work to improve the Air Force's process and 
attention to detail in taking care of the airmens' families.
    Besides the death gratuity and payment for funeral expenses, the 
other major payment to our airmen is done under the Servicemembers' 
Group Life Insurance (SGLI). This low cost insurance is a benefit that 
almost every airman uses. Currently 99 percent of all enlisted members 
are covered by SGLI with 88 percent electing the maximum coverage of 
$250,000. Only 0.02 percent elected zero coverage. Amongst the officer 
ranks, 92 percent elected the maximum SGLI coverage. Only 4 percent 
elect zero coverage. SGLI is a great benefit, and I appreciate your 
desire to strengthen it further.
    Mr. Chairman and members of the committee, the Department of the 
Air Force is part of a great joint team fighting a global war on 
terrorism. We are challenged every day in the conduct of combat 
operations across the globe. None of the challenges, though, are more 
personal or more important than taking care of our airmen and their 
families. Thank you for the unwavering support you have given our 
Nation. Thank you for calling this hearing. I am grateful to you for 
the opportunity to reexamine this important issue.

    Chairman Warner. Thank you very much, General. This has 
been an excellent presentation by our panel.
    I again mentioned, Senator McCain, that you were among 
those who recommended that we bring up the military services to 
make there is sort of a unity of views here, and I think we are 
achieving that.
    Again, in recognition of the initiatives by Senator 
Sessions over a number of years on this issue, I will yield my 
question time to you and then take my turn at the bottom of the 
order. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman, for really 
giving us the first hearing. You said we were going to move on 
this promptly and you certainly have. I think it is time for us 
to bring it to a reality.
    There are a lot of different ways we can do it. We will 
have some ideas, and I am sure the legislation that Senator 
Lieberman and I have offered can be improved today or in the 
days to come. Hopefully, we can bring it to final passage.
    Dr. Chu, I would like to see us consider moving this as 
part of the defense supplemental, or there could be other ways 
it could be done. I know that is one way it would move rapidly. 
What are your thoughts about that?
    Dr. Chu. We certainly have no objection, Senator. We 
endorse the principle of retroactivity back to the start of 
current operations in October of 2001. So if it is done in a 
later vehicle, the authorization bill, for example, we would 
still be taking care of all those concerned.
    Chairman Warner. I have talked with the Majority Leader 
about this, and I think he has been consulting Senator Reid. I 
do hope that this can be achieved, Senator.
    Senator Sessions. Thank you, Mr. Chairman. I know you are 
pushing to make this a reality soon.
    General Nyland, I was in Iraq 2 weeks ago and in Fallujah 
where I met with the Marines. What a magnificent accomplishment 
those marines demonstrated there. That was a tough battle. I 
think it is too little appreciated just how difficult it was. 
They had to go house to house against a determined, often 
suicidal enemy. We lost 70, maybe 80 marines in that tough 
battle. They performed with courage and fidelity to duty. They 
never waivered and there were never any complaints, just ``we 
want to do the job.'' It was just thrilling to be with them, 
and I wanted to say that.
    The life insurance, SGLI, applies to every service person 
no matter what they do and how they may lose their life. But if 
it is in a hostile zone, they do not have to pay the premiums 
on the extra $150,000, from $250,000 to $400,000. I think there 
is some distinction between a person in a hostile fire zone and 
a person not in a hostile fire zone who may lose their life. I 
would love to make sure we have some flexibility for you and 
members in uniform who have wrestled with these issues for 
years to reach the right decision about how to say the death 
benefit is paid. That is what we are really talking about. It 
would only affect the death benefit portion here.
    Do you have thoughts about that? Would you like more 
flexibility and an opportunity to work on the details more 
carefully before this legislation finally moves?
    General Nyland. Senator, yes, sir. First, thank you for the 
comments on the marines, and I would be remiss if I did not add 
that we did that in company with my great brother and soldier, 
Dick Cody, and his soldiers.
    Senator Sessions. You are correct. There were quite a 
number of Army personnel in that fight.
    General Nyland. I think I would like a little more time to 
understand the details, sir. For me, if a young man or a young 
lady steps forward and raises his right hand to serve this 
great Nation, I think we have to be very careful about making 
any distinctions about the type of service that they rendered. 
There are some additional benefits if you are in combat, 
obviously, with tax exclusions, hostile fire pay, and hazardous 
duty pay. We have to be very careful not to omit those who 
might be training to go, or perhaps, one who has already 
returned and is having trouble adapting and perhaps loses his 
life through a late night at the club, trying to come to grips 
with what he may have seen over there, and accidentally loses 
his life on the way home. So my concern is that if an 
individual wears the cloth of this great Nation, we just have 
to understand completely and be very careful about how we would 
characterize his service.
    I think we have some vehicles in our line-of-duty 
investigations that would allow us to address that, but I do 
think we probably ought to make sure we really have it right 
before we slap the table, sir.
    Senator Sessions. Well, I thank you for your insights into 
that.
    Mr. Epley, the legislation that Senator Lieberman and I 
offered would bring SGLI up to $400,000, which I think in 
contemporary terms is probably a better number, or a more 
legitimate number, than $250,000. I noticed the Veterans' 
Affairs Committee is concerned with this number and has 
suggested maybe just going up to $300,000. But this is 
basically a program that is paid for by the service personnel, 
and they would not be required to take the upper limits, 
although they would get the extra hostile fire pay if they were 
killed in hostile fire.
    What are your thoughts about that? What difficulties or 
problems do you see in raising the life insurance from $250,000 
to $400,000?
    Mr. Epley. Senator, we at the VA support the concept of 
increasing the benefit in SGLI. We have looked at some 
different numbers. Currently, as you indicated, the insurance 
program is paid for through the premiums that are paid for by 
the service men and women themselves, and the current rate is 
about 6.5 cents per $1,000 of coverage in insurance. Our 
estimates are that we could keep that rate if the insurance 
were increased up to about $300,000 per member, and if the rate 
were to go higher, we might have to increase the premium rates 
per month, per member or have it subsidized. That could be done 
more simply, I think, as was discussed here, through the 
payment that is currently called the death gratuity.
    Senator Sessions. If there is a modest increase in rate, 
should they not be given an opportunity to choose to go up? How 
would that adversely impact the basic insurance payments?
    Mr. Epley. Certainly they should be, and they are given the 
choice to choose the amount. They can choose below what is now 
the maximum of $250,000 and make a designation. I trust that we 
would continue to allow them to do that, and the premium rates 
would be determined by the actuarial staff to just make sure it 
was the fairest, most economical method for all the service men 
and women.
    Senator Sessions. Just briefly, I will ask any of the Vice 
Chiefs here if they would like to comment on a concern that I 
have heard that spouses or perhaps other designated 
beneficiaries should be notified of any change or elimination 
by the servicemember of the life insurance benefit. In other 
words, sometimes a spouse may have a valuable insight into how 
much life insurance should be taken out and whether it should 
be stopped or not. Would that be a positive benefit for your 
commanders as they counsel soldiers on SGLI?
    Admiral Nathman. Sir, I believe there should be some 
counseling about the benefits, obviously. I believe it is a 
personal choice, and the personal choice is he is electing to 
have a certain service level, as it were, and it is very 
typical of what we do in the civilian world. So I think once 
you provide the counseling with the benefits, then that should 
remain a personal decision as to the level of coverage and 
benefit.
    Senator Sessions. What if the servicemember has taken out 
life insurance, the $250,000 under current law, and decides to 
just eliminate that? Should the spouse be consulted in any way 
or be given notice in any way of the servicemember's choice in 
that regard?
    General Nyland. I would submit, sir, that I think that as 
an individual, he or she ought to feel an obligation to inform 
their spouse and/or a parent, or whoever the beneficiary might 
be. I am not 100 percent sure how we would handle that and 
still let it be the individual's notification vice whether the 
command became involved. I think I would have to think about 
that a little bit more as part of the study as we go forward.
    Senator Sessions. Well, you never know. People make 
decisions sometimes impulsively. Sometimes consulting with a 
spouse would help make a better decision and might help relieve 
families and children from an adverse and unwise, impetuous 
decision for a few bucks a month which could, in fact, 
jeopardize their family. I am not sure it would be too 
burdensome if we at least asked that there be notice given to a 
spouse before a policy is dropped.
    General Nyland. Yes, sir. I agree with that. We certainly 
encourage our members to discuss it with their family when they 
make those decisions. In my own mind, I am not yet sure of the 
exact mechanics of how we would do something like that.
    Senator Sessions. Well, these are real-life decisions, some 
of the things we discussed in this legislation.
    Thank you, Mr. Chairman. My time is expired.
    Chairman Warner. Thank you very much, Senator Sessions.
    If I might just take a minute. Thank you, General Nyland, 
for acknowledging that it was a joint operation in Fallujah 
with the United States Army. I had a very modest role in the 
Marine Corps as a uniformed officer at one time years ago.
    But throughout history, the Marines and the Army have 
fought side by side, I suppose most notably in World War I in 
which my father participated as an Army doctor in the trenches 
with the Marines who distinguished themselves at the battle of 
Belleau Wood. At that time, Pershing acknowledged that they 
might have some permanence in the military annals of our 
history. I believe in this operation in Iraq, Desert I as well 
as Desert II, the Marines and the Army have written a chapter 
about jointness.
    At this point, Admiral Nathman, how many thousand sailors 
are in country in Iraq now?
    Admiral Nathman. Well, sir, if you look at the total 
theater right now, depending on the battle group or the----
    Chairman Warner. Let us take in country on the ground. I 
mean, it is surprising the number that are on the ground.
    Admiral Nathman. Yes, sir. We are probably around the 
18,000 level right now.
    Chairman Warner. Correct, in country.
    Admiral Nathman. Yes, sir.
    Chairman Warner. Boots on the ground.
    Admiral Nathman. Kuwait, Bahrain, Qatar, Iraq, yes, sir. 
They are serving in many different ways, supporting the Army in 
terms of logistics support or moving cargo or medical support. 
There is a tremendous medical presence also because of our 
relationship with the Marine Corps, obviously, in terms of the 
type of on-scene casualty care, but also the right kind of 
surgical care that has done so much to make sure that our 
members survive some pretty horrific injuries.
    Chairman Warner. Well, it has been a joint operation. 
Magnificent.
    How many on the ground in country in Iraq and Afghanistan 
with you, General Moseley?
    General Moseley. Mr. Chairman, we have 33,000 deployed into 
the Central Command (CENTCOM) area of responsibility (AOR) for 
Afghanistan and Iraq, with about 400 aircraft.
    Senator Sessions. Mr. Chairman, I would just note that 
General Sattler, the Marine commander there in Fallujah, took 
me first and foremost to the hospital operated by the Navy 
Medical Corps and bragged on them extensively. I flew in and 
out, as we all have, with Air Force pilots who are flying in at 
risk every day.
    Chairman Warner. Magnificent jointness.
    Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    I would like to ask each of you about whether or not the 
amount of the death gratuity should depend upon where the death 
takes place. Three of you have commented either very forcefully 
or more subtly against making that distinction. I want to ask 
each of you that question.
    General Nyland, I do not think I have to ask you that 
question. I think you have basically answered it. But I gather 
it is your strong feeling that there should not be a 
distinction, or before any such distinction is made, that there 
should be a whole lot greater consideration given to creating 
that distinction. Why do you not put it in your words again?
    General Nyland. Yes, sir. I agree exactly with the latter 
part of your statement. I think we need to understand before we 
put any distinctions on the great service of these wonderful 
young men and women who wear the cloth of this Nation, either 
going forward into combat, training to go to combat, or in 
tsunami relief. They are all performing magnificently. I think 
we have to be very cautious in drawing distinctions.
    Senator Levin. It has not been made to date, and you would 
not instinctively put that distinction into it.
    General Nyland. No, sir, I would not.
    Senator Levin. Admiral.
    Admiral Nathman. Well, sir, it is kind of where the debate 
started. This has often been about how we take care of the 
survivors, the families, and the children. They cannot make a 
distinction. I do not believe we should either. I think I am 
right where Senator Sessions was, that this is such a strong 
bond, this is a covenant bond with those who serve. So we 
should not make a distinction. We do in terms of compensation 
for people in combat. There is combat pay, there are those 
kinds of things that recognize that they are actually in that 
AOR in combat, but in terms of taking care of the men and women 
that they leave behind, there should be no distinction.
    Senator Levin. All right. Dr. Chu, I will get back to you 
at the end, but General Cody.
    General Cody. Sir, I agree with my comrades here. We have 
discussed it at length. This is a very complex world we live in 
right now. The amount of training we do is changing every day. 
We have soldiers, airmen, sailors, marines, and coast guardsmen 
moving all around this world. It is about service to this 
country, and I think we need to be very careful about making 
this $100,000 decision based upon what type of action. I would 
rather err on the side of covering all deaths rather than try 
to make the distinction.
    Senator Levin. All right. Thank you.
    General Moseley. Sir, I agree. I believe geographically we 
have people in advance composite force training preparing for 
combat, which in some cases is as lethal as actual combat. We 
have the mechanisms in place to work with Dr. Chu and the 
Department on line-of-duty assessments relative to determining 
were those actual line-of-duty deaths or not. So those 
mechanisms are in place, and we would welcome the opportunity 
to work with the Department to finesse those details. But I 
believe a death is a death, and our service men and women 
should be represented that way.
    Senator Levin. Now, Dr. Chu, the proposal that you have 
made does make that distinction, and I am wondering if you 
would comment on the statements that you have heard here this 
morning, as to why that distinction is included in your----
    Dr. Chu. I would be glad to. I think one of the things that 
I would emphasize, as General Moseley pointed out, is that S. 
77 gives the Department latitude. It does cull out training 
accidents specifically in the combat-related special 
compensation standard that it sets.
    I do think it is a question of objectives. Our premier 
objective here is to provide for those who have fallen in Iraq 
and Afghanistan--to their surviving families, as I indicated in 
my testimony, a total payment of $500,000.
    Then I think there are a variety of other objectives that 
people have spoken to. One objective asks, should we recognize 
this service in a special way? If the objective is to provide 
for all families, then I think one increases the emphasis on 
SGLI, and perhaps picks a little different figure on what we 
today call the death gratuity. I think as the witnesses have 
indicated, this is an issue we will work with Congress on as to 
what are our objectives are, what we want to achieve, what our 
purpose is in making these various changes.
    S. 77 does give the Department latitude to take a line-of-
duty approach. It is well within, as I understand it, the 
language in the proposal.
    Senator Levin. Is the administration's proposal in the 
budget going to include that distinction?
    Dr. Chu. We think that the kind of approach that Senator 
Sessions and Senator Lieberman have taken in their draft, which 
gives the Department latitude to recognize the wide range of 
circumstances we face today and the perhaps wider range of 
circumstances we face tomorrow, is the right way to go. We 
would prefer not to enshrine specific choices in statute.
    Senator Levin. But you are going to have to budget for 
those choices, are you not?
    Dr. Chu. We understand that.
    Senator Levin. So is the budget that you are going to 
submit going to include a distinction of that kind or not?
    Dr. Chu. The immediate budgeting for this, as I understand 
the plan, is to include it in our supplemental funding because 
we have a significant retroactive payment we need to make.
    Senator Levin. I am saying, are you going to assume the 
distinction as to where the death took place in your budget 
request.
    Dr. Chu. That is not a decision that is before us. The 
question of what the future costs will be turns importantly on 
the level of hostilities. That is not a foreseeable event at 
this stage.
    Senator Levin. But is the retroactive payment that is going 
to be in the budget going to make the distinction which we 
talked about?
    Dr. Chu. The Department's approach on these payments will 
be to propose they be financed as part of the supplemental 
financing. Therefore, we will finance them as they occur, 
whatever rules are adopted on this point.
    Senator Levin. Does that mean you have not made the 
decision on retroactivity?
    Dr. Chu. No, sir. We support the principle of 
retroactivity.
    Senator Levin. But are you going to apply retroactivity to 
deaths which occurred anywhere to people on Active-Duty during 
this period or only in the areas of Iraq and----
    Dr. Chu. As I think the subject matter of this morning's 
hearing emphasizes, we have no authority at the moment to pay 
anything beyond the current level of what people call a death 
gratuity. We are seeking higher limits for both SGLI and the 
death gratuity. Whatever rules pertain to those payments, 
obviously, we will follow in our budgeting practices, but we 
support the kind of flexibility Senator Sessions has built into 
his bill.
    Senator Levin. I do not think that you have answered the 
question, because you have to make an assumption in the budget 
one way or the other when it comes to retroactive deaths. So, 
of course, you are going to follow the law, but you are going 
to make a proposal relative to the budget which is going to 
assume one way or the other, and I do not think you have 
answered the question.
    Dr. Chu. The larger assumption in making a budgetary 
forecast is what is the level of hostilities that we are going 
to confront, and that is unknowable, obviously, at the present 
time.
    Senator Levin. Retroactivity is very knowable.
    Dr. Chu. Retroactivity is a different matter, yes, sir.
    Senator Levin. My time is up.
    Chairman Warner. You can have another question.
    Senator Levin. Let me just ask one more, because it goes 
really to the same issue. You have made the same distinction, I 
believe, in the administration's proposal as to where the death 
occurred as to whether or not the premium will be paid on the 
life insurance. As I understand the proposal, the extra premium 
for the $150,000 would be paid where the person is in the area 
of hostility or the area of operation (AO).
    Dr. Chu. I believe the language of Senator Sessions and 
Senator Lieberman's bill is AO.
    Senator Levin. Right. Is that same distinction going to be 
in the administration's proposal relative to the life insurance 
premium?
    Dr. Chu. We support the notion that the provision in the 
proposed legislation puts forward the idea that we ought to 
provide some degree of coverage, and what we have recommended 
is the change in coverage that is being advanced here this 
morning for a servicemember, even if he or she declines the 
SGLI program. That is the purpose of this feature of the 
package. For those who have already elected it, we would, of 
course, rebate or reduce their premiums accordingly.
    Senator Levin. My final question goes to the issue of 
whether or not we should deduct from the SBP payment, the VA 
payment, and DIC payment. If we do that, we eliminate any 
benefit, as I understand it, for a significant portion of our 
service personnel from that VA benefit.
    Mr. Epley. They are offset now.
    Senator Levin. Then the offset means that there is no 
benefit from that benefit for a significant percentage of our 
troops. DOD's plan, is actually--if we are going to deduct the 
VA benefit from it, it does not leave them with any benefit 
from it at all.
    Now, my question is this. In what percentage do we know, 
Dr. Chu, of the cases where we have death benefits paid, these 
annuity benefits, and where there is this deduction of the one 
from the other does that mean, in effect, there is only one 
annuity? Do we know what percentage?
    Dr. Chu. I will need to get that number for the record for 
you, Senator.
    Senator Levin. Could it be as many as half?
    Dr. Chu. I do not know off the top of my head, Senator. I 
think this question of the offset raises much broader issues 
that go beyond the care of deceased servicemembers. Offsets are 
built into the Social Security system, both in private pension 
plans and public plans. As Mr. Epley testified, the DIC is paid 
to 212,000 survivors. That is much bigger than the casualty 
group in Iraq and Afghanistan. I think we are opening a much 
bigger window, and a much bigger debate if we want to look at 
the offset issue.
    People who select DIC do get a benefit from it. That 
payment, as you have noted and others have noted this morning, 
is tax-free, which is not true of the SBP amounts.
    Senator Levin. Our quick analysis is that a married 
servicemember who is an E-4, 23 years of age, that the spouse 
would get no benefit whatsoever if the SBP annuity benefit is 
offset by the DIC benefit.
    Dr. Chu. That is likely.
    Senator Levin. I think it is important to us that we know 
what these numbers are.
    Dr. Chu. We would be delighted to get those numbers for 
you, Senator.
    [The information referred to follows:]

    There are about 275,000 families receiving Survivor Benefits Plans 
(SBP) benefits. Of these, roughly 21,000 (7.6 percent) have a reduced 
benefit as a result of the Dependency and Indemnity Compensation (DIC) 
offset. Another 25,000 (9 percent) have total offsets and receive only 
DIC. In all of these cases, the spouse was refunded all premiums paid 
for the portion of SBP no longer payable. The effect is to pay the 
surviving spouses of participating members first with any free coverage 
through DIC with an increase for any SBP above that, charging premiums 
only for the added amount of SBP actually payable.

    Senator Levin. Thank you very much, Dr. Chu, and thank you 
for your service. I join our chairman in thanking you. 
Apparently you are going to be leaving at some point fairly 
soon, from what he says, and I want to join him in thanking you 
for your service to the country.
    Chairman Warner. Thank you, Senator Levin.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman. I want to thank 
the administration for coming forward with this initiative. I 
think it is obvious that there is unanimity within Congress 
that we need to act on this compelling issue.
    Dr. Chu, can we expect specific legislation from the DOD, 
or do we wait until legislation is generated here?
    Dr. Chu. It is our intent, sir, with our transmission of 
legislative language, which follows the budget, to send our 
proposed----
    Senator McCain. A specific legislative proposal.
    Dr. Chu. Yes, sir, it is our intent to do so.
    Senator McCain. Which I am sure the chairman will act on 
very quickly.
    Chairman Warner. That is with the main budget? We talked 
about the supplemental option here. I think Senator McCain's 
question is very important in terms of timing. If it is the 
desire of the leadership of Congress, that is, on the Senate 
side, to try and do the supplemental, I would urge that you 
consider the timing of your submission.
    Dr. Chu. Thank you, sir. I appreciate that guidance.
    Senator McCain. Also, Dr. Chu, there are differences in the 
Guard and Reserve with the way they are paid and the way they 
handle retirement, et cetera. I would imagine the Guard and 
Reserves will be included in this as well in every way.
    Dr. Chu. Yes, sir.
    Senator McCain. The nature of this conflict is different 
than any other--by the way, I also want to associate myself 
with the uniformed people's remarks here. This kind of conflict 
has a gray area. B-2 bombers flew from the United States to 
combat missions in Afghanistan. If a B-2 had crashed on landing 
in the United States, that is a combat mission. So I think we 
have to make this legislation all-encompassing, otherwise we 
would be in enormous gray areas which would be, first, 
difficult to define and, second of all, as the uniformed 
witnesses have testified here, all these men and women in the 
military are in this together, no matter where they are.
    But the nature of this conflict is such that there are much 
larger instances of wounds that require amputations. This, 
obviously, is a significant disability for any American, 
although the recovery exhibited by many of these young men and 
women is remarkable. But it makes for a very difficult life in 
the future.
    General Nyland, General Hagee briefed me on a program that 
the Marine Corps has, which I think is important, and I 
understand the other Services do not have anything quite like 
it. It is called the Marine for Life Program. Would you 
describe that for the committee? Because I think that somehow 
we ought to either legislatively, financially, or some other 
way encourage this type of program.
    General Nyland. Yes, sir. The Marine for Life is a program 
that we started some time ago to celebrate the honorable 
service of any marine returning to society. It is designed, 
through the use of hometown links and our inspector and 
instructor staffs, to help a young marine reestablish himself 
or herself in the civilian community through the resources of 
the hometown link and the people.
    What we have done most recently is to expand that to a 
second phase that we call Injured Support Program. In this 
regard, we are basically trying to help these disabled marines 
not only with resettlement into society but also to get through 
all the bureaucracy and red tape that allows them to get their 
ready-to-go. So this entails----
    Senator McCain. Tell us how it works, General.
    General Nyland. Yes, sir. We are putting a staff officer 
over at the VA. We will work individually with our marines, in 
essence, in individual case management, to take them through 
the medical evaluation and the performance evaluation boards, 
so that we link them quickly with the VA so there is no break 
in the pay between the Defense Finance and Accounting Service 
(DFAS) pay system and the VA pay system. In essence, we assist 
the marine with that transition until he or she is back where 
he or she wants to be, a useful member of society.
    Senator McCain. Someone who has suffered the loss of a limb 
has some difficulty in their readjustment and acquiring 
sufficient vocational skills. Do you believe that this 
legislation addresses that problem sufficiently? I will begin 
with you, General Nyland, and ask the other witnesses.
    General Nyland. Sir, I actually believe that is beyond the 
scope of this particular legislation, but I certainly share 
your concern because these are magnificent young men and women. 
As you have pointed out, in many cases their recoveries are 
remarkable, some to include returning to Active-Duty and combat 
again. It is a life-changing event, and the education is an 
area that I think we have to look very closely at as we look at 
this package of benefits that goes to the disabled veterans, as 
well as those who regrettably lose their lives.
    Senator McCain. I go to you next, General Cody.
    General Cody. Yes, sir. We have a program very similar to 
the Marines and call ours DS3 that we stood up in recognition 
of the wounds you are talking about, Senator. Armor that we are 
providing our soldiers and marines today in ground combat is 
saving lives, but we have a significant number of amputees and 
other serious injuries. To date, we have about 271 Active Guard 
and Reserve soldiers that are in the DS3 program, some double 
amputees, and we are working very closely with the VA on 
working the transition and benefits.
    But DS3 is a 5- to 10-year commitment by the Army to each 
one of these soldiers and their families to not only take care 
of their health care, but also their financial care. It starts 
when the soldier arrives at Landstuhl, coming out of theater. 
We have a cell there. We have a cell at Brooke, as well as 
Walter Reed, and we have just hired on about 54 case workers to 
handle each one of these individual soldiers, plus their family 
members.
    I also agree with General Nyland. It is outside the scope 
of what we are talking about today, but it is something that we 
have to come back and look at.
    We are looking at our regulations. We have several soldiers 
right now that are amputees that we put back on Active-Duty. 
One sergeant, in particular, lost his right leg above the knee 
and is serving now as a master sergeant. He is a combat medic. 
His name is Sergeant Luis Rodriguez. He lost it in Mosul. He is 
still on Active-Duty, and he is now a combat medic trainer 
there at Fort Campbell, Kentucky. We are looking at our 
regulations, because there are certainly technical advances in 
the prothesis devices that we are providing our servicemembers.
    We also are looking at other things. We have also teamed 
the Helping Our Heroes Foundation with our DS3 program, which 
is a separate foundation that teams with industry. For those 
that we do transition or they elect to transition out of the 
military, our case workers will follow and team them up with 
some of our larger corporations who have stepped forward that 
are teaming with VA and getting educational benefits and help 
in the family transition.
    There is more we can do. Like I say, we are dealing with 
about 271 cases right now. We have had over 7,200 wounded 
during this fight, and we are looking at each case individually 
and making sure that we are doing it. But I think it is outside 
the scope right now of what we are dealing with here, but it is 
something that probably deserves a better look.
    General Moseley. Senator, thanks for that question.
    We are attempting to poach as many good ideas as we can 
from the Marine Corps program, which is outstanding. We have a 
program. We have had 166 airmen severely injured. We have had 
145 return to Active-Duty as amputees. We have 20 right now 
awaiting medical evaluation boards, and we think 16 of them 
will be returned to Active-Duty. Of the 166 wounded, we have 
only had one that we have had to discharge and that was a 
double amputee that actually wanted to go to school.
    Of the 145, we have amputees back on Active-Duty, to 
include some of our special operations guys who have been 
responsible for working with the Army on reducing the load of 
the packs, bettering the com gear, et cetera.
    When we have a wounded airman, we have a casualty 
assistance representative from U.S. Air Forces, Europe (USAFE) 
that meets with that person at Landstuhl and stays with that 
person when we get them back to Walter Reed, Bethesda, or 
Malcolm Grove. Then we have a person permanently assigned to 
that injured airman that stays with him through the next set of 
processes, to include the medical evaluation board.
    Senator, we are partnering with the VA, but I can tell you 
where we can do better. When a person separates and goes to a 
small community, there are certainly less opportunities in a 
small community for continued care. We are beginning to look at 
opportunities to partner with the other services to see if 
there is not something that we can pool better, whether it is 
Veterans of Foreign Wars (VFW) or whether it is some agencies 
out there in smaller communities to make this better for our 
folks. That is the piece where we think we can do better. We do 
not have an answer for you yet, but we are working on that.
    Admiral Nathman. Senator McCain, we do have continuing care 
for our sailors. In fact, what I think is interesting is the 
continuing care that we are talking about includes the Marine 
Corps. We get the Marine Corps' severely injured ready for that 
decision about Marine for Life, as they transition into 
civilian life. We have a very interesting and good relationship 
with the Army at Walter Reed because they are particularly good 
at prothesis care and transitioning those severely injured 
marines and sailors into the right type of prosthetic device 
that allows them to do what they need to do.
    But to answer your question directly, I do not believe this 
legislation covers that matter, but the question is certainly a 
very good one about how we want to go look at this to make sure 
we are doing the right thing by our people. Does it imply the 
right type of relationship with our organizations like American 
Legion or VFW and imply a different relationship with the VA? I 
believe your question means that we ought to scrutinize this 
and look for the opportunities to do the right thing by our 
severely injured sailors and marines that transition to 
civilian life.
    Our goal has been to try and return our severely injured 
back to Active-Duty. One of the questions that is implied in 
that, is what are we doing to make sure that we are stimulating 
those young men and women to do that besides just taking care 
of their attendant physical needs.
    Thank you, sir.
    Senator McCain. Thank you. Mr. Chairman, we probably have 
to look at this more in the future, but from my conversations, 
it is one of the biggest issues that many of these young men 
and women face.
    By the way, I think it is noteworthy that $10 million is 
being expended on an amputee rehabilitation facility out at 
Walter Reed. It may be a little overdue, but the fact is I do 
not think we ever anticipated this element in war. I believe 
that people should be assured that whatever is necessary, we 
will fund to care for these people.
    I thank you, Mr. Chairman.
    Chairman Warner. I thank you for bringing that up, Senator 
McCain. I have the privilege of joining with Secretary 
Wolfowitz today at the designation of the military severely 
injured joint support operations center, a new concept that is 
being set up. I appreciate you bringing that important subject 
to the attention of the members here at this hearing this 
morning. Thank you.
    Mr. Nelson has departed I see. Then, Mr. Dayton, I believe 
you are next.
    Senator Dayton. Thank you, Mr. Chairman.
    I want to commend my colleagues who have sponsored this 
important legislation, and I am proud to be a cosponsor of a 
couple of those initiatives.
    I want to associate myself with the comments of the 
distinguished ranking member, Senator Levin, about this 
coverage including all servicemembers serving in all locations 
and whose deaths occur under all circumstances. I agree with 
what he said, that someone who is killed in a training 
exercise--and I have had that experience with a couple of 
Minnesotans since I joined the Senate and served on this 
committee--their losses are just as immense as those families 
who lost servicemembers in combat areas. So I do not think it 
is appropriate to distinguish one type of death from another.
    Dr. Chu, your testimony about the various kinds of coverage 
is very helpful. I do not mean to quibble here, but if 
servicemembers are carrying their own life insurance through a 
group policy, if they are paying what you say are modest 
premiums, to the extent that that is not subsidized by the 
Government, I would question whether that can be fairly termed 
a Government-provided benefit. Anybody can do that, and 
probably should do that, in almost any occupation, especially 
if they have a family, anywhere in this society. If they are 
paying their own premiums, for the Government to claim that as 
a benefit seems to me inflates this number quite dramatically. 
It would be appropriate, to the extent that it is being 
subsidized, but not to the extent that the individual is paying 
that cost himself or herself.
    Dr. Chu. It is, as you are aware, Senator, subsidized. The 
Department picks up all risks beyond normal peacetime risks, 
war risks especially, and as you point out, training risks are 
important in that regard. So someone who was a flyer could not 
buy this insurance at this rate commercially.
    Senator Dayton. What percent of the premium for somebody 
serving in a combat area is paid by the individual?
    Dr. Chu. We basically pay all the combat deaths.
    Senator Dayton. I am sorry?
    Dr. Chu. We basically pay all the combat deaths. It does 
not work quite that way mechanically, but that is the practical 
import.
    Senator Dayton. When you talk about the administration's 
proposal at the end here that would increase the coverage to 
$400,000, that additional $150,000 insurance would be funded by 
the Government when the member is serving in an AO designated 
by the Secretary of Defense?
    Dr. Chu. That is correct.
    Senator Dayton. Again, you would pay that. But if the 
individual under this proposal were serving in a noncombat zone 
and was killed while in service, that would not apply?
    Dr. Chu. They would still be eligible for the $400,000. I 
think that is the important point that we are trying to 
emphasize here. We need, as Senator Sessions' and Senator 
Lieberman's bill does, to raise SGLI's number. It has not been 
addressed for a while. We need to provide the surviving 
families, as you suggest, regardless of circumstance, with a 
larger bequest so they can deal with their issues in a cohesive 
way. So we would like to get SGLI increased. I think that is 
the first big point I would like to emphasize this morning.
    Second, we would like to make the increment something the 
Government pays for in an AO designated by the Secretary. That 
is intended specifically to deal with combat areas. It is also 
intended to deal with individuals who--they are small in 
number--but a few do decline. Then as Senator Sessions' 
questions suggest about should the spouses be consulted, there 
is substantial regret ex post. So we are trying to begin to 
create a little bit of a different construct here with this 
package. I think his bill has exactly that feature in it, if I 
recall it correctly. We celebrate that.
    Senator Dayton. Especially, again, people with families, 
the cost factor, depending again how much the individual is 
paying and how much the military is paying----
    Dr. Chu. The charge for that $250,000 I believe is $16.25 a 
month, and I think most people view that as a bargain.
    Senator Dayton. You mentioned also the ability to remain in 
military housing for 6 months. Is that the same housing that 
the family is in presently on base?
    Dr. Chu. Yes, sir.
    Senator Dayton. Okay, so they have that option. Do you 
think 6 months is sufficient time? I have heard concerns 
expressed by a couple of surviving spouses whose children are 
in school. This is their support system. These are their 
friends, the other spouses, their children's friends. Is 6 
months sufficient time?
    Dr. Chu. The Government's benefit actually is more generous 
than just the military housing. We either allow them to stay in 
their housing, if that is their choice, or if they are already 
receiving or prefer to receive their housing allowance, we do 
that for 6 months. So this is, I think, a very sound package. 
It provides a good transition for them. My understanding is the 
Services manage this with extraordinary compassion.
    General Cody. If I might add, Senator.
    Senator Dayton. Yes, sir.
    General Cody. I have commanded a post, and we had this 
situation arise several times. The way the policy and 
regulation are written, the post commander has the authority to 
extend in those types of cases, and so it is not open-ended, 
but he has the ability to deal with the family's situation 
because none of them are all the same. I have never heard of 
one who did not extend it.
    Senator Dayton. Is that true in all Service branches?
    General Nyland. Yes.
    General Moseley. Yes.
    Senator Dayton. I think that's appropriate.
    Chairman Warner. Senator Dayton, that is a very important 
question. I want the record to reflect the acknowledgement of 
each of the Vice Chiefs to your question as to whether or not 
there is uniformity in that policy. So if you would just ask 
each individual.
    Senator Dayton. Could I ask each of you then to respond for 
the record please?
    General Moseley. It is the same in the Air Force, sir.
    Senator Dayton. Thank you.
    Admiral Nathman. I would like to make sure of my facts, 
sir, but yes, sir.
    Senator Dayton. Thank you.
    General Nyland. I believe that is also the case for the 
Marine Corps, sir.
    Senator Dayton. All right. Thank you.
    I believe I have visited with all the Minnesota families 
who have lost servicemembers, and generally speaking, I would 
say their comments support what you said in your testimony 
about the quality of the notification. I will--and I would be 
remiss if I did not, because I just met with this family just a 
couple weeks ago, whose son was serving in the Marine Corps and 
was visited by a couple of service men, but not accompanied by 
a chaplain. The mother was distraught because she asked if the 
body had been anointed, and the servicemembers did not know 
what that meant. Again, I am not trying to--in my position 99 
percent of the things go well, and I hear about 1 percent, and 
I usually get it in a public setting, so I cringe. But I would 
be remiss if I did not take the opportunity just to ask you to 
review that policy and make sure that there are chaplains 
involved and that those who are doing this very difficult work 
are trained and trained not only with a manual, but in grief 
counseling because I think this is hugely important and it 
makes a huge impact. It is irreversible if it is not handled 
properly.
    General Nyland. Yes, sir. I certainly share your concern. I 
am unaware of that, but I will certainly look into that because 
we want this to be done properly for the families.
    Senator Dayton. I can give you the names of the family if 
you want to check it out.
    General Nyland. Yes, sir.
    Senator Dayton. But again, I think it is an aberration in 
the Marines and the Army. I have heard uniformly from the 
families real gratitude at the proper notification, and the 
support they received. But I do want to put it on the record. 
Thank you.
    Thank you, Mr. Chairman.
    Chairman Warner. Thank you very much, Senator.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    First, let me start by thanking you for scheduling this 
hearing so early in the session. I think that demonstrates your 
commitment to moving this important legislation.
    I also want to congratulate my colleagues, particularly 
Senator Sessions, Senator Allen, Senator Lieberman, and Senator 
Nelson, for their leadership on this important issue.
    As the chairman is well aware, I have long supported an 
increase in the payment that is made to the families of those 
who have made the ultimate sacrifice for our country. During 
the last Congress, I was, in fact, the chief Senate sponsor of 
legislation to double the death gratuity and to make it tax-
free. That was, however, only a very modest first step and an 
inadequate one. I am very pleased to see the growing consensus 
that we should enact significant legislation in this regard. It 
is terrific to hear the administration's support for doing that 
promptly, as well.
    Dr. Chu, there have been disturbing reports of confusion 
among some military personnel regarding the amount of their 
insurance benefits and even more troubling reports of 
unscrupulous financial salesmen and women having access to our 
military bases and peddling very expensive and often unneeded 
insurance products to our troops. This is very troubling 
because the insurance program that is already available to them 
is a very good one and a relatively inexpensive one, and the 
passage of Senator Sessions' bill will make it an even better 
program.
    What efforts are being undertaken to inform our troops of 
the benefits of the insurance programs and to give them 
guidance so that they can make informed choices regarding their 
insurance purchases? Obviously, if they feel they need 
additional insurance, they have every right to purchase it, but 
this is troubling if they are being talked into buying 
superfluous or very expensive insurance products that they 
really do not need.
    My second and related question is, when the legislation is 
enacted, as I believe it will be, to improve the insurance 
benefits, how will the DOD act to quickly inform our troops of 
the new benefits?
    Dr. Chu. Ma'am, as I think you are aware, over 2 years ago, 
we launched in the Department for this reason and other 
reasons, what we call a financial readiness campaign, that 
basically is an effort to ensure that our people, for whom 
often this is their first posting, so to speak, after school, 
about how to manage their finances broadly, including the 
insurance issue.
    We have been working for almost 2 years to change the 
Department's regulations in terms of the unscrupulous salesman 
issue, as you correctly point out. Unfortunately, we are under 
an injunction that is part of the last appropriations act that 
does not allow us to move forward with that directive until 
after the GAO renders its report, which is not expected until 
June 2005. If I could plead for one thing in this domain that 
you properly raised, if indeed our action is the vehicle for 
change, perhaps we could get that prohibition against action 
removed so we can start to deal more effectively with the 
unscrupulous actor.
    Senator Collins. So the administration would support doing 
away with that rider. Is that correct?
    Dr. Chu. Yes, ma'am.
    Senator Collins. That limits your ability to deal with this 
problem.
    Dr. Chu. Under present law, we cannot deal with this until 
after the GAO renders its report.
    Senator Collins. But surely you could undertake efforts to 
make sure that the troops are better informed and have 
increased financial awareness. I understand that the injunction 
limits your ability to perhaps cut off access to the troops, 
but in many ways, this is an educational issue. It is a 
financial sophistication or awareness campaign that is needed.
    Dr. Chu. We agree with you completely and that is why 2 
years ago, we launched the financial readiness campaign. We can 
do a great deal. We are doing a great deal. I think individual 
base commanders are improving their policies. I particularly 
praise the approach that the Fort Benning commander has taken 
in this regard. Yes, ma'am, we can do a lot to educate people 
on our own without a change in the statute, but we would 
appreciate a revocation of the rider.
    Senator Collins. General Cody, do you have anything you 
would like to add to this?
    General Cody. Yes. I think, first off, I agree with Dr. Chu 
that we need to do more. Having commanded a large post, I can 
tell you that every time, when a soldier enlists, when they go 
to the training base, whatever training base they go to, they 
get financial guidance. Now, these are young soldiers, and it 
takes a lot of discussion about why you need insurance. Some of 
them do not want to buy insurance for their car, and so we have 
to work through all that. Of course, we have regulations that 
you cannot register your car on post unless you get insurance, 
and so each post has that and we are working it hard.
    At each one of our posts, camps, and stations, soldiers, 
after they come out of their training base, have a 7- to 10-day 
transition period before they go to their units, and they have 
financial management classes at Fort Campbell that I am 
familiar with in which we give them the SGLI briefing. It is 
not just a 1-hour briefing. It is a whole discussion about what 
it means, especially if you are married. We give them the same 
type of briefing to watch out for people that bird dog you, 
quite frankly, for insurance, and other characters are out 
there trying to do that. They also get classes on how to buy 
cars. It is a full financial management program that we have 
been doing so that they fully understand what they need to. I 
think it is not where it should be, but it is certainly much 
better than when I joined several years ago.
    Senator Collins. Thank you.
    Mr. Chairman, I hope, as we mark up this legislation, that 
we will take a look at that issue as well. Again, I commend you 
for moving so quickly on this important issue.
    Chairman Warner. I would ask, Senator, that you and other 
Senators that you know of that have a particular interest in 
this unscrupulous situation--and that is not to cast aspersions 
against a lot of, I think, perfectly bona fide individuals who 
come on board base and work, but there is an element that we 
should address. Could you give me your best advice as to how we 
should handle this?
    Senator Collins. I would be happy to, Mr. Chairman.
    Chairman Warner. I thank you very much.
    Senator Collins. I spent 5 years in State government 
overseeing the insurance regulations. So I would be happy to 
assist in this area.
    Chairman Warner. So you have a background in this. Thank 
you very much, Senator Collins.
    [The prepared statement of Senator Collins follows:]
             Prepared Statement by Senator Susan M. Collins
    Mr. Chairman, I would like to thank you for scheduling this session 
on this topic so early in the session.
    I have long supported an increase in the payment made to the family 
of those who have lost their lives in service to our country. During 
the 108th Congress, I was proud to be the Senate sponsor of legislation 
to double the death gratuity to $12,000 and make it tax free, a modest 
first step. I would like to reiterate my support for the measures 
before us today. Like all Americans, I have been greatly saddened by 
the loss of life in recent days during our operations in Iraq, and I 
commend my colleagues from both sides of the aisle for working together 
to again increase this benefit in this Congress, as well.
    As illustrated this past weekend during the elections in Iraq, our 
military forces continue their noble dedication to advancing freedom 
and democracy even in the most difficult circumstances. The successful 
and truly historic elections in Iraq are a credit to their dedication 
and professionalism.
    The young men and women of our military represent the very best our 
Nation has to offer. They do not join the military for monetary gain 
nor to have a comfortable lifestyle. They serve our Nation out of a 
sense of patriotism that should make each and every American proud. The 
patience and dedication they have shown during the months leading up to 
and through the election process are testament to the strength of 
character that is the core of our military values. In many cases, we 
ask our own troops to take additional risks in order to avoid injuring 
or killing innocent civilians. That they do this without question or 
regret speaks well not only of our military, but of our country.
    When we send a young man or woman into harm's way, our Nation has 
in return a sacred obligation to them and to their families. We must 
ensure they go forth with the complete confidence, should the worst 
happen and they are called upon to make the ultimate sacrifice, that 
their country will care for their families and honor their service.
    The death gratuity is a small token, but it assists the grieving 
families with their immediate financial needs. There are a variety of 
other programs that provide for longer-term support, but in the initial 
hours and days after a family has endured such a terrible loss, these 
funds help to alleviate monetary concerns. This benefit is commonly 
provided within 72 hours to the family of the servicemember who is 
killed while on Active-Duty.
    Brigadier General John Libby, the Adjutant General of the Maine 
National Guard, recently wrote to me in support of this legislative 
initiative. More than 65 percent of Maine's Army National Guard force 
structure has now been mobilized and deployed in support of the global 
war on terrorism. Brigadier General Libby wrote, ``Behind every 
dedicated servicemember is a dedicated service family who deserves to 
be taken care of in the event of the loss of their servicemember. The 
level of the current benefit package is not sufficient but this 
corrective action will honor those who serve us on a daily basis.''
    We can never fully repay the debt of our proud Nation to those who 
have laid down their lives. The best we can do is honor their memory, 
ensure that their sacrifice is not in vain, and help provide for their 
families. We must continue to assure our brave young men and women that 
their Nation is grateful for their service. I look forward to hearing 
your testimony and to working with my colleagues to ensure that we move 
forward to ensure that the families of those brave service men and 
women who give their lives for our country are properly cared for.
    Thank you.

    Chairman Warner. Senator Lieberman, thank you for your 
patience.
    Senator Lieberman. Thank you, Mr. Chairman. It has been a 
very helpful hearing. I want to go back to the line of 
questioning that Senator McCain opened up about those wounded 
in action (WIA) because I do think, thanks to the 
administration announcement today, that we have a real strong 
consensus on the need for and, in fact, how to better care for 
the survivors of those killed in action (KIA). We have some 
details to work out, but we are going to do it, and it is clear 
we are going to do it with a real sense of urgency, and that is 
absolutely right.
    I think it is appropriate to focus on those WIA. We know 
that we are operating in a circumstance in which the rate of 
survival for injury is much higher in the conflicts we are 
involved in now because of the extraordinary advances in 
medical science and technology and, to the great credit of the 
Pentagon and the Services, the extent to which the Services 
have embraced and implemented all those advances in medicine 
and medical technology. So it means we have people, thankfully, 
who are surviving but with very serious injuries and 
disabilities. I think we have to make sure we are doing our 
best for them.
    It leads me to ask, just as a question of information for 
myself, if not for other members of the committee, because some 
of them are clearly not--I want to stop here. I know I have 
admiration but I am in awe of the numbers of those injured who 
remain on Active-Duty. It is nothing short of inspirational. 
But they are going to come to a moment where they are going to 
leave the Service. They go back to civilian life. Some of them 
are going to have impaired earning capacity because of the 
injury they suffered while serving on our behalf.
    What do we do for them or their families? We are focused on 
survivors. Now, these are, fortunately, not survivors. These 
are the families. They are dependents. What do we do for them 
economically when they come out with an income-impairing 
disability for medical service? I leave it to whomever wants to 
respond.
    Dr. Chu. I think I would let Mr. Epley answer that because 
that really is a keystone of the VA's program.
    Mr. Epley. Yes, sir. Senator, we do have programs that are 
intended to address the income loss. The most significant of 
those programs is our disability compensation program which 
will pay to the veteran, based on the degree of disability, 
from 10 percent, which is $108 a month, up to a 100 percent 
benefit, which is about $2,290 per month, and additional 
amounts for their dependents.
    Senator Lieberman. What is it based on? Their service 
salary compensation or is it a set amount?
    Mr. Epley. No, sir. It is based on the degree of their 
disability. We do a formal medical evaluation of their 
disability and assess it, and based on our evaluation, be they 
100 percent or 50 percent disabled, we set the pay rate. You 
set the pay rate in law, sir.
    Senator Lieberman. So if there is a change, it is up to us. 
What I am saying is, it is a percent of what? In other words, 
in a lot of circumstances, clearly if somebody is injured in an 
accident, as a matter of court procedure, the award is based on 
the potential earning capacity of that person prior to the 
accident.
    Mr. Epley. It is similar in the VA, sir. We have a rating 
schedule of disabilities, which is codified in title 38 of the 
U.S. Code, and it describes all of the various body systems and 
the disability evaluation criteria that will be used for each 
disability suffered by a serviceman. That is how we set the 
level of disability and the level of payment to be given.
    May I add one more thing? You asked about if they have 
earning incapacitation. We do have a vocational rehabilitation 
program as well at VA. It is geared specifically to help those 
men and women who come back from service who have a disability 
that might affect their earning capacity. We case-manage those 
men and women. We try to work with the military departments to 
identify them, as soon as they are separating, and offer them 
means to determine not only what their desires are in future 
earnings, but also what their aptitudes are and try to engineer 
a program to bring back their earning capacity where it would 
be. We rehabilitate a little over 10,000 veterans a year 
through that program.
    Senator Lieberman. That is very reassuring. I think we 
ought to, Mr. Chairman, stay on top of that. I invite you--I am 
sure all the committee would--to come to us if you think we are 
not fulfilling our responsibility to those who are severely 
disabled as a result of service.
    I want to ask another question about this. Periodically, as 
I am sure you know as well or better than we, there is a flurry 
in the media that we are not providing enough benefits to the 
WIA when they are in, for instance, Walter Reed. There was a 
flurry. We got calls a while back that we were not paying for 
their phone calls, at one point that the WIA had to pay for 
their meals. I wonder, General Cody, since we have you here if 
you would help clarify some of that for us.
    General Cody. As I stated earlier, Senator--and I 
appreciate the opportunity to discuss this. This is all part of 
taking care of not just the soldier's wounds, but the financial 
care that we need to provide immediately to the family of that 
soldier because they have to travel, and in many cases, some of 
them work. Some have to pay for child care and everything else. 
So we are picking all that up, as soon as we can get with it, 
and fully understand, because each case is entirely different. 
We have the Mologne House. We have the Fisher House.
    We have quickly reacted to this, since Operation Enduring 
Freedom (OEF) and Operation Iraqi Freedom (OIF), and we keep 
learning the different permutations of challenges that each 
individual family has so we can compensate for them. I think we 
are really doing a much better job than we have in the past on 
this. Each time we see some of these issues, we work through 
them.
    Senator Lieberman. Are we taking care of their phone calls, 
for instance, and the meals?
    General Cody. Yes, sir. We are taking care of their phone 
calls. In fact, we are even, in most cases, not stopping the 
compensation they had when they left Iraq for the first 90 
days, and we are doing that across the board. We are also 
working with DFAS, which is very complex. We are working 
directly with that so that the soldier or the family does not 
have to deal with it. We have a case worker dealing with it to 
ensure that the computer does not automatically start 
deducting. We have had those problems where all of a sudden the 
computer picks up the fact that they are no longer in Iraq, but 
oh, by the way, we paid you for 6 months and automatically 
started deducting. We have had several cases of that early on. 
So now we are putting the case worker in the loop, to take care 
of it.
    One of the other things we are doing, as I said earlier, is 
teaming with Helping Our Heroes Foundation, which is a separate 
foundation that provides all the other benefits that we cannot 
do right now because of statute.
    Senator Lieberman. Thank you. That is very reassuring.
    Mr. Chairman, my time is up. I just want to add something I 
was just thinking as we were talking about the financial 
benefits we want to provide to the survivors. There is sort of 
an emotional benefit as well. I have had the experience very 
often talking to survivors of soldiers, particularly from 
Connecticut, who have been killed in action where they will say 
please see this through to a successful conclusion in Iraq so 
that I will never believe that my son or daughter or husband or 
wife died in vain. I just saw a soldier from Walter Reed, I 
believe, on the TV the other night, who had lost a limb, saying 
watching the Iraqis vote on Sunday made him feel that what he 
had done had not been in vain. It was very moving. It is 
another kind of benefit that we can provide by sticking 
together until this is successfully concluded.
    General Moseley. Senator Lieberman, can I follow up with 
another piece of this?
    Senator Lieberman. Please.
    General Moseley. Our experience in dealing with our kids 
that are at Walter Reed and Bethesda is as much a family issue 
as it is anything. Dick and the rest of us do the same things. 
We get up to three family members. We fly them to the location, 
in this case Walter Reed for us, and we cover those expenses 
for 30 days. We can waiver that beyond 30 days. We have a 
special care provider assigned to that member and that family 
to ensure that those things that you are talking about do not 
happen. Whether they are in the Fisher House or whether they 
are in some other sets of quarters, we are with that family and 
that member every day. So we cover three family members flown 
at our expense, and up to 30 days. You can extend that as 
necessary.
    Senator Lieberman. It is very reassuring. Thank you all 
very much.
    Chairman Warner. Thank you, Senator Lieberman, for early on 
getting out on this basic legislation we are addressing today.
    Thank you for bringing up in this colloquy the questions of 
family participation. All of us, I think, have been to Walter 
Reed, Bethesda, and other military hospitals. I remember, 
Senator Clinton, you and I joined way early in your first stop 
as a member of the Armed Services Committee, and we went 
together.
    I also would like to have the record reflect that in last 
year's bill this committee put in an encouragement, based on 
our visitations at the hospital, including a reference to the 
many times that all of us have experienced the wounded saying, 
Senator, what can you do so that I can stay in the military 
even though I have lost an arm or a limb or other injury. But 
these old gray hairs indicate I have sort of reached back a 
little bit in this system, and I cannot recall a period in 
history where I have seen the returning soldiers more anxious 
to remain in the military. It is a tremendous sense of pride 
for their families and themselves.
    General, you perhaps have the largest group. What has been 
your experience as a consequence of the legislation we put in 
last year on this?
    General Cody. It has been very helpful not only in 
execution but in tone and tenor. It sends the right message. 
You are right. The first thing these soldiers, airmen, marines, 
and sailors that get WIA want to do is get back to their unit. 
There is a tremendous bond of a band of brothers and sisters. 
Over time, our experience shows that many want to stay, and 
then, many come to the conclusion that they want to move on to 
other things. But knowing upfront that there is that window and 
that possibility, our doctors say it really helps them 
initially during their rehabilitation, that there is no 
finality, no ``I cannot go back to this way of life.'' So I 
think it has been extremely helpful.
    As I have told you, we have put several of our 
noncommissioned officers (NCOs) and officers back to Active-
Duty already. One captain is going back into combat. He lost 
his right limb. You visited him from the 3rd Armored Cavalry 
Regiment, Dave Rozelle. The first thing he said to me, as well 
as to other people, when we saw him up there after the first 
fight, was ``I want to stay in the Army.'' I am proud to report 
to you in about a month and a half, he will deploy with the 3rd 
Armored Cavalry Regiment again as the commander of headquarters 
and Headquarters Troop.
    Chairman Warner. Without the benefit of one arm. Is that 
correct?
    General Cody. This is the one with the missing right leg, 
sir.
    Chairman Warner. Oh, leg.
    General Cody. Yes, sir. He also ran in a marathon. So it 
speaks to what this country can provide, in terms of medical 
care and everything else.
    I firmly believe it has been very helpful. I know all of 
our Services are looking at our medical evaluation board 
procedures and our physical evaluation board procedures because 
those things were written in the 1970s and 1980s and, quite 
frankly, they do not deal with the great medical care that this 
country can provide. So we are looking at each case 
individually. I know we are all committed to not let them leave 
Service until we know they are making the right decision, that 
we have given them everything, and then we work the 
transitions. So I feel very positive about it.
    General Nyland. Sir, if I might add, I certainly share 
that. We have already one marine who lost an ankle and a foot 
in Afghanistan who is on duty in Iraq, and they are marvelous, 
marvelous young people. The advances in the prosthetics, for 
those who want to stay and can contribute can stay, due to the 
committee's action. It absolutely makes a difference.
    Chairman Warner. This committee stands by to receive any 
legislative proposals, Dr. Chu, to greater enhance that 
opportunity for these marvelous young people.
    Dr. Chu. We appreciate that, sir.
    Chairman Warner. I take note of the fact that maybe some of 
our procedures are slightly outdated. I hope before you leave, 
you would take that on as one of your highest priorities, 
because you draw on a long experience in working in the DOD.
    Dr. Chu. Thank you, sir.
    Chairman Warner. That might be one of your hallmark 
achievements to make sure that record is right up to date.
    General Moseley. Mr. Chairman, can I add one more piece to 
that?
    Chairman Warner. Yes, of course.
    General Moseley. Dr. Chu has been a big partner in helping 
us with this. Every single kid that we have talked to, his 
first question is, I want to stay in the Air Force. Do not 
throw me out. The second one is, I want to get back to my unit, 
the same as my other brothers here. What we have also done is 
if we cannot keep a person on Active-Duty, we will guarantee 
them a job in the civilian sector in the Air Force. We have not 
had to do that yet because we have 145 of them back on Active-
Duty. But our counselors make it very clear to them, that if we 
cannot get them back to Active-Duty and if not back to that 
particular unit, then we will give them a job in the civilian 
sector of the Air Force. We have only had the one person that 
was medically disqualified by a medical evaluation board, and 
that kid is at Texas A&M University right now going to school.
    Chairman Warner. I think this chapter in history also 
reflects the magnificence of the people across this country. 
Even though they may not have family members involved, the 
support the American people are giving individually and 
collectively to the men and women of the Armed Forces. For 
those of us who had responsibilities during the Vietnam era, 
what a stark contrast to today in the manner in which those 
brave individuals returned home from Vietnam and had to face 
certain hostilities which were not of their making.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. I am glad we got 
into the discussion of the hospitals and of the attitudes of 
the kids that are there. Senator Thune and I will be going to 
Iraq at the end of this week, and we are going to be stopping 
by Landstuhl. In fact, I have recommended that anyone going 
over there should make that stop.
    I remember so well, Admiral, my stop there. It must have 
been, I guess, a couple of years ago. There was a young black 
lady. She was very small in stature. You will probably remember 
this. She got her leg caught in a fueling line and it took her 
down. It should have killed her, the impact was incredible. But 
they were trying to get her back. She could not talk except 
between gasps, and all she talked about was getting back to her 
ship. You hear this over and over and over again.
    Senator Thune and I will be stopping by Landstuhl to bring 
this message back home. I think it is so important that we do 
this because I have often said we have a very unfriendly press 
that does not tell us accurately what is going on there.
    I might add, General Cody, when we go over--we had this 
discussion on these hydration packs--we are taking a bunch of 
those back to distribute when we are there.
    General Cody. Yes, sir.
    Senator Inhofe. I was one of the original cosponsors of 
this legislation. I am very supportive of it. We have talked 
about this, and I have my own ideas about when you should raise 
the core benefits. Yet there are those, even under the passage 
of this bill--well, actually depending what provisions are 
accepted that are going to say whether or not individuals are 
going to be able to get an enhanced death benefit, a lot of it 
is tied to the idea of whether or not they reject the 
insurance. I am talking about out-of-combat zones. The 
rejection of that has to be done and signed by the troops. We 
talked about this earlier. What about the beneficiaries? What 
about the wives?
    It is not unprecedented that they sign. Under the 
retirement benefit plan, wives have to sign, the same as the 
individual. I have some fairly strong feelings that we ought to 
comply with that and make that a part of this bill.
    I will not ask each one to respond to that, but if there is 
anything you want to offer concerning that, do so.
    Dr. Chu. Senator, if I may, I just want to reinforce the 
point you made. This is not a new idea. It is a central feature 
of the SBP as it currently exists, that the survivors need to 
be consulted in this decision because ultimately it affects 
them.
    Senator Inhofe. By consulting with the spouses on the 
decision--what evidence is there that they have been consulted 
with?
    Dr. Chu. In the SBP case, they have to actually sign saying 
they understand what the military person has chosen.
    Senator Inhofe. On the life insurance.
    Dr. Chu. No, on the survivor benefit plan. We have no such 
provision today on the life insurance.
    Senator Inhofe. Okay. That is what I am referring to.
    Dr. Chu. If I may, I think you and Senator Sessions and 
Senator Lieberman have opened an important issue with the 
provision in your proposed legislation that would require a 
mechanism by which the survivors are consulted.
    Senator Inhofe. Well, I think the main thing I wanted to 
bring out is it is not unprecedented because we do it in 
retirement plans. I will not ask the rest of you to respond to 
that.
    Senator McCain brought up a couple of things that were 
answered for me. I think the whole idea of amputations show as 
a testament to the effectiveness of the body armor. I know you 
have thought about this in your own mind. Of those who have 
suffered amputations, how many would be alive today if it had 
not been for that. I would suggest probably not very many.
    There is always a propensity, when you are talking to 
elected officials, to spend more and more and more and more. I 
heard something on the radio this morning. Someone was saying, 
``Well, why is it not the same amount as the families that were 
victims of September 11.'' You can argue that it should be. But 
there has to be some kind of a line drawn. I would suggest to 
my colleagues that I think we are strapped in our military in 
terms of modernization, and end strength, and I do not think we 
are spending enough, and I have said that many times. The more 
you increase these benefits, most of that comes out of DOD. I 
think we have to keep that in mind.
    Now, General Cody, you may remember the case of Fern 
Holland. Does that sound familiar to you? Maybe not. She was a 
33-year-old Oklahoma attorney who was a civilian employee of 
the Army, and she was murdered, along with another American, 
Robert Zangus, in Iraq last March when their vehicle was 
ambushed by gunmen. According to DOD, this young woman was a 
Department of the Army civilian who was supporting OIF and 
assigned to the Coalition Provisional Authority (CPA).
    Fern's sister contacted me recently and was concerned why 
there was not some kind of a benefit. You could argue this. I 
think that we have a tendency to open Pandora's box. There has 
to be a place where you stop. So if you have civilian employees 
that are actually in AORs in combat, that has to be addressed. 
But then if that is addressed, then you are going to have 
contract employees, even though they probably have their own 
benefit plans from their companies and others.
    What I would like to do is ask each one of you if you have 
a response as to if we are going the right distance in the way 
it is proposed by both the administration and by the Sessions 
legislation.
    General Nyland.
    General Nyland. Yes, sir. I think it is clearly going in 
the right direction. I think, as Dr. Chu articulated, the 
$500,000 benefit or bequest, if you will, however that is 
ultimately packaged, has parts that I think are obviously far 
superior to what any of the survivors' families would receive 
today. I think it is an appropriate step in the right 
direction.
    Admiral Nathman. Yes, sir. To your point, I understand the 
demarcation or distinction here is an important part of the 
debate we ought to have.
    Senator Inhofe. Yes, it is.
    General Cody. Senator, I agree. I think we are going in the 
right area. I am now familiar with Ms. Holland. It is something 
in which we have to go back and really take a look at because 
in this post-major combat phase of this war, we have put an 
awful lot of our Department of the Army civilians, as well as 
other Department civilians, over there as part of our reset 
forward in Balad and other places. They have different 
packages, and I think it is worthwhile for us to go back and 
absolutely take a good, hard look and make sure we are 
compensating them also.
    Senator Inhofe. Sure.
    General Moseley. Yes, sir. We are going in the right 
direction.
    Senator Inhofe. Thank you, Mr. Chairman. I know my time is 
expired. I would only like to echo what everyone else has said 
about your duty and how much we appreciate what you have done. 
I would say, particularly you, General Cody. I got to know 
General Cody when he was in command of Operation Task Force 
Hawk, I think it was, in Bosnia, and I watched you in action 
there.
    Chairman Warner. Thank you very much.
    At this point I would like to yield the chair to our 
distinguished colleague, Senator Sessions, to chair the balance 
of this hearing, and I call on Senator Akaka at this time. 
Thank you.
    Senator Akaka. Thank you, Mr. Chairman.
    Dr. Chu, I am very pleased to hear that the Joint Support 
Operations Center will be up and operational today.
    Dr. Chu. Yes, sir. The phone number actually already works.
    Senator Akaka. I understand that people will be able to 
contact the center by dialing a 1-888 number to get to the 
center. I am really delighted to hear this because it will 
really help families.
    What did DOD do and what is it doing to promote the 
services provided by the center to survivors?
    Dr. Chu. We are doing the following.
    Senator Sessions [presiding]. Dr. Chu, would you yield for 
a second? I believe General Cody may have an engagement or a 
plane to catch. If he does, please know that we know you do 
have that challenge, and when the time comes, just let us know.
    General Cody. I will hang in here until the tough questions 
come, Mr. Senator. [Laughter.]
    I appreciate your indulgence. Thank you.
    Senator Sessions. Dr. Chu.
    Dr. Chu. Thank you, Mr. Chairman.
    Senator Akaka, we are doing three things really in terms of 
making the service available. First, we are publicizing the 
existence of the center with a ceremony today and other similar 
steps.
    Second, of course, as I would emphasize, what this center 
does really is build upon the individual programs of each 
military service, which have been described this morning. We 
have a significant challenge in the executive branch because, 
as the testimony indicates, programs come from a variety of 
sources, including the VA. So it is important to have a strong 
liaison with the VA.
    Third, we are going to reach out proactively and make sure 
we have called everybody to ensure that they have had all their 
issues addressed. That will take some time. I would recognize 
that will not happen overnight. But we want to be sure. There 
is always a challenge with complex Government programs that no 
one falls through the cracks, that everyone understands how the 
various benefits and services work, and that they can take 
advantage of them. I think the majority do now. The Army and 
the Marine Corps have led the way with Marine for Life and DS3. 
We are just trying to make sure we have left no stone unturned 
in terms of the services we offer to our personnel.
    Senator Akaka. Grief services are one of the kind of 
services that can be given. With this center, will data be 
collected and utilized to provide greater grieving services to 
family survivors?
    Dr. Chu. We would be delighted to look at that, Senator. I 
think on that front, I particularly want to single out, as I 
think Senator Dayton's comments did, what our casualty 
assistance officers (CAOs) already do. They are, of course, the 
ones who must bring the terrible news to a family first. I 
believe they do a superb job. They are well-trained by the 
military departments. Obviously, there is always an issue or 
two we could improve in terms of their training. But that is 
the first step I think in the grieving process. But we will 
certainly look at your issue, sir.
    Senator Akaka. Also, there has been some concern about 
survivors' benefits, and in particular, some have raised issues 
regarding the processing time for survivor benefits. Can you 
mention anything about processing times?
    Dr. Chu. Yes, sir. As you appreciate, there really are 
three pillars to the annuity or income support benefits that a 
surviving family receives. There is the survivor benefit plan, 
which we have discussed. There is the VA payment, which was 
mentioned. There is also Social Security. Actually, about a 
year and a half ago, we partnered with Social Security to 
inaugurate a new, expedited process that we think demonstrates 
that can be speeded up. So it is a matter of days before that 
is taken care of as opposed to weeks or months.
    On the SBP, that does take a little time, typically 1 to 2 
months. There are some papers the family must sign. If there 
are children, the spouse must decide if she or he wishes to 
elect payment of those benefits to the children. So there are 
some decisions the family must make, and we try to be 
thoughtful about not asking them to make that decision the next 
day. So there is a lag built into the process, and then the 
payments, if I recall correctly, typically are made on a 
monthly basis so that it is the first of the next pay period 
before you are actually going to see a check. So there are some 
delays there. We are looking constantly at how we can improve 
these processes and cut down on these delays.
    Senator Akaka. I understand that some of the claims have 
been heavy. Are there any efforts being made to accelerate the 
processing time?
    Dr. Chu. Yes, sir. As I indicated, we have given attention 
to that the last year and a half or so. We will give continuing 
attention to that issue. We would like to be sure the families 
are paid as promptly as possible.
    Senator Akaka. This question goes out to all the Service 
Chiefs. While I understand that the DOD is dedicating the Joint 
Support Operations Center today and is providing the 1-888 
number to assist survivors during this difficult time, are 
there other areas that we should be focusing on to help in this 
transition?
    Admiral Nathman. Well, sir, I would say, one area that I 
feel we have focused on goes back to this relationship to the 
CAO to the family. This does not terminate when a check is 
signed off or when a particular transition has occurred to the 
VA. I personally want to thank the VA for all they do for us in 
this because of the liaison work we do with them.
    But there is a very strong relationship--some people would 
call it a bond--between the CAO and the family, and we have 
really focused on that. We treat it as a central activity at 
our Personnel Command. We make sure that the Casualty 
Assistance Calls Officers (CACOs) are trained. We make sure 
they understand that they can explain at a technical level and 
a basic level for the members of the family. They have a strong 
relationship that is sustained for as long as the family needs 
that sustained relationship.
    I think these are the kinds of things that serve the 
family--we have coalesced it now on this center, but the intent 
I believe is already being performed at our service level, and 
this is just a good way now to integrate it. I think this is an 
important part of our service. I think it starts and, frankly, 
ends with the CACO because the relationship he forms with the 
family. No one else can do that.
    Mr. Epley. If I could add to that. The VA has been 
mentioned in this. Senator, you asked if there are 
improvements. We do defer to the DOD CAO. We do work with him 
very closely, but when we get notice of the casualty or when we 
get a claim, we have centralized that to our Philadelphia 
center where we also do the insurance payments. We are paying 
those DIC benefits now in about 3 days on average. So we really 
have expedited that process by centralizing it for in-service 
death.
    General Nyland. I would also add that with regard to the 
initiatives that Dr. Chu mentioned, the expedited claims 
process (ECP) with both the VA and Social Security, we have 
seen tremendous progress in making sure that those benefits are 
promptly received by the surviving members. I think those 
initiatives, along with the initiatives that each of the 
Services has taken to include their CACOs and now the Joint 
Support Operations Center, which members of our Services will 
man as well so that they can turn survivors to the right source 
immediately, all are pointed in that right direction, sir.
    General Moseley. Senator, our casualty assistance 
representative has a full-time job. That is a career field for 
these folks. They are not part-time, nor do they change over. 
These folks receive extensive training, and they interface with 
the VA. Let me also thank the VA for being a good partner in 
this. We are also exploring opportunities with the Department 
of Labor so that these people will develop contacts there and 
have visibility on things that are going on within the 
Department of Labor. That is a new one for us, and we are just 
learning what opportunities we have there.
    But this comes down through all of our units down to the 
lowest common denominator as a squadron or a flight, and the 
first sergeants and the commanders and all the supervisors know 
that this person, this casualty assistance representative, is 
the point of contact for that family and the assigned person to 
that member for the length of his or her care.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Senator Sessions. Thank you, Senator Akaka.
    In the calls I make to the families who have lost loved 
ones in combat, I ask how things are going. They brag on the 
casualty assistance officers. I have had people break down. 
They almost become like a member of the family. They help them 
and they go far beyond what you would expect them to be helping 
with. I think that is something that works, and I salute you 
for being true to your commitment to the families, as well as 
the men and women in uniform.
    Senator Thune, it is a delight to have you on the 
committee. I know you wanted to be on this committee, and we 
are delighted that that has occurred. You served in the House 
and as a Senate staffer. So you hit the ground running. It is a 
delight to have you here and it is a pleasure for me to 
recognize you at this time.
    Senator Thune. Thank you, Mr. Chairman. Let me acknowledge 
also that since this is my first hearing as a new member of 
this very prestigious committee, what a privilege it is to 
serve on the committee and to have the opportunity to serve 
with you, Mr. Chairman, and other members of this committee.
    The work before this committee today is perhaps the most 
important responsibility that falls on the shoulders of this 
great body, and that is our responsibility to our young men and 
women serving in harm's way. Because we are a country at war, 
the needs of our service men and women and their families must 
be one of our highest priorities. We cannot put a value on the 
sacrifice of those who have died in Iraq and Afghanistan, nor 
can we hope to fully compensate families for a lost husband, 
wife, brother, son, or daughter. But we can do more and 
hopefully we will. That is why I appreciate very much the 
hearing today.
    I support raising the death gratuity from $12,000 to 
$100,000 for service men and women who have lost their lives in 
combat and also believe it ought to be retroactive to soldiers 
who have died fighting in the war on terrorism since September 
11.
    I think that about everything that can be asked about with 
respect to the specific legislation has been asked today, and I 
appreciate very much your answers and the questions of our 
colleagues here on the committee. I think it has shed a 
considerable amount of light on the issue and on the solutions 
that have been proposed as well.
    But I would like to perhaps just ask one question with 
respect to something that was in the written testimony of 
General Nyland and perhaps get each of you to comment, if you 
might, with respect to your particular branch. General Nyland, 
you had mentioned, in discussing this whole issue of benefits, 
that it ultimately is part of the recruiting and retention 
package. In an increasingly difficult recruiting environment, 
particularly for the two Services that are shouldering the 
greatest burden of death and injury in this war, we must take a 
hard look at anything that will set the minds of those in the 
war and their families at ease.
    I guess in a broader way, I am sort of curious to know what 
the status of our recruiting efforts is today and are we seeing 
young people, men and women, who are continually being 
attracted to serve in the military, and what, if anything, can 
be done to improve your ability to be able to recruit young men 
and women into the Service. So if you would comment generally 
with respect to that overall question.
    General Nyland. Yes, sir. Today our recruiting and 
retention are still going quite well. We are over 9 years in 
making our recruiting goals. Our retention rates are on track 
with previous years for both our first-term and second-term 
members.
    It is however, getting more difficult. Surprisingly, more 
of the questions come now from the parents than from the 
individual. The young man or woman still wants to serve. The 
mother or father wants to know how will he be trained, how will 
he be led, when will he go.
    So I think anything that helps round out the package and an 
understanding of what these benefits can mean certainly is 
going to be not only a step in the right direction, but has to 
at least help in the education of a member who wants to come 
into one of the military services to understand that there are 
benefits there that, God forbid, should they lose their life or 
have serious injury, that this country is not going to forget 
them.
    Senator Thune. Any others have comments on that, just on 
the general overall status of recruitment?
    Dr. Chu. Let me, if I could, Senator, answer for the DOD. 
In active recruiting, as General Nyland said, the Services are 
making their goals. They are also doing well on retention. We 
do have a somewhat greater challenge on the Reserve front, I 
should acknowledge.
    I think General Nyland touched on a very key point. There 
is a place in which you can help us. The military, since the 
first Persian Gulf war, in various public opinion polls, is the 
most respected institution in this country. It stayed right up 
there all the last 15 years. When you next ask parents, ``Would 
you advise your son, daughter, nephew, niece, et cetera to 
join?'' support drops. Where we need your help is in 
celebrating the value of military service, the values that 
people are going to get out of this period of service. They are 
going to come back a better person and a better citizen. I 
think that message from parents, from older siblings, uncles, 
aunts, school counselors, is a very important message to send 
to the young men and young women of America, to celebrate their 
choice.
    General Cody. Senator, I just came back from a trip at one 
of our enlistment stations in Chicago. In fact, I had the great 
opportunity to enlist into the Army 25 of our newest soldiers. 
Four of them were 17 years old. None of them, when I asked them 
why they wanted to join onto the Army, mentioned benefits. Five 
or 6 years ago, you would hear about benefits and education. 
Most of the time now I hear our country is at war or I want to 
serve. Now, that does not mean that we ought to stop the 
benefits and the educational benefits and everything else 
because I think they are very important.
    I also would tell you that I enlisted them in the center 
court of the Chicago Bulls vs. Boston Celtics game that night 
and it was a packed house. If you could have seen the 
thunderous applause of the arena that night, recognizing that 
these young men and women just raised their right hand to serve 
the Army that is at war, it was heartfelt. I would like to 
think that support exists throughout this country.
    But that is where we need help. The influencers of these 
young children, young teenagers, are really their parents. I 
think we need to talk more about service to this Nation. In 
many cases, these young men and women absolutely understand it. 
They understand this is a calling of their time. But I think it 
would be helpful if we could get some more help with the 
influencers, who are their parents, and what service to our 
Nation means, and also the fact that when we take these young 
men and women in no matter what service, we are committed to 
giving them great leadership, but we will also let them reach 
their full potential. I think that is a story that we need to 
continue to harp on.
    General Moseley. Senator, let me agree with everything my 
colleagues have said, but add a couple of thoughts for you. It 
is axiomatic in the retention world that you recruit the member 
but you retain the family. So anything that we can do to make 
that bond tighter will benefit all of us because it is the 
family that is important while our members are away. These 
deployment numbers--the Air Force experienced about a 500-
percent higher deployment rate than we did in the early 1990s. 
So our members are away from families at a much higher rate and 
they are away longer than they have been before. So you do 
recruit that member, but you retain that family. That is a big 
deal for us.
    Also, all of these things that we are talking today in this 
hearing are critically important for us because it is an 
article of faith for our people. When they take the oath to 
defend the Republic, it is an article of faith that the 
Republic will stand by them.
    Senator Sessions, thank you so much for what you are asking 
of us today, and Senator, I would only add those two things to 
my colleagues.
    Admiral Nathman. Senator, I would add that on the 
recruiting side, the Navy is on a path of reshaping its force. 
We are reshaping our recruiting goals as a result of that 
because we are going to downsize. At the same time, we want to 
attract the best and the brightest to our Service, and I think 
the most important point about attracting the best and the 
brightest to our Service is that we sustain the value of 
serving. What I find very pleasing in this discussion today is 
it has all been about sustaining the value of service. That is 
really important in this discussion. In the near term, the most 
important thing we can do to sustain that value is win this 
fight in Iraq.
    Senator Thune. I appreciate very much your answers to those 
questions and would just say that as a new member of this 
committee--and I think all my colleagues on the committee--
would also welcome any suggestion that you have with respect to 
pay, benefits, compensation, and all those things that continue 
to make service in the military attractive, in addition to the 
things that you have mentioned about creating this culture and 
celebrating the work that they do. It is so important. We are 
very grateful and proud of the work they do. So thank you for 
your testimony.
    Senator Sessions. Senator Clinton.
    Senator Clinton. Thank you very much. I want to thank the 
chairman for holding this hearing. I think it is a subject that 
is not only very important but needs to be addressed, and I am 
delighted we are doing so.
    Last week I joined with Senator Chuck Hagel in introducing 
legislation to raise the survivor benefit from $12,000 to 
$100,000, and I am delighted the administration will be making 
such recommendations. The legislation we introduced would have 
been retroactive to November 2001, and I think that it is very 
important that it be so.
    I have also joined the efforts led by Senators Sessions and 
Lieberman. These are reforms that I think send the right signal 
about the sustainability of service and the respect and regard 
we have for those who do serve.
    Several other issues have been raised in this hearing, and 
I appreciate very much Chairman Warner's concern that we 
address all of them and this gives us an opportunity to do so.
    General Cody, I appreciate your comments about following up 
on the soldiers who have been injured. I recently had occasion 
to write to the Secretary of the Army with respect to a case 
that came to my attention in New York of Specialist Lauria who 
is an amputee who was at Walter Reed and was presented with a 
significant bill and was going to have his pay docked. In our 
efforts to look into this, we discovered that there were at 
least, I think, 19 other soldiers in a similar situation. I 
understand a task force was created at Fort Hood. I have not 
yet received an answer to my letter to the Secretary--and I 
would very much appreciate receiving that--to look at issues of 
payment and debt arising out of service and service-connected 
disabilities and how we best treat those.
    Another issue that I think is significant, which has been 
alluded to today, is this question about military insurance. 
There was a series of articles in the New York Times last year 
detailing how many servicemembers were being taken advantage of 
by unscrupulous insurance agents who were selling soldiers 
insurance that offered high cost but little return. Mr. 
Chairman, I would ask unanimous consent to place those articles 
in the record.
    Senator Sessions. Without objection, they will be made a 
part of the record.
    [The New York Times articles follow:]
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
    Senator Clinton. Thank you.
    Often these agents were able to get on bases with the tacit 
approval of base commanders and often the insurance companies 
employed retired military officers who conveyed a real sense of 
authority. The servicemembers were convinced to sign up for 
policies that required large payments to be taken out of their 
paychecks.
    Last Congress, Senator Enzi and I introduced legislation to 
ban periodic payment plans which were the most egregious of 
these policies and to require better recordkeeping and a 
registry of unscrupulous agents. Our companion legislation did 
pass Congress before adjournment. We plan to reintroduce that 
legislation this Congress, and I would commend that both to the 
committee and also to our witnesses because I think it is an 
important piece of the puzzle. If the insurance is going to be 
available, then we owe it to the servicemembers and their 
families that it be insurance of the highest integrity.
    Another piece of this is the financial education issue. I 
think that this is a concern because, although there are 
programs which you have discussed which educate some of our 
servicemembers about insurance policies, about car insurance, 
and the like, it is important that we make sure we have uniform 
education across all Services and all bases because from our 
checking on this, it is quite uneven. Some commanders take it 
more seriously than others. Some feel that if you are old 
enough to be in the military, look out for yourself. But when 
you are 17, 18, or 19, there is still a lot to learn. I think 
that part of our obligation, not only to our servicemembers but 
to their families, is to make sure that as they are becoming 
acclimated, getting used to being in the Service, getting, 
maybe for the first time, used to being away from home, that 
they are not taken advantage of at the very moment they have 
signed up to serve our country.
    I am also concerned about the payday lending abuses that 
are going on around our bases, which is another issue that I 
would like to have included in this overall look that we are 
taking. Chairman Warner, I would be very interested in working 
with Senator Collins and looking at this broader range of 
insurance abuses, payday lending abuses, just so we have a 
handle on what is going on and what we might do to try to 
prevent that.
    Chairman Warner. Senator, that will be done. You two are a 
great team. I am very conscious of that. It is just a 
continuation of what you have been doing since the first day 
you joined the committee.
    Senator Clinton. Thank you, Mr. Chairman.
    Finally, we have in the audience representatives of the 
Gold Star Wives of America. I have been privileged to develop a 
very close working relationship with both the Gold Star Wives 
and the Gold Star Mothers. With respect to some of these issues 
that we are asking that you look into, and particularly, 
Secretary Chu, with respect to the charge that the chairman 
gave to you, I think it would be useful to include the 
observations and experiences of the Gold Star Wives and 
Mothers. Some of the concerns about the casualty assistance 
officers that have been raised with me by the Gold Star Wives 
and Mothers really need to be brought to your attention because 
I think this is a wonderful opportunity to improve what we are 
already doing and to remedy any of the problems that are seen 
firsthand by those who are really on the front lines of 
survivors because they are the ones who receive that knock on 
the door.
    Mr. Chairman, I would ask unanimous consent to submit the 
statement of the Gold Star Wives of America also for the 
record.
    Senator Sessions. Without objection, it will be made a part 
of the record.
    Senator Clinton. Thank you. Thank you very much, gentlemen.
    Senator Sessions. Senator DeWine, we are glad to have you 
with us today.
    Senator DeWine. Mr. Chairman, I want to thank you and 
Chairman Warner for your graciousness in allowing me, not as a 
member of the committee, to ask a few questions and take a 
little of your time. I appreciate it very much.
    I agree with the sentiment that has been expressed by many 
members of the panel and others today about really treating all 
the families of service men and women who die in service to 
their country equally. I think it is just so very important.
    We are now mourning in Ohio machinist mate second class 
Joseph Ashley. He died on the U.S.S. San Francisco. It ran 
aground near Guam on January 9. He died in service to our 
country. Megan Elizabeth Edelman died in a parachute accident. 
Her services will be this week. It was only her second jump. 
This was a training exercise here in the United States. Those 
are just two examples from my home State of Ohio.
    Senator McCain gave another example. We can all think of 
examples. A helicopter goes down in Texas, a training exercise. 
You cannot distinguish them. They are in service to their 
country. They sign up. Each life is given so that we can be 
free and that we can live in peace.
    I think that as we go about our business in crafting this 
legislation, as you do, Mr. Chairman, here in this committee 
and do such a great job and as we do on the floor, that we 
should listen to the comments that have been made by the 
members of this panel today and take that into consideration.
    Let me also make another comment that I made earlier today 
and maybe amplify it a little bit and then ask a question. I 
think that it is very proper that we raise these benefits, the 
lump sum benefit. I commend Senator Sessions and others who 
have done this. They are absolutely correct. It needs to be 
done, Mr. Chairman.
    I still worry, though, about what is going to happen in 15, 
16, or 17 years. I think about the little babies, some of them 
who never saw their father. We have a moral obligation, to see 
that they, if they want to, get to go to college or get to go 
to a vocational school, whatever they want to do post-
secondary. Whatever they want to do, they ought to have the 
right to do that. If you look at the amount of money we have 
set aside today, it is just not quite enough. It just is not 
there, and we have to change it. To say that we have set aside 
so much money in a lump sum payment, it is just not the same 
thing because a lot can happen in 17 years. That is just the 
way the world works. Our obligation is to the child of the 
deceased service man or woman. So, Mr. Chairman, we ought to 
look at that and we have to look at that.
    Finally, I want to address the issue of health care. The 
bill that has been introduced by the leadership does cover 
this, something I was very concerned about, and I would hope 
the committee would take that part of that bill at least and 
incorporate it into whatever bill that you craft. I do want to 
mention it.
    It goes back to something that Dr. Chu said about trying to 
get some of the same benefits and put these families in the 
same shape that they were in during the time that the 
serviceman is alive. During the life of the servicemember, 
dependents have cost-free access to military health systems, 
including many services for special needs children. Following 
the death of the servicemember, the surviving dependents 
continue to receive military health care free for 3 years, but 
then, under current law, are subject to yearly enrollment fees 
and copayments.
    It seems to me that it would be helpful, as provided in the 
leader's bill that was introduced, to the families of deceased 
servicemembers if we would remove the unnecessary burden and 
worry of enrollment fees and copayments that can become 
substantial in the case certainly of a special needs child. 
That would do exactly what Dr. Chu said, and that would put 
this family in the same position they would have been in if 
that servicemember would have lived.
    It seems to me, General Cody and others, that is what we 
ought to try to do. We are not trying to give them something 
they would not have had, but you cannot bring that mom or dad 
back, but what we can do, what this compassionate society ought 
to do, is step in there and say we want to make sure you can go 
to a State university at least, which is all my bill would do, 
is to provide enough money to get to go to a State university, 
room, board, tuition, and provide enough so that the medical is 
taken care of.
    I wonder if any of the servicemembers in uniform would 
comment on that broad concept without getting into the details, 
but of the broad concept of trying to do that. General, you are 
nodding your head there. I always like nodders when they are 
nodding yes. [Laughter.]
    General Cody. Senator, I think you are absolutely right. 
What we have talked about here today is to take care of the 
initial, as well as set up the future of the family unit. What 
needs to be looked at is the potential loss in terms of the 
young soldier who died at a certain rank. Had he not died, he 
would have probably retired in 20 years at two or three levels 
higher, gotten that retirement pay, but still had some more 
earning potential later, and been able to provide for his 
family in a different way. So that is the gap that we need to 
take a look at.
    Certainly education, being what it is today, just having 
paid for two sons going through college, is expensive. We 
should have something. I do not know if it should be on the 
back of the Office of the Secretary of Defense or the VA, but 
as we take a look across this great country and take a look at 
our universities and everything else, we ought to have some 
type of means so that they take this up. We give preference at 
the military academies for those sons and daughters of deceased 
servicemembers, but that is based on order of merit. There are 
other things we can do, because I think the education of these 
family members that are left behind is something we need to pay 
attention to and it is the most costly.
    Senator DeWine. Well, I appreciate it. My time is up.
    Mr. Epley. May I add something to that, Senator, from the 
VA's perspective?
    Senator DeWine. With the chairman's permission, certainly.
    Mr. Epley. The VA does have benefit programs geared toward 
the survivors of service men and women who die in service or 
die from a service-connected disability. It provides for 
payments currently at $803 a month if the son or daughter is in 
full-time training, beginning at age 18 through age 26, and it 
offers up to 45 months of entitlement to that training. We are 
currently paying about 58,000 of those children, either 
survivors or children of totally disabled servicemen today. 
That compares to the Montgomery GI Bill, a benefit for veterans 
themselves, which is currently $1,004 per month. Congress 
raised the rate two times in the last year or year and a half. 
It was about $680 prior to that time. Certainly we need to make 
sure that it is commensurate with the costs of higher 
education.
    Senator DeWine. I appreciate it.
    Thank you, Mr. Chairman.
    Senator Sessions. Thank you, Senator DeWine.
    Chairman Warner, it is an honor to be with you and to be in 
the odd position of chairing the chairman. You are too kind and 
gracious to allow me to do this.
    Chairman Warner. I wanted to be the wrap-up here, and I 
certainly want to defer to the leaders like yourself on both 
sides--this is truly a bipartisan issue--that have taken 
initiatives and I thank you again.
    In that vein, I would like to ask unanimous consent that a 
statement by Senator Hagel--I mentioned him earlier in my 
opening remarks--be admitted to the record. He was one of the 
cosponsors.
    Senator Sessions. We have that and without objection.
    [The prepared statement of Senator Hagel follows:]
               Prepared Statement by Senator Chuck Hagel
    Chairman Warner and Senator Levin, thank you for holding this very 
important hearing on survivor benefits for our latest generation of 
warriors who have given their lives in service to our country. This 
committee makes a clear statement to America about the priorities of 
our country: our men and women in uniform and their families.
    On January 23, the Lincoln Journal Star reported that Nebraska 
ranks fifth in the number of military deaths per capita in Iraq. In the 
story, the families of Marine Captain Travis Ford of Ogallala, Marine 
Corporal Matt Henderson of Lincoln, Army Sergeant Cory Mracek of Hay 
Springs and Marine Private Noah Boye of Grand Island shared their 
personal stories of how they have grieved and are struggling to grasp 
life without their loved one. Their stories are filled with hardship. 
But they are also filled with a strong will and determination to let 
the memory and legacy of our soldiers live proudly in their hearts and 
communities. These stories inspire all of us and make us proud to be 
Americans.
    Last Monday, I reintroduced legislation to raise the military 
survivor benefit paid to the families of military personnel killed 
while on Active-Duty from $12,420 to $100,000. The families of our 
first responders across the Nation receive between $50,000 and $100,000 
as a survivor benefit for the loss of their firefighter or police 
officer. My legislation proposes that this legislation apply 
retroactively to all servicemembers on Active-Duty who have died after 
September 11, 2001.
    The military death gratuity is money provided immediately to 
families of our servicemembers who are killed while on Active-Duty. 
These funds assist next-of-kin with their immediate financial needs. 
These financial needs and challenges are no different for the families 
of servicemembers who have lost their lives outside combat zones than 
they are for those who have died in Iraq or Afghanistan. My legislation 
therefore increases the military death gratuity for all servicemembers 
who die while on Active-Duty. This is an issue of fundamental fairness.
    As we face the challenges of the 21st century, service men and 
women sacrificing for their country in a time of war need to be assured 
that, should the worst occur, their families will be properly provided 
for. The loss of a loved one is a tremendous emotional hardship for 
families. Congress should do what it can to ensure that it does not 
cause extreme financial hardship as well.
    Though nothing can replace the hole torn in a family by the loss of 
a son, daughter, mother, or father, the ``Military Death Benefit 
Improvement Act of 2005'' will help alleviate some of the financial 
hardships faced by the families of our brave service men and women who 
give their lives in service to our country. It will send a message to 
our brave young men and women and their families that their Nation 
appreciates their service and sacrifice. I urge my colleagues on the 
Armed Services Committee to move swiftly to improve the death benefits 
paid to the families of the brave men and women who give their lives in 
service to our great country.
    Thank you.

    Chairman Warner. Mr. Epley, we have a marvelous man, Jim 
Nicholson, who has taken over from Secretary Principi now as 
the new presidential appointee running your Department. I have 
known him for a long time. He is a decorated Vietnam veteran 
and a man in whom I have a lot of confidence and great respect. 
I would hope that you would give him a full report of this 
hearing because our committee wants to work in tandem and in 
partnership with the Veterans' Affairs Committee, and I am sure 
that he wants to work with Secretary Rumsfeld, Dr. Chu, and 
others in working this legislation.
    We will try and use as a target the legislation going 
through, as Senator Sessions mentioned, the omnibus bill. These 
types of legislation, in my long experience on this committee, 
should be given the highest priority. I think America wants it 
first and foremost. It is interesting. The men and women of the 
Armed Forces who experienced these grievous losses of family 
and so forth, have come through quietly in their modest ways, 
but the American public really is behind them to get this 
legislation. So let us move forward with that.
    Before I go a little further here, Dr. Chu, in my opening 
remarks, I wanted to compliment you on your long service in the 
Department. I guess you have combined service of more years in 
presidential appointments than anybody else serving in the 
Department today. I don't imagine that you spend time sitting 
down and adding it all up, but it is close to 15-some-odd years 
or more. Am I not correct?
    Dr. Chu. Yes, sir.
    Chairman Warner. Who was that famous person who said the 
reports of my demise are greatly exagerated or something? I 
think we had in mind Dr. Feith when we were talking about the 
early departure. So we will strike from the record your 
departure.
    Dr. Chu. I appreciate that, Senator. I thought maybe you 
were sending me a message of some kind. [Laughter.]
    Chairman Warner. No, no. If this old chairman is going to 
send you a message, he just barrels it out in a blunt way. He 
is not going to do it subtly. Do not worry about that.
    Senator Levin. Senator Warner, I am afraid I followed your 
lead again in also thanking Dr. Chu for his service. I have to 
be more cautious in doing that! But thanks anyway for your 
service, Dr. Chu. [Laughter.]
    Dr. Chu. I appreciate it.
    Chairman Warner. I am going to leave to go out to this 
dedication of this new rehabilitation center, which we are 
privileged to have in Virginia. But I want to sort of wrap up 
with the following.
    We have to be mindful, as we move in this legislative 
package, of the first responders here in America. Certainly 
they, through their professionalism and the arduous tasks that 
they perform, be it the police, firemen, or many others, are 
subjected to high risk of death and injury, as are other 
members of the armed services. We want to pay them appropriate 
tribute here in the context of this hearing. I think this 
legislation moves in a direction that would provide a total 
package for the men and women of the Armed Forces that is quite 
different than the packages in the States for the first 
responders and those in the Federal system. But I think their 
record has helped contribute here in Congress to the early 
recognition and consideration of the one for the military. I 
wanted to mention that.
    Now, Dr. Chu, having been in your position for many years--
some 35 years ago, I was privileged to be Secretary of the 
Navy--I know full well there are times when the civilian side 
of the house has viewpoints which at some times are at variance 
with the uniformed side. That is the strength of the system, 
and it should always be that way. It is by no means any 
criticism. I have found it exceedingly helpful. But the buck 
does stop on the Secretary of Defense's desk as you send that 
buck up.
    I would like to conclude this hearing this morning, or my 
participation here in this question period, with asking you to 
let us define with some precision those differences as we view 
them as of today, because Congress will move into the vacuum. I 
want Congress to move into that vacuum and work with the DOD to 
resolve it or take its own initiatives, but let us do so well 
informed.
    Now, one of them is this issue of the qualification for 
benefits. The eligible military today, I think quite properly--
and I must say I associate my views with them for the moment--
should not be limited to personnel in designated geographic 
areas. Is that one area of difference, Dr. Chu, that needs to 
be resolved legislatively?
    Dr. Chu. I would actually ask to follow the provision in 
the Sessions, Lieberman, et cetera bill, which leaves that to 
the discretion of the Secretary. My colleagues here this 
morning had mentioned line-of-duty as one approach we could 
take. The thinking we have on this point has two important 
elements. One, the Nation particularly wants to recognize those 
who have fallen in Iraq and Afghanistan. Second, we lose 
service personnel--on I-395 for example, in a variety of 
peacetime, and nontraining situations. Is that appropriate for 
this same payment or not, particularly if there is a 
contribution from the individual to the tragic event? I would 
urge that discretion be given the Secretary on the point of how 
we cover this. You might wish to consider report language that 
guides us in using that discretion as to what your intent is.
    Chairman Warner. All right. Senator Sessions, you will be 
among those who will be working on this issue. Let us have some 
precision on that. I believe an element of discretion reposed 
in the Secretary is a wise piece of legislation to have in 
there.
    Would a second one be the date of retroactivity, or are we 
pretty much in agreement?
    Dr. Chu. I think we all agree it should be October 7, 2001. 
That is the start of combat operations in Afghanistan.
    Chairman Warner. Now, are there any others that come to 
mind, any other areas where there could be at the moment some 
difference of views between the civilian side of the house and 
the uniformed side?
    Dr. Chu. The other important point that I am aware of is 
how one consults with the next of kin on a declination of 
insurance. Again, I think we leave some discretion to the 
Secretary as to how that happens. I think it is very helpful, 
and Senator Sessions' and Senator Lieberman's bill calls out 
the need to do something here, just as you have guided us on 
this point in the SBP legislation much earlier.
    Chairman Warner. All right.
    Our distinguished acting chairman, can you think of any 
other differences that come to mind here before we close out?
    Senator Sessions. No. Other than the additional suggestions 
such as from Senator DeWine on health care benefits or 
education interests, I do not know of any other specific items 
that need to be settled. I think the Veterans Committee 
suggested $300,000, as the increase from $250,000 to $300,000 
rather than to $400,000. So that is a matter that we may need 
to think through.
    Chairman Warner. Well, that is within the Veterans' Affairs 
jurisdiction. We want to be very careful to coordinate with 
their jurisdictional responsibilities.
    Well, then that concludes my comments on this, colleagues 
and our distinguished witness panel. I thank all of you. You 
have done a great service to those on Active-Duty and to their 
families and others, as you have come up forthrightly in your 
testimony today, and I am confident that Congress will act 
swiftly. I compliment the Department, Dr. Chu, through your 
good efforts and those of the Secretary and the Deputy 
Secretary.
    Dr. Chu. Thank you, sir.
    Chairman Warner. Thank you very much. I entrust this to you 
and Senator Levin.
    Senator Sessions. Thank you.
    Chairman Warner. Again, I thank Senator Levin for his 
leadership on this issue, not only on this but on many others. 
But you have your own bill, and I presume that the area in 
which we are moving is consistent with the objectives and goals 
that you had in mind, Senator Levin?
    Senator Levin. Trying to eliminate that distinction is an 
important goal, and we do eliminate the distinction as to where 
the death took place in our bill.
    Chairman Warner. Good. I thank you.
    Senator Levin. One other area that is complicated, it seems 
to me, is that the proposal I believe the administration is 
supporting suggests that the extra insurance will be provided 
in the event that the death occurs in the AO and that the 
premium will be paid for.
    Dr. Chu. No, sir. What we are supporting, as I think has 
been outlined this morning, is an increase in SGLI for 
everybody to $400,000.
    Senator Levin. Right.
    Dr. Chu. In addition, we would like a provision, which I 
think is parallel to the Sessions-Lieberman bill provision, 
that would allow us to finance that for everyone in the AO 
designated by the Secretary. The intent there is to ensure that 
everyone, notwithstanding whatever next-of-kin provision we 
work out, is afforded some level of insurance, even if they 
declined. So if you selected the full $400,000, you would get a 
rebate on your premium. You would get a lower premium 
basically. If you did not, we would buy the insurance for you 
anyway.
    Senator Levin. I just would raise the administrative 
complexity about having the premium----
    Dr. Chu. We are discussing that with the VA. Compared to 
commercial policies, I think this is relatively straightforward 
frankly.
    Senator Levin. Well, it is not straightforward if, when you 
are in the AO, you get a premium paid for what you do not get 
if you are outside of the AO.
    Dr. Chu. We have a whole series of pays, as you are aware, 
Senator, that are triggered by AO constraints.
    Senator Levin. I just want to raise that issue.
    Dr. Chu. We think it is tractable.
    Senator Levin. Okay.
    The other issue that I have has to do with the legislation, 
Dr. Chu, which we enacted giving the DOD and other Federal 
agencies a requirement that senior executives be paid on the 
basis of performance.
    Now, you issued a memorandum. You signed a memorandum on 
January 12 saying to all of the Secretaries that you may not 
grant an across-the-board increase to Senior Executive Service 
(SES) members. You may not grant an across-the-board increase. 
Yet, we find that an across-the-board increase has been now 
ordered for political appointees.
    Dr. Chu. You are speaking, I think, to Mr. DuBois' 
memorandum regarding Washington Headquarters Services. Is that 
correct?
    Senator Levin. Yes.
    Dr. Chu. That is not quite accurate. My understanding is 
that they still have to demonstrate a fully successful 
performance.
    Senator Levin. Yes, but fully-successful level is the 
lowest level. Right?
    Dr. Chu. No. There is unsuccessful, basically.
    Senator Levin. Well, what about career SES members 
performing at the fully-successful level? Are they guaranteed 
that pay?
    Dr. Chu. Let me step back from the specifics of his memo 
and outline the process we tried to put in place. We tried to 
encourage each major component of the Department, the three 
military departments, and then what some like to call the 
fourth estate, to craft within the parameters of the statute a 
performance-oriented result. Now, from my memorandum, I set the 
standard that you could not just give everybody the same thing 
and that your decisions need to have a performance foundation. 
I left each component to its discretion how it could best carry 
that out.
    Senator Levin. Now, noncareer SES members that perform at 
the fully-successful level will receive an increase of 2.5 
percent. Is that correct? That is what the decision was.
    Dr. Chu. That is Mr. DuBois' choice for the Washington 
career service. Yes, sir, that is correct.
    Senator Levin. Is that true for career SES members?
    Dr. Chu. No, he set a different standard for those 
reflecting----
    Senator Levin. I think that is inconsistent with our 
statute and with your memo because he is treating career and 
noncareer SES folks differently. All the fully-successful are 
better----
    Dr. Chu. Can I make a suggestion, sir? Let me get him to 
come up and explain----
    Senator Levin. No, no. I want you to tell me whether you 
believe that his memo, which distinguishes between career and 
noncareer SES members, is consistent with your memo. That is 
what I want.
    Dr. Chu. I think it is consistent because he set a 
performance standard. Whether it is consistent with the 
statute, I leave to the general counsel who tries to review 
these things for me and make sure I am on the right path in 
each case. But to the philosophy that is involved, his argument 
for this choice is that the noncareer SES received actually in 
the previous round a smaller increase. So he is trying to look 
on a multi-year basis as to how was this done.
    Senator Levin. Regardless of what his motive or purpose 
is--and that is arguable--the law says that we have to treat 
the career and noncareer SES folks the same. He has 
distinguished between them by saying that if you have fully-
successful performance or better, you get a 2.5 percent pay 
raise.
    Dr. Chu. I am delighted to go back to my legal counsel and 
make sure we are in the right place in allowing him to do this.
    Senator Levin. Was it the legal counsel who wrote your 
memo?
    Dr. Chu. We wrote the memo and we asked them to review it.
    Senator Levin. All right.
    Mr. Chairman, with your permission, could we ask the legal 
counsel whether or not distinguishing between career and 
noncareer the way that we have just described is consistent 
with our statute which says we cannot distinguish between 
career and noncareer, that performance-based compensation is 
what we required? So that would be the question which would be 
asked. With your permission, I would like to ask that----
    Senator Sessions. We will leave the hearing open for 
questions, and you will be able to submit that. I would suggest 
that that would be a good approach.
    Senator Levin. Thank you, Dr. Chu, and thank you, Mr. 
Chairman.
    Senator Sessions. Gentlemen, thank you for your testimony 
today and for your service to your country. I think there is a 
good feeling out there among the American people about doing 
more for families who have lost a loved one in combat. It has 
been surprising to me the groundswell of grassroots support 
that have come to my office and others who have been talking 
about this issue. People want to be generous to those who 
serve. We thank you for your excellent testimony today.
    I would offer for the record a letter from the American 
Legion, the Veterans of Foreign Wars, and the Disabled American 
Veterans, which specifically have endorsed the HEROES Act that 
Senator Lieberman and I have offered, although all of us are 
moving in a bipartisan, collegial way to develop the best 
language that we can come up with in that regard.
    [The letter from the American Legion, the Veterans of 
Foreign Wars, and the Disabled American Veterans follows:]
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
    Senator Sessions. I would also note that in our last 
defense authorization bill, I worked with the committee and 
Chairman Warner and others, and language was put in that bill 
to require a study of disability benefits for those who are 
wounded. It would call for the Department to identify and 
assess the changes in the DOD personnel policies needed to 
enhance the financial and nonfinancial benefits. It calls on 
the DOD to consult with the Veterans' Affairs agency, the 
Veterans Disability Benefit Commission, and it would be 
finished and completed not more than 150 days from the date of 
the bill. So, Dr. Chu, that time is running on us.
    Dr. Chu. We know the clock is ticking, yes, sir. But it is 
important, I think, for us to take a fresh review, as Senator 
McCain and others said. Where are we? What can we do to 
modernize this in a way that is effective?
    Senator Sessions. I also appreciate the financial 
counseling, General Cody, you mentioned, that is provided for 
young soldiers. We have discussed whether that should be a part 
of any legislation with regard to families or widows or 
surviving spouses who lost a loved one and they receive 
$400,000, $500,000 in payment. I am sure that it will be 
offered to them. Is that correct, gentlemen? I see you are 
nodding yes. Through the service support or the Office of the 
Judge Advocate General, you will be able to provide counseling 
to them on that. I do not know whether it should be mandatory 
and some formal procedure set up for that. Perhaps not. I would 
look forward to your suggestions on that.
    If there is no additional business to come before the 
committee, I will again thank you for you participation today 
and note that we are adjourned.
    [Questions for the record with answers supplied follow:]
               Questions Submitted by Senator Pat Roberts
irs treatment of differential pay provided to members of the guard and 
                                reserve
    1. Senator Roberts. General Cody, Admiral Nathman, General Nyland, 
and General Moseley, are you aware of any interagency strategy to 
encourage the Internal Revenue Service (IRS) along and get them to do 
the right thing by our men and women of the Guard and Reserve?
    General Cody. There is no interagency strategy to engage the IRS on 
behalf of Guard and Reserve members.
    Admiral Nathman. There is no interagency strategy to engage the IRS 
on behalf of the Guard and Reserve members.
    General Nyland. According to the IRS, differential pay is not 
compensation for the recipients since it is not paid for services 
performed in the employment of companies who voluntarily make such 
payments. For that reason, payments for differential pay are not 
``wages'' as defined by law under the Internal Revenue Code and are not 
subject to the taxes imposed by the Federal Insurance Contributions Act 
and the Federal Unemployment Tax Act or to the Collection of Income Tax 
at the Source of Wages. Taxpayers must include differential pay in 
income for Federal tax purposes; however, there is no requirement for 
employers to withhold income tax from differential pay. Bottom line: 
There is no interagency strategy to encourage the IRS to alter its 
guidance on differential pay since the IRS must treat differential pay 
within the legislative parameters established by the Internal Revenue 
Code and other applicable laws.
    General Moseley. Military differential pay is made voluntarily by 
an employer to represent the difference between the regular salary of 
an employee called to military Active-Duty and the amount being paid by 
the military, if the regular salary is higher.
    The employment relationship between the employee and the company is 
interrupted when the worker is called for active military service with 
the U.S. Government or National Guard. Therefore these payments are not 
``wages'' subject to the taxes imposed by the Federal Insurance 
Contributions Act and the Federal Unemployment Tax Act or to the 
Collection of Income Tax at Source on Wages (IRS Revenue Ruling 69-
136).
    The activated member's employer does not withhold taxes for 
military differential pay.
    The payments are considered income but not ``wages'' subject to 
withholding. Therefore, the recipient should prepare for the tax 
liability by making quarterly estimated tax payments.
    Currently the best IRS option for a deployed military member is for 
that taxpayer to sign up for the Electronic Federal Tax Payment System. 
This enables the person to schedule payments directly from a bank 
account for up to a year in advance. It is an easy way for both the 
taxpayer and the government, and ensures prompt and accurate crediting 
of payments to the taxpayers account. Other options are for the member 
to make credit card payments or to send checks with Form 1040-ES 
vouchers.
    Ref: IRS Publication 505, Tax Withholding and Estimated Tax.

    2. Senator Roberts. General Cody, Admiral Nathman, General Nyland, 
and General Moseley, has the IRS provided the necessary resources to 
our troops and their families to ensure that between fighting 
insurgents and rebuilding a nation, our troops can file their quarterly 
estimated tax returns if they are able?
    General Cody. Yes. In cases where there is no requirement for 
private employers to withhold income tax from differential pay (pay by 
a private employer to represent the difference between the employees' 
regular salary and military pay) the IRS recommends that military 
members make quarterly estimated tax payments. While there is no legal 
requirement for recipients of differential pay to pay quarterly 
estimated taxes, those who choose to pay them may pay by electronic 
payment (scheduled up to a year in advance), credit card, or check.
    As a Department of Defense (DOD) participant in the IRS Volunteer 
Income Tax Assistance Program, the Army assists soldiers by preparing 
and filing tax returns. These services extend to soldiers deployed 
worldwide to include those in combat zones and qualified hazardous duty 
areas. In addition, current law grants an automatic extension to 
members of the Armed Forces deployed to combat zones and qualified 
hazardous duty areas. The automatic extension lasts for a minimum of 
180 days after the member returns from deployment to these locations 
and covers activities such as filing tax returns, paying taxes, and 
filing claims for a refund.
    Admiral Nathman, General Nyland, and General Moseley. There is no 
legal requirement for recipients of differential pay to file quarterly 
estimated taxes, however this filing approach is one method for those 
taxpayers to avoid owing the tax all at once when they file their 
returns. Available options for payment of quarterly estimated taxes 
include by electronic payment scheduled up to a year in advance, credit 
card payments or payments by check. Through a partnership with the IRS, 
the Department of the Navy has an active Volunteer Income Tax 
Assistance program to aid servicemembers, including those deployed 
around the world, in completing and filing their tax returns. There are 
understandable limits on the capability of service personnel deployed 
to certain geographic locations to complete and file tax returns. 
Therefore the law grants an automatic extension for filing tax returns, 
paying taxes, filing claims for refund and taking other actions with 
IRS for service personnel deployed to a combat zone, qualified 
hazardous duty area or participating in a qualified contingency 
operation. The automatic extension lasts for a minimum of 6 months 
after the individual returns from deployment to such a location.
                                 ______
                                 
               Questions Submitted by Senator Carl Levin
        pay raises for political appointees and career employees
    3. Senator Levin. Dr. Chu, Section 1125 of the National Defense 
Authorization Act for Fiscal Year 2004 eliminated the established 
system for paying senior executives and required the DOD and other 
Federal agencies to pay senior executives ``based on individual 
performance, contribution to the agency's performance, or both, as 
determined under a rigorous performance management system.'' On January 
12, 2005, you implemented this provision for the DOD by issuing a 
memorandum directing the military departments and defense agencies to 
award pay increases for senior executives ``based on their relative 
standing.'' Your memorandum expressly prohibited the use of across-the-
board increases.
    On the same day, however, the Director of Administration and 
Management for the Office of the Secretary of Defense (OSD) directed an 
across-the-board pay raise of 2.5 percent--the maximum pay raise 
allowable--for all senior executives in OSD and the defense agencies 
who are political appointees and who receive a fully satisfactory 
rating. By contrast, career civil servants who receive the same rating 
would be evaluated on their individual performance and contribution to 
the agency, and only the top performers would receive a 2.5 percent pay 
raise.
    Do you believe that an across-the-board pay raise of 2.5 percent 
for senior executives in OSD and the defense agencies who are political 
appointees is consistent with the statutory requirement that pay be 
``based on individual performance, contribution to the agency's 
performance, or both, as determined under a rigorous performance 
management system''?
    Dr. Chu. On January 12, 2004, I issued policy regarding SES pay 
increases. Each DOD component applied that policy based upon its 
existing pay and performance system, all of which pre-date the new SES 
pay-for-performance law and regulations. The existing performance 
management system for executives in OSD and Defense agencies is a 
three-level rating system, the highest of which is fully successful. 
Career employees are further evaluated by a performance review board 
and awards are granted accordingly. Because non-career SES in DODare 
not eligible for awards, their performance was not subject to review by 
the performance review board; therefore no further ranking was made 
under the criteria in place for the most recent performance cycle. 
Based on those criteria, the decision to increase the pay of non-career 
and career executives in OSD was based not on status but on performance 
and contribution as required by law and policy. While the existing 
system cannot be certified under the current OPM rules, the Department 
made appropriate decisions regarding the 2005 pay increase. 
Accordingly, this should not be treated as an example of the new SES 
pay for performance system, simply because the system has not yet been 
approved for implementation.
    The Department is working closely with the Office of Personnel 
Management (OPM) on a new SES pay and performance system that will 
produce positive results and meet the new legal and regulatory 
requirements necessary for OPM and the Office of Management and Budget 
certification.

    4. Senator Levin. Dr. Chu, have you obtained a written opinion from 
counsel on this issue? If so, please provide a copy of the opinion to 
the committee. If not, please obtain such an opinion and provide a copy 
to the committee.
    Dr. Chu. Response pending from the Office of General Counsel.

    5. Senator Levin. Dr. Chu, doesn't the decision to award the 
maximum allowable pay raise to all political appointees in OSD and the 
defense agencies undermine DOD's credibility when you say that the new 
authority granted by the National Security Personnel System (NSPS) will 
be implemented in a manner that fairly relates pay to performance 
without bias or favoritism?
    Dr. Chu. No. As explained in response to question three, each DOD 
component based the 2005 pay increase on ratings made under its 
existing pay and performance system, all of which pre-date the new SES 
pay-for-performance law and regulations.
    The new Executive and Senior Professional Pay and Performance 
system that we submitted to the Office of Personnel Management for 
approval contains safeguards to effectively support and meet all legal 
and regulatory requirements. I can assure you the new system will 
alleviate your concerns. The new DOD pay system will be credible not 
only with senior executives but also with other employees who will be 
entering pay-for-performance systems under the National Security 
Personnel System.
    I am confident that as you look at the Department's new system you 
will agree that it is both consistent with the requirements of section 
1125 of the National Defense Authorization Act for Fiscal Year 2004 and 
in the best interests of the DOD and its employees.
                                 ______
                                 
            Questions Submitted by Senator Edward M. Kennedy
    death benefits and services available to survivors of military 
                               personnel
    6 and 7. Senator Kennedy. General Cody, a constituent of mine, 
Private First Class John Hart from Bedford, Massachusetts, was killed 
in action in Iraq in October 2003. Before he deployed, he filled out a 
will along with the other soldiers in his unit. After he was killed, 
neither the Hart family or the Army could locate his will amongst his 
personal effects. His family asked the Army to search his personal 
effects for the will and it was never found. Private Hart's family 
finally had to declare a lost will and went through Probate in 
Massachusetts. This painstaking evolution takes both time, money and an 
attorney, something that nobody that is grieving needs to be exposed, 
especially when their loved one dies defending our values. What is the 
procedure for the U.S. Army when it pertains to holding the wills for 
deploying soldiers? Does the Army hold wills? If not, why?
    General Cody. No, the Army does not hold wills. When a will is 
prepared for a soldier, the soldier is advised of the legal 
significance of the document and the need to safeguard it. Soldiers are 
advised to inform their personal representative of the location of the 
current will and the need to update it after a major life event occurs. 
In the rare instance when a will is prepared immediately prior to 
deployment, arrangements are made to mail the will to the soldier's 
personal representative.
    The Army consistently strives to ensure that soldiers are educated 
regarding the importance of safeguarding their wills and informing the 
personal representative of the location of the current will. The 
constant mobility of our soldier-clients and soldier-attorneys and the 
personal nature of such documents make it impractical for legal 
assistance offices to be a repository of the wills prepared for 
soldiers, thus the emphasis on sending the will to the personal 
representative.

    8. Senator Kennedy. General Cody, I have heard of cases where the 
personal effects of a person wounded or killed in action are not being 
returned to them or their loved ones. That certainly was the case with 
the family of Private John Hart, who was killed in Iraq in October 
2003. Please explain the procedures for returning personal effects to 
loved ones after a servicemember is killed in action.
    General Cody. The unit commander is responsible for collecting and 
evacuating the deceased soldier's personal effects through mortuary 
affairs channels within the theater of operations to the Joint Personal 
Effects Depot at Aberdeen Proving Ground, Maryland. The depot will 
photograph, clean, and inventory the personal effects and then FedEx 
the deceased soldier's property to the Casualty Assistance Officer 
(CAO) for delivery to the family. Unfortunately, in the case of Private 
First Class John Hart, the unit shipped his personal effects directly 
to his family instead of using mortuary affairs channels. According to 
the CAO, Mr. and Mrs. Hart received Private First Class Hart's personal 
effects January 2004. Since this time, we have continued to publish 
guidance informing our deployed units of the appropriate channels for 
evacuating the personal effects of deceased and wounded soldiers. 
Within the past 6 months, we have been able to account for every 
deceased soldier's personal effects as units comply with established 
policies and procedures.
                                 ______
                                 
               Question Submitted by Senator Mark Dayton
           government housing for a surviving military family
    9. Senator Dayton. General Cody, Admiral Nathman, General Nyland, 
and General Moseley, in response to a previous question of mine, each 
of the Vice Chiefs indicated that base commanders have authority to 
extend the 6 months that a surviving family can remain in government 
housing. I know that the first 6 months is at no cost to the family. If 
this time is extended so that children can complete the school year, or 
for other reasons, does the family have to pay rent?
    General Cody. Yes. When exceptions are submitted and approved by 
the installation commander for the family to retain housing for an 
additional 180 days, rent is charged at an amount equal to the 
Soldier's Basic Allowance for Housing (BAH).
    Admiral Nathman. Yes. In compliance with the National Defense 
Authorization Act and Department of Defense Housing Management 
regulations, surviving family members occupying family housing are 
allowed to occupy housing without charge for a period of 180 days. The 
installation commander may extend occupancy beyond the 180 days. When 
an extension beyond the 180 days is granted, rental rates equivalent to 
the member's full housing allowances or fair market value of the 
quarters will be charged.
    General Nyland. In accordance with the DOD Financial Management 
Regulation (DODFMR), Volume 7A, Table 26-9, rule 19, if family members 
are residing in government quarters, then the widow/widower 
(dependents) entitlement to receive BAH exists for 180 days.
    In compliance with DOD 4165.63M guidance, family members shall pay 
a rental rate to continue to remain in family housing. This is after 
the 180-day period and upon termination of the BAH entitlement.
    General Moseley. Survivors of military members may stay in 
government housing longer than 6 months. Survivors would pay rent at 
fair market rate for any time longer than 6 months.

    [Whereupon, at 12:36 p.m., the committee adjourned.]

                                 
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