[Senate Hearing 110-394]
[From the U.S. Government Publishing Office]


                                                  S. Hrg. 110-394 Pt. 6
 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2009

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 3001

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2009 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
    PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER PURPOSES

                               __________

                                 PART 6

                               PERSONNEL

                               __________

                     FEBRUARY 27 AND APRIL 16, 2008


         Printed for the use of the Committee on Armed Services

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42-634 PDF                       WASHINGTON : 2008

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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

EDWARD M. KENNEDY, Massachusetts     JOHN McCAIN, Arizona
ROBERT C. BYRD, West Virginia        JOHN WARNER, Virginia,
JOSEPH I. LIEBERMAN, Connecticut     JAMES M. INHOFE, Oklahoma
JACK REED, Rhode Island              JEFF SESSIONS, Alabama
DANIEL K. AKAKA, Hawaii              SUSAN M. COLLINS, Maine
BILL NELSON, Florida                 SAXBY CHAMBLISS, Georgia
E. BENJAMIN NELSON, Nebraska         LINDSEY O. GRAHAM, South Carolina
EVAN BAYH, Indiana                   ELIZABETH DOLE, North Carolina
HILLARY RODHAM CLINTON, New York     JOHN CORNYN, Texas
MARK L. PRYOR, Arkansas              JOHN THUNE, South Dakota
JIM WEBB, Virginia                   MEL MARTINEZ, Florida
CLAIRE McCASKILL, Missouri           ROGER F. WICKER, Mississippi

                   Richard D. DeBobes, Staff Director

              Michael V. Kostiw, Republican Staff Director

                                 ______

                       Subcommittee on Personnel

                 E. BENJAMIN NELSON, Nebraska, Chairman

EDWARD M. KENNEDY, Massachusetts     LINDSEY O. GRAHAM, South Carolina
JOSEPH I. LIEBERMAN, Connecticut     SUSAN M. COLLINS, Maine
JIM WEBB, Virginia                   SAXBY CHAMBLISS, Georgia
CLAIRE McCASKILL, Missouri           ELIZABETH DOLE, North Carolina

                                  (ii)


























                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
  Active Component, Reserve Component, and Civilian Personnel Programs
                           february 27, 2008

                                                                   Page

Chu, Hon. David S., Under Secretary of Defense for Personnel and 
  Readiness......................................................    39
Rochelle, LTG Michael D., USA, Deputy Chief of Staff, G1, United 
  States Army....................................................    82
Harvey, VADM John C., Jr., USN, Deputy Chief of Naval Operations 
  (Manpower, Personnel, Training, and Education), United States 
  Navy...........................................................    88
Coleman, Lt. Gen. Ronald S., USMC, Deputy Commandant for Manpower 
  and Reserve Affairs, United States Marine Corps................   106
Newton, Lt. Gen. Richard Y., III, USAF, Deputy Chief of Staff, 
  Manpower and Personnel, United States Air Force................   115

 Testimony of Military Beneficiary Organizations Regarding the Quality 
 of Life of Active, Reserve, and Retired Military Personnel and Their 
                             Family Members
                             april 16, 2008

Beck, Meredith M., National Policy Director, Wounded Warrior 
  Project........................................................   161
Barnes, Master Chief Petty Officer Joseph L., USN (Ret.), 
  National Executive Director, Fleet Reserve Association.........   166
Moakler, Kathleen B., Director of Government Relations, National 
  Military Family Association....................................   172
Cline, Master Sergeant Michael P., USA (Ret.), Executive 
  Director, Enlisted Association of the National Guard of the 
  United States..................................................   196
Strobridge, Col. Steven P., USAF (Ret.), Director of Government 
  Relations, Military Officers Association of America............   202

                                 (iii)


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2009

                              ----------                              


                      WEDNESDAY, FEBRUARY 27, 2008

                               U.S. Senate,
                         Subcommittee on Personnel,
                               Committee on Armed Services,
                                                    Washington, DC.

  ACTIVE COMPONENT, RESERVE COMPONENT, AND CIVILIAN PERSONNEL PROGRAMS

    The subcommittee met, pursuant to notice, at 3 p.m. in room 
SR-232A, Russell Senate Office Building, Senator E. Benjamin 
Nelson (chairman of the subcommittee) presiding.
    Committee members present: Senators Ben Nelson, Webb, and 
Graham.
    Committee staff member present: Leah C. Brewer, nominations 
and hearings clerk.
    Majority staff members present: Gabriella Eisen, counsel; 
Gerald J. Leeling, counsel; and Peter K. Levine, general 
counsel.
    Minority staff members present: Lucian L. Niemeyer, 
professional staff member; Diana G. Tabler, professional staff 
member; and Richard F. Walsh, minority counsel.
    Staff assistants present: Ali Z. Pasha and Brian F. Sebold.
    Committee members' assistants present: Jon Davey, assistant 
to Senator Bayh; Gordon I. Peterson, assistant to Senator Webb; 
Sandra Luff, assistant to Senator Warner; Clyde A. Taylor IV, 
assistant to Senator Chambliss; and Andrew King, assistant to 
Senator Graham.

   OPENING STATEMENT OF SENATOR E. BENJAMIN NELSON, CHAIRMAN

    Senator Ben Nelson. Good afternoon. This Personnel 
Subcommittee hearing will now come to order.
    The subcommittee meets today to receive testimony on the 
Active, Guard, Reserve, and civilian personnel programs in 
review of the National Defense Authorization Request for Fiscal 
Year 2009 and the Future Years Defense Program.
    I'm honored to continue to serve as chairman of this 
subcommittee, the subcommittee that's focused on the care and 
well-being of our servicemembers, their families, retirees, and 
Department of Defense (DOD) civilians. No aspect of our 
military programs is more important than taking care of our 
people.
    I'm privileged once again to be joined in this effort by my 
ranking member, Senator Graham. He and I have worked together 
for several years now to do what's right for our servicemembers 
and their families, and will continue in this never-ending 
effort.
    I welcome our witnesses here today. Secretary Chu, staff 
tell me this will be your 10th appearance before this 
subcommittee. Is that right? Or, who's counting?
    Dr. Chu. Right, sir.
    Senator Ben Nelson. Okay. [Laughter.]
    We appreciate your service and dedication to our 
servicemembers and their families, and thank you for what you 
have done to provide continuity and steady leadership during 
your time as the Under Secretary of Defense for Personnel and 
Readiness.
    We also welcome here today the military personnel chiefs of 
each of the military branches: Lieutenant General Michael D. 
Rochelle, United States Army; Vice Admiral John C. Harvey, Jr., 
United States Navy; Lieutenant General Ronald S. Coleman, 
United States Marine Corps; and Lieutenant General Richard 
Newton III, United States Air Force.
    Admiral Harvey, this committee has already favorably acted 
on your nomination for another position, and your nomination is 
now before the full Senate, so I congratulate you on your very 
successful service as the Chief of Naval Personnel and your 
nomination to yet another position of trust and importance. 
Congratulations.
    Admiral Harvey. Thank you very much, sir.
    Senator Ben Nelson. General Newton, this is your first 
appearance before this subcommittee. You follow a long 
tradition of successful Air Force chiefs of personnel. I'm 
confident that General Brady gave you very wise counsel as he 
moved on to--[laughter]
    ----a four-star position. General Rochelle and General 
Coleman, we welcome you back and thank you for your continued 
service.
    The current stress on the All-Volunteer Force, Active and 
Reserve, is overwhelming and unprecedented. As we meet here 
today, we're entering our 7th year of combat.
    We continue the effort to increase the size of the Army and 
Marine Corps. Growing the force raises obvious questions about 
recruiting and retention, as well as the right mix of pay, 
bonuses, and benefits to attract and retain America's best 
young men and women.
    Congress fully appreciates the sacrifices that our 
servicemembers and their families are making. In recognition of 
this, Congress continues to improve military pay and benefits. 
The stress of military operations is not limited to our 
servicemembers, as we know. We must never lose sight of their 
families as we consider what measures to take to enhance the 
safety and well-being of our servicemembers. Their family is 
our family.
    To help our military families, Congress passed a law last 
year requiring the establishment of a Military Family Readiness 
Council to assess the adequacy and effectiveness of military 
family readiness programs and to recommend improvements. 
Congress also passed the Wounded Warrior Act. This 
comprehensive, bipartisan legislation advances the care, 
management, and transition of wounded and ill servicemembers, 
enhances healthcare and benefits for their families, and begins 
the process of fundamental reform for the disability evaluation 
systems of the DOD and the Department of Veterans Affairs (VA).
    All of this reflects the reality that we face today. Our 
servicemembers shoulder more responsibility and are 
increasingly asked to do more. With the increased requirements 
comes a cost that is difficult to bear. We absolutely must take 
care of our servicemembers, especially those who are wounded, 
and their families. We must ensure that our servicemembers are 
properly trained and equipped to perform the tasks we ask them 
to perform. On these issues, there can be no compromise. The 
issues we face, going forward, are difficult, but not 
insurmountable.
    So, I look forward to hearing from our witnesses today on 
the programs and priorities the Department has identified to 
overcome these challenges.
    With that, thank you. Senator Graham, do you have an 
opening statement?

             STATEMENT OF SENATOR LINDSEY O. GRAHAM

    Senator Graham. Very briefly, Mr. Chairman, and it will 
begin the way all of them have, and that's thanking you. We've 
swapped roles a couple of times here, but nothing has really 
changed. I've thoroughly, thoroughly enjoyed working with you 
and your staff on this subcommittee, as sort of a respite from 
partisanship. We seem to figure it out, how to get along for 
the common good here, and nothing could bring us together more 
quickly than the needs of the men and women in uniform and 
their families. So, I look forward to another year of trying to 
help those who are making us all safe.
    Dr. Chu, thank you very much for your service. You have a 
very demanding job, and you have been here many times, and I 
appreciate the knowledge and expertise you bring to the table 
in serving your country. I'm sure you could go other places and 
make more money. I just really appreciate your staying around 
and helping us figure out the challenges that we face.
    Admiral Harvey, good job. [Laughter.]
    The proof's in the pudding. People recognized your work and 
your accomplishments, and well done. We look forward to dealing 
with you in another capacity, down the road, and definitely 
looking forward to hearing from you in terms of where we need 
to go this year.
    General Newton, you're the new guy. I know how that feels. 
I can't think of a more important task right now for the Air 
Force, in particular, to try to figure out the balance between 
planes and people and ever-increasing health care costs, how 
you all reconcile that with the missions we assign you.
    We have a great staff. I look forward to working with 
everybody. One of the highlights of our time together, I think, 
has been the Wounded Warrior Act. I think this committee and 
our staffs put together the Wounded Warrior Act in a way that 
received a lot of bipartisan support, and hopefully will 
continue to deliver good service to those who have been 
terribly wounded, and the families who suffer alongside.
    There's so much more to be done, and the question, I think, 
for the country is, how much of the health care role should DOD 
provide? Should we, long term, look at having retiree health 
care separated and just focus on a very limited health care 
function within the military? I don't know the answer to that, 
but I do believe that the biggest challenge facing all of us is 
how to deal with the growing personnel costs, particularly in 
the area of health care, because, as you said, Senator Nelson, 
no one wants to retreat from quality, availability, and access, 
but when you look at the demographic changes in the pie chart, 
the personnel costs, particularly the health care costs, are 
growing at a dramatic rate. We're going to have to figure out 
how to balance that out.
    I'll look forward to listening to the testimony, in terms 
of force structure, the number of people we have, the number of 
people we'll need--who are we getting in, what kind of level of 
education do they provide, and is the force ready for the 
fight? The answer, to me, is overwhelmingly yes, because we're 
winning the fight; but, as Senator Nelson said, it's been a 
long, hard struggle for many years, and we're all aware of what 
the strain has been.
    I look forward to receiving your testimony and working with 
Senator Nelson, and putting together a good package.
    Senator Ben Nelson. Thank you, Senator Graham.
    Dr. Chu, I hope you weren't listening too closely when he 
said you could make more money elsewhere. [Laughter.]
    That's not an invitation to go anywhere.
    The Military Coalition has submitted a written statement 
for the record, and, without objection, it will be included in 
the record.
    [The prepared statement of The Military Coalition follows:]
              Prepared Statement by The Military Coalition
    Mr. Chairman and distinguished members of the committee. On behalf 
of The Military Coalition, a consortium of nationally prominent 
uniformed services and veterans' organizations, we are grateful to the 
committee for this opportunity to express our views concerning issues 
affecting the uniformed services community. This statement provides the 
collective views of the following military and veterans' organizations, 
which represent approximately 5.5 million current and former members of 
the 7 uniformed services, plus their families and survivors.

         Air Force Association
         Air Force Sergeants Association
         Air Force Women Officers Associated
         American Logistics Association
         American Veterans (AMVETS)
         Army Aviation Association of America
         Association of Military Surgeons of the United States
         Association of the United States Army
         Chief Warrant Officer and Warrant Officer Association, 
        U.S. Coast Guard
         Commissioned Officers Association of the U.S. Public 
        Health Service, Inc.
         Enlisted Association of the National Guard of the 
        United States
         Fleet Reserve Association
         Gold Star Wives of America, Inc.
         Jewish War Veterans of the United States of America
         Marine Corps League
         Marine Corps Reserve Association
         Military Chaplains Association of the United States of 
        America
         Military Officers Association of America
         Military Order of the Purple Heart
         National Association for Uniformed Services
         National Military Family Association
         National Order of Battlefield Commissions
         Naval Enlisted Reserve Association
         Naval Reserve Association
         Noncommissioned Officers Association
         Reserve Enlisted Association
         Reserve Officers Association *
         Society of Medical Consultants to the Armed Forces
         The Retired Enlisted Association
         United States Army Warrant Officers Association
         United States Coast Guard Chief Petty Officers 
        Association
         Veterans of Foreign Wars of the United States
         Veterans' Widows International Network

    * The Reserve Officers Association supports the non-health care 
portion of the testimony.
    The Military Coalition, Inc., does not receive any grants or 
contracts from the Federal Government.
                           executive summary
Wounded Warrior Issues
    Joint Transition Office
    The Coalition is encouraged with the creation of a joint DOD-VA 
office to oversee development of a bi-directional electronic medical 
record. However, we strongly recommend that the subcommittee upgrade 
the scope of responsibilities and span of authority for the new DOD-VA 
Interagency Program Office to include top-down planning and execution 
of all ``seamless transition'' functions, including the joint 
electronic health record; joint DOD/VA physical; implementation of best 
practices for Traumatic Brain Injuries (TBI), Post-Traumatic Stress 
Disorder (PTSD), and special needs care; care access/coordination 
issues; and joint research.
    The Coalition believes authorizing 3 years of their active-duty-
level health care benefit for service-disabled members and their 
families after separation or retirement is essential to align stated 
``seamless transition'' intentions with the realities faced by disabled 
members and families.
    Disability Retirement Reform
    The Coalition urges the subcommittee to ensure any legislative 
changes to the military disability evaluation and retirement systems do 
not reduce compensation and benefit levels for disabled servicemembers.
    The Coalition does not support proposals to do away with the 
military disability retirement system and shift disability compensation 
responsibility to the VA.
    The Coalition urges an expanded review of all administrative and 
disciplinary separations since October 7, 2001, for members with recent 
combat experience to assess whether the behavior that led to separation 
may have been due to service-caused exposure.
Active Force Issues
    End Strength and Associated Funding
    The Coalition strongly urges the subcommittee to sustain projected 
increases in ground forces and provide additional recruiting, 
retention, and support resources as necessary to attain/sustain them.
    The Coalition urges the subcommittee to reconsider the consistency 
of projected reductions of Navy and Air Force forces with long-term 
readiness needs.
    Compensation and Special Incentive Pay
    The Coalition urges the subcommittee to propose a military pay 
raise of at least 3.9 percent for fiscal year 2009 (one-half percentage 
point above private sector pay growth) and to continue such half-
percent annual increases over the Employment Cost Index (ECI) until the 
current 3.4 percent pay comparability gap is eliminated.
    The Coalition also urges the subcommittee to continue periodic 
targeted pay raises as appropriate to recognize the growing education 
and technical qualifications of enlisted members and warrant officers 
and sustain each individual grade/longevity pay cell at the minimum 
70th percentile standard.
    Access to Quality Housing
    The Military Coalition (TMC) urges reform of military housing 
standards that inequitably depress Basic Allowance for Housing (BAH) 
rates for mid- to senior-enlisted members by relegating their occupancy 
to inappropriately small quarters.
    Family Readiness and Support
    The Coalition urges the subcommittee to support increased family 
support funding and expanded education and other programs to meet 
growing needs associated with increased ops tempo, extended deployments 
and the more complex insurance, retirement, and savings choices faced 
by over-extended military families.
    Spouse Employment
    The Coalition urges the subcommittee to support legislation which 
would expand the Workforce Opportunity Tax Credit for employers who 
hire spouses of Regular and Reserve component servicemembers.
    Additionally, the Coalition supports providing tax credits to 
offset military spouses' expenses in obtaining career-related licenses 
or certifications when servicemembers are relocated to a different 
State.
    Flexible Spending Accounts
    TMC urges the subcommittee to continue pressing the Defense 
Department until servicemembers are provided the same eligibility to 
participate in Flexible Spending Accounts that all other Federal 
employees and corporate employees enjoy. Additionally, we support S. 
773.
    Permanent Change of Station (PCS) Allowances
    TMC urges the subcommittee to upgrade permanent change-of-station 
allowances to better reflect the expenses members are forced to incur 
in complying with government-directed relocations, with priority on 
adjusting flat-rate amounts that have been eroded by years--or 
decades--of inflation, and shipment of a second vehicle at government 
expense to overseas accompanied assignments.
    Base Realignment and Closure (BRAC)/Rebasing/Military Construction/
        Commissaries
    The Coalition urges the subcommittee to closely monitor rebasing/
BRAC plans and schedules to ensure sustainment and timely development 
of adequate family support/quality of life programs. At closing and 
gaining installations, respectively--to include housing, education, 
child care, exchanges and commissaries, health care, family centers, 
unit family readiness, and other support services.
    Morale, Welfare, and Recreation Programs
    TMC urges the subcommittee to ensure that DOD funds MWR programs at 
least to the 85 percent level for Category A programs and 65 percent 
for Category B requirements.
    Education Enhancements
    TMC urges the subcommittee to work with the Veterans Affairs 
Committee to establish the benchmark level of Montgomery GI Bill (MGIB) 
education benefits at the average cost of attending a 4-year public 
college, and support continuous in-State tuition eligibility for 
servicemembers and their families in the State in which the member is 
assigned and the member's home State of record once enrolled as a 
student.
National Guard and Reserve Issues
    Reserve Retirement and `Operational Reserve' Policy
    TMC strongly urges further progress in revamping the Reserve 
retirement system in recognition of increased service and sacrifice of 
National Guard and Reserve component members, including at a minimum, 
extending the new authority for a 90 day=3 month reduction to all Guard 
and Reserve members who have served since September 11.
    A Total Force Approach to the Montgomery GI Bill
    TMC urges Congress to integrate Guard and Reserve and active duty 
MGIB laws into Title 38. In addition, TMC recommends restoring basic 
Reserve MGIB rates to approximately 50 percent of active duty rates and 
authorizing upfront reimbursement of tuition or training coursework for 
Guard and Reserve members.
    Family Support Programs and Benefits
    TMC urges Congress to continue and expand its emphasis on providing 
consistent funding and increased outreach to connect Guard and Reserve 
families with relevant support programs.
    Tangible Support for Employers
    The Coalition urges Congress to support needed tax relief for 
employers of Selected Reserve personnel and reinforce the Employer 
Support for Guard and Reserve Program.
    Seamless Transition for Guard and Reserve Members
    The Coalition urges the subcommittee to continue and expand its 
efforts to ensure Guard and Reserve members and their families receive 
needed transition services to make a successful readjustment to 
civilian status.
Retirement Issues
    Concurrent Receipt
    The Coalition urges the subcommittee to act expeditiously on the 
recommendations of the Veterans' Disability Benefits Commission and 
implement a plan to eliminate the deduction of VA disability 
compensation from military retired pay for all disabled military 
retirees.
    Uniformed Services Retiree Entitlements and Benefits
    TMC urges the subcommittee to resist initiatives to ``civilianize'' 
the military retirement system in ways that reduce the compensation 
value of the current retirement system and undermine long-term 
retention.
    Permanent ID Card Reform
    The Coalition urges the subcommittee to direct the Secretary of 
Defense to authorize issuance of permanent military identification 
cards to uniformed services family members and survivors who are age 65 
and older.
Survivor Issues
    Survivor Benefit Plan (SBP)-Dependency and Indemnity Compensation 
        (DIC) Offset
    The Coalition strongly urges the subcommittee to take further 
action to expand eligibility for the special survivor indemnity 
allowance to include all SBP-DIC survivors and continue progress toward 
completely repealing the SBP-DIC offset for this most-aggrieved group 
of military widows.
    Final Retired Paycheck
    TMC urges the subcommittee to end the insensitive practice of 
recouping the final month's retired pay from the survivor of a deceased 
retired member.
Health Care Issues
    Full Funding for the Defense Health Program
    TMC strongly urges the subcommittee to take all possible steps to 
restore the reduction in TRICARE-related budget authority and ensure 
continued full funding for Defense Health Program needs.
    Protecting Beneficiaries Against Cost-Shifting
    The Coalition urges the subcommittee to require DOD to pursue 
greater efforts to improve TRICARE and find more effective and 
appropriate ways to make TRICARE more cost-efficient without seeking to 
``tax'' beneficiaries and make unrealistic budget assumptions.
    TMC Healthcare Cost Principles
    The Coalition most strongly recommends Representative Chet Edwards' 
and Representative Walter Jones' H.R. 579 and Senator Frank 
Lautenberg's and Senator Chuck Hagel's S. 604 as models to establish 
statutory findings, a sense of Congress on the purpose and principles 
of military health care benefits, and explicit guidelines for and 
limitations on adjustments.

         Active duty members and families should be charged no 
        fees except retail pharmacy co-payments, except to the extent 
        they make the choice to participate in TRICARE Standard or use 
        out-of-network providers under TRICARE Prime.
         For retired and survivor beneficiaries, the percentage 
        increase in fees, deductibles, and co-payments that may be 
        considered in any year should not exceed the percentage 
        increase beneficiaries experience in their compensation.
         The TRICARE Standard inpatient copay should not be 
        increased further for the foreseeable future. At $535 per day, 
        it already far exceeds inpatient copays for virtually any 
        private sector health plan.
         There should be no enrollment fee for TRICARE Standard 
        or TRICARE For Life (TFL), since neither offers assured access 
        to TRICARE-participating providers. An enrollment fee implies 
        enrollees will receive additional services, as Prime enrollees 
        are guaranteed access to participating providers in return for 
        their fee. Congress already has required TFL beneficiaries to 
        pay substantial Medicare Part B fees to gain TFL coverage.
         There should be one TRICARE fee schedule for all 
        retired beneficiaries, just as all legislators, Defense leaders 
        and other Federal civilian grades have the same health fee 
        schedule. The TRICARE schedule should be significantly lower 
        than the lowest tier recommended by the Defense Department, 
        recognizing that all retired members paid large upfront 
        premiums for their coverage through decades of arduous service 
        and sacrifice.

    TRICARE Standard Enrollment
    The Coalition strongly recommends against establishment of any 
TRICARE Standard enrollment system; to the extent enrollment may be 
required, any beneficiary filing a claim should be enrolled 
automatically, without denying the claim. No enrollment fee should be 
charged for TRICARE Standard until and unless the program offers 
guaranteed access to a participating provider.
    Private Employer Incentive Restrictions
    The Coalition recommends Congress modify the law restricting 
private employer TRICARE incentives to explicitly exempt employers who 
offer only cafeteria plans (i.e., cash payments to all employees to 
purchase care as they wish) and employers who extend specific cash 
payments to any employee who uses health coverage other than the 
employer plan (e.g., Federal Employees Health Benefits Program (FEHBP), 
TRICARE, or commercial insurance available through a spouse or previous 
employer).
    Provider Participation Adequacy
    The Coalition urges the subcommittee to continue monitoring DOD and 
Government Accountability Office (GAO) reporting on provider 
participation to ensure proper follow-on action.
    Administrative Deterrents to Provider Participation
    The Coalition urges the subcommittee to continue its efforts to 
reduce administrative impediments that deter providers from accepting 
TRICARE patients.
    TRICARE Reimbursement Rates
    The Coalition urges the subcommittee to exert what influence it can 
to persuade the Finance Committee to reform Medicare/TRICARE statutory 
payment formula. To the extent the Medicare rate freeze continues, we 
urge the subcommittee to encourage the Defense Department to use its 
reimbursement rate adjustment authority as needed to sustain provider 
acceptance.
    Additionally, The Coalition urges the subcommittee to require a 
Comptroller General report on the relative propensity of physicians to 
participate in Medicare vs. TRICARE, and the likely effect on such 
relative participation of a further freeze in Medicare/TRICARE 
physician payments along with the affect of an absence of bonus 
payments.
    Minimize Medicare/TRICARE Coverage Differences
    The Coalition urges the subcommittee to align TRICARE coverage to 
at least match that offered by Medicare in every area and provide 
preventive services at no cost.
    TRICARE Reserve Select (TRS) Premium
    The Coalition recommends reducing TRS premiums to $48/month 
(single) and $175/month (family), as envisioned by the GAO, with 
retroactive refunds as appropriate. For the future, the percentage 
increase in premiums in any year should not exceed the percentage 
increase in basic pay.
    The Coalition further recommends that the subcommittee request a 
report from the Department of Defense on options to assure TRS 
enrollees' access to TRICARE-participating providers.
    Private Insurance Premium Option
    The Coalition recommends developing a cost-effective option to have 
DOD subsidize premiums for continuation of a Reserve employer's private 
family health insurance during periods of deployment as an alternative 
to permanent TRS coverage.
    Involuntary Separatees
    The Coalition recommends authorizing 1 year of post-Transitional 
Assistance Management Program (TAMP) TRS coverage for every 90 days 
deployed in the case of returning members of the Individual Ready 
Reserve (IRR) or members who are involuntarily separated from the 
Selected Reserve. The Coalition further recommends that voluntarily 
separating reservists subject to disenrollment from TRS should be 
eligible for participation in the Continued Health Care Benefits 
Program (CHCBP).
    Gray Area Reservists
    The Coalition urges the subcommittee to authorize an additional 
premium-based option under which members entering ``gray area'' retiree 
status would be able to avoid losing health coverage.
    Reserve Dental Coverage
    The Coalition supports providing dental coverage to reservists for 
90 days pre- and 180 days post-mobilization (during TAMP), unless the 
individual's dental readiness is restored to T-2 condition before 
demobilization.
    Restoration of Survivors' TRICARE Coverage
    The Coalition recommends restoration of TRICARE benefits to 
previously eligible survivors whose second or subsequent marriage ends 
in death or divorce.
    TRICARE Prime Remote Exceptions
    The Coalition recommends removal of the requirement for the family 
members to reside with the active duty member to qualify for the 
TRICARE Prime Remote Program, when the family separation is due to a 
military-directed move or deployment.
    BRAC, Rebasing, and Relocation
    The Coalition recommends codifying the requirement to provide a 
TRICARE Prime network at all areas impacted by BRAC or rebasing. 
Additionally, we recommend that DOD be required to provide an annual 
report to Congress on the adequacy of health resources, services, 
quality, and access of care for those beneficiary populations affected 
by transformation plans.
    Pharmacy Co-payment Changes
    The Coalition recommends deferral of any pharmacy copay increases 
pending assessment of the effects of the new Federal pricing law on 
usage and cost patterns for the different venues, and that the 
subcommittee instead urge DOD to pursue copay reductions and ease prior 
authorization requirements for medications for chronic diseases, based 
on private sector experience that such initiatives reduce long-term 
costs associated with such diseases.
    Rapid Expansion of ``Third Tier'' Formulary
    The Coalition urges the subcommittee to reassert its intent that 
the Beneficiary Advisory Panel should have a substantive role in the 
formulary-setting process, including access to meaningful data on 
relative drug costs in each affected class, consideration of all 
Beneficiary Advisory Panel (BAP) comments in the decisionmaking 
process, and formal feedback concerning rationale for rejection of BAP 
recommendations.
    Referral and Authorization System
    The Coalition recommends that Congress require a cost analysis 
report, including input from each Managed Care Support Contractor, 
concerning the referral process within DOD and reliance on Civilian 
Network Providers within an MTF's Prime Service Area.
    Deductibility of Health and Dental Premiums
    The Coalition urges all Armed Services Committee members to seek 
the support of the Finance Committees to approve legislation to allow 
all military beneficiaries to pay TRICARE-related insurance premiums in 
pre-tax dollars, to include TRICARE dental premiums, TRS premiums, 
TRICARE Prime enrollment fees, premiums for TRICARE Standard 
supplements, and long-term care insurance premiums.
                                overview
    Mr. Chairman, TMC thanks you and the entire subcommittee for your 
continued, steadfast support of our active duty, Guard, Reserve, 
retired members, and veterans of the uniformed services and their 
families and survivors. The subcommittee's work last year generated 
ground-breaking, innovative improvements in military end strength, 
currently serving pay, survivor benefits, disabled retiree programs, 
and of most significance, improvements in wounded warrior benefits, 
care, and treatment. These enhancements will definitely make a positive 
difference in the lives of active, Guard and Reserve personnel, 
retirees, survivors, and families.
    As our men and women in uniform continue to prosecute the global 
war on terror, the Coalition believes it is critical that the Nation 
support our troops with the appropriate resources. The Services have 
reported that they are wearing out equipment at a record pace; however, 
the Coalition is concerned that we are wearing out our people in 
uniform at even a faster pace. The current rate of deployments and the 
accompanied stress to our troops and their families put at risk the 
readiness of our servicemembers.
    The men and women in uniform--Active Duty, Guard, and Reserve--are 
answering the call--but not without ever-greater sacrifice. Currently, 
over 615,000 National Guard and Reserve members have been called to 
active Federal service for the war on terrorism. Over 150,000 have had 
two or more deployments, putting particular stress on these members' 
civilian careers and employers. The ``total force'', with the support 
of their families, continues to endure mounting stress brought about by 
repeated deployments and ever-increasing workloads. Therefore, now is 
not the time to scrimp on the needs for our troops and their families.
    Over the past several years, the Pentagon has repeatedly sought to 
curb spending on military personnel and facilities to fund operational 
requirements. In the process, the Defense Department has imposed 
dramatic force reductions in the Air Force and the Navy, tried to deter 
military retirees from using their earned health coverage by proposing 
large TRICARE fee increases, and cut back on installation quality of 
life programs.
    The Coalition believes these efforts to rob personnel to fund 
operations will only make the uniformed services more vulnerable to 
future readiness problems. We agree with the Chairman of the Joint 
Chiefs of Staff, who has stated that 4 percent of GDP should be the 
``absolute floor'' for the overall military budget. If we want a strong 
national defense, we have to pay for a strong military force as well as 
replace and upgrade aging, war-worn weapons and equipment.
    The Coalition is encouraged by Congress' strong support for 
continued increases to Army and Marine Corps end strength, in 
recognition that our troops and families are dangerously overburdened. 
We believe the country must follow through on future planned increases, 
regardless of troop withdrawals from Iraq, and that these should be 
funded through permanent increases in the defense budget, not 
supplemental appropriations that undermine essential, long-term 
commitments. It's been proven that our military didn't have sufficient 
forces to meet the requirements of the current war. It would be 
inexcusable not to be better prepared for future contingencies.
    In our statement today, TMC offers its collective recommendations 
on what needs to be done to address important personnel-related issues 
in order to sustain long-term personnel readiness.
                         wounded warrior issues
    Last February, a series of articles in the Washington Post titled 
``The Other Walter Reed'' profiled shocking cases of wounded 
servicemembers who became lost in military health care and 
administrative systems upon being transferred to outpatient 
rehabilitative care.
    Subsequently, the national media ran many stories of seriously 
wounded troops warehoused in substandard quarters, waiting weeks and 
months for medical appointments and evaluation board results, left 
pretty much on their own to try and navigate the confusing maze of 
medical system and benefit and disability rules, and low-balled into 
disability separations rather than being awarded the higher benefits of 
military disability retirement.
    Interviews with family members--spouses, children, and parents--
revealed heartbreaking real life dramas of those who quit their jobs 
and virtually lived at military hospitals to become caregivers to 
seriously wounded troops. Left with diminishing resources and 
unfamiliar with military benefit and disability rules, they were 
severely disadvantaged in trying to represent the interests of their 
wounded spouses and children who couldn't stand up for themselves.
    These issues drew the attention of the President and Congress, 
leading to the immediate appointment of multiple special commissions 
and task forces charged with investigating the problems and identifying 
needed solutions. The Coalition is very grateful for the work of the 
Dole-Shalala Commission, the Marsh-West Independent Review Group, the 
VA Interagency Task Force on Returning Veterans, the Mental Health Task 
Force, and the previously authorized Veterans' Disability Benefits 
Commission. The Coalition endorses the vast majority of these groups' 
recommendations, and we're pleased that the subcommittee made a 
conscientious effort to address many of them in the Wounded Warrior Act 
provisions of the National Defense Authorization Act (NDAA) for Fiscal 
Year 2008.
    Congress and TMC agree that our Nation's service men and women have 
earned first class care and assistance, both during recuperation and 
following separation or retirement from the military.
    We are gratified at the sincere and unprecedented leadership 
efforts in the Departments of Defense and Veterans' Affairs and the 
Armed Services and Veterans' Affairs Committees to transform the system 
to make this long overdue goal a reality.
    But years of bureaucratic and parochial barriers can't be swept 
away as easily as we all would wish. The good work done in 2007 was 
only a modest first step on the path to transforming military and 
veterans programs to meet the pressing needs of wounded and disabled 
members and their families. We're still a long, long way from achieving 
the ``seamless transition'' goal.
Joint Transition Office
    The Coalition believes one critical problem is bureaucratic stove-
piping in each department. While both DOD and VA are making great 
efforts to cooperate, there is no permanent joint activity or office 
whose primary mission is to jointly plan and execute the seamless 
transition strategy and then exercise productive oversight over the 
longer-term process. There's no doubt about the good intentions of 
leadership, but to sustain the effort for the long term requires a 
change in organizational structure. Periodic meetings, after which the 
DOD and VA participants return to their separate offices on opposite 
sides of the Potomac, won't sustain the effort after the horror stories 
fade from the headlines.
    This simply can't be someone's part-time job. It requires a full-
time joint Federal transition office, staffed by full-time DOD, service 
and VA personnel working in the same office with a common joint 
mission: developing, implementing and overseeing the Joint Executive 
Council's strategic plan. This office's responsibilities should 
include:

         Joint In-Patient Electronic Health Record--The NDAA 
        for Fiscal Year 2008 took the first step in authorizing a DOD/
        VA Interagency Program Office to oversee this specific 
        initiative, which TMC has been seeking for years. But we 
        believe the 2012 objective for implementing this system is too 
        long to wait. Congress must press DOD and VA to speed delivery 
        as soon as humanly possible, with concrete timelines and 
        milestones for action. TMC also believes that the same logic 
        that necessitates a joint office's oversight of this specific 
        initiative is equally applicable in other areas, and that the 
        interagency office's area of responsibility should be expanded 
        accordingly.
         Special Needs Health Care--Polytrauma Rehabilitation 
        Centers were established to meet the specialized clinical care 
        needs of patients with multiple trauma conditions. They provide 
        comprehensive inpatient rehabilitation services for individuals 
        with complex cognitive, physical and mental health sequelae of 
        severe disabling trauma. These centers require special 
        oversight in order to ensure the required resources are 
        available to include specialized staff, technical equipment and 
        adequate bed space. This oversight must be a joint effort since 
        it provides a significant piece of the health care continuum 
        for severely injured personnel.
         PTSD, TBI, and Mental Health/Counseling--The Coalition 
        strongly supports the provisions in the NDAA for Fiscal Year 
        2008 establishing Centers of Excellence for these programs. We 
        simply must have some central monitoring, evaluation, and 
        crossfeed to take best advantage of the wide variety of current 
        and planned DOD, service, and VA programs and pilot projects 
        aimed at destigmatizing, identifying, and treating TBI and 
        PTSD. The Coalition believes it also is important to ensure 
        that TBI and PTSD are identified and treated as combat injuries 
        rather than mental health problems. The Coalition is doubtful 
        whether these centers, by themselves, will be in a position to 
        ensure coordination and implementation of best practices across 
        all departments and Services.
         Caregiver Initiatives--Several wounded warrior 
        provisions in the recently enacted NDAA provide additional 
        support for the caregiver of the wounded warrior, typically a 
        family member. However, we believe more needs to be done to 
        strengthen support for families, to include the authorization 
        of compensation for family member caregivers of severely 
        injured who must leave their employment to care for the 
        servicemember.
         Access to Care--A significant impediment to the 
        ``seamless transition'' goal is that there are significant 
        differences between health coverage and some other entitlements 
        when a member transitions from active military service to 
        separated or retired status. TRICARE benefits for disability 
        retirees and families are not the same as they were on active 
        duty, and there are significant differences between coverage 
        and availability of programs between TRICARE and the VA. When a 
        member dies on active duty, Congress has deemed that the 
        member's family should be eligible for 3 years of active-duty 
        level TRICARE coverage to assist in the family's transition. 
        TMC believes strongly that members who are disabled 
        significantly by military service deserve equal treatment. The 
        NDAA for Fiscal Year 2008 authorized continued active-duty 
        level coverage, but only for the servicemember, and then only 
        in cases where VA coverage is not available. TMC believes this 
        limitation significantly undermines the seamless transition 
        goal for wounded/disabled members whose rehabilitation and 
        recovery may continue long after the time they leave active 
        duty. Their needs--and those of their families--should not be 
        inhibited by higher copays, deductibles, and coverage decreases 
        the moment they are separated or retired from active duty. 
        Allowing disabled members and their families to retain their 
        active duty military health care benefit for 3 years after 
        separation or retirement is essential to align our stated 
        intentions with the realities faced by disabled members and 
        families.
         Joint Research--Combined Research Initiatives would 
        further enhance the partnership between VA and DOD. Since many 
        of the concerns and issues of care are shared, joint 
        collaboration of effort in the area of research should enable 
        dollars to go much further and provide a more standardized 
        system of health care in the military and veteran communities. 
        Furthermore, research must also be performed jointly and across 
        all military departments and with other practicing health care 
        agencies to ensure timely integration of these findings in the 
        diagnosis and treatment of wounded and disabled patients.

          The Coalition is encouraged with the creation of a joint DOD-
        VA office to oversee development of a bi-directional electronic 
        medical record. However, we strongly recommend that the 
        subcommittee upgrade the scope of responsibilities and span of 
        authority for the new DOD-VA Interagency Program Office to 
        include top-down planning and execution of all ``seamless 
        transition'' functions, including the joint electronic health 
        record; joint DOD/VA physical; implementation of best practices 
        for TBI, PTSD, and special needs care; care access/coordination 
        issues; and joint research.
          The Coalition believes authorizing 3 years of their active-
        duty level health care benefit for service-disabled members and 
        their families after separation or retirement is essential to 
        align stated ``seamless transition'' intentions with the 
        realities faced by disabled members and families.
Disability Retirement Reform
    Several of the Walter Reed task forces and commissions recommended 
significant changes to the DOD Disability Evaluation System (DES), and 
the NDAA for Fiscal Year 2008 includes several initiatives requiring 
joint DOD/VA DES pilot programs; use of the VA Schedule for Rating 
Disabilities; review of medical separations with disability ratings of 
20 percent or less; and enhanced disability severance pay. These 
changes will hopefully improve the overall DES and correct the reported 
``low-ball'' ratings awarded some wounded warriors.
    The Coalition is very supportive of the current DOD/VA disability 
rating pilot, which has the potential to help streamline transition 
from active duty into veteran/retired status. However, we believe 
further legislative efforts are required to curb service differences in 
determining whether a condition existed prior to service. To this end, 
language in the NDAA for Fiscal Year 2008 aimed at addressing this 
problem may actually have exacerbated it by amending only a part of the 
relevant provisions of law.
    The Coalition does not support proposals to simply do away with the 
military disability retirement system and shift disability compensation 
responsibility to the VA. While this proposal seems administratively 
simple, and supports our longstanding ``concurrent receipt'' goal of 
ensuring proper vesting of service-based retirement for members who 
suffer from service-caused disabilities, it poses two significant risks 
that TMC deems unacceptable. First, it would cause significant 
compensation reductions for some severely disabled personnel--up to 
$1,000 a month or more in some cases, and even more for some Guard and 
Reserve members who suffer severe disabilities. Second, it would 
eliminate the 30 percent-disability retirement threshold that now 
establishes eligibility for retiree TRICARE coverage for disabled 
members and their families. TMC believes there must continue to be a 
statutory military disability threshold above which the member is 
considered a military retiree (not simply a separatee and veteran) and 
eligible for all the privileges of military retirement, including 
TRICARE coverage. The Coalition objects strongly to establishing 
disability ratings, compensation, or health care eligibility based 
whether the disability was incurred in combat vice non-combat.
    The Coalition strongly supports the recent NDAA requirement for a 
case review of members separated with 20 percent or lower ratings since 
October 7, 2001. There is evidence that many received ``low-ball'' 
ratings that did not adequately reflect the degree of their 
disabilities and unfairly denied them eligibility for military 
disability retired pay and health coverage.
    But we believe the subcommittee did not go far enough to correct 
past inequities. The Coalition is aware of many cases of ``model 
troops'' who fell into depression, drug use, and disciplinary 
situations after one or more combat tours, and who subsequently 
received administrative or disciplinary discharges.
    The Coalition urges the subcommittee to ensure any legislative 
changes to the military disability evaluation and retirement systems do 
not reduce compensation and benefit levels for disabled servicemembers.
    The Coalition does not support proposals to do away with the 
military disability retirement system and shift disability compensation 
responsibility to the VA.
    The Coalition urges an expanded review of all administrative and 
disciplinary separations since October 7, 2001, for members with recent 
combat experience to assess whether the behavior that led to separation 
may have been due to service-caused exposure.
                          active force issues
    The subcommittee's key challenges will be to fend off those who 
wish to cut needed personnel and quality of life programs while working 
with DOD and the administration to reduce the stress on the force and 
their families already subjected to repeated, long-term deployments. 
Rising day-to-day workloads for non-deployed members and repeated 
extensions of combat tours creates a breeding ground for retention 
problems. Meeting these challenges will require a commitment of 
personnel and resources on several fronts.
End Strength and Associated Funding
    The Coalition was encouraged whenthe subcommittee ensured that the 
Army and Marine Corps authorized end strengths continued to grow in 
fiscal year 2008, and we are further encouraged that the DOD has asked 
for additional manpower increases for the Army and Marine Corps over 
the next 4 years.
    Congress must ensure these increases are sufficient to ease force 
rotation burdens and the Services are fully funded in order to achieve 
the new end strength. Increasing end strength is not a quick fix that 
will ease the stressors on currently serving servicemembers and their 
families.
    Some already speculate that the planned increases may not be needed 
if we can reduce the number of troops deployed to Iraq. The Coalition 
believes strongly that the increases are essential to future readiness, 
regardless of force levels in Iraq. We know we didn't have enough 
troops to fight the current war without imposing terrible penalties on 
military members and families, and we must build our force management 
plans to avoid having to do so when the Nation is faced with another 
major unexpected contingency requirement.
    For too long, we have planned only for the best-case scenario, 
which ignores our responsibility to the Nation to be prepared for 
unexpected and less-favorable scenarios, which could well arise 
anywhere around the globe, including the Far East.
    A full range of funding is required to support this necessary end 
strength, including housing, health care, family programs, and child 
care. Having the Services absorb these costs out of pocket is self-
defeating.
    Furthermore, as the Army and Marine Corps increase over the next 4 
years, the Coalition remains concerned that ongoing Navy and Air Force 
Active and Reserve personnel cuts are driven by budget considerations 
rather than operational requirements. We believe it is increasingly 
likely that future experience will prove these cutbacks ill-advised, 
and urge the subcommittee to reconsider their consistency with long-
term readiness needs.
    The Coalition strongly urges the subcommittee to sustain projected 
increases in ground forces and provide additional recruiting, 
retention, and support resources as necessary to attain/sustain them.
    The Coalition urges the subcommittee to reconsider the consistency 
of projected reductions of Navy and Air Force forces with long-term 
readiness needs.

Compensation and Special Incentive Pays
    The Coalition is committed to ensuring that pay and allowance 
programs are equitably applied to the seven uniformed Services. In that 
regard, the Coalition urges the subcommittee to be mindful that 
personnel and compensation program adjustments for Department of 
Defense forces should also apply to uniformed members of the Coast 
Guard, NOAA Corps, and Public Health Service.
    Since the turn of the century, Congress and DOD have made 
significant progress to improve the lives of men and women in uniform 
and their families. Since 1999, when military pay raises had lagged a 
cumulative 13.5 percent behind the private sector pay comparability 
standard, the subcommittee has narrowed that gap to 3.4 percent. Each 
year during that span, the subcommittee has ensured at least some 
progress in shrinking that disparity further. TMC is grateful for that 
progress, and believes strongly that it should continue until full pay 
comparability is restored.
    DOD uses the 70th percentile of earnings of private workers of 
comparable age, experience and education as a standard to help 
rebalance the military pay table through special targeted pay increases 
depending on grade and longevity status. The Coalition believes this 
measure is useful as one tool in the process of establishing the proper 
progression of the pay table, and needs to be monitored and applied as 
necessary in the future. But it does not, by itself, supplant overall 
growth in the ECI as the measure of pay comparability, nor does it 
erase the remaining 3.4 percent gap between military pay raises and 
private sector pay growth.
    The Coalition believes Congress will never find a better 
opportunity to phase out the remaining gap than today's conditions when 
private sector pay growth is relatively low. In assessing the proper 
amount to reduce the pay gap, Congress also should consider that 
today's troops are working much harder--and their families sacrificing 
much more--for their modest raises.
    This year, we expect the Defense budget will propose a 3.4 percent 
raise for military personnel in 2009--a percentage equal to the growth 
in private sector pay 2 years earlier in 2007. The Coalition believes 
strongly that this is not the time to end Congress' steady path of 
progress in reducing the military pay comparability gap.
    The Coalition urges the subcommittee to propose a military pay 
raise of at least 3.9 percent for fiscal year 2009 (one-half percentage 
point above private sector pay growth) and to continue such half-
percent annual increases over the ECI until the current 3.4 percent pay 
comparability gap is eliminated.
    The Coalition also urges the subcommittee to continue periodic 
targeted pay raises as appropriate to recognize the growing education 
and technical qualifications of enlisted members and warrant officers 
and sustain each individual grade/longevity pay cell at the minimum 
70th percentile standard.
Access to Quality Housing
    Today's housing allowances come much closer to meeting military 
members' and families' housing needs than in the past, thanks to the 
conscientious efforts of the subcommittee in recent years.
    But the Coalition believes it's important to understand that some 
fundamental flaws in the standards used to set those allowances remain 
to be corrected, especially for enlisted members.
    The Coalition supports revised housing standards that are more 
realistic and appropriate for each pay grade. Many enlisted personnel 
are unaware of the standards for their respective pay grade and assume 
that their BAH level is determined by a higher standard or by the type 
of housing for which they would qualify if they live on a military 
installation. For example, only 1.25 percent of the enlisted force (E-
9) is eligible for BAH sufficient to pay for a 3-bedroom single-family 
detached house, even though thousands of more junior enlisted members 
do, in fact, reside in detached homes. The Coalition believes that as a 
minimum, this BAH standard (single-family detached house) should be 
extended gradually to qualifying servicemembers beginning in grade E-8 
and subsequently to grade E-7 and below over several years as resources 
allow.
    TMC urges reform of military housing standards that inequitably 
depress BAH rates for mid to senior enlisted members by relegating 
their occupancy to inappropriately small quarters.
Family Readiness and Support
    A fully funded, robust family readiness program continues to be 
crucial to overall readiness of our military, especially with the 
demands of frequent and extended deployments.
    Resource issues continue to plague basic installation support 
programs. At a time when families are dealing with increased 
deployments, they are being asked to do without. Often family centers 
are not staffed for outreach. Library and sports facilities hours are 
being abbreviated or cut altogether. Manpower for installation security 
is being reduced. These are additional sacrifices that we are imposing 
on our families left behind while their servicemembers are deployed.
    In a similar vein, the Coalition believes additional authority and 
funding is needed to offer respite and extended child care for military 
families. These initiatives should be accompanied by a more aggressive 
outreach and education effort to improve members' and families' 
financial literacy. We should ensure members are aware of and 
encouraged to use child care, mental health support, spousal 
employment, and other quality-of-life programs that have seen recent 
growth. However, this education effort should also include expanded 
financial education initiatives to inform and counsel members and 
families on life insurance options, Thrift Savings Plan, IRAs, flexible 
spending accounts, savings options for children's education, and other 
quality of life needs.
    In particular servicemembers must be educated on the long-term 
financial consequences of electing to accept the much lower-value 
$30,000 REDUX retention bonus after 15 years of service vice sustaining 
their full High-3 retirement benefit.
    The Coalition urges the subcommittee to support increased family 
support funding and expanded education and other programs to meet 
growing needs associated with increased operations tempo (OPTEMPO), 
extended deployments and the more complex insurance, retirement, and 
savings choices faced by over-extended military families.
Spouse Employment
    The Coalition is pleased that movement is being made to enhance the 
total force spouse employment opportunities through a test program and 
strong partnerships between DOD, Department of Labor, service 
organizations, employers, and others; however, more needs to be done.
    More and more military spouses are in the workforce than in the 
past, but challenges in finding jobs after relocation adversely impact 
the military families' financial stability and satisfaction with 
military life. Spouse employment helps contribute to a strong military 
and helps in retention of our high quality, All-Volunteer Force. 
Defense leaders repeatedly acknowledge, ``We recruit servicemembers, 
but we retain families.''
    One of the greatest frustrations for working spouses is the career 
and financial disruption associated with military-directed relocations. 
If we're serious about retaining more military families, we must get 
serious about easing this significant career and military life 
dissatisfier.
    The Coalition urges the subcommittee to support legislation which 
would expand the Workforce Opportunity Tax Credit for employers who 
hire spouses of Regular and Reserve component servicemembers.
    Additionally, the Coalition supports providing tax credits to 
offset military spouses' expenses in obtaining career-related licenses 
or certifications when servicemembers are relocated to a different 
State.
Flexible Spending Accounts
    The Coalition cannot comprehend the Defense Department's continuing 
failure to implement existing statutory authority for active duty and 
Selected Reserve members to participate in Flexible Spending Accounts 
(FSAs), despite both Armed Services Committees' prodding on this 
subject.
    All other Federal employees and corporate civilian employees are 
able to use this authority to save thousands of dollars a year by 
paying out-of-pocket health care and dependent care expenses with pre-
tax dollars. It is unconscionable that the Department has failed to 
implement this money-saving program for the military members who are 
bearing the entire burden of national sacrifice in the global war on 
terrorism.
    TMC urges the subcommittee to continue pressing the Defense 
Department until servicemembers are provided the same eligibility to 
participate in Flexible Spending Accounts that all other Federal 
employees and corporate employees enjoy. Additionally, we support S. 
773.
Permanent Change of Station Allowances
    PCS allowances have continually failed to keep pace with the 
significant out-of-pocket expenses servicemembers and their families 
incur in complying with government-directed moves.
    For example, PCS mileage rates still have not been adjusted since 
1985. The current rates range from 15 to 20 cents per mile--an ever-
shrinking fraction of the 50.5 cents per mile rate authorized for 
temporary duty travel. Also, military members must make any advance 
house-hunting trips at personal expense, without any government 
reimbursements such as Federal civilians receive.
    Additionally, the overwhelming majority of service families consist 
of two working spouses, making two privately owned vehicles a 
necessity. Yet the military pays for shipment of only one vehicle on 
overseas moves, including moves to Hawaii and Alaska. This forces 
relocating families into large out-of-pocket expenses, either by 
shipping a second vehicle at their own expense or selling one car 
before leaving the States and buying another upon arrival. The 
Coalition is greatly disappointed that, for 2 consecutive years, a 
subcommittee proposal to authorize shipping two vehicles to non-foreign 
duty locations outside of the continental United States has been 
dropped in conference.
    The Coalition is grateful that the senior enlisted PCS weight 
allowance tables were increased slightly in the NDAA for Fiscal Year 
2006; however, we believe that these modification need to go further 
for personnel in pay grades E-7, E-8, and E-9 to coincide with 
allowances for officers in grades O-4, O-5, and O-6 respectively. The 
personnel property weight for a senior E-9 leader without dependents 
remains the same as for a single O-3 despite the normal accumulation of 
household goods over the course of a career.
    Four years ago, the subcommittee authorized the Families First 
initiative. Among its provisions was full replacement value (FRV) 
reimbursement for household goods damaged during PCS moves. We are 
grateful that this first FRV phase has begun but will continue to 
monitor its implementation. The next phase, focusing on survey results 
and real time access to the progress of household goods in the moving 
process has yet to be fully implemented. We will continue to monitor 
the progress and hope that Congress will be doing the same.
    Aside from that long-delayed initiative the last real adjustment in 
PCS expenses was 7 years ago in 2001, when this subcommittee upgraded 
PCS per diem (but not mileage) rates and raised the maximum daily 
Temporary Lodging Expense (TLE) allowance from $110 to $180 a day for a 
PCSing family, among certain other adjustments, including the increase 
in the junior enlisted weight allowances. That TLE amount is supposed 
to cover a family's food and lodging expenses while in temporary 
quarters at the gaining or losing installation. Today, after 7 years of 
inflation, it's hardly adequate to cover the daily expenses of a family 
of four or five anywhere in America, let alone a family ordered to 
relocate to San Diego or Washington, DC.
    The Coalition also supports authorization of a dislocation 
allowance for servicemembers making their final ``change of station'' 
upon retirement from the uniformed services and a 500-pound 
professional goods weight allowance for military spouses.
    We cannot avoid requiring members to make regular relocations, with 
all the attendant disruptions in their children's education and their 
spouses' careers. The Coalition believes strongly that the Nation that 
requires military families to incur these disruptions should not be 
making them bear the attendant high expenses out of their own pockets.
    TMC urges the subcommittee to upgrade permanent change-of-station 
allowances to better reflect the expenses members are forced to incur 
in complying with government-directed relocations, with priority on 
adjusting flat-rate amounts that have been eroded by years--or 
decades--of inflation, and shipment of a second vehicle at government 
expense to overseas accompanied assignments.
BRAC/Rebasing/Military Construction/Commissaries
    TMC remains concerned about inadequacy of service implementation 
plans for DOD transformation, global repositioning, Army modularity, 
and BRAC initiatives. Given the current wartime fiscal environment, TMC 
is greatly worried about sustaining support services and quality of 
life programs for members and families. These programs are clearly at 
risk--not a week goes by that the Coalition doesn't hear reports of 
cutbacks in base operation accounts and base services because of 
funding shortfalls.
    Feedback from the installation level is that local military and 
community officials often are not brought ``into the loop'' or provided 
sufficient details on changing program timetables to plan, seek, and 
fund support programs (housing, schools, child care, roads, and other 
infrastructure) for the numbers of personnel and families expected to 
relocate to the installation area by a specific date.
    We believe it is important to note that the commissary is a key 
element of the total compensation package for servicemembers and 
retirees. In addition to providing average savings of 30 percent over 
local supermarkets, commissaries provide an important tie to the 
military community. Shoppers get more than groceries at the commissary. 
It is also an opportunity to connect with other military family members 
and to get information on installation programs and activities through 
bulletin boards and installation publications. Finally, shoppers 
receive nutrition information and education through commissary 
promotions and educational campaigns contributing to the overall health 
of the entire beneficiary population.
    The Coalition urges the subcommittee to closely monitor rebasing/
BRAC plans and schedules to ensure sustainment and timely development 
of adequate family support/quality of life programs. At closing and 
gaining installations, respectively--to include housing, education, 
child care, exchanges and commissaries, health care, family centers, 
unit family readiness, and other support services.
Morale, Welfare, and Recreation Programs
    The availability of appropriated funds to support MWR activities is 
an area of continuing concern. TMC strongly opposes any DOD initiative 
that withholds or reduces MWR appropriated support for Category A and 
Category B programs or that reduces the MWR dividend derived from 
military base exchange programs.
    Servicemembers and their families are reaching the breaking point 
as a result of the war and the constant changes going on in the force. 
It is unacceptable to have troops and families continue to take on more 
responsibilities and sacrifices and not give them the support and 
resources to do the job and to take care of the needs of their 
families.
    TMC urges the subcommittee to ensure that DOD funds MWR programs at 
least to the 85 percent level for Category A programs and 65 percent 
for Category B requirements.
Education Enhancements
    Providing quality education for all military children is a key 
recruiting and retention standard that has been historically supported 
by the subcommittee.
    The Coalition is concerned that there was no increase in the amount 
of the DOD Supplement to Impact Aid. The need for supplemental funding 
as school districts receive more military children as rebasing is 
implemented is increasing. We believe that the funding should reflect 
this greater impact.
    Servicemembers have seen the value of their MGIB dramatically 
diminish due to double digit education inflation. The Coalition 
recommends tying the MGIB education benefit level to the average cost 
of a 4-year public college.
    Furthermore, service families facing several duty location changes 
during a career often encounter problems establishing State residency 
for the purpose of obtaining in-State tuition rates for military 
children and spouses. The Coalition supports authorizing in-State 
college tuition rates for servicemembers and their families in the 
State in which the member is assigned and the member's home State of 
record. The in-State tuition should remain continuous once the military 
member or family member is established as a student.
    TMC urges the subcommittee to work with the Veterans' Affairs 
Committee to establish the benchmark level of MGIB education benefits 
at the average cost of attending a 4-year public college, and support 
continuous in-State tuition eligibility for servicemembers and their 
families in the State in which the member is assigned and the member's 
home State of record once enrolled as a student.
                national guard and reserve force issues
    Every day somewhere in the world, our National Guard and Reserves 
are answering the call to service. Although there is no end in sight to 
their participation in homeland security, overseas deployment and 
future contingency operations, Guard and Reserve members have 
volunteered for these duties and accept them as a way of life in the 
21st century.
    Since September 11, 2001, more than 615,000 National Guard and 
Reserve service men and women have been called to active Federal 
service for the war on terrorism and more than 150,000 have served 
multiple deployments. They are experiencing similar sacrifices as the 
Active-Duty Forces. However, readjusting to home life, returning to 
work and the communities and families they left behind puts added 
stress on Guard and Reserve members. Unlike active duty members, whose 
combat experience enhances their careers, many Guard Reserve members 
return to employers who are unhappy about their active duty service and 
find that their civilian careers have been inhibited by their prolonged 
absences. Further, despite the continuing efforts of the subcommittee, 
most Guard and Reserve families do not have the same level of 
counseling and support services that the active duty members have.
    All Guard and Reserve components are facing increasing challenges 
involving major equipment shortages, end strength requirements, 
wounded-warrior health care, assistance and counseling for Guard and 
Reserve members for pre-deployment and post-deployment contingency 
operations.
    Congress and the Department of Defense must provide adequate 
benefits and personnel policy changes to support our troops who go in 
harm's way.
Reserve Retirement and `Operational Reserve' Policy
    The assumption behind the 1948-vintage G-R retirement system--
retired pay eligibility at age 60--was that these servicemembers would 
be called up only infrequently for short tours of duty, allowing the 
member to pursue a full-time civilian career with a full civilian 
retirement. Under the ``Operational Reserve'' policy, reservists will 
be required to serve 1-year active duty tours every 5 or 6 years.
    Repeated, extended activations devalue full civilian careers and 
impede reservists' ability to build a full civilian retirement, 401(k), 
etc. Regardless of statutory reemployment protections, periodic long-
term absences from the civilian workplace can only limit Guard and 
Reserve members' upward mobility, employability and financial security. 
Further, strengthening the Reserve retirement system is needed as an 
incentive to retain critical mid-career officers and NCOs for a full 
Reserve career to meet long-term readiness needs.
    The Coalition is grateful for the NDAA for Fiscal Year 2008 
provision that would lower the Reserve retirement age by 3 months for 
each cumulative 90 days of active duty on contingency operation orders. 
TMC appreciates the importance of this small first step, but is very 
concerned that the new authority authorizes such credit only for 
service in 2008 and beyond--ignoring the extreme sacrifices of those 
who have borne the greatest burden of sacrifice in the war on terror 
for one, two, three or more combat tours in the past 6 years.
    TMC strongly urges further progress in revamping the Reserve 
retirement system in recognition of increased service and sacrifice of 
National Guard and Reserve component members, including at a minimum, 
extending the new authority for a 90-day=3-month reduction to all Guard 
and Reserve members who have served since September 11.
A Total Force Approach to the MGIB
    The Nation's Active-Duty, National Guard and Reserve Forces are 
operationally integrated under the Total Force policy. But educational 
benefits under the MGIB do not reflect the policy nor match benefits to 
service commitment.
    TMC is grateful that the NDAA for Fiscal Year 2008 addressed a 
major inequity for operational reservists by authorizing 10 years of 
post-service use for benefits earned under chapter 1607, 10 U.S.C.
    But this change will require the DOD, not the VA to pay the costs 
of readjustments for reservists. At a hearing on January 17, 2008, a 
senior DOD official acknowledged that the DOD no longer should control 
chapter 1607.
    In addition, basic Reserve MGIB benefits for initial service entry 
have lost proportional parity with active duty rates since September 
11. These relative benefits have spiraled down from a historic ratio of 
47-50 percent of active duty MGIB levels to less than 29 percent--at a 
time when Guard and Reserve recruitment continues to be very 
challenging.
    TMC urges Congress to integrate Guard and Reserve and active duty 
MGIB laws into title 38. In addition, TMC recommends restoring basic 
Reserve MGIB rates to approximately 50 percent of active duty rates and 
authorizing upfront reimbursement of tuition or training coursework for 
Guard and Reserve members.
Family Support Programs and Benefits
    The Coalition supports providing adequate funding for a core set of 
family support programs and benefits that meet the unique needs of 
Guard and Reserve families with uniform access for all servicemembers 
and families. These programs would promote better communication with 
servicemembers, specialized support for geographically separated Guard 
and Reserve families and training and back up for family readiness 
volunteers. This access would include:
         Web-based programs and employee assistance programs 
        such as Military OneSource and Guardfamily.org.
         Enforcement of command responsibility for ensuring 
        that programs are in place to meet the special needs of 
        families of individual augmentees or the geographically 
        dispersed.
         Expanded programs between military and community 
        religious leaders to support servicemembers and families during 
        all phases of deployments.
         Availability of robust preventive counseling services 
        for servicemembers and families and training so they know when 
        to seek professional help related to their circumstances.
         Enhanced education for Guard and Reserve family 
        members about their rights and benefits.
         Innovative and effective ways to meet the Guard and 
        Reserve community's needs for occasional child care, 
        particularly for preventive respite care, volunteering, and 
        family readiness group meetings and drill time.
         A joint family readiness program to facilitate 
        understanding and sharing of information between all family 
        members, no matter what the service.

    The Coalition recognizes the subcommittee's longstanding interest 
and efforts on this topic, including several provisions in the NDAA for 
Fiscal Year 2008. The Coalition will monitor the results of the surveys 
and increased oversight called for in the provisions and looks forward 
to working closely with the Family Readiness Council.
    TMC urges Congress to continue and expand its emphasis on providing 
consistent funding and increased outreach to connect Guard and Reserve 
families with relevant support programs.
Tangible Support for Employers
    Employers of Guard and Reserve servicemembers shoulder an extra 
burden in support of the national defense. The new ``Operational 
Reserve'' policy places even greater strain on employers. For their 
sacrifice, they get plaques to hang on the wall.
    For Guard and Reserve members, employer `pushback' is listed as one 
of the top reasons for reservists to discontinue Guard and Reserve 
service. If we are to sustain a viable Guard and Reserve Force for the 
long-term, the Nation must do more to tangibly support employers of the 
Guard and Reserve and address their substantive concerns, including 
initiatives such as:

         Tax credits for employers who make up any pay 
        differential for activated employees.
         Tax credits to help small business owners hire 
        temporary workers to fill in for activated employees.
         Tax credits for small manufacturers to hire temporary 
        workers.

    The Coalition urges Congress to support needed tax relief for 
employers of Selected Reserve personnel and reinforce the Employer 
Support for Guard and Reserve Program.
Seamless Transition for Guard and Reserve Members
    Over 615,000 members of the Guard and Reserve have been activated 
since September 11. Congressional hearings and media reports have 
documented the fact that at separation, many of these servicemembers do 
not receive the transition services they and their families need to 
make a successful readjustment to civilian status. Needed improvements 
include but are not limited to:

         Funding to develop tailored Transition Assistance 
        Program (TAP) services in the hometown area following release 
        from active duty.
         Expansion of VA outreach to provide ``benefits 
        delivery at discharge'' services in the hometown setting.
         Authority for mobilized Guard and Reserve members to 
        file ``Flexible Spending Account'' claims for a prior reporting 
        year after return from active duty.
         Authority for employers and employees to contribute to 
        401k and 403b accounts during mobilization.
         Enactment of academic protections for mobilized Guard 
        and Reserve students including: academic standing and refund 
        guarantees; and, exemption of Federal student loan payments 
        during activation.
         Automatic waivers on scheduled licensing/
        certification/promotion exams scheduled during a mobilization.
         Authority for reemployment rights for Guard and 
        Reserve spouses who must suspend employment to care for 
        children during mobilization.

    The Coalition appreciates the work of this subcommittee in seeking 
to address some of these needs in the NDAA for Fiscal Year 2008, but 
more remains to be done.
    The Coalition urges the subcommittee to continue and expand its 
efforts to ensure Guard and Reserve members and their families receive 
needed transition services to make a successful readjustment to 
civilian status.
                           retirement issues
    TMC is extremely grateful to the subcommittee for its support of 
maintaining a strong military retirement system to help offset the 
extraordinary demands and sacrifices inherent in a career of uniformed 
service.
Concurrent Receipt
    In the NDAA for Fiscal Year 2004, Congress acknowledged the 
inequity of the disability offset to earned retired pay and established 
a process to end or phase out the offset for all members with at least 
20 years of service and at least a 50 percent disability rating. That 
legislation also established the Veterans' Disability Benefits 
Commission and tasked the Commission to review the disability system 
and recommend any further adjustments to the disability offset law.
    Now the Commission has provided its report to Congress, in which it 
recommended an end to the VA compensation offset for all disabled 
military retirees, regardless of years of service, percentage of 
disability, or source of the service-connected disability (combat vs. 
non-combat).
    In the interim, congressional thinking has evolved along similar 
lines. The Coalition is thankful for the subcommittee's efforts in the 
NDAA for Fiscal Year 2008 to extend Combat-Related Special Compensation 
to disabled retirees who had their careers forced into retirement 
before attaining 20 years of service, as well as ending the offset for 
retirees rated unemployable by the VA.
    Despite this important progress, major inequities still remain that 
require the subcommittee's immediate attention. Many retirees are still 
excluded from the same principle that eliminates the disability offset 
for those with 50 percent or higher disabilities. The Coalition agrees 
strongly with the Veterans' Disability Benefits Commission that 
principle is the same for all disabled retirees, including those not 
covered by concurrent receipt relief enacted so far.
    The one key question is, ``Did the retired member fully earn his or 
her service-based retired pay, or not, independent of any disability 
caused by military service in the process?'' The Coalition and the 
Disability Commission agree that the answer has to be ``Yes.'' Any 
disability compensation award should be over and above service-earned 
retired pay.
    If a service-caused disability is severe enough to bar the member's 
continuation on active duty, and the member is forced into medical 
retirement short of 20 years of service, the member should be 
``vested'' in service-earned retired pay at 2.5 percent times pay times 
years of service.
    To the extent that a member's military disability retired pay 
exceeds the amount of retired pay earned purely by service, that 
additional amount is for disability and therefore is appropriately 
subject to offset by VA disability compensation.
    The principle behind eliminating the disability offset for Chapter 
61 retirees with less than 20 years of service with combat-related 
disabilities is no less applicable to those who had their careers cut 
short by other service-caused conditions. It is simply inappropriate to 
make such members fund their own VA disability compensation from their 
service-earned military retired pay, and it is unconscionable that 
current law forces thousands of severely injured members with as much 
as 19 years and 11 months of service to forfeit most or all of their 
earned retired pay.
    The Coalition urges the subcommittee to act expeditiously on the 
recommendations of the Veterans' Disability Benefits Commission and 
implement a plan to eliminate the deduction of VA disability 
compensation from military retired pay for all disabled military 
retirees.
Uniformed Services Retiree Entitlements and Benefits
    The Coalition awaits the results of the 10th Quadrennial Review of 
Military Compensation, which was tasked with reviewing the 
recommendations of the Defense Advisory Committee on Military 
Compensation (DACMC). The Coalition does not support the DACMC (nor the 
Commission on the National Guard and Reserve) recommendations to modify 
the military retirement system to more closely reflect civilian 
practices, including vesting for members who leave service short of a 
career and delaying retired pay eligibility for those who serve a 
career.
    Many such proposals have been offered in the past, and have been 
discarded for good reasons. The only initiative to substantially 
curtail/delay military retired pay that was enacted--the 1986 REDUX 
plan--had to be repealed 13 years later after it began inhibiting 
retention.
    The Coalition believes such initiatives to ``civilianize'' the 
military retirement system in ways that reduce the value of the current 
retirement system and undermine long-term retention are based on a 
seriously flawed premise. The reality is that unique military service 
conditions demand a unique retirement system. Surveys consistently show 
that the military retirement system is the single most powerful 
incentive to serve a full career under conditions few civilians would 
be willing to endure for even 1 year, much less 20 or 30. A civilian-
style retirement plan would be appropriate for the military only if 
military service conditions were similar to civilian working 
conditions--which they most decidedly are not. The Coalition believes 
strongly that, if such a system as recommended by the DACMC existed for 
today's force under today's service conditions, the military Services 
would already be mired in a much deeper and more traumatic retention 
crisis than they have experience for many of the past several years.
    TMC urges the subcommittee to resist initiatives to ``civilianize'' 
the military retirement system in ways that reduce the compensation 
value of the current retirement system and undermine long-term 
retention.
Permanent ID Card Eligibility
    The advent of TFL, expiration of TFL-eligible spouses' and 
survivors' military identification cards--and the threatened denial of 
health care claims--have caused many frail and elderly members and 
their caregivers significant administrative and financial distress.
    Previously, those who lived miles from a military installation or 
who resided in nursing homes and assisted living facilities simply did 
not bother to renew their identification (ID) cards upon the 4 year 
expiration date. Before enactment of TFL, they had little to lose by 
not doing so. But now, ID card expiration cuts off their new and all-
important health care coverage.
    Congress has agreed with the Coalition's concerns that a 4-year 
expiration date is reasonable for younger family members and survivors 
who have a higher incidence of divorce and remarriage, but it imposes 
significant hardship and inequity upon elderly dependents and 
survivors.
    In the NDAA for Fiscal Year 2005, Congress authorized permanent ID 
cards for spouses and survivors who have attained age 75 (vs. the 
Coalition-recommended age 65), recognizing that many elderly spouses 
and survivors with limited mobility or who live in residential care 
facilities find it difficult or impossible to renew their military ID 
cards. Subsequently, Congress expanded that eligibility to permanently 
disabled dependents of retired members, regardless of age.
    Coalition associations continue to hear from a number of 
beneficiaries below the age of 75 who are disabled, living in 
residential facilities, are unable to drive, or do not live within a 
reasonable distance of a military facility. The threat of loss of 
coverage is forcing many others to try to drive long distances--
sometimes in adverse weather and at some risk to themselves and 
others--to get their cards renewed.
    For administrative simplicity, the Coalition believes the age for 
the permanent ID card for spouses and survivors should coincide with 
the advent of TFL. To the extent an interim step may be necessary, the 
eligibility age could be reduced to 70.
    The Coalition urges the subcommittee to direct the Secretary of 
Defense to authorize issuance of permanent military identification 
cards to uniformed services family members and survivors who are age 65 
and older.
                            survivor issues
    The Coalition is grateful to the subcommittee for its significant 
efforts in recent years to improve the SBP. We particularly note that, 
as of April 1, thanks to this subcommittee's efforts, the minimum 
annuity for all SBP beneficiaries, regardless of age will be 55 percent 
of covered retired pay.
    We also appreciate Congress' initiative in last year's defense bill 
that establishes a special survivor indemnity allowance that is the 
first step in a longer-term effort to phase out the DIC offset to SBP 
when the member died of a service-caused condition.
SBP-DIC Offset
    The Coalition believes strongly that current law is unfair in 
reducing military SBP annuities by the amount of any survivor benefits 
payable from the VA DIC program.
    If the surviving spouse of a retiree who dies of a service-
connected cause is entitled to DIC from the Department of Veterans 
Affairs and if the retiree was also enrolled in SBP, the surviving 
spouse's SBP benefits are reduced by the amount of DIC. A pro-rata 
share of SBP premiums is refunded to the widow upon the member's death 
in a lump sum, but with no interest. This offset also affects all 
survivors of members who are killed on active duty.
    The Coalition believes SBP and DIC payments are paid for different 
reasons. SBP is purchased by the retiree and is intended to provide a 
portion of retired pay to the survivor. DIC is a special indemnity 
compensation paid to the survivor when a member's service causes his or 
her premature death. In such cases, the VA indemnity compensation 
should be added to the SBP the retiree paid for, not substituted for 
it. It should be noted as a matter of equity that surviving spouses of 
Federal civilian retirees who are disabled veterans and die of 
military-service-connected causes can receive DIC without losing any of 
their Federal civilian SBP benefits.
    The Coalition is concerned that, in authorizing the special 
survivor indemnity allowance in last year's NDAA, the conferees did not 
use the precise language proposed by this subcommittee, but adopted a 
technical language change that had the effect of limiting eligibility 
for the new allowance to survivors of members who were either retired 
or in the ``gray area'' reserve at the time of death. That is, it 
excluded survivors of members who died while serving on active duty.
    The Coalition believes strongly that the latter group of survivors 
is equally deserving of the new allowance. Some have argued that relief 
should be allowed only for those who paid a cash premium in retirement. 
The Coalition strongly disagrees, noting that a severely injured member 
who dies 1 month after his military disability retirement and who paid 
1 month of SBP premiums is little different than the case of a member 
who is more severely injured and expires more rapidly. Further, the new 
law authorizes coverage for ``gray area'' retirees who have paid no 
premiums, since their retired pay and SBP premiums don't begin until 
age 60.
    But the Coalition believes the issue goes beyond any such hair-
splitting. The reality is that, in every SBP/DIC case, active duty or 
retired, the true premium extracted by the service from both the member 
and the survivor was the ultimate one--the very life of the member--and 
that the service was what caused his or her death.
    The Coalition knows that the subcommittee is aware that the 
military community (and especially the survivors concerned) view the 
amount of the new allowance--$50 per month initially, and growing to 
$100 over the course of several years--as grossly inadequate. We 
appreciate that the subcommittee could have elected to do nothing 
rather than incur the expected negative feedback about the small 
amount. In that regard, we applaud you for having the courage to 
acknowledge the inequity and take this first step, however small, to 
begin trying to address it.
    But we also urge the subcommittee to work hard to accelerate 
increases in the amount of the allowance, to send the much-needed 
message to these survivors who have given so much to their country that 
Congress fully intends to find a way to address their loss more 
appropriately.
    The Coalition strongly urges the subcommittee to take further 
action to expand eligibility for the special survivor indemnity 
allowance to include all SBP-DIC survivors and continue progress toward 
completely repealing the SBP-DIC offset for this most-aggrieved group 
of military widows.
Final Retired Paycheck
    TMC believes the policy requiring recovery of a deceased member's 
final retired paycheck from his or her survivor should be changed to 
allow the survivor to keep the final month's retired pay.
    Current regulations require the survivor to surrender the final 
month of retired pay, either by returning the outstanding paycheck or 
having a direct withdrawal recoupment from her or his bank account.
    The Coalition believes this is an extremely insensitive policy 
imposed by the government at a most traumatic time for a deceased 
member's next of kin. Unlike his or her active duty counterpart, a 
retiree's survivor receives no death gratuity. Many older retirees do 
not have adequate insurance to provide even a moderate financial 
cushion for surviving spouses. Very often, the surviving spouse already 
has had to spend the final month's retired pay before being notified by 
the military finance center that it must be returned. Then, to receive 
the partial month's pay of the deceased retiree up to the date of 
death, the spouse must file a claim for settlement--an arduous and 
frustrating task, at best--and wait for the military's finance center 
to disburse the payment. Far too often, this strains the surviving 
spouse's ability to meet the immediate financial obligations 
commensurate with the death of the average family's ``bread winner.''
    TMC urges the subcommittee to end the insensitive practice of 
recouping the final month's retired pay from the survivor of a deceased 
retired member.
                           health care issues
    The Coalition very much appreciates the subcommittee's strong and 
continuing interest in keeping health care commitments to military 
beneficiaries. We are particularly grateful for your support for the 
last 2 years in refusing to allow the Department of Defense to 
implement disproportional beneficiary health fee increases.
    The Coalition is more than willing to engage substantively in 
TRICARE fee and copay discussions with DOD. In past years, the 
Coalition and the Defense Department have had regular and substantive 
dialogues that proved very productive in facilitating reasonably smooth 
implementation of such major program changes as TRICARE Prime and TFL. 
The objective during those good-faith dialogues has been finding a 
balance between the needs of the Department and the needs of 
beneficiaries.
    It is a great source of regret to the Coalition that there has been 
substantively less dialogue on the more recent fee increase 
initiatives. From its actions, it is hard to draw any other conclusion 
than the Department's sole concern is to extract a specified amount of 
budget savings from beneficiaries. The savings are intended to come 
from increased revenues from higher fees and less utilization by 
military retirees. The Coalition and Congressional Budget Office 
believe that DOD's approach will not achieve the projected savings.
    The unique package of military retirement benefits--of which a key 
component is a top-of-the-line health benefit--is the primary offset 
afforded uniformed servicemembers for enduring a career of unique and 
extraordinary sacrifices that few Americans are willing to accept for 1 
year, let alone 20 or 30. It is an unusual--and essential--compensation 
package that a grateful Nation provides for the relatively few who 
agree to subordinate their personal and family lives to protecting our 
national interests for so many years.
Full Funding for the Defense Health Program
    The Coalition very much appreciates the subcommittee's support for 
maintaining--and expanding where needed--the healthcare benefit for all 
military beneficiaries, consistent with the demands imposed upon them.
    The Defense Department, Congress, and TMC all have reason to be 
concerned about the rising cost of military health care. But it is 
important to recognize that the bulk of the problem is a national one, 
not a military-specific one. To a large extent, military health cost 
growth is a direct reflection of health care trends in the private 
sector.
    It is true that many private sector employers are choosing to shift 
an ever-greater share of health costs to their employees and retirees. 
In the bottom-line-oriented corporate world, many firms see their 
employees as another form of capital, from which maximum utility is to 
be extracted at minimum cost, and those who quit are replaceable by 
similarly experienced new hires. But that can't be the culture in the 
military's closed personnel, all volunteer model, whose long-term 
effectiveness is utterly dependent on establishing a sense of mutual, 
long-term commitment between the servicemember and his/her country.
    Some assert active duty personnel costs have increased 60 percent 
since 2001, of which a significant element is for compensation and 
health costs. But much of that cost increase is due to conscious 
decisions by Congress to correct previous shortfalls--including easing 
the double-digit military ``pay gap'' of that era and correcting the 
unconscionable situation before 2001 when military beneficiaries were 
summarily dropped from TRICARE coverage at age 65. Additionally, much 
of the increase is due to the cost of war and increased OPTEMPO.
    Meanwhile, the cost of basic equipment soldiers carry into battle 
(helmets, rifles, body armor) has increased 257 percent (more than 
tripled) from $7,000 to $25,000 since 1999. The cost of a Humvee has 
increased seven-fold (600 percent) since 2001 (from $32,000 to 
$225,000).
    While we have an obligation to do our best to intelligently 
allocate these funds, the bottom line is that maintaining the most 
powerful military force in the world is expensive--and doubly so in 
wartime.
    The Coalition assumes that DOD will again propose a reduction to 
the defense health budget based on the assumption that Congress will 
approve beneficiary fee increases for fiscal year 2009 at least as 
large as those as outlined last year. The Coalition objects strongly to 
the Administration's arbitrary reduction of the TRICARE budget 
submission. DOD has typically overestimated its healthcare costs as 
evidenced by a recent GAO report on the TRS premiums. The Coalition 
deplores this inappropriate budget ``brinksmanship'', which risks 
leaving TRICARE significantly underfunded, especially in view of 
statements made for the last 2 years by leaders of both Armed Services 
Committees that the Department's proposed fee increases were excessive.
    The Coalition understands only too well the very significant 
challenge such a large and arbitrary budget reduction would pose for 
this subcommittee if allowed to stand. If the reduction is not made up, 
the Department almost certainly will experience a substantial budget 
shortfall before the end of the year. This would then generate 
supplemental funding needs, further program cutbacks, and likely 
efforts to shift even more costs to beneficiaries in future years--all 
to the detriment of retention and readiness.
    The Coalition particularly objects to DOD's past imposition of 
``efficiency wedges'' in the health care budget, which have nothing to 
do with efficiency and everything to do with imposing arbitrary budget 
cuts that impede delivery of needed care. We are grateful for the 
subcommittee's strong action on this topic, and trust in your vigilance 
to ensure that such initiatives will not be part of this year's budget 
process.
    TMC strongly urges the subcommittee to take all possible steps to 
restore the reduction in TRICARE-related budget authority and ensure 
continued full funding for Defense Health Program needs.
Protecting Beneficiaries Against Cost-Shifting
    The Task Force on the Future of Military Health Care had a great 
opportunity for objective evaluation of the larger health care issues. 
Unfortunately, the Coalition believes the Task Force missed that mark 
by a substantial margin.
    The bulk of its report cites statistics provided by the Defense 
Department and focuses discussions of cost-sharing almost solely on 
government costs, while devoting hardly a sentence to what the 
Coalition views as an equally fundamental issue--the level of health 
coverage that members earn by their arduous career service, the value 
of that service as an in-kind, upfront premium prepayment, and the role 
of lifetime health coverage as an important offset to the unique 
conditions of military service. The Task Force focused on what was 
``fair to the taxpayer'' and felt the benefit should be ``generous but 
not free.''
    The Task Force gave short shrift to what the Coalition sees as a 
fundamental point--that generations of military people have been told 
by their leaders that their service earned them their health care 
benefit, and the Defense Department and Congress reinforced that 
perception by sustaining flat, modest TRICARE fees over long periods of 
time. But now the Department and the Task Force assert that the 
military retirement health benefit is no longer earned by service. They 
now say beneficiary costs should be ``restored'' to some fixed share of 
Defense Department costs, even though no such relationship was ever 
stated or intended in the past. The Task Force report acknowledges that 
DOD cost increases over the intervening years have been inflated by 
military/wartime requirements, inefficiency, lack of effective 
oversight, structural dysfunction, or conscious political decisions by 
the administration and Congress. Yet they assert that the government 
should foist a fixed share of those costs on beneficiaries anyway.
    The Coalition believes the Task Force's fee recommendations (see 
charts below)--which actually propose larger fee increases than DOD 
had--would be highly inequitable to beneficiaries and would pose a 
significant potential deterrent to long-term career retention.

  CURRENT VS. PROPOSED TRICARE FEES   (Recommended by DOD Task Force on
                     Future of Military Health Care)
                  Retiree Under Age 65, Family of Three
------------------------------------------------------------------------
              TRICARE Prime1                 Current        Proposed
------------------------------------------------------------------------
Enrollment Fee...........................        $460     $1,090-$2,0903
Doctor Visit Copays......................         $60               $125
Rx Cost Shares2..........................        $288               $960
Yearly Cost..............................        $808      $2,175-$3,175
------------------------------------------------------------------------


------------------------------------------------------------------------
            TRICARE Standard 1               Current        Proposed
------------------------------------------------------------------------
Enrollment Fee...........................          $0               $120
Deductible...............................        $300       $600-$1,1503
Rx Cost Shares2..........................        $288               $960
Yearly Cost..............................        $588      $1,680-$2,230
------------------------------------------------------------------------
\1\ Fully phased-in proposal; assumes five doctor visits per year.
\2\ Assumes two generic and two brand name prescriptions per month in
  retail pharmacy
\3\ Includes annual medical inflation adjustment recommended by the Task
  Force.

                     Retiree Over Age 65 and Spouse
------------------------------------------------------------------------
           TRICARE for Life \2\              Current        Proposed
------------------------------------------------------------------------
Medicare Part B..........................      $2,314             $2,314
Enrollment Fee...........................          $0               $240
Rx Cost Shares \2\.......................        $396             $1,260
Yearly Cost..............................      $2,710             $3,814
------------------------------------------------------------------------
\1\ Assumes lowest tier Medicare Part B premium for 2008.
\2\ Two generic and three brand name prescriptions per month purchased
  at a network retail pharmacy

                    Currently Serving Family of Four
------------------------------------------------------------------------
           TRICARE Standard \1\              Current        Proposed
------------------------------------------------------------------------
Enrollment Fee...........................          $0          $120 (??)
Deductible...............................        $300    $600-$1,150 \3\
Rx Cost Shares \2\.......................        $180               $660
Yearly Cost..............................        $480      $1,260-$1,930
------------------------------------------------------------------------
\1\ Fully phased in proposals. Spouse and two children use Standard.
(??) Task Force report unclear whether enrollment fee would apply to
  currently serving families who elect TRICARE Standard
\2\ Assumes two generic and one brand name prescription per month
  purchased at retail pharmacy.
\3\ Includes annual military medical inflation adjustment as recommended
  by the Task Force.

    The Task Force cited GAO and other government reports to the effect 
that DOD financial statements and cost accounting systems are not 
auditable because of system problems and inadequate business processes 
and internal controls. Despite those statements, the Task Force 
accepted DOD data as the basis for assessing and proposing beneficiary 
cost-sharing percentages. The Coalition has requested information 
concerning the 1996 calculation and has never received an adequate 
accounting as to what was included in the calculation.
    The Task Force refers to its fee increases as ``modest'' and 
suggests the changes would be more generous than those offered by 75 
percent to 80 percent of all organizations in the private sector that 
offer health care benefits. The Coalition finds it telling that the 
Task Force would be content that 20 percent to 25 percent of U.S. firms 
offer their employees--most of whom never served 1 day for their 
country--a better benefit than the Defense Department provides in 
return for two or three decades of service and sacrifice in uniform.
    The Coalition is very grateful that Congress has expressed a much 
greater recognition of beneficiary perspectives, and has sought a more 
comprehensive examination of military health care issues. In that 
regard, the Coalition testimony will outline several specific concerns 
and address some principles that the Coalition believes need to be 
addressed in statute, just as there are statutory standards and 
guidelines for other major compensation elements--pay raises, housing 
and subsistence allowances, retired pay cost-of-living adjustments 
(COLAs), et cetera.
    People vs. Weapons
    Defense officials have provided briefs to Congress indicating that 
the rising military health care costs are ``impinging on other service 
programs.'' Other reports indicate that DOD leadership is seeking more 
funding for weapons programs by reducing the amount it spends on 
military health care and other personnel needs.
    TMC continues to assert that such budget-driven trade-offs are 
misguided and inappropriate. Cutting people programs to fund weapons 
ignores the much larger funding problem, and only makes it worse.
    The Coalition believes strongly that the proposed defense budget is 
too small to meet national defense needs. Today's defense budget (in 
wartime) is only about 4 percent of GDP, well short of the average for 
the peacetime years since World War II.
    The Coalition believes strongly that America can afford to and must 
pay for both weapons and military health care.
    Military vs. Civilian Cost-Sharing Measurement
    Defense leaders assert that substantial military fee increases are 
needed to bring military beneficiary costs more in line with civilian 
practices. But merely contrasting military vs. civilian cash cost-
shares is a grossly misleading, ``apple-to-orange'' comparison.
    For all practical purposes, those who wear the uniform of their 
country are enrolled in a 20- to 30-year prepayment plan that they must 
complete to earn lifetime health coverage. In this regard, military 
retirees and their families paid enormous ``upfront'' premiums for that 
coverage through their decades of service and sacrifice. Once that 
prepayment is already rendered, the government cannot simply pretend it 
was never paid, and focus only on post-service cash payments.
    The Department of Defense and the Nation--as good-faith employers 
of the trusting members from whom they demand such extraordinary 
commitment and sacrifice--have a reciprocal health care obligation to 
retired servicemembers and their families and survivors that far 
exceeds any civilian employer's to its workers and retirees.
    The Task Force on the Future of Military Health Care acknowledges 
that its recommendations for beneficiary fee increases, if enacted, 
would leave military beneficiaries with a lesser benefit than 20-25 
percent of America's corporate employees. The pharmacy copayment 
schedule they propose for military beneficiaries is almost the same--
and not quite as good in some cases--as the better civilian programs 
they reviewed.
    The Coalition believes that military beneficiaries from whom 
America has demanded decades of extraordinary service and sacrifice 
have earned coverage that is the best America has to offer--not just 
coverage that is at the 75th percentile of corporate plans.
    Large Retiree Fee Increases Can Only Hurt Retention
    The reciprocal obligation of the government to maintain an 
extraordinary benefit package to offset the extraordinary sacrifices of 
career military members is a practical as well as moral obligation. 
Mid-career military losses can't be replaced like civilians can.
    Eroding benefits for career service can only undermine long-term 
retention/readiness. Today's troops are very conscious of Congress' 
actions toward those who preceded them in service. One reason Congress 
enacted TFL is that the Joint Chiefs of Staff at that time said that 
inadequate retiree health care was affecting attitudes among active 
duty troops.
    The current Joint Chiefs have endorsed increasing TRICARE fees only 
because their political leaders have convinced them that this is the 
only way they can secure funding for weapons and other needs. TMC 
believes it is inappropriate to put the Joint Chiefs in the untenable 
position of being denied sufficient funding for current readiness needs 
if they don't agree to beneficiary benefit cuts.
    Those who think retiree health care isn't a retention issue should 
recall a quote by then Chief of Naval Operations and now Chairman of 
Joint Chiefs of Staff, Admiral Mike Mullen, in a 2006 Navy Times:

          ``More and more sailors are coming in married. They talk to 
        me more about medical benefits than I ever thought to when I 
        was in my mid-20s. I believe we have the gold standard . . . 
        for medical care right now, and that's a recruiting issue, a 
        recruiting strength, and it's a retention strength.''

    That's more than backed up by two independent Coalition surveys. A 
2006 Military Officers Association of America survey drew 40,000 
responses, including more than 6,500 from active duty members. Over 92 
percent in all categories of respondents opposed the DOD-proposed plan. 
There was virtually no difference between the responses of active duty 
members (96 percent opposed) and retirees under 65 (97 percent 
opposed). A Fleet Reserve Association survey showed similar results.
    Reducing military retirement benefits would be particularly ill-
advised when recruiting is already a problem and an overstressed force 
is at increasing retention risk.
    Proposed Increases Far Exceed Inflation Increases
    The increases proposed by the Administration and the Task Force are 
grossly out of line with TRICARE benefit levels originally enacted by 
Congress, even allowing for interim inflation since current fees were 
established.
    If the $460 family Prime enrollment fee had been increased by the 
same Consumer Price Index (CPI) percentage increase as retired pay, it 
would be $642 for fiscal year 2009--far less than either the $1,512 
envisioned in the fiscal year 2008 budget request or the $900-$1,700 
cited by the Task Force as its ultimate target fees.
    If the $300 deductible for TRICARE Standard were CPI-adjusted for 
the same period, it would be $419 by 2009--far short of the $1,210 in 
annual deductible and new fees proposed by DOD in 2007, or the $610-
$1,080 Task Force target.
    Further, both the administration and the Task Force propose 
adjusting beneficiary fees by medical cost growth, which has been two 
to three times the inflation-based increase in members' retired pay. 
The Task Force estimates the annual increase would be 7.5 percent.
    Both methodologies would ensure that medical costs would consume an 
ever-larger share of beneficiaries' income with each passing year. The 
Coalition realizes that this has been happening to many private sector 
employees, but believes strongly that the government has a greater 
obligation to protect the interests of its military beneficiaries than 
private corporations feel for their employees.
    Pharmacy copay increases proposed by the Task Force are even more 
disproportional. They would increase retail copays from $3 (generic), 
$9 (brand), and $22 (nonformulary) to $15, $25, and $45, respectively. 
Those represent increases of 400 percent, 178 percent, and 100 percent, 
respectively. Despite citing experience in civilian firms that 
beneficiary use of preferred drugs increased when their copays were 
reduced or eliminated, the Task Force actually proposes the highest 
percentage copay increases for the medications TRICARE most wants 
beneficiaries to use. That huge increase for retail generics flies in 
the face of recent commercial initiatives such as Wal-Mart's offering 
of many generics to the general public for a $4 copay. If the purpose 
is to push military beneficiaries to use Wal-Mart instead of TRICARE, 
it might indeed save the government some money on those medications, 
but it won't make military beneficiaries feel very good about their 
military pharmacy benefit. It shouldn't make Congress feel good about 
it, either.
    The Coalition particularly questions the need for pharmacy copay 
increases now that Congress has approved Federal pricing for the 
TRICARE retail pharmacy system.
    Retirees Under 65 ``Already Gave'' 10 percent of Retired Pay
    The large proposed health fee increases would impose a financial 
``double whammy'' on retirees and survivors under age 65.
    Any assertion that military retirees have been getting some kind of 
``free ride'' because TRICARE fees have not been increased in recent 
years conveniently overlooks past government actions that have 
inflicted far larger financial penalties on every retiree and survivor 
under 65--penalties that will grow every year for the rest of their 
lives.
    That's because decades of past budget caps already depressed 
lifetime retired pay by an average of 10 percent for military members 
who retired between 1984 and 2006. For most of the 1980s and 1990s, 
military pay raises were capped below private sector pay growth, 
accumulating a 13.5 percent ``pay gap'' by 1998-99--a gap which has 
been moderated since then but persists at 3.4 percent today.
    Every member who has retired since 1984--exactly the same under-65 
retiree population targeted by the proposed TRICARE fee increases--has 
had his or her retired pay depressed by a percentage equal to the pay 
gap at the time of retirement. That depressed pay will persist for the 
rest of their lives, with a proportional depression of SBP annuities 
for their survivors.
    As a practical example, a member who retired in 1993--when the pay 
gap was 11.5 percent--continues to suffer an 11.5 percent retired pay 
loss today. For an E-7 who retired in 1993 with 20 years of service, 
that means a loss of $2,000 this year and every year because the 
government chose to cap his military pay below the average American's. 
An O-5 with 20 years of service loses more than $4,300 a year.
    The government has spent almost a decade making incremental 
reductions in the pay gap for currently serving members, but it still 
hasn't made up the whole gap--and it certainly hasn't offered to make 
up those huge losses for members already retired. Under such 
circumstances, it strikes the Coalition as ironic that defense 
officials now propose, in effect, billing those same retirees for 
``back TRICARE fee increases''.
    Fee-Tiering Scheme Is Inappropriate
    Both the administration and the Task Force have proposed multi-
tiered schemes for proposed beneficiary fee increases, with the 
Administration's based on retired pay grade and the Task Force's based 
on retired pay amount. The intent of the plan is to ease opposition to 
the fee increases by introducing a means-testing initiative that 
penalizes some groups less than others.
    The Coalition rejects such efforts to mask a fundamental inequity 
by trying to convince some groups that the inequity being imposed on 
them is somehow more acceptable because even greater penalties would be 
imposed on other groups.
    Any such argument is fundamentally deceptive, since the Task Force 
plan envisions adjusting fee levels by medical inflation (7-8 percent a 
year), while retired pay thresholds would be adjusted by retiree COLAs 
(2 percent-3 percent a year). That would guarantee ``tier creep''--
shifting ever greater numbers of beneficiaries into the top tier every 
year.
    Surveys of public and private sector health coverage indicate that 
less than 1 percent of plans differentiate by salary. No other Federal 
plan does so. The Secretary of Defense has the same coverage as any GS 
employee, and the Majority Leader of the Senate has the same coverage 
as the Senate's lowest-paid staff member.
    The Coalition believes strongly that all military retirees earned 
equal health benefits by virtue of their career service, and that the 
lowest fee tier proposed by either the administration or the Task Force 
would be an excessive increase for any military beneficiary (see chart 
at appendix A).
    TRICARE for Life Trust Fund Accrual Deposit Is Dubious Excuse
    According to DOD, most of the growth in defense health spending (48 
percent) was attributable to the establishment of the accrual 
accounting methodology for the TFL trust fund (which doesn't affect 
current outlays). The next largest contributor is medical care cost 
inflation (24 percent). Increase in usage by retirees and their 
dependents under age 65 accounted for 7 percent of the increase. Other 
benefit enhancements weigh in at 5 percent while global war on terror 
and other factors account for the remaining 15 percent. However, the 
affect of shifting beneficiaries from military treatment facilities to 
the civilian network was not discussed.
    When the Defense Department began arguing 3 years ago that the 
trust fund deposit was impinging on other defense programs, the 
Coalition and the subcommittee agreed that that should not be allowed 
to happen. When the Administration refused to increase the budget top 
line to accommodate the statutorily mandated trust fund deposit, 
Congress changed the law to specify that the entire responsibility for 
TFL trust fund deposits should be transferred to the Treasury. 
Subsequently, Administration budget officials chose to find a way to 
continue charging that deposit against the defense budget anyway.
    In the Coalition's view, this represents a conscious and 
inappropriate Administration decision to cap defense spending below the 
level needed to meet national security needs. If the administration 
chooses to claim to Congress that its defense budget can't meet those 
other needs, then Congress (which directed implementation of TFL and 
the trust fund deposit) has an obligation to increase the budget as 
necessary to meet them.
    TRICARE For Life Enrollment Fee is Inappropriate
    The Coalition disagrees strongly with the Task Force's 
recommendation to impose a new $120 annual enrollment fee for each TFL 
beneficiary. The Task Force report acknowledged that this would be 
little more than a ``nuisance fee'' and would be contrary to Congress' 
intent in authorizing TFL.
    The Task Force report cites data highlighting that costs are higher 
for beneficiaries age 65 and older, as if neither the administration 
nor Congress envisioned in 2001 that older beneficiaries might need 
more medications and more care.
    Congress authorized TFL in 2001 in recognition that, prior to that 
date, most older beneficiaries had to pay for all of their care out of 
their own pockets after age 65, since most had been summarily ejected 
from any military health or pharmacy coverage. Congress also required 
that, to be eligible for TFL, beneficiaries must enroll in Medicare 
Part B, which already entails a substantial and rapidly growing annual 
premium. Therefore, TRICARE only pays the portion of costs not covered 
by Medicare.
    When the current administration came to office in 2001, military 
and civilian Defense leaders praised TFL, as enacted, as an appropriate 
benefit that retirees had earned and deserved for their career service. 
The Coalition asks, ``What has changed in the 6 intervening years of 
war that has somehow made that service less meritorious?''
    Alternative Options to Make TRICARE More Cost-Efficient
    The Coalition continues to believe strongly that the Defense 
Department has not sufficiently investigated other options to make 
TRICARE more cost-efficient without shifting costs to beneficiaries. 
The Coalition has offered a long list of alternative cost-saving 
possibilities, including:

         Promote retaining other health insurance by making 
        TRICARE a true second-payer to other insurance (far cheaper to 
        pay another insurance's copay than have the beneficiary migrate 
        to TRICARE).
         Reduce or eliminate all mail-order co-payments to 
        boost use of this lowest-cost venue.
         Change electronic claim system to kick back errors in 
        real time to help providers submit ``clean'' claims, reduce 
        delays/multiple submissions.
         Size and staff military treatment facilities (least 
        costly care option) in order to reduce reliance on non-MTF 
        civilian providers.
         Promote programs to offer special care management 
        services and zero copays or deductibles to incentivize 
        beneficiaries to take medications and seek preventive care for 
        chronic or unusually expensive conditions.
         Promote improved health by offering preventive and 
        immunization services (e.g., shingles vaccine, flu shots) with 
        no copay or deductible.
         Authorize TRICARE coverage for smoking cessation 
        products and services (it's the height of irony that TRICARE 
        currently doesn't cover these programs that have been long and 
        widely acknowledged as highly effective in reducing long-term 
        health costs).
         Reduce long-term TRS costs by allowing members the 
        option of a government subsidy (at a cost capped below TRS 
        cost) of civilian employer premiums during periods of 
        mobilization.
         Promote use of mail-order pharmacy system via mailings 
        to users of maintenance medications, highlighting the 
        convenience and individual expected cost savings.
         Encourage retirees to use lowest-cost-venue military 
        pharmacies at no charge, rather than discouraging such use by 
        limiting formularies, curtailing courier initiatives, etc.

    The Coalition is pleased that the Defense Department has begun to 
implement at least some of our past suggestions, and stands ready to 
partner with DOD to investigate and jointly pursue these or other 
options that offer potential for reducing costs.
    TRICARE Still Has Significant Shortcomings
    While DOD chooses to focus its attention on the cost of the TRICARE 
program to the government, the Coalition believes there is insufficient 
acknowledgement that thousands of providers and beneficiaries continue 
to experience significant problems with TRICARE. Beneficiaries at many 
locations, particularly those lacking large military populations, 
report difficulty in finding providers willing to participate in the 
program. Doctors complain about the program's low payments and 
administrative hassles. Withdrawal of providers from TRICARE networks 
at several locations has generated national publicity.
    Of particular note is a 2007 GAO survey of Guard and Reserve 
personnel, also cited by the DOD Task Force on the Future of Military 
Health Care, in which almost one-third of respondents reported having 
difficulty obtaining assistance from TRICARE, and more than one-fourth 
reported difficulty in finding a TRICARE-participating provider.
    That problem is getting worse rather than better. The Task Force 
report stated that all military beneficiary categories report more 
difficulty than civilians in accessing care, and that military 
beneficiaries' reported satisfaction with access to care declined from 
2004 to 2006. The problem is exacerbated in areas like Alaska where a 
combination of physician shortages and an unwillingness to take TRICARE 
make it very difficult to find a physician.
    The Coalition urges the subcommittee to require DOD to pursue 
greater efforts to improve TRICARE and find more effective and 
appropriate ways to make TRICARE more cost-efficient without seeking to 
``tax'' beneficiaries and make unrealistic budget assumptions.
    TMC Health Care Cost Principles
    TMC believes strongly that the current fee controversy is caused in 
part by the lack of any statutory record of the purpose of military 
health benefits and the degree to which cost adjustments are or should 
be allowable. Under current law, the Secretary of Defense has broad 
latitude to make administrative adjustments to fees for TRICARE Prime 
and the pharmacy systems. As a practical matter, the Armed Services 
Committees can threaten to change the law if they disapprove of the 
Secretary's initiatives. But absent such intervention, the Secretary 
can choose not to increase fees for years at a time or can choose to 
quadruple fees in 1 year.
    Until recently, this was not a particular matter of concern, as no 
Secretary had previously proposed dramatic fee increases. Given recent 
years' precedents, the Coalition believes strongly that the 
subcommittee needs to establish more specific and permanent principles, 
guidelines, and prohibitions to protect against dramatic administrative 
fluctuations in this most vital element of servicemembers' career 
compensation incentive package.
    Other major elements of the military compensation package have much 
more specific standards in permanent law. There is a formula for the 
initial amount of retired pay and for subsequent annual adjustments. 
Basic pay raises are tied to the ECI, and housing and food allowances 
are tied to specific standards as well.
    A 2006 survey of military retirees indicates that 65 percent of 
retirees under 65 have access to private health insurance. What the 
Task Force report does not measure is the percent of retirees that do 
not embark on a second career and thus depend solely on their 
retirement income. If fees are allowed to be tiered, up to one third of 
retirees could see a large portion of their retirement eaten up by 
healthcare costs.
    The Coalition most strongly recommends Representative Chet Edwards' 
and Representative Walter Jones' H.R. 579 and Senator Frank 
Lautenberg's and Senator Chuck Hagel's S. 604 as models to establish 
statutory findings, a sense of Congress on the purpose and principles 
of military health care benefits, and explicit guidelines for and 
limitations on adjustments.

         Active duty members and families should be charged no 
        fees except retail pharmacy co-payments, except to the extent 
        they make the choice to participate in TRICARE Standard or use 
        out-of-network providers under TRICARE Prime.
         For retired and survivor beneficiaries, the percentage 
        increase in fees, deductibles, and co-payments that may be 
        considered in any year should not exceed the percentage 
        increase beneficiaries experience in their compensation.
         The TRICARE Standard inpatient copay should not be 
        increased further for the foreseeable future. At $535 per day, 
        it already far exceeds inpatient copays for virtually any 
        private sector health plan.
         There should be no enrollment fee for TRICARE Standard 
        or TFL, since neither offers assured access to TRICARE-
        participating providers. An enrollment fee implies enrollees 
        will receive additional services, as Prime enrollees are 
        guaranteed access to participating providers in return for 
        their fee. Congress already has required TFL beneficiaries to 
        pay substantial Medicare Part B fees to gain TFL coverage.
         There should be one TRICARE fee schedule for all 
        retired beneficiaries, just as all legislators, Defense leaders 
        and other Federal civilian grades have the same health fee 
        schedule. The TRICARE schedule should be significantly lower 
        than the lowest tier recommended by the Defense Department, 
        recognizing that all retired members paid large upfront 
        premiums for their coverage through decades of arduous service 
        and sacrifice.

    TRICARE Standard Enrollment
    Last year, the Department of Defense proposed requiring 
beneficiaries to take an additional step of signing an explicit 
statement of enrollment in TRICARE Standard. The Department proposed a 
one-time $25 enrollment fee. The Task Force on the Future of Military 
Health Care also endorsed enrollment, and proposed an annual enrollment 
fee of $120.
    The proposals are based on three main arguments:

         Enrollment is needed to define the population that 
        will actually use the program
         Enrollment would allow more accurate budgeting for 
        program needs
         The fee would help offset DOD's cost of implementing 
        the enrollment system (DOD rationale) and ``impose some 
        personal accountability for health care costs'' (Task Force 
        rationale).

    The Coalition believes none of these arguments stands up to 
scrutiny.
    Department officials already know exactly which beneficiaries use 
TRICARE Standard. They have exhaustive records on what doctors they've 
seen and what medications they've used on what dates and for what 
conditions. They already assess trends in beneficiary usage and project 
the likely effect on those trends for current and future years--such as 
the effect of changes in private employer changes on the likely return 
of more beneficiaries to the TRICARE system.
    The Defense Department does not have a good record on communicating 
policy changes to Standard beneficiaries. That means large numbers of 
beneficiaries won't get the word, or appreciate the full impact if they 
do get it. They have always been told that their eligibility is based 
on the Defense Enrollment Eligibility Reporting System. A single, bulk-
mail communication can't be expected to overwrite decades of 
experience.
    Hard experience is that many thousands of beneficiaries would learn 
of the requirement only when their TRICARE Standard claims are rejected 
for failure to enroll. Some would involve claims for cancer, auto 
accidents and other situations in which it would be unacceptable to 
deny claims because the beneficiary didn't understand an administrative 
rule change. DOD administrators who casually dismiss this argument as 
involving a relative minority of cases see the situation much 
differently if they found their family in that situation--as hundreds 
or thousands of military families certainly would.
    Inevitably, most beneficiaries who do receive and understand the 
implications of an enrollment requirement will enroll simply ``to be 
safe'', even if their actual intent is to use VA or employer-provided 
coverage for primary care--thus undercutting the argument that 
enrollment would increase accuracy of usage projections.
    The arguments for a Standard enrollment fee also don't hold water. 
First, it's inequitable to make beneficiaries pay a fee to cover the 
cost of an enrollment system that's established solely for the benefit 
and convenience of the government, with no benefit whatsoever for the 
beneficiary. Second, the Task Force acknowledges that a $120 fee is 
more a ``nuisance fee'' than a behavior modifier, and existing 
deductibles and copays provide a much more immediate ``accountability'' 
sense to the beneficiary. Third and most important, one who pays an 
enrollment fee expects something extra in return for the fee. An 
enrollment fee for TRICARE Prime is reasonable, because it buys the 
beneficiary guaranteed access to a participating provider. TRICARE 
Standard provides no such guarantee, and in some locations it's very 
difficult for beneficiaries to find a TRICARE provider.
    For all these reasons, establishing an enrollment requirement will 
neither better define the user population nor better define budget 
needs.
    The Coalition believes the real intent of the enrollment proposal 
is simply to reduce TRICARE costs by allowing DOD to reject payment for 
any claims by beneficiaries who fail to enroll.
    To the extent any enrollment requirement may still be considered 
for TRICARE Standard, such enrollment should be automatic for any 
beneficiary who files a TRICARE claim. Establishing an enrollment 
requirement must not be allowed to become an excuse to deny claims for 
members who are unaware of the enrollment requirement.
    The Coalition strongly recommends against establishment of any 
TRICARE Standard enrollment system; to the extent enrollment may be 
required, any beneficiary filing a claim should be enrolled 
automatically, without denying the claim. No enrollment fee should be 
charged for TRICARE Standard until and unless the program offers 
guaranteed access to a participating provider.
    Private Employer Incentive Restrictions
    Current law, effective January 1, 2008, bars private employers from 
offering incentives to TRICARE-eligible employees to take TRICARE in 
lieu of employer-sponsored plans. This law is well-intended, but 
inadvertently imposes unfair penalties on many employees of companies 
that are not, in fact, attempting to shift costs to TRICARE.
    The Armed Services Committees have tasked the Secretary of Defense 
for a report on the issue, which may not protect current beneficiaries 
and, even with a favorable response, in no way restricts future 
Secretaries of Defense who may impose a strict interpretation of the 
law.
    In the meantime, Coalition associations have heard from hundreds of 
TRICARE beneficiaries whose civilian employers are using the new law to 
bar equal payments to TRICARE beneficiaries that are available to other 
company employees (e.g., if the company offers $100 per month to any 
employee who uses insurance available through a spouse's coverage or a 
previous employer).
    TRICARE coverage is an extremely important career benefit that is 
earned by decades of service in uniform. TMC believes it is 
contradictory to the spirit of this earned benefit to impose statutory 
provisions that deny access to TRICARE by those who have earned it or 
that deny TRICARE beneficiaries the same options available to non-
TRICARE beneficiaries who work for the same civilian employer.
    The Coalition recommends Congress modify the law restricting 
private employer TRICARE incentives to explicitly exempt employers who 
offer only cafeteria plans (i.e., cash payments to all employees to 
purchase care as they wish) and employers who extend specific cash 
payments to any employee who uses health coverage other than the 
employer plan (e.g., FEHBP, TRICARE, or commercial insurance available 
through a spouse or previous employer).

    TRICARE Standard Improvements
    The Coalition very much appreciates the subcommittee's continuing 
interest in the specific problems unique to TRICARE Standard 
beneficiaries. In particular, we applaud your efforts to expand TRICARE 
Standard provider and beneficiary surveys and establish Standard 
support responsibilities for TRICARE Regional Offices. These are needed 
initiatives that should help make it a more effective program. We 
remain concerned, however, that more remains to be done. TRICARE 
Standard beneficiaries need assistance in finding participating 
providers within a reasonable time and distance from their home. This 
will become increasingly important with the expansion of TRS, as these 
individuals are most likely not living within a Prime Service Area.
    Provider Participation Adequacy
    We are pleased that Congress added the requirement to survey 
beneficiaries in addition to providers. The Coalition believes this 
will help correlate beneficiary inputs with provider inputs for a more 
accurate view of participation by geographic location.
    The Coalition is concerned that DOD has not yet established any 
standard for the adequacy of provider participation. Participation by 
half of the providers in a locality may suffice if there is not a large 
Standard beneficiary population. The Coalition hopes to see an 
objective participation standard (perhaps number of beneficiaries per 
provider) that would help shed more light on which locations have 
participation shortfalls of Primary Care Managers and Specialists that 
require positive action.
    The Coalition is grateful to the subcommittee for provisions in the 
NDAA for Fiscal Year 2008 that will require DOD to establish benchmarks 
for participation adequacy and follow-up reports on actions taken.
    The Coalition urges the subcommittee to continue monitoring DOD and 
GAO reporting on provider participation to ensure proper follow-on 
action.
    Administrative Deterrents to Provider Participation
    The Coalition is pleased that Congress has directed DOD to modify 
current claims procedures to be identical to those of Medicare. We look 
forward to implementation with the next generation of Managed Care 
Support Contracts. Feedback from providers indicates TRICARE imposes 
additional administrative requirements on providers that are not 
required by Medicare or other insurance plans. On the average, about 50 
percent of a provider's panel is Medicare patients, whereas only 2 
percent are TRICARE beneficiaries. Providers are unwilling to incur 
additional administrative expenses that affect only a small number of 
patients. Thus, providers are far more prone to non-participation in 
TRICARE than in Medicare.
    TRICARE still requires submission of a paper claim to determine 
medical necessity on a wide variety of claims for Standard 
beneficiaries. This thwarts efforts to encourage electronic claim 
submission and increases provider administrative expenses and delays 
receipt of payments. Examples include speech therapy, occupational/
physical therapy, land or air ambulance service, use of an assistant 
surgeon, nutritional therapy, transplants, durable medical equipment, 
and pastoral counseling.
    Another source of claims hassles and payment delays involve cases 
of third party liability (e.g., auto insurance health coverage for 
injuries incurred in auto accidents). Currently, TRICARE requires 
claims to be delayed pending receipt of a third-party-liability form 
from the beneficiary. This often delays payments for weeks and can 
result in denial of the claim (and non-payment to the provider) if the 
beneficiary doesn't get the form in on time. Recently, a major TRICARE 
claims processing contractor recommended that these claims should be 
processed regardless of diagnosis and that the third-party-liability 
questionnaire should be sent out after the claim is processed to 
eliminate protracted inconvenience to the provider of service.
    Additionally, changes to the TRICARE pharmacy formulary are 
becoming increasingly burdensome for providers. The number of 
medications added to non-formulary status ($22 copay) has increased 
tremendously, and changing prescriptions has added to the providers' 
workload, as have increases in prior-authorization (Step Therapy) 
requirements. The increase in the number of third tier drugs and DOD's 
reliance on pharmacy medical necessity requests has increased provider 
workload to the extent that many now charge beneficiaries extra to 
complete this form. For others, it's yet another TRICARE-unique 
administrative hassle that makes them less likely to agree to see 
TRICARE beneficiaries.
    The Coalition urges the subcommittee to continue its efforts to 
reduce administrative impediments that deter providers from accepting 
TRICARE patients.
    TRICARE Reimbursement Rates
    Physicians consistently report that TRICARE is virtually the 
lowest-paying insurance plan in America. Other national plans typically 
pay providers 25-33 percent more. In some cases the difference is even 
higher.
    While TRICARE rates are tied to Medicare rates, TRICARE Managed 
Care Support Contractors make concerted efforts to persuade providers 
to participate in TRICARE Prime networks at a further discounted rate. 
Since this is the only information providers receive about TRICARE, 
they see TRICARE as even lower-paying than Medicare.
    This is exacerbated by annual threats of further reductions in 
TRICARE rates due to the statutory Medicare rate-setting formula. 
Doctors are unhappy enough about reductions in Medicare rates, and many 
already are reducing the number of Medicare patients they see.
    But the problem is even more severe with TRICARE, because TRICARE 
patients typically comprise a small minority of their beneficiary 
caseload. Physicians may not be able to afford turning away large 
numbers of Medicare patients, but they're more than willing to turn 
away a small number of patients who have low-paying, high-
administrative-hassle TRICARE coverage.
    Congress has acted to avoid Medicare physician reimbursement cuts 
for the last 4 years, but the failure to provide a payment increase for 
2006 and 2007 was another step in the wrong direction, according to 
physicians. Further, Congress still has a long way to go in order to 
fix the underlying reimbursement determination formula.
    Correcting the statutory formula for Medicare and TRICARE physician 
payments to more closely link adjustments to changes in actual practice 
costs and resist payment reductions is a primary and essential step. We 
fully understand that is not within the purview of this subcommittee, 
but we urge your assistance in pressing the Finance Committee for 
action.
    In the meantime, the rate freeze for 2006 and 2007 along with a 
small increase for the first part of 2008 makes it even more urgent to 
consider some locality-based relief in TRICARE payment rates, given 
that doctors see TRICARE as even less attractive than Medicare. 
Additionally, the Medicare pay package that was enacted in Public Law 
109-432 included a provision for doctors to receive a 1.5 percent bonus 
next year if they report a basic set of quality-of-care measures. The 
TFL beneficiaries should not be affected as their claims are submitted 
directly to Medicare and should be included in the physicians' quality 
data. But there's been no indication that TRICARE will implement the 
extra increases for treating beneficiaries under 65, and this could 
present a major problem. If no such bonus payment is made for TRICARE 
Standard patients, then TRICARE will definitely be the lowest payer in 
the country and access could be severely decreased.
    The TRICARE Management Activity has the authority to increase the 
reimbursement rates when there is a provider shortage or extremely low 
reimbursement rate for a specialty in a certain area and providers are 
not willing to accept the low rates. In some cases a State Medicaid 
reimbursement for a similar service is higher than that of TRICARE. As 
mentioned previously, the Department has been reluctant to establish a 
standard for adequacy of participation and should use survey data to 
apply adjustments nationally.
    The Coalition urges the subcommittee to exert what influence it can 
to persuade the Finance Committee to reform Medicare/TRICARE statutory 
payment formula. To the extent the Medicare rate freeze continues, we 
urge the subcommittee to encourage the Defense Department to use its 
reimbursement rate adjustment authority as needed to sustain provider 
acceptance.
    The Coalition urges the subcommittee to require a Comptroller 
General report on the relative propensity of physicians to participate 
in Medicare vs. TRICARE, and the likely effect on such relative 
participation of a further freeze in Medicare/TRICARE physician 
payments along with the affect of an absence of bonus payments.
    Minimize Medicare/TRICARE Coverage Differences
    A 2006 DOD report to Congress contained the coverage differences 
between Medicare and TRICARE. The report showed that there are at least 
a few services covered by Medicare that are not covered by TRICARE. 
These include an initial physical at age 65, chiropractic coverage, 
respite care, and certain hearing tests. We believe TRICARE coverage 
should at least equal Medicare's in every area and include recommended 
preventive services at no cost. As an example, the Army Medical 
department has implemented the ``Adult Pneumovax'' program and projects 
savings of $500 per vaccine given.
    Our military retirees deserve no less coverage than is provided to 
other Federal beneficiaries.
    The Coalition urges the subcommittee to align TRICARE coverage to 
at least match that offered by Medicare in every area and provide 
preventive services at no cost.
National Guard and Reserve Health Care
    The Coalition is grateful to the subcommittee for its leadership in 
extending lower-cost TRICARE eligibility to all drilling National Guard 
and Reserve members. This was a major step in acknowledging that the 
vastly increased demands being placed on Selected Reserve members and 
families needs to be addressed with adjustments to their military 
compensation package.
    While the subcommittee has worked hard to address the primary 
health care hurdle, there are still some areas that warrant attention.
    TRICARE Reserve Select Premium
    The Coalition believes the premium-setting process for this 
important benefit needs to be improved and was incorrectly based upon 
the basic Blue Cross Blue Shield option of the FEHBP. This adjustment 
mechanism has no relationship either to the Department's military 
health care costs or to increases in eligible members' compensation.
    When the program was first implemented, the Coalition urged DOD to 
base premiums (which were meant to cover 28 percent of program costs) 
on past TRICARE Standard claims data to more accurately reflect costs. 
Now a GAO study has confirmed that DOD's use of Blue Cross Blue Shield 
data and erroneous projections of participation resulted in 
substantially overcharging beneficiaries.
    GAO found that DOD projected costs of $70 million for fiscal year 
2005 and $442 million for fiscal year 2006, whereas actual costs proved 
to be $5 million in fiscal year 2005 and about $40 million in fiscal 
year 2006. GAO found that DOD estimates were 72 percent higher than the 
average single member cost and 45 percent higher than average family 
cost. If DOD were to have used actual fiscal year 2006 costs, the 
annual individual premium would have been $48/month instead of $81/
month. The corresponding family premium would have been $175/month 
instead of $253/month.
    GAO recommended that DOD stop basing TRS premiums on Blue Cross 
Blue Shield adjustments and use the actual costs of providing the 
benefit. DOD concurred with the recommendations and says, ``it remains 
committed to improving the accuracy of TRS premium projections.'' 
However, GAO observed that DOD has made no commitment to any timetable 
for change.
    The Coalition believes our obligation to restrain health cost 
increases for Selected Reserve members who are periodically being asked 
to leave their families and lay their lives on the line for their 
country is should be even greater than our obligation to restrain 
government cost increases. These members deserve better than having 
their health premiums raised arbitrarily by a formula that has no real 
relationship to them.
    The Coalition believes strongly that TRS premiums should be reduced 
immediately to $48/month (single) and $175/month (family), with 
retroactive refunds to those who were overcharged in the past.
    For the future, as a matter of principle, the Coalition believes 
that TRS premiums should not be increased in any year by a percentage 
that exceeds the percentage increase in basic pay.
    The Coalition also is concerned that members and families enrolled 
in TRS are not guaranteed access to TRICARE-participating providers and 
are finding it difficult to locate providers willing to take TRICARE. 
As indicated earlier in this testimony, the Coalition believes that 
members who are charged a fee for their health coverage should be able 
to expect assured access, and hopes the subcommittee will explore 
options for assuring such access for TRS enrollees.
    The Coalition recommends reducing TRS premiums to $48/month 
(single) and $175/month (family), as envisioned by the GAO, with 
retroactive refunds as appropriate. For the future, the percentage 
increase in premiums in any year should not exceed the percentage 
increase in basic pay.
    The Coalition further recommends that the subcommittee request a 
report from the Department of Defense on options to assure TRS 
enrollees' access to TRICARE-participating providers.
    Private Insurance Premium Option
    The Coalition thanks Congress for authorizing subsidy of private 
insurance premiums for reservists called to active duty in cases where 
a dependent possesses a special health care need that would be best met 
by remaining in the member's civilian health plan.
    The Coalition believes Congress is missing an opportunity to reduce 
long-term health care costs by failing to authorize eligible members 
the option of electing a partial subsidy of their civilian insurance 
premiums during periods of mobilization. Current law already authorizes 
payment of up to 24 months of FEHBP premiums for mobilized members who 
are civilian employees of the Defense Department.
    Congress directed GAO to review this issue and submit a report in 
April 2007--a report that, to our knowledge, has not been completed. We 
hope that report will address not only the current wartime situation, 
but the longer-term peacetime scenario. Over the long term, when Guard 
and Reserve mobilizations can be expected at a considerably lower pace, 
the Coalition believes subsidizing continuation of employer coverage 
during mobilizations periods offers considerable savings opportunity 
relative to funding year-round family TRICARE coverage while the member 
is not deployed.
    In fact, the Department could calculate a maximum monthly subsidy 
level that would represent a cost savings to the government, so that 
each member who elected that option would reduce TRICARE costs.
    The Coalition recommends developing a cost-effective option to have 
DOD subsidize premiums for continuation of a Reserve employer's private 
family health insurance during periods of deployment as an alternative 
to permanent TRS coverage.
    Involuntary Separatees
    The Coalition believes it is unfair to deny TRS coverage for IRR 
members who have returned from deployment or terminate coverage for 
returning members who are involuntarily separated from the Selected 
Reserve (other than for cause).
    The Coalition recommends authorizing 1 year of post-TAMP TRS 
coverage for every 90 days deployed in the case of returning members of 
the IRR or members who are involuntarily separated from the Selected 
Reserve. The Coalition further recommends that voluntarily separating 
reservists subject to disenrollment from TRS should be eligible for 
participation in the CHCBP.
    Gray Area reservists
    The Coalition is sensitive that Selected Reserve members and 
families have one remaining ``hole'' in their military health coverage. 
They are eligible for TRS while currently serving in the Selected 
Reserve, then lose coverage while in ``Gray area'' retiree status, then 
regain full TRICARE eligibility at age 60.
    The Coalition believes some provisions should be made to allow such 
members to continue their TRICARE coverage in gray area status. 
Otherwise, we place some members at risk of losing family health 
coverage entirely when they retire from the Selected Reserve. We 
understand that such coverage likely would have to come with a higher 
premium.
    The Coalition urges the subcommittee to authorize an additional 
premium-based option under which members entering ``gray area'' retiree 
status would be able to avoid losing health coverage.
    Reserve Dental Coverage
    The Coalition remains concerned about the dental readiness of the 
Reserve Forces. Once these members leave active duty, the challenge 
increases substantially, so the Coalition believes the services should 
at least facilitate correction of dental readiness issues identified 
while on active duty. DOD should be fiscally responsible for dental 
care to reservists to ensure servicemembers meet dental readiness 
standards when DOD facilities are not available within a 50 mile radius 
of the members' home for at least 90 days prior and 180 days post 
mobilization.
    The Coalition supports providing dental coverage to reservists for 
90 days pre- and 180 days post-mobilization (during TAMP), unless the 
individual's dental readiness is restored to T-2 condition before 
demobilization.
Consistent Benefit
    As time progresses and external changes occur, we are made aware of 
pockets of individuals who for one reason or another are denied the 
benefits that they should be eligible for. DOD and its health 
contractors were leaders in modifying policy and procedures to assist 
Katrina victims. Additionally, Congress' action to extend eligibility 
for TRICARE Prime coverage to children of deceased active duty members 
was truly the right thing to do.
    Restoration of Survivors' TRICARE Coverage
    When a TRICARE-eligible widow/widower remarries, he/she loses 
TRICARE benefits. When that individual's second marriage ends in death 
or divorce, the individual has eligibility restored for military ID 
card benefits, including SBP coverage, commissary/exchange privileges, 
et cetera--with the sole exception that TRICARE eligibility is not 
restored.
    This is out of line with other Federal health program practices, 
such as the restoration of CHAMPVA eligibility for survivors of 
veterans who died of service-connected causes. In those cases, VA 
survivor benefits and health care are restored upon termination of the 
remarriage.
    Remarried surviving spouses deserve equal treatment.
    The Coalition recommends restoration of TRICARE benefits to 
previously eligible survivors whose second or subsequent marriage ends 
in death or divorce.
    TRICARE Prime Remote Exceptions
    Longer deployments and sea/shore and overseas assignment patterns 
leave many military families faced with tough decisions. A spouse and 
children may find a greater level of support by residing with or near 
relatives during extended separations from the active duty spouse. DOD 
has the authority to waive the requirement for the spouse to reside 
with the servicemember for purposes of TRICARE Prime Remote eligibility 
if the service determines special circumstances warrant such coverage. 
We remain concerned about the potential for inconsistent application of 
eligibility. The special authority is a step in the right direction, 
but there is a wide variety of circumstances that could dictate a 
family separation of some duration, and the Coalition believes each 
family is in the best situation to make its own decision.
    The Coalition recommends removal of the requirement for the family 
members to reside with the active duty member to qualify for the 
TRICARE Prime Remote Program, when the family separation is due to a 
military-directed move or deployment.
    BRAC, Rebasing, and Relocation
    Relocation from one geographic region to another and base closures 
brings multiple problems. A smooth health care transition is crucial to 
the success of DOD and Service plans to transform the force. That means 
ensuring a robust provider network and capacity is available to all 
beneficiary populations, to include active and Reserve component and 
retirees and their family members, and survivors at both closing and 
gaining installations. It is incumbent upon the Department and its 
Managed Care Support Contractors to ensure smooth beneficiary 
transition from one geographic area to another. We stress the 
importance of coordination of construction and funding in order to 
maintain access and operations while the process takes place.
    The Coalition recommends codifying the requirement to provide a 
TRICARE Prime network at all areas impacted by BRAC or rebasing. 
Additionally, we recommend that DOD be required to provide an annual 
report to Congress on the adequacy of health resources, services, 
quality and access of care for those beneficiary populations affected 
by transformation plans.
Pharmacy
    The TRICARE Pharmacy benefit must remain strong to meet the 
pharmaceutical needs of millions of military beneficiaries. While we 
are pleased at the overall operation of the program, the Coalition has 
significant concerns about certain recent trends.
    Beneficiary Migration
    One issue highlighted by the Task Force report is that a large 
share of the growth in retail pharmacy use has been the result of 
beneficiaries migrating from military treatment facilities to local 
retail pharmacies. In that regard, the number of beneficiaries using 
only military pharmacies declined by 900,000 between fiscal year 2002 
and fiscal year 2007, whereas the number of beneficiaries using only 
retail pharmacies increased by about 1,000,000 in the same period.
    Some of the shift is because enactment of TFL and TSRx meant that 
Medicare beneficiaries who live some distance from military 
installations no longer have to make long treks to the military 
pharmacy.
    But the change also coincides with the onset of increased wartime 
deployments and installation security measures. The deployment of large 
numbers of military medical professionals has forced shifting more 
beneficiaries of all kinds to see civilian providers, which reduces 
proximity access to the military pharmacy and ease the convenience of 
using retail stores. Increased installation security measures also 
increase the ``hassle factor'' for retirees to use on-base facilities. 
Finally, local budget pressures and DOD ``core formulary'' guidance 
removes many medications from the installation formulary that retirees 
use, leaving many no choice but to use alternative venues.
    Coalition associations have heard anecdotal reports that some local 
commanders have actively discouraged retirees from using the military 
pharmacies, primarily for budget savings purposes. What's worse is that 
MTFs have failed to educate beneficiaries of the next most cost-
effective venue--the TRICARE Mail Order Pharmacy (TMOP).
    The point is that it is inappropriate to punish beneficiaries 
(through higher retail copayments) for migration that may be dictated 
more by military operational and budget requirements than by retiree 
preferences.
    Pharmacy Co-payment Changes
    The Coalition thanks the subcommittee for freezing pharmacy co-
payments for fiscal year 2008. The Coalition believes strongly that 
uniformed services beneficiaries deserve more stability in their 
benefit levels, and that DOD has not performed due diligence in 
exploring other ways to reduce pharmacy costs without shifting such 
increased expense burdens to beneficiaries. The DOD Health Care Task 
Force would dramatically raise most military pharmacy copays. For 
example, they'd raise the copay for generic drugs purchased in retail 
pharmacies from the current $3 to $15. But Wal-Mart is now dispensing 
generic drugs to the general public for $4. Shouldn't the military 
pharmacy benefit be better than what civilians can get through Wal-
Mart?
    One important consideration in the mail-order vs. retail discussion 
is that some medications are simply not appropriate or available for 
delivery through the TMOP. If the purpose of imposing higher retail 
copays is to incentivize beneficiaries to use military or mail-order 
pharmacies, application of this philosophy is inappropriate when the 
beneficiary has no access to those lower-cost venues.
    The Coalition believes any further discussion of pharmacy copayment 
increases should be deferred pending review of the implications of 
requiring Federal pricing in the retail system. We believe that this 
action by Congress in the fiscal year 2008 has shifted the dynamic of 
pharmacy costs, and that the primary cost differential may no longer be 
the venue of dispensing.
    Rather, the Coalition urges the subcommittee to consider the 
findings of RAND, Pharma, and others cited by the Task Force that 
considerable cost savings can be gained by establishing positive 
motivations for beneficiaries with chronic diseases to take any of the 
medications--regardless of generic, brand, or nonformulary--that reduce 
the adverse effects of their conditions over the long term. Those steps 
included eliminating copays for the lowest-cost and most effective 
medications, reducing copays for some effective nonformulary 
medications, and reducing prior authorization requirements that impede 
beneficiaries from using the medications they and their doctors believe 
are best for them.
    We note with regret that the Department has declined to comply with 
Congress' urging to eliminate copayments for generic medications in the 
mail-order system--a recommendation echoed by the Task Force. In this 
case, the administrative cost of processing the co-pay actually wipes 
out a large percentage of the co-pay revenue.
    The Coalition believes pharmacy cost growth concerns have missed 
the mark by focusing on current-year dollars rather than long-term 
effects. For example, the Task Force report highlights as part of the 
cost ``problem'' that some drugs, including medications to treat 
diabetes, grew more than 15 percent in a single year. Viewed in terms 
of long-term effects, it's a good thing to identify patients who have 
diabetes and a good thing for diabetes patients to take their 
medications. So growing use (and cost) of medications for such chronic 
diseases is a positive, not a negative, and the copay structure should 
be remodeled to incentivize beneficiaries and make it as easy as 
possible for them to take whatever medication will mitigate the effects 
of their condition through whatever venue they are most likely to be 
satisfied with and therefore will be most likely to take their 
medications.
    The Coalition recommends deferral of any pharmacy copay increases 
pending assessment of the effects of the new Federal pricing law on 
usage and cost patterns for the different venues, and that the 
subcommittee instead urge DOD to pursue copay reductions and ease prior 
authorization requirements for medications for chronic diseases, based 
on private sector experience that such initiatives reduce long-term 
costs associated with such diseases.
    Rapid Expansion of ``Third Tier'' Formulary
    The Coalition very much appreciated the efforts of Congress to 
protect beneficiary interests by establishing a statutory requirement 
for a BAP to give beneficiary representatives an opportunity in a 
public forum to voice our concerns about any medications DOD proposes 
moving to the third tier ($22 co-pay). We were further reassured when, 
during implementation planning, Defense officials advised the BAP that 
they did not plan on moving many medications to the third tier.
    Unfortunately, this has not been the case. To date, DOD has moved 
over 90 medications to the third tier. While the BAP did not object to 
most of these, the BAP input has been universally ignored in the small 
number of cases when it recommended against a proposed 
reclassification. The Coalition is also concerned that the BAP has been 
denied access to information on relative costs of the drugs proposed 
for reclassification and the Defense Department has established no 
mechanism to provide feedback to the BAP on why its recommendations are 
being ignored.
    The Coalition believes Congress envisioned that the BAP would be 
allowed substantive input in the Uniform Formulary decision process, 
but that has not happened. In fact, BAP discussion issues and 
recommendations (other than the final vote tallies) are routinely 
excluded from information provided to the Assistant Secretary of 
Defense (Health Affairs) for decisionmaking purposes, and there has 
been no formal feedback to the BAP on the reasons why their 
recommendations were not accepted.
    Although Congress has tasked GAO for a report on the effectiveness 
of the BAP process, that report has not been issued to date.
    The Coalition urges the subcommittee to reassert its intent that 
the BAP should have a substantive role in the formulary-setting 
process, including access to meaningful data on relative drug costs in 
each affected class, consideration of all BAP comments in the 
decisionmaking process, and formal feedback concerning rationale for 
rejection of BAP recommendations.
TRICARE Prime and MCSC Issues
    DOD and its health contractors are continually trying to improve 
the level of TRICARE Prime service. We appreciate their inclusion of 
Coalition associations in their process improvement activities and will 
continue to partner with them to ensure the program remains 
beneficiary-focused and services are enhanced, to include: beneficiary 
education, network stability, service level quality, uniformity of 
benefit between regions (as contractors implement best business 
practices), and access to care.
    Referral and Authorization System
    There has been much discussion and consternation concerning the 
Enterprise Wide Referral and Authorization System. Much time, effort 
and money have been invested in a program that has not come to 
fruition. Is adding to the administrative paperwork requirements and 
forcing the civilian network providers into a referral system really 
accomplishing what DOD set out to do? Rather than forcing unique 
referral requirements on providers, perhaps DOD should look at 
expanding its Primary care base in the Prime Service Areas and capture 
the workload directly.
    The Coalition recommends that Congress require a cost analysis 
report, including input from each Managed Care Support Contractor, 
concerning the referral process within DOD and reliance on Civilian 
Network Providers within an MTF's Prime Service Area.
Health-Related Tax Law Changes
    The Coalition understands fully that tax law changes are not within 
the subcommittee's jurisdiction. However, there are numerous military-
specific tax-related problems that are unlikely to be addressed without 
the subcommittee's active advocacy and intervention with members and 
leaders of the Finance Committee.
    Deductibility of Health and Dental Premiums
    Many uniformed services beneficiaries pay annual enrollment fees 
for TRICARE Prime, TRS, and premiums for supplemental health insurance, 
such as a TRICARE supplement, the TRICARE Dental and Retiree Dental 
Plans, or for long-term care insurance. For most military 
beneficiaries, these premiums are not tax-deductible because their 
annual out-of-pocket costs for healthcare expenses do not exceed 7.5 
percent of their adjusted gross taxable income.
    In 2000, a Presidential directive allowed Federal employees who 
participate in FEHBP to have premiums for that program deducted from 
their pay on a pre-tax basis. A 2007 court case extended similar pre-
tax premium payment eligibility to certain retired public safety 
officers. Similar legislation for all active, Reserve, and retired 
military and Federal civilian beneficiaries would restore equity with 
private sector employees and retired public safety officers.
    The Coalition urges all Armed Services Committee members to seek 
the support of the Finance Committee to approve legislation to allow 
all military beneficiaries to pay TRICARE-related insurance premiums in 
pre-tax dollars, to include TRICARE dental premiums, TRS premiums, 
TRICARE Prime enrollment fees, premiums for TRICARE Standard 
supplements, and long-term care insurance premiums.
                               conclusion
    TMC reiterates its profound gratitude for the extraordinary 
progress this subcommittee has made in advancing a wide range of 
personnel and health care initiatives for all uniformed services 
personnel and their families and survivors. The Coalition is eager to 
work with the subcommittee in pursuit of the goals outlined in our 
testimony. Thank you very much for the opportunity to present the 
Coalition's views on these critically important topics.

    Senator Ben Nelson. With that, Dr. Chu, would you like to 
begin?

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

    Dr. Chu. Thank you, Mr. Chairman and Senator Graham. It's a 
great privilege to be testifying before you again, and I thank 
you for your kind words.
    I am honored to be joined by my colleagues, the Deputy 
Chiefs of Staff for Manpower and Personnel of the four 
Services. We each have a formal statement, which we would like 
to submit for the record, if we may.
    Senator Ben Nelson. That will be permitted.
    Dr. Chu. Thank you, sir.
    As you suggested in your opening comments, Mr. Chairman, 
this is a joint force. It's composed of our civilians, our 
Active-Duty military, and our Reserve components. It's a force 
composed entirely of volunteers, and that All-Volunteer Force, 
I would argue, has served us very well. We do set high 
standards for quality and entrance. We set high standards for 
motivation. I think we've seen the rewards of those high 
standards in the exemplary performance of American forces in 
the field, as celebrated in Senator Graham's comments, and we 
intend to maintain those high standards for this Department as 
we go forward.
    The fact that we've been successful in sustaining this All-
Volunteer Force across the last 7 years is due, I think, to the 
strong partnership between the executive and legislative 
branches to which you referred in your opening statements. You 
have given us authority for a new National Security Personnel 
System (NSPS) for civilians. That's of extraordinary value to 
us as we try to reshape the civil workforce toward one that is 
more deployable, willing to go forward. Just yesterday, I had 
the privilege of participating in the ceremony in which the 
first of the Secretary of Defense Global War on Terrorism 
medals for civilians was awarded to 15 representative civilians 
of the 16,000 who have served forward in the current conflict.
    Across the board, for both military and civilian personnel, 
you have given this Department increased flexibility. You've 
enlarged the scope of our authority. You've given us greater 
limits, for example, in terms of age for entrance to military 
service; higher ceilings, in terms of bonuses and reenlistment 
incentives; you've given us broad authority to reform the 
special incentive pays that we use to direct personnel to the 
high-priority and critical occupations of the Department.
    If there is one single explanation that undergirds the 
success, I think it is this willingness to accord a substantial 
measure of flexibility to the Department. As you look at our 
fiscal year 2009 proposals, I think you'll see that theme 
repeated, in terms of specific areas where we think there are 
remaining issues that it would be constructive to address.
    You spoke about families in your opening statement. We 
could not agree more about their importance to our success. As 
is observed frequently, it is really the family that makes the 
retention decision together. If the family is not satisfied 
with the military lifestyle, the military person is going to 
find it very hard to continue serving our country. We recognize 
that we ask a lot of the families, and we also recognize that 
it's our responsibility to, in turn, support them in the 
burdens that they are asked to carry--the most important 
burden, of course, being the absence of their loved one in a 
risky and dangerous environment.
    The President, in his State of the Union Address, as I know 
you appreciate, addressed two elements that we believe are most 
important to contemporary military families in terms of their 
willingness to serve and see their family member don the 
Nation's uniform. Those two elements are the education of their 
children and the opportunity for a career for the spouse--not 
just a job, but a career. Something that has growth and aspires 
to more important responsibilities over time. The President 
advocated for a series of changes that we hope Congress will 
enact, to allow, for example, the transferability of the 
individual member's GI Bill benefits to the spouse and children 
if that family should so desire, to give spouses a preferred 
status, in terms of Federal hiring and Federal career 
opportunities; and to accelerate our already strong program of 
daycare for the children of military families by accelerating 
the construction of our daycare centers, which will require, we 
believe, some modest adjustment of statute, and by encouraging 
us to enter public/private partnerships for off-post daycare 
that would meet the same high standards that we set in the 
military, which again would require some changes to current 
authorities the Department enjoys.
    Mr. Chairman, Senator Graham, we very much appreciate the 
partnership with this subcommittee, and Congress as a whole, 
that has allowed us to continue to have, for this country, the 
finest military the world has seen.
    Thank you, sir.
    [The prepared statement of Dr. Chu follows:]
               Prepared Statement by Hon. David S.C. Chu
                      military personnel policies
Active Duty Recruiting
    Never in the history of the All-Volunteer Force (AVF) have our 
Armed Forces faced as challenging a recruiting environment as they have 
during the past several years. First, the global war on terrorism has 
placed unprecedented demands on the Services as our volunteer military 
is now into its 7th year of a protracted war in Iraq and Afghanistan. 
Second, youth willingness to serve, the heart of our AVF, has declined 
and influencers of youth (e.g., parents, teachers) are less likely to 
recommend military service today than in recent years. Third, the 
economy has remained strong and labor markets tight. Unemployment 
(currently at 4.9 percent) is relatively low by historical standards, 
and earnings are up--providing youth with lucrative post-secondary high 
school choices. Fourth, recruiting goals for the Army and Marine Corps 
have increased as they grow their forces.
    Despite these challenges, the Services have met, and continue to 
meet, their recruiting goals--thanks to significant legislative 
initiatives and new authorities granted by Congress and the hard work 
of the recruiting commands and recruiters in the field. During fiscal 
year 2007, the Active-Duty components recruited 166,302 first-term 
enlistees and an additional 14,870 individuals with previous military 
service, attaining over 100 percent of the Department of Defense (DOD) 
goal of 180,377 accessions.
    While meeting our quantitative goals is important, we also need to 
have the right mix of recruits--recruits who will complete their term 
of service and perform successfully in training and on the job. The 
``quality'' of the accession cohort is critical, and we have long 
reported recruit quality along two dimensions--aptitude test scores and 
educational attainment. Both are important, but for different reasons.
    Aptitude test scores are used to select recruits who are most 
likely to perform satisfactorily in training and on the job. All 
military applicants take a written enlistment test, the Armed Services 
Vocational Aptitude Battery. One component of that test is the Armed 
Forces Qualification Test (AFQT), which measures math and verbal 
skills. Those who score above average on the AFQT are in Categories I-
IIIA. We value these higher-aptitude recruits because they do better in 
training and perform better on the job than their lower-scoring peers 
(Categories IIIB-IV).
    We also value recruits with a high school diploma. The high school 
diploma has long been the best single predictor of successful 
adjustment to military life. About 80 percent of recruits with 
traditional high school diplomas complete their first 3 years, while 
only about 50 percent of those without a traditional diploma do so. The 
first-term attrition of those holding an alternative educational 
credential, such as a high school equivalency or a General Educational 
Development certificate, falls between those two statistics. In short, 
enlisting youth with traditional high school diplomas is a good 
investment. Studies have estimated the attrition at over $50,000 for 
each person who leaves service early.
    In conjunction with the National Academy of Sciences, the 
Department reviewed how best to balance educational attainment, 
aptitude, recruiting resources, and job performance. With an optimizing 
model, we established recruit quality benchmarks of 90 percent high 
school diploma graduates (HSDGs) and 60 percent scoring above average 
on the AFQT. Those benchmarks are based on the relationship among costs 
associated with recruiting, training, attrition, and retention, using 
as a standard the performance level obtained by the enlisted force 
cohort of 1990--the force that served in Operations Desert Shield/
Desert Storm. Thus, the benchmarks reflect the aptitude and education 
levels necessary to minimize personnel and training costs while 
maintaining the required performance level of that force.
    For over 20 years, the Services have met or exceeded the 
Department's quality benchmarks for active duty recruits (Figure 1). 
Although the Army missed its HSDG benchmark in 2007, DOD met its 
overall goal: 90 percent of active duty new recruits were HSDGs. This 
compares favorably to the national average in which about 70 percent to 
80 percentate from high school with a diploma. In addition, DOD 
exceeded its aptitude quality benchmark, with 68 percent of new Active 
recruits scoring at the top half of the AFQT, well above the DOD 
benchmark of 60 percent.
      
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    Fiscal year 2008 active duty recruiting efforts are positive to 
date. Through January, all Services met or exceeded numerical 
recruiting objectives for the Active Force, and the Army achieved 
18,829 of its 18,600 recruiting goal, for a 101 percent year-to-date 
accomplishment (Table 1). However, the active Army fell short of the 
HSDG goal, accessing 82 percent recruits with a high school diploma 
versus the standard of 90 percent. Although the Army accessed 58 
percent of new recruits who scored at or above the 50th percentile on 
the AFQT--slightly below the DOD benchmark of 60 percent--we expect the 
Army to achieve this DOD benchmark by the end of fiscal year 2008.
      
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    We should not lose sight of the fact that, although the youth 
population is large, a relatively small proportion of American youth is 
qualified to enlist when we consider other factors besides education 
and aptitude. It is an unfortunate fact that many of the contemporary 
youth population are currently ineligible to serve. About 35 percent 
are medically disqualified (with obesity a large contributing factor), 
18 percent abuse drugs and alcohol, 5 percent have conduct/criminal 
issues, 6 percent have dependents, and 9 percent are in the lowest 
aptitude category (Figure 2). Another 10 percent are qualified, but 
attending college. That leaves less than 5 million--or about 15 percent 
of the roughly 31 million youth ages 17-24--who are available to 
recruit (25 percent including those in college).
    Our recruiting success has not come easily. It has been the result 
of long hours and hard work by the 15,000 dedicated and professional 
military recruiters. These recruiters often stand as the sole 
representative of our military forces in local communities, and they 
have my most sincere respect and gratitude. Equally important has been 
the unwavering support from Congress for our recruiting efforts. 
Throughout my time in this office, you have assisted us with 
authorities and programs that have helped the Services to expand the 
recruiting market in responsible ways.
      
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    We appreciate your assistance expanding military recruiter access 
to high schools. The No Child Left Behind Act of 2001 opened the doors 
for military recruiters to provide information on military service 
opportunities to juniors and seniors in over 22,600 high schools 
nationwide. Through the enforcement of these laws, the Services report 
that all high schools have complied with the provision of student 
directory information to military recruiters, who, in turn, provide 
information to young people about the opportunities and nobility of 
military service.
    The establishment of a National Call to Service program has been 
very helpful. This shorter-than-normal, 15-month enlistment option 
allows us to offer military service options to youth who, due to the 
length of traditional enlistment terms, would choose not to serve. Over 
9,000 young Americans have enlisted under this option.
    The new $2,500 bonus for those transferring between Armed Forces 
components has been a helpful incentive in getting members to transfer 
from one Service to another and serve a minimum of an additional 3 
years. This program has helped the Army access over 1,500 new soldiers 
from other Services that otherwise may have left the military--saving 
over $50,000 in recruiting and training costs per experienced 
transferee.
    We also thank you for helping us to increase the maximum age for 
enlistment. This has expanded the recruiting market by raising the 
maximum age for enlistment in a regular component from 35 to 42 years.
    In addition, we appreciate the new accession bonus for Officer 
Candidate School (OCS). Creating a new officer through either the 
Service Academies or Reserve Officer Training Corps is a 4-year 
process. The Services use OCS not only to produce a portion of their 
new officers annually, but in times of growth, this valuable program 
provides a surge capacity that cannot be duplicated. The accession 
bonus provides the Services an incentive to attract recent college 
graduates for these programs--particularly important as we grow the 
force in the Army and Marine Corps.
    Most important, you provided us the opportunity to conduct the Army 
Recruiting Demonstration Program. This authority is permitting the Army 
to test innovative marketing and incentive programs in support of 
recruiting efforts not otherwise permitted in law, and we plan to work 
with you to expand this initiative to the other Services for the 
purpose of addressing the continuing challenges in the recruiting and 
retention environment.
Active Duty Retention
    Retention programs help shape the force to ensure we have the right 
numbers and mix of active duty personnel with the right experience. 
This is particularly challenging during this era of changing force 
structures. Thus, we thank you for your substantial assistance over the 
past several years in obtaining new and enhanced programs and 
authorities for the military departments to encourage military 
personnel to remain in Service.
    Notably, the National Defense Authorization Act (NDAA) for Fiscal 
Year 2006 increased the maximum reenlistment bonus from $60,000 to 
$90,000, and it expanded eligibility for the bonus from 16 to 20 years 
of active duty, and 18 to 24 years of service. It also amended the 
critical skills retention bonus (CSRB) authority to include Reserve 
component members and members assigned to high priority units. The 
amended statutory authority for the CSRB established eligibility to 
Reserve component members with a designated skill or who volunteer to 
serve in a designated high priority unit, not to exceed $100,000. It 
also established an exception to allow members in designated Special 
Operations Forces and nuclear critical skills to receive a CSRB beyond 
25 years of service; and we appreciate your extending that authority to 
all qualifying members in the NDAA for Fiscal Year 2008. The incentive 
bonus for transfer between Armed Forces and the increase in the maximum 
amount of the bonus for such transfer--from $2,500 to $10,000--all have 
been very helpful. Finally, authorizing pay and benefits to facilitate 
voluntary separation of targeted populations of servicemembers have 
proven invaluable.
    For almost 7 years--since September 11--retention has remained 
relatively strong in the Active-Duty Force. The Marine Corps and Army 
met or exceeded their overall reenlistment goals each year. While the 
Air Force and Navy did relatively well, they did not always meet all 
retention goals, which were often complicated by force shaping goals. 
Both Services have adjusted their retention bonus programs to target 
deficient skills better.
    In fiscal year 2007, all four Active-Duty Services met or exceeded 
their aggregate reenlistment targets. The Marine Corps surpassed its 
overall aggregate reenlistment mission (110 percent), exceeding its 
fiscal year 2007 targeted end strength by a comfortable margin. The Air 
Force fell short of its Zone B (mid-career) reenlistments mission and 
will use the Selective Reenlistment and CSRB programs to maximize mid-
grade retention in fiscal year 2008. The new, expanded CSRB authorities 
are helping to provide the Services with additional flexibility to 
better target specific critical skills for retention.
    Through January 2008 (Table 2), the Army, Navy, and Marine Corps 
exceeded their retention missions. The Air Force is fairing well in 
Zone B and has recently adjusted its retention bonus programs in order 
to counter some challenges in Zones A (initial) and C (career). Force 
shaping efforts within the Air Force, along with its fiscal year 2008 
funding priorities, could complicate Air Force's overall retention 
effort.
      
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    As always, our retention efforts ultimately support the delivery of 
experienced performers to higher ranks. In recent years, the grade 
proportions have shifted upward slightly as we continue to field weapon 
systems and units with fewer lower-grade positions, and we greatly 
appreciate the new NDAA for Fiscal Year 2008 authorities--the increase 
in authorized strengths for Army officers on active duty in the grade 
of major; the increase in authorized strengths for Navy officers on 
active duty in the grades of lieutenant commander, commander, and 
captain; and the increase in authorized daily average of the number of 
members in paygrade E-9--that will facilitate our adjustments to these 
grade structure changes.
    The Army continues to use Stop Loss; as of December 2007, the Army 
Stop Loss program affected less than half of 1 percent of the total 
force (7,404 Active, 1,370 Reserve, and 2,027 National Guard soldiers). 
The Active Army Unit Stop Loss program takes effect 90 days prior to 
unit deployment or with official deployment order notification, if 
earlier, and remains in effect through the date of redeployment to 
permanent duty stations, plus a maximum of 90 days. Reserve component 
Unit Stop Loss begins 90 days prior to mobilization, or with the 
official mobilization alert deployment order notification, if later, 
and continues through mobilization, and for a period up to 90 days 
following unit demobilization. The Army shares the Secretary of 
Defense's goal of minimizing the use of Stop Loss.
    The retention of Army company grade officers (lieutenants and 
captains) must be significantly enhanced to meet new force 
requirements. Although the fiscal year 2007 company grade loss rates 
were 8.1 percent--below the historical average of 8.5 percent, and well 
below the pre-September 11 loss rates of 9.1 percent--the Army 
increased its promotion rate to captain to 98 percent in order to meet 
its growth demand. Additionally, the Army implemented an innovative 
incentives program that offers captains in specified year groups a 
``menu'' of incentives. Officers may choose from five different 
programs, which include up to a $35,000 bonus or graduate school, in 
return for an additional 3-year service commitment.
Shaping the Force
    We are balancing our end strength needs--increasing where we must, 
decreasing where it makes sense. To that end, the permanent end 
strength increases of the Army and Marine Corps focus on combat 
capability, while continued planned reductions from transformation 
efforts in the active Air Force and Navy manpower programs, and the 
Navy Reserve, balance risk with fiscally responsible manpower program 
decisions.
    To support these programmed strength reductions, we developed an 
integrated package of voluntary separation incentives and coupled these 
with the targeted incentive authority Congress recently provided, 
allowing us to offer monetary incentives to shape the Services by 
offering incentives to non-retirement eligible officer and enlisted 
personnel in specific grades, skills, and year-of-service cohorts. We 
plan to continue the judicious use of these tools to ensure our forces 
meet readiness needs and are effective, flexible, and lethal.
Force Development
    Over the past year, we embarked on the second leg of a journey that 
began over two decades ago with the enactment of the Goldwater-Nichols 
legislation. This continuing journey, empowered with special 
authorities contained in the NDAA for Fiscal Year 2007, allowed the 
Department to recognize joint experience whenever and wherever it 
occurs in an officer's career. Implementation of these authorities 
helps build an officer corps with the critical competencies required 
for counterinsurgency warfare, peace making/keeping, and nation 
building.
    The Department is implementing a Joint Qualification System that is 
a true total force system. Reserve component officers, full partners in 
this system, have the opportunity for the first time to have their 
joint experiences recognized and earn the same qualifications as their 
Active component counterparts.
    Joint officer management is not the only area of significant 
improvement for the officer corps. Mandatory retirement age 
limitations, with origins dating back over 150 years, were amended to 
account for increased longevity and, as a result, valuable military 
experience was retained across the DOD. The Department also redoubled 
efforts to develop a credible and sustainable cadre of senior military 
intelligence leaders by working with the Director of National 
Intelligence to create a viable National Intelligence Structure and to 
provide general and flag officers to fill critical positions in each 
major intelligence organization.
    Now, as we look to the future, the next steps are clear; we must 
capitalize on the momentum gained and deliver general and flag officer 
management systems that seamlessly integrate with the changes to joint 
officer management. The numerous controls put in place over the years 
to address a myriad of issues must be reassessed. The statutory 
framework supporting the management of our senior leaders must be at 
least as flexible as that of the joint officer management system and 
the Senior Executive Service. We need the flexibility to develop 
general and flag officers with competencies and experience necessary to 
lead and counter emerging threats. We intend to work diligently with 
Congress on this subject.
Reserve Component Recruiting and Retention
    With the initial mobilization of Reserve component members for the 
global war on terrorism, the Department established a policy of 
judicious and prudent use of the Reserve components in order to sustain 
them during the war. We continue to assess the impact of mobilization 
and deployments on the National Guard and Reserve, and adjust policies 
as needed to sustain a strong Reserve Force. The most recent change 
occurred last January, when Secretary Gates published a new utilization 
for the force.
    It is evident that Reserve component contributions to the war 
effort are significant, with almost 600,000 Selected Reserve members 
mobilized in support of global war on terrorism operations since 
September 2001. This represents about 44 percent of the 1.3 million who 
served in the Selected Reserve during that period. These data do not 
include the 14,500 members of the Individual Ready Reserve (IRR), who 
have been mobilized during the past 6\1/2\ years. The use of the IRR is 
modest compared to Operation Desert Storm, when we mobilized 30,000 IRR 
members.
Military Compensation
    The current administration, with your support, has improved overall 
compensation significantly, helping the Department sustain our highly 
skilled AVF. Since 2001, as a direct result of the close cooperation 
between the Department and Congress, average basic pay has increased 32 
percent and housing allowances by nearly 70 percent, eliminating out-
of-pocket housing costs. Together, we have more than doubled hardship 
duty pay, provided Combat-Related Injured Rehabilitation Pay, 
established traumatic injury protection insurance, and increased the 
maximum for Servicemember's Group Life Insurance to $400,000, as well 
as increasing the Death Gratuity from $6,000 to $100,000. The increases 
to Family Separation Allowance and our Hostile Fire/Imminent Danger 
pays were made permanent, and our military members are now able to 
participate in the Federal Thrift Savings Plan.
    The Department continues its strong commitment to provide a secure 
standard of living to those who serve in uniform by requesting a 3.4 
percent increase in military pay for all servicemembers in the fiscal 
year 2009 budget. This increase is equal to earnings increases in the 
private sector as measured by the Employment Cost Index.
    To better manage our force, you established CSRB and increased 
enlistment and reenlistment bonuses from $12,000 maximum to $40,000, 
along with establishing, and later increasing, Assignment Incentive 
Pay. These tools are flexible and allow precise targeting to help us 
sharply focus on specific needs, rather than casting a wide net.
    To further refine our tool set, the 10th Quadrennial Review of 
Military Compensation (QRMC) initially focused on consolidating special 
pays, bonuses, and recruiting and retention incentives into fewer, 
broader, and more flexible authorities which you have adopted in the 
NDAA for Fiscal Year 2008. I will be sending the first volume of the 
QRMC report to you shortly. By consolidating over 60 separate pays into 
8 broad pay categories, the Department now has increased flexibility to 
target specific skills, and the quantity and quality of personnel 
filling those positions.
    One of our remaining tasks is to rebalance compensation for our 
single military personnel. Based on recommendations from the QRMC, the 
Department set the ``without dependents'' Basic Allowance for Housing 
rate to a minimum of 75 percent of the ``with dependents'' rate. The 
Department will review the QRMC report and determine if additional 
improvements are warranted.
    The QRMC helped the balance of entitlements and discretionary 
bonuses and incentive pays. We are convinced that the expansion of 
entitlements, and the creation of new ones that do not directly and 
measurably improve recruiting, retention, or readiness in a manner 
commensurate with their cost, should be discouraged. Rather, the 
Department requests Congress provide for more discretionary funds in 
special and incentive pays. Currently, those pays account for only 4 
percent of the Military Personnel account.
    In a separate effort, and as follow-on to a 2001 comprehensive 
report to Congress on the Uniformed Services Former Spouses Protection 
Act (USFSPA), the Department is also requesting Congressional support 
for a balanced package of proposed improvements for military members 
and former spouses, and to streamline the efficiency of administering 
accounts. Our USFSPA proposals are grouped into four major areas: 1) 
retirement pay; 2) Defense Finance and Accounting Service (DFAS) 
improvements; 3) procedural improvements; and 4) Survivor Benefit Plan 
(SBP). Proposals include initiatives to prohibit court-ordered payment 
of retired pay prior to retirement; compute divisible retired pay based 
on rank and years of service at divorce; allow direct payments from 
DFAS in all cases (not just cases with more than 10 years of marriage); 
and allow split of SBP between former and current spouses.
Defense Travel Management Office
    The Defense Travel Management Office (DTMO) was established in 
February 2006, to consolidate and synchronize disparate, stove-piped 
and independent commercial travel programs within the Department. The 
DTMO provides oversight for commercial travel management, travel policy 
and implementation, travel card program management, training, 
functional oversight of the Defense Travel System (DTS) and customer 
support, and has embarked on several major efforts to improve oversight 
and services for Defense travelers. In March 2007, we received a report 
containing recommendations resulting from a congressionally mandated, 
independent study of the DTS. This study concluded that the Reservation 
Refresh version of DTS, which was deployed in February 2007, provides 
lowest-cost routing, improves system usability, and allows travelers to 
access a more complete airline flight inventory. The study's authors, 
from the Institute for Defense Analyses, concluded that there is no 
basis to abandon the DTS in favor of another travel system or process. 
The Department has accepted all recommendations from this important 
study and we are committed to implementing them.
    We established enterprise partnerships and a governance structure 
for Defense Travel and are developing a Travel Enterprise performance 
management program. To improve customer support, we conducted a 
comprehensive review of existing travel training programs and enhanced 
our training programs by establishing 23 distance learning modules we 
will implement this year. We established a Travel Assistance Center to 
provide help to all Defense travelers. Currently, the Navy, Marine 
Corps, Defense Agencies, and the After Hours Recruit Assistance program 
have transitioned to this support concept; in addition, the Army and 
Air Force will begin using it this calendar year. We also conducted the 
first DTS Customer Satisfaction Survey, using the Department's ``Quick 
Compass'' survey vehicle, and collected feedback on various aspects of 
Defense Travel via Interactive Customer Evaluation (ICE) tool .
    In September, another key milestone for Defense travel was attained 
when the DTMO awarded an Indefinite Delivery/Indefinite Quantity 
contract for worldwide Commercial Travel Office (CTO) services. For the 
first time, the Department is leveraging an integrated management 
approach to standardize CTO requirements, establish consistent 
standards of service, and ensure consistent levels of service for the 
traveler.
    The coming months will bring even greater improvements in oversight 
and customer service for Defense travel. My office is partnering with 
the General Services Administration (GSA) and the State Department to 
conduct a comprehensive review of Federal and Department travel 
policies. This comprehensive review provides an excellent opportunity 
to ensure policies are modernized, simplified and understandable by 
travelers and managers across the Federal Government. The Department 
recently selected Citibank to provide government travel charge card 
services under the SmartPay  2 master contract administered by the GSA 
for implementation across the Department in November 2008. This 
transition will affect more than 1.2 million Defense personnel who have 
travel charge cards.
DOD Disability Evaluation System
    In honor of the men and women of our Armed Forces, the citizens of 
the United States have a long and proud history of compensating 
servicemembers whose opportunity to complete a military career has been 
cut short by injuries or illnesses incurred in the line of duty. 
Congress mandated the development of a system of rating disabilities in 
1917. Over time, that system has been further refined to the benefit of 
servicemembers and their families. The Career Compensation Act of 1949 
formalized the code the military departments utilize today.
    In addition to DOD disability compensation, former servicemembers 
may be eligible for disability compensation through the Department of 
Veterans Affairs (VA) for service-connected disabilities and for VA 
pension for veterans who are permanently and totally disabled and meet 
certain income requirements. The key difference between the DOD and VA 
disability compensation systems is in the nature of the disabilities 
that are rated. The Military Services award disability ratings only for 
medical conditions which make the individual unfit for continued 
military service, with the intent of compensating for the loss of a 
military career, whereas VA awards ratings for service-connected 
disabilities, to compensate for the average loss of earning capacity. 
Military disability ratings are fixed upon final disposition, while VA 
ratings can vary over time, depending on how a person's condition 
progresses.
    The process of transition from servicemember to veteran has been 
fraught with duplicative and sequential steps requiring time and effort 
to navigate.
    The Department was informed over the last year by the thorough and 
thoughtful reports of the Task Force on Returning Global War on Terror 
Heroes, the Independent Review Group, the President's Commission on 
Care for America's Returning Wounded Warriors (Dole/Shalala 
Commission), the Veterans Disability Benefits Commission (Scott 
Commission), and the DOD Task Force on Mental Health. We have reviewed 
these reports and, where possible, are making changes within policy and 
where supported by legislative revisions.
    A fundamental goal of our efforts is to improve the continuum of 
care from the point-of-injury to community reintegration. To that end, 
in November 2007, a DOD and VA collaborative DES Pilot was implemented 
for disability cases originating at the three major military treatment 
facilities in the National Capitol Region (Walter Reed Army Medical 
Center, Bethesda National Naval Medical Center, and Malcolm Grow 
Medical Center).
    The DES Pilot is a servicemember-centric initiative designed to 
eliminate the often confusing elements of the current disability 
processes of our two Departments. Key features include a single medical 
examination and a single-source disability rating. A primary goal is to 
reduce by half the time required for a member to transition to veteran 
status and receive VA benefits.
    To ensure a seamless transition of our wounded, ill, or injured 
from the care, benefits, and services of DOD to the VA system, the 
pilot is testing enhanced case management methods, identifying 
opportunities to improve the flow of information, and identifying 
additional resources for servicemembers and their families. VA is 
poised to provide benefits to the veterans participating in the pilot 
as soon as they transition out of the military.
                            reserve affairs
National Guard and Reserve Forces
    In recent years we have seen an unprecedented reliance on the 
Reserve components--since September 11, over 623,000 Reserve component 
members (including Selected Reserve and IRR) have been mobilized; of 
that number 164,000 have served more than once. Looking at recent 
trends, and looking to the future, it is clear that we have left behind 
the old model of ``maybe once in a lifetime mobilization.'' Recognizing 
that transformation, this administration has presided over the largest 
set of changes in policy and statute, arguably since the inception of 
the AVF, to transform the Guard and Reserve from a purely strategic 
force to a sustainable Reserve Force with both operational and 
strategic roles.
    The Department began this transformation in 2002 with the 
publication of ``Reserve Component Contributions to National Defense,'' 
as part of that year's Quadrennial Defense Review (QDR). That document 
provided the seminal intellectual foundation for transitioning to an 
Operational Reserve, proposing new ideas for building force 
capabilities and creating flexibility in force management to sustain an 
All-Volunteer Operational Reserve. The proposals addressed included 
changes to Active/Reserve Force structure, potential roles and missions 
in overseas conflicts and in homeland defense, and a new approach to 
personnel management entitled ``continuum of service.''
    Since that time, with the support of Congress, legislation was 
enacted and we implemented numerous initiatives that facilitated the 
successful transition to an Operational Reserve. Although we have 
clearly accomplished much, we still have much to do. The following will 
briefly summarize the considerable progress that has been made and 
efforts that are continuing.
Utilization
    When I started my tenure as the Under Secretary, the Department had 
inherited an Active/Reserve Force structure that was not designed for 
the extended conflict of the kind we now face. The military was 
designed to maximize immediate combat power in the active force while 
using Reserve components as a repository for capabilities needed in the 
later phases of major theater war, combat augmentation and combat 
support/combat service support (CS/CSS), such as military police, 
engineers, and civil affairs.
    In the 1990s, force downsizing, along with reduced budgets and 
rising tempo of operations, spurred an increase in the use of the 
Reserve components, particularly in CS/CSS. Demand for these skills has 
sky-rocketed in the current conflict, to include Reserve component 
combat power, and the Guard and Reserve have proven essential to 
success in the conflict.
    As events unfolded following the attacks of September 11, we 
recognized this increasing reliance would require a different kind of 
Reserve component with changed expectations and policies. Our policies 
on mobilization, force structure rebalancing, personnel management, 
training, readiness, equipping, and family and employer support have 
changed significantly during what is now the largest mobilization of 
the Guard/Reserve since the Korean War--in a war that has lasted longer 
than World War II.
Mobilization Policies
    We authored mobilization policies that institutionalized judicious 
use as the core principle of Reserve component utilization to include 
the latest mobilization policy issued by the Secretary on January 19, 
2007. This document is the underpinning of predictability (1-year 
mobilization, 1:5 utilization) for the Operational Reserve, and it is 
widely supported by military members, families, and employers alike. In 
addition, we set a standard of notifying members a minimum of 30 days 
prior to mobilization. We routinely exceed this goal, now providing 
alerts to units 1 year or more in advance. We now foresee notifying 
units up to 2 years prior to mobilization. We have streamlined the 
mobilization process. These and other changes have sustained the 
Reserve components during a period of extensive mobilizations. Our 
success is reflected in recruitment and retention of Reserve component 
members. (The six DOD Reserve components combined achieved 108 percent 
of their recruiting goals in the first 4 months of fiscal year 2008, 
and attrition during the last 6 years--the global war on terrorism 
years--has been lower than the previous 10 years.) Clearly, the changes 
in compensation and benefits that recognized the increased operational 
role of the Guard and Reserve, as well as the pride guardsmen and 
reservists take in serving their country in these challenging times, 
are major factors in these achievements. It is also fairly evident that 
our policies needed to evolve to sustain a reasonable level of 
utilization of an Operational Reserve Force. The principles established 
in January 2007 that now guide this utilization appear to be serving us 
well:

         Involuntary mobilization for members of the Reserve 
        Forces will be for a maximum 1 year at any one time
         Mobilization of ground combat, combat support and 
        combat service support resources will be managed on a unit 
        basis
         The planning objective for involuntary mobilization of 
        Guard/Reserve units will remain a 1 year mobilized to 5 years 
        demobilized ratio and we will move to the broad application of 
        1:5 as soon as possible
         The planning objective for the Active Force remains 1 
        year deployed to 2 years at home station
         A new program was established to compensate or 
        incentivize individuals who are required to mobilize or deploy 
        early or often, or to extend beyond the established rotation 
        policy goals
         All commands and units have been directed to review 
        how they administer the hardship waiver program to ensure they 
        are properly taking into account exceptional circumstances 
        facing military families of deployed servicemembers
         Use of Stop Loss will be minimized for Active and 
        Reserve component forces

    Our policy has set the standard for judicious and prudent use, 
provides predictability, and ensures Reserve component members are 
treated fairly, and allows for their individual circumstances to be 
taken into consideration.
Rebalancing
    Using personnel data to analyze utilization of individual 
servicemembers by occupation and skill from September 11 to the 
present, we have instituted policies and practices that significantly 
improve how we manage people to ensure the burden is shared more 
equally across the force and to alleviate stress on the force. We found 
which skill sets were in much higher demand and those that were not. 
Some were weighted so heavily toward Reserves that it put Reserve 
component members in jeopardy of repeated, extensive mobilization. New 
force management approaches were developed to achieve a better 
allocation and mix of capabilities in our Active and Reserve components 
to meet the demands of the global war on terrorism and sustain an 
Operational Reserve.
    Over the past 5 years, we developed a rebalancing effort in the 
Services that initially transitioned 89,000 billets in less-stressed 
career fields to more heavily used specialties--such as military 
police, civil affairs, and others. As of this year, we have rebalanced 
about 106,000 billets and working with the Services, they have planned 
and programmed an additional 99,000 billets for rebalancing between 
fiscal years 2008 and 2012. Although the amount and type of rebalancing 
varies by Service, key stressed capability areas include: engineers, 
intelligence, special operations, military police, infantry, aviation, 
space and combat air superiority. By 2012, we expect to have rebalanced 
about 205,000 billets. Rebalancing is a continuous and iterative 
process. The Department will continue to work closely with the Services 
as they review and refine their rebalancing plans to achieve the right 
mix of capabilities and alignment of force structure. This will greatly 
help reduce stress and support the Operational Reserve by providing a 
deeper bench for those skills that are in high demand. However, easing 
the stress on the force is more than just rebalancing the military.
Personnel Management
    At the outset of the conflict, it also became clear that many of 
our Reserve personnel management policies and practices were too rigid 
and inflexible. We knew that we could employ better practices in 
managing personnel.
    One of our signature initiatives is transforming personnel 
management to create a ``continuum of service.'' This approach provides 
greater opportunities for reservists to volunteer for extended periods 
of active duty and additional flexibility in managing Reserve 
personnel. It offers innovative accession and affiliation programs to 
permit individuals with specialized skills to contribute to military 
mission requirements. This supports the Operational Reserve because it 
considerably widens the aperture in how people can serve. Working with 
the members of this committee and your staffs yielded many legislative 
proposals related to the continuum of service, the cornerstone of our 
efforts.
    Reserve Affairs has been leading a continuum of service working 
group to collaborate with the Services to make the changes necessary to 
Department policy and legislation to improve the continuum of service 
for all Services. The record shows that between 2002 and 2007, over 164 
separate legislative changes directly affecting Reserve personnel 
management were enacted, establishing the statutory basis and support 
for the transition to the Operational Reserve. Together, Congress and 
the Department established a new personnel strength accounting 
category, ``reservists on active duty for operational support,'' which 
permits Reserve component members to serve up to 3 years out of 4 on 
active duty, without counting against active duty strength or grade 
ceilings, and always being treated as reservists for promotion 
purposes. Legislative accomplishments also include elimination of 
perceived and real limits on service for reservists; (179 days before a 
member counts against limits of reservists serving on active duty) 
artificial eligibility thresholds (140 days on active duty) to qualify 
for the same housing allowance as active duty members receive, and 
TRICARE Prime; expansion of critical skill and other bonuses for 
reservists; and access to a world-class medical benefit (TRICARE) for 
Selected Reserve members and their families, regardless of the duty 
status of the member.
    We have work left to do, particularly with some of our educational 
assistance programs, and in our continuing efforts to remove 
impediments and barriers to transitioning Reserve component members 
between Reserve and Active service. But we have made tremendous 
progress in cementing the underpinnings of the Operational Reserve with 
a manpower management system vastly different than the one that 
supported once-in-a-lifetime mobilization. One of our final steps will 
be implementation of the Defense Integrated Military Human Resources 
System, which beginning this year will provide transparent, single-
system personnel management.
Training, Readiness, and Equipping
    Our Reserve Forces, which now have more combat veterans than at any 
time since World War II, are the best-equipped and best-trained that 
our Nation has ever had. We recognized the old mobilization/training 
model for a Strategic Reserve of ``mobilize, train, deploy'' would not 
work in a world requiring a more agile and quick response to rapidly 
developing operations. We have transformed from this old model to a new 
mobilization/training model of ``train, mobilize, deploy.'' Your help 
in crafting the NDAA for Fiscal Year 2005 authorizing the mobilization 
of reservists for individual training, makes unit post-mobilization 
training more efficient.
    During pre-mobilization, units certify individual medical, dental 
and administrative readiness and certify certain individual and theater 
specific skills in order to minimize time at the mobilization station 
to maximize ``Boots on the Ground.'' The standardization of processes, 
procedures, and applications for units at home station will allow the 
transfer of certification documentation to the mobilization station and 
significantly reduce the need to recertify pre-mobilization processing 
and training.
    Training transformation is a dynamic and constantly evolving 
process that will ensure all individuals, units and organizations of 
the Total Force receive the education and training needed to accomplish 
tasks that support the combatant commanders. The combination of web-
based technologies and distance-learning methodologies are cost-
effective alternatives to sending individuals away to resident courses 
and units off to live-training events. In many cases, units can train 
at their home stations and individuals can complete required courses on 
their home computers. While these training technologies can never 
completely replace the need for some forms of face-to-face education 
and training, they do help reduce post-mobilization time spent 
preparing for deployment overseas by allowing individuals and units to 
complete more pre-deployment requirements before they mobilize. 
Likewise, Innovative Readiness Training allows units and individuals to 
carry out training that improves their mobilization readiness while at 
the same time undertaking projects that serve the larger community.
    We are also looking at increased Active/Reserve component 
integration to improve Reserve component availability to the warfighter 
as a critical step in the continuing evolution of the Operational 
Reserve. Integration of the active and Reserve components support the 
Department's transformation to a capabilities-based force that will 
help relieve stress on the force. Integration will increase warfighter 
capability, facilitate equipment utilization, and provide a method to 
increase deployment predictability.
    Furthermore, we have supported the development of force-generation 
models by the Services, which ultimately provide predictability for an 
Operational Reserve Force, accompanied by a training and equipping 
strategy that will provide more first-line equipment to be positioned 
in the Reserves and which will also allow more training be conducted in 
the pre-mobilization phase at home station. We have achieved major 
progress in programming funds and equipping our Reserve components for 
an operational role. We are progressing in changing equipping 
priorities to align better with Service force generation models and to 
raise the importance of homeland defense in equipping considerations.
Equipping Strategy
    The Reserve components of each military department need to be 
properly equipped not only when deploying, but in order to stay 
trained. The design of the Reserve component equipping strategy is 
envisioned to procure and distribute equipment to maintain a degree of 
readiness that is responsive to the combatant commanders' request while 
sustaining capabilities to respond when called upon here at home. The 
strategy also must take into account the Department's support to State 
Homeland Defense missions, while maximizing equipment availability 
throughout the force.
    The Department's goal is to analyze what and where the greatest 
needs lie and design and achieve the strategy that is the best fit for 
today's Operational Reserve--rather than relying on an outdated 
equipping strategy for a purely Strategic Reserve Force. Major changes 
in current thinking as well as new concepts are needed for equipping 
the Reserve component force. Focusing on availability, access, and 
transparency in distribution of equipment and resources must be 
paramount. The Department's ultimate goal is to fully equip units using 
a transitional approach designed to provide an equipped, trained, and 
ready force at various stages of a Service's rotation policies, while 
factoring in our Homeland Defense mission.
Families, Healthcare, and Employers
    During this time of transition to an Operational Reserve, we 
recognized that support of families and employers is vital to success. 
The Department has devoted substantial resources and efforts toward 
expanding the support for our families. The challenge is particularly 
acute for widely-dispersed Reserve families, most of who do not live 
close to major military installations. Thus, we have developed and 
promoted Web sites and electronic support for families, have promoted 
use of the 700 military family service centers for all Active, Guard, 
and Reserve families to provide personal contact, and have hosted and 
attended numerous family support conferences and forums. Reintegration 
training and efforts to support members and families following 
mobilization, particularly for service in the combat zones, are vital. 
The reintegration program in Minnesota forms a basis for the Yellow 
Ribbon Reintegration Program for all Guard and Reserve members required 
in the NDAA for Fiscal Year 2008 . The Department is fully committed to 
implementing this program, which will provide Guard and Reserve 
members, and their families, the support that will help them during the 
entire deployment cycle--from preparation for active service to 
successful reintegration upon return to their community and beyond. We 
are moving quickly to stand up an interim Office for Reintegration 
Programs, which will operate until permanent staff, facilities and 
required resources are determined. We will continue to work with State 
Governors, their Adjutants General, the State family program directors 
as well as with the Military Services and their components to ensure an 
integrated support program is delivered to all Guard and Reserve 
members and their families.
    The Defense Management Data Center is creating a website for 
Reserve personnel to check the status of all of their benefits. This 
website is in the final stages of approval and should go live in the 
very near future.
    The Department has fully implemented the TRICARE Reserve Select 
(TRS) program, which offers an affordable healthcare program to all 
Selected Reserve members and their families (unless they are covered 
under the Federal Employee Health Benefit Program). This is a valuable 
benefit that our members and their families appreciate. The transition 
from the three-tiered TRS program to the comprehensive program 
authorized in the NDAA for Fiscal Year 2007 has been very smooth and we 
continue to publicize this much improved benefit.
    We implemented a policy requiring Reserve component members to 
complete a periodic Health Assessment annually. In addition, Guard and 
Reserve members complete a predeployment health assessment to identify 
nondeployable health conditions and a post-deployment health assessment 
to identify deployment related conditions prior to releases from active 
duty. Those members identified with health related conditions post-
deployment are provided evaluation and treatment.
    Because health and adjustment concerns may not be noticed 
immediately after deployment, a Post-Deployment Health Reassessment 
(PDHRA) is provided within 90 to 180 days after redeployment to address 
mental health and physical health concerns that may develop. The PDHRA 
is designed to identify conditions that emerge later and facilitate 
access to services for a broad range of post-deployment concerns. 
Establishing the Yellow Ribbon Reintegration Program across all Guard 
and Reserve units and commands will facilitate identifying symptoms and 
conditions, and ensuring members receive the care and treatment they 
need and deserve.
    The support for employers over the past 6 years mirrors the 
increased support for families. We doubled the budget of the National 
Committee for Employer Support of the Guard and Reserve (ESGR). We 
developed an employer database which identifies the employers of Guard/
Reserve members, expanded the ESGR State committees and their support 
(over 4,500 volunteers are now in these committees) and are reaching 
out to thousands more employers each year. The Freedom Awards program 
and national ceremony to recognize employers selected for this award 
has become a capstone event, in which the President has recognized in 
the Oval Office in each of the past 2 years the annual Freedom Award 
winners (15 recipients per year from more than 2000 nominees). Never in 
the history of the Guard and Reserve have families and employers been 
supported to this degree and they appreciate it, as this effort is 
critical to sustaining an Operational Reserve.
Commission on the National Guard and Reserves
    The Commission tendered a report in March 2007 evaluating the 
``National Guard Empowerment Act'' as directed by Congress. The 
Secretary responded quickly to the recommendations of the Commission 
and directed development of plans to implement the Commission's 
recommendations. Of the 22 plans developed:

         Eight are complete or now embedded in DOD processes
         Nine have met their objective of producing directives, 
        memoranda, recommendations, or policies, and are progressing 
        through the staffing process
         Work is on schedule for the five remaining plans that 
        have longer implementation objectives

    We have completed a preliminary review of the Commission's final 
report and we are pleased that the Commission supported two of our 
major strategic initiatives--an Operational Reserve and the Continuum 
of Service. We disagree, however, with the Commission's views on the 
Department's ability to respond to homeland operations. I was 
disappointed that the Commission downplayed the many, significant 
changes that the Department and Congress have made to facilitate the 
transition to an Operational Reserve and institutionalize the Continuum 
of Service. Much has already been accomplished.
    We will conduct a comprehensive review of the Commission's 
recommendations and propose courses of action for the Secretary to 
consider.
    Because our Reserve components will be asked to continue their role 
as an operational force, we are developing a DOD directive to provide 
the framework for an Operational Reserve in a single document. The 
National Guard and Reserve continue to be a mission-ready critical 
element of our National Security Strategy.
    Working together, we can ensure that the Reserve components are 
trained, ready, and continue to perform to the level of excellence they 
have repeatedly demonstrated over the last 6\1/2\ years.
               foreign language and regional proficiency
    Foreign language and regional proficiency, which includes cultural 
awareness, have emerged as key competencies for our 21st century Total 
Force. Skills in foreign language and cultural understanding are 
increasingly important ``soft'' skills in the DOD. Our forces are 
operating with coalition and alliance partners and interact with 
foreign populations, in a variety of regions, with languages and 
cultures different from ours. Past experience has proven repeatedly 
that we enhance partnerships with our allies and coalition partners 
when we are able to communicate and when we demonstrate an 
understanding and respect for the cultures of our allies and coalition 
partners.
    Our challenge lies in the reality that language and regional 
proficiency take time to develop and sustain. Even when we devote that 
time, the next threat to security will very likely require different 
language and cultural capabilities, in an entirely different region of 
the world. Any solution, whether it is policy-driven, programmatic, 
scientific, or pedagogic, must be adaptable and agile to meet the 
challenges of tomorrow as well as the requirements of today.
Essential Soft Skills
    Three years ago, the Department did not have policies in place to 
effectively manage a true Defense enterprise-wide approach to 
establishing foreign language skills and regional knowledge. These 
skills were not core competencies within the Total Force, but resided 
mostly within the Intelligence Community professionals, Special Forces, 
and the Foreign Area Officer program. Now we have DOD directives and 
instructions that institutionalize attention to these needs. Three 
years ago, cultural training was sporadic across the Department. Now 
this vital training, referred to as Regional Area Content, is 
incorporated into all aspects of our officer Professional Military 
Education, and the Services are extending it to all enlisted 
professional military education as well.
Strategic Guidance
    The Strategic Planning Guidance (fiscal year 2006 through fiscal 
year 2011) directed development of a comprehensive roadmap to achieve 
the full range of language capabilities necessary to carry out national 
strategy. The resulting 2005 Defense Language Transformation Roadmap, 
through its 43 specific actions, has guided the Department in building 
language, regional and cultural knowledge skills required to meet our 
many and diverse mission requirements. The Roadmap provides broad goals 
that ensures a strong foundation in language, regional and cultural 
proficiency, a capacity to surge to meet unanticipated demands, and a 
cadre of language professionals--our ability to provide the right 
resource, at the right level of competency, at the right place, at the 
right time.
    The 2006 QDR drove an increase in funding of approximately 50 
percent through the Future Years Defense Program for initiatives to 
strengthen and expand our Defense Language Program. These initiatives 
span technology, training, education, recruitment, and outreach 
programs to our Nation. The Strategic Planning Guidance for fiscal year 
2008 through 2013 outlines the national commitment to developing the 
best mix of capabilities within the Total Force and sets forth a series 
of additional roadmaps that coincide with the goals of the Defense 
Language Transformation Roadmap.
    To unify Department efforts to ensure oversight, execution, and 
direction for DOD language and culture transformation, the Deputy 
Secretary of Defense assigned the Under Secretary of Defense for 
Personnel and Readiness responsibility for the overall Defense Language 
Program. The Deputy Secretary then created a board of senior leaders to 
oversee this effort. The Deputy Under Secretary of Defense for Plans 
was appointed the DOD Senior Language Authority. We now have Senior 
Language Authorities for each Combatant Command, in each of the four 
Services, the Joint Staff, Defense Agencies, and Defense Field 
Activities. The Defense Language Steering Committee, composed of these 
members and principal Office of the Secretary of Defense (OSD) staff, 
serves as an advisory board and guides the execution of the Roadmap. 
The Defense Language Office is now in place to ensure oversight and 
execution of the Defense Language Transformation Roadmap and to 
institutionalize the Department's commitment to these critical and 
enduring competencies.
Screening and Assessment
    A critical initiative of the Defense Language Transformation 
Roadmap is to identify the capabilities and resources needed across the 
Department to meet mission requirements. We have nearly completed a 3-
year effort to identify the language and regional proficiency 
requirements necessary to support operational and contingency planning 
and day-to-day mission requirements. Simultaneously, we initiated 
reviews of all relevant doctrine, policies, and planning guidance to 
ensure that they include where appropriate the need for language, 
regional and cultural capabilities.
    Before 2004, we had never conducted a comprehensive assessment to 
identify the specific languages and proficiency levels of the Total 
Force. We are now asking every servicemember and inviting every 
civilian employee to indicate language proficiency beyond English. We 
are pleased to report that we have over 280,000 foreign language 
capabilities in-house. As you would expect, it consists primarily of 
the foreign languages traditionally taught in the United States such as 
French, German and Spanish. However, a surprising number are proficient 
in languages of contemporary strategic interest ranging from Chinese to 
Tagalog to Igboo. Individuals are now routinely screened as part of the 
military accession and civilian hiring process and we now have database 
capabilities that allow us to identify needs and match them to existing 
resources.
    In order to encourage servicemembers to identify, improve, and 
sustain language capability, we implemented a revised Foreign Language 
Proficiency Bonus (FLPB) policy, and, with the support of Congress, 
increased the proficiency bonus from $300 maximum per month, up to 
$1,000 maximum per month for military personnel. The number of enlisted 
personnel who currently receive this incentive pay has increased about 
21 percent since implementation of this policy change. Congressional 
support now provides equitable language proficiency bonus policies for 
both the Active and Reserve components.
    In an effort to identify gaps in capability, we are developing a 
Language Readiness Index (LRI), which will be integrated into the 
Defense Readiness Reporting System's network of software applications. 
The LRI will compare foreign language requirements to the language 
capability of individuals available to perform missions across the 
Total Force, resulting in the identification of the gaps in the 
language capability. The LRI is designed to be used by DOD agencies, 
combatant commands, and the Services to provide decisionmakers with the 
tools necessary to assess language risk and take appropriate action.
Foreign Area Officers
    High levels of language, regional and cultural knowledge and skills 
are needed to build the internal and external relationships required 
for coalition/multi-national operations, peacekeeping, and civil/
military affairs. In 2005, the Department began building a cadre of 
language specialists possessing high-level language proficiency (an 
Interagency Language Roundtable (ILR) Proficiency Level 3 in reading, 
listening, and speaking ability, or 3/3/3) and regional expertise. We 
are working to identify the tasks and missions that will require this 
professional-level proficiency and determine the minimum number of 
personnel needed to provide this language capability.
    The Foreign Area Officers (FAOs) program fulfills the Department's 
need for this cadre of language and regional professionals. FAOs are 
highly educated, have professional-level fluency in at least one 
regional language, and have studied and traveled widely in their region 
of expertise. In 2005, there was no unified approach to fielding FAOs. 
Two Services did not have FAO programs. The Department now requires all 
Services to establish formal FAO programs, standardizing the 
requirements that one must meet to become a FAO. Our FAOs must have, in 
addition to a broad range of military skills, experience with the 
political, cultural, sociological, economic, and geographical factors 
of the countries and regions in which they are stationed; knowledge of 
political-military affairs; and must be professionally proficient in 
one or more of the dominant languages in their region of proficiency. 
The Services have dramatically increased the number of FAO positions to 
approximately 1,600.
Preaccession
    We start building language skills in future officers prior to 
commissioning. The 2006 QDR recognized that there is insufficient time 
available during most military careers to build advanced language 
capabilities throughout the Force for other than FAOs and those 
specialties that require the use of language full-time. The three 
Military Service Academies have enhanced their foreign language study 
programs to develop language and cultural knowledge. They now require 
all nontechnical degree cadets and midshipmen to take four semesters of 
foreign language study. The United States Military Academy and the 
United States Air Force Academy have established language majors in 
Arabic and Chinese. The United States Naval Academy, for the first time 
in history, will offer midshipmen the opportunity to major in a foreign 
language beginning with the Class of 2010.
    We are expanding opportunities for members of the Reserve Officers' 
Training Corps (ROTC) to learn a foreign language. Of the 1,322 
colleges and universities with ROTC programs, 1,149 offer foreign 
language study, but many of the languages we need for current 
operations are not widely offered at this time. Therefore, the 
Department has launched a program to award grants to colleges and 
universities with ROTC programs to expand opportunities for ROTC cadets 
and midshipmen to study languages and cultures critical to national 
security. Increasing the number of what we call ``less commonly taught 
languages'' in college curricula remains a challenge in which we are 
actively engaged. We seek your support for a fiscal year 2009 
legislative proposal to support the Secretary's goal of encouraging 
ROTC cadets and midshipmen in Senior ROTC to study foreign language 
courses of strategic interest to the Department. The proposal would 
award up to $3,000 per year to a ROTC student studying a language of 
interest.
Post Accession
    Since the September 11 terrorist attacks, we have redirected 
training toward the strategic languages, such as Arabic, Chinese and 
Persian Farsi. The Defense Foreign Language Institute Foreign Language 
Center is the Department's schoolhouse for training military personnel. 
Over 2,000 servicemembers graduate each year having studied 1 of 24 
languages. In 2006 we implemented the Proficiency Enhancement Program 
designed to graduate 80 percent of the students at increased language 
proficiency levels. We are well on our way to achieving this goal. 
Changes include reducing the student-to-instructor ratio, increasing 
the number of classrooms, creating improved expanded curricula, 
retooling faculty training, deploying classroom technology integration, 
and expanding overseas training. Cultural awareness has also been added 
to every language course.
    The Defense Language School's foreign language and cultural 
instruction extends beyond the classroom, offering Mobile Training 
Teams, video tele-training, Language Survival Kits, and online 
instructional materials. Since 2001, the Defense Language School has 
dispatched over 434 Mobile Training Teams to provide targeted training 
to more than 50,000 personnel. Deployed units have received over 
800,000 Language Survival Kits--mostly Iraqi, Dari, and Pashto.
Increasing the Capacity to Surge
    Ensuring that we have a strong foundation in language and regional 
proficiency involves reaching out to personnel who already possess 
these skills to employ in our workforce. All of our military Services 
have developed heritage-recruiting plans to bring personnel into the 
Force with key language skills and regional proficiency. These plans 
focus on reaching out to our heritage communities and their children 
who possess near-native language skills and knowledge of the culture. 
One particularly successful program is the Army Interpreter/Translator 
(09L) Program. This pilot program was launched in 2003 to recruit and 
train individuals from heritage Arabic, Dari, and Pashto communities to 
support operations in Iraq and Afghanistan. The program was so 
successful that in 2006, it was formally established as a permanent 
military occupational specialty with a career path from recruit through 
sergeant major. More than 450 native/heritage speakers have 
successfully graduated; an additional 150 personnel are currently in 
the training pipeline.
Defense Language Testing
    Another critical component of our effort to improve language 
capability is to validate and deliver tools for measuring language 
proficiency. We have taken steps to strengthen our Defense Language 
Testing System by updating test content and delivery. Delivering these 
tests over the Internet greatly increases the availability and 
accessibility of these tests to Defense language professionals 
worldwide.
Supporting the National Agenda
    In January 2006, the President of the United States announced the 
National Security Language Initiative. The Initiative was launched to 
dramatically increase the number of Americans learning critical need 
foreign languages such as Arabic, Chinese, Russian, Hindi, and Farsi. 
The Secretary of Defense joined the Secretaries of State and Education, 
and the Director of National Intelligence to develop a comprehensive 
national plan to expand opportunities for United States students to 
develop proficiencies in critical languages from early education 
through college. The White House provides ongoing coordination as 
partner agencies work to implement this plan.
    The focal point for the Department's role in the National Security 
Language Initiative is the National Security Education Program (NSEP). 
NSEP represents a key investment in creating a pipeline of 
linguistically and culturally competent professionals into our 
workforce. NSEP provides scholarships and fellowships to enable 
American students to study critical languages and cultures in return 
for Federal national security service. NSEP partners with universities, 
providing grants for the development and implementation of National 
Flagship Language Programs, specifically designed to graduate students 
at an ILR Level Three (3/3/3) language proficiency (in reading, 
listening and speaking modalities) in today's critical languages. These 
programs provide a major source of vitally needed language proficiency 
in the national security community. As part of the DOD's contribution 
to the National Security Language Initiative, we have expanded the 
National Language Flagship Program to establish new flagship programs 
in Arabic, Hindi, and Urdu and to expand the Russian flagship to a 
Eurasian program focusing on critical central Asian languages. The 
flagship effort serves as an example of how the National Security 
Language Initiative links Federal programs and resources across 
agencies to enhance the scope of the Federal Government's efforts in 
foreign language education. For example, the flagship program is 
leading the way in developing programs for students to progress through 
elementary, middle, and high school and into universities with more 
advanced levels of language proficiency. This enables our universities 
to focus more appropriately on taking a student from an intermediate or 
advanced level to the professional proficiency. While focusing on early 
language learning, this effort has already succeeded in enrolling 10 
students, as freshmen, from Portland, OR, high schools in an 
experimental advanced, intensive 4-year Chinese program at the 
University of Oregon. We have also awarded a grant to the Chinese 
flagship program at Ohio State University to implement a State-wide 
system of Chinese programs. Finally, we awarded a grant to Michigan 
State University to develop an Arabic pipeline with the Dearborn, MI, 
school district, announced in conjunction with the Department of 
Education's foreign language assistance program grant.
National Language Service Corps
    Our second commitment to the President's National Security Language 
Initiative is the launching of the National Language Service Corps 
pilot program. This effort will identify Americans with skills in 
critical languages and develop the capacity to mobilize them during 
times of national need or emergency. The National Language Service 
Corps represents the first organized national attempt to capitalize on 
our rich national diversity in language and culture. This organization 
has a goal of creating a cadre of 1,000 highly proficient people, in 10 
languages by 2010 and began recruiting in January 2008.
    Recently, the department coordinated a series of regional summits 
to engage State and local governments, educational institutions, school 
boards, parents, and businesses at the local level in addressing 
foreign language needs. The NSEP reached out to the proficiency of its 
three flagship universities--in Ohio, Oregon, and Texas to convene 
these summits and to develop action plans that reflect an organized and 
reasonable approach to building the infrastructure for language 
education at the State and local level.
    Industry, academia, Federal, State, and local governments, 
business, nongovernmental organizations and our international partners 
must continue to work together in order to achieve our mutual goals. 
The United States continues to seek out and increase collaboration in 
today's global world. The DOD is leading an effort in the public and 
private sectors of the United States to develop a globalized workforce 
through the development of language, regional and cultural capabilities 
and is deeply committed to this initiative. We have fundamentally 
transformed our approach to foreign language and cultural capabilities 
and in doing so have ignited a spark across the Nation that is 
resulting in increased language and international education programs in 
schools and colleges. The need for language, regional and cultural 
competence is real and critical and is not confined to the DOD or the 
shores of the United States. We clearly face a world challenge that 
will require that we embrace the diversity that makes us who we are, 
while at the same time, enable us to work together to solve the complex 
global challenges that we face.
    The Department has, since 2001, led a national effort to address 
serious national shortfalls in foreign language expertise. The context 
for languages has changed dramatically in less than a decade--we need 
to address more and more languages at higher levels of proficiency. We 
recognize that we cannot address our own language needs or those of the 
broader national security community and Federal sector without a 
strategic investment in the development of a more globalized 
professional workforce--one that is multi-lingual and multi-cultural. 
The results of our own Department language transformation roadmap are 
impressive. But we also recognize that in order to successfully address 
our ever-expanding needs we simply must invest long-term in key 
``leverage points'' in the U.S. education system. Enlarging the 
recruitment pool will serve to lower the costs and allow the Department 
to devote more time to mission-critical skills. As a side benefit it 
will serve to change attitudes and increase the national capability to 
respond to military, diplomatic, economic and social needs.
                             defense health
    A crucial part of my portfolio as the Under Secretary of Defense 
for Personnel and Readiness is the health of our servicemembers. Over 
the last 7 years the Military Health System (MHS) has implemented 
significant new programs for its more than 9 million beneficiaries, 
overhauled contracts, leveraged new technology, provided global health 
and support around the world, and made dramatic improvements in 
battlefield medicine and care of the wounded, injured and ill.
Force Health Protection
    Force Health Protection embraces a broad compilation of programs 
and systems designed to protect and preserve the health and fitness of 
our servicemembers--from their entrance into the military, throughout 
their military service to their separation or retirement, and follow-on 
care by the VA. Our integrated partnership for health between 
servicemembers, their leaders and health care providers ensures a fit 
and healthy force and that the continuum of world-class health care is 
available anytime, anywhere.
    In 2007, we recorded remarkable war-wounded survival rates, the 
lowest death-to-wounded ratio in the history of American military 
operations, and the lowest disease non-battle injury rate.

         Lowest Disease, Non-Battle Injury Rate. As a testament 
        to our medical readiness and preparedness, with our preventive-
        medicine approaches and our occupational-health capabilities, 
        we are successfully addressing the single largest contributor 
        to loss of forces--disease.
         Lowest Death-to-Wounded Ratio. Our agility in reaching 
        wounded servicemembers, and capability in treating them, has 
        altered our perspective on what constitutes timeliness in 
        lifesaving care from the golden hour to the platinum 15 
        minutes. We are saving servicemembers with grievous wounds that 
        were likely not survivable even 10 years ago.
         Reduced time to evacuation and definitive tertiary 
        care. We now expedite the evacuation of servicemembers 
        following forward-deployed surgery to stateside definitive 
        care. We changed our evacuation paradigm to employ airborne 
        intensive-care units. Wounded servicemembers often arrive back 
        in the United States within 3-4 days of initial injury.

    One of our most important preventive health measures in place for 
servicemembers today--immunization programs--offer protection from many 
diseases endemic to certain areas of the world and from diseases that 
can be used as weapons. These vaccines are highly effective, and we 
base our programs on sound scientific information verified by 
independent experts.
    The Department has programs to protect our servicemembers against a 
variety of illnesses. We continue to view smallpox and anthrax as real 
threats that may be used as potential bioterrorism weapons against our 
soldiers, sailors, airmen, and marines. To date, through the use of 
vaccines we have protected almost 1.6 million servicemembers against 
anthrax spores and more than 1.1 million against the smallpox virus. 
These vaccination programs have an unparalleled safety record and are 
setting the standard for the civilian sector. Since the Food and Drug 
Administration published the Final Order confirming that the anthrax 
vaccine absorbed is safe and effective for its labeled indication to 
protect individuals at high risk for anthrax disease, we restarted the 
mandatory anthrax vaccination program.
    Insect-repellant-impregnated uniforms and prophylactic medications 
also protect our servicemembers from endemic diseases, such as malaria 
and leishmaniasis, during deployments. Since January 2003, DOD 
environmental health professionals have analyzed more than 6,000 
theater air, water, and soil samples to ensure that forces are not 
unduly exposed to harmful substances during deployments.
    We published a new DOD Instruction, ``Deployment Health,'' in 2006. 
Among its many measures to enhance force health protection is a 
requirement for the Services to track and record daily locations of DOD 
personnel as they move about in theater and report data weekly to the 
Defense Manpower Data Center. We can use the data collected to identify 
populations at risk for exposure, to easily assign environmental 
exposures on a population basis, to study long-term health effects of 
deployments, and to mitigate health effects in future conflicts.
    Among the many performance measures the MHS tracks is the medical 
readiness status of individual members, both Active and Reserve. The 
MHS tracks individual dental health, immunizations, required laboratory 
tests, deployment-limiting conditions, Service-specific health 
assessments, and availability of required individual medical equipment. 
We are committed to deploying healthy and fit servicemembers and to 
providing consistent, careful post-deployment health evaluations with 
appropriate, expeditious follow-up care when needed.
    Medical technology on the battlefield includes expanded 
implementation of the Theater Medical Information Program and 
enhancements to the Theater Medical Data Store in support of Operations 
Iraqi Freedom and Enduring Freedom. These capabilities provide a means 
for medical units to capture and electronically disseminate near-real-
time information to commanders. Information provided includes in-
theater medical data, medical surveillance analysis and reports, 
environmental hazards and exposures, and such critical logistics data 
as blood supply, beds, and equipment availability. Theater Medical 
Information Program enhancements, particularly in the capture, 
distribution, and expanded access to inpatient and outpatient medical 
information, enables DOD and VA health care providers to have complete 
visibility into the continuum of care across the battlefield, from 
theater to sustaining base.
    With the expanded use of the Web-based Joint Patient Tracking 
Application, our medical providers also will have improved visibility 
into the continuum of care across the battlefield, and from theater to 
sustaining base. New medical devices introduced to OIF provide field 
medics with blood-clotting capability; light, modular diagnostic 
equipment improves the mobility of our medical forces; and individual 
protective armor serves to prevent injuries and save lives.
    DOD has been performing health assessments on servicemembers prior 
to and just after deployment for several years now. These assessments 
serve as a screen to identify any potential health concerns that might 
warrant further medical evaluation. This includes screening the mental 
well-being of all soldiers, sailors, airmen, and marines in the Active 
Force, Reserves, and National Guard.
    We are also ensuring our servicemembers are medically evaluated 
before deployments (through the Periodic Health Assessment), upon 
return (through the Post-Deployment Health Assessment) and then again 
90-180 days after deployment (through the PDHRA). These health 
assessments provide a comprehensive picture of the fitness of our 
forces and highlight areas where we may need to intervene. For example, 
we have learned that servicemembers do not always recognize or voice 
health concerns at the time they return from deployment, but may do so 
after several months back home.
    For the period of June 1, 2005 to January 8, 2008, 466,732 
servicemembers have completed a PDHRA, with 27 percent of these 
individuals receiving at least one referral for additional evaluation. 
By reaching out to servicemembers 3 to 6 months post-deployment, we 
have learned their concerns are physical-health concerns, e.g., back or 
joint pain, and mental health concerns. This additional evaluation 
gives medical staff an opportunity to provide education, reassurance, 
or additional clinical evaluation and treatment, as appropriate. 
Fortunately, as these clinical interactions occur, we have learned that 
only a fraction of those with concerns have diagnosed clinical 
conditions.
    Mental health services are available for all servicemembers and 
their families before, during, and after deployment. Servicemembers are 
trained to recognize sources of stress and the symptoms of depression, 
including thoughts of suicide, in themselves and others, that might 
occur because of deployment. Combat-stress control and mental health 
care are available in theater. In addition, before returning home, we 
brief servicemembers on how to manage their reintegration into their 
families, including managing expectations, the importance of 
communication, and the need to control alcohol use.
    During the return from deployment process, we educate 
servicemembers and assess them for signs of mental health issues, 
including depression and Post Traumatic Stress Disorder (PTSD), and 
physical health issues. During the post-deployment reassessment, we 
include additional education and assessment for signs of mental and 
physical health issues.
    After returning home, servicemembers may seek help for any mental 
health issues that may arise, including depression and PTSD, through 
the MHS for active duty and retired servicemembers, or through the VA 
for non-retired veterans. TRICARE is also available for 6 months post-
return for Reserve and Guard members. To facilitate access for all 
servicemembers and family members, especially Reserve component 
personnel, the Military OneSource Program--a 24/7 referral and 
assistance service--is available by telephone and on the Internet. 
Additionally, we have fielded the DOD Deployment Health and Family 
Readiness Library (http://deploymenthealthlibrary.fhp.osd.mil/) to 
provide a convenient source of deployment health and family readiness 
information for servicemembers, family, health care providers and 
commanders. We also provide face-to-face counseling in the local 
community for all servicemembers and family members. We provide this 
nonmedical counseling at no charge to the member, and it is completely 
confidential.
    To supplement mental health screening and education resources, we 
added the Mental Health Self-Assessment Program in 2006. This program 
provides military families, including National Guard and Reserve 
families, Web-based, phone-based and in-person screening for common 
mental health conditions and customized referrals to appropriate local 
treatment resources. The program also includes parental screening 
instruments to assess depression and risk for self-injurious behavior 
in their children, along with suicide-prevention programs in DOD 
schools. Spanish versions of the screening tools are available, as 
well.
    Pandemic influenza represents a new threat to national security. 
With our global footprint and far-reaching capabilities, we are 
actively engaged in the Federal interagency effort to help effectively 
prevent, detect, and respond to the threat of avian influenza, 
domestically and internationally. The President's National Strategy for 
Pandemic Influenza includes the DOD as an integral component in our 
Nation's response to this threat. One example of this integrated 
response is DOD's medical Watchboard website, established in 2006, to 
provide ready access to pandemic influenza information for DOD 
servicemembers, civilians, and their families, DOD leaders, and DOD 
health care planners and providers. The DOD Watchboard is linked to 
PandemicFlu.gov for one-stop access to U.S. Government avian and 
pandemic influenza information.
Then and Now--Traumatic Brain Injury (TBI)
    Seven years ago, TBI was not part of our Nation's vernacular. 
Today, the MHS is working on a number of measures to evaluate and treat 
servicemembers affected or possibly affected by TBI. Our new Defense 
Center of Excellence for Psychological Health and Traumatic Brain 
Injury will integrate quality programs and advanced medical technology 
to give us unprecedented expertise in dealing with psychological health 
and TBI. In developing the national collaborative network, the Center 
will coordinate existing medical, academic, research, and advocacy 
assets within the Services, with those of the VA and Health and Human 
Services, other Federal, State, and local agencies, as well as academic 
institutions. The Center will lead a national effort to advance and 
disseminate psychological health and traumatic brain injury knowledge, 
enhance clinical and management approaches, and facilitate other vital 
services to best serve the urgent and enduring needs of our wounded 
warriors and their families.
Then and Now--Extremity Injury
    Under the leadership at Walter Reed, the Military Advanced Training 
Center opened in September 2007 to accelerate improvements in amputee 
care. Together with prosthetics research and innovations developed and 
tested at the Center for the Intrepid in San Antonio--a great gift from 
the Fisher family--nearly 15 percent of amputees can now remain on 
active duty. Many others are helped by the Computer/Electronic 
Accommodations Program.
Then and Now--Health Informatics
    Over the last 7 years, the MHS developed and implemented Armed 
Forces Health Longitudinal Technology Application (AHLTA), DOD's global 
electronic health record and clinical data repository. The MHS 
continues to add capabilities to AHLTA, which does not yet have an 
inpatient record. The MHS will have requirements for a joint DOD-VA 
inpatient record, and work on that will soon begin.
    AHLTA, DOD's global electronic health record and clinical data 
repository, significantly enhances MHS efforts to build healthy 
communities. AHLTA creates a life-long, computer-based patient record 
for each military health beneficiary, regardless of location, and 
provides seamless visibility of health information across our entire 
continuum of medical care. This gives our providers unprecedented 
access to critical health information whenever and wherever care is 
provided to our servicemembers and beneficiaries. In addition, AHLTA 
offers clinical reminders for preventive care and clinical-practice 
guidelines for those with chronic conditions.
    In November 2006, we successfully completed worldwide deployment of 
AHLTA Block 1 at all DOD MTFs. Our implementation-support activities 
spanned 11 time zones and included training for 55,242 users, including 
18,065 health care providers. DOD's Clinical Data Repository is 
operational and contains electronic clinical records for more than 9 
million beneficiaries. AHLTA use continues to grow at a significant 
pace. As of January 4, 2008, our providers had used AHLTA to process 
66,491,855 outpatient encounters, and they currently process more than 
124,000 patient visits per workday.
    The MHS is accelerating AHLTA's responsiveness with version 3.3, 
which will be appreciably faster and more user friendly.
Then and Now--Health Care Communications
    Seven years ago, MHS communications were mostly one-way. Today, 
with the arrival of web 2.0, the MHS has an opportunity to be 
transparent about quality, satisfaction and cost effectiveness. TRICARE 
launched a new Web site in 2007 with a new approach to delivering 
information to its beneficiaries that is based on extensive user 
research and analysis. A key feature of the redesign is that users now 
receive personalized information about their health care benefits by 
answering a few simple questions about their location, beneficiary 
status and current TRICARE plan.
    Recently, the MHS launched a new Web site, www.health.mil. Its 
purpose is to inspire innovation, creativity, and information sharing 
among MHS staff.
Then and Now--Health Budgets and Financial Policy
    The TRICARE benefit has been enhanced through the implementation of 
TRICARE for Life, expansion of covered services and new benefits for 
the Reserve component. These benefit enhancements have come at a time 
when private-sector employers are shifting substantially more costs to 
employees for their health care. TRICARE has actually moved in the 
other direction.
    At the direction of Congress, we executed new health benefits which 
extend TRICARE coverage to members of the National Guard and Reserve. 
We implemented an expanded TRS health plan for Reserve component 
personnel and their families, as mandated by the NDAA for Fiscal Year 
2007. Today, more than 61,000 reservists and their families are paying 
premiums to receive TRS coverage. In addition, we made permanent their 
early access to TRICARE upon receipt of call-up orders and their 
continued access to TRICARE for 6 months following active duty service 
for both individuals and their families. Our fiscal year 2009 budget 
request includes $407 million to cover the costs of this expanded 
benefit.
    The Department is committed to protecting the health of our 
servicemembers and providing the best health care to more than 9 
million eligible beneficiaries. The fiscal year 2009 Defense Health 
Program funding request is $23.6 billion for Operations and 
Maintenance, Procurement and Research, and Development, Test and 
Evaluation Appropriations to finance the MHS mission. Total military 
health program requirements, including personnel expenses, is $42.8 
billion for fiscal year 2009. This includes payment of $10.4 billion to 
the DOD Medicare Eligible Retiree Health Care Fund, and excludes 
projected savings of $1.2 billion, based on recommendations provided by 
the DOD Task Force on the Future of Military Health Care for benefit 
reform.
    As the civil and military leaders of the Department have testified, 
we must place the health benefit program on a sound fiscal foundation 
or face adverse consequences. Costs have more than doubled in 7 years--
from $19 billion in fiscal year 2001 to $39.9 billion in fiscal year 
2008--despite MHS management actions to make the system more efficient. 
Our analysts project this program will cost taxpayers at least $64 
billion by 2015. Health care costs will continue to consume a growing 
slice of the Department's budget, reaching 12 percent of the budget by 
2015 (versus 6 percent in 2001).
    Simply put, the Department and Congress must work together to agree 
on necessary changes to the TRICARE benefit to better manage the long-
term cost structure of our program. Failure to do so will harm military 
health care and the overall capabilities of the DOD--outcomes we cannot 
afford.
Budgeting for the Defense Health Program (DHP)
    The MHS utilizes a collaborative, disciplined process to develop 
the DHP budget. Throughout the process, the MHS analyzes and validates 
requirements identified for funding by the three Service Medical 
Departments and the TRICARE Management Activity (TMA). We balance 
resource priorities to achieve an integrated, effective budget that 
reflects senior leader guidance and allocates required resources to 
sustain operational readiness while continuing to provide high-quality, 
accessible health care. The following MHS committees review and make 
recommendations on issues pertaining to the development and execution 
of the DHP budget:

         The Resource Management Steering Committee, includes 
        the senior resource managers for the Service Surgeons General 
        and the TMA Private Sector Care Program.
         The Chief Financial Officer Integration Council, 
        includes the Service Deputy Surgeons General and the TMA Deputy 
        Director.
         The Senior Military Medical Advisory Council, includes 
        the Service Surgeons General and the Assistant Secretary of 
        Defense (Health Affairs), Deputy Assistant Secretaries of 
        Defense within Health Affairs and the TMA Deputy Director.

    Issues that cannot be resolved within the MHS are addressed in the 
Department-wide Budget Review. A medical issue team is established and 
includes representation from DOD staff, as well as representatives from 
the Military Departments (medical and line), the Under Secretaries of 
Defense, and the Joint Staff. The team thoroughly evaluates all 
outstanding issues, develops alternatives, and provides recommendations 
for coordination within the Department. Final decisions are made by the 
Secretary of Defense and incorporated into the President's budget 
request.
    The DHP budget enacted by Congress is distributed to the Army, 
Navy, Air Force medical components and TMA. The Service Surgeons 
General approve the allocation of funding provided to the military 
treatment facilities and oversee the execution of the funds used during 
the fiscal year. In addition to the funding included in the President's 
Budget, unbudgeted requirements, such as global war on terrorism 
emergencies, such as Humanitarian Relief activities, are included in 
the DOD's request for supplemental funding for validated, essential 
requirements. During execution of the budget, we use resources that may 
become available to fund emerging, priority requirements, primarily in 
the in-house care system. Budgeting for health care benefits is an 
imprecise science--the 1 percent (previously 2 percent through fiscal 
year 2007) carryover authority authorized by Congress for the DHP has 
served as an invaluable tool to manage DHP resources appropriately 
within the enacted budget.
Management
    The Department has initiated several management actions to use 
resources more effectively and help control the increasing costs of 
health care delivery. The MHS continues to implement a prospective-
payment system in a phased, manageable way that provides incentives for 
local commanders to focus on outcomes, rather than on historical 
budgeting. We are confident this budgeting approach will ensure our 
hospitals and clinics continue to deliver high-quality, efficient 
health care to our patients within the military medical institutions.
    In addition, the MHS is instituting a new strategic plan that 
includes actionable metrics. Through this plan, the MHS is 
strengthening its commitment to military medical forces, to our war 
fighters, and to our Nation's security. The MHS strategic plan takes 
important steps toward consolidating administrative and management 
functions across the MHS, and it will strengthen joint decisionmaking 
authorities.
    With implementation of the base realignment and closure (BRAC) 
recommendations, the major medical centers in San Antonio and the 
national capital area will be consolidated. These BRAC actions afford 
us the opportunity to provide world-class medical facilities for the 
future while streamlining our health care system and creating a culture 
of best practices across the Services.
    Under the BRAC recommendations, we are also developing a medical 
education and training campus that will colocate medical basic and 
specialty enlisted training at Fort Sam Houston, TX. By bringing most 
medical enlisted training programs to Fort Sam Houston, we will reduce 
the overall technical-training infrastructure while strengthening the 
consistency and quality of training across the Services.
    In the meantime, we are doing everything possible to control our 
cost growth. We are executing our new TRICARE regional contracts more 
efficiently, and we are demanding greater efficiency within our own 
medical facilities. However, one area--pharmacy--is particularly 
noteworthy. Nearly 6.7 million beneficiaries use our pharmacy benefit, 
and in fiscal year 2007, our total pharmacy cost was more than $6.8 
billion. If we did nothing to control our pharmacy cost growth, we 
project pharmacy costs alone would reach $15 billion by 2015.
    To address this issue, we are taking every action for which we have 
authority: promoting our mandatory generic substitution policy, joint 
contracting with Veterans Affairs, promoting home-delivery, and making 
voluntary agreements with pharmaceutical manufacturers to lower costs. 
We also continue to effectively manage the DOD Uniform Formulary. We 
avoided approximately $450 million in drug costs in fiscal year 2006, 
and more than $900 million in drug costs in fiscal year 2007 due to key 
formulary-management changes and decisions.
    We have worked with industry experts to design and develop the 
government requirements for TRICARE's third generation of contracts (T-
3). The Managed Care Support Contracts are TRICARE's largest and most 
complex purchased-care contracts. Others include the TRICARE Pharmacy 
Program (TPharm), the active duty Dental Contract, and the TRICARE 
Quality Monitoring Contract. Request for Proposals have either been, or 
will soon be, released for these contracts. Recent successful T-3 
awards include the TRICARE Retiree Dental Contract to Delta Dental of 
California, and the new TRICARE Dual Eligible Fiscal Intermediary 
Contract (TDEFIC) to Wisconsin Physicians Services, Inc.
    The three TRICARE Regional Directors are actively engaged in 
managing and monitoring regional health care with a dedicated staff of 
both military and civilian personnel. They are strengthening existing 
partnerships between the active duty components and the civilian 
provider community to help fulfill our mission responsibilities.
    The Balanced Scorecard has guided the MHS through the strategic 
planning process over the last 5 years and helped the MHS manage 
strategy at all levels of the organization. Using this strategic 
planning tool, the MHS is identifying the most critical mission 
activities, and then applying Lean Six Sigma methodology to create a 
data-driven, decision-making culture for process improvement. The 
Service Surgeons General have aggressively incorporated this 
methodology into their business operations, and we are already 
witnessing the fruits of this commitment to building better processes. 
We also have hired a nationally recognized expert in Lean Six Sigma to 
help facilitate integration of the National Capital Area and San 
Antonio under our BRAC work.
Defense Mishap Reduction Initiative
    As a world-class military, we do not tolerate preventable mishaps 
and injuries. The direct cost of mishaps is more than $3 billion per 
year, with estimates of total costs up to $12 billion. We have 
rededicated ourselves to achieve a 75 percent accident-reduction goal 
and are aggressively working toward it. For example, the Marine Corps 
has reduced its civilian lost-day rate by 62 percent, and last fiscal 
year, the Air Force achieved the best aviation class ``A'' mishap rate 
in its history.
    To reach the next level in military and civilian injury reductions, 
safety is now a performance element under the new National Security 
Personnel System (NSPS) and in military evaluations. The Department is 
implementing Occupational Safety and Health Administration's Voluntary 
Protection Program (VPP) at more than 80 installations and sites. This 
program brings together management, unions, and employees to ensure 
safe working conditions. VPP and our other accountability programs have 
the highest visibility and support within the Department.
    We also technology can address many safety issues. Safety 
technologies include both systems and processes. For example, we are 
pursuing the Military Flight Operations Quality Assurance process to 
reduce aircraft flight mishaps. We are exploring the use of data 
recorders and roll-over warning systems as tools to help drivers avoid 
wheeled vehicle accidents. Our plan is for DOD components to include 
these and other appropriate safety technologies as a standard 
requirement in future acquisition programs.
Taking Proper Care of the Wounded
    The Department is committed to providing the assistance and support 
required to meet the challenges that confront our severely injured and 
wounded servicemembers, and their families. The new Post-Deployment 
Health Assessment and PDHRA forms with the TBI screening questions and 
other improvements were officially published September 11, 2007.
    The Department is working on a number of additional measures to 
evaluate and treat servicemembers affected or possibly affected by TBI. 
In August 2006, we developed a clinical-practice guideline for the 
Services for the management of mild TBI in theater. We sent detailed 
guidance to Army and Marine Corps line medical personnel in the field 
to advise them on ways to look for signs and to treat TBI.
    The ``Clinical Guidance for Mild Traumatic Brain Injury (mTBI) in 
Non-Deployed Medical Activities,'' October 2007, included a standard 
Military Acute Concussion Evaluation (MACE) form for field personnel to 
assess and document TBI for the medical record. The tool guides the 
evaluator through a short series of standardized questions to obtain 
history, orientation (day, date, and time), immediate memory (repeat a 
list of words), neurological screening (altered level of consciousness, 
pupil asymmetry), concentration (repeat a list of numbers backwards), 
and delayed recall (repeat the list of words asked early in the 
evaluation). The evaluator calculates and documents a score, which 
guides the need for additional evaluation and follow-up. The MACE also 
may be repeated (different versions are available to preclude 
``learning the test'') and scores may be recorded to track changes in 
cognitive functioning.
    U.S. Central Command (USCENTCOM) has mandated the use of clinical 
guidelines, which include use of the MACE screening tool, at all levels 
of care in theater, after a servicemember has a possible TBI-inducing 
event. Furthermore, Landstuhl Regional Medical Center is using MACE to 
screen all patients evacuated from the USCENTCOM area of responsibility 
with polytrauma injuries for co-morbid TBI. In addition, MACE is used 
in MTFs throughout the MHS.
    Each Service has programs to serve severely wounded from the war: 
the Army Wounded Warrior Program (AW2), the Navy Safe Harbor program, 
the Air Force Helping Airmen Recover Together (Palace HART) program, 
and the Marine4Life (M4L) Injured Support Program. DOD's Military 
Severely Injured Center augments the support provided by the Services. 
It reaches beyond the DOD to other agencies, to the nonprofit world and 
to corporate America. It serves as a fusion point for four Federal 
agencies--DOD, the VA, the Department of Homeland Security's 
Transportation Security Administration (TSA), and the Department of 
Labor.
    The Military Severely Injured Center unites Federal agencies 
through a common mission: to assist the severely injured and their 
families. The VA Office of Seamless Transition has a full-time liaison 
assigned to the Center to address VA benefits issues ranging from 
expediting claims, facilitating VA ratings, connecting servicemembers 
to local VA offices, and coordinating the transition between the 
military and the VA systems. The Recovery and Employment Assistance 
Lifelines (REALifelines) initiative is a joint project of the U.S. 
Department of Labor, the Bethesda Naval Medical Center, and the Walter 
Reed Army Medical Center. It creates a seamless, personalized 
assistance network to ensure that seriously wounded and injured 
servicemembers who cannot return to active duty are trained for 
rewarding new careers in the private sector. The Department of Labor 
has assigned three liaisons from its REALifelines program, which offers 
personalized employment assistance to injured servicemembers to find 
careers in the field and geographic area of their choice. REALifelines 
works closely with the VA's Vocational Rehabilitation program to ensure 
servicemembers have the skills, training, and education required to 
pursue their desired career field. The Department of Homeland 
Security's TSA has a transportation specialist assigned to the Center 
to facilitate travel of severely injured members and their families 
through our Nation's airports. The Center's TSA liaison coordinates 
with local airport TSA officials to ensure each member is assisted 
throughout the airport and given a facilitated (or private) security 
screening that takes into account the member's individual injuries.
    The Military Severely Injured Center has coordinated with more than 
40 non-profit organizations, all of which have a mission to assist 
injured servicemembers and their families. These non-profits offer 
assistance in a number of areas from financial to employment to 
transportation to goods and services. Many are national organizations, 
but some are local, serving service men and women in a specific region 
or at a specific military treatment facility.
    The American public's strong support for our troops shows 
especially in its willingness to help servicemembers who are severely 
injured in the war, and their families, as they transition from the 
hospital environment and return to civilian life. Heroes to Hometowns' 
focus is on reintegration back home, with networks established at the 
national and State levels to better identify the extraordinary needs of 
returning families before they return home. They work with local 
communities to coordinate government and non-government resources 
necessary for long-term success.
    The Department has partnered with the National Guard Bureau and the 
American Legion, and most recently the National Association of State 
Directors of Veterans Affairs, to tap into their national, State, and 
local support systems to provide essential links to government, 
corporate, and non-profit resources at all levels and to garner 
community support. Support has included help with paying the bills, 
adapting homes, finding jobs, arranging welcome home celebrations, help 
working through bureaucracy, holiday dinners, entertainment options, 
mentoring, and very importantly, hometown support.
    The ability of injured servicemembers to engage in recreational 
activities is an important component of recovery. We continue to work 
with the United States Paralympics Committee and other organizations so 
that our severely injured have opportunities to participate in adaptive 
sports programs, whether those are skiing, running, hiking, horseback 
riding, rafting, or kayaking. We are also mindful of the need to ensure 
installation Morale Welfare and Recreation (MWR) fitness and sports 
programs can accommodate the recreational needs of our severely injured 
servicemembers. At Congressional request, we are studying the current 
capabilities of MWR programs to provide access and accommodate eligible 
disabled personnel.
    Over the last year we have addressed important issues that deserved 
and received our immediate and focused attention. First and foremost, 
we are listening. We are actively surveying (by telephone, on the web, 
and in person) our wounded servicemembers and their families, and we 
are acting on the answers they provide. Our goal is to improve patient 
satisfaction, and these surveys let us know where we need to put 
resources to continuously improve. In addition to surveys, we encourage 
leadership to spend time with servicemembers and their families who are 
receiving long-term rehabilitative care. On February 14, we held our 
first webcast town-hall meeting on our new website www.health.mil to 
receive additional, anonymous feedback from the wounded, injured, ill 
and their families. We are taking all of this input back to DOD 
leadership--where we have clear leadership--as we develop and implement 
solutions.
    DOD and VA are working together through a Senior Oversight 
Committee (SOC), co-chaired by the Deputy Secretaries of each 
Department. It builds on the earlier and continuing word of the Joint 
executive Council. The SOC is developing implementation plans and 
future funding requirements for eight ``lines of action'' that address 
the disability system, case management, data sharing between the 
Departments, facilities requirements, personnel and pay support, as 
well as such wounded warrior health issues as TBI and psychological 
health. The recommendations and decisions from this group are being 
implemented now and will drive future funding requests for both 
Departments.
    We can best address the changing nature of inpatient and outpatient 
health care requirements, specifically the unique health needs of our 
wounded servicemembers and the needs of our population in this 
community through the planned consolidation of health services and 
facilities in the National Capital Region. The BRAC decision preserves 
a precious national asset, Walter Reed, by sustaining a high-quality, 
world-class military medical center with a robust graduate medical 
education program in the Nation's Capital. The plan is to open this 
facility by 2011. In the interim, we will sustain the current Walter 
Reed Army Medical Center (WRAMC) as the premier medical center it is.
Process of Disability Determinations
    We know that both the servicemember and the Department expect:

         Full rehabilitation of the servicemember to the 
        greatest degree medically possible
         A fair and consistent adjudication of disability
         A timely adjudication of disability requests--neither 
        hurried nor slowed due to bureaucratic processes.

    We currently have a pilot program in place to improve the 
disability process and implement one system that is jointly 
administered by both DOD and VA. Our goal is to create a process that 
requires one exam and one rating, binding by both DOD and VA within 
current law. The new Disability Evaluation System pilot program, which 
began in late November, will provide smoother post-separation 
transition for veterans and their families--including medical 
treatment, evaluation, and delivery of compensation, benefits and 
entitlements.
Process of Care Coordination
    The quality of medical care we deliver to our servicemembers is 
exceptional; independent review supports this assertion. Yet, we need 
to better attend to the process of coordinating delivery of services to 
members in long-term outpatient, residential rehabilitation.
    The Army's new Warrior Transition Brigade became operational at 
WRAMC on April 26, 2007. As of February 4, 2008, the 35 Warrior 
Transition Units throughout the Army had 9,774 wounded warriors 
assigned to them (this number includes Active and Reserve component 
members). Many of the Warrior Transition Unit cadres have volunteered 
for their assignments, and each officer or noncommissioned officer goes 
through an interview process before he or she is selected.
    Each wounded warrior is also assigned a primary care manager, a 
nurse case manager and a squad leader. They follow up with soldiers 
after they return to their units or transfer to the VA.
    The Federal Recovery Coordination program began in November 2007. 
The role of Federal Recovery Coordinators is to be the ultimate 
resource to oversee the development and implementation of services 
across the continuum of care from recovery through rehabilitation to 
reintegration, in coordination with relevant governmental, private, and 
non-profit programs.
DOD-VA Collaboration.
    The 2008-2010 DOD-VA Joint Strategic Plan will improve the quality, 
efficiency, and effectiveness of the delivery of benefits and services 
to veterans, servicemembers, military retirees, and their families 
through an enhanced VA and DOD partnership. The plan incorporates 
concrete performance measures and strategies that link directly to the 
actions of the SOC, joint communications, improved case management, 
better information sharing, and collaborative training and continuing 
education for health care providers.
    We are committed to working with the VA on appropriate electronic 
health information exchanges to support our veterans. The Federal 
Health Information Exchange (FHIE) enables the transfer of protected 
electronic health information from DOD to the VA at the time of a 
servicemember's separation. We have transmitted messages to the FHIE 
data repository on more than 4.1 million retired or separated 
servicemembers.
    Building on the success of FHIE, we also send electronic pre- and 
post-deployment health assessment and PDHRA information to the VA. We 
began this monthly transmission of electronic pre- and post-deployment 
health assessment data to the FHIE data repository in September 2005, 
and the PDHRA in December 2005. As of January 2008, VA had access to 
more than 2 million pre- and post-deployment health assessments and 
post-deployment health re-assessment forms on more than 838,000 
separated servicemembers and demobilized National Guard and Reserve 
members who had been deployed.
    The Bidirectional Health Information Exchange (BHIE) enables real-
time sharing of health data for patients being treated by DOD and VA. 
Access to BHIE data is available through AHLTA and through VistA, the 
VA's electronic health record, for patients treated by both 
departments.
    To increase the availability of clinical information on a shared 
patient population, VA and DOD have collaborated to further leverage 
the BHIE functionality to allow bidirectional access to inpatient 
documentation from DOD's Essentris System. In December 2007, we 
announced the enterprise-wide release of enhancements to the BHIE and 
the Clinical Data Repository/Health Data Repository (CHDR) interfaces. 
With these enhancements, DOD and VA are now able to view each other's 
clinical encounters, procedures, and problems lists on shared patients 
using the BHIE. This adds to the pharmacy, allergy, microbiology, 
chemistry/hematology data, and radiology reports we made available 
previously.
    Additionally, DOD and VA providers may now view theater data 
(including inpatient data) from the Theater Medical Data Store (TMDS). 
OD providers no longer have to log out of AHLTA and into another 
application to see it.
    To support our most severely wounded and injured servicemembers 
transferring to VA Polytrauma Centers for care, DOD continues to send 
radiology images and scanned paper medical records electronically to 
the VA Polytrauma Centers.
    We have worked closely with our partners in the VA, in our shared 
commitment to provide our servicemembers a seamless transition from the 
MHS to the VA. DOD implemented a policy entitled ``Expediting Veterans 
Benefits to Members with Serious Injuries and Illness,'' which provides 
guidance for collecting and transmitting critical data elements for 
servicemembers involved in a medical or physical evaluation board. DOD 
began electronically transmitting pertinent data to the VA in October 
2005 and continues to provide monthly updates, allowing the VA to 
better project future workload and resource needs.
    We have provided information for more than 28,000 servicemembers 
while they were still on active duty, allowing the VA to better project 
future workload and resource needs. When the VA receives these data 
directly from DOD before servicemembers separate, it helps to reduce 
potential delays in developing a benefits claim. This process ensures 
that the VA has all the relevant information to decide claims for 
benefits and services in a timely manner.
    We are committed to discharging well the joint responsibilities of 
the DOD and VA. The VA/DOD Joint Executive Council, that I co-chair 
with DVA Deputy Secretary Gordon Mansfield, provides guidance and 
policy for our collaborative efforts. Much has been accomplished, but 
much remains to be done.
                   military community & family policy
    The Department has long-recognized that families also serve. Since 
the beginning of the AVF in the 1970s, the Department forged programs 
to meet the needs of young military families.
    As the American standard of living has changed, military programs 
and policies have been updated to match improvements and cultural 
changes going on in the Nation as a whole. In 2002, we published the 
first DOD Social Compact, recognizing the three-way relationship among 
the servicemember, the family, and the Department.
    In the President's State of the Union Address this January, he 
addressed the sacrifices military families make for America. He 
acknowledged the responsibility of the Nation to provide for our 
military families, and asked that Congress support military families' 
need for more child care for well deserved educational opportunities, 
and for support to spousal careers.
Child care
    We have a robust child care program in DOD and our child 
development services continue to be a national model. Yet, we still 
have unmet demand for thousands of children. The President directed the 
Department to build more centers and provide more care.
    To increase the availability of child care, the Department proposes 
to accelerate the child development center construction program and to 
increase public-private ventures with nationally recognized 
organizations. Our plan would result in an additional 58,000 child care 
spaces.
Spousal careers and education
    Our survey of active duty military spouses in 2006 not only 
confirmed that the vast majority of military spouses want to work (over 
77 percent), but that they want a career--a portable career. An 
overwhelming 87 percent of military spouses would like to further their 
education, but the cost of education is their primary reason for not 
enrolling in school or training.
    In an effort to meet the educational needs of military spouses, the 
Department partnered with the Department of Labor to make Career 
Advancement Accounts available to military spouses at 18 installations 
as a pilot program. These accounts enable spouses to pursue college or 
technical training and credentials or licenses to advance them into 
high-demand occupations in health services, education, information 
technology, financial services or trades (e.g., electrician, plumber). 
Spouses will be able to obtain recertification or licensure training as 
they move from State to State. Congressional authority to include 
spouses in a nationwide program is required for fiscal year 2009 
implementation.
    The President also proposed that a servicemember's unused 
Montgomery GI Bill benefits be made transferable to the spouse or 
dependent children. This will provide further support to our military 
families in an area of great concern to them. While the Department 
enjoys limited existing authority to offer such transferability in 
critical skills in return for an extension of service, we anticipate 
soon forwarding proposed legislative language that would grant broader 
authority to carry out the President's initiative.
Family support of the National Guard and Reserves
    Reaching the geographically dispersed families of the National 
Guard and Reserves has always been a challenge. In response to 
Congressional direction, we established the Joint Guard and Reserve 
Family Assistance Program in 15 States. Partnering with the Red Cross, 
this program facilitates a Federal, State, and local team that can 
offer benefits and transition assistance throughout each of the 
participating States.
Morale, Welfare, and Recreation (MWR)
    Recognizing that participation in recreation, fitness, sports, 
cultural arts programs are key to active living which leads to improved 
personal health and well-being and helps build strong families and 
healthy communities, the Department plans to explore ways to expand the 
military MWR benefit to those who do not have access to installation 
MWR programs. This will include pursuing national partnerships to 
provide discounts for fitness and other recreation programs. We are 
working with many non-profit organizations that provide recreation 
opportunities and also the National Recreation and Park Association to 
partner with State and local community parks, recreation and library 
departments to enlist their support in meeting the needs of our 
military personnel, particularly the National Guard and Reserve 
members.
    An additional component of family well-being is the ability to stay 
in touch. Military spouses indicate that being able to communicate with 
their servicemember is a primary factor in being able to cope with 
deployments. Affordable phone rates ease the burden of deployment and 
we've been aggressively working to reduce phone rates. We've provided 
access to computers and Internet service in our family support centers, 
recreation centers, installation libraries, and youth centers to help 
families stay connected.
    Servicemembers have free access to the military internet by using 
their military e-mail address, including aboard ships. They also have 
free internet access at 610 MWR-operated internet cafes in Iraq and 43 
MWR-operated internet cafes in Afghanistan--an increase of 478 cafes 
over the last year. MWR Internet cafes offer voice over internet 
protocol phone service at less than $.04 per minute.
    The Exchanges also provide unofficial telephone service at low 
international rates for both land and sea based deployed members. The 
Army and Air Force Exchange Service operates 73 call centers with 1,664 
telephones in Iraq, Afghanistan, and Kuwait. The Navy Exchange Service 
Command (NEXCOM) supports most ships in theater with 1, 10, or 20 
telephone lines depending on the size of the ship.
Military OneSource (1-800-342-9647 and www.militaryonesource.com)
    Launched in 2002, Military OneSource provides support services 24/7 
for our troops and their families. Military OneSource is one of the 
Department's resounding successes, proven especially useful during 
Hurricane Katrina. Military OneSource offers free, convenient access to 
confidential resource and referral support for servicemembers and their 
families. When a Service or family member calls or emails, a master's 
level consultant provides assistance. Military OneSource is especially 
beneficial to those geographically separated from installation services 
or those who are unable to seek assistance during traditional working 
hours.
MilitaryHOMEFRONT Web portal (www.militaryhomefront.DOD.mil)
    This portal is the Department's ``Google'' for quality of life 
information. As a sister site to Military OneSource, the HOMEFRONT 
provides the library of DOD information on quality of life issues, 
useful to installation staff and policymakers. In fiscal year 2007 
there were over 1.7 million visits to the site.
    To help our servicemembers and their families plan smooth 
relocations, usually every 3 years, to their next duty locations, we 
have developed a new online tool called Plan My Move. Plan My Move 
provides a fully customizable calendar and 'to do' list that links 
individual moving tasks with related installation information and 
points of contact.
    A second new tool is MilitaryINSTALLATIONS. From any page on the 
MilitaryHOMEFRONT users can access information about military 
installations throughout the world. MilitaryINSTALLATIONS includes 
specifics about 23 different topics of interest on each installation 
(such as child care, check in procedures or housing).
    In the past 2 months, MilitaryHOMEFRONT, in coordination with the 
Joint Guard and Reserve Family Support Assistance Program, has 
introduced MySTATE (www.mystate.mhf.DOD.mil), a powerful new tool 
providing State and local servicemembers and their families across the 
Nation with access to various organizations and businesses that offer 
special discounts and services specifically for military personnel and 
their families. MySTATE includes State directories, locations of 
programs and services, maps, directions, and much more. It also gives 
users the opportunity to provide feedback on the organizations or 
businesses listed.
    Another important communication tool is the military spouse career 
network Web portal, www.military.com/spouse. Spouses can use this site 
to search for employment opportunities at their new installation. Over 
400 spouse-friendly employers are actively recruiting military spouses 
for their vacant positions; these organizations can post jobs at no 
cost and can search this exclusive database for military spouse 
candidates. Since this site was opened in 2005, there have been 3.6 
million spouses who have visited the site, and over 7.2 million job 
searches have been conducted. Over 36,000 spouses have posted resumes.
Financial Readiness Campaign
    We aggressively promote a culture within the military that values 
financial competency and responsible financial behavior. The eight 
``pillars'' of the Campaign represent the personal financial readiness 
objectives for military personnel. Mission success will be determined 
by all servicemembers and their families meeting each pillar's 
objective. The pillars are:

         To protect valuable security clearances by resolving 
        financial issues early
         To establish, maintain, and protect good credit
         To develop financial stability by living within one's 
        means
         To establish routine savings
         To participate in military benefit programs such as 
        the Thrift Savings Plan and the Savings Deposit Program
         To maintain enrollment in Servicemember's Group Life 
        Insurance
         To utilize legitimate, low-percentage alternative loan 
        products and avoid predatory lenders
         To take advantage of military MWR Programs as a 
        healthful option to spending money

    From February 24 to March 3, 2007, the Department held its first 
``Military Saves'' Week Campaign, a social marketing campaign to 
encourage military members and their families to start a savings plan 
and to ``Build Wealth, Not Debt.'' The Military Services each engaged 
with this first Military Saves Week and had over 50 on-installation 
credit unions and banks participating, nearly 1 million public affairs 
items sponsored, almost 80,000 saving events/actions held, and 8,500 
new ``Military Savers'' enrolled. Defense Credit Unions reported nearly 
a 10-fold increase in the number of special certificates opened during 
this week thanks to savings account incentive programs and a nearly 5-
fold increase in deposits. This year's Military Saves Week will take 
place February 24 to March 2, 2008, and we are expecting even greater 
success at enrolling servicemembers and their families to become part 
of what the Campaign calls the ``Military Savings Community.''
    Military OneSource now features telephonic financial counseling to 
augment those programs provided by the Services. At the request of 
National Guard and Reserve units, the Department dispatched Military 
Family Life Consultants with financial readiness specialties to attend 
special events such as drill weekends and reunion ceremonies to meet 
with Guard and Reserve members and families and provide education on 
many aspects of financial readiness.
TURBO TAP
    The key to a successful transition is understanding military 
benefits earned during service in the military. The TURBO TAP web 
portal is a joint initiative between the DOD, the Department of Labor, 
and the VA and allows each servicemember to obtain a lifelong account 
to connect them to veteran benefits' information. This portal was 
launched in 2007. The key partners in the TurboTAP effort are currently 
assisting DOD in expanding and promoting the new TurboTAP.org website 
and online Individual Transition Plan Accounts system which link 
servicemembers to transition assistance services and benefits, many of 
which have significant cash value. Examples include the Montgomery GI 
Bill, the Thrift Savings Plan and the Savings Deposit Program.
    In the fall, DOD TurboTAP Mobile Training Teams began training the 
National Guard and Reserves. This highly specialized outreach team 
travels to State level deployment support and reintegration programs at 
the request of National Guard and Reserve component leaders to connect 
servicemembers to the benefits they have earned through military 
service. The TurboTAP Mobile Training Team provides information about 
transition assistance, service-related benefits, and related on-demand 
counseling services. By the end of 2009, it is our goal to have 
TurboTAP fully integrated into deployment support, transition 
assistance and financial awareness programs in all 50 States.
Predatory Lending Regulation
    On October 1, 2007, the congressionally-mandated Predatory Lending 
Regulation went into effect, capping the annual percentage rate on 
three specific types of loans to 36 percent, these include payday 
loans, vehicle title loans, and tax refund anticipation loans. I thank 
Congress for its support of this critical piece of legislation; it is 
already showing positive results in protecting our servicemembers and 
families from unscrupulous practices within the fringe banking 
industries. Feedback from the field indicates that lenders are 
refraining from offering these loans to servicemembers and their 
families. State regulators have said that their examinations of payday 
stores have shown general compliance. A few lenders have developed 
products that comply with the restrictions in the regulations and we 
have heard of only one lender modifying a payday loan product in an 
attempt to evade these restrictions. The trade group representing 
military banks reported that one major member has seen a significant 
increase in the use of alternative loan products by servicemembers and 
their families.
    Since the implementation of the regulation, the Department has 
continued to work with the Federal regulators on interpretations and 
answers to questions. Additionally, the Department is developing 
relationships with State regulators. In November, we sent letters to 
Governors expressing the Department's interest in working together to 
ensure the protections afforded to servicemembers and their families 
are enforced. Our initial review of States indicates at least 28 are 
committed to working with the Department on the oversight and 
enforcement issue.
The Department of Defense Education Activity (DODEA)
    DODEA has provided military students with an exemplary education 
for over 60 years. It recently received expanded authority to create 
educational partnerships with local education agencies that educate 
military students to complement the work of the National Governors 
Association. The ongoing relocation of thousands of military students 
through BRAC, global rebasing, and other force structure changes, has 
created an urgent need and obligation to partner with military-
connected communities to ensure the best possible educational 
opportunities for students. On October 1, 2007, DODEA launched the 
Educational Partnership Directorate (EPD) to fulfill this mission.
    There are many facets to improving the education of school-age 
military students. From the strictly education perspective, EPD will 
develop partnerships with schools and districts to focus on educational 
best practices and to provide online/alternative learning opportunities 
for students worldwide. From the transition support perspective, EPD 
will facilitate agreements at the local, State, and Federal levels to 
reduce the many transition and deployment issues that military students 
face. Other facets of EPD's mission and strategy are to:

         Gather, disseminate, and promote research-based 
        educational best practices
         Manage the MilitaryStudent Web site, the primary 
        vehicle for communication to parents, students, service 
        representatives, and local schools
         Support and influence foreign language education, to 
        include strategic languages, in partner schools and districts
         Establish a virtual school district for military 
        students that can be accessed by school districts nationwide 
        and homeschoolers worldwide
         Provide information to parents and commands about 
        school choice, including information and, upon request, 
        assistance in establishing charter schools
         Marshall resources to meet the unique educational and 
        transition needs of military-connected schools and districts
         Administer the DOD Supplement to Impact Aid to 
        eligible schools nationwide

    The Department has also recognized that some of the key issues 
important to the quality of life of servicemembers and families require 
more than individual State effort. For example, school transition 
issues that impact military children, such as differing enrollment, 
placement and graduation rules, require interstate cooperation. 
Consequently, the Department sought out the assistance of the Council 
of State Governments (CSG), which among other services, works with 
State governments on issues that are inherently the responsibility of 
the State, but require an interstate effort. CSG has developed an 
interstate compact, with the assistance of a variety of national and 
State-based education stakeholders, which will resolve many of these 
transition issues confronting military children. The interstate compact 
is now being reviewed by States for consideration during their 2008 
legislative sessions. At last count, 24 States were actively 
considering the compact and 15 State legislatures have bills under 
review. We are working with States to have a minimum of 10 adopt the 
compact, at which time the compact will be enforceable.
    State assistance to accommodate the transient nature of military 
life is equally impressive. A total of 48 States are supporting the 
educational needs of active duty service families by extending in-State 
tuition rates while the family resides within the State regardless of 
residency, and 34 of these States continue that coverage for family 
members after the servicemember has reassigned out of the State, as 
long as the family member stays enrolled in a State institution of 
higher learning. As another example, 21 States now provide a departing 
spouse unemployment compensation as a result making a military move--an 
increase of 11 States since 2004.
Sexual Assault Prevention
    In 2004, I was directed to review the Department's sexual assault 
prevention and response policies and programs. As a result, we quickly 
assembled the Care for Victims of Sexual Assault Task Force and charged 
it with recommending changes that would enhance the quality of care and 
support for victims. The Sexual Assault Prevention and Response Joint 
Task Force followed and focused victim care, prevention, improved 
reporting, and accountability for offenders. Both Task Forces published 
a report with a series of recommendations and findings. We have acted 
on these recommendations. One of the major recommendations focused on 
the Department's need for a single point of accountability regarding 
sexual assault policy. In 2005, we established the Sexual Assault 
Prevention and Response Office, and institutionalized a research-based 
policy supported by three pillars: care and treatment for victims, 
prevention through training and education, and system accountability.
    This new policy revolutionized the Department's sexual assault 
response structure and established programs that are quickly becoming 
the benchmark for America. At the heart of the policy is a reporting 
system that respects the privacy and needs of the victim. One of the 
greatest challenges in responding to sexual assault is motivating 
victims to report the crime and get much needed medical and 
psychological care. National studies indicate that as many as 8 out of 
10 sexual assaults go unreported in the civilian sector--largely 
because victims are fearful of the life-changing consequences and loss 
of privacy that often come with a public allegation. Consequently, we 
introduced a reporting system that allows victims to make a choice 
about how they report the crime of sexual assault. Our policy 
encourages victims to make an Unrestricted Report--that is a report to 
military law enforcement and command--that allows the Department to 
investigate and hold perpetrators accountable. However, should victims 
feel unready to participate in the military justice system, they may 
choose to make a Restricted Report. This option enables victims to 
receive medical care, mental health care, and other support services 
without initiating a criminal investigation or alerting their command 
structure. This flexible reporting system is designed to respect the 
needs of victims and encourage them to get care quickly. Experts in 
this area inform us that quicker entry into care often translates into 
a healthier recovery and improved coping by victims.
    Our policy also created a new and unique framework for an expanded 
and comprehensive response system. We now have 24/7 support network at 
all military installations and for deployed units worldwide. Sexual 
Assault Response Coordinators and Victim Advocates are now available to 
provide consultation and support so that our military members 
understand their options and get the care and support they need. We 
believe the response structure we have now institutionalized will 
continue to instill trust and confidence in servicemembers who are 
victims of sexual assault and spur them to come forward for assistance.
    Responding to these horrible crimes is only half the battle. 
Clearly, we owe it to our people to eradicate sexual assault from 
military service. Toward this goal, the Department implemented an 
aggressive and wide-reaching education program in 2006. Mandatory 
training about sexual assault and its prevention is now required at 
every rank and in all professional military education programs. In 
addition, Sexual Assault Prevention and Response Office (SAPRO) 
conducted a worldwide Sexual Assault Response Coordinator Conference in 
June 2006, training more than 350 professional from installations 
worldwide. The military Services have also expanded their training 
programs to adapt training curricula to their unique needs, providing 
prevention training to over 1 million Active Duty and Reserve 
servicemembers.
    We have only just begun our efforts to prevent sexual assault. 
SAPRO is currently developing a strategic plan to guide the military 
Services' efforts to stop this crime before it happens. Again, we are 
tapping the experts in this field to guide our path. Last July, SAPRO 
partnered with the National Sexual Violence Resource Center to convene 
a Prevention Summit with leading military and civilian advocacy 
experts. As a result of this summit, SAPRO is continuing to work with 
the Services and the national experts to develop a prevention policy 
that fosters a research based, measurable, and effective approach to 
stopping this crime. The expert consensus is that bystander 
intervention should be a major focus on our efforts. We have discovered 
that by teaching people how and when to act, we may be able to turn 
bystanders into actors. This bystander intervention approach, augmented 
by a powerful social messaging campaign, holds great promise. No sexual 
assault prevention effort has ever occurred on such a widespread level. 
We hope to provide a benchmark for the Nation.
    Our aggressive training and outreach program, coupled with the new 
reporting option, has sent an unmistakable message: The Department 
cares about its active duty servicemembers. I believe our 
servicemembers are hearing us. After 2 full years of the new policy 
being in effect, we are seeing victims making both Restricted and 
Unrestricted reports and entering care. While we are saddened when even 
one sexual assault occurs, we see members use of the Restricted Report 
process as a very positive indicator of confidence in the program. We 
believe that these military members would never have sought this 
service had they not had the ability to select how and when to engage 
our support system.
What is the future of Family Support?
    Along with the common stressors of daily living, there are 
stressors unique to military service--and the global war on terrorism 
places new demands on every aspect of military life. From the anxieties 
of nation building in hostile environments to the significant number 
and length of family separations, the stress currently affecting the 
military has not been of this magnitude since the inception of the AVF.
    The Department has made family support a priority and redesigned 
and boosted family support in a number of ways to recognize the crucial 
role families play in supporting servicemembers deployed worldwide. 
While outstanding support is provided through installation family 
centers, family and spousal support groups, and family assistance 
centers, we know more needs to be done. Looking to the future:

         We must address how the Department defines ``family''
         We must build programs and resources to deliver family 
        support to meet wartime levels of engagement to recognize the 
        sacrifices families endure
         We must provide equitable family support programs and 
        services for Reserve component families
         We must reach out to the community to augment support 
        programs to meet the needs of the military who live off the 
        installation and Reserve component families
         We must resource joint family programs to meet the 
        needs of the total population to be served, regardless of 
        Service and component
         We must provide high quality support programs that 
        servicemembers and their families can expect to receive, 
        regardless of their location
         We must address the needs of special interest groups:

                 Severely injured servicemembers and their 
                families
                 Family members of the deceased
                 Family members with special needs
                 Family members with incarcerated 
                servicemembers
                 Extended family members who care for children 
                of deployed single and dual military parents
                 Individual Augmentees, AGRs, IRRs, ROTC

         We must develop effective partnerships with Federal, 
        national, State, local, and private agencies to meet the needs 
        of military members and their families regardless of where they 
        reside
         We must synergize our efforts to build systems instead 
        of silos. Our work will not be effective if it is done in a 
        vacuum--it requires integration, collaboration and 
        communication with all helping professionals--including a 
        partnership with our clinical colleagues
         We must leverage technology to meet the communication 
        needs of the ``digital generation''
                         readiness and training
Improving Readiness Assessment and Reporting
    Since 2000, the Department has fundamentally changed the way we 
view and assess readiness. We have come from an inflexible, Cold War 
approach which was based on the prescribed resources assigned to a 
unit. Our old view of readiness was a static analysis with known 
adversaries based on plans that changed little over the years. We 
assessed ourselves as ready against a stationery target.
    Today, we have, for the first time, given the Department the 
ability to answer the question, ``Ready for what?'' We have worked with 
the Services, Joint Staff, Combatant Commands, and Combat Support 
Agencies to address the bureaucratic intransigence and opposition to 
reform cited by Congress to bring about a new readiness reporting 
system. Combatant Commanders now have a view of their resources and 
capabilities for assigned missions which did not exist before. Because 
the new Defense Readiness Reporting System (DRRS) allows the user to 
``drill down'' to root causes impacting the ability to perform 
missions, it enjoys the support of commanders and the leadership of the 
joint community. DRRS is a major transformation, moving the focus of 
force managers from reporting and assessing unit resources to managing 
force capabilities. We continue to expand the concept of this readiness 
system through our work with the Department of Homeland Security to 
develop the National Preparedness System. This system will provide 
increased situational awareness and assist the Department to integrate 
and coordinate our response to domestic crisis. Development and 
implementation of DRRS will continue through 2009.
Joint Training--The Engine of Force Transformation
    The senior leadership of the department concluded just prior to 
September 11, in the QDR, that while the military departments had 
established operationally proven processes and standards, it was clear 
that further advances in joint training and education were urgently 
needed to prepare for complex multinational and interagency operations 
in the future. Our ability to successfully defend our Nation's 
interests relies heavily upon the Department's Total Force--its Active 
and Reserve military components, its civil servants, and its 
contractors--for its warfighting capability and capacity. The Total 
Force must be trained and educated to adapt to different joint 
operating environments, develop new skills and rebalance its 
capabilities and people if it is to remain prepared for the new 
challenges of an uncertain future. Our forces must be capable of 
adapting to rapidly changing situations, ill-defined threats, and a 
growing need to operate across a broad spectrum of asymmetric missions, 
to also include stability and support operations and disaster response.
    Since September 11 we have transformed DOD training (T2) to meet 
the national security needs of the 21st century. With your 
encouragement and direction we expanded the heretofore successful open, 
collaborative, transparent and incentivized business process to include 
a wider array of joint training programs through the Department-wide 
Combatant Commander Exercise and Engagement Training Transformation 
initiative. We created three new joint training capabilities: Joint 
Knowledge Development and Distribution Capability (JKKDC--joint 
training and education for individuals), Joint National Training 
Capability (JNTC--joint unit and staff training), and Joint Assessment 
and Enabling Capability (JAEC--metrics development and assessments to 
answer the question are we truly transforming training). Collectively 
these joint capabilities have created a globally distributed and 
persistent ability to distribute and access knowledge, reach back for 
subject matter expertise, and immerse units, staffs and individuals in 
to a live-virtual-constructive training environment that replicates the 
rigor and reality of real-world operations with ground truth, realism, 
a dedicated opponent and feedback prior to deployment.
    Today the focus of joint training is on the deploying joint force 
prior to deployment with robust mission rehearsals. Our goal is to 
ensure that no member of the deployed joint force will experience a 
joint task for the first time in combat. Lessons learned are garnered 
on a weekly basis with operational forward deployed commands sharing 
real-time subjects with stateside training counterparts at Service 
training centers and schoolhouses. Mission rehearsal exercises now 
routinely integrate Afghan, Iraqi, and coalition partner personnel as 
participants, mentors, and advisors. Cultural and language concerns and 
matters receive prominent consideration through role-playing. 
Intergovernmental and nongovernmental and international organizations 
and personnel are habitually included in mission rehearsals.
    Ten years ago the DOD had not harnessed the power of individual 
learning technologies. In great part this was due to the plethora of 
proprietary software or computing systems that did not allow the 
exchange of courseware in an interoperable manner. Another Service 
could not discover learning content developed by one Service for 
repurpose and reuse for its own needs. In effect, this lack of 
capability created an inefficient, duplicative, and costly development 
cycle for learning content and courseware while precluding its global 
exchange.
    Since 2001, in collaboration with academia and industry we have 
made great strides in expanding the Department's Advanced Distributed 
Learning (ADL) Initiative and the ADL Co-Laboratory System. The vision 
remains constant--to provide access to the highest quality education 
and training, tailored to individual needs, delivered cost effectively, 
anywhere and anytime.
    The ADL Initiative is recognized across the Department and Federal 
agencies for having developed the standards and guidelines that define, 
and are being used to develop, the technology-based global digital 
learning environment. ADL is a global movement, for example, in use by 
NATO, Partnership for Peace countries, the United Kingdom, Korea, 
Singapore, Norway, numerous Federal agencies, and industry leaders such 
as Boeing, Chrysler, and FedEx/Kinko. ADL is the technology enabler of 
JKDDC. Available courses anywhere and anytime to members of the Armed 
Forces, interagency or international partners and to the general public 
grew from zero available courses to over 157 course to include, for 
example, Joint Antiterrorism Course, Global Command and Control System, 
Interagency Coordination, Contractors on the Battlefield, Pre-
Deployment Cultural Awareness--Afghanistan, and Combating Trafficking 
in Persons.
    We owe a debt of gratitude to Congress for enacting legislation 
providing authority for the DOD to distribute to certain foreign 
military personnel education and training materials and information 
technology to enhance military interoperability with our allies and 
partners. I ask that Congress support the administration's proposed 
Building Global Partnerships Act. I ask that Congress extend to 
permanent authority section 1207 of the NDAA for Fiscal Year 2007.
    Another achievement is the designation of training as a Selective 
Key Performance Parameter in Defense systems acquisitions there by 
strengthening the process of training our service men and women in the 
proper employment of new equipment in task performance, and educating 
commanders in the proper doctrinal application of the equipment in 
operations and combat.
Range Sustainment--Training
    Over the last 10 years our existing training infrastructure, bases 
and ranges, have come under increasing pressure. Continued and assured 
access to high-quality test and training ranges and operating areas 
plays a critically important role in sustaining force readiness. 
However, the Department finds itself in growing competition with a 
broad range of interests for a diminishing supply of land, air and sea 
space and frequency spectrum that we use to test and train effectively. 
Exacerbating the encroachment challenge, the demands of the military 
mission are also very dynamic. The increased complexity and integration 
of training opportunities necessary to satisfy joint mission 
requirements, combined with the increasing testing and training 
battlespace needs of new weapons systems, evolving tactics and end-
strength growth associated with force transformation, point to a 
military need for more, rather than less, range and operating area 
space. The confluence of these competing trends demonstrates a 
continuing challenge to preserving test and training flexibility and 
military readiness. Successful range sustainment clearly requires a 
comprehensive and continuing response.
    Since 2001, the Department's Range Sustainment Integrated Product 
Team has actively worked to mitigate encroachment impacts on readiness 
and coordinated OSD and Service efforts to ensure the long-term 
sustainability of military readiness and the resources entrusted to our 
care. Congressional action on selected DOD legislative clarifications, 
in conjunction with DOD policy and comprehensive planning initiatives, 
have provided increased mission flexibility, and at the same time have 
enabled improved environment management on DOD lands. The Department is 
increasing working beyond our fence lines to engage with local, State, 
regional, and national stakeholders to address shared interests and 
build effective partnerships both enhancing the environment and 
advancing range sustainment and the military mission.
                      civilian personnel policies
Human Capital Planning
    The Department civilian strategic human capital planning focuses 
human capital investments on long-term issues. Guiding principles are 
continually reviewed and refreshed in the Department's Human Capital 
Strategic Plan (HCSP). Our 2006-2011 HCSP recognizes the need to 
refocus civilian force capabilities for the future--a civilian 
workforce with the attributes and capabilities to perform seamlessly in 
an environment of uncertainty and surprise, execute with a wartime 
sense of urgency, create tailored solutions to multiple complex 
challenges, build partnerships, shape choices, and plan rapidly.
    Our HCSP is based upon the 2006 QDR and the 2006 NDAA, and calls 
for an updated, integrated human capital strategy for the development 
of talent that is more consistent with 21st century demands. The QDR 
and the Secretary's leadership and transformation requirements called 
for a human capital strategy that is competency-focused, performance 
based, and links compensation and rewards to individual employee 
performance. Our human capital strategy aims to ensure DOD has the 
right people, doing the right jobs, at the right time and place, and at 
the best value. The HCSP is delineated by a DOD enterprise-wide set of 
human resources goals and objectives that focus on leadership and 
knowledge management, workforce capabilities, and a mission-focused, 
results-oriented, high-performing, diverse workforce. These goals and 
objectives incorporate a competency-based occupational system, a 
performance-based management system, and enhanced opportunities for 
personal and professional growth. The Department's Civilian Human 
Capital Strategic Plan has four goals, which are helping to produce and 
maintain a future civilian workforce that is decisive, agile, and 
integrated with the total force and is capable of supporting the 
warfighter in carrying out DOD's mission.
    The Department's approach to workforce planning, a continuous 
process that ensures the right number of people in the right jobs at 
the right time, has become more deliberate and systematic with the 
publication of QDR 2006. I want to be clear on this point--the 
Department conducts workforce planning on both the military side and 
civilian side. However, on the civilian side, workforce planning has 
been done by each individual component. The Department developed a new 
model for workforce planning that will provide both DOD-level workforce 
planning and component level workforce planning based upon the 
requirements of QDR 2006.
    Now, I would provide some specifics about our new workforce 
planning efforts. QDR 2006 set the mission direction for reshaping the 
Defense enterprise for the 21st century, and required the new human 
capital strategy to be ``competency-focused'' and ``performance-
based.'' \1\ This section of my statement will discuss the Department's 
efforts to reorient its workforce planning to a ``competency-focused'' 
approach. Later sections will describe the Department's ``performance-
based'' workforce planning approach.
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    \1\ Quadrennial Defense Review Report, ``Developing a 21st Century 
Total Force,'' 2006, page 80.
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    Recognizing that each DOD component has a discrete mission with 
unique occupational series and occupational emphasis, the Department's 
strategy provides an overarching framework for the components to plan, 
identify and assess workforce requirements and to integrate their own 
workforce requirements. The strategy also provides for a set of core or 
common workforce planning requirements which will provide new 
foundational competencies for the civilian workforce, such as knowledge 
of joint matters, and enhance any component mission. It is the 
combination of DOD and component workforce planning that will provide 
the Department with important information about its talent needs in the 
21st century.
    The workforce planning strategy consists of the following elements 
which cascade from the Department-level to the component level:

          Phase 1: Setting the Direction: Uses the QDR 2006, the CHSP, 
        and other component goals and objectives to identify the 
        mission requirements for the next 5 years and beyond.
          Phase 2: Identifying the core competencies for DOD Mission 
        Critical Occupations. Uses surveys, focus groups, research, 
        etc., to validate the essential workforce knowledge, skills, 
        abilities, and behaviors required in the updated mission 
        critical occupations.
          Phase 3: Assessing the workforce talent against the Core DOD 
        Mission Critical Competencies. Uses a gap analysis process to 
        compare the current and desired state of workforce talent
          Phase 4: Implement the Strategy across the employment 
        lifecycle. Uses enterprise tools to bring the workforce plan to 
        life and defines the measures/milestones to deliver the 
        information, trains and equips the workforces, recruits and 
        retains a workforce.
          Phase 5: Monitor, Evaluate, and Adjust. Uses performance 
        measurement for ongoing evaluation and adjustments.

    We are also working diligently to create and institutionalize a 
comprehensive competency management framework that can be used across 
the enterprise. To that end, we have established a multi-faceted 
component work group to develop common competency taxonomies, job 
analysis methodologies, workforce planning strategies and tools, 
competency gap assessment methodologies and common reporting 
requirements. Our goal is to have a number of these deliverables 
completed by the end of fiscal year 2008, with the remaining completed 
during fiscal year 2009.
    While this strategic work of building an enterprise-wide competency 
approach evolves, the Department, and its components and Defense 
Agencies are addressing immediate competency requirements for those 
occupations which will be the key to meeting future mission 
requirements. Thus far, enterprise-wide competency/skill gap 
assessments have been conducted on the following occupations: human 
resources; information technology; civil engineers; pharmacists; 
logistics; and contracts. Additionally, the Department of the Army has 
completed a full competency gap assessment for 75 of its occupations, 
starting with its mission critical occupations, and plans on the 
completion of a full competency gap assessment for 157 of its 
occupations by the end of fiscal year 2008.
    The Department of the Navy (DON) is approaching its competency gap 
assessment initiative from a total force perspective. Under the 
leadership of the Assistant Secretary of the Navy (Manpower & Reserve 
Affairs), the DON is embarking on an aggressive, comprehensive approach 
that will identify key competencies for critical positions, along with 
career roadmaps for competency development for those competencies for 
which gaps have been identified. The Air Force is also conducting 
competency gap analyses for both those competencies which are 
institutional, i.e., behavioral competencies that should be present 
across the enterprise, and those that are technical or functional for 
their mission critical occupations. Similarly, the Defense Agencies are 
also conducting competency gap analyses for their mission critical 
occupations, as is evidenced by the efforts of the DFAS, the Defense 
Information Systems Agency, and the Defense Logistics Agency.
    With the development of an enterprise approach to competency 
management underway and the conduct of competency assessments ongoing, 
the Department is now embarking on how best to forecast its future 
workforce needs. We have formed a work group of component subject 
matter experts to develop a Department approach to workload/workforce 
projections and succession planning, and to gather information on those 
workload projections initiatives already underway to leverage best 
practices. We will also discuss with the VA and the Social Security 
Administration the methodologies they are using to determine their 
applicability to the Department's needs.
    Many efforts are underway within the Department to ensure we have a 
healthy pipeline in place. We are using a variety of recruitment and 
compensation programs to meet our talent needs and develop the skills 
needed for the future. These include intern and career development 
programs, student employment programs, recruitment at job fairs with 
diverse candidates, and establishing liaisons with professional 
organizations to leverage their candidate pools. There are also 
numerous fellowship and scholarship programs in operation throughout 
the Department, providing us a pipeline for those positions deemed 
critical. Two such examples are the NSEP, through which the Department 
grants scholarships in the study of language and cultures in return for 
service, which are especially important to the Department as it 
conducts its Stability/Reconstruction efforts throughout the world; and 
the Science, Mathematics, and Research for Transformation Program, 
through which the Department assists students with tuition in the 
Science, Technology, Engineering and Mathematics arena in return for 
service, ensuring we keep our edge in these most vital of career 
fields.
    Pipeline/succession planning efforts also include a wide array of 
education and training, and professional development programs, such as 
the: Army Fellows Program, Training-With-Industry, Army Comptrollership 
Program, Graduate Cost Analysis Program, DOD Professional Enhancement 
Program, Logistics and Acquisition Management Program, Logistics 
Executive Development Program and the DOD Professional Enhancement 
Program. This is not an all inclusive list but provides a flavor of the 
type of education and training the Department provides to ensure it has 
the current and future talent it needs.
    The Department is also exploring new recruitment methodologies, 
such as ``Boutique Recruiting,'' which was successfully used to recruit 
and hire large numbers of positions in the medical arena, to include 
pharmacists, one our mission-critical occupations. This is in addition 
to the more standard recruitment sources, such as Federal Career 
Interns and veterans.
    We are also looking at the Department's compensation systems to 
ensure all needed compensation strategies are available to our managers 
to recruit and retain the talent needed. We are in process of 
developing a new ``Hybrid'' compensation plan for our doctors and 
dentists that will leverage the best of Title 5 and Title 38 hiring 
flexibilities. By so doing, we will be able to remain competitive in 
reaching and keeping those critical medical skills. We also recently 
obtained approval from the Office of Personnel Management (OPM) to 
offer retention incentives for moves within the Federal Government for 
mission critical personnel at BRAC bases. This new compensation 
flexibility will enable us to retain needed skills as we deploy the 
current BRAC recommendations. These compensation flexibilities are in 
addition to those currently in use, such as student loan repayment, 
special salary rates; recruitment, retention and relocation incentives, 
and the flexibilities offered by the NSPS compensation system.
    As evidenced in the last several years, DOD civilian employees 
continue to support the global war on terrorism at home and on the 
front-lines to help build democracies in Afghanistan and Iraq. Just as 
agile military forces are needed to meet a mission characterized by 
irregular, catastrophic and disruptive challenges, the Department needs 
agile and decisive support from our DOD civilians. It is only through 
the integration of DOD civilian employees that we can realize the 
potential of a Total Force. The Department's civilian employees are a 
critical component as DOD works with the various other Federal 
agencies, including the Department of State to place expanded 
Provincial Reconstruction Teams in Iraq and staff the new formed Africa 
Command.
    At the same time, it is important to ensure that benefits remain 
balanced and commensurate with the commitments we are requesting of our 
DOD civilians. In that lane, I want to thank Congress for reauthorizing 
the authority to waive the annual limitation on total compensation paid 
to Federal employees working overseas under the auspice of the CENTCOM 
and for enacting the a death gratuity of $100K for those brave Federal 
civilians who die of injuries incurred in connection with their service 
in support of a military contingency operation
    Additionally, the NSPS improves the way the Department compensates 
and rewards its civilian employees covered by NSPS and provides a 
performance management system that aligns performance objectives with 
DOD's mission and strategic goals. To date, the Department has 
converted 135,000 employees under NSPS with another 75,000 slated for 
conversion in fiscal year 2008. .
Acquiring, Developing, and Retaining Civilians
    The Department's civilian workforce supports DOD's national 
security and military missions. Technological advances, contract 
oversight, and complex missions have generated the need for more 
employees with advanced education and more sophisticated technical 
skills. Additionally, there must be a very active campaign to recruit, 
train, and develop a diverse workforce. We take seriously the 
responsibility to foster and promote an environment that is attractive 
to individuals from all segments of society.
    The Department is committed to providing disabled veterans who want 
to serve our country as DOD or Federal civil servant the opportunity to 
do so. The Hiring Heroes campaign demonstrates this commitment. The 
Hiring Heroes job fairs concept is a collaborative initiative to inform 
and educate our wounded servicemembers on the various employment 
opportunities available to them within the Department and private 
sector after they complete their military Service. Generally lasting 2 
days, the job fairs offer servicemembers an opportunity to attend 
technical workshops covering a variety of topics such as resume 
writing, job interview skills, dressing for success, and learning about 
social security and veterans' benefits. Additionally, the job fairs 
also provide a unique opportunity for wounded servicemembers to meet 
with potential employers, veterans' organizations and government 
agencies. Over 50 organizations usually attend the job fairs.
    Through the Hiring Heroes campaign, we offer wounded servicemembers 
the opportunity to find new careers, as DOD civilian employees, in over 
700 diverse, challenging, and rewarding occupations. Since 2005, the 
Department has hosted 13 Hiring Heroes career fairs at various major 
medical facilities including Walter Reed, Madigan Army Medical Center, 
Balboa Naval Hospital and Brooke Army Medical Center. Five more Hiring 
Heroes are scheduled between March and September 2008. Additionally, we 
maintain the Defense website specifically designed for our disabled 
veterans--www.DODVETS.com. This web portal serves as a resource of 
employment information for veterans, their spouses, and managers. 
Through our efforts, many servicemembers have been offered positions at 
various DOD and Federal agencies, but more important, they have been 
exposed to a network of both DOD and Federal recruiters dedicated to 
helping them transition back to productive employment where and when 
they are ready. We continue work with other Federal agencies, including 
the VA and the Department of Labor, to provide job training, 
counseling, and reemployment services to seriously injured or wounded 
veterans.
    We have dedicated an office within the Department to help us 
transform the way we attract and hire talented civilian employees. 
Under its lead, we have developed a comprehensive outreach program with 
colleges, universities and professional and heritage associations, 
reenergized our branding and marketing materials, and revamped our 
website to align with the interests of those whom we are trying to 
attract. Our nationwide recruitment campaign takes us to college and 
university campuses where we personally invite talented individuals to 
serve the Department. Since the fourth quarter of fiscal year 2007 
through the end of February 2008, our DOD recruiters made 50 
recruitment visits. An additional 25 visits are planned through fiscal 
year 2008, budget permitting. In one of these visits alone, the 
Department made 60 job offers to engineering students, primarily of 
Hispanic origin. Efforts such as these help ensure the Department has 
the diverse, talented workforce it needs to meet the challenges of the 
21st century.
    The Department launched another innovative program in fiscal year 
2007, known as the DOD Student Training Academic Recruitment program. 
Under this program, DOD has hired four honors-level student who are 
responsible for developing and executing a marketing plan, through 
which students with academic studies match DOD mission critical skills 
are made aware of and are encouraged to consider employment with the 
Department. We continue to leverage technology including, importantly, 
the Internet, to educate and interest talent from a variety of sources. 
Our website showcases vignettes of current Department employees who 
discuss their work and the satisfaction they realize from it, as well 
as the benefits of working for the Department. We believe these 
testimonials will further our efforts to have the Department viewed as 
an ``Employer of Choice''. In addition, we routinely sponsor live web 
chats with DOD career functional managers who can answer questions from 
potential employees about working for DOD as well as provide them with 
the tools they need to successfully apply for DOD jobs.
    Our outreach is not only to those young men and women who are about 
to graduate from college. In recognition of the OPM's Career Patterns 
initiative, in which recruitment strategies are developed to target 
candidate sources in entry, mid and senior points of their careers, we 
are collaborating with the Partnership for Public Service (PPS) in a 
pilot program to reach retirees from the corporate world who are 
looking for challenging work and the opportunity to share their 
knowledge and talent, while serving the public good. PPS has 
established the initial pilot with retirees from IBM. Within the DOD, 
we will be working with PPS and IBM to identify possible placement 
opportunities in the acquisition community. Although the pilot is in 
its infancy stage, we are hopeful it may produce yet another source of 
diversified, qualified talent to fill some of the most critical 
positions in the Department.
    The ``Career Patterns'' initiative also suggests that the use of 
different work life dimensions will enhance the success of recruitment 
efforts. To that end, the Department continues its analysis of our 
workforce to identify the recruitment strategies that will engender the 
talent we need for the 21st century.
    We have paid special attention this year on improving recruitment 
and retention strategies for our health care practitioners, especially 
those caring for our wounded warriors. I'd like to thank you for 
providing us additional direct hire authority for both our medical and 
mental health care practitioners. Through this authority, we will be 
able to compete more readily with our private sector counterparts and 
more expeditiously hire the critical care givers we so urgently need. 
Coupled with this direct hiring authority, we have developed some 
innovative, enterprise-wide recruitment approaches, gleaned from 
literature research and industry best practices, to further enable us 
to recruit the numbers and quality of candidates we need. We have also 
structured some new salary schedules to enable us to remain competitive 
in some of our more critical occupational needs, such as nurses and 
professors at our Health University. Although medical recruitment is a 
challenge across the Nation, both in the public and private sector, you 
can be assured we are using a variety of innovative recruitment and 
compensation approaches to meet this challenge as aggressively as 
possible. Our wounded warriors deserve no less.
    As the Chair of the Federal Chief Human Capital Officer's 
Subcommittee for Hiring and Succession Planning, I personally work with 
a number of other Federal agencies and the OPM to streamline and 
improve the Federal hiring process. The subcommittee has made a number 
of recommendations, the benefits of which we hope to see over the next 
several years. Additionally, over the next coming months, my 
Subcommittee will be working closely with OPM on a new project 
entitled, ``Improve the Federal Hiring Experience,'' which will explore 
new recruitment methodologies, and strategies for improving end-to-end 
recruitment cycle time and candidate quality.
    While recruiting and supporting the civilian workforce which we 
need to meet our mission demands, we are also cognizant of our need to 
support our military families. At the direction of the President in his 
State of the Union Address, we are pursuing strategies to support the 
spouses of our active duty military. We are exploring three approaches 
to meeting the President's request. When taken together, these three 
approaches will address the hiring, training and career portability 
requirements that are the key to keeping spouses employed as they 
accompany their military husbands/wives to their different posts of 
duty.
    The first approach is a non-competitive appointing authority for 
military spouses, which would allow an agency in the executive branch 
to noncompetitively appoint to the competitive service a spouse of an 
active duty military member. Such an authority would facilitate the 
hiring of spouses into Federal positions and would provide a vehicle 
for spouses to access Federal employment upon completion of training 
under the Career Advancement Account Program, which together with the 
Department of Labor, we began piloting in January 2008. The Department 
is working jointly with OPM in developing legislation that we hope to 
submit to you very shortly for your consideration. In recognition of 
the benefits such an appointing authority would engender, I hope it 
will receive your favorable attention and action.
    The second initiative would assist spouses in obtaining Federal 
positions that provide training for advancement into journey positions, 
i.e., a military spouse Federal intern program. Under this program, the 
DOD would fund the salary and benefits of a set number of military 
spouses as they participate in the career intern programs of other 
Federal agencies. The spouse would be permanently employed at the host 
Federal agency, but first year costs would be borne by DOD. We believe 
such a program will encourage other Federal Agencies to hire military 
spouses into their intern programs, thereby giving the military spouse 
the ability to again experience and training in a portable career 
field.
    The third initiative being explored is the expansion of the current 
DOD Military Spouse Preference Program throughout the Federal 
Government. This program facilitates spouses being able to maintain 
their careers as they accompany their sponsors to new posts of duty, by 
affording them preference for vacant positions for which they are 
considered well qualified. The third initiative being explored is the 
expansion of the current DOD Military Spouse Preference Program 
throughout the Federal Government. This current program facilitates 
spouses being able to maintain their careers as they accompany their 
sponsors to new posts of duty, by affording them preference for vacant 
positions for which they are considered well qualified.
World Class Leaders
    Our HCSP ensures the continuity of world class, civilian leaders 
who are fully capable of leading DOD's efforts within a larger national 
security context. To meet this goal, the Department launched an 
initiative aimed at the deliberate identification, development, 
management, and sustainment of senior executive leadership for the 
Department's 21st century requirements. This effort will expand the 
current, enduring executive leadership competencies to include 
knowledge of joint matters and building an enterprise-wide perspective 
acquired through a portfolio of diverse experiences. The definition of 
``joint matters'' expands beyond that prescribed in Goldwater-Nicholas 
Act to recognize the realities of today's multinational and interagency 
operating environment. Further, cultural awareness and regional 
expertise are part of the required core competencies. In the conflicts 
and wars faced by the Department, cultural awareness, language and 
regional expertise become key skills needed by every leader.
    To build a qualified and talented pipeline to sustain leadership 
continuity, the HCSP provides for the identification and closing of 
leadership competency gaps and strengthening of the talent pipeline to 
ensure continuity of diverse and capable leaders. To ensure the 
deliberate development of our current and future leaders, we are 
instituting a new joint civilian leader development system that will 
have at its core a future-focused framework of competencies based on 
the OPM Executive Core Qualifications, but strengthened with the DOD-
unique requirements that will enable the Department to accomplish its 
national security mission in today's complex environment and beyond.
    Our DOD joint civilian leader development framework is designed to 
produce world-class leaders with an enterprise-wide perspective for 
leadership positions across the continuum from entry to executive 
level. It will be implemented across the Department later this year, 
upon completion of our ongoing work to formally validate the Defense-
unique competencies, define proficiency benchmarks, and identify 
targeted proficiency levels needed for successful performance at 
successive leadership levels. This year, we will also complete the 
initial assessment of the proficiency of our current leadership cadre 
against the new competency framework. This baseline analysis will 
identify any systemic competency gaps, and guide future leader 
development initiatives as needed to close those gaps.
    Building upon existing programs, the framework ultimately will 
include a series of DOD-sponsored courses, programs and other learning 
opportunities, designed to meet the specific competency requirements of 
the civilian Defense leader. These opportunities will serve as 
retention incentives for high performing DOD employees and will also 
support DOD initiatives to increase diversity in the senior ranks.
    Two highly competitive DOD-wide leader development programs are key 
building blocks of the new leader development framework. The Executive 
Leadership Development Program (ELDP) and the Defense Leadership and 
Management Program (DLAMP) have been thoroughly reviewed for alignment 
to the competency framework. ELDP, with over 20 years of success, will 
remain as the premier program for high potential mid-level leaders. 
ELDP provides participants with an extensive exposure to the roles and 
missions of the entire Department and an increased understanding and 
appreciation of today's warfighter. The curriculum features immersion 
weeks of hands-on experiential training with each of the military 
Services, an overseas command, a unified command, and the National 
Guard; and topical seminars.
    Our review of DLAMP against the framework resulted in the decision 
to significantly restructure and rename the premier program for high 
potential senior civilian leaders. Accordingly, the new Defense Senior 
Leader Development Program (DSLDP) will be fully developed this year 
and will admit its first class in early fiscal year 2009. Complementing 
component leader development efforts, DSLDP will focus on strengthening 
individuals' enterprise-wide perspective, through a robust program of 
professional military education, targeted developmental assignments, 
and Defense-focused leadership seminars, designed to ensure application 
of critical leader competencies in the joint environment. The 
transition DSLDP will be complete by the end of fiscal year 2010. 
Workforce analysis and modeling tools will further ensure the 
Department's leadership succession plan and strategy is sound, future-
focused, and adaptive to mission requirements. We are confident that 
ensuring alignment of our programs with the DOD-wide competency model 
and best practices in private and public sector leader development will 
further position us for strong civilian leadership in the decades 
ahead.
Senior Executive Service Pay for Performance
    The NDAA for Fiscal Year 2004 established a new performance-based 
pay system for members of the Senior Executive Service (SES). OPM 
approved the design of DOD's performance management system on April 1, 
2005 and on October 9, 2007, fully certified the system for calendar 
years 2007 and 2008. This relatively new performance system is a 
critical tool in building a results-oriented performance culture within 
the Department.
    The system expects excellence in senior executive performance, 
links individual performance with the DOD's strategic goals and 
priorities, sets and communicates individual and organizational goals 
and expectations, systematically appraises executives using measures 
that balance organizational results with customer, employee, and other 
perspectives, and uses the performance results as a basis for pay and 
performance rewards.
    DOD strengthened performance management training to help build a 
performance management culture--one with rigorous performance 
requirements, greater accountability, and deliberate focus on results. 
The training has focused on the five stages of the Federal performance 
evaluation process, planning, monitoring, developing, appraising, and 
rewarding.
    The Department also strengthened the alignment of individual 
performance plans to DOD-wide goals. For the second year, the Secretary 
of Defense issued DOD's top organizational priorities for the 
performance year. These priorities then are embedded in each 
component's strategic plans and translated to specific, measurable, and 
results-oriented performance requirements for executives. Annually, the 
Department issues an organizational assessment, which supplements that 
which may be issued by individual components, to help inform executive 
rating decisions.
    The Department performed its first longitudinal study of the 
performance management system upon completion of the 2006-2007 
performance cycles to determine the impact of the performance 
management system on building a high performing, results-oriented 
performance culture in DOD over time. Additionally, the Department 
implemented a common ``Tier Structure'' for its SES members. The tier 
structure establishes common pay ranges and associated business rules 
to support transparency and comparability in executive position and 
compensation management.
International Workforce Programs
    The Department recently reviewed the foreign national (FN) human 
resources program, which covers over 70,000 workers in some 22 
countries to ensure alignment with the Department's 21st century 
requirements. The Department employs the FN workforce under various 
laws, treaties, and international agreements, host nation labor 
policies and labor union contracts. The current FN human resources 
policies have evolved over many decades. It has been over 20 years 
since there was a comprehensive review of the FN human resources 
program. To launch the review, the Department hosted a worldwide 
conference of U.S. and FN human resources personnel. They offered 
enlightened thinking and a set of recommendations to help refine the 
current FN human resources program. The Department is considering these 
recommendations.
    The Department continues to be engaged in establishing Status of 
Forces Agreements (SOFAs) with new NATO partners, such as Romania, 
Poland, Bulgaria, and the Czech Republic. As part of these SOFAs, the 
Department has developed a new framework for FN employment which will 
ensure a ready, capable, and agile FN workforce.
Pipeline Reemployment Program
    The Pipeline Reemployment program enables partially recovered 
employees with job related injuries and illnesses to return to work. 
The program supports the President's Safety, Health, and Return-to-
Employment initiatives by assisting each Department installation in 
reducing lost days resulting from injuries. DOD organizations will have 
resources and funding to reemploy partially recovered injured employees 
for up to 1 year. Returning injured employees to suitable productive 
duty, as soon as they are able, improves that employee's sense of value 
to the organization while minimizing the cost of workers' compensation 
disability payments. To date, the Pipeline program has returned 500 
employees to productive positions; 91 employees refused valid job 
offers and were removed from compensation rolls. This saves the 
Department approximately $427.5 million in lifetime cost charges.
    In addition to bringing employees back to work, we are striving to 
improve injury compensation program management across the Department. 
We have embarked on a program to renew the skills of our field 
personnel through the development of a comprehensive e-learning 
curriculum, which provides program managers a thorough knowledge base 
from which to manage their programs. Additionally, we are collecting 
the best practices of our field personnel, especially in regard to case 
management with the Department of Labor, and will be instituting those 
practices across the enterprise. By so doing, we hope to further reduce 
costs that the Department may be accruing.
Civilian Force Shaping
    A number of initiatives influence the size and shape of the 
Department's civilian workforce. The most significant are upcoming BRAC 
actions, global repositioning of deployed military and civilians, 
competitive sourcing, and military-to-civilian conversions. The DOD is 
committed to providing comprehensive transition tools and programs to 
assist our valued employees and their families as these force shaping 
initiatives are implemented.
    Since the first BRAC round in 1988, the Department has reduced the 
civilian workforce by more than 400,000, with less than 10 percent of 
that number involuntarily separated. To mitigate the impact of these 
force shaping initiatives on our civilians, the Department has 
aggressively sought and obtained authority for several essential 
transition tools assuring that drawdowns or reorganizations are handled 
in the most efficient and humane manner possible, while ensuring we 
have the talent needed to effectively continue Department operations. 
Employees adversely affected by BRAC may be offered the opportunity to 
separate voluntarily under the Voluntary Early Retirement Authority or 
the Voluntary Separation Incentive Payment program, or both. 
Involuntarily separated employees are also eligible for a number of 
post-separation benefits and entitlements, including: temporary 
continuation of health insurance for 18 months with the Department 
paying the employer portion of the premium, severance pay with a lump-
sum payment option, and, unemployment compensation.
    The Department will implement legislative changes, as directed by 
section 1109 of the NDAA for Fiscal Year 2008 to assist employees 
affected by these actions in transitioning to other positions, careers, 
or to private employment. We are continuing to establish and foster 
employment partnerships with Federal agencies, State, county, and local 
governments, trade and professional organizations, local Chambers of 
Commerce, and private industry. For example, DOD is partnering with the 
Department of Labor to provide BRAC installations outplacement 
assistance under their Workforce Investment System (WIS). The WIS 
consists of over 3,000 State One-Stop Career Centers prepared to offer 
assistance such as retraining, career counseling, testing, and job 
placement assistance.
Emergency Planning
    We have taken great strides to ensure we have plans in place to 
continue our operations and safeguard our employees in times of crisis. 
Significant planning has gone into Pandemic Influenza preparedness. We 
have developed a human resources practitioner guide for use by managers 
and human resource practitioners in planning for, and executing actions 
during emergencies, which include nuclear, chemical and biological 
attacks, and natural disasters, as well as a resource practitioner 
guide for use during a pandemic crisis. We have supported this guide 
with exercise criteria to assess our plans and refine them as needed. 
We conducted a 3-day Pandemic Influenza exercise within the OSD 
Personnel and Readiness organization. The purpose of the exercise was 
to assess our ability to carry on essential work, in light of an 
assumed 40 percent pandemic absenteeism rate, and our ability to 
``socially distance'' while in the Pentagon, a key strategy for 
pandemic influenza avoidance. The exercise was extremely valuable in 
assessing our preparedness and indicating those areas on which 
additional preparations may be needed. The lessons learned from our 
exercise have been shared throughout the Department, as well as with 
our Federal Agency colleagues. We continue to work on our information 
technology preparedness to ensure essential work will be able to be 
performed in case a pandemic influenza should occur.
                               conclusion
    The health of our AVF is best measured by the opinions of its 
members. Eighty percent of active duty members believe they are 
personally prepared, and two-thirds believe their unit is prepared, for 
their wartime jobs. These views have held steady from the start of OIF 
(March 2003) through the latest survey (August 2007). Although 
deployments can place a strain on servicemembers and their families, 
two-thirds of members deployed since the start of OIF indicated that 
access to the Internet and e-mail while away have greatly improved 
their quality of life. In terms of compensation, more than two-thirds 
of servicemembers reported being financially comfortable in April 2007, 
and four-fifths indicated saving a portion of their household income. 
In August 2007, more than two-thirds of servicemembers were satisfied 
with their medical (69 percent) and dental (76 percent) benefits. 
Overall, in August 2007, 56 percent of servicemembers indicated they 
are likely to stay on active duty. Based on research using prior 
surveys, 90 percent of servicemembers who indicate they are likely to 
stay actually do stay. Therefore, we feel confident that almost three-
fifths of our current active duty force will stay in the military.
    After declining retention improved between May 2003 and November 
2004, Reserve retention intentions have stabilized and are currently at 
69 percent. Reports of family support to stay in the National Guard/
Reserve have also stabilized. The June 2007 survey indicates that 
approximately two-thirds of members say they have not been away longer 
than expected; average nights away actually decreased from June 2006. 
Results from this survey also show that roughly three-quarters of 
reservists working for employers consider them to be supportive of 
their military obligations. Where employment problems have occurred and 
reservists have sought assistance, roughly two-thirds turned to ESGR. 
Of those who contacted ESGR, 62 percent reported they were satisfied 
with the manner in which their request for assistance was handled.
    In the past year, we also fielded special surveys to spouses so we 
could fully understand the impact of deployments on the family. Results 
indicate that 61 percent of active duty spouses and 75 percent of 
Reserve spouses support their husband or wife staying in the military. 
These results are encouraging, as spouses' reports of their support are 
even higher than members' assessments of spouse support. We plan to 
continue fielding regular surveys of spouses to better understand the 
issues facing today's military families.
    We continue to have a dynamic, energetic, adaptable All-Volunteer 
Total Force. With your help we are confident we can sustain that Total 
Force. These volunteers have performed magnificently under the most 
arduous and perilous of circumstances. They have not failed us; we must 
not fail them.

    Senator Ben Nelson. Thank you.
    General Rochelle?

  STATEMENT OF LTG MICHAEL D. ROCHELLE, USA, DEPUTY CHIEF OF 
                 STAFF, G1, UNITED STATES ARMY

    General Rochelle. Thank you, sir. Thank you for the 
opportunity to appear before the subcommittee once again.
    Chairman Nelson, Senator Graham, and distinguished members 
of the subcommittee, thank you for the opportunity to report on 
the Army's personnel posture for 2008 and entering 2009. Thank 
you for your continued support of America's Army.
    Without question, our Nation's Army remains the best-
trained, best-equipped, best-led Army in the world; and, I 
might add, quite resilient. As we enter the 7th year of 
conflict, however, the third-longest period of armed conflict 
in our Nation's history, there's little question that our Army 
is, today, out of balance. Your Army soldiers and their 
families are remarkable, having endured lengthy and repeated 
deployments and hardships. Many have been injured, and many 
have made the ultimate sacrifice.
    In spite of the tremendous burdens they bear, they remain 
resilient and committed to serving our Nation. Indeed, they are 
our Nation's heroes, truly a national treasure. I look forward 
to our dialogue today regarding how best to support and sustain 
them. Thank you for this opportunity, once again.
    Restoring balance and creating readiness is our top 
priority after winning the global war on terror. Regaining our 
boxer stance, if you will, the ability to shift our weight and 
respond decisively, requires that we apply the Chief of the 
Staff of the Army's four imperatives: sustain, prepare, reset, 
and transform.
    He is growing the Army to 547,000--point four--as soon as 
possible, and we are on track to do that by the end of fiscal 
year 2010. We are on target to meet this goal by 2010, as I 
said, thanks largely to the support from this committee. Army 
growth will help us return to shorter deployments, increased 
time at home between deployments, and greater predictability 
for soldiers and families in both the Active and Reserve 
components. We must grow, to become a modular, expeditionary 
force that is fully capable of supporting combatant commanders 
in meeting the full spectrum of contingencies.
    Our efforts to grow the Army are challenging. Only 3 in 10 
of our 18- to 24-year-olds today are fully eligible for 
enlistment. The remainder fall short in some element of 
standards for health, education, or character. Our recruiting 
mission is difficult, given the lowest propensity for military 
service in two decades, declining support from those who 
influence our youth, opportunities for post-secondary 
education, and a competitive job market. In spite of what is 
happening in the United States, we are on track to meet our 
recruiting goal for fiscal year 2008.
    I'm concerned about the Nation's ability to produce the 
highest-possible caliber of military recruits, and, I might 
add, the citizens that we will need to be competitive in the 
21st and 22nd century. Declining high school graduation rates 
and alarming rates of obesity among our young adult population 
constitute a pending human capital crisis, a crisis that not 
only has the potential to undermine military readiness, but 
threatens our Nation's well-being, as a whole. I share your 
concerns about quality, and am committed to recruiting a 
quality force with the highest-possible educational attainment 
and aptitude scores.
    Our current analysis and our commanders in the field tell 
us that soldiers assessed in fiscal years 2006 and 2007 are 
performing exceptionally, and I would emphasize exceptionally. 
Every one of these soldiers is qualified in his or her military 
occupational specialty, and their demonstrated performance on 
the battlefield speaks for itself.
    I believe that a willingness to serve in the Army today, a 
nation at war, at this place in time, portends a very unique 
aspect of quality that accession metrics simply cannot measure: 
the heart of a well-led, well-trained volunteer soldier.
    While equipment and technology are certainly vital to 
readiness and transformation, people are the Army. Retaining 
soldiers starts at home. We must sustain soldiers and their 
families, as you both have spoken to, with a quality of life 
commensurate with the quality of the service they provide. This 
is absolutely essential to both near-term and long-term 
readiness.
    With support from this committee and Congress, the Army has 
made tremendous strides in this regard, from funding for 
improved housing facilities and essential services, to 
increased pay and benefits, and all are appreciated. Our 
soldiers and their families recognize, and deeply appreciate, 
actions taken by their military and civilian leadership, 
especially Congress. These targeted improvements to policies, 
programs, and services delivery mitigate risks exacerbated by a 
prolonged conflict and the many stresses that conflict entails. 
We ask for continued congressional support for these programs 
that provide our soldiers and families with the quality of life 
they so richly deserve.
    In closing, I thank you for the opportunity to appear 
before you today. I thank you for the continued support. I look 
forward to taking your questions.
    [The prepared statement of General Rochelle follows:]
           Prepared Statement by LTG Michael D. Rochelle, USA
    Chairman Nelson, distinguished members of this subcommittee, thank 
you for the opportunity to talk today on behalf of America's Army. Our 
Army is out of balance as we enter the 7th year of the Long War. Demand 
for forces exceeds our capacity to supply them on a sustained basis. As 
a result, our soldiers and their families in both the Active and 
Reserve component have endured repeated, lengthy deployments and the 
countless stressors that accompany the many sacrifices they have made. 
In spite of this, and facing an uncertain future, they remain committed 
to serve. We have no greater heroes than America's most precious 
resource--our soldiers. These soldiers and their families, backed by 
our civilian workforce, represent the very best of American values and 
ideals. While we may be out of balance, we are not broken, a fact we 
can attribute to the inspiring resilience and dedication of these 
American heroes. The Army leadership is committed to their well-being, 
consistent with their quality of service and many sacrifices.
    The Army's number one priority is restoring balance to the All-
Volunteer Force, while supporting the National Security Strategy. 
Restoring balance requires that we grow the Active Army by 65,000, to 
547,400, by the end of fiscal year 2010. Restoring balance also 
requires that we grow our Reserve component force, with the Army 
National Guard and Army Reserve adding 8,200 and 1,000 soldiers, 
respectively to their end strengths. We must do this if we are to 
continue to effectively support current military operations, while 
transforming the Army to meet the needs of the Combatant Commanders in 
a dynamic and lethal security environment. We must reduce deployment 
lengths from 15 months, increase time spent at home-station between 
deployments, and provide predictability across all components, if we 
are to relieve the considerable stress placed on our Army, our 
soldiers, and our Army families.
    Though facing national-level challenges, we remain committed to 
sustaining [growing] the best-trained, best-led, best-equipped Army in 
the world. While facing a number of manpower challenges, these factors 
have not decreased the resolve, nor the quality, of the American Army.
    The Army is also dedicated to caring for soldiers and families who 
have borne the burden of battle. The Army must have timely resourcing 
to ensure we are able to match the quality of life offered to soldiers 
with the quality of the tremendous service they provide the Nation. 
Through initiatives like the Army Soldier Family Action Plan, the Army 
Wounded Warrior Program, improvements to the Physical Disability 
Evaluation System, and providing soldiers with critical skills the 
ability to transfer portions of their Montgomery GI Bill benefits to 
dependents, the Army is working hard to care for soldiers and families. 
We are indebted to Congress for your tremendous support and 
leadership--they have been instrumental to the considerable progress 
made on behalf of these American heroes. With your continued support, 
we will further improve our programs and develop meaningful, effective 
new programs for the benefit of the entire Army community.
                      grow the all-volunteer force
    For the first time since the inception of the All-Volunteer Force, 
America is recruiting and retaining its military during a period of 
protracted combat. With the help of Congress and the support of the 
American people, the Army has accomplished its recruitment and 
retention milestones. However, growing the All-Volunteer Force will not 
be without challenges.
    Wartime recruiting is challenging. It is made even more challenging 
by a declining eligible population. Fewer than 3 out of 10 of America's 
youth are fully qualified to serve in our Nation's military due to 
medical, conduct, or aptitude disqualifications. Many 17-24-year-old 
men and women may want to join the Army, but are not actively recruited 
because they have disqualifying physical conditions, have committed 
crimes, or do not have a high school diploma.
    For example, the rate of obesity among youth tripled since 1980. 
Today, up to 19 percent of the Nation's 6-19-year-olds are overweight.
    The Nation's high school graduation rate is only 70 percent. For 
minorities, the graduation rate falls to 50 percent and, for youth 
living at or below the poverty level, the rate drops to an alarming 30 
percent.
    These lower capacities among our Nation's 17-24-year-old population 
are not only an Army recruitment issue--they are a national crisis. 
Fixing these problems will require concerted, long-term national 
commitment. We simply cannot afford for the American public to become 
complacent.
    To help meet these challenges, we developed a program called the 
Assessment of Recruit Motivation and Strength test. This test allows 
those who pass the physical test, but are a few percentage points over 
Army accessions body-fat standards, to serve in the Army. To ensure 
quality, participants must lose the weight within 1 year from the time 
they ship to Basic Combat Training. For fiscal year 2006 and fiscal 
year 2007 combined, over 2,500 recruits entered the Active Army under 
this program, a significant boost to our recruiting efforts.
    Another initiative is the Army's Prep School, which will provide 
high quality youth the opportunity to complete their General 
Educational Diploma (GED) prior to commencing Basic Combat Training. 
Fort Jackson, SC, will be the location for the pilot program beginning 
in third quarter, fiscal year 2008, with expansion dependent upon 
analysis of the pilot's success and through-put capacity.
    Concerns regarding graduation rates, rising rates of obesity, and 
incidents of misconduct requiring administrative review 
notwithstanding, young millennials, as they are referred to, continue 
to answer the Nation's call.
    Despite the toughest recruiting and retention environment ever 
faced by the All-Volunteer Force, the Army's accomplishments in these 
areas are noteworthy. Two key accomplishments are worth highlighting: 
(1) the Army recruited more than 170,000 soldiers in fiscal year 2007, 
and (2) the recruiting and retention success enabled America's Army to 
grow its combined end strength by almost 49,000 soldiers. By making 
prudent use of the incentive authorities granted by Congress, the 
Active component and Army Reserve exceeded their respective recruiting 
objectives of 80,000 and 26,500 in fiscal year 2007, while the Army 
National Guard achieved 96.6 percent of its 65,115 soldier objective 
before reducing recruiting effort to remain within mandated end 
strength limits.
    The propensity for America's youth to serve in our Nation's All-
Volunteer Force is at its lowest point since the Army began surveying 
such metrics. Their willingness to do so depends on a demonstrated 
commitment on our part to reward the sacrifices of those who willingly 
accept this responsibility--one that so many others either cannot, or 
choose not to, perform.
    To ensure that military service remains an attractive career 
option, the Army continues to shape its recruiting efforts through a 
mix of innovation, incentives, and bonuses. We again thank Congress for 
providing the necessary funding to support and sustain our recruitment 
efforts.
    The Army Advantage Fund is a pilot program launched on February 4, 
2008, in Albany, Cleveland, Montgomery, San Antonio, and Seattle; it 
has already produced 17 high quality enlistments. The prospects for 
widening the pilot in the near future are excellent.
    Just as crucial as recruitment is the retention of trained, highly 
skilled soldiers in the Army, and bonuses have been a strong incentive 
for soldiers to reenlist. The Army Retention Program adjusts to meet 
the needs of the Army to ensure that the right soldiers with the right 
skills reenlist to meet Army manpower requirements.
    Army retention continues at very high levels, reflecting the 
commitment of soldiers and the quality of Army leaders. Even while 
engaged in persistent conflict, the Army surpassed its retention goals 
each year since 2002. This continued success is directly attributed to 
the talented men and women in the Army who provide ``boots on the 
ground'' around the world. It is important to note that their success 
would not be possible without great leadership, the backing of their 
families, and the tremendous support provided by Congress. The Active 
Army retained 69,777 soldiers in fiscal year 2007, finishing the year 
at 112 percent of mission. The Army Reserve finished the year achieving 
119 percent of mission and the Army National Guard finished at 100 
percent of mission.
    To achieve overall manpower levels in fiscal year 2008, the Active 
Army must retain 65,000 soldiers, the Army Reserve must retain 14,946 
soldiers, and the Army National Guard must retain 31,889 soldiers. 
Current indicators show the Army on track to meet its retention mission 
for fiscal year 2008. As of the end of January, the Active Army 
achieved 118 percent of its year-to-date mission, the Army Reserve 
achieved 103 percent of its year-to-date mission, and the Army National 
Guard achieved 113 percent of its year-to-date mission. A robust bonus 
program has been essential in enabling the Army to meet required 
retention goals.
    Careful and deliberate adjustments are made to bonus levels to 
target retention of soldiers in critical skills and grades. Retention 
of combat experienced veterans is imperative to future readiness. The 
deployed reenlistment bonus targets soldiers assigned to units in Iraq, 
Afghanistan, and Kuwait. Recently deployed units, or units currently 
deployed to these areas of operations, have reenlistment rates ranging 
between 110-120 percent of their annual goals. General Petraeus 
presided over a single reenlistment ceremony for 600 troops who 
reenlisted in Baghdad on Independence Day this past year. More than 100 
Army Reserve soldiers gathered January 18, 2008, at the Al Faw palace 
at Camp Victory, Iraq, to reenlist during a ceremony marking the 100th 
anniversary of the Army Reserve. Currently, 50 percent of all 
reenlistments occur in the deployed theater.
    The Army implemented a pilot program in 2006 to allow reenlisting 
soldiers with critical military skills to transfer their Montgomery GI 
Bill benefits to their spouses. Based on the feedback received from 
soldiers, we expanded the pilot in November 2007 to include transfer of 
benefits to their children. Reaction from soldiers indicates that these 
benefits contributed to their decision to reenlist. We are still in the 
assessment phase of this pilot.
                          quality of the force
    While the Army met recruiting quality marks mandated by law, we did 
fall short of the Department of Defense goal to have 90 percent of our 
new recruits enter with a high school diploma. The Army looks at 
quality as more than DOD quality marks and, therefore, each soldier we 
enlist with a waiver is thoroughly screened before being approved for 
entry. We have seen increases in waivers over the past few years and 
remain vigilant in our screening process. Our 2007 study of waivered 
soldiers, as compared to non-waivered soldiers from 2003 to 2006, 
showed that the waivered soldiers performed comparably. Feedback from 
commanders in the field continues to support this analysis. We do not 
envision the quality of the force or future readiness of the Army 
suffering as our goal remains focused on DOD quality benchmarks.
                           army officer corps
    The Army's greatest challenges in officer manning are the sudden 
and rapid growth of officer requirements, the conversion to new modular 
formations, and the transition in Reserve component employment from a 
strategic to operational Reserve. The Army will grow over 9,000 new 
officer billets from fiscal year 2007 to fiscal year 2010 in the Active 
component alone, with over 6,000 of those at the grades of Captain and 
Major. Combined with the longstanding Reserve component shortages, our 
officer production capability remains challenged. It will take several 
years for the Army to balance competing requirements and fully fill its 
officer corps. We are launching a strategic review of commissioned 
officer requirements, production sources, policy and legislation to set 
the conditions for future success, as recommended by the recent 
Government Accounting Office report.
    Officer retention is a critical component of ensuring our officer 
corps is adequately manned to meet these increasing requirements. While 
fiscal year 2007 officer attrition in the Active component was lower 
than the historical average, we must reduce attrition even further to 
meet increased officer requirements by fiscal year 2011. To address 
these challenges, the Army implemented a number of measures to maximize 
growth in the officer corps. Accessions have increased from all 
traditional commissioning sources. Additionally, with cooperation from 
our sister Services, we have added highly qualified officers from the 
Air Force, Navy, and our Army Reserve components. Those efforts have 
produced almost 1,500 additional commissioned officers for the Active 
Army.
    The Army also instituted an unprecedented Army Captain's Critical 
Skills Retention Bonus Retention Menu of Incentives Program. This 
program has guaranteed retention of more than 12,689 captains thru 
fiscal year 2010, nearly 90 percent of our goal of 14,184 captains 
retained from the eligible captain year groups. After review of the 
initial phase of this program, the Army plans to initiate a second 
phase of the Incentive Program beginning in the second quarter of 
fiscal year 2008 that will add additional captain year groups. The 
Office of the Secretary of Defense recently approved a similar program 
for a range of Reserve component captain specialties that should 
substantially increase officer retention in critical specialties 
required in the Reserve component.
    The Army increased officer accession missions for fiscal year 2008 
and beyond to meet requirements for captains and majors by fiscal year 
2011. The United States Military Academy (USMA), Reserve Officers' 
Training Corps (ROTC), and Officer Candidate School (OCS) will increase 
production, with heavy short-term emphasis on OCS due to its short 
lead-time. A pre-commissioning incentives program targets high-
performing USMA and ROTC cadets to select their branch, posting, or 
graduate education, upfront, in exchange for an additional 3-year 
service obligation. This program ensures improved retention at critical 
career decision points in fiscal year 2010 and beyond and, since its 
inception in 2006, has guaranteed the retention of nearly 3,000 
additional officers from year groups 2006 and 2007. We anticipate an 
additional 1,500 officers in year group 2008 will participate in this 
program.
                   incentives and enlistment bonuses
    Incentives and bonuses are effective tools to open the door to the 
possibility of military service, but going through the door requires 
the vision of serving a greater good. During his recent appearance 
before the Senate Armed Services Subcommittee on Personnel, Major 
General Bostick, the Commanding General of the United States Army 
Recruiting Command, said, ``No amount of money would be enough to 
convince them [America's soldiers] to continue to serve if they did not 
believe in what they were doing.'' Once men and women become soldiers, 
they realize the significance of what they volunteered to do for their 
country, their families, and themselves. The incentives and bonuses 
serve, in a small way, to reinforce their choice and the Army, our 
soldiers and their families are indebted to Congress for your 
invaluable, continued support in this crucial area.
                        army civilian workforce
    Only through the integrated efforts of Army civilians and soldiers 
can the Army accomplish its assigned missions and make the most 
effective use of resources. The Army civilian workforce offers vital 
support to our soldiers and families in this era of persistent 
conflict. Short of actual combat, Army civilians share full 
responsibility for mission accomplishment by delivering combat support 
and combat service support--at home, abroad, and on the battlefield. 
More than ever, Army civilians are an absolutely invaluable component 
of readiness.
    Currently, the Army's Civilian Corps is over 265,000 strong, over 
3,500 of whom are serving in harm's way in the U.S. Central Command 
Area of Operations.
    Army civilians also serve the Nation in myriad non-combat Army 
missions such as maintaining waterways and flood control, domestic 
emergency response, and scientific research. They work in over 550 
different occupations, with the highest concentrations in logistics, 
research and development, and base operations functions.
                             army diversity
    Diversity in America's Army assures that the Army remains relevant 
to the Nation and the demographically evolving American society it 
serves. Diversity of culture, language, gender, race, and ethnicity, as 
well as diversity of thought, contribute materially to the Army's 
unmatched warfighting effectiveness. Further, a richly diverse force 
serves as a strategic hedge against uncertainty in an increasingly 
unpredictable global security environment. The Army established the 
Army Diversity Task Force in November 2007, which is led by a general 
officer. Reporting directly to the Secretary and the Chief of Staff, 
the Task Force will conduct a holistic review and assessment of 
diversity programs and progress for military and civilian components of 
the Army, as well as the adequacy of the resources currently available 
to achieve the Army's diversity vision. An inclusive environment will 
underpin efforts to build and sustain the workforce needed for the 21st 
century environment.
                    caring for soldiers and families
    The well-being of our soldiers, civilians, and their families 
centers on life domains such as standard of living, health, career, 
community life, and personal and family life. A strong sense of well-
being across these life domains enables our soldiers, civilians, and 
their families to focus on performing and supporting the Army's mission 
while improving a quality work-life balance. Identifying those life 
domain areas that are out of balance serves as a platform from which to 
base policy and strategy decisions in order to restore balance and 
sustain the All-Volunteer Force.
    We, as an institution, are deeply committed to providing for the 
well-being of the force. These life domains define the Army's ability 
to influence institutional outcomes of recruiting, retention, readiness 
and morale. We are leading the effort in building a comprehensive 
system of subjective and objective metrics and analytics to monitor 
potential stress and health of the force indicators that affect 
soldiers and Army families. This process will serve as a key element of 
the Well-Being Index that will assist the Army in its efforts to 
restore balance of the force.
    Our objective is to provide leaders a greater depth of 
understanding upon which to base policy and strategy decisions; develop 
a clearly defined multi-component Human Capital Strategy; strengthen 
the Army's ability to recruit and retain the right human capital; and 
reinforce the commitment of our soldiers to serve in the All-Volunteer 
Army.
    The Army is committed to continual combat readiness, but certain 
stressors can inhibit the personnel readiness of the Army. The Army 
continuously monitors data that provides indicators of the Well-Being 
of soldiers, families, and civilians. Data shows that soldiers and 
families are feeling strained by this era of persistent conflict. The 
Army is committed to providing an environment that mitigates the 
effects of the stress they experience. We will ensure that soldier and 
family programs meet the needs of our people.
    The Army remains committed to eliminating incidents of sexual 
assault from our ranks. Sexual assault is contrary to Army Values and 
degrades our readiness--it has no place in our Army. We continue to 
lead the effort to refine and improve a comprehensive sexual assault 
prevention and response program. This program serves as a key element 
of each Army leader's responsibility to create a climate that minimizes 
sexual assault, encourages victims to come forward, and takes 
appropriate action against offenders.
    While a number of trends remain steady or show a decline, there are 
some areas of great concern to Army leaders. One area of continuing 
concern is the increasing number of suicides and attempted suicides. 
The loss of any soldier is a tragedy, and we remain dedicated to 
suicide prevention. A General Officer Steering Committee is reviewing 
the Army Suicide Prevention Program with a focus on better integrating 
and strengthening our efforts to decrease the current trend. This is a 
multi-disciplined approach that includes Army researchers, behavioral 
health professionals, legal professionals, law enforcement 
professionals and chaplains. Central to the program are actions begun 
in 2007 to reduce the stigma associated with seeking help for mental 
health issues. We are also reinvigorating in small unit leaders and 
teammates the responsibility to be proactive in identifying issues and 
behaviors that may signal suicidal behavior.
    The Army Chaplain Corps' ``Strong Bonds'' Training Program is 
expanding to reach more soldiers and family members to develop 
relationship-building skills intended to reduce failed relationships, 
the leading stress factor associated with completed suicides. The 
Army's Medical Command is recruiting and hiring additional behavioral 
health providers, and screening all soldiers for possible mental health 
problems during Initial Entry Training, as well as during pre- and 
post-deployment health assessments. In addition, commanders have 
continued to emphasize Battlemind Training, which is designed to build 
resiliency for soldiers and families.
    Our plan for providing comprehensive mental health support to our 
soldiers includes continuing to expand our capacity for behavioral 
health treatment, and improving the continuity of care between medical 
facilities and providers, to include Veterans' Administration treatment 
facilities for Reserve component soldiers. Future steps include the 
development of an action plan utilizing core strategies in developing 
life-coping skills, maintaining constant vigilance, encouraging help-
seeking behaviors, reducing stigma, maintaining constant surveillance 
of behavioral health data, and integrating and synchronizing unit and 
community programs.
    The longstanding Army Family Action Plan (AFAP) is a bottom-up 
system that also provides a means for soldiers and their families to 
inform leadership about what is working, what is not working, and what 
might be done to make improvements. As a result of AFAP input, 
servicemembers' group life insurance benefits increased, family support 
groups have been institutionalized, and new programs for single 
soldiers have been introduced.
    We are strengthening programs and services so that the well-being 
of our men and women remains at the forefront of Army life. These 
programs address personal issues around substance abuse, suicide 
prevention, and sexual assault as well as personnel issues involving 
diversity, safety, occupational health, equal employment opportunity 
and comprehensive deployment cycle support.
                        congressional assistance
    Recruiting, retaining, and providing for the well-being of the best 
Army in the world requires a significant commitment by the American 
people. The Army is grateful for the continued support of Congress for 
competitive military benefits and compensation along with incentives 
and bonuses for soldiers and their families and the civilian workforce.
    Congress recently authorized pay raises sufficient to provide 3.5 
percent increase in compensation for soldiers for fiscal year 2008. The 
Army is programming a 3.4 percent pay raise for fiscal year 2009 and 
would appreciate Congress' support in this plan.
    The Army also thanks Congress for new ability to consolidate 
special pay, incentive pay and bonuses authorities which will give the 
Army the necessary flexibility to direct programs at specific needs, 
such as a Warrior Pay program to pay Soldiers who are frequently 
deployed.
    I would like to emphasize that your tremendous support has proven, 
and will continue to prove, absolutely essential to Army readiness. 
From recruiting and retention piloting authorities, to funding directed 
at caring for soldiers and families, your yeoman efforts serve as a 
catalyst for success--be it on the battlefield, or at home stations 
across the Army. We are Growing and Transforming the Army in a period 
of prolonged war. We will do so with young men and women of the highest 
caliber whose willingness to serve portends an immeasurable aspect of 
quality and commitment. We look forward to meeting the challenges ahead 
with your continued leadership and support for the Army.

    Senator Ben Nelson. Thank you, General.
    Admiral Harvey?

  STATEMENT OF VADM JOHN C. HARVEY, JR., USN, DEPUTY CHIEF OF 
     NAVAL OPERATIONS (MANPOWER, PERSONNEL, TRAINING, AND 
                 EDUCATION), UNITED STATES NAVY

    Admiral Harvey. Yes, sir. Chairman Nelson, Ranking Member 
Graham, distinguished members of this subcommittee, I 
appreciate the opportunity to appear before you today on behalf 
of the 330,000 Active Duty and 70,000 Reserve component sailors 
currently serving our Nation.
    Thanks in no small part to the extraordinary support and 
work of this committee and its professional staff, your Navy 
today is ready, relevant, and responsive. We are recruiting a 
high-quality force, and we are retaining those sailors we need 
to sustain a high-quality force, and we intend to keep it that 
way.
    We're sustaining our Nation's engagement in Iraq and 
Afghanistan, both directly and in support of Army and Marine 
ground forces, and we are simultaneously strengthening our 
engagement around the world, in keeping with the guidance in 
our new Cooperative Maritime Strategy for the 21st Century.
    I would like to give you an example of what your Navy is 
doing on any given day. Last week, on February 20, the Nation's 
attention was focused on the U.S.S. Lake Erie, one of our Aegis 
cruisers, as it successfully engaged a failing satellite with a 
Navy standard missile launched by Fire Controlman Second Class 
Andrew Jackson of Raytown, MO. But, also on February 20, just 
as Lake Erie was engaging the satellite in an extremely 
challenging and complex real-world scenario, our Navy was also 
operating newly developed riverine forces in the Euphrates 
River, near the Haditha Dam. Navy SEALs were pursuing al Qaeda 
deep in Afghanistan and throughout Iraq, and the Harry S. 
Truman Carrier Strike Group and the Tarawa Expeditionary Strike 
Group, just entered through the Straits of Hormuz into the 
Gulf, supporting Operation Iraqi Freedom (OIF) and Operation 
Enduring Freedom (OEF).
    February 20 was a day on which 127 of our 279 ships--about 
46 percent--were underway or deployed, including 2 aircraft 
carriers and 5 big-deck expeditionary warfare ships. That day, 
your Navy had 54,000 sailors forward deployed overseas, 
including about 24,000 sailors in the Central Command (CENTCOM) 
area of operations (AOR), of whom 10,000 were afloat and 14,000 
were boots-on-ground in various capacities. On that day, 1,700 
sailors from our Navy medical team--doctors, nurses, and 
corpsmen, of whom 400 are reservists--were deployed to the 
European Command and CENTCOM AOR in support of OIF and OEF, 
from Landstuhl to Balad.
    On February 20, we had approximately 10,000 sailors on 
individual augmentation missions, serving in roles ranging from 
our traditional areas of expertise in intelligence, medical 
support, explosive ordnance disposal, and combat-zone 
construction, to delivering new capabilities in areas like 
civil affairs, Provincial Reconstruction Teams, running 
detainee operations, and combating improvised exposive devices 
while embedded in Army and Marine tactical units.
    Also in the CENTCOM AOR on 20 February, three of our 
surface combatants were engaged in anti-piracy operations in 
and around the Horn of Africa, attempting to ensure the flow of 
relief for famine and drought conditions in those bereaved 
countries.
    Sailors in the Naval Forces, Europe, region supported 
President Bush's trip to Africa with Operation Nomad Fire, 
while the U.S.S. Fort McHenry and highspeed vessel Swift 
continued the inaugural deployment in support of Africa 
partnership stationing in the Gulf of Guinea, where 14 percent 
of our Nation's oil is generated.
    On February 20, we had frigates and P-3s partnering with 
the Coast Guard, conducting counternarcotics operations in the 
Caribbean and off the coast of South America, an operation 
which has resulted in seizing 4.4 metric tons of drugs, just 
since December and January.
    Closer to home, in Newport News, on the 20th, we saw 
construction continuing on our newest nuclear-powered aircraft 
carrier, the U.S.S. George H.W. Bush. Finally, on that day, we 
had about 870 of our newest recruits conducting the battle 
stations-21 exercise at Great Lakes, the culminating experience 
of their initial training at boot camp.
    On February 20, the common element in all these missions, 
from the high-end operations of our Aegis weapon system, to the 
low-tech, but far more demanding, riverine mission in the 
combat zone, was our people. It is the Navy's people who are 
making it all happen, executing these important missions and 
achieving great success. It is that same Navy that accomplishes 
all these diverse tasks; and our Navy's people--our young men 
and women who have volunteered to serve a cause much larger 
than themselves, deserve all the credit and our gratitude for 
the immeasurable achievements made in the defense of our 
Nation.
    In the years that have passed since September 11, your Navy 
has undertaken a truly significant reshaping in order to 
develop the capability to engage worldwide at every level of 
warfare and peace maintenance, while still maintaining our 
ability to dominate the blue water anywhere around the globe.
    So as we approach our steady-state force levels of about 
322,000 sailors in the Active component and 68,000 sailors in 
the Reserve component, it is clear we will not become just a 
smaller Navy, we will be a different Navy. To get the essential 
manpower, personnel, training, and education pieces of this 
different Navy right, we are putting together all the component 
parts of our value chain for people to ensure we have the right 
sailor in the right job at the right time with the right 
experience, a concept we call ``Fit.'' Our efforts will ensure 
we are still ready to respond to any mission at any time, 
anywhere, from the deep ocean to well beyond the shoreline. 
Your Navy is a Service whose routine forward presence around 
the world, actively supporting friends and allies, pursuing our 
enemies, and maintaining the global maritime stability upon 
which our economic well-being depends, clearly illustrated by 
the many missions we accomplish on a typical day, is a fact 
now, and will certainly remain so for the indefinite future.
    On behalf of all our sailors, Active and Reserve, I wish to 
thank this committee for their steadfast support of all our 
Navy people who are doing so much for so many every day. I am 
standing ready to respond to your questions, sir.
    Thank you.
    [The prepared statement of Admiral Harvey follows:]
          Prepared Statement by VADM John C. Harvey, Jr., USN
                              introduction
    Chairman Nelson, Senator Graham, and distinguished members of the 
Personnel Subcommittee, thank you for providing me with the opportunity 
to appear before you to present an overview of Navy's recruiting, 
retention, and compensation programs.
    I want to express my deep appreciation for your support of the many 
new and enhanced authorities to support sailors and their families 
included in the National Defense Authorization Act for Fiscal Year 
2008. I am particularly pleased you included Defense Officer Personnel 
Management Act (DOPMA) Control Grade Relief and an increase in senior 
enlisted strength authorization, which will prove essential to our 
ongoing efforts to properly size and shape the Navy Total Force of the 
future.
    During testimony last year, I informed this subcommittee of our 
challenge to sustain core capabilities and readiness, while 
simultaneously building the future naval fleet and developing a 
workforce capable of operating, fighting, and leading in a variety of 
challenging environments. Demands on the Navy Total Force are growing, 
and our ability to deliver sailors with the skills required to meet 
those demands is becoming increasingly challenging in an austere fiscal 
environment and ever more-competitive recruiting and retention 
marketplace.
    I expressed that recruiting, personnel management, training, and 
compensation systems which served us well in the past, would not be 
sufficient to deliver the workforce of the future. Sustaining the All-
Volunteer Force through recruiting, developing, retaining, and taking 
care of this Nation's best and brightest young Americans is my primary 
responsibility and most solemn obligation. Upon taking the helm of the 
United States Navy, Admiral Gary Roughead established a goal that Navy 
be recognized as a top 50 employer during his tenure as Chief of Naval 
Operations (CNO). The first step toward accomplishing this goal is to 
align the life and career goals of our people with the mission 
requirements of our Navy--current and future--in a way that provides 
the greatest opportunities for personal and professional development. 
Achieving this view of our future for sustaining the high quality All-
Volunteer Force entails providing a robust pay and benefits package, 
professional and personal fulfillment and affirmation of the value we 
place on sailors, their families, and their selfless service to our 
country.
    During congressional testimony last year, I highlighted three key 
priorities that were the focus for our efforts:

         Navy Total Force Readiness
         Sizing, Shaping, and Stabilizing the Navy Total Force
         Strategies for the Future Navy Workforce

    I want to set the stage for my testimony this year by taking a 
brief look back at each of those areas:
Navy Total Force Readiness
    To support Navy's mission and sustain combat readiness, we focused 
on elements of readiness subjected to risk by impending recruiting and 
retention challenges, community health issues, and barriers to 
individual readiness and family preparedness.
    In 2007, recruiting and retention efforts focused on communities 
experiencing the most stress associated with the global war on terror:

         Naval Construction Force (Seabees)
         Naval Special Warfare and Special Operations (NSW/
        SPECOPS)
         Health Professionals

    While we are pleased to report significant progress in improving in 
Seabees/NSW/SPECOPS recruiting over the past year, our highest priority 
this year, and where I may need further help, is with health 
professionals.
    We implemented improvements in our Individual Augmentee/Global War 
on Terror Support Assignment (IA/GSA) process by developing a better 
understanding of the shift from an emerging to an enduring requirement. 
We established an effective management plan and process for assigning 
sailors to these critical positions, including a more integrated total 
force approach, and dramatically improved support for sailors and 
families before, during and after deployments. IA/GSA sailors also earn 
points towards advancement and officers are awarded appropriate joint 
credit.
    We made great progress in all areas of sailor readiness and family 
preparedness, focusing on issues of greatest concern, such as support 
to injured sailors, fitness, education and professional development, 
personal financial management, child and youth programs, and sea-shore 
rotation.
    We established a Special Assistant to the CNO to develop and 
implement a coherent and complete plan of action to sustain effective 
casualty care for all our sailors and their families. This plan will 
incorporate, at a minimum, all required elements of the recently 
enacted ``Wounded Warrior Act.''
Sizing, Shaping, and Stabilizing The Navy Total Force
    Extensive work has been invested in recent years to validate Navy's 
proper force size, through a capability-based analysis of current and 
future force structure and warfighting requirements associated with a 
313-ship, 2,813-aircraft-Navy. That analysis also took into account 
present and projected global war on terror requirements. The outcome 
was an optimized steady-state Active component end strength requirement 
of 322,000, which we anticipate reaching by 2013.
    In June 2007, a Reserve recruiting and retention cross-functional 
team was stood up to address the challenges of resourcing the Reserve 
Force. In conjunction with United States Fleet Forces Command, this 
team is conducting a review of overall Reserve capabilities based on 
Active component requirements. Selected Reserve end strength of 68,000 
is about right, but this analysis will build upon the work of the 2003 
Zero-Based Review of the Reserve Force and may further refine that 
number.
    Having identified the required force size, we shifted our primary 
focus to ``FIT'', which entails force shaping (getting the right 
sailors in the right positions at the right time) and stabilizing 
(establishing a flexible and adaptable personnel management system that 
proactively responds to changing war-fighting requirements). Our goal 
is to build upon last year's efforts with greater emphasis on those 
areas most critical to our role in supporting the Maritime Strategy--
delivery of training, focus on jointness, language skills, regional 
expertise and cultural awareness, and continued Active Reserve 
Integration efforts, particularly in leveraging Reserve capabilities 
when sourcing global war on terror assignments.
    Although the Navy manpower management system is flexible and 
capable of responding to changes in manpower requirements and force 
structure, recruiting and developing sailors takes time and 
necessitates the best alignment of sailors to the mission they are 
required to perform. Accordingly, Navy is developing a demand-based 
personnel system to better link Fleet requirements to training 
resources and pipelines necessary to fulfill a unit's mission.
         where we are today--sustaining the all-volunteer force
Strategies for the Future Navy Workforce
    The Strategy for Our People (SFOP) provides the framework through 
which we will continue to shape our workforce into a diverse Navy. Our 
Navy has undergone tremendous change over a relatively short period of 
time, not only in terms of expanding nontraditional missions, in the 
way that we operate, fight, and lead, or in regard to force structure 
changes, but certainly from a personnel standpoint. The numbers of 
Active-Duty and Selected Reserve sailors has steadily declined since 
2002, in part due to our shift to more technologically advanced, less 
manpower-intensive platforms and weapons systems. Despite the 
technological advances, maintaining the right balance between people 
and warfighting capabilities will continue to prove challenging in an 
increasingly constrained fiscal environment. As we move to a leaner, 
more sea-centric, and technologically advanced force, we must increase 
our focus on investing in our most valuable asset--our people.
Readiness
    By incorporating lessons learned from past experiences, sailors and 
their families are better prepared today for the range of operations 
they're asked to support. Navy Fleet and Family Support centers 
worldwide are improving support for families of deployed sailors, as 
well as supporting them during disasters such as the 2007 San Diego 
fires.
    As GSA detailing is new for most sailors and their families, Navy 
continues to tailor deployment services and support to the unique 
situations of IA sailors and families. IA sailor, family and command 
handbooks are posted on the Web and provide comprehensive information 
on GSA deployment preparation, readiness and reunion issues. Fleet and 
Family Support Centers and Command Ombudsmen distribute a monthly GSA 
Family Connection Newsletter to GSA families.
    Additionally, Navy improves sailor readiness and family 
preparedness through a number of Morale, Welfare and Recreation (MWR) 
programs, Quality of Life programs and services assessments, fitness 
development, and family financial readiness education.

         Physical Readiness is being institutionalized across 
        Navy through the ``Culture of Fitness'' program, which focuses 
        sailor and command attention on the entire scope of healthy and 
        physically fit sailors.
         Liberty Programs are offered to sailors in alcohol and 
        tobacco-free Liberty Centers, which serve as ``family rooms'' 
        that promote camaraderie among single and unaccompanied 
        sailors, while providing healthy recreation alternatives.
         Sailor and Family Assessments solicit feedback from 
        sailors, families, and command leaders on Navy life, programs, 
        and services, which lead to program changes focused on 
        providing an optimal level of support.
         Family Financial Readiness is important to mission 
        readiness and improves retention. Navy provides educational 
        programs tailored to family members and teens. We have also 
        implemented a career life-cycle-based training continuum that 
        directs when, where, and how sailors receive specific Personal 
        Financial Management (PFM) training.
Shaping and Stabilizing the Force
    Efforts to align the career goals of sailors, through learning and 
development, with Navy's mission requirements, are at the core of 
shaping the force. Stabilizing the force cannot be accomplished without 
changing programs, practices, policies and laws, in ways that promote 
improved life-work balance. We must align the life and career goals of 
sailors with the mission requirements of the Navy in order to sustain 
warfighting readiness; and ensure we deliver the sailor required to 
operate, fight, and lead the Fleet of the future.
    We know IA/GSA requirements will remain for the foreseeable future, 
and as such, we established long-term support processes. Additionally, 
the Cooperative Strategy for 21st Century Seapower calls for new 
capabilities and capacity. We will leverage the Reserve component to 
meet these demands; develop an enduring cultural, historical, and 
linguistic expertise in our Total Force, and further our efforts to 
maximize Navy's contribution to the global operations.
Individual Augmentation/Global War on Terror Support Assignment 
        Detailing
    Significant progress has been made in filling IA requirements, 
particularly in high demand skill sets. In many cases, Navy identified 
skill sets resident in lesser-stressed communities and fulfilled 
requirements with alternate sourcing. This flexible response, coupled 
with effective strategic communications to the Fleet, reduced some 
uncertainty of repeat IA deployments and helped provide predictability 
and stability for sailors and their families.
    Through GSA Detailing, we are filling the majority of joint 
warfighting requirements by our mainstream assignment processes. 
Sailors now have increased influence over when they choose to do an IA, 
improved management of their careers, and longer ``lead times'' for 
preparation, improving sailor readiness and family preparedness for 
these long deployments.
    GSA sailors receive Permanent Change-of-Station (PCS) orders to San 
Diego or Norfolk and Temporary Duty Under Instructions (TEMDUINs) 
orders for all training and movement. PCS orders allow for moving 
dependents to Fleet concentration areas with significant support 
services and infrastructure. Advancement boards will continue to stress 
the value of GSA and IA tours. Other benefits include advancement 
points, flexible advancement exam options, and joint credit. Execution 
of GSA detailing requires the merger of two systems currently operating 
in parallel--GSA and the Individual Augmentation Manpower Management 
(IAMM) systems. Placing global war on terror billets and IA 
requirements into the normal detailing process will improve unit 
manning stability. Navy Personnel Command and USFF will collaborate to 
balance Fleet readiness and GSA requirements. Until GSA detailing is 
fully implemented, USFF will continue to fill a portion of IA 
requirements through IAMM. The short-term goal of GSA detailing is to 
create an environment where GSA assignments are the normal business 
practice and IAs are the exception.
    In support of Central Command, we have more personnel ashore than 
afloat. Today, over 14,000 sailors support Operation Iraqi Freedom 
(OIF)/Operation Enduring Freedom (OEF) staffs and missions ashore, 
while over 12,000 sailors afloat in Central Command are performing 
their traditional Maritime Missions. As of 2007, we have deployed or 
mobilized 62,811 sailors (17,435 Active component/45,376 Reserve 
component) as IAs since OEF in 2001. Almost 75 percent of IAs are 
employed using core Navy competencies, such as electronic warfare, 
airlift support, cargo handling, maritime security, medical support, 
explosives engineering, and construction. This additional commitment of 
providing IAs comes at a cost--we are carefully monitoring the strain 
on our PCS and TEMDUINs accounts to ensure we can execute core Navy and 
global war on terror missions while also fostering the necessary 
development of our people. There is also a ``cost'' in terms of filling 
global war on terror support assignments by removing sailors from their 
primary assignments. Currently, 8,000 Active Duty sailors are on these 
assignments, requiring others to ensure their duties in the affected 
commands are carried out.
Active-Reserve Integration
    Through Active-Reserve Integration (ARI), Navy is increasing its 
overall capability and readiness. We continue to blend units in many 
communities, including Intelligence, NSW/EOD, Medical Support, 
Helicopter Combat Support, Riverine, Maritime Expeditionary Security 
Force and Naval Construction Battalions (Seabees), as well as surface 
and aviation warfare. We are working on developing methods to smooth 
the transition between components. One of our key Task Force Life Work 
initiatives is implementing an Active component/Reserve component ``On/
Off Ramp'' concept, which may require legislative relief.
    Personnel planning, in support of global war on terror, includes a 
sustainable operational Reserve Force with capacity to support current 
operations, while maintaining a Strategic Reserve capability. 
Additionally, Reserve sailors are now aligned with Navy region commands 
to better support a Total Force response to Homeland Defense/Security 
and natural disaster requirements. We are also more closely aligning 
Active component/Reserve component medical care and medical case 
management policies and practices. Caring for sailors mandates a Total 
Force approach that will ensure sailors receive the best possible 
medical care.
Diversity Campaign Plan
    In the past year, we focused on implementing the CNO's Diversity 
Concept of Operations (CONOPs). We stood up the Diversity Directorate, 
growing from an office of 3 to its present size of near 20. The 
Diversity Directorate made great strides in working to improve 
diversity in our Navy. The CONOPS called for focus on five key areas: 
accountability, outreach, training, mentoring, and communication.
    We initiated an accountability regimen that identified areas Navy 
enterprises and communities can leverage to ensure the Navy's talent is 
promoted and retained. In taking a snapshot view of their diversity, 
the enterprises and communities were able to identify baseline 
diversity statistics, potential negative or positive trends, and areas 
for potential focus or study. Four Enterprises completed their initial 
review and briefed the CNO, while the remaining enterprises and 
communities are on deck this year. Once we have completed the initial 
round of reviews, we will go back annually and revisit the review, 
following up on how the enterprises and communities have worked to meet 
the challenges and goals outlined in their initial accounting.
    As part of the initiative to spread the word of Navy education and 
career opportunities, we worked to create a focused, sustained outreach 
program with identified individuals and affinity groups, such as the 
National Society of Black Engineers and the Society of Hispanic 
Professional Engineers. Additionally, we encouraged increased Flag 
level and junior officer and enlisted participation in the two Navy-
affiliated affinity groups, the National Naval Officers Association and 
the Association of Naval Service Officers. These groups are 
instrumental in maintaining and retaining our diverse Navy force, 
particularly through their mentoring and professional development 
efforts.
    We created a Navy-wide mentoring culture by developing a consistent 
framework that will ensure all sailors have mentors and mentoring 
networks. Our draft mentoring instruction is currently in circulation 
with officer and enlisted leadership.
    From E-1 to O-7, we provide detailed training curricula to 
institutionalize the importance of diversity in the Navy. At every 
level of the Navy's training continuum, we emphasize the benefits of a 
diverse organization and how those benefits relate to our core 
principles.
    Finally, none of these efforts would be effective without a 
strategic communication plan to deliver a concise, consistent, and 
compelling message on diversity to both internal and external 
audiences. In the past year, we layered our communications by 
distributing the diversity message through a variety of internal media. 
We are also working to increase our success stories through external 
media; including those most important to members of the diverse 
affinity groups with whom we have developed relationships.
Millennial Generation Values
    We are quickly learning that the one-size-fits-all personnel 
policies we have in place today won't work in the future. The young men 
and women of the Millennial Generation, those junior Officers and 
Enlisted under the age of 24, expect to change jobs or career fields 
multiple times over their life and expect a life-work balance that 
allows them to serve as well as explore outside interests and attend to 
personal and family needs. Their career paths, pay, and benefits must 
evolve to a more flexible system that supports mid-career off and on-
ramps, part-time service and temporary sabbaticals.
    Inflexible Navy careers and the adverse impact to quality of life, 
particularly among junior sailors, is borne-out in recent survey data. 
Sixty-percent of respondents on a 2005/2006 survey of Surface Warfare 
Officers (SWO) reported the ability, or lack thereof, to start a family 
or plan personal activities significantly influenced their decision to 
leave active duty. Of those who decided to make Navy a career, only 26 
percent reported the current SWO continuation pay was a strong 
influence on their decision. Additionally, as of the beginning of 
December 2007, retention of SWOs in Year Group 2002 was at 19.4 
percent, against a goal of 33.3 percent. In a 2006 Naval Aviation 
Survey, 49 percent of female officers said that to be successful in the 
aviation field they have to choose their career over marriage, and 71 
percent said to be successful they have to choose their career over 
having children. However, many of the things that are important to 
women in the workplace are proving to be important to both the men and 
women of the Millennial generation--family, stability, a true sense of 
fulfillment and value from their work. Continuing retention challenges 
demonstrate a need to develop new and different ways to influence long-
term retention decisions.
    Military service is not often first among career options 
Millennials consider. Today's influencers, most of who have never 
served in the military, are often not inclined to steer Millennials 
toward a military option. We are responding to this challenge by 
meeting Millennials on their terms, appealing to their search for 
something more, their sense of service, their spirit of volunteerism 
and their interest in the world around them. The Navy must recognize 
and respect generational traits to ensure it appeals to and competes 
with the best of industry for the talent we seek to recruit and retain. 
Initiatives such as the Navy's Diversity Campaign and Task Force Life 
Work will help us achieve that goal. Our focus in the next several 
years is building a menu of retention options for our changing 
workforce and striving to capitalize on the diversity and differences 
of our Navy Total force to ensure our Navy is a family-friendly ``Top 
50'' place to work.
                     building a path to the future
    This Nation commits our greatest talent and good will toward 
achieving peace and freedom for a better future, at home and abroad. 
The readiness we've attained, and global leadership role we hold, in 
warfighting, diplomacy, maritime security, and humanitarian assistance, 
are all dependent on the honor, courage and commitment of the men and 
women in our All-Volunteer Total Force. To maximize their potential and 
provide the most ready force to the fleet and joint warfare commanders, 
we will continue to improve upon our personnel systems, policies, and 
development tools. Our investment will offer greater life-work balance; 
place the right sailor in the right job at the right time, and prepare 
our 21st century leaders to operate adeptly in our dynamic global 
environment.
Achieving FIT
    The concept of FIT is centered on the idea of delivering the right 
sailor to the right job at the right time. ``Right sailor'' is defined 
as an individual with the proper mix of knowledge, skills and abilities 
to match the demands of the assignment--the ``right job.'' The timing 
element refers to both the timeliness of that sailor arriving in the 
position to support the operational unit's schedule, and the right 
point in the sailor's career to provide the seniority and leadership 
required. We must assign sailors to positions that draw from and 
enhance their talents and strengths, and emphasize continued 
professional growth and development, through learning and experience. 
Achieving FIT means we enhance their development in stages that align 
to career milestones, affording them the opportunity to progress and 
remain competitive for advancement and promotion. Over the next year, 
we will continue to focus our efforts to achieve FIT by:

         Developing our people, through learning and 
        experience, in a way that fulfills the promise of our people 
        and aligns their careers aspirations with Navy commitments
         Meeting our recruiting and retention challenges by 
        modifying our programs, policies, and incentives to meet the 
        life and career goals of our people, providing an appropriate 
        balance between the two, while meeting the mission requirements 
        of the Navy
    Achieving FIT--Development of our People
    Training and education are the critical enablers to developing the 
knowledge, skills, and abilities of our sailors. In accordance with the 
Maritime Strategy, we will focus our efforts on delivery of training, 
emphasis on joint management, development and training continuum, 
graduate education programs, and implementing Navy's Language Skills, 
Regional Expertise and Cultural Awareness Strategy.
        Train to Qualify
    Navy ships must be designed and developed based on capability 
requirements, a sustainable CONOPs, robust Human Systems Integration, 
and sound Acquisition Strategies. These upfront deliverables drive the 
analysis to properly operate and maintain ship systems. In May 2007, 
the Vice Chairman, Joint Chiefs of Staff, approved a Systems Training 
Key Performance Parameter (KPP) establishing training thresholds and 
objectives for appropriate acquisition programs. The new KPP ensures 
performance standards and training are developed based on Personnel 
Qualification Standards, Navy Mission Essential Task Lists, and 
Objective Based Training. The Littoral Combat Ship (LCS) is one of the 
first programs to use the Systems Training KPP.
    The LCS Program makes use of many other concepts that pose new 
challenges, as well as presenting many opportunities to improve the 
effectiveness and efficiency of the Surface Force. The Navy's 
Cooperative Maritime Strategy identifies a total requirement of 55 LCS 
ships in the 313-ship Navy Shipbuilding Plan. Maintaining readiness and 
sustaining operations on these ships requires improved manpower, 
personnel, training, and education solutions.
    The LCS Train-to-Qualify training methodology sets in motion a 
challenging new training paradigm for the Surface Force critical to 
supporting the LCS manning, readiness, and sustainment. The training 
methodology is conducted in an off-ship training environment that 
trains an individual in the knowledge, skills and abilities required to 
competently perform basic tasks associated with specific shipboard 
watch stations or positions. Training delivery methods include some 
combination of classroom instruction, computer-based lessons, live and 
virtual simulations, and live evolutions, in port and, where 
appropriate, at sea. Delivery is conducted in both individual and team 
training environments and focuses on achieving qualification and 
proficiency prior to reporting on the ship.
    Sailors are prepared to join an LCS core or mission package crew 
via billet training tracks that satisfy the required knowledge, skills 
and abilities. Sailors' previous schools and qualifications are 
examined to avoid redundant training and tailored to fill in the gaps.
        Navy Learning and Development Strategy
    During the last year, a series of reviews were conducted to ensure 
our learning and development strategy for sailors would support not 
only the Cooperative Maritime Strategy, but be fully integrated with 
Navy's SFOP. Our goal was to look objectively at the impact of changes 
made in how we prepared our sailors for their Navy careers over the 
last 5 years, a period referred to as the Revolution in Navy Training. 
Tasks consisted of:

         A review of changes made to learning strategies
         A review of training organizational alignments
         Evaluation of learning technology acquisitions
         Benchmarking ourselves against projected advances in 
        learning within industry, academia, and our sister Services

    The results verified efforts our Navy learning organization is 
undertaking and we have made minor adjustments to learning 
organizations and investment strategies for the future.
    We are well-positioned to train and prepare our sailors for the new 
technologies and platforms they will be tasked to operate, fight, and 
maintain in the future. The accelerating rate of technology insertion 
and new platform acquisition drives our manpower and training 
organizations to continued close collaboration with all Navy 
enterprises to ensure our learning strategy remains fully-integrated 
and resources are optimized to support current and future fleet 
training readiness. Investments in new learning technology and delivery 
systems will fully support the professional development of our sailors 
necessary to man the future fleet and further our efforts to become a 
competency-based Total Force.
        Joint Management, Development, and Joint Training Continuum
    Navy remains committed to the Chairman's vision for Joint 
Development in both the officer and senior enlisted communities across 
the Total Force. In 2007, we began developing an action plan for Joint 
Development, which will improve how we plan, prepare and assign Navy 
leaders to joint positions in a way that maximizes Navy's contribution 
to joint, interagency, and multi-national coalition partners.
    Joint Qualification System (JQS). Authorities enacted by the John 
Warner National Defense Authorization Act of Fiscal Year 2007, provided 
us with the first significant updates to the Goldwater-Nichols Act in 
over 20 years. Last August and September, the Joint Staff conducted 
Experience Review Panels under the new JQS, recognizing the changing 
nature of jointness and allowing the Services to increase the pool of 
O-6s eligible for promotion to flag via the new experience path. We are 
working diligently with DOD to continue implementing the JQS and to 
extend jointness to our Reserve Force.
    Joint Training Continuum/Professional Military Education (PME). The 
Navy continues its emphasis on PME designed to prepare its leaders for 
challenges at the tactical, operational and strategic levels of war. 
During the last year we met several key milestones in implementing the 
Navy's PME Continuum with its embedded JPME for E-1 through O-8. We 
conducted two flag-level courses to prepare future 3-star officers to 
serve effectively as Maritime Component Commanders for Joint Force 
Commanders. One of those courses was a Combined Course with flag 
officers from our partner nations in the Pacific Command. The course 
was designed to develop and deepen relationships to meet regional 
challenges and advance understanding of security issues facing the 
participating nations.
    The Naval War College (NWC) successfully completed its first 
academic year with the disaggregated intermediate and senior-level 
courses which was approved by CJCS for JPME phase II. Officer student 
throughput for the senior and intermediate-level courses, resident and 
non-resident, increased with significant numbers of graduates 
immediately assigned to follow-on joint duties in accordance with 
established assignment policies. All of these efforts directly 
contribute to Navy's continued development at the operational-level of 
war.
    The Primary PME Course for junior officers (O-1 to O-3) and Chiefs 
(E-7 to E-8) completed its first year with an enrollment of about 
10,000 sailors. In January 2008, the Navy implemented the PME Continuum 
by launching the Introductory PME Course for sailors (E-1 to E-4) and 
the Basic PME Course for leaders in the grades of E-4 to E-6. With the 
complete fielding of the Continuum, PME will become an important 
element of assignment and career progression for all sailors, officer 
and enlisted. The Navy will continue to use resident and distance 
learning options to provide the capability and flexibility to prepare 
Total Force leaders--military and civilians--for the operating 
environments of today and the future.
        Education Strategy
    In 2007, we completed the second in a series of studies on graduate 
education within the Navy. Our examination yielded some valuable 
insights into the role, timing and content of education as a key 
enabler of the Total Force. In 2008, we will apply those insights to 
the development of a strategy that addresses graduate education 
requirements to support successful execution of our joint and maritime 
missions. At the core of the Education Strategy will be an emphasis on 
the knowledge elements delivered through graduate education that will 
enable the Total Force to maximize its effectiveness. When coupled with 
the ongoing work on the Learning and Development Strategy and the PME 
Continuum, the Education Strategy will help Navy deliver enhanced 
capability to meet the challenges laid out in the Cooperative Maritime 
Strategy.
    Language Skills, Regional Expertise, and Cultural Awareness 
        Strategy
    As we have seen in our recent missions with U.S.N.S. Comfort in 
Latin America and the U.S.S. Peleliu Pacific Partnership in Southeast 
Asia, our effectiveness overseas is as dependent on our ability to 
comprehend and communicate as it is on firepower and technological 
superiority. Facility with languages, expertise in regional affairs, 
and broad awareness of foreign cultures is essential to effective 
interaction with our diverse international partners and emerging 
friends. These competencies are key to theater security cooperation, 
maritime domain awareness, humanitarian efforts, and shaping and 
stability operations; they are crucial to intelligence, information 
warfare, and criminal investigations. They are a prerequisite to 
achieving the influence called for in the Maritime Strategy.
    January 2008, we promulgated Navy's Language Skills, Regional 
Expertise, and Cultural Awareness Strategy--a plan that aligns and 
transforms Language Skills, Regional Expertise and Cultural (LREC) 
across the Navy Total Force. The LREC Strategy galvanizes the following 
efforts:

         The Foreign Area Officer (FAO) Program has been 
        reconstituted as a community restricted line community. FAOs 
        will augment Navy Component Commands, forward-deployed Joint 
        Task Forces, Expeditionary and Carrier Strike Groups, American 
        embassies, and coalition partners. At full operational 
        capability, Navy FAOs will number 400. To date, 138 have been 
        identified with selection boards convening twice each year to 
        select more.
         The Personnel Exchange Program (PEP) is being 
        realigned for consistency with theater engagement strategies of 
        Navy Component Commanders. PEP billets with some of our 
        traditional allies will be redistributed to support new 
        relationships with emerging partners. The program will be made 
        more competitive and career enhancing, particularly for 
        commissioned officers. As theater security cooperation is 
        indeed a core Navy mission, PEP is an essential ingredient in 
        global and theater engagement strategies.
         Language Instruction. We are increasing language 
        instruction for non-FAO officers at the Defense Language 
        Institute (DLI). Beginning in fiscal year 2008, OPNAV 
        programmed 100 seats per year for officers in non-FAO 
        designators. Officer Community Managers at the Navy Personnel 
        Command now have greater flexibility to incorporate DLI 
        training into the career paths of officers whose duty 
        assignments require facility with a foreign language.
         Foreign Language Skills Screening. We continue to 
        screen for foreign language skills at all Navy accession points 
        and ensure the information is captured in personnel databases. 
        The data allows us to identify and track these skills for 
        operational purposes. As I reported last year, we executed a 
        one-time Navy-wide self assessment of language capacity in 
        2006, which yielded unprecedented visibility on this 
        increasingly critical capability. When we rebase-lined our data 
        in July 2007, we counted over 143,000 individual assessments 
        (not people--some people are fluent in more than one language) 
        of proficiency in more than 300 separate languages and 
        dialects. As expected, approximately half the capability is in 
        Spanish with large populations of French, German and Tagalog; 
        however, exceptional capability--much of it native--is in 
        obscure, less commonly-taught languages from remote areas of 
        the world. These bi- and multi-lingual sailors are a valued 
        capability woven into the fabric of the force.
         Foreign Language Proficiency Bonus (FLPB). We continue 
        to enhance the FLPB to incentivize the acquisition, 
        sustainment, and improvement of skill in strategic languages. 
        Formerly restricted to the Navy's crypto linguists and others 
        serving in language-coded billets, FLPB eligibility has 
        expanded dramatically to include sailors and officers with 
        qualified (i.e., tested) proficiency in critical languages, 
        irrespective of billet. Consistent with National Defense 
        Authorization Act for Fiscal Year 2007, we modified our 
        policies to pay incentives at lower proficiency for sailors 
        engaged in special or contingency operations. Eligibility is 
        contingent upon successful completion of the Defense Language 
        Proficiency Test.
         Navy Center for Language, Regional Expertise and 
        Culture (CLREC). Through the Center for Information Dominance 
        (CID) in Pensacola, we continue to expand language and culture 
        training support to an increasing number of Fleet constituents. 
        Conceived in February 2006, CID CLREC started as a clearing-
        house for LREC-related training, but has gradually expanded its 
        portfolio to include development of individual country and 
        regional studies tailored to Fleet operations. CID CLREC 
        developed collaborative relationships with NWC, Naval 
        Postgraduate School, and the U.S. Naval Academy, as well as 
        with the DLI, in Monterey, and the language and cultural 
        centers of our sister Services. These cooperative relationships 
        yielded promising results to date, including dedicated pre-
        deployment training to the three Riverine Squadrons which have 
        or are deploying to Iraq, as well as the aforementioned support 
        to both U.S.N.S. Comfort and U.S.S. Peleliu in 2007.
         LREC Instruction. We continue to provide LREC 
        instruction to the Total Force. Naval Postgraduate School's 
        (NPS) Regional Security Education Program embarks NPS and U.S. 
        Naval Academy faculty and regional experts in Navy strike 
        groups to deliver underway instruction in regional threats, 
        history, current affairs and cultural/religious awareness. 
        Similarly, NWC continues to develop integrated regional content 
        in its resident curricula, and developed PME modules containing 
        regional content available both in resident and in non-resident 
        venues, including on-line.
    Achieving FIT--Meeting the All-Volunteer Force Recruiting 
        Challenges
    During 2007, Navy executed a focused, integrated Active/Reserve 
recruiting effort, attaining 101 percent of Active enlisted accession 
goals and 100 percent of Reserve enlisted affiliation goal. Officer 
recruiting, however, fell short obtaining 88 percent of the Active 
component goal and 52 percent of the Reserve component goal.
    Our goal is to position the Navy as a top employer, in order to 
gain a competitive edge in the market and provide our people the 
appropriate life/work balance, not only to attract and recruit them, 
but to retain them. Retention will be defined as providing the 
opportunity to transition between types of naval service (Active, 
Reserve, civilian, or contractor support). We aim to provide a 
continuum of service to our people, affording our Navy the maximum 
return on our most valuable investment. This year, we will focus our 
recruiting and retention efforts in the areas that pose the greatest 
risk and challenge to our ability to sustain the All-Volunteer Force.
        Medical Recruiting
    As mentioned earlier, meeting medical program recruiting goals is 
our highest recruiting priority for 2008. While overall manning levels 
within the medical department are improving, we continue to face 
retention challenges in physician critical specialties of which many 
require 3-7 years of specialty training beyond medical school. We 
currently face manning shortages of medical professionals. Dental Corps 
is manned at 89 percent (1,007 inventory vs. 1,127 billets) with 70 
percent of our junior dentists leaving the Navy at their first decision 
point. The Medical Service Corps is currently manned at 91 percent 
(2,293/2,512) and while overall Nurse Corps manning levels appear sound 
(94 percent) the Navy has experienced relatively high attrition in the 
junior officer ranks (O-2/O-3). While recruiting medical professionals 
has historically been a challenge, it is it becoming increasingly 
difficult for several reasons:

         There is an increasing shortage of health care 
        professionals in the civilian sector
         The number of students attending medical schools has 
        increased at a much slower pace the past three decades as 
        compared to the overall population growth of the United States 
        and the requirement for medical professionals to support that 
        growth.
         The demographics of the medical school students have 
        changed with females now making up more than 50 percent of the 
        students attending medical school.
         New financial scholarships in the civilian sector have 
        made military scholarships less attractive.
         Potential recruit concerns derived from the OIF/OEF

    While the recruiting of medical professionals has improved in 2007 
from previous years, Navy still attained only 82 percent of the Active 
component medical specialty mission and 57 percent of the Reserve 
component medical goals. To combat the recruiting challenges and 
continue supporting the increased demand for the OIF/OEF, we 
implemented the following:

         Increased accession bonuses for the Nurse Corps and 
        Dental Corps
         Initiated plans for a Medical Corps accession bonus
         Funded a critical skills accession bonus for medical 
        and dental school Health Professions Scholarship Program (HPSP) 
        participants
         Increased the stipend for HPSP students, as well as 
        Financial Assistance Program participants
         Expanded the critical skills wartime specialty pay for 
        Reserve component medical designators
         Recently implemented a Critical Wartime Skills 
        Accession bonus for Medical and Dental Corps.
         Implemented Critical Skills Retention Bonus for 
        clinical psychologists.
        Enlistment Bonuses
    Our incentive programs were a key component of our enlisted 
recruiting success in 2007. The enlistment bonus continues to be our 
most popular and effective incentive for shaping our accessions. The 
authority to pay a bonus up to $40,000 made a significant contribution 
to our Navy Special Warfare and Navy Special Operations recruiting 
efforts. Likewise, our Reserve component success would not have been 
possible without the availability of enlistment bonuses.
        Education Incentives
    Tuition assistance remains a powerful enlistment incentive-offering 
the opportunity to pay for college while serving. The Navy College 
Program Afloat College Education (NCPACE) provides educational 
opportunities for sailors while deployed. The Navy College Fund, 
another enlistment incentive, provides money for college when a sailor 
decides to transition to the civilian sector. In 2007, we initiated a 
pilot program called Accelerate to Excellence, which pays recruits who 
attend community college while in the delayed entry program before boot 
camp then continue school through their initial skills training, 
culminating in a rating specific Associate's Degree. Lastly, our Loan 
Repayment Program allows us to offer debt relief of up to $65,000 to 
recruits who enlist after already earning an advanced degree.
    Achieving FIT--Meeting the All-Volunteer Force Retention Challenges
    The dynamics of retention have shifted from the behavioral patterns 
of previous generations who valued long-term commitments to a new 
generation, most of whom expect to change employers, jobs and careers 
several times in their working life. Our sailors have more choices 
available to them now than ever before. They expect innovative and 
flexible compensation policies, a commitment to continuing education, 
and professional development opportunities. Despite a weakening 
economy, there will be increased competition for our Nation's best 
talent. Retaining our sailors will continue to be challenging due to 
comparable compensation and benefits offered by industry balanced with 
the sacrifices and commitments we ask of our sailors.
    To address these challenges we are aggressively pursuing the use of 
tools that allow us to manage our people to achieve four desired 
outcomes: predictability, stability, personal and professional growth, 
and satisfying real work. To achieve these outcomes, with the goal of 
promoting a ``Stay Navy'' message, we are considering alternative 
manning solutions, providing our sailors with professional 
credentialing opportunities, exploring initiatives that support the 
life/work balance our people desire, and providing greater sailor and 
family support.
        Sea Shore Flow
    Last year, I testified the Navy was becoming increasingly sea-
centric and that the Navy's first priority was to man sea-duty and 
front-line operational units. As we continue to assess the size and 
shape of the Navy workforce that will be required to meet future 
capabilities, it has become evident that one of the key variables to 
effective management of sailors is to determine the optimal sea-shore 
rotation periodicity. To that end, we stood up the Sea Shore Rotation 
Working Group comprised of representatives from throughout the Navy 
with significant senior enlisted representation. The working group was 
charged with conducting a comprehensive review and overhaul of the 
current plan, to ensure that we man the Fleet with the right sailor, in 
the right job, at the right time.
    Today, it is a pleasure to inform you that we made substantial 
progress in finding solutions that optimize our enlisted career paths. 
We developed an evolutionary method, known as Sea-Shore Flow, for 
determining sea tour lengths for our sailors. Sea-Shore Flow provides 
the optimal balance of sea and shore duty throughout a sailor's career; 
improves Fleet manning; and gives sailors more career choices for 
professional and personal development with improved geographic 
stability. This year we intend to revise the Navy policy that currently 
sets sea tour lengths based solely on a sailor's pay grade to a policy 
that sets sea tour lengths based on the optimal Sea-Shore Flow career 
path for each enlisted community. In some cases this may mean 
shortening sea tour lengths in order to achieve a better FIT in the 
Fleet. In other cases, a market-based rotation system that rewards 
sailors for self-selecting more time at sea, through monetary 
incentives like Sea Duty Incentive Pay, and non-monetary incentives 
like guaranteed geographic stability, may be more effective.
    Although sustaining a more sea-centric military workforce will be 
more costly, the policy is based on optimal Sea-Shore Flow career 
paths, coupled with a market-based rotation system that leverages 
incentive programs will minimize those costs, improve fleet manning, 
and enhance each sailor's life work balance.
        Navy Credentialing Opportunities On-Line
    Since June 2006, the Navy embraced licensure and certification as a 
key means of helping sailors apply their military training and work 
experience in attainment of industry-recognized credentials. We 
conducted extensive research to link the Navy's ratings, jobs, and 
occupations to civilian jobs and applicable civilian licenses and 
certifications. We found that 100 percent of the Navy's enlisted 
workforce has applicable civilian credentials. This program is 
available to over 300,000 enlisted Active and Reserve sailors.
    The Navy Credentialing Opportunities On-Line (COOL) Web site 
(https://www.cool.navy.mil) provides sailors, counselors, family 
members, veterans, prospective Navy applicants, and employers with 
comprehensive information about certification and licensure relevant to 
Navy Ratings, jobs, and occupations. It helps sailors find civilian 
credentialing programs best suited to their background, training, and 
experience; and to understand what it takes to obtain a credential and 
to identify resources that will help pay credentialing fees.
    Clear ``side benefits'' of credentialing can also be seen in the 
use of Navy COOL for recruiting (on-ramp), continuum of service 
(retention), and ultimately transition (off-ramp). The recruiting 
workforce integrated Navy COOL as part of its training and sales 
strategy. Anecdotal evidence has shown that use of Navy COOL in 
recruiting directly increased conversion of new contracts and led to 
higher Delayed Entry Program retention.
    Though retention metrics have not yet been established (funding of 
credentials began October 2007), Navy COOL and credentialing is 
expected to positively impact retention of the workforce. To be 
eligible for Navy-funded credentialing, the sailor must have a minimum 
of 1 year remaining in service. This provides the Navy with at least 1 
year use of enhanced sailor skills and knowledge, and time for the 
sailor to decide to re-enlist to obtain further credentialing 
opportunities. As a transition tool, Navy COOL provides the sailor 
valued information in translating their military training and work 
experience to the civilian workforce.
    COOL Web site usage has been high. There have been over 16 million 
hits since the web site was launched in June 2006, with visitors 
reviewing the site in excess of 9 minutes per visit. Since the 
authorization to fund for credentialing exams began in October 2007, 
over 97.4 percent of sailors completing civilian exams have passed and 
been certified, compared to a civilian pass rate of around 80 percent. 
The evidence is clear, sailor credentialing is not only successful, but 
is also meeting the goals and desires of the sailor and Navy.
        Task Force Life Work Initiatives
    We experienced some success through the use of monetary retention 
incentives such the Selective Reenlistment Bonus; however, monetary 
incentives do not always produce the desired retention effects among 
some population segments in certain specialties or skills. For example, 
female SWOs and female aviators retain at only half the rate of their 
male counterparts, despite the existence of robust retention bonus 
programs in these communities. Because female SWOs comprise more than 
25 percent of the SWO community, insufficient retention among this 
segment of the population has led Navy to explore alternative 
incentives as a means of achieving required long-term retention goals.
    On/Off Ramps. This proposal would provide temporary authority to 
the Navy to test an alternative retention incentive allowing sailors in 
a demonstration program to take an ``intermission'' in their careers 
not to exceed 3 years, to attend to personal matters (family issues, 
civic duties, advanced education, etc.) and then return to active duty 
service. During the ``intermission'' participants would not be eligible 
to receive active duty pays and allowances; however, they would be 
eligible to continue receiving certain active duty benefits (medical/
dental care, access to commissary, exchange, MWR facilities, and child 
care, etc.).
    Expanded Education Benefits Initiative. The Navy has operated 
educational programs in the past that allowed enlisted sailors to 
attend school for up to 2 years in lieu of a shore tour to complete an 
associate or bachelors degree, but those programs were incorporated 
into the Seaman-to-Admiral program in the late 1990s. As a result, the 
only full-time college programs were commissioning programs; therefore, 
sailors who desired to remain enlisted could not benefit from this 
valuable program. In addition to Tuition Assistance and NCPACE, the 
Advanced Education Voucher program provides educational assistance for 
senior enlisted to earn a bachelor or masters degree in an off-duty 
status. In the next year, we will consider the benefits of several 
education programs specifically targeting the enlisted sailor, similar 
to the discontinued Enlisted Education Advancement Program (EEAP), and 
create a ``Mini-EEAP'', whereby sailors could take 6 months or a year 
between assignments, to complete their degree.
        Improved Sailor and Family Support
    We continue to provide our sailors and their families with a myriad 
of benefits--housing, health care, deployment support, child care, 
family employment support, education, and efforts to improve geographic 
stability. Below is an overview of the sailor and family support 
programs and initiatives we will focus on this year.
    Housing is a key element of the quality of life of our sailors and 
their families by providing suitable, affordable, and safe housing in 
the community, in privatized or government owned housing, or in the 
community.
    Navy successfully privatized 95 percent of its continental United 
States (CONUS)/Hawaii family housing units and recently awarded two 
unaccompanied housing privatization projects. The unaccompanied housing 
projects were the first for the Department of the Defense.
    The first Unaccompanied Housing Privatization project site, Pacific 
Beacon, in San Diego will feature 4, 18-story towers with 941 dual-
master suite apartments. Two sailors will share an apartment, with 
their own master suite, walk-in closet, and private bathroom. The 
apartments will have eat-in kitchens, in-suite washers and dryers, 
living rooms, and balconies. Sailors will enjoy the comfort, style, and 
privacy of a place they can proudly call home.
    Navy also executed approximately $40 million in Major Repair 
projects in Japan, Guam, Northwest Region, and Guantanamo Bay. Our goal 
to eliminate inadequate housing by fiscal year 2007 was realized by 
having all contracts in place by October 2007.
    Our sailors and their families appreciated these improvements as 
reflected in the Annual Resident Satisfaction Survey, which showed high 
satisfaction levels with Navy housing.
    Navy is also implementing the Homeport Ashore initiative by 
ensuring shipboard sailors have the opportunity to live ashore when in 
homeport. Eleven projects at eight locations were programmed from 
fiscal year 2002-fiscal year 2008. The final projects to complete this 
initiative were approved at Naval Base Kitsap Bremerton, WA, for fiscal 
year 2008 with occupancy by fiscal year 2010.
    Sailor Care Continuum. The Navy has a long and proud history of 
providing outstanding support for all sailors who are wounded, ill, and 
injured. Sailors receive both clinical and non-clinical care through 
established programs. Medical care is coordinated by Navy Medicine 
while non-medical support is provided through sailors' parent commands 
and the Naval Personnel Command with the goal of reintegrating a 
wounded, ill or injured sailor with their Command, their family, and 
their community at the earliest possible opportunity.
    Based on our experiences in OIF/OEF, we see a different mix of 
injuries than we've seen in the past. These injuries often involve 
complex medical issues that require closer coordination of support for 
members and families. Each sailor's situation is different and their 
support must be tailored to meet their unique needs.
    In an effort to ensure we are meeting these obligations, we 
recently examined how we can best close any seams that exist between 
our current organizations and processes as well as applying new 
resources to those sailors and families in the most demanding cases--
the severely and very severely injured.
    One group that we focused renewed attention on was those sailors 
and their families who are our severely wounded, ill, and injured. The 
Navy's commitment is to provide severely injured sailors personalized 
non-medical support and assistance; to better guide them through 
support services and structures. This is accomplished through 
addressing the non-medical needs and strongly reinforcing the message 
that they, our heroes, deserve the very best attention and care of a 
grateful nation. These individuals and their families often have the 
greatest need for tailored and individualized attention in order to 
deal with personal challenges from the time of injury through 
transition from the Navy and beyond.
    Safe Harbor staff establishes close contact, with each severely 
injured sailor, as soon as he or she is medically stabilized after 
arriving at a CONUS medical treatment facility. Safe Harbor Case 
Managers are located at major Navy medical treatment centers as well as 
the VA Poly-trauma Centers at Tampa, FL, and Palo Alto, CA, and Brooke 
Army Medical Center, San Antonio, TX. Typical assistance provided 
includes: PFM including financial assistance referral and waiving of 
debt, member/family member employment, PCS moves, assisting with non-
medical attendant orders for assisting attendants, post-separation case 
management, expediting travel claims, and assisting with VA and Social 
Security benefits and remedying personnel/pay issues.
    The Navy's Safe Harbor program, which was established in late 2005, 
was initially stood up to provide these services for those sailors 
severely wounded, ill, and injured as a result of OEF/OIF operations 
but would not turn any severely wounded, ill, and injured sailors away. 
In January 2008 we formally acknowledged the entire population and have 
expanded Safe Harbor's mission. This will increase the potential 
population to about 250 sailors, with about 169 of these in the current 
population. Safe Harbor Case Managers' role has also been expanded to 
provide a far more active engagement to include interactions with the 
new Federal Recovery Coordinators. Overall we believe these changes 
will allow us to continue to provide the individualized non-clinical 
care that each of these individuals and their families deserve.
    Other important initiatives involve support for those individuals 
who are assigned to or volunteer for a global war on terror support 
assignment (individual augmentation). We improved our processes for 
screening, training, and family support at our Fleet and Family Service 
Centers, Navy Operational Support Centers, and Navy Mobilization 
Processing Sites. Our Warrior Transition Program (for returning sailors 
and their families) is just one of the many initiatives working at a 
local level.
    Additionally, in collaboration with other key stakeholders, we're 
enhancing the Navy's Operational Stress Control continuum. Navy's 
continuum serves to address the increasing challenges that military 
personnel currently face caused by the immediate and cumulative effects 
of the stresses of Navy life, especially the type of operational 
stresses encountered in all forms of deployments. The continuum is part 
of the Navy's overall psychological health construct and applies to all 
sailors who serve.
    The objectives of the Operational Stress Control program are to: 
improve force-wide psychological health, mission readiness, and 
retention; reduce stigma associated with stress and stress control; 
foster cultural change; eliminate redundancy and gaps across and within 
organizations; and address all aspects of psychological health, to 
include substance abuse, depression, and suicide prevention.
    The Navy is currently promoting and implementing a number of 
initiatives to enhance the current Operational Stress Control program. 
These include: (a) development of a more robust outreach, screening, 
and assessment capability; (b) establishment of doctrine and a CONOPs 
to promote a common understanding and build consensus among 
stakeholders, including leadership, trainers, health care providers, 
researchers, and other care providers; (c) a comprehensive and 
integrated continuum of training and education for sailors, leadership, 
communities support, and families.
    Extended Child Care Initiative. In a continued effort to offer 
quality child care and youth programs to Navy families, Navy launched 
extended child care, youth fitness, and School Transition Service (STS) 
initiatives.
    Navy has begun an aggressive child care expansion plan, which 
includes adding 4,000 new child care spaces within the next 18 months, 
construction of 14 new Child Development Centers (including facilities 
open 24/7), commercial contracts, and expanding military certified home 
care. In addition, Navy is converting 3,000 existing 3-5-year-old child 
care spaces into infant-2-year-old spaces to meet the greatest demand, 
children under the age of 3. Combined, these initiatives will reduce 
the current waiting time for child care of 6-18 months down to less 
than 3 months Navy-wide with first priority given to single military 
parents.
    To assist parents and children with the challenges of frequent 
deployments, an additional 100,000 hours of respite child care will be 
provided for families of deployed servicemembers.
    In efforts to combat youth obesity, the Navy implemented a new 
worldwide youth fitness initiative called ``FitFactor,'' as a means to 
increase youth interest and awareness in the importance of healthy 
choices in life.
    Navy STS is addressing the many transition/deployment issues facing 
Navy children. STS consists of a variety of programs and initiatives 
that provide strategies and resources for installations, school 
districts, and parents to address the changes associated with 
transitioning between school systems and during deployments in support 
of the Navy expeditionary mission.
    Family Employment Support Initiative. Navy launched a Family Member 
Employment Program to create opportunities for family members to manage 
their careers and achieve life goals, specifically in improving family 
finances, providing spouses with improved employment opportunities and 
improving their ability to pursue portable careers. We are implementing 
standardized short-term employment programs to provide new military 
spouses initial skills development to improve employment marketability. 
Through collaboration with the Department of Labor, we are expanding 
mobile career opportunities so our spouses may find jobs quicker when 
their sailor executes permanent change of station moves. To promote 
hiring of spouses in the private sector, we are developing a nationwide 
marketing campaign to promote the military spouses' skills as solutions 
to corporate demands.
    Montgomery GI Bill (MGIB) Benefit Initiative. Education benefits 
are a key component of the incentive package used by the military to 
attract and retain quality servicemembers. From our Task Force Life 
Work visits to the Fleet, education benefits, specifically the MGIB, 
are viewed by sailors as akin to health benefits--as a fundamental 
benefit that should be available to all sailors and transferable to 
their family members.
    We fully support legislation that would expand the ability of 
servicemembers to transfer their Montgomery GI Bill (MGIB) to their 
dependents.
    Geographic Stability. Our Geographic Stability Working Group is 
leading the effort to develop implementation strategies for increased 
geographic stability throughout the Fleet. Improving geographic 
stability during a time when the Navy is transitioning to a more sea-
centric force has its challenges; however it is a critical issue that 
consistently remains at the top of the list for ``reasons why people 
leave the Navy.''
    While cultivating a diverse background in multiple operational 
theaters will remain important to ensuring mission readiness, we also 
recognize that geographic stability allows members to establish support 
networks which permit sailors to be successful everyday. In a time when 
dual military couples and single parenthood rates are rising at the 
same time as our operational commitments, it is critical we support 
healthy family dynamics--geographic stability is an important part of 
this.
    Part of the solution is ensuring viable shore tour opportunities in 
sea-centric locations, many of which we have ``civilianized'' in recent 
years. While we are attempting to ``buy back'' some of those billets, 
we are also looking towards more creative solutions like the EEAP 
whereby a sailor can pursue advanced education in lieu of a traditional 
shore tour while also exploring the possibility of ``virtual commands'' 
as part of our large scale telecommuting effort which has recently 
gained much popularity among the Fleet.
    Sea Warrior Spiral 1. We continue to make significant progress 
towards providing our sailors with an integrated and easy to use system 
of Navy career tools that allow them greater personal involvement in 
managing their careers.
    During the past year we continued the programmatic rigor necessary 
to develop Sea Warrior as a program of record for POM-10. In 2007, we 
fielded the first version of the Career Management System (CMS) with 
Interactive Detailing. This new system has the functionality of 
allowing sailors ashore to review their personal and professional 
information, view available jobs, and submit their detailing 
preferences through their career counselors. The next step in this 
evolution is to provide the same functionality to sailors on ships. 
This portion of the system has been tested in the laboratory and is 
currently in the process of being installed and tested on a selected 
group of ships.
    The successful development and testing of these increments of 
additional functionality to the CMS system are the first steps in 
achieving our vision of enabling all sailors to review available jobs 
and submit their own applications for their next assignment by June 
2009.
    Retention of O-6s. There has been significant growth in demand for 
control grade officers, particularly for our seasoned O-6s. At the same 
time, we are experiencing a shortage of inventory of these senior 
officers. In addition to aggressively employing existing retire/retain 
authority to allow high-performing O6s to remain on active duty, we 
have taken aggressive steps to understand the considerations behind 
officers' decisions to stay on active duty past the 25 year point. 
Recent surveys indicate that retention among URL Captains is largely 
driven by 3 factors: family stability, financial concerns (a leveling 
off or reduction of pay and retirement benefits compared to civilian 
opportunities), and job satisfaction. We are exploring a variety of 
monetary and non-monetary incentives to encourage more senior officers 
to make the choice to ``stay Navy'' past the 25 year point. For 
example:

         To incentivize retention, we may offer a Captain a 
        single long tour option or a ``bundled detail'' to cover two 
        tours. This addresses two common concerns of those in senior 
        ranks: the desire for family and geographic stability to 
        accommodate a spouse's career and older children attending high 
        school or college.
         For officers beyond the 25 year point, we are 
        developing several initiatives to address specific financial 
        concerns. We are exploring financial mitigation for those who 
        may choose a geographic bachelor tour as a way of providing 
        geographic stability for the family. In addition, the loss of 
        most career incentive pays at the 25 years of commissioned 
        service point makes retirement and transition to a civilian 
        career more attractive than continued service. Accordingly, we 
        will pursue specific bonuses selectively targeted to high-
        demand senior officer designators. Other initiatives include 
        assignment to adequate, available quarters, or periodic funded 
        travel back to the family's location, in return for a 
        commitment to serve a 2-3 year geographic bachelor tour.
         To leverage the power of job satisfaction as a 
        retention incentive, we are exploring detailing processes to 
        provide our senior officers with opportunities for increased 
        responsibility and a heightened sense of value and worth at the 
        executive level. We are striving to enhance our approach to 
        managing the careers of Captains that don't screen for Major 
        Command (approximately 60 percent of the cohort) and those who 
        are post-major command. Many highly skilled, experienced 
        officers who reach these career points perceive that their 
        upward mobility and career options have stalled, and are thus 
        more likely to choose to transition to the civilian sector. 
        Establishing a tier of billets that capitalize on a senior 
        Captain's experience and leadership abilities by providing 
        meaningful, challenging positions may serve as an incentive for 
        retention to the 30 year point.
         Enhancing the ability of our senior Reserve component 
        officers to achieve Joint designation is critical to retaining 
        our control grade talent, and we are aggressively implementing 
        a plan to make this process executable and easily understood, 
        without compromising the spirit or integrity of Goldwater-
        Nichols.
                               next steps
    We have made great strides in enhancing Navy's military personnel 
readiness over the past few years, and this committee has been 
unwavering in its support for our manpower, personnel, training and 
education goals.
Meeting Navy Recruiting Challenges--Health Professions
    As we continue to tackle tough recruiting and retention challenges 
among the health care professions, we ask for your continued strong 
support for the kinds of flexible tools required to better compete with 
the private sector for highly-trained medical professionals and 
students. Specifically, we anticipate continuing challenges in 
recruiting into clinical specialties of the Medical Service Corps; to 
the Nurse Candidate program; Registered Nurses accepting a commission 
as a naval officer; and in offering a sufficiently attractive loan 
repayment program for Reserve component health care professionals. We 
expect this challenge to be further exacerbated by enactment in the 
FY08 NDAA of a moratorium on military-to-civilian conversions within 
the health professions and requirement to restore certain previously 
converted or deleted end strength. Compelled to move forward without 
this critical force shaping tool, the number of health care 
professionals we will have to recruit and retain will increase among 
skill sets for which we have achieved full readiness even under the 
reduced requirement made possible by military-to-civilian conversion 
authority. We are fully committed to ensuring that we carry out force 
shaping in the health professions in a manner which protects the 
integrity of the access and quality of care for sailors and their 
families and Navy retirees. We urge Congress reconsider its decision in 
imposing this moratorium and the requirement to restore converted 
billets that are not encumbered by civilian employees by September 30, 
2008.
Outreach to Recruiting Influencers
    As mentioned earlier, the Millennial Generation is motivated by 
different stimuli than their predecessors. Military service is often 
not considered when evaluating their career options. Today's 
influencers, most of whom never served, are often not inclined to steer 
the Millennials toward a military option. I ask that when you meet with 
your constituents, and interest groups that play a role in influencing 
the decisions of today's youth, please highlight the importance of 
service and the many outstanding opportunities available through 
service in the United States Navy. The impact of hearing this important 
message from Members of Congress will certainly go a long way in 
persuading parents, teachers, guidance counselors, coaches, and other 
influencers to encourage the young men and women of the Millennial 
generation to at least consider serving in the United States Armed 
Forces.
                               conclusion
    Again, on behalf of all Active and Reserve sailors and their 
families, the Department of the Navy (DON) civilians, and contractors 
who support the Navy--I want to thank you for your staunch support of 
our policies, programs and plans, and National Defense Authorization 
Act for Fiscal Year 2008.
    Because of your leadership, our sailors, DON employees and 
contractors are more organized, better trained and equipped than at any 
time I can recall in my career. In short, they're ready to win in 
battle, protect our sovereign soil and to use their skills to help 
others in crisis.
    Throughout my career, and especially in my role as Chief of Naval 
Personnel, it's been my goal to set in place policies and programs that 
reorganize our people as the principle means by which our Navy 
accomplishes its mission.
    Today, our training curriculums and methods of delivery ensure the 
continued professional development of our people and are aligned with 
fleet requirements, both in terms of the number of sailors we deliver 
to the waterfront and the development of their skill sets, so that we 
will achieve FIT in our smaller, more sea-centric force, today and in 
the future.
    We will continue to balance the requirements of our afloat commands 
and those of the combatant commanders to meet both enduring Navy 
missions and Joint warfighting augmentee responsibilities. A major step 
forward, our GSA IA detailing process, implemented in 2007, rewards 
volunteerism and instituted predictability and stability for our 
sailors and their families, as well as Navy commands. Establishing this 
was critical to the long-term goal of keeping our talent in the Fleet. 
I'm proud to say, our process and support systems are in place and 
working to meet the warfighting requirements and the personal goals of 
our people.
    Our pays and benefits, continue to keep pace with the civilian 
sector, and I thank you for that significant and impactful investment. 
With today's low unemployment rate and low-propensity to join the 
military, due to the ongoing war, we must be competitive with the 
civilian work environment, in order to attract 21st century leaders to 
serve.
    I'm confident that the policies and programs we have in place 
today, and our ongoing initiatives in diversity, life-work balance, 
family readiness and the continuum of medical care, will improve upon 
what we know already to be a highly desirable organization in which to 
work. Our goal, however, is not only to be desirable, but to be among 
the best organizations--unmistakably a ``Top 50 Employer''--one that 
every young Millennial, regardless of race, gender, socioeconomic or 
cultural background wants to affiliate with, contribute to and defend, 
because of what we recognizably value--our people.
    This goal will keep our service on pace to continue to attract the 
best our Nation has to offer. The professional challenges, 
opportunities and rewards our sailors and DON civilians experience, 
along with the quality of life and service that our sailors and their 
families deserve, will retain those high-performing patriots in our 
Nation's Navy, and keep us ready to ``defend against all enemies, 
foreign and domestic.''
    In the end, our ability to maintain this readiness and achieve our 
vision is only made possible by having your support and that of the 
American public, so again I thank you for that. The authorities you 
afforded us along with the budget necessary to realize these plans and 
initiatives, enables our people to serve confidently. On behalf of the 
more than 550,000 sailors and their families, Civilians and 
contractors, thank you for your leadership and confidence, upon which 
we rely to achieve our vision for a Cooperative Strategy for 21st 
Century Seapower.

    Senator Ben Nelson. Thank you.
    General Coleman?

     STATEMENT OF LT. GEN. RONALD S. COLEMAN, USMC, DEPUTY 
  COMMANDANT FOR MANPOWER AND RESERVE AFFAIRS, UNITED STATES 
                          MARINE CORPS

    General Coleman. Thank you, sir.
    Chairman Nelson, Senator Graham, and distinguished members 
of the subcommittee, it is my privilege to appear before you 
today to discuss Marine Corps recruiting, retention, and other 
personnel issues. Today, I would like to make just a few key 
points.
    First, in regard to our end-strength growth, the Marine 
Corps achieved unprecedented success in fiscal year 2007. We 
exceeded our goal of growing to 184,000 marines, ending the 
fiscal year with an Active Duty end strength of 186,492, and we 
fully expect to exceed our next milestone of 189,000 during 
fiscal year 2008 as we set our sights toward 202,000 without 
lowering our standards. We owe our success, in large part, to 
our recruiters, who met all accession goals in fiscal year 
2007, while maintaining our high-quality standards. We expect 
to meet this challenge again this fiscal year. Thank you for 
your support of our enlistment incentives which made these 
achievements possible.
    Retention should also be viewed as a success. We reenlisted 
3,700 more marines in 2007 than in the prior fiscal year--
again, without lowering standards. Nevertheless, retention will 
continue to pose a significant challenge as our goals become 
more and more aggressive. We thank you for your support of our 
selective reenlistment bonus program. It is the foundation of 
our retention efforts. The funds provided to us have increased 
significantly in recent years and is money extremely well 
spent. These funds have enabled us to increase retention in 
targeted and specialized military occupational specialties so 
that we maintain the leadership and experience necessary for 
combat and other operational requirements, as well as for the 
new units stood up in support of our 202,000 growth.
    I also want to emphasize today our efforts toward Marine 
Corps families. Thanks to your support, we are putting our 
family readiness programs on a wartime footing, increasing 
steady-state funding, and making a host of improvements. We are 
establishing school liaison officer capability at every Marine 
Corps installation to advocate for our marine's children. We're 
also expanding our exceptional family member programs to 
improve support and provide respite care to these special 
families. These and other initiatives will help ensure that we 
fulfill our obligation to our marine's spouses, children, and 
other family members.
    Lastly, but certainly not least, I want to tout our Wounded 
Warrior Regiment. It is quickly becoming what you envisioned, a 
comprehensive and integrated approach to caring for our 
wounded, ill, and injured marines and sailors through all 
phases of their recovery. We have recently implemented a 24/7 
Wounded Warrior Call Center to reach out to our wounded 
warriors, including those who have already left the Service, 
and a job transition cell to help them find satisfying work. 
We're very proud of how the regiment has progressed in such a 
short time, and are thankful for the high priority you have 
given it.
    Overall, the commitment of Congress to supporting our 
202,000 end-strength growth and to improve the quality of life 
for marines and their families is central to the strength that 
your Marine Corps enjoys today.
    Thanks to you, your Marine Corps remains the Nation's force 
in readiness, and will continue to fulfill its mission of being 
the most ready when the Nation is least ready.
    I look forward to answering your questions.
    [The prepared statement of General Coleman follows:]
         Prepared Statement by Lt. Gen. Ronald S. Coleman, USMC
    Chairman Nelson, Senator Graham, and distinguished members of the 
subcommittee, it is my privilege to appear before you today to provide 
an overview of your Marine Corps personnel.
                              introduction
    We remain a Corps of Marines at war with over 31,200 marines 
deployed to dozens of countries around the globe. The young men and 
women who fill our ranks today recognize the global, protracted, and 
lethal nature of the challenges facing our Nation, and their dedicated 
service and sacrifice rival that of any generation preceding them.
    Thanks to you, marines know that the people of the United States 
and their Government are behind them. The continued commitment of 
Congress to increasing the warfighting and crisis response capabilities 
of our Nation's Armed Forces and to improving the quality of life of 
our marines and their families is central to the strength that your 
Marine Corps enjoys today. The Nation is receiving a superb return on 
its investment in the world's finest expeditionary force.
    We know the future will remain challenging, but I am confident that 
with your continued support, your Corps will remain the Nation's force 
in readiness and will continue to fulfill its congressionally mandated 
mission of being the most ready when the Nation is least ready.
                      right-size our marine corps
Active Component End Strength
    To meet the demands of the Long War and other crises that arise, 
our Corps must be sufficiently manned, trained, and equipped. To this 
end, the Marine Corps plans to grow its personnel end strength to 
202,000 Active component marines by fiscal year 2011. This increase 
will enable your Corps to train to the full spectrum of military 
operations and improve the ability of the Marine Corps to address 
future challenges. This growth will also enable us to increase the 
dwell time of our marines so that they are able to operate at a 
``sustained rate of fire.'' Our goal is to achieve a 1:2 deployment-to-
dwell ratio for all of our Active Forces--for every 7 months a marine 
is deployed, he or she will be back at home station for at least 14 
months.
    Our success in the first phase of this growth--184,000 marines by 
the end of fiscal year 2007--is a great first step toward our ultimate 
end strength goal. Overall, we ended fiscal year 2007 with an Active 
component end strength of 186,492 marines. We fully expect to meet our 
second goal--189,000 marines this fiscal year.
Funding
    The Marine Corps greatly appreciates the increase in authorized end 
strength to 189,000 recently passed in the National Defense 
Authorization Act for Fiscal Year 2008. We are funding the end strength 
in excess of 180,000 through supplemental appropriations. For fiscal 
year 2009, we note that all costs of military personnel are included in 
the baseline budget.
Compensation
    The vast majority of our personnel budget is spent on entitlements, 
including compensation. Compensation is a double-edged sword in that it 
is a principal factor for marines both when they decide to reenlist and 
when they decide not to reenlist. Private sector competition will 
always seek to capitalize on the military training and education 
provided to our marines. Marines are a highly desirable labor resource 
for private sector organizations. Competitive compensation authorities 
aid the Marine Corps in targeting specific areas and provide the 
capability to access, retain, and separate as needed. The extensions of 
special and incentive pay authorities have demonstrated your continued 
support of the Marine Corps and its endeavor to reach our ultimate end 
strength goal. We appreciate the continued support of Congress in the 
creation of flexible compensation authorities which afford the Marine 
Corps with tools that allow us to shape your Corps for the 21st 
century.
Military-to-Civilian Conversions
    Military-to-civilian conversions replace marines in non-military-
specific billets with qualified civilians, enabling the Corps to return 
those marines to the operating forces. Since 2004, the Marine Corps has 
returned 3,096 marines to the operating force through military-to-
civilian conversions. We will continue to pursue sensible conversions 
as this will aid in our deployment-to-dwell ratio goals for the force.
Reserve Component End Strength
    Our deployments in Iraq and Afghanistan have been a Total Force 
effort--our Reserve Forces continue to perform with grit and 
determination. Our goal is to obtain a 1:5 deployment-to-dwell ratio 
within our Reserve component. As our Active Force increases in size, 
our reliance on our Reserve Forces should decrease--helping us to 
achieve the desired deployment-to-dwell ratio. Our authorized Reserve 
component end strength remains at 39,600 selected Reserve marines. As 
with every organization within the Marine Corps, we continue to review 
the make-up and structure of the Marine Corps Reserve in order to 
ensure the right capabilities reside within the Marine Forces Reserve 
units and our Individual Mobilization Augmentee program across the 
force.
                               recruiting
    Our Recruiters continue to make their recruiting goals in all areas 
in support of our total force recruiting mission. This past year, our 
recruiting mission was increased as part of a series of milestones to 
``grow the force'' and build an active component 21st century Marine 
Corps with an end strength of 202,000. Our focus in fiscal year 2008 is 
to continue to recruit quality men and women into our Corps as we 
expand our ranks.
    To meet the challenges of the current recruiting environment, it is 
imperative that we maintain our high standards both for our recruiters 
and those who volunteer to serve in our Corps. The Corps must continue 
to be comprised of the best and brightest of America's youth. We must 
also remain mindful that the Marine Corps needs to reflect the face of 
the Nation and be representative of those we serve. Our image of a 
smart, tough, elite warrior continues to resonate with young people 
seeking to become marines.
    The Marine Corps is unique in that all recruiting efforts (officer, 
enlisted, regular, Reserve, and prior-service) fall under the direction 
of the Marine Corps Recruiting Command. Operationally, this provides us 
with flexibility and unity of command in order to annually meet our 
objectives. In fiscal year 2007, the Marine Corps achieved 100 percent 
of the enlisted (regular and Reserve) ship mission (accessions). Over 
95 percent of our accessions were Tier 1 high school diploma graduates 
and over 66 percent were in the I-IIIA upper mental group testing 
categories. In short, we accomplished our recruiting mission achieving 
the Commandant's standards and exceeding those of the Department of 
Defense (DOD). To meet the Marine Corps' proposed end strength 
increase, annual total force accessions missions will steadily grow 
from 40,863 in fiscal year 2007 to over 46,000 in fiscal year 2010. 
Fiscal year 2008 total force accessions mission is 42,202. As of 1 
February 2008, we have shipped (accessed) 12,597 applicants, 
representing 104 percent of our total force mission fiscal year to 
date. Although recruiting is fraught with uncertainties, we expect to 
meet our annual recruiting mission this fiscal year, to include our 
quality goals. Additionally, we continue to achieve our contracting 
goals for this fiscal year which ensures we have a population of 
qualified individuals ready to ship to recruit training as we enter 
fiscal year 2009. Achieving this success, as always, is dependent on 
your support for our enlistment incentives. We thank you for this 
support.
    Our Officer Selection Teams were also successful in fiscal year 
2007, accessing 1,844 second lieutenants for 101 percent of their 
assigned mission. In fiscal year 2008, we are continuing efforts to 
increase the population of officer candidates and commission second 
lieutenants commensurate with our force structure and the growth in end 
strength. To assist our Officer Selection Officers in meeting their 
officer accession missions, we have implemented new programs, such as 
the College Loan Repayment program, in order to attract prospective 
candidates and remain competitive in this difficult recruiting 
environment.
    For the Reserve component, the Marine Corps achieved its fiscal 
year 2007 Reserve enlisted recruiting goals with the accession of 5,287 
non-prior service marines and 3,591 prior service marines. As of 1 
February 2008, we have accessed 1,484 non-prior service and 1,660 prior 
service marines, which reflects 36 percent of our annual mission. 
Again, we expect to meet our Reserve recruiting goals this year. 
Officer recruiting and retention for our Selected Marine Corps Reserve 
units is traditionally our greatest challenge. The Officer Candidate 
Course-Reserve introduced in 2007 is helping to address this issue, and 
we anticipate commissioning 50 to 75 second lieutenants in the Reserve 
this year. Under this program, individuals attend Officer Candidates 
School, The Basic School, a Military Occupational Specialty school, and 
return to a Reserve unit to serve. When coupled with the selected 
Reserve officer affiliation bonus, we believe we have established a 
valid method to address the challenge.
                               retention
    Retention is the other important part of building and sustaining 
the Marine Corps. As a strong indicator of our forces' morale, the 
Marine Corps has achieved unprecedented numbers of reenlistments in 
both the First Term and Career Force. When examining mental, 
educational and physical components as quality measures, the Center for 
Naval Analyses found that the first term force has improved steadily 
over the last 8 years and the best marines continue to demonstrate a 
higher propensity to reenlist than separate. The expanded reenlistment 
goal, in which we sought to reenlist over 3,700 additional marines, 
resulted in the reenlistment of 31 percent of our eligible first term 
force and 70 percent of our eligible career force--compared to the 22 
percent first term and 65 percent career force reenlistments in fiscal 
year 2006. This achievement was key to reaching the first milestone in 
our end strength increase--184,000 marines by the end of fiscal year 
2007--while still maintaining quality standards.
    For fiscal year 2008, our retention goals are even more aggressive 
to achieve an end strength of 189,000, but we fully expect to meet 
them. As of 15 February 2008, we have achieved 6,395 First Term 
Alignment Plan reenlistments, or 69 percent of the 9,507 goal. Equally 
impressive, we have achieved 7,331 Subsequent Term Alignment Plan 
reenlistments, or 90 percent of the 8,124 goal. Altogether, we have 
achieved 13,726 total reenlistments, or 78 percent of the combined 
goals.
    Our continuing retention success will be largely attributable to 
several important, enduring themes. First, marines are motivated to 
``stay marine'' because they are doing what they signed up to do--
fighting for and protecting our Nation. Second, they understand our 
culture is one that rewards proven performance and takes care of its 
own.
    There is no doubt that your marines' leadership and technical 
skills have rendered them extremely marketable to lucrative civilian 
employment opportunities. To keep the most qualified marines, we must 
maintain Selective Reenlistment Bonus (SRB) funding. In fiscal year 
2007, the Marine Corps spent over $425 million in SRB and Assignment 
Incentive Pay to help achieve our end strength increase. With a 
reenlistment mission of 17,631 in fiscal year 2008--compared to an 
historical average of 12,000--the Marine Corps expects to invest $536 
million in reenlistment incentives. This aggressive SRB plan will allow 
us to retain the right grades and skill sets for our growing force--
particularly among key military occupational specialties.
    I am happy to report that the Marine Corps continues to achieve our 
goals for officer retention. We are retaining experienced and high 
quality officers. Our aggregate officer retention rate was 91 percent 
for fiscal year 2007, which is above our historical average. Current 
officer retention forecasts indicate healthy continuation rates for the 
officer force as a whole.
    Concerning our Reserve Force, we satisfied our manpower 
requirements by retaining 76 percent in fiscal year 2007, the 6th 
consecutive year above our pre-September 11 historic norm of 71 
percent. For the current year, Reserve officer retention has thus far 
remained above historical norms. Enlisted Reserve retention is 
currently lower than has been seen in the last 2 years, and is being 
monitored very closely. It is important to note that increased 
opportunity for prior service marines to return to the Active component 
is affecting Reserve retention rates. Additionally, higher planned 
retention in the Active component is reducing the number of personnel 
transitioning into the Selected Marine Corps Reserve. For these reasons 
we appreciate the increased reenlistment incentive provided in the 
National Defense Authorization Act for Fiscal Year 2008.
                          marine corps reserve
    This year marks the 7th year that our Reserve component has 
augmented and reinforced our Active component in support of the Long 
War. Thanks to strong congressional support, the Marine Corps has 
staffed, trained, and equipped its Reserve to respond to crises around 
the world. Our Reserve component possesses capabilities to fight across 
the full spectrum of conflicts to support our Marine Air Ground Task 
Forces. As of 1 February 2008, there have been 56,275 Reserve 
activations since September 11.
    The Marine Corps Reserve continues to recruit and retain quality 
men and women willing to serve in our military and help our Nation 
fight the Long War. These men and women do so while maintaining their 
commitments to their families, their communities, and their civilian 
careers. The development of our Long War Force Generation Model has 
greatly improved our ability to provide our Reserve Marines with 
advance notification of activation. More than 6,100 Reserve marines are 
currently on active duty with nearly 5,000 serving in Reserve ground, 
aviation and combat support units, while over 1,100 serve as individual 
augments in both Marine Corps and joint commands. Eighty-four percent 
of all mobilized reservists have deployed to the Central Command area 
of operations. To support ongoing mission requirements for Operation 
Iraqi Freedom, the Marine Corps Reserve provides approximately 18 
percent of our Total Force commitment.
    As previously mentioned, recruiting and retention remain a 
significant interest as the Marine Corps Reserve continues its support 
for the Long War. The increased flexibility and funding authorizations 
you provided in the National Defense Authorization Act for Fiscal Year 
2008 are valuable assets to assist in our recruitment and retention 
missions; they not only generate greater interest in Reserve 
reenlistment, but also provide financial assistance during the critical 
period of transition from active duty to Reserve service.
    Health care remains an essential part of mobilization readiness for 
our Reserve component. TRICARE Reserve Select has helped to ensure that 
our Selected Marine Corps Reserve members, and their families, have 
access to affordable health care. Increased access and flexibility to 
health care for these families assists in alleviating one of the most 
burdensome challenges facing families of deploying Reserve marines.
    The dedication and Reserve experience provided by our cadre of 
full-time support personnel has been a key to success in integrating 
our Total Force. Likewise, our Marine Corps Total Force Pay and 
Personnel System (MCTFS) has ensured and continues to provide a 
seamless continuum of service for our Reserve marines.
    The long-term success and sustainability of our Reserve Forces in 
both Operational Support and Strategic Reserve roles is directly 
related to our ability to prepare and employ our forces in ways that 
best manage limited assets while meeting the expectations and needs of 
individual marines and their families. In an effort to ensure a well-
balanced total force and address any potential challenges that may 
arise, we are constantly monitoring current processes and policies, as 
well as implementing adjustments to the structure and support of our 
Reserve Forces.
                            civilian marines
    Civilian marines continue to provide an invaluable service to the 
Corps as an integral component of our Total Force. With a population of 
over 30,000 appropriated and non appropriated funded employees and 
foreign nationals, civilian marines work in true partnership with the 
active duty and play an important role in supporting the mission of the 
Marine Corps and the Long War. Our vision for the future not only 
defines what the Marine Corps will offer to, but what it expects from, 
its civilian marines.
    The Marine Corps strategy for achieving this vision is detailed in 
the Civilian Workforce Campaign Plan (CWCP) designed to create, 
develop, acculturate, reward, and maintain an innovative and 
distinctive civilian marine workforce responsible for providing 
exceptional support to the Nation's premier expeditionary ``Total Force 
in Readiness.'' Marine Corps Senior Executives have been charged with 
overseeing implementation of the CWCP by providing developmental 
opportunities and career management for assigned communities of 
interest.
    The Marine Corps is also committed to the successful implementation 
of the National Security Personnel System (NSPS). NSPS will assist us 
in achieving the goals and objectives of the CWCP by enabling us to 
better support the warfighter and provide a civilian workforce that is 
flexible, accountable, and better aligned to the Marine Corps mission. 
The first group of Marine Corps organizations converted approximately 
1,900 general schedule civilian employees to NSPS in January and 
February 2007, and we just completed this month the conversion of 
approximately 4,200 more employees across all remaining Marine Corps 
organizations, including overseas and field activities. We are actively 
participating with the Department of Defense in the development and 
implementation of NSPS. Partnering with the Services, we are working to 
ensure our civilians are provided opportunities for training and 
support for successful transition to NSPS. Our goal is high operational 
performance while supporting successful implementation of the system.
                         information technology
    Ensuring accurate, timely pay is supported by our continued efforts 
to transform our manpower processes by leveraging the benefits of the 
MCTFS, the Department of Defense's only fully integrated personnel, 
pay, and manpower system. MCTFS seamlessly serves our Active, Reserve, 
and retired members; provides total visibility of the mobilization and 
demobilization of our Reserve marines; and ensures proper and timely 
payments are made throughout the process. MCTFS provides one system, 
one record--regardless of an individual's duty status. According to the 
most recent Defense Finance and Accounting Service's ``Bare Facts'' 
report, MCTFS continues to achieve a pay accuracy rate of over 99 
percent for both our Active and Reserve components. MCTFS has enabled 
the Marine Corps to move its pay and personnel administration to a 
predominately self-service, virtually paperless, secure, web-based 
environment. In fiscal year 2007, individual marines and their leaders 
leveraged MCTFS' capabilities to process more than 1.6 million 
paperless transactions.
              taking care of our marines and our families
    Marines take care of their own--period. Never has this ethos been 
more relevant than during time of war. As marines continue to perform 
magnificently around the globe, serving in harm's way, their dedicated 
families contribute to mission success by managing the home front. 
Oftentimes, with their contribution comes great sacrifice. We realize 
that families are the most brittle part of the deployment equation and 
it is our moral imperative to ensure marines and families are provided 
the right tools to secure their family readiness.
Putting Family Readiness on a Wartime Footing
    Last year, at the Commandant's direction, the Marine Corps set out 
to ensure our family programs have fully transitioned to wartime 
footing in order to fulfill the promises made to our families. Many of 
our family and installation support programs underwent rigorous 
assessments, and actions are underway to refresh, enhance, or improve 
family support programs in five key areas: unit family readiness 
programs and Marine Corps Family Team Building, the Exceptional Family 
Member Program (EFMP), the School Liaison Officer Program, remote and 
isolated support, and installation and infrastructure support.
Unit and Installation Family Readiness Programs
    Through our assessments, we found that our Marine Corps Family Team 
Building Program and unit family readiness program, the centerpiece of 
our family support capability, were based on a peacetime model and 18-
month deployment cycle and largely depended on volunteer support. As 
our deployment and tempo of operations increased, we now know that we 
overburdened our dedicated volunteers. While our compassionate 
volunteers performed magnificently, the Marine Corps must take action 
to establish an appropriate division of labor. This will be 
accomplished by increased civilian staffing within our programs and the 
establishment of primary duty family readiness officers at the 
regiment, group, battalion and squadron levels. We will additionally 
procure technology to improve outdated processes and reduce manual 
functionality.
    To implement and sustain our identified family readiness program 
improvements, the Marine Corps budget supports a $30 million sustained 
funding increase. These improvements, currently under aggressive 
implementation, include:

         Formalizing the role and relationship of family 
        readiness process owners to ensure accountability for family 
        readiness;
         Expanding programs to support the extended family of a 
        marine (spouse, child, and parents (70 percent of marines in 
        their first enlistment are unmarried));
         Establishing primary duty billets for Family Readiness 
        Officers (FROs) (84 civilian FROs for Regiment/Group and higher 
        and 302 primary-duty military FRO billets for Battalion/
        Squadron level;
         Increasing Marine Corps Community Services and Marine 
        Corps Family Team Building installation personnel at bases and 
        stations (we are hiring 138 new full-time staff);
         Enhancing methods of communication between 
        installation programs to better synergize support to individual 
        commands;
         Refocusing and applying technological improvements to 
        our official communication network between commands and 
        families; and
         Developing a standardized, high-quality volunteer 
        management and recognition program.

Warrior Family Support
    Optimally, we would like to keep our families at the bases and 
installations when their marines are deployed. We have found that 
families find better support being surrounded by others who understand 
the nature of deployments and the marine way of life. Accordingly, the 
Marine Corps has dedicated $100 million in the fiscal year 2008 Global 
War on Terror Supplemental for Warrior Family Support.
    At installations across the Marine Corps, to include remote and 
isolated locations, we are making quality of life program and services 
upgrades to include child care availability and support, playground 
equipment, youth sports equipment, fitness center equipment, bike 
paths, and facility improvements. These enhancements will further 
promote the sense of community required to form strong bonds among our 
marine families that contribute so greatly to readiness.
Exceptional Family Member Program (Respite Care)
    Parental stress can be heightened for marine families who are also 
caring for one or more family member with special needs. To focus on 
this specific need, the Marine Corps offers our active duty families 
enrolled in the EFMP up to 40 hours of free respite care per month for 
each exceptional family member. This care is intended to provide the 
caregiver intermittent breaks while giving their family member(s) with 
special needs a nurturing and developmentally appropriate environment. 
We also seek to provide a ``continuum of care'' for our exceptional 
family members. In this capacity, we are implementing EFMP improvements 
to provide a continuum of care for EFMs that will ensure appropriate 
access and availability to medical, educational, and financial 
services. We will utilize assignment processes to stabilize the family 
or marine as necessary. Finally, we will work with Federal or State 
agencies to ensure a continuity of care for EFMs as they relocate and 
change duty stations.
School Liaison Officers
    The education of over 41,000 school age children of Marine Corps 
parents is a quality of life priority. Our Marine children are as 
mobile as their military parents. As they relocate from duty stations, 
they encounter academic and extra curricular differences that directly 
impact learning and development achievement. To address these education 
challenges, we are establishing a School Liaison Officer capability at 
every Marine Corps Installation to help parents and commanders interact 
with local schools and help resolve education transition issues. This 
issue is especially important to our EFMs. Working with commanding 
officers, marines, and families, our School Liaison Officers will seek 
to optimize the educational experience of elementary, middle, and high 
school students.
    Our intent for all family support programs is to build trust 
between the Marine Corps and our families, enable and empower marines 
and their families to advocate and seek help as need from support 
programs available at installations and through on-line technology, and 
ensure a continuum of care through the lifecycle of a marine and his 
mission, career, and life events.
Remote and Isolated Support
    We are additionally taking action to improve quality of life at 
remote and isolated installations that need infrastructure or expanded 
programs to appropriately sustain marines and their families. Actions 
underway include updating programs and services to appropriately 
support the needs of our Millennial Generation Marines and families who 
have experienced multiple deployments. We plan to conduct focus groups 
at installations across the Marine Corps to target these ``Generation 
Y'' marines and families to determine their specific support 
requirements, particularly in view of the tempo of operations. We will 
use the results to ensure that our program transformation meets the 
needs of the future leaders of your Marine Corps and generations of 
marines and their families to come.
    Once fully implemented, the recommendations will yield an extensive 
network of revitalized family support programs to sustain marines into 
the future. Moreover, the enhanced family readiness programs will 
better empower marines and families to effectively meet the challenges 
of and thrive in today's military lifestyle.
Combat Operational Stress Control
    Marines train to fight. Their training includes preparedness that 
hardens them physically and instills mental readiness for the stressors 
of battle. Commanders bear primary responsibility for Combat 
Operational Stress Control (COSC) in the Marine Corps. They also bear 
responsibility for leading and training tough, resilient marines and 
sailors, and for maintaining strong, cohesive units. We teach 
commanders to detect stress problems in warfighters and family members 
as early as possible, and to effectively manage these stress problems 
anywhere they occur--in theater or at home.
    At the center of our COSC Program is a combat/operational stress 
continuum model, recommended by our Marine Expeditionary Forces 
Commanding Generals, that indicates that stress responses and outcomes 
occur on a continuum, from stress coping and readiness at one end of 
the spectrum, to stress injuries and illnesses at the other end. These 
stress responses are color-coded as green (for ``Ready''), yellow (for 
``Reacting''), orange (for ``Injured''), and red (for ``Ill''). Marine 
leaders promote green-zone resiliency and mental readiness in their 
marines, sailors, and families, and this is done primarily through 
training, leadership, and unit and family cohesion. Training and 
education in COSC knowledge, skills, and attitudes is a priority not 
only for units preparing to deploy, but throughout deployment cycles, 
as well as in formal career schools for all marines.
    We also continue our collaboration with sister Services, the 
Department of Veterans Affairs' National Center for Post-Traumatic 
Stress Disorder, and external agencies to determine best practices to 
better support marines and their families.
Casualty Assistance
    Your marines proudly assume the dangerous but necessary work of 
serving our Nation. They selflessly accept their mission and perform 
magnificently around the globe. Some marines have paid the ultimate 
price, and we continue to honor them as heroes who contributed so much 
to our country. Our casualty assistance program has and continues to 
evolve to ensure the families of our fallen marines are always treated 
with the utmost compassion, dignity, and honor. Our trained Casualty 
Assistance Calls Officers provide the families of our fallen marines 
assistance to facilitate their transition through the stages of grief.
    Last year, congressional hearings and inquiries into casualty next 
of kin notification processes revealed deficiencies in three key and 
interrelated casualty processes: command casualty reporting, command 
casualty inquiry and investigation, and next of kin notification. These 
process failures were unacceptable. As soon as we discovered these 
process failures, we ordered an investigation by the Inspector General 
of the Marine Corps and directed remedial action to include issuing new 
guidance to commanders--reemphasizing existing investigation and 
reporting requirements and the importance of tight links between these 
two systems to properly serve marines and their families. Additionally, 
effective December 2007, the Headquarters Marine Corps Casualty Section 
assumed responsibility for telephonic notification of the next of kin 
of injured/ill marines from the commands. The Casualty Section is 
available 24/7 to provide status updates and support to family members. 
The Marine Corps will continue to monitor our processes, making every 
effort to preclude any future errors and ensure marines and families 
receive timely and accurate information relating to their marine's 
death or injury.
                        wounded warrior regiment
    In April 2007, the Wounded Warrior Regiment was activated to 
achieve unity of command and effort in order to develop a comprehensive 
and integrated approach to Wounded Warrior care. The establishment of 
the Regiment reflects our deep commitment to the welfare of our 
wounded, ill, and injured. The mission of the Regiment is to provide 
and facilitate assistance to wounded, ill, and injured marines, sailors 
attached to or in support of marine units, and their family members, 
throughout all phases of recovery. The Regiment provides non-medical 
case management, benefit information and assistance, and transition 
support. We use ``a single process'' that supports active duty, 
Reserve, and separated personnel and is all inclusive for resources, 
referrals, and information.
    There are two Wounded Warrior Battalions headquartered at Camp 
Lejeune, NC, and Camp Pendleton, CA. The Battalions include liaison 
teams at major military medical treatment facilities, Department of 
Veterans Affairs Poly-trauma Centers and Marine Corps Base Naval 
Hospitals. The Battalions work closely with our warfighting units to 
ensure our wounded, ill, and injured are cared for and continue to 
maintain the proud tradition that ``marines take care of their own.''
    The Regiment is constantly assessing how to improve the services it 
provides to our wounded, ill, and injured. Major initiatives of the 
Regiment include a Job Transition Cell manned by marines and 
representatives of the Departments of Labor and Veterans Affairs. The 
Regiment has also established a Wounded Warrior Call Center for 24/7 
support. The Call Center both receives incoming calls from marines and 
family members who have questions and makes outreach calls to the 
almost 9,000 wounded marines who have left active service. A Charitable 
Organization Cell was created to facilitate linking additional wounded 
warrior needs with charitable organizations that can provide support. 
Additionally, the Regiment has strengthened its liaison presence at the 
Department of Veterans Affairs Headquarters. These are just some of the 
initiatives that reflect your Corps' enduring commitment to the well-
being of our marines and sailors suffering the physical and emotional 
effects of their sacrifices for our great Nation.
    Thank you for your personal and legislative support on behalf of 
our wounded warriors. Your personal visits to them in the hospital 
wards where they recover and the bases where they live is sincerely 
appreciated by them and their families. Your new Wounded Warrior Hiring 
Initiative to employ wounded warriors in the House and Senate 
demonstrates your commitment to and support of their future well-being. 
We are grateful to this Congress for the many wounded warrior 
initiatives in the National Defense Authorization Act for Fiscal Year 
2008. This landmark legislation will significantly improve the quality 
of their lives and demonstrates the enduring gratitude of this Nation 
for their personal sacrifices. I am hopeful that future initiatives 
will continue to build upon your great efforts and further benefit the 
brave men and women, along with their families, who bear the burden of 
defending this great country.
    We are at the beginning of a sustained commitment to care and 
support our wounded, ill, and injured. As our Wounded Warrior Program 
matures, additional requirements will become evident. Your continued 
support of new legislation is essential to ensure our Wounded Warriors 
have the resources and opportunities for full and independent lives.
                               conclusion
    As we continue to fight the Long War, our Services will be required 
to meet many commitments, both at home and abroad. We must remember 
that marines, sailors, airmen, and soldiers are the heart of our 
Services--they are our most precious assets--and we must continue to 
attract and retain the best and brightest into our ranks. Personnel 
costs are a major portion of both the Department of Defense and Service 
budgets, and our challenge is to effectively and properly balance 
personnel, readiness, and modernization costs to provide mission 
capable forces.
    Marines are proud of what they do! They are proud of the ``Eagle, 
Globe, and Anchor'' and what it represents to our country. It is our 
job to provide for them the leadership, resources, quality of life, and 
moral guidance to carry our proud Corps forward. With your support, a 
vibrant Marine Corps will continue to meet our Nation's call!
    Thank you for the opportunity to present this testimony.

    Senator Ben Nelson. Thank you.
    General Newton?

STATEMENT OF LT. GEN. RICHARD Y. NEWTON III, USAF, DEPUTY CHIEF 
   OF STAFF, MANPOWER AND PERSONNEL, UNITED STATES AIR FORCE

    General Newton. Mr. Chairman and Ranking Member Graham, 
it's noted that this is my first opportunity to testify before 
this subcommittee. I can tell you that I'm honored to be here 
today. I'm honored to be here today, certainly with Dr. Chu and 
my teammates here on this joint team, the other Services, 
military personnel teammates. I want to thank you also for this 
opportunity to discuss the airmen who serve the world's most 
respected airspace and cyberspace force.
    Our airmen have been continuously deployed and globally 
engaged in combat missions for over 17 straight years since 
that first day that an F-15 touched down over in Saudi Arabia, 
in August 1990, in the beginning of Operation Desert Shield. 
Today, airmen are fully engaged in the interdependent joint 
fight, and stand prepared for rapid response in conflict across 
the globe, to provide capabilities for our joint combatant 
commanders.
    Our priorities are clear: winning today's fight, developing 
and caring for our airmen and their families, and preparing for 
tomorrow's challenges.
    Today's airmen are doing amazing things to execute the Air 
Force mission and certainly to meet Air Force commitments and 
keep the Air Force on a vector for success against potential 
future threats in a very uncertain world. Our aim is to improve 
capability while maintaining the greatest combat-ready Air 
Force in the world.
    I look forward to accomplishing this through the lens of 
five key focus areas that I'm taking on as your Air Force 
Deputy Chief of Staff for Manpower and Personnel: managing end 
strength efficiently to maximize capability; recruit and retain 
the highest-quality airmen; maximizing the continuum of 
learning throughout the airmen life cycle; continue on focusing 
on quality-of-life programs for airmen and their families; and 
to maximize the efficiencies through evolving smart business 
solutions.
    Due to increased operations, maintenance, and personnel 
costs, we've been forced to self-finance a centerpiece of 
future dominance, the massive and critical recapitalization and 
modernization effort for our aging air and space force.
    As we prepare for an uncertain future, we are transforming 
the force to ensure we are the right size and shape to meet 
emerging global threats with joint and battle-trained airmen. 
In order to dominate in the domains of air and space and 
cyberspace throughout the 21st century, we must recruit and 
develop and organize America's diverse and brightest talent for 
complex multinational and joint interagency operations of the 
future.
    Our recruiting force has met their enlisted recruiting 
mission through persistence and dedication. Since 2000, the Air 
Force has enlisted over 258,000 airmen, against a goal of 
approximately 255,000 airmen, for nearly 101 percent mission 
accomplishment.
    For fiscal year 2008, the active-duty requirement is 
27,800, and just over 9,000 airmen have been assessed, up to 
this point, with an additional 9,500 awaiting basic military 
training, down at Laughlin Air Force Base, outside of San 
Antonio, TX. So, we're on track to meet our goals this year.
    For fiscal year 2007, Active-Duty Air Force officer 
retention finished 11 percent above the goal, while enlisted 
retention fell short, about 8 percent below the goal. The Air 
Force Reserve fell short of its enlisted retention goal by 3 
percent, but was less than one-half percent shy of the officer 
retention goal. The Air National Guard met their overall 
officer and enlisted retention goals for fiscal year 2007.
    Even with these successes, some enlisted specialties in the 
active Air Force did not achieve their overall retention goal, 
including air traffic control and Mid-East crypto-linguists, 
structural civilian engineering, pavement and construction 
equipment, vehicle operations, and contracting. As part of our 
ongoing Air Force transformation, we are reviewing and 
synchronizing our development efforts to realize efficiencies 
in how well we put into play developmental tools--education, 
training, and experiential--to produce our stellar airmen, our 
military and civilian, our officer and enlisted, our Active and 
Reserve components.
    We're dedicating resources to ensure our most important 
weapon system, our airmen, are prepared to deliver airspace and 
cyberspace power wherever and whenever it's needed.
    I'm excited that my new duties as your Air Force A-1 enable 
me to also be the quality-of-life champion for the Air Force. 
Quality of life is not necessarily a list of programs and 
services; it's the way we take care of our airmen through these 
programs, and how they know that we're supporting them and 
their families, who, every day, make the sacrifices for 
America. We know airmen focus more on their mission when they 
have a positive way to rejuvenate from stress, when they have 
the knowledge that their families are in good hands, and when 
they are comfortable, and also confident, in being part of the 
larger Air Force team.
    To achieve the Secretary of Defense's objective to shift 
resources from bureaucracy to battlefield, we are overhauling 
Air Force personnel services. Our total force personnel 
services delivery initiative modernizes the processes, the 
organizations, takes advantage of new technologies through 
which we are able to support our airmen and their commanders. 
Our goal is to deliver higher-quality personnel services with 
greater access, speed, accuracy, reliability, and efficiency.
    The Air Force plans to program the resulting manpower 
savings to other compelling needs over the next 6 years. This 
initiative enhances our ability to acquire, train, educate, 
deliver, employ, and empower airmen with the needed skills and 
knowledge and experience to accomplish the diverse set of Air 
Force missions.
    In conclusion, your Air Force is often the first to the 
fight, and the last to leave. We give unique options to all 
Joint Force Commanders. The Air Force must safeguard our 
ability to see anything on the face of the Earth, range it, 
observe it, or hold it at risk; supply, rescue, support, or 
destroy it; assess the effects and exercise global command and 
control over all of these activities.
    Rising to the 21st century challenge is not a choice, it's 
our responsibility to bequeath a dominant Air Force to 
America's joint team that will follow us in service to the 
Nation.
    Again, we appreciate your unfailing support to the United 
States Air Force. I'm honored to be here this afternoon, and I 
look forward to your questions and discussion.
    [The prepared statement of General Newton follows:]
       Prepared Statement by Lt. Gen. Richard Y. Newton III, USAF
                              introduction
    Mr. Chairman, members of the committee, thank you for this 
opportunity to discuss the airmen who serve in the world's most 
respected air, space, and cyberspace force. Our airmen have been 
continuously deployed and globally engaged in combat missions for over 
17 straight years--since the first F-15 touched down in Saudi Arabia in 
August 1990. Today, airmen are fully engaged in the interdependent 
joint fight and stand prepared for rapid response and conflict across 
the globe as our Nation's sword and shield.
    Our priorities are clear: winning today's fight; developing and 
caring for our airmen and their families; preparing for tomorrow's 
challenges. Today's confluence of global trends already foreshadows 
significant challenges to our organization, systems, concepts, and 
doctrine. We are at an historic turning point demanding and equally 
comprehensive revolution. The future strategic environment will be 
shaped by the interaction of globalization, economic disparities and 
competition for resources; diffusion of technology and information 
networks whose very nature allows unprecedented ability to harm, and 
potentially, paralyze advanced nations; and systemic upheavals 
impacting state and non-state actors, and thereby, international 
institutions and the world order.
    Due to increased operations, maintenance, and personnel costs, we 
have been forced to self-finance the centerpiece of future dominance--a 
massive and critical recapitalization and modernization effort for our 
aging air and space force. Budgetary pressures forced difficult choices 
to ensure that the Air Force would maintain the right balance across 
our personnel, infrastructure, readiness, and investment portfolios.
    The Air Force undertook significant personnel reductions to 
generate billions of dollars to reprogram towards recapitalizing and 
modernizing essential air, space, and cyber systems, congruent with our 
three key mission priorities. The impact on our warfighting airmen has 
been significant. We have been compelled to make some very difficult 
choices with respect to our people. Fewer platforms that require fewer 
operators and maintainers are part of the equation. We are taking a 
hard look at all our processes and streamlining our organizations. At 
the same time, we want to improve the training and professional 
development of our airmen.
    However, maintaining a Required Force of 86 modern Combat Wings 
will also be significantly impacted by current programmed reductions in 
Air Force end strength. The Air Force has submitted a report to 
congressional defense committees on Total Force end strength 
requirements due to new and emerging missions. This report identifies 
our Total Force end strength requirement of 681,900 in fiscal year 2009 
growing to 688,500 by fiscal year 2015 to operate, maintain, and 
support a required force of 86 modern combat wings and how the Air 
Force will fund these requirements.
                             force shaping
    We are working to tailor our personnel mix to the new security 
environment by using a variety of force shaping tools across the 
personnel inventory. In fiscal year 2007 we used a variety of voluntary 
and involuntary initiatives to reduce our end strength in very specific 
areas. We deliberately took greater risk in the home-station and 
support career fields to minimize risk in the combat arena. We are 
pleased with the results of our fiscal year 2007 Force Shaping efforts. 
However, we will not be looking for any significant force reductions 
beyond normal separation and retirements in fiscal year 2008. We intend 
for fiscal year 2008 to be a ``strategic pause'' as we evaluate the 
effects of our force shaping efforts on the field. This is the time for 
people and organizations to ``settle'' and we will use the feedback 
from the field to make any necessary course corrections in fiscal year 
2009. The fiscal year 2008 Force Shaping program has been structured to 
achieve approximately 650 officer separations and retirements over and 
above normal attrition. The program will offer Voluntary Separation 
Pay; Limited Active Duty Service Commitment waivers; Lieutenant Colonel 
and Colonel Time in Grade waivers for retirement; Officer 8-year Total 
Active Federal Commissioned Service retirement (vice the normal 10 year 
requirement); and continuation of the officer and enlisted Blue to 
Green Interservice Transfer program. We have cancelled the fiscal year 
2008 Force Shaping Board because we are confident we will meet our end 
strength without needing to involuntarily reduce our officer corps. 
There are currently no enlisted Force Shaping programs in fiscal year 
2008 except for the voluntary Blue-to-Green Interservice Transfer 
program.
                      personnel services delivery
    To achieve the Secretary of Defense's objective to shift resources 
``from bureaucracy to battlefield,'' we are overhauling Air Force 
personnel services. Our Total Force (Active Duty, Air Force Reserve 
(AFRES), Air National Guard (ANG), and Civilian) Personnel Services 
Delivery initiative modernizes the processes, organizations, and 
technologies through which the Air Force supports our airmen and their 
commanders.
    Our goal is to deliver higher-quality personnel services with 
greater access, speed, accuracy, reliability and efficiency. The Air 
Force plans to program the resulting manpower savings to other 
compelling needs over the next 6 years. This initiative enhances our 
ability to acquire, train, educate, deliver, employ, and empower airmen 
with the needed skills, knowledge and experience to accomplish Air 
Force missions.
    Our front line airmen at base-level are key. They are the experts 
on the day-to-day workings of the Air Force. Just a few months ago, our 
base-level airmen at Grand Forks Air Force Base (AFB) presented us a 
technological innovation. It's a locally developed software application 
that brings mass quantities of Personnel data right to each commander 
in a consolidated, meaningful ``dashboard'' of information. All of this 
happens with minimal intervention of the Personnel ``middleman'' 
thereby freeing the Personnelists up to work on other tasks. We are 
very excited by this homegrown ``Base-Level Service delivery Model'' 
and are actively working to incorporate it across the Air Force in 
fiscal year 2008. We will let the bases incorporate it into their 
programs and procedures and see how we can adapt it to different 
organizations and environments. We plan to adapt it continually and 
make improvements as we get inputs from the field.
                   national security personnel system
    Our civilian workforce is undergoing a significant transformation 
with implementation of the Department of Defense (DOD) National 
Security Personnel System (NSPS). NSPS is a simplified, more flexible 
civilian personnel management system that improves the way we hire, 
assign, compensate, and reward our civilian employees. This modern 
management system enhances the Air Force's responsiveness to the 
national security environment, preserves employee protections and 
benefits, and maintains the core values of the civil service.
    NSPS design and development has been a broadbased, participative 
process that included employees, supervisors and managers, unions, 
employee advocacy groups and various public interest groups. Almost 100 
percent of eligible employees have converted to NSPS--over 39,000. NSPS 
is the most comprehensive new Federal personnel management system in 
more than 50 years, and it's a key component in the DOD's achievement 
of a performance-based, results-oriented Total Force.
                               recruiting
    As we prepare for an uncertain future, we are transforming the 
force to ensure we are the right size and shape to meet emerging global 
threats with joint and battle trained airmen. We are becoming a smaller 
force, with a critical need for specific skills. In order to dominate 
in the domains of Air, Space, and Cyberspace throughout the 21st 
century, we must recruit, develop, and organize America's diverse and 
brightest talent for the complex, multinational, and interagency 
operations of the future.
    Our recruiting force has met their enlisted recruiting mission 
through persistence and dedication. Since 2000, the Air Force has 
enlisted 258,166 airmen against a goal of 254,753 for 101 percent 
mission accomplishment. For fiscal year 2008, the active-duty 
requirement is 27,800 and 9,258 new airman have accessed up to this 
point with 9,461 waiting to enter Basic Military Training. We're on 
track to meet our goals. To date for fiscal year 2008, we've accessed 
100 percent of our active duty goal, and accessed 100 percent and 114 
percent of our Reserve and Guard accession goals, respectively.
    The United States Air Force Recruiting Service (AFRS) continues to 
find the right person, for the right job, at the right time and this is 
clearly evident in our most critical skills. Recruiting Service has 
filled every requirement for Combat Controller, Pararescue, Tactical 
Air Control Party, Survival, Evasion, Resistance, and Escape, Fuels 
Systems, Security Forces, Armament Systems, Munitions Systems, 
Utilities and Linguists since 2001. This has been accomplished through 
hard work and the significant assistance of the U.S. Congress. Recruits 
who choose to enter these career fields are offered an Initial 
Enlistment Bonus ranging from $1.5K to $13K, depending on the job and 
length of enlistment. No other enlistment bonuses are offered.
    The AFRESs exceeded its recruiting goals for the 7th consecutive 
year in fiscal year 2007. However, the Base Realignment and Closure 
(BRAC), Total Force Initiative and PBD 720 cuts will pose significant 
challenges in 2008. Aggressive measures will be needed to stand up new 
missions at Pope, MacDill, and Elmendorf AFBs. While we've benefited 
from active duty Force Shaping initiatives we anticipate tougher days 
ahead as the prior service recruiting pool will be smaller forcing us 
to rely more heavily on non-prior service (NPS) individuals. Competing 
for the NPS pool against other Reserve and Active Duty components that 
may have more attractive bonus packages will add to recruiting 
challenges. Funding for advertising and bonuses will play a key role in 
meeting manning requirements.
    The majority of our officer programs have also met with mission 
success, with the exception of medical recruiting. Last year the Air 
Force recruited just under half of its target for fully qualified 
healthcare professionals. Broken down by specialty, we recruited 68 
doctors (17.4 percent of target), 45 dentists (25.5 percent), 222 
nurses (62.5 percent), 125 biomedical scientists (62.8 percent), and 34 
medical administrators (97 percent). Currently, the Air Force's 
Medical, Dental, and Nurse corps have significant manning challenges 
that are a directly attributable to recruiting and retaining these 
personnel. These challenges are made all the greater because the Air 
Force has deployed over 8,000 medical officers in support of the global 
war on terror since 2001. Since September 11, AFRS and Air Force 
Medical Service have been working together to implement innovative ways 
to address our shortfalls in medical recruiting, to include increasing 
the number of available health professions scholarships and developing 
a ``Career Field Champions'' network of medical professionals to assist 
with our recruiting effort.
                               retention
    In fiscal year 2007, we continued to manage and shape the force 
across and within skills. Maintaining acceptable retention levels 
through targeted programs continues to be critical to this effort. 
Force shaping ensured active duty end strength met our longer term 
requirements.
    For fiscal year 2007, active duty Air Force officer retention 
finished 11 percent above goal (excluding force shaping losses), while 
enlisted retention fell below goal (92.7 percent of goal), still within 
acceptable margins. The AFRES fell short of its enlisted retention goal 
by 3 percent, attaining 97 percent and was .2 percent shy of the 
officer retention goal, attaining 99.8 percent. The ANG met their 
overall officer and enlisted retention goals for fiscal year 2007. Even 
with these successes, some enlisted specialties in the active Air Force 
did not achieve their overall retention goal, including Air Traffic 
Control, Mid East Crypto Linguist, Structural Civil Engineering, and 
Pavement and Construction Equipment Vehicle Operations, and 
Contracting.
    Our most critical warfighting skills require a special focus on 
retention to maintain combat capability due to critical manning and the 
demands of increased operations tempo placed on career fields including 
Pararescue, Combat Control, and Explosive Ordnance Disposal. Budget 
support for retention programs is critical to effectively manage the 
force and preserve needed warfighting capability. These programs are 
judiciously and effectively targeted to provide the most return-on-
investment in both dollars and capability.
    Retention rate in the AFRESs is also becoming a concern although we 
missed our goal in fiscal year 2007 by only a slight margin (99.8 
percent). However, this marked the second year in a row that we didn't 
reach our AFRES retention targets. We've seen an increase in the 
turnover rate via gradual decreases in First Term and Career Airmen 
reenlistments over the last 3 years with reenlistments dropping nearly 
10 points. We believe this is partly due to fallout from BRAC and PBD 
720, but will monitor closely to identify opportunities to influence 
our airmen's behavior as they reach key career decision points.
    The Air Force's ability to retain experienced health care personnel 
past their initial commitment has declined--compounding our recruiting 
challenges. The retention at the 10-year point is 26 percent for 
physicians, 18 percent for dentists, 34 percent for nurses, 36 
percent for biomedical sciences officers, and 52 percent for 
administrators. The Air Force continues to develop both accession and 
retention incentives to ensure the right mix of health professionals.
    Our warfighting airmen are committed to serving, including those 
experiencing high deployment rates. Combatant Commander (COCOM) 
requirements and the global war on terror levy a high demand for 
pilots, navigators, intelligence, civil engineers, and security forces 
officers as well as enlisted airmen in aircrew, special operations, 
intelligence, vehicle operators, civil engineering, and security 
forces. Despite an increased operations tempo and deployment rate, the 
Air Force continues to achieve acceptable retention levels across the 
officer and enlisted force.
    Finally, we understand that support to families is a critical part 
of retention. Working together with their spouses and families, airmen 
make a decision to stay in the Air Force based on many factors, one of 
which is the quality of life they and their families deserve. With a 
strategic plan that highlights the importance of ``Taking Care of 
People'', Air Force recognizes that families are vital to retention.
                           force development
    As part of our Air Force Transformation, we are reviewing and 
synchronizing our development efforts to realize efficiencies in how we 
utilize developmental tools--educational, training or experiential--to 
produce airmen (military and civilian; officer and enlisted; Active and 
Reserve). We're dedicating resources to ensure our ``most important 
weapon system'' is prepared to deliver Air, Space, and Cyberspace power 
wherever and whenever it is needed. Synchronized, deliberate 
development relies on a common language, a common framework and 
enduring processes. We are finalizing this common language and 
framework by publishing our Institutional Competency List and Continuum 
of Learning framework. Next, we must review our developmental processes 
to ensure they describe requirements, align programs, and link 
investments with outcomes. As an example, we eliminated redundancies in 
legacy ancillary training reducing training time to 90 minutes per 
airman ultimately saving 8 hours, per year, per airman, for a total of 
over 6 million Air Force work-hours per year.
    We are synchronizing processes to meet requirements for the skills 
airmen need in an expeditionary environment. Starting in 2011 we'll 
send select airmen to the Common Battlefield Airman Training course to 
enhance the expeditionary skills they learned in Basic Military 
Training. We are teaching airmen self aid and buddy care so they can 
take care of each other when their bases take mortar fire or when teams 
come under fire while performing their duties ``outside the wire.'' 
We've established a Center of Excellence for Expeditionary Ground 
Combat to ensure our pre-deployment training is responsive to the 
changing tactics and techniques used by our enemies in the AOR. We are 
extending Basic Military Training to 8.5 weeks, to teach airmen skills 
to defend an Air Base and to operate in the expeditionary environment 
of the 21st century.
    We established the Air Force Culture and Language Center at Maxwell 
AFB, AL, unique in its mission to develop expeditionary airmen by 
synchronizing education and training across our Professional Military 
Education Schools and deployment training venues. We are teaching 
language training and enhancing regional studies at our Air Command and 
Staff College and Air War College. We've also implemented regional 
studies at our Senior Noncommissioned Officer (NCO) Academy, NCO 
Academy, and Airmen Leadership Schools. We are consolidating Air Force 
Specialty codes to provide broader skill sets and enabling flexibility 
in global war on terror and support of COCOM missions.
    We have also placed a great focus on culture and language training 
at our officer accession sources, with the objective of developing 
officers with acute cultural understandings, able to forge partnerships 
and alliances. A majority of Air Force Academy and Reserve Officer 
Training Corps (ROTC) Cadets are enrolled in foreign language education 
and are now able to participate in study abroad programs, not only at 
foreign military academies but also local universities. One force 
development strategy is to target foreign language speakers, primarily 
focusing on Air Force ROTC detachments that sponsor foreign language 
programs. Currently, we have 54 cadets enrolled as Language Majors, 
with another 629 scholarship cadets majoring in technical degrees and 
taking languages as an elective. Another 100 cadets annually 
participate in foreign culture and language immersions in countries of 
strategic importance. Beginning with cadets contracted in August 2006, 
Air Force ROTC scholarship cadets majoring in nontechnical degrees must 
now complete 12 semester hours of foreign languages. Further, USAFA 
cadets who are technical majors are taking 6 semester hours in a 
foreign language and non-technical majors are taking 12 semester hours 
in a foreign language.
                           caring for airmen
    I'm excited that my role as Air Force A1 enables me to be the 
Quality of Life champion for the Air Force. Quality of life is not 
merely a list of programs and services; it's the way we take care of 
our airmen through those programs, and how they know we're supporting 
them and their families who sacrifice for America. We know airmen focus 
more on their mission when they have positive ways to rejuvenate from 
stress, when they have the knowledge that their families are in good 
hands, and when they feel good about being part of the larger Air Force 
team.
    The Air Force is shifting a portion of funding from manpower and 
base operating support to address our critical recapitalization 
requirements. However, we understand that to maintain combat capability 
we must continue to balance our modernization of our weapons systems 
with development of airmen who are ready, willing, and able to employ 
them. To that end, we are finding innovative ways to transform our 
community support services and programs while avoiding unnecessary 
impacts to services delivered. One way we are transforming is through 
the headquarters realignment of Air Force Services from Logistics to 
Manpower and Personnel. This transition opens the door to increased 
efficiencies and a more seamless approach to customer service. It also 
allows for a single point of oversight across the entire ``people 
enterprise'' and tightly linking the personnel, manpower, and services 
functions. We remain committed to ensure the needs of our airmen and 
their families are met.
    Taking care of our seriously wounded, injured, or ill airmen is a 
top priority. We continue to expand the Air Force Wounded Warrior 
Program in an effort to provide the best possible care to these brave 
airmen and their families. The heart of the Air Force Wounded Warrior 
Program is the Family Liaison Officer (FLO) who is assigned to each 
patient for the duration of their need. The FLO serves as a single 
point of contact between the airman and the numerous helping agencies. 
Our FLOs provide a critical resource to deal with the unfamiliar 
routine of the recovery process and prevents the airman from being lost 
in the bureaucracy.
    Similarly, the Air Force assigns a Community Readiness Coordinator 
(CRC) when a servicemember casualty notification is made. The CRC works 
closely with the FLO to ensure the combat related injured or ill 
servicemember and their family receives complete information and 
entitlements. Later, if the member is not returned to active duty, we 
assist with Federal employment, entitlements and benefits information, 
financial resources, family support, and more. The member is tracked 
monthly for 5 years after separation or retirement.
    Our Fit to Fight program and food service operations are 
cornerstones of combat capability. Airmen who are well-fed and 
physically fit are healthier, think more clearly, handle more stress, 
and are better able to complete the mission despite reduced sleep and 
extended hours. This translates directly to increased combat capability 
from our most important weapon system--our people.
                       child development programs
    Child care is the number 1 quality of life issue for our airmen and 
their families. We are focused on providing quality, available and 
affordable child and youth development programs to airmen and their 
families through an extensive system of programs and services both on 
and off Air Force installations. A recent national study highlighted 
the DOD child care program as leading the Nation in quality standards 
and effective oversight. We recognize that readily available, quality, 
and affordable child care and youth programs are a workforce issue with 
direct impact on mission readiness. We are proud of the Air Force's 
contribution to this program and believe our child care program is a 
critical factor in helping airmen remain focused on the mission.
    Airmen must balance the competing demands of parenting and military 
service, particularly challenging in today's environment of higher 
operations tempo, increased mobilization, and longer periods of time 
away from home. We are committed to serving these airmen and their 
families by redoubling our efforts to reach out and assist all members 
of the total force through robust child and youth programs wherever the 
member resides, when they need care. Traditional child care is provided 
in on-base Child Development Centers (CDCs), School Age Programs housed 
in Youth Centers, and Family Child Care (FCC) Homes. The Air Force 
requires that CDCs be accredited by the National Association for the 
Education of Young Children and school age programs be accredited by 
the National After-school Alliance, and the National Association of 
Family Child Care also offers accreditation to FCC providers. A diverse 
array of approaches to provide airmen and their families with 
nontraditional child care are available to support our families outside 
of typical duty schedules, or in geographically separated areas.
    The Air Force Extended Duty Child Care (EDC) Program provides 
18,000 hours of extended child care each month in FCC homes at no-cost 
to the military member. The EDC initiative enables airmen and their 
families to obtain high-quality child care from Air Force licensed or 
affiliated providers at or near their base when parental workloads 
increase due to longer duty hours and exceed their typical 50-hours per 
week child care arrangements. Child care is provided for nontraditional 
hours, such as evenings and weekends at no additional costs to parents. 
This initiative also helps parents with ``child care emergencies'' when 
their regular source of child care is not available, and care is 
provided for spouses of deployed or TDY airmen needing child care 
created in part by absence of spouse. The EDC program is available to 
Active Duty, ANG, and AFRES members.
    The Air Force Returning Home Care (RHC) Program supports airmen 
returning home from deployments lasting 30 or more days and for airmen 
who routinely deploy on a short-term basis (cumulative of 30 days in a 
6-month period) in support of contingency operations. Airmen receive 16 
hours of free child care upon their return to their home station and 
their family. The care is provided in one of the Extended Duty FCC 
homes on base that is currently under contract as part of an Air Force 
Services initiative to support airmen required to work extended hours. 
The RHC Program supports post-deployment by providing child care while 
airmen and spouses reconnect.
    Our Airman and Family Readiness professionals are helping airmen 
and their families adapt to the realities of life in an Expeditionary 
Air Force. They do this through personal and family readiness 
counseling, personal financial management, Air Force Aid assistance, 
spouse career planning, and transition and relocation assistance. 
Experts in the Equal Opportunity and Sexual Assault Prevention and 
Response arenas help every Airman exercise positive and productive 
interpersonal relationships, in both professional and personal 
interactions. The Air Force is a family, and our clubs and recreation 
programs foster and strengthen those community bonds, and promote high 
morale and an esprit de corps vital to all our endeavors.
    I'm also excited to serve as Chairman of the Board of Directors for 
the Army and Air Force Exchange Service. These exchanges exist in one 
form or another at every installation where soldiers, airmen, and their 
families need support, both at home station and in contingency or 
deployed environments. The Board acts on behalf of the Secretaries and 
Chiefs of Staff of the Army and the Air Force in directing the 
operations of this $8.7 billion per year retail operation that serves 
the needs of soldiers and airmen wherever they are stationed, providing 
goods and services and generating dividends to support morale, welfare, 
and recreation benefits. They do more than consistently provide 
affordable products for soldiers and airmen; they bring a sense of 
community and familiarity to the larger military family, and that 
carries over outside United States borders where exchanges also bring a 
sense of home to a deployed soldier or airman. Just recently, the Board 
approved 17 major construction and image update projects for a total of 
$169 million, all in an effort to ensure the highest levels of service 
and quality to our soldiers, airmen, and their families. Growing up in 
a military family, I've been a lifelong customer of both, and I'm 
dedicated to supporting both of them fully for our soldiers, airmen and 
their families.
    Additionally, we are equally committed to ensuring that all airmen 
are well trained and provided with modern, safe and efficient equipment 
and facilities to complete their mission. We provide life-sustaining 
support, such as food service and lodging, to our troops in the field 
and essential community programs to our airmen and their families back 
home. Through innovative systems and programs and the hard work of our 
dedicated personnel we continue to provide critical mission capability 
for our commanders and vital support for our members and their 
families.
                               conclusion
    Today's airmen are doing amazing things to execute the Air Force 
mission, meet Air Force commitments, and keep the Air Force on a vector 
for success against potential future threats in an uncertain world. We 
are ready and engaged today, but we must continue to invest to ensure 
tomorrow's air, space, and cyberspace dominance. Our aim is to improve 
capability while maintaining the greatest combat-ready force in the 
world. We will accomplish this through dedication to my five focus 
areas: Manage end strength efficiently to maximize capability; Recruit 
and retain the highest quality airmen; Maximize continuum of learning 
throughout airman life cycle; Continue focus on quality of life 
programs for airmen and their families; and Maximize efficiencies of 
business processes through evolving IT solutions.
    The Air Force is often first to the fight and last to leave. We 
give unique options to all Joint Force Commanders. The Air Force must 
safeguard our ability to: see anything on the face of the Earth; range 
it; observe or hold it at risk; supply, rescue, support or destroy it; 
assess the effects; and exercise global command and control of all 
these activities. Rising to the 21st century challenge is not a choice. 
It is our responsibility to bequeath a dominant Air Force to America's 
joint team that will follow us in service to the Nation.
    We appreciate your unfailing support to the men and women of our 
Air Force, and I look forward to your questions.

    Senator Ben Nelson. Thank you.
    Secretary Chu, we've spent time showing concern and looking 
for solutions to the sexual assault issues in the armed 
services today, because preventing those assaults in the 
military remains a high priority in Congress, and I'm sure it 
is with the military as well, and Congress is going to continue 
to monitor the DOD actions on this issue.
    In that regard, in the Ronald Reagan National Defense 
Authorization Act for Fiscal Year 2005, Congress required the 
Secretary of Defense to expand the mission of the Task Force on 
Sexual Harassment and Violence at the Military Service 
Academies to examine sexual-assault matters throughout the 
entire Armed Forces, and to report findings and recommendations 
to the Secretary of Defense within 12 months of its initial 
meeting. The Secretary of Defense is then required to report to 
Congress.
    In the statement of managers accompanying this legislative 
requirement, the conferees stated, ``Given the urgency of the 
need for effective action to prevent and resolve sexual-assault 
offenses against military members, the conferees expect the 
task force will provide an independent assessment of the 
effectiveness of policies and programs developed by the 
Department, as well as the success of the military Services at 
all levels, in achieving their implementation.''
    What's the status of the task force, at this point?
    Dr. Chu. Sir, thank you for that question. It is a very 
important issue. We agree with your presumption, that the first 
priority is prevention, not simply reaction after a terrible 
event has occurred.
    The task force has been appointed. We are in the process of 
putting in place a more senior executive director to give it 
greater heft within the Department. It has held its first 
administrative meeting, which I believe, advised by lawyers, 
doesn't count as the ``clock starting'' that you mentioned.
    I do think the task force at this time is helpful, because 
we've had time for the policies to be implemented across the 
force, as a whole, time to begin to assess their effects to 
see, are we in the right place? Are we doing the right things? 
What further steps should we pursue?
    We have, of course, conducted the surveys that are required 
by statute. We have transmitted to you the academy surveys, 
specifically. I have spent some time perusing the focus-group 
report, which is part of the package we have sent you, at the 
military academies, in which the interviewers have sat down 
with the young men and women at those institutions.
    I am encouraged by what those cadets/midshipmen have told 
us. It's a very different picture from what was true 3 or 4 
years ago, when I think there was considerable fear in some 
quarters, and distrust. They may not use all the fancy 
bureaucratic terms that we employ, but they know we've put 
counselors in place, they know the procedures for reporting 
incidents. I'm particularly struck by the comments of the women 
at these academies; at least in my judgment, they feel that we 
have created a safe environment for them with our various 
policies. They're not all the same--there are some amusing 
differences across the Services, about how they've addressed 
this issue, but I do believe substantial progress has been 
made.
    Senator Ben Nelson. Do you have any idea of when we might 
expect a report from the group?
    Dr. Chu. From the task force?
    Senator Ben Nelson. Yes.
    Dr. Chu. Since it's just getting started, I do think it's 
going to be toward the end of this year before we'll see 
substantive material.
    Senator Ben Nelson. Will that report include more than the 
Service Academies?
    Dr. Chu. Yes, sir, absolutely. As directed, it is to be an 
across-the-board look at all our policies. We have put, as I 
know you appreciate, a great deal of training emphasis on this 
issue, starting with basic training for both officers and 
enlisted personnel.
    Senator Ben Nelson. Thank you.
    In terms of suicide prevention, I know the Army has 
recently experienced an increase in the number of suicides, and 
some are holding up the Air Force suicide program as a 
successful model for the Army and other Services to emulate. 
General Newton, can you briefly describe the Air Force's 
suicide prevention policy and your assessment of its success to 
date? I realize you're new into it, but you may have some 
thoughts about it at this point.
    General Newton. Yes, sir. Thank you for that question, and 
I'll be brief. But from a standpoint of where it starts in the 
Air Force, it starts down at the base level, down at the unit 
level. Other programs, much like the suicide programs that 
we've had in the past, or other similar programs, that's where 
we find a lot of success, down at the unit level; rather than 
being a top-down, it's a bottom-up, point one.
    The second point is how we communicate. How do we convey 
to, not only our airmen--and, by the way, it's Active Duty, 
Guard, and Reserve, but also to our civilians, as well--
communication showing that, not only at the unit-commander 
level, but again, now top-down, that we as a Service put a lot 
of great value. Again, I think the fact that we are able to 
communicate to people, to have them actually understand that we 
can discuss things that perhaps have been held back in years 
gone by, particularly in a very high operations-tempo 
environment, and with the expeditionary nature of Air Force 
today.
    My last point on this is that we have discovered that, not 
only does it work in garrison or on base, in a traditional 
sense, but it also fits an expeditionary model.
    Senator Ben Nelson. General Rochelle and General Coleman 
and Admiral Harvey, can you give us some idea of what your 
experience is with the programs you have in each of your 
Services, and how effective you think that they are at the 
present time?
    General Rochelle. Happy to do that, Chairman Nelson.
    First of all, I should mention that it's clear that the 
increase in suicide, as well as other measures that we track 
very, very closely, are a reflection of the amount of stress 
that's on the force. There has been a task force--Suicide 
Prevention Task Force--in existence for quite some time. But, 
what the Secretary and the Chief have directed is greater 
Surgeon General, chaplain, Army G-1, Provost Marshal, and other 
specialist oversight and steerage of that effort, focused on 
four things:
    First is removal of the stigma that is associated with 
seeking mental health counseling and support. Our most recent 
Military Health Advisory Team trip into theater has borne out 
some very good results of the elimination of that stigma--the 
reduction of that stigma.
    The second is exactly what General Newton spoke to, 
sensitizing our junior-most leaders, not only of how to 
identify and respond to soldiers who are in danger, but, more 
importantly, reemphasizing that this is a part of our Army 
values, it's one of the tenets of our Army values, never 
leaving a fallen or falling comrade behind.
    Third is increasing the mental health professionals in 
direct support of our soldiers.
    Finally, providing commanders, at every level, actionable 
intelligence when prevention measures fail--with intelligence 
that they can use to then prevent--and ideally prevent the next 
one.
    Senator Ben Nelson. Do you have any data that would 
establish the tracking of high tempo of operations (OPTEMPO) 
with the increase? In other words, are there any statistics, 
Dr. Chu, that would establish that there is some correlation 
between the high ops tempo and the increased suicide rate?
    Dr. Chu. I do.
    We have looked at suicide rates for all four, sir. We have 
tracked them for years, actually. The chairman has testified to 
the quality of DOD suicide prevention programs, which I think 
have been recognized in the civil sector, recently with some 
awards.
    I do think it is still speculative to ascribe causality to 
``Why has the Army rate started to rise?'' because the Marine 
Corps rate has not risen. So, it's not quite the same in each 
Service.
    Also, the majority of the suicides really are here at home. 
Of those today, the majority of people are on their first 
deployment. So, it's a more complex picture. I would be very 
hesitant to ascribe to any one cause. We do know a fair amount 
about precipitating factors. Failed relationships are a key 
factor across the board. Financial difficulty is a key factor 
across the board. But, I think I would be careful about drawing 
any immediate conclusions about, ``Why has the Army rate gone 
up?'' and, ``Why at this particular time?''
    Senator Ben Nelson. My time is up, but, maybe, Admiral and 
General Coleman, you might briefly--General Coleman, I'll give 
you a chance to go first, because your numbers apparently are 
not increasing, at some level, even with a high OPTEMPO.
    General Coleman. Yes, sir. That is correct, sir. Again, 
thanks for allowing me to answer the question.
    Since about 2001, our numbers have remained relatively low; 
meaning, they did not increase. We do not see a correlation 
between OPTEMPO and suicide rate. Obviously, one suicide is one 
too many. Our ethos is a small unit--at the small unit level, 
and emphasizing that it's not weak to seek help or to seek 
assistance. But, our main focus is on that small unit, small 
unit leader, the buddy system. We see no correlation between 
deployments. Whether a marine who committed suicide had been to 
the fight or had not been, there's no increase in the numbers 
since 2001, sir.
    Thank you, sir.
    Senator Ben Nelson. Thank you.
    Admiral?
    Admiral Harvey. Yes, sir. Our suicide rate is--for details, 
since 2004, is about 10.3 or so per 100,000, down to about 9.5 
per 100,000 now. So, fairly steady, with a robust operations 
tempo throughout that period of time. Our focus has been on 
unit training. Interestingly enough, if you look at the 
demographics of, sadly, those who are the most likely to take 
their own life, it is a relatively senior individual, not the 
young kid, the one who's been around for a while. It's that 
mid-grade petty officer, that chief petty officer, who are in 
positions of authority, which makes this a little more unique, 
because the traditional ``looking after your people''--who's 
looking after those who's looking after the people? So, it's a 
matter of unit training on awareness, unit training on the 
ability to intervene, the concept of a shipmate as someone who 
will step forward at the right time in order to prevent 
something from happening, and not just react to something 
that's happening. It's intense training on this part, 
understanding the demographics, and making sure we're ready to 
put forward with the mental health professionals available to 
us to help guide those efforts.
    Senator Ben Nelson. Thank you.
    Dr. Chu. Mr. Chairman, could I add just one comment? It is, 
I think, useful to underscore that, although each one of these 
is a tragedy, our rate in the military is, and has been, at or 
below the gender and age-adjusted rate for American society, as 
a whole. We've also seen in civil society that's been reported 
in news media, where--in some ways, this parallels with Admiral 
Harvey--older suicide rates have been rising in civil society. 
So, again, I do not think we fully understand the causality of 
all these troubles. We are concerned by the fact that the 
Army's rate has been rising. Let me underscore that point.
    Senator Ben Nelson. Thank you.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    Dr. Chu, I think you're pretty well aware of the fact that, 
last year, this committee and Congress as a whole passed a 
provision that would promote the Judge Advocates General to 
three-star rank, Lieutenant General or Vice Admiral, and I 
think that was effective January 28. Do you know the status of 
attempts to comply with that legislation? Are there any 
problems that I need to be made aware of?
    Dr. Chu. No, sir, I don't believe there are any problems. 
We are very much aware of the provision. It has the Secretary's 
personal interest, and he is asking the Department to act in a 
unified way, since it affects all three Services.
    Senator Graham. Thank you very much. If you have any 
problems, please let me know.
    Now, pharmacy costs. We've been trying to deal with ways to 
lower our pharmacy costs without hurting quality, and actually 
improving access. Can you tell me where we stand now with 
trying to come up with a new pharmaceutical system?
    Dr. Chu. We will, of course, implement the statutory 
provisions that you have enacted. We are looking at, again, the 
question, and we very much hope for partnership with Congress 
of, how do we address the overall TRICARE structure, as you 
signaled in your opening comments.
    We do believe that the report of the task force that 
Congress required that we constitute does provide a roadmap for 
the way ahead. We can change the specifics, obviously, and that 
needs to be a constant process, and we're very glad that you 
have agreed to receive that briefing, because I do think it 
provides us with a set of guidelines as to how to think about 
other issues.
    Senator Graham. Thank you very much.
    Admiral Harvey, one of the issues facing, I think, all 
Services is health care professionals. You're competing in a 
very tough market out there. Maybe just very briefly, each of 
you, starting with the Navy, could you tell me what your 
biggest challenge is, in terms of your health care costs and 
obligations in your health care professionals, of recruiting 
and retaining those professionals? Is there anything we can do?
    Admiral Harvey. Sir, I'm very pleased to tell you that this 
committee and this Congress have done an awful lot in the 2007 
and 2008 authorization bills that have enabled us to, I 
believe, turn the corner, for the first time in 5 years, and 
put ourselves on a path to success in recruiting in every area 
for our medical professionals. Let me just give you a quick hit 
on what's come out of those bills that gave us the tools that 
we needed to have in what is a very, very tough market.
    Our 4-year active nurse corps accession bonus has gone from 
$15,000 in 2005 to $25,000 in 2007. I'm going to make nurse 
corps accession goals this year.
    Critical wartime specialty accession bonuses for medical 
corps, dental corps officers, up to $400,000; general surgeons, 
$300,000; psychiatrists, $175,000; emergency medicine, 
$175,000. I am 40 percent ahead of where I was last year on 
medical corps accessions. We have 80 accepted and 92 in 
process, against a goal of 358.
    The dental officer accession bonus has increased to 
$75,000. I expect to make our goal of 141 for dental corps 
accessions this year.
    The Health Professions Scholarship Program increased to a 
maximum amount of $30,000 per year, and the Health Professions 
Loan Repayment Program, critical action that you all put into 
the bills, increased to $60,000 a year.
    So, I see that these tools are being received very well. We 
have made medical recruiting the number-one priority in our 
recruiting command, and it's my number-one priority in my job, 
as Chief of Naval Personnel. We have the Surgeon General and 
his team onboard. Doctors are helping us recruit doctors. 
Nurses are helping us recruit nurses. Our medical service corps 
are helping us recruit those health care professionals.
    So, I'm not declaring victory, sir, but I am saying after 4 
to 5 years of missing every goal in every year, I believe we 
have turned the corner on this one, and I'm really looking 
forward to when we get the results of medical school decisions 
here, in the next 2 months, that we'll be able to come back and 
tell you, yes, we are definitely on the path to success.
    Senator Graham. That's great. One of the unsung heroes of 
this war, that our men and women in uniform and, I guess, some 
contractors, but primarily men and women in uniform, who are 
handling combat casualties, it's just an amazing story.
    General Rochelle?
    General Rochelle. Senator Graham, I thank you for that 
question. I would like to echo Admiral Harvey's comments about 
the increases in incentives. But, I would take a slightly 
different tack with respect to where Congress has been most 
helpful, in terms of our medical recruiting, and that is, 
echoing Dr. Chu's comments about authorities, giving us the 
flexibility--the Army, in particular, in 2005--to pilot 
inventive and innovative programs that would allow us to be 
able to stretch out and do things in quite a different way.
    Two examples--we are about to launch, in the Army, a 
program to grow our own nurses--registered nurses, bachelor of 
science in nursing graduates--in partnership with universities. 
The second is, we will soon launch, as part of our pilot 
authorities granted by this committee, by Congress, a waiver of 
the military service obligation that accrues to every 
commissioned officer in the Army--as a pilot. We think this 
will give us a huge increase, in terms of the challenges in the 
marketplace.
    So, I would echo everything that Admiral Harvey has said; 
most especially, the Health Professions Scholarship Program and 
the increase in those incentives; but, the authorities, by far, 
have been the most effective.
    Senator Graham. I'll be very brief, here. I know Senator 
Webb has questions.
    General Coleman, we're growing the Marine Corps; it seems 
to be we're on track to grow the numbers we need.
    General Coleman. Yes, sir.
    Senator Graham. The quality is being maintained. Is there 
any major deviation in quality, here, as we try to grow our 
numbers?
    General Coleman. Thank you, sir. Sir, we have not lowered 
our standards one bit. Our goal, last year, was 184,000 end 
strength. I believe we came in at 186,000-plus, and we have not 
lowered our standards in any way, shape, form, or fashion.
    Senator Graham. Is the Marine Corps generally in good 
shape, here?
    General Coleman. The Marine Corps is in great shape, sir.
    Senator Graham. Personnel wise?
    General Coleman. Yes, sir, great shape.
    Senator Graham. All right. Anything we can do for you, let 
us know.
    General Newton, the Air Force has a sort of dilemma here. 
We're, I think, 5 percent short of where we need to be, in 
terms of personnel. Tell me your dilemma and what we can do to 
help you, here.
    General Newton. Yes, sir. We made a conscious decision, as 
we look at striving to recapitalize our force and modernize our 
force, the average aircraft age--I'm sure you heard reported--
is over 24\1/2\ years old. So, we've made the conscious 
decision, as we look at our program force, of decreasing end 
strength by 40,000. So, we're on a glide slope, by the end of 
fiscal year 2009, to get down to about 316,600--the number for 
Active Duty end strength.
    Senator Graham. Is that wise, given the OPTEMPO?
    General Newton. Sir, it's a balance between cost and risk. 
I'll tell you that we submitted a report to Congress, just 
several weeks ago, with regard to what--as I just indicated, 
the program force is, versus the required force. The required 
force, in order to meet our global commitments, with new 
emerging missions, with the growth of end strength, the United 
States Army and the United States Marine Corps, appears to be 
about 330,000 if you look at the Program Objective Memorandum 
starting around fiscal year 2010 and through 2015. If you're 
asking me the question, ``Are we incurring more risk by staying 
on glide path to a reduced end strength for program force down 
to 316,000?'' I would say, yes, sir, we are. But, again, it 
comes down to the challenge between the costs of--so forth 
and--as well as the overarching need at this juncture to 
recapitalize and modernize.
    Senator Graham. So, you're having to cut your personnel 
cost to pay for your capital needs, is that the deal, here?
    General Newton. Sir, if you think of it in terms of the 
number of banks we went to, in this case we made the decision 
in Program Budget Decision 720 back in November 2005 to make 
that very tough recapitalization call and went into the 
personnel account.
    Again, the backdrop of that is, with new emerging 
missions--I didn't mention, but we have a new combatant command 
standing up in U.S. Africa Command--not only are we striving to 
dominate in air and space, by cyberspace, as well, with our 
plans to stand up a new cyberspace command. But, if you look at 
the QDR report that came out around that same time period, 
which reports that the Air Force is to maintain 86 modern 
combat wings, it's the difference between, obviously the cost 
and the risk, but also the difference between where we are, 
programmatically, but also in terms of requirements.
    Senator Graham. Thank you.
    Thank you, Mr. Chairman.
    Senator Ben Nelson. Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    Gentlemen, first, I would like to just start by saying--
listening to the reactions on the question about suicide 
prevention and your programs and the information that you have, 
I've been watching this for 6 years now, through three 
different family relationships, from the enlisted infantry 
company level, looking up, and I don't have the service-wide 
data that you have, but I do have a serious concern about this. 
The things that I have seen are admittedly anecdotal, but they 
kind of contravene all of the things you're just saying, in 
terms of age and OPTEMPO and these sorts of things. Because 
they are personal in nature, and because they're anecdotal, I 
don't think it's appropriate for me to go into it in a hearing, 
but I would like the opportunity to have you come and sit in my 
office for about 10 minutes and explain some of the concerns 
that I have. I don't believe I'd be doing my job if I didn't 
say this. We really have a responsibility to make sure we 
examine the potential as it exists. Sometimes, as data filters 
up to the top--having spent 5 years in the Pentagon, 4 of them 
with Dr. Chu, I know how that can go. So, at some point, I 
would enjoy being able to sit down and talk to you all about 
that.
    Dr. Chu. Delighted, Senator.
    Senator Webb. One statistic that jumps out at me, David, 
from all the years that I've been involved in this, is this 
notion that fewer than 3 out of 10 of America's youth are 
deemed fully qualified to serve in the military. That just 
astounds me because when you look back, for instance, at the 
Vietnam era, one out of every three males in the age group 
actually served and there were many more who would have been 
physically qualified. To what do you attribute this number?
    Dr. Chu. I think there are two principal factors, in my 
judgment. One is, in the military, we have set far higher 
standards, particularly for educational achievement than was 
true before and far higher standards than we set in the force 
in the early days of the volunteer force, when Congress rebuked 
us, as you recall, in the 1970s, for the low fraction of high 
school diploma graduates and the weak performance on the Armed 
Forces Qualification Test. So, we really have set ourselves to 
be Lake Woebegone. We have set a standard that 90 percent 
should be high school diploma graduates. The estimates--and 
they are only estimates--of the high school diploma graduation 
in the country hover between 70 and 80 percent. Everybody in 
the military, as I know you appreciate, is a high school 
graduate, either through diploma or General Equivalency 
Diploma. That didn't used to be true. Similarly, in the AFQT, 
we aim to have 60 percent or more--and three of the four 
Services are really in the 70 percent range--of scores above 
average. We limit mental category IV to 4 percent of 
accessions, for example, whereas Project 100,000 in the 1960s 
deliberately took mental category IV individuals, in the hopes 
that--often high school dropouts--we could rehabilitate them 
and put them on a more productive track.
    Senator Webb. Right, but just to recall the history of that 
30 years ago, during the Carter administration, we redefined 
what category IV was. We created category IIIA and then 
category IIIB, and a whole lot of the IIIBs were category IVs 
previously.
    Dr. Chu. Let me double check, but I think the category 
limits were kept more or less the same.
    [The information referred to follows:]

    The Armed Forces Qualifications Test (AFQT) Category definitions 
have remained the same since the inception of the Joint-Service 
enlistment test battery in the mid-1970s. However, in the late 1970s, 
we experienced a miscalibration (scaling error) of test scores when new 
forms of the enlistment test were implemented. The result, often called 
the ``misnorming,'' was that AFQT scores ranging from 21 through 49 
were particularly inflated. For example, a recruit with a reported 
score of 50 should have received a score of 41. When the error was 
discovered, the scores were adjusted and by 1980, new norms were 
implemented. But with all that going on, the AFQT Category definitions 
remained unchanged: an AFQT percentile score of 50 or better was, and 
remains, defined as AFQT Category I-IIIA: AFQT Category III is for 
scores from 31 through 64. with AFQT Category IIIA defined as scores of 
50 to 64 and AFQT Category IIIB for scores from 31 through 49; AFQT 
Category IV is for scores of 10 through 30; and AFQT Category V 
includes scores 9 or lower.

    Dr. Chu. The other big factor, I think--and this is 
something that is a national challenge--is the issue of 
physical fitness, and particularly obesity. A large fraction of 
the loss of the cohort that is described in this study that has 
been done is because they're not medically qualified. This is 
not the draft-era failing the physical issue; these are recent 
standards for physical fitness and obesity that are 
sufficiently tight that large numbers of young Americans can't 
comply.
    It doesn't necessarily mean--and this is one of the 
internal issues that we are examining (the Army is examining in 
pilot)--that we're necessarily in the right place on some of 
those standards. The Army does have a so-called ARMS 
experiment, where we're--instead of looking at the indicators, 
we ask the person to actually perform for us--do a step test, I 
think as one of the key ingredients. If they can do that well, 
even if they might be a larger girth than the rules would 
otherwise argue should be the case----
    Senator Webb. It would seem to me--I have a very limited 
amount of time here, and I know where you're going on this--
that if you take, for instance, truly disqualifying conditions, 
such as disease or systemic disorders and those sorts of 
things, you still have a pretty large group of people that 
you're potentially missing out on, here. The Marine Corps used 
to have what we called ``Fat Boy Platoons,'' where they would 
take people who were overweight, and run them through a pre-
boot-camp conditioning program, and then in-process them. In 
terms of high school graduates, I've always been of a mind that 
if you take someone with a higher mental category on their 
testing, who happens to be a non-high-school grad, you can make 
very fine military people out of them, and help them redirect 
their life.
    Walter Anderson, who's the CEO of Parade Magazine 
Enterprises, was a high school dropout who enlisted in the 
Marine Corps and became valedictorian of his college class 
after he got out.
    I want to ask another question, here, so I don't lose all 
my time on this, but I would hope that you could find ways to 
expand the potential recruitment base and take advantage of 
that.
    Dr. Chu. We agree, sir. And, just very quickly to say, the 
Army is running another pilot--so-called Tier Two Attrition 
Screen--where we are looking at other indicators--and, 
specifically, some combination of test scores and other 
attributes, to say, could they substitute for the diploma as a 
predictor of success in the military? So, we agree; we want to 
enlarge that pool.
    Senator Webb. General Rochelle, I'm interested in this 
notion that--and, actually, for Dr. Chu, as well, potentially--
of transferability with the educational benefits. First of all, 
has that been costed? Has anybody put a cost on this?
    Dr. Chu. If I may answer that part, sir--the specifics of 
the program are still being debated within the administration, 
issues of, ``Should you have served a certain number of years 
before you can do this?'' So the cost estimates depend on that 
set of answers.
    Senator Webb. So, we have a program that the President 
mentioned in his State of the Union Address, and Secretary 
Gates mentioned when he testified, that we really don't have a 
cost for. Is that correct?
    Dr. Chu. No, we do have a cost for it, sir.
    Senator Webb. You do have? What's the projected cost?
    Dr. Chu. It depends on the parameters of the program.
    Senator Webb. What's the low and the high?
    Dr. Chu. The low ranges from $0.5 billion a year to above 
$1 billion a year, depending again on the parameter choices 
that you're making.
    Senator Webb. Just for the transferability.
    Dr. Chu. Transferability, yes, sir.
    Senator Webb. Okay. Let me make two suggestions to you, 
here. Number one, having served on the House Veterans Committee 
for 4 years, there was a lot of wisdom over there when this 
idea came up, 30 years ago, that you have to be very careful 
because you're taking a benefit away from a veteran. There's 
one point in your life you may want to transfer this off to a 
family member and 9 years later you're divorced and you're out 
on the economy, and you want to get an education and your 
benefit's gone, then what do you do? That's point number one.
    Point number two is, I've been working really hard to try 
to get the right kind of a GI Bill, instead of this Montgomery 
GI Bill, that would actually allow you to expand your potential 
recruitment base in an area where you're not really able to 
recruit that individual who has a propensity to come into the 
military, for family tradition, because they love their 
country, but not necessarily because they want to become a part 
of a career force, when they know they're going to get a full 
boat out of it, the same way that people in World War II got, 
if they get on the other end of it. That total cost is about--
we're trying to get a firm estimate, but it's about $2 billion, 
to dramatically change the GI Bill and really help recruitment, 
here.
    Dr. Chu. Sir, you raise two very important issues. Let me 
respond very briefly.
    First, on your concern with the irrevocable nature of it 
and perhaps having deep regret at some later point, yes, that 
is one of the issues that we are, likewise, concerned with. We 
want to structure this so that we protect the servicemember 
from what might not always be a decision that he or she would 
sustain over time.
    Senator Webb. How do you do that?
    Dr. Chu. I'd rather not comment yet, sir, if I may. 
[Laughter.]
    But, we do have some ideas on that point.
    Second, on the cost estimates, VA did testify last year 
when your bill was first introduced that, at least as then 
structured, it was more like $7.5 billion a year--$75 billion 
over a 10-year period, 2008 to----
    Senator Webb. What, my bill? S. 22?----
    Dr. Chu. They also testified that it would be technically 
complex to carry out, when people did it in 1944 on the back of 
a memo pad----
    Senator Webb. The best estimate we have now from the 
Congressional Budget Office (CBO) is $2 billion.
    Dr. Chu. Then, I believe you've revised the parameters, but 
I defer to CBO.
    Senator Webb. Okay. Well, we haven't an official estimate 
out anywhere. I don't know where the DVA got $7.5 billion, 
other than the fact that the administration opposes the program 
because they're saying that DOD believes it will affect 
retention.
    Dr. Chu. I have looked at the VA's estimates for the bill, 
as then drafted. I understand you've made some proposed changes 
to it. I do think the $75 billion number over 10 years is in 
the ballpark, so to speak. Now, one could structure a less 
expensive proposal, that's absolutely true.
    Senator Graham. Senator Webb, I don't mean to interrupt, 
but could you tell me what your bill does? I apologize, but I 
don't know.
    Senator Webb. The bill basically gives a mirror benefit to 
the people who have been serving since September 11 as those 
people who came back from World War II received. It pays 
tuition, buys their books, and gives them a monthly stipend. 
The bill, as originally introduced--and, Dr. Chu, you're 
correct on this--had a room-and-board provision in it, and also 
had a provision where all private schools would give a full 
tuition. We've modified it on that but I don't think that would 
in any way bring the bill to the cost that people say that it 
has.
    I would just strongly urge you to take a look at what that 
might do, in terms of your potential recruitment pool.
    My time's way up; thank you, Mr. Chairman.
    Senator Ben Nelson. Thank you, Senator Webb.
    I have a question from Senator McCaskill who had planned to 
attend, but she is presiding over the Senate from 3:00 to 5:00 
today, and so she's asked that I ask the question on her 
behalf, which I'm happy to do.
    This is her question: ``I want to address the issue of 
administrative personality disorder discharges in DOD.'' My 
colleagues, Senators McCaskill and Lieberman, have taken 
particular leadership on these issues. They have raised 
concerns with the propriety of use of these discharges, which 
lead to a discharge of a servicemember for what is deemed a 
`pre-existing' personality disorder. ``The discharge, unlike a 
medical discharge, is not accompanied by a medical or a 
monetary compensation, and in some ways, may be viewed as a 
black mark on the servicemember's permanent military discharge 
file. In the case of combat veterans, it seems that a post-
combat finding that a servicemember's mental health problems 
are not combat-related, but rather pre-existed service, may be 
suspect.
    ``In July 2007, Dr. Sally Satel, a resident scholar at the 
American Enterprise Institute, noted in her testimony before 
the House Veterans Affairs Committee that `The controversy 
surrounding Chapter 5-13 discharges would suggest the need for 
a reevaluation of screening protocols currently used by DOD. 
Misapplication of the Chapter 5-13 discharge sets up the kind 
of Catch 22 for the DOD. First, the military deems a recruit 
sufficiently mentally fit to be sent into training and then 
into a war zone, but then when psychiatric problems arise, it 
turns around and claims that those problems were there all 
along, problems that should have shown up earlier in their tour 
of duty.
    ``Further, the summer 2007 report of the Mental Health Task 
Force found that servicemembers may be being pressured to 
accept personality disorder discharges instead of awaiting more 
thorough medical diagnoses and gaining compensation through the 
MEB and PEB process.''
    ``Finally, it's my understanding that the DOD instruction 
on personality disorder charges has not been updated since 
1982.
    ``Secretary Chu, are you concerned that the administrative 
personality disorder discharges are being misused in the DOD?''
    Dr. Chu. The short answer, sir, is no. But, let me first 
underscore two points that I know you're familiar with. One, 
these are only reached upon the advice of fairly senior 
clinicians; this is not something cavalierly adopted. Second, 
it's basically a no-fault discharge for the individual. In a 
number of these cases, discharge could be on another basis, but 
it might not--but, it's an honorable discharge.
    Senator Ben Nelson. It is, but doesn't it carry a stigma?
    Dr. Chu. I'm not so sure. It depends whether people can 
read the codes and so on, so forth. I don't think that's the 
big issue.
    That all said, we are looking at whether it would be wise 
to require yet more significant review before such a discharge 
is employed, and whether some of that review should be 
triggered if the person has served in a combat theater.
    So, we agree it's an area we ought to relook at. We are 
engaged in that with our colleagues in the military 
departments. I would urge we be careful not to rule out the use 
of this discharge because in some cases for the individual it 
is actually a better basis for discharge than some of the 
alternatives.
    Senator Ben Nelson. I don't think that there would be any 
expectation to rule it out altogether, just perhaps updating 
the 1982 approach.
    Dr. Chu. We are in the process of doing that, yes, sir. 
That's appropriate to ask.
    Senator Ben Nelson. Thank you.
    There was a recent series in the Denver Post relating to 
deploying medically unfit soldiers. This would be to you, 
General Rochelle. Those articles reported that 79 soldiers, who 
were determined to be medical no-goes, were knowingly deployed 
to Iraq. The most recent article described the soldier being 
pulled out of a hospital, where he was being treated for 
bipolar disorder and alcohol abuse, so that he could be 
deployed to Kuwait. Thirty-one days later, he was returned to 
Fort Carson because health care professionals in Kuwait 
determined that he shouldn't have been sent there in the first 
place. These articles quote an e-mail from Fort Carson's 3rd 
Brigade Combat Team as saying, ``We've been having issues 
reaching deployable strength, and thus, have been taking along 
some borderline soldiers who we would otherwise have left 
behind for continued treatment.''
    I suspect that catches all of us a little bit flatfooted, 
that that kind of a situation could be occurring. Have you been 
able to look into that? Because I'm sure it's been brought to 
your attention, since it was reported so widely in the papers.
    General Rochelle. It has, Mr. Chairman. I am familiar with 
the incident. Let me say that that particular incident is under 
review--the Fort Carson case. Therefore, it would be 
inappropriate for me to comment on it.
    But from a policy perspective, I will say two things that 
are significant.
    First, every soldier who has a questionable deployability 
status, medical or otherwise, is reviewed not only by--
certainly, medical is reviewed by a clinician and then that 
review, subject to the review also of the chain of command. We 
would not knowingly deploy a soldier into combat who should not 
be deployed.
    Senator Ben Nelson. Excuse me. What about borderline? I 
mean, that was the from the combat team who had some borderline 
soldiers.
    General Rochelle. ``Borderline'' may very well, in this 
case, mean an area of judgment within a range. But, I say 
again, sir, with absolute affirmation, that I have confidence 
that commanders would not knowingly deploy a soldier who would 
be dangerous to himself, to the unit, or the mission.
    Senator Ben Nelson. As you complete the investigation and 
review of this current situation, could you get in touch with 
us to let us know what you found out?
    General Rochelle. Yes, sir.
    Senator Ben Nelson. I would imagine that the question would 
apply to all the other Services, as well. This might have been 
an example, citing the Army, but we'd want to make sure that 
there wouldn't be any situation like this for any of the 
Services. So, if we can be sure of that, that would be helpful.
    General Coleman, during Secretary Gates' recent trip 
abroad, he made comments regarding NATO forces not being able 
to combat a guerrilla insurgency. The Marine Corps is now 
preparing to send an additional 3,200 marines to Afghanistan. 
Is the Marine Corps' end strength sufficient to send an 
additional 3,200 marines to Afghanistan--asking you the 
question without expecting to get crosswise with the Secretary 
of Defense, but you are here to give us your opinion. 
[Laughter.]
    General Coleman. Thank you, sir.
    Yes, sir, we are well prepared. Certainly, the plan has 
been done. Last week, I was in both Iraq and Afghanistan. We 
looked at some of the areas where our forces may go. There was 
a number of areas that we could not visit because of weather, 
but our 3,200, plus or minus, marines are ready--prepared and 
ready to go. They will be combat ready and 100 percent up round 
when it is time to deploy.
    Senator Ben Nelson. That ``combat ready'' would mean that 
they would have the equipment, including body armor or whatever 
is required, to qualify them as combat ready. Is that correct?
    General Coleman. That's correct, sir. We would say they 
were a full-up round, which means they were 100 percent 
prepared, sir.
    Senator Ben Nelson. Do you have any thought on what the 
impact could be, of this deployment, on recruiting and 
retaining--the recruitment in the Marine Corps?
    General Coleman. Sir, we're doing better than expected in 
our recruiting. We're not having--our goal is 189,000 at the 
end of September 30 for this year. We have every reason to 
believe that we will exceed 189,000 end strength, and that will 
be without lowering our standards. So, yes, sir, there are no 
concerns about how this will affect recruitment and retention.
    Now, I would venture to say that there was a planned end 
date to this deployment. If that end date were extended, and 
other things weren't adjusted, then that may cause some 
concerns. But, as it stands right now with this mission, we're 
fully capable and fully ready to take it on, sir.
    Senator Ben Nelson. Yesterday General Casey, in testifying 
before the Senate Armed Services full committee, stated that 
one of the top five areas that Army families expressed concern 
about was access to quality health care. He said that soldiers 
and their families are dealing with an inundated health care 
system, and those stationed in more remote areas may not have 
access to as many providers as they would consider adequate.
    Maybe Dr. Chu and General Rochelle, can you tell us a bit 
more about the problems that the Army families are having with 
health care coverage? Senator Graham made some reference to, 
maybe, splitting off the programs into different programs for 
retirees versus Active members and their families, but perhaps 
you could just tell us a little bit more, because this is 
obviously something very important, and General Casey has now 
raised it to attention, where maybe there's something we can do 
about it.
    Dr. Chu. Yes, sir. Thank you for raising that issue.
    We do poll our people repeatedly about their satisfaction 
with the health care that they receive. Generally, the system 
gets quite good grades.
    It is the case, interestingly, that the Active Duty 
members, the younger members in the patient population, tend to 
be more critical. The retired population tends to be much more 
satisfied, even though it doesn't have quite the same access 
rights as the Active Duty population. There's an interesting 
relationship here as to how you perceive the world.
    There is an issue, in some areas, with the ease of access 
to specialty care. I think, in general, access to primary care 
is quite good. The Services set high standards, in terms of 
primary care availability, and generally meet those standards. 
We will be looking at those posts where General Casey, and the 
Army, have identified issues as to whether we have enough 
uniformed providers in that area. Do we have a strong enough 
network for the TRICARE program, where we go to the civil 
sector--and that's particularly true for the specialty care--to 
support that?
    Certainly, there have been issues in the past about 
reimbursement rates from the government under TRICARE. We're 
prepared to address those.
    I have heard, more recently from Secretary Geren, that some 
providers in some areas of the country are distrustful of the 
government. So whatever the rates may be, that's not the issue; 
it's alleged that some providers simply don't want too many 
government patients in their practice for fear that a future 
set of decisionmakers will be less generous, I presume. I don't 
know what it might be. If that's true, we need, together, to 
advocate to the Nation's clinicians that this is a national 
responsibility. You shouldn't be here. Several of your 
colleagues have been very gracious in doing that in their home 
States. We're prepared to work with the Governors through the 
National Governors Association, if that proves to be an 
important issue.
    Senator Ben Nelson. General?
    General Rochelle. Yes, sir. Please allow me to add just 
three fine points to that.
    First of all, I'm pleased to report that the Secretary of 
the Army and General Casey have added, in fiscal year 2007, 
$1.4 billion, double what we submitted in the past to our Army 
Family Action Plan, recognizing that the resiliency of our 
families is not without limits. In the 2009 budget which is 
currently before Congress--$1.2 billion to address family well-
being needs.
    Social work services is the number-one area in which 
General Casey and Mrs. Casey, as they traveled about, and 
Secretary Geren, as he travels now, as well, hear about, with 
respect to the pressures of deployment on children. We are 
aggressively, with the resources Congress has given us, 
increasing social work services coverage in and around our 
military installations, most especially with the schools that 
are attended by military youth.
    The third and final point, the network, especially in 
specialty-care services, is sorely in need of some beefing up, 
and that's what our families tell us, sir.
    Senator Ben Nelson. Admiral, do you have any particular 
points you'd like to make on family health care?
    Admiral Harvey. Yes, sir. The particular issue for us, in 
terms of this point, is the medical support to the Marine Corps 
bases that we routinely provide. So part of what I talked about 
in the medical recruiting, we've really gone after the 
psychiatrists, psychologists, social workers, et cetera. I'm 
pleased to see we're getting the same results there.
    The issue for us has been keeping them once we get them. We 
saw over the last 3 years a higher loss rate than we'd like, 
and particularly in the areas that impact Camps Pendleton and 
Lejeune, with the tempo and the fight that they're sustaining 
in CENTCOM. So, I think we see the movement. We're getting in 
the right direction and getting them in there. We know where we 
have to get them to. We have some end strength issues that 
we're working through right now, in terms of the shape of the 
medical corps, the talent that we have in there, and the talent 
we need to keep. I think we have some road ahead on that. So 
I'm confident that we're going to improve in this area, but 
clearly we have improvements to make.
    Senator Ben Nelson. General Coleman, here's your chance. 
The Navy doing well for you, or not?
    General Coleman. The Navy truly is doing an outstanding 
job. But, a lot of that is because of the budgetary help that 
they're receiving. So, yes, sir, they're doing a fantastic job.
    Senator Ben Nelson. Thank you.
    General Newton?
    General Newton. Mr. Chairman, in terms of medical 
recruiting and so forth, as well as retention, we have some 
challenges. I know the Navy mentioned that they're going to be 
pretty much on track, in terms of recruitment. Recruitment, 
overall in the United States Air Force, is in good shape. So is 
retention. But, if you look into our health professionals, we 
have some challenges with regard to both recruiting, as well as 
retention, the same issues that were just raised in the Navy. 
So, that's a prime focus for us.
    I would also add the fact that we are, again, a very high 
operations tempo Air Force; we're also an expeditionary force. 
To go back to the mental health discussion we had, perhaps what 
would have been thought of in the past, in terms of the health 
environment or the health professionals, now needs to be added, 
certainly with our psychiatrists and psychologists, as well as 
our social workers.
    What affects our airmen--Active Duty, Guard, and Reserve--
to a degree, our civilians, but principally those in uniform 
affects our family members, as well. So the stresses that our 
airmen have can obviously have a dramatic impact, perhaps that 
we've not seen before.
    I'll close on this point--we still have to continue to 
strive for and create an environment, either at our bases, at 
home or deployed, whereby mental health becomes something that 
is no longer the stigma, but it's something that we can all 
understand and relate to.
    Senator Ben Nelson. I guess I'd ask this of all of you. If 
we are able to even out the time at home and the deployment, in 
terms of the number of months, so that there's less time 
deployed, more time at home, will that help some of the mental 
stress that we're seeing on the families, as well as on the 
servicemembers? Obviously, it's going to help some, but will we 
see anything appreciable coming from that?
    Dr. Chu?
    Dr. Chu. First, I should emphasize that again, we survey 
the military person about his or her perception of a family's 
support for that military career choice. We also do survey the 
spouses about their outlook. Those indicators have held up 
remarkably well across this period of time. Now, that's not to 
say there isn't stress there. I don't want to suggest that. 
But, when you take into account the kind of energy that, for 
example, General Rochelle described the Army is putting in some 
of these support programs, the military family is reasonably 
satisfied with where it stands.
    Certainly, they would like to see the military person spend 
more time at home. That is a constant complaint.
    I would not, however, overemphasize that attitude to the 
exclusion of what I think is an equally important factor, and 
that's predictability. I think the whole issue of expectations 
is a central element here. What do we promise--or what do we 
lead people to believe will be the compact between us and them? 
What do we deliver? I would hope that we'd pay equal attention 
to that issue. We ask our military persons, properly, to do a 
lot of tough, demanding things, spend a lot of time away from 
home. The military is there to be deployed, in the end. I don't 
think we want to shrink from that reality. We want to be honest 
with our families about it. But, we want to be constant, so 
much as world events permit us, in honoring whatever 
expectation we set. I think that's really the issue out there. 
Can we set a reasonable set of expectations? Can we honor those 
expectations? Can we avoid breaking our word to our people? 
That, I think, above all, is the most important thing.
    Senator Ben Nelson. I'm trying to remember whether it was 
April, where the extension was put in place, and that many of 
the servicemembers in the war zone found out about it, because 
it came through the news back here at home, and they found out 
about it from their families.
    Dr. Chu. Yes, and if you're going to have bad news, you're 
obviously right, sir, you want to communicate it to the 
affected parties first. We have tightened up those procedures. 
It is tough, given the time-zone differences, given 
notification requirements here on the Hill, to tell everybody 
first. That is a challenging assignment, I would acknowledge.
    General Rochelle. If I may, Mr. Chairman, we were 
particularly displeased with the way that announcement went, 
the way it occurred. We're striving very, very aggressively to 
make sure that never happens again, in terms of notifying 
families. That's leader responsibility, and that's exactly how 
we view it.
    To your question, predictability is key. Predictability for 
the soldier, predictability for the family. I would not want us 
to perceive the lack of predictability as anything other than a 
stressor, in and of itself. So, the answer to your question is 
yes.
    Senator Ben Nelson. Thank you.
    In terms of the wounded warrior issues, Secretary Chu, the 
committee recently received a letter signed by your principal 
deputy, Secretary Dominguez, and Secretary Cooper, from the VA, 
saying that they couldn't meet the February 1 statutory 
requirement for an interim report on the policy, as required by 
the Wounded Warrior Act, and stating that the interim report 
would be submitted by February 15. I'm not going to quarrel 
over a few days, but can you tell us--since the 15th has 
passed, whether there's another extension that you're going to 
talk about, or you could tell us that there might be a date 
that we might expect it?
    Dr. Chu. Let me go back and check why we're late against 
the late date. That's not excusable.
    [The information referred to follows:]

    The Interim Report to Congress on the Policy on Improvements to 
Care, Management, and Transition of Recovering Servicemembers was 
delivered to the Senate and House Armed Services Committees on February 
27, 2008.

    Senator Ben Nelson. Okay.
    The President, in his State of the Union speech, referred 
to the importance of implementing the recommendations of the 
Dole-Shalala Commission to improve the care and treatment of 
our wounded warriors. I believe that the Wounded Warrior Act, 
included in the National Defense Authorization Act that the 
President signed into law on January 28, addresses all but one 
of the recommendations of that Commission. The recommendation 
that the Wounded Warrior Act does not address is the 
recommendation to restructure the VA disability payments into 
three payments: transition payments, earnings lost payments, 
and quality of life payments. The VA Committees of the House 
and the Senate are holding hearings to address this 
recommendation.
    First let me ask you, do you agree that the Wounded Warrior 
Act addresses all but one of the recommendations of the 
Commission? We have to establish some groundwork, first of all. 
Is there only remaining that hasn't been addressed?
    Dr. Chu. I think the way I would see it, sir, is that the 
central proposition of Dole-Shalala was not addressed. That is 
this big issue, what should the annuity and disability system 
look like? As you have summarized, there would be several 
changes for VA. VA has launched the studies, even though 
Congress did not adopt the recommendation. Likewise, the other 
provision is that we would vastly simplify the medical 
retirement decision in Defense. If you're not fit for duty and 
you're medically retired, you get a much smaller annuity, but 
it would not be subject to concurrent receipt; you would 
actually receive it, and we would end a lot of the quarreling 
that goes on about what your status is. I do think the 
Department's view of this is, this is the central provision, 
this is the heart of the other Dole-Shalala proposition. We 
hope Congress would enact it. We also recognize that one of its 
benefits is that it sets up a sharper division of labor between 
DOD and VA. Our job then becomes focused on, is this medical 
condition unfitting for military service? If the answer is yes, 
``Thank you for your service,'' you move over to the VA, and 
they deal with the remaining issues.
    So, I do hope that Congress will act on this important 
issue.
    Senator Ben Nelson. Of course, we're all going to call that 
``seamless,'' because it's going to happen automatically.
    Dr. Chu. I do think part of the advantage of what Dole-
Shalala has recommended is that it's a much simpler sort of 
decision, as far as DOD is concerned. There is some controversy 
about this, I would acknowledge--but, basically it removes DOD 
from the rehabilitation business. I think that's part of where 
some of the current issues arise.
    Senator Ben Nelson. Your determination by DOD, versus VA, 
was, in many instances, for different reasons. We understand.
    Dr. Chu. Yes, sir.
    That's statutory in its foundation. Therefore, we need your 
action to clarify the roles.
    Senator Ben Nelson. Now, as that legislation gets 
introduced, should I assume that the funding for it is already 
included in the DOD budget?
    Dr. Chu. The way it would affect the DOD budget is through 
the normal cost percentage for the retirement account, which 
would change. That requires, under the laws that affect that 
account, the actuaries to pronounce--and I believe the 
situation is, until it's enacted, they won't actually make that 
change.
    Senator Ben Nelson. Would they have some idea of what the 
net cost would be?
    Dr. Chu. Yes, sir, we do have estimates of what the net 
cost would be.
    Senator Ben Nelson. Okay.
    Dr. Chu. Not necessarily sanctioned by the actuaries, I 
emphasize. This is what we have done.
    Senator Ben Nelson. Question about the fiscal year 2009 
budget of the Departments that includes 2,036 military-to-
civilian conversions for medical military billets. It appears 
inconsistent with section 721 of the conference report for the 
National Defense Authorization Act for Fiscal Year 2008, which 
expressly prohibits the Department from converting any 
additional military medical and dental positions to civilian 
positions until September 30, 2012. Are we misreading this, or 
is this actually happening?
    Dr. Chu. Sir, we, of course, will obey the law, as it's 
written. The budget was prepared before the enactment of the 
authorization bill, which didn't come until January, as you are 
well aware. We will also be submitting a legislative proposal 
to change back to the prior regime. Obviously, that would be 
ultimately your decision. So, we recognize that, unless the law 
changes, we can't actually make the conversions, but we would 
like to be able to pursue some of those conversions in the 
future.
    Senator Ben Nelson. So, we won't have the conversions in 
the future unless we have the actual authorization, and have it 
handled by legislation.
    Dr. Chu. We will be sending you a legislative proposal to 
reverse the action just taken. If it should receive favorable 
action by Congress, then we would be able to make some of these 
conversions.
    Admiral Harvey. Dr. Chu, may I add something on that?
    Senator Ben Nelson. Oh, sure.
    Admiral Harvey. Yes, sir. We certainly got the message. 
It's been received and acknowledged, and we will carry out the 
law.
    One thing I would just put on the table for you, sir, is 
that the appropriations to support the end strength that we're 
going to have to carry are not there. So in the short-term, 
we're going to do what we have to do to provide medical care 
across-the-board to where we have to do it, but in the long-
term, we do have an issue here, in that the appropriations that 
we have do not match what is now going to be the end strength 
we need to carry with the current force structure. So, 
something either changes in our operational force structure, in 
terms of end strength to support the increased military end 
strength we'll carry, or we have to find some other means here. 
But, it is a significant issue for us, as we carry out the law.
    General Rochelle. If I may, Mr. Chairman.
    Senator Ben Nelson. Sure.
    General Rochelle. Another nuance, not at all insignificant, 
to piggyback on my colleagues' comments, we may also require, 
in addition to the appropriations to accompany the reversal 
back military spaces, standard-of-grade relief, just to 
highlight something, because as we bring the military structure 
back in, we're going to bump--inside the same end-strength 
structure--against standard-of-grade ceilings. So, I mention 
that, if you please, for the record.
    Senator Ben Nelson. Sure. Okay, thank you.
    I was hoping that we didn't have the situation develop, 
where we now had a fourth branch of government. When I was 
Governor, I always knew we had three branches of government--
executive, legislative, and judiciary--and then the fourth 
branch, the Department of Roads. [Laughter.]
    They did whatever they felt they wanted to do. So, I didn't 
think we had that developing here. We'll find a way to smooth 
that out, to the best extent possible.
    In terms of respite care, General Coleman, in your written 
statement, you said that the Marine Corps offers Active Duty 
families enrolled in the Exceptional Family Member Program up 
to 40 hours of free respite care per month to enable caregivers 
to get breaks while still nurturing the needs of family members 
with special needs. This sounds like a very important program 
for these families with special needs. Can you give us a little 
bit more about it and who it covers and how you are able to 
fund it?
    General Coleman. Yes, sir. This is a great success and news 
story. The Commandant was able to procure some funds for this, 
and some given from the Office of the Secretary of Defense, 
some from within the Marine Corps, that allows these special 
needs to give the caregivers--to give the homemaker some time 
away. One of my dearest friends, his son has autism, and his 
wife is there all the time. A thing like this allows her some 
downtime, some alone time, some ``Let me get myself together'' 
time. I believe it's in the 36- to 40-hours-a-month time, where 
she can get away and get some well-needed rest. It's a great 
program.
    We stole it from the Army, because we weren't as involved 
in it as the Army was. Mrs. Conway, the Commandant's wife, read 
an article, where the Army was all over this, and she said, 
``Hey, Marine Corps, we need some of this, too.'' So, it's a 
great news story, sir.
    Senator Ben Nelson. It certainly is family-friendly and in 
recognition of reality for people with families with those 
special needs. So maybe the other two Services--well, you stole 
it from the Army, so maybe you can give it to the Navy and give 
it to the Air Force. [Laughter.]
    General Rochelle. I'd like to thank my colleague for the 
acknowledgment. [Laughter.]
    Senator Ben Nelson. There is nothing better than to find 
good programs on what you would call the exceptional programs 
that are there. I am one of those; I commented about yesterday 
with Secretary Geren, and that is maternity leave, after 
delivering the baby, for the mother not to be deployed sooner 
than 12 months, I think is the Navy's standard; 6 months, the 
Marines; and, I think, 4 months for the Army and the Air Force, 
at the moment, and suggested that that be reviewed because of a 
variety of different reasons, all of which makes some sense. If 
we want to be a family-friendly force, the last thing we need 
to do is let a situation develop, or continue to be there, that 
might cause a choice between having a family and not having a 
family. That's the objective. We don't want to train people and 
then have those kinds of roadblocks or those kinds of 
hindrances that would cause people to say, ``At some point, I 
guess I'll just have to hang it up, because I want to have a 
family, and 4 months is not enough in between deployments,'' 
not knowing what future deployments may be.
    Dr. Chu, would you have some thoughts on that?
    Dr. Chu. Let me comment on that, sir. I'd like to make 
several points. First of all, 4 months is a minimum. Services 
are free to adopt more. You've noted some have. Second, the 
Services--and I've spoken to both the Army and Air Force 
Assistant Secretaries for Manpower on this matter--will use 
waivers to deal with individual situations. I do think we need 
to be a little careful that we don't damage the standing of 
women as a key element of the force, in saying that they should 
not share their part of the overall force burdens, in terms of 
how we utilize them. That's the reason the Department has 
looked at it in the past, and I think in the end judges we 
should look at again, the notion of a sabbatic period, which I 
think may be a superior alternative for those who would like 
room within which to develop a family. The Navy has expressed 
interest in this before. The Department has never really come 
to a good conclusion about this. It would require statutory 
assistance, in my judgment, in order to have a successful 
program, so people could step out of their military role, 
maintain some degree of benefit support during that period of 
time--perhaps most important, health care--but not be part of 
the Active component for a period of 1 or 2 years. That may 
really be the solution, for those who need more time off, 
whether it's to care for a relative or to start a family or for 
other purposes.
    Senator Ben Nelson. That was going to be my next question. 
If you're going to have maternity leave, is it possible, 
without absolutely adversely affecting the possibility of a 
deployment of a person, other conditions where you might grant 
a waiver to keep them in the military; otherwise, they have a 
choice.
    Dr. Chu. Right, and we don't want to lose the trained 
personnel.
    Senator Ben Nelson. Right
    Dr. Chu. On the other hand, I do think we have to remember, 
the military is there as a deployable force. That is its 
primary mission.
    I should add, also into the record, that mothers all 
receive 6 weeks maternity leave.
    Senator Ben Nelson. Yes.
    Dr. Chu. It's a separate matter.
    Senator Ben Nelson. We worked on that, so now I believe we 
have something for adoptive parents, as well, recognizing that 
it's not just the biological situation that we're recognizing, 
but also the family relationship that's developing and bonding 
that's required. Otherwise, we run into other issues. I was 
glad to find that particular situation that we could cite as a 
reason to change the policy.
    General?
    General Rochelle. Mr. Chairman, may I simply state, for the 
record, that at the direction of Secretary Geren and General 
Casey, our policy is actively under review.
    Admiral Harvey. Sir, this is a not a small issue. Seventeen 
percent of the Navy right now is made up of women, and our 
incoming classes in Reserve Officers' Training Corps and the 
Naval Academy is about 22-23 percent. I expect that the 
percentage of women in the Navy will grow steadily over the 
next few years. So, they'll be picking up a larger and larger 
contribution of our overall effort.
    We have to be able to come up with the means and the manner 
in which we will also get the retention of this group that is 
equivalent to the male sailors that we now enjoy. The sad fact 
is that female retention in our surface warfare and aviation 
communities is about one-third of their male counterparts. So, 
we run up against this issue every day, and we have to keep 
pushing forward on this aspect of our service, and the nature 
of our service, to ensure that we reach all the talent we have 
to deliver the capabilities we must, and find a way to keep 
that talent with us, regardless of gender.
    So, this is a very big issue, and I think it's going to get 
bigger for us over time.
    Senator Ben Nelson. If we don't get it right, we lose our 
investment in personnel, the cost of training, and then we're 
faced with replacing those trained personnel. We don't have to 
perform miracles, we just have to figure out what works and 
what will keep us in the mix as they make decisions about 
family. If we have those things that are roadblocks or 
inhibitors, we're obviously going to pay the price of the loss 
in retention.
    Admiral Harvey. I think we can do this in a way to express 
the concern, that Dr. Chu so rightly expressed, that we can 
never forget, we are an expeditionary force. We are routinely 
forward deployed. We are expected to go forward and do hard 
things in hard places. That's never going to change. That's the 
core element of who we are and what we do. But, I do believe 
that we can find a way to bring these two issues together that 
will result in the kind of outcomes we need to sustain this 
force in the future with the demographics that simply are 
before us.
    Senator Ben Nelson. General Newton, I think you might have 
been at Strategic Command at the time that we found out about 
the Air Force couple that served as the example for why we were 
able to get this policy changed.
    General Newton. Yes, sir. We constantly survey throughout 
our force, both Active Duty, Guard, and Reserve, to make sure 
that we are certainly in touch with the realities that our 
airmen and their families face. We also stand tall and not take 
for granted the fact that it's an All-Volunteer Force, and that 
it's just unique circumstances we have. So constantly, it's 
under review and assessment to make sure that we're on the 
mark.
    Senator Ben Nelson. Thank you.
    Those are generally the questions that I have. Would there 
be any comments that anybody would like to make before we 
adjourn the hearing?
    Now, I would say thank you for what you do, day in and day 
out. Thank you for the members of your Service, for what they 
do.
    Thank you, Dr. Chu, for what you, at the Pentagon, do to 
keep our country safe, to keep our military functioning as an 
expeditionary force and ready to go and deploy as the need 
requires.
    I appreciate the fact that we don't ignore reality just to 
try to stay ready to go. There are other considerations about 
how we can go about doing it that will not get in the way. 
Moving toward programs of transferability of education, of 
other opportunities, just simply to enhance the ability of the 
military to stay an All-Volunteer Force. Competition is such 
that you're up against the corporate world, against the 
government, and others for the same young people, and to retain 
the ones you have. So, it just behooves us all to continue to 
work together to try to find ways to make it that much more 
friendly.
    It's easy to say that in a hostile world, but that's what 
we have to do. We have to have this military-friendly demeanor 
for the people so we can protect ourselves from a hostile 
world.
    Dr. Chu. Mr. Chairman, thank you for the actions you and 
your subcommittee members have taken in support of the military 
forces, the partnership that has allowed us, I think, to 
sustain this fine force over the course of the last 7 years.
    Senator Ben Nelson. Thank you.
    General?
    General Coleman. Sir, I would like to jump onto your kind 
nature there, and also Senator Graham when you asked if there's 
anything you can do. My mother used to say, ``If you want 
something fixed, you go to the people that can fix it.'' So, if 
I may, back in December, the Commandant, General Conway, 
discussed with me, in a one-way discussion where I was 
listening, that the Army--and I've already vetted this with my 
good friend and colleague, Lieutenant General Rochelle, so 
there's no hard feelings here--is having a little bit of 
concern with their company-grade officers staying on Active 
Duty. There's a couple of programs where they give upwards of 
$30,000, depending on the specialty, so that they stay. We, in 
the Marine Corps, aren't having that problem--knock on wood--
but, the Commandant, in December, said, ``Ron, I'd like to 
reward our company-grade officers. Is there some way that I can 
say to those officers, to all the company-grade officers that 
are staying, `Hey, here's $2,000; here's $3,000, go do 
something. Thank you for staying. No commitment.' ''
    Senator Ben Nelson. A reward, as opposed to, perhaps, an 
incentive?
    General Coleman. Yes, sir. Or, sir, what it reminds me of, 
when I returned from Vietnam in 1970, the great State of 
Pennsylvania gave me a whopping $300 and said, ``Thanks for 
your service.'' So, we vetted that, and we've come up against 
quite a few roadblocks. We were told that we could do that if 
we made them sign on for another 1, 2, or 3 years. That's not 
what we want to do. We don't--they're already staying for the 1 
or 2 or 3 years that we want. All the Commandant would like to 
do is say, ``Thank you for your service.'' So, if you could 
give us a hand there, sir, in either pointing me in the right 
direction or at least acknowledging to the Commandant that I 
said that, so I don't have any more one-way conversations, I 
certainly would appreciate it, sir. [Laughter.]
    Senator Ben Nelson. I suspect he's going to know, by the 
end of the day. [Laughter.]
    That is a worthy consideration, because we talk about 
incentives, but we ought to also think about it in terms of 
``thank you'' recognition, as well. A pat on the back is 
helpful, but very often there are other things that you could 
do to make it even better. So, we will take that under 
consideration, under advisement, clearly.
    Once again, thank you, everybody, for being here. I 
appreciate, so much, your input. As my colleague and I clearly 
indicated this is a bipartisan effort here. There's nothing 
partisan about making sure that our men and women in uniform 
are receiving the best and having the best opportunity to do 
their job, and to be able to do it well, and also for us to be 
able to say ``thank you'' in a number of different ways, all of 
which, I hope, are helpful and express our appreciation for 
what they do and what you do.
    So, with that, unless there's anything else, this hearing 
is adjourned.
    [Questions for the record with answers supplied follow:]
                Questions Submitted by Senator Evan Bayh
                  national security education program
    1. Senator Bayh. Secretary Chu, please describe the activities of 
the National Security Education Program's (NSEP) Flagship Program in 
2007 and your projected activities in 2008 and 2009.
    Secretary Chu. The Language Flagship is a cornerstone of the 
Department's Language Transformation Plan and the President's National 
Security Language Initiative (NSLI). The Flagship effort, since its 
inception, has had a major impact on the way many higher education 
institutions, as well as K-12 programs, organize and develop their 
approaches to language education. The central goal of Flagship is to 
reach a minimum of 2,000 students by the end of the decade. This effort 
provides the Department of Defense (DOD), as well as the entire 
national security community, with an opportunity to recruit from a more 
globally proficient pool of candidates. We are pleased to report that 
we are well on our way to meeting or exceeding this goal.
    In 2007, Language Flagship provided funding primarily in the form 
of core institutional grants to domestic and overseas Flagship Centers 
and partners. During 2007, Flagship continued its major effort to 
transition its focus from post-graduate to primarily United States 
undergraduate education. In moving toward this goal, Flagship has 
endeavored to include more institutions in the movement through the 
launch of a Promoting the Diffusion of Innovation grant program. This 
grant program was held as an open national competition designed to 
increase collaboration within the Flagship framework while increasing 
the number of institutions, language programs, degree programs, and 
students involved in Flagship efforts. Through the grant program, the 
Language Flagship encourages individuals and organizations to work with 
currently funded Flagship Centers to propose ways of increasing the 
effectiveness and scope of the Language Flagship. Partners may include 
academic institutions, public sector and nonprofit sector agencies, 
school districts, businesses, or private sector organizations.
    In October 2007, three new projects were funded under the Promoting 
the Diffusion of Innovation grant program: the Arizona State University 
Chinese Flagship Partner Program, which increased the scale and scope 
of Chinese offerings by teaming up with the Chinese Flagship Center at 
the University of Oregon; the Flagship ``My China'' project (also at 
the University of Oregon), which creates a virtual Flagship presence in 
the online world of ``Second Life''; and, the American Councils for 
International Education's Flagship Online Russian Proficiency Test and 
Assessment, which provides online assessment tools for evaluating 
individual student performance. In addition to the institutional 
grants, the Language Flagship, through the Institute of International 
Education (IIE), provided significant funding to support students in 
the form of student scholarships, fellowships, and stipends.
    The Diffusion of Innovation effort continues with a 2008 
competition initiated in December 2007 with proposals due by March 14, 
2008. The Diffusion of Innovation solicitation, managed by our 
nonprofit partner, IIE, was announced through all major communication 
channels. As in 2007, the grant program intends to provide funds to 
additional institutions of higher education who demonstrate a strong 
commitment to support innovative approaches to language education, 
including the diffusion of proven and effective practices. We expect to 
expand the reach of Flagship to as many as 10 to 15 more institutions 
through this innovative diffusion model.
    In 2007, Language Flagship also introduced special initiatives as 
part of its overall approach to changing the way Americans learn 
languages. Flagship special initiatives provide a larger venue for 
discourse and action in areas that are important to language learning 
and that complement the core activities of Language Flagship. In June 
2007, regional Language Summits were hosted by three Flagship Centers: 
Ohio State University, University of Oregon, and University of Texas at 
Austin. The summits resulted in highly innovative and ``first of their 
kind'' State Language Roadmaps for Ohio, Oregon, and Texas. With 
funding provided by Congress, the projects were overseen by NSEP with 
co-sponsorship from the Departments of Defense, Commerce, and Labor.
    The Language Roadmaps were instrumental in identifying State and 
local needs for language learning and enhancing the capabilities of 
Flagship Centers to address the goals of the Language Flagship. They 
also introduced language education as an important element of the 
public policy debate, asking State policymakers and business leaders to 
examine their priorities and seek ways to identify the needs for a 
workforce with language and culture skills. The engagement of State and 
local government decision makers and the business community served as 
an important and necessary step in moving the national language agenda 
forward. Flagship Centers will continue to explore efforts to address 
key components of these Roadmaps and to facilitate opportunities for 
additional States to develop their own Roadmaps. Recently, Language 
Flagship announced a competition for an African Languages Flagship 
Center with a due date of May 2, 2008. This effort responds to the 
urgent need for a pipeline of students with increased knowledge and 
expertise in African language and culture. NSEP expects to make this 
award by early summer.
    During 2009, Language Flagship will consolidate its efforts with 
its core Flagship Centers and its diffusion partners. Our focus will 
remain on transforming language learning in United States higher 
education so that, in the coming years, DOD, our colleagues in the 
entire Federal sector as well as business, will be able to identify and 
hire a new generation of global professionals.

    2. Senator Bayh. Secretary Chu, please list the current Language 
Flagship Programs and the universities which have been identified as 
the lead institutions for those Flagship Programs.
    Secretary Chu. The current Language Flagship Programs and 
universities identified as lead institutions are:

          Arabic Flagship Centers
          Michigan State University*
          Dearborn Public Schools K-12 Flagship Program
          University of Texas, Austin*
          University of Maryland, College Park*
          Alexandria University, Egypt
          Damascus University, Syria
          Central Asian Turkic Language Consortium
          American Councils for International Education*
          Indiana University
          University of Chicago
          Chinese
          Arizona State University Flagship Partner Program
          Brigham Young University*
          Ohio State University*
          Ohio Public Schools K-12 Flagship Program
          University of Mississippi*
          University of Oregon
          Portland Public School K-12 Flagship Program
          Nanjing University, China
          Qingdao University, China
          Eurasian Languages
          American Councils for International Education*
          Bryn Mawr College
          Middlebury College
          University of California, Los Angeles
          University of Maryland, College Park
          St. Petersburg University, Russia
          Hindi/Urdu
          University of Texas, Austin*
          American Institute for Indian Studies, Jaipur, India (Hindi)
          American Institute for Indian Studies, Lucknow, India (Urdu)
          Korean
          University of Hawaii, Manoa*
          Korea University, South Korea
          Persian/Farsi
          University of Maryland, College Park *
          Tajik State National University, Tajikistan
    * Lead Institution

    3. Senator Bayh. Secretary Chu, how were the institutions which 
have been identified as the lead for each Language Flagship Program 
selected?
    Secretary Chu. Institutions designated as lead Flagship Language 
Centers have been chosen through open competition. For Flagship 
programs that focus on a more diverse set of language groups and which, 
typically, rely more on overseas immersion than domestic study (e.g., 
Eurasian and Central Asian Turkic Languages), a nonuniversity umbrella 
organization with extensive experience in the region, American Councils 
for International Education, has taken primary responsibility for the 
overseas effort while promoting and facilitating partnerships among 
academic institutions. Partner institutions have been actively 
encouraged to expand their programming and offerings through an annual 
competition, Promoting the Diffusion of Innovation grant program, which 
provides funding at the institutional level. A Diffusion of Innovation 
solicitation for 2008 was announced in December 2007 with proposals due 
by March 14, 2008.

    4. Senator Bayh. Secretary Chu, did NSEP hold a competition for 
these designations? Please explain.
    Secretary Chu. Competitions have been held for all Flagship grant 
awards since the inception of the program in 2000-2003 when the program 
was operated as a pilot under the NSEP institutional grants umbrella. 
Since 2003, when Flagship was formally established, all awards have 
been made through open national competitions administered by the NSEP 
nonprofit contractor, the Institute of International Education. The 
most recent solicitation is for an African Flagship Program. During 
2003-2007, open competitions were held for the establishment of 
programs in Arabic, Chinese, Hindi/Urdu, and Persian/Farsi. In 
addition, through its Diffusion of Innovation process, NSEP has also 
held open competitions for new partner programs in all of these 
languages as well as Eurasian and Central Asian.

    5. Senator Bayh. Secretary Chu, NSEP has been working with U.S. 
universities to provide critical language training to Reserve Officers' 
Training Corps (ROTC) cadets. What are your plans to continue this 
program in 2009 and beyond?
    Secretary Chu. The DOD plans to continue the ROTC Language and 
Culture Project in 2009. This program was funded from fiscal year 2007 
through 2013.
    This project was developed based on guidance contained in the 2006 
Quadrennial Defense Review (QDR), which charged the Department to 
increase investments focused on developing and maintaining appropriate 
language, cultural and skills relevant to the challenges of the 21st 
century. The QDR directs that the Department will, ``Require language 
training for Service Academy and Reserve Officer Training Corps 
scholarship students, and expand immersion programs, semester abroad 
study opportunities.''
    The goal of the project is to provide cadets and midshipmen with 
opportunities to study languages and cultures of world regions critical 
to United States national security. We are beginning the review for the 
2009 ROTC Language and Culture Project now.

    6. Senator Bayh. Secretary Chu, not all of the Service Academies 
work in conjunction with their respective ROTC scholarship programs to 
ensure that applicants who are rejected from the academy have the 
opportunity to apply for an ROTC scholarship. Has DOD investigated 
whether to institute such a program? If not, why not? If so, how is the 
DOD looking to implement those programs?
    Secretary Chu. While not all service applicant information exchange 
processes are formalized, all Service Academies exercise recruiting 
partnerships with their respective ROTC programs. Candidates are 
encouraged to apply to both the Service Academy and the corresponding 
Service ROTC. Oftentimes, applicants will apply to all Service 
Academies and ROTC scholarship programs with many highly qualified 
candidates receiving multiple acceptances and offers.
    In recent years, the United States Military Academy (USMA) has 
created a more robust partnership with the United States Army Cadet 
Command (USACC) to formalize their procedures for exchanging applicant 
data. From September through January, they share candidate information 
on a monthly basis. In 2007, USACC conducted a centralized board to 
review USMA applicants who did not receive a USMA nomination. Forty-two 
percent of the 892 candidates considered will receive 4-year Army ROTC 
scholarship offers. USACC will conduct a similar board this month.
    Since there is considerable crosstalk between the Service Academies 
and their respective ROTC programs, there is currently no DOD plan to 
institute a formal program for their partnerships.
                                 ______
                                 
            Questions Submitted by Senator Claire McCaskill
                         paternity leave policy
    7. Senator McCaskill. Secretary Chu, I understand that most of the 
Services have indicated that they support instituting a paternity leave 
policy that would permit unit commanders to provide military members 
administrative paternity leave at the commander's discretion. It 
strikes me that such a policy would be supportive of military families, 
would be consistent with policies in the civilian sector, and would 
send a strong message to servicemembers about the respect their 
Services have for their personal lives. It also seems to me that such a 
policy can only prove helpful in retention efforts.
    However, I have since been informed that the Department may have 
ordered that work on paternity leave policies be terminated and that 
the issue not be considered for a DOD-wide personnel policy initiative.
    Can you discuss what consideration was given by the Office of the 
Secretary of Defense (OSD) of paternity leave issues and what decisions 
have been reached by OSD on instituting a Department-wide policy?
    Secretary Chu. This legislative proposal is being worked within the 
Department. It would allow spouses up to 21 days of discretionary 
administrative absence after the birth of a child. The Department is 
weighing the proposal against operational readiness, cost, and equity 
factors. We anticipate a decision on proceeding with the present 
proposal by end of March 2008.

    8. Senator McCaskill. Secretary Chu, has OSD directed the Services 
to cease work on instituting or considering paternity leave policies, 
and if so, why?
    Secretary Chu. No. This legislative proposal is being worked within 
the Department. It would allow spouses up to 21 days of discretionary 
administration absence after the birth of a child. The Department is 
weighing the proposal against operational readiness, cost, and equity 
factors. We anticipate a decision on proceeding with the present 
proposal by end of March 2008.

    9. Senator McCaskill. Lieutenant General Rochelle, Vice Admiral 
Harvey, Lieutenant General Coleman, and Lieutenant General Newton, what 
is your Service's current policy on paternity leave?
    General Rochelle. The Army does not have paternity leave policy. 
However, soldiers may take up to 30 days of annual leave on the birth 
of a child.
    Admiral Harvey. Under current DOD guidance, Navy authorizes regular 
leave for paternity purposes, approved by each servicemember's 
commanding officer. DOD Instruction 1327.6, governing leave and liberty 
procedures, prohibits the use of administrative leave following the 
birth of a child.
    General Coleman. Commanders may authorize up to 10-days 
administrative absence (Permissive TAD) for a married male marine when 
his spouse gives birth, dependent on the unit's mission, specific 
operational circumstances, and the marine's billet.
    General Newton. The Air Force does not have a specific category of 
administrative absence (i.e., leave) that is designated for paternity. 
Military members accrue 30 days of leave annually (2.5 days/month). 
Military fathers may use this leave to assist mothers and newborns.

    10. Senator McCaskill. Lieutenant General Rochelle, Vice Admiral 
Harvey, Lieutenant General Coleman, and Lieutenant General Newton, have 
you considered, at any time, instituting a formal paternity leave 
policy, and if so, when and what was considered and what was done?
    General Rochelle. The Army has explored implementation of 
nonchargeable paternity leave for soldiers, through the Army Family 
Action Plan program. However, since paternity leave is another form of 
nonchargeable absence from duty like other forms of permissive 
temporary duty, implementation would require the support of the other 
Services and OSD.
    Admiral Harvey. In August 2007, Navy submitted a proposal to amend 
title 10, U.S.C., to authorize Military Department Secretaries to grant 
up to 21 days permissive temporary duty in connection with the birth of 
a new dependent. This initiative was intended to align the Department's 
policy for natural fathers with policy applicable to adoptive parents, 
as provided for in the National Defense Authorization Act for Fiscal 
Year 2006.
    Based on a subsequent dialogue, it is my understanding that a 
paternity leave authority may be accomplished through policy without 
the need for new legislative authority. The issue is currently pending 
before the Under Secretary of Defense for Personnel and Readiness but a 
final decision has not been reached.
    General Coleman. The Marine Corps implemented an official 
Permissive TAD policy for Paternity on 4 October 1995. We implemented 
it based on the guidance in the Presidential Memorandum on Supporting 
the Role of Fathers in Families, 16 June 1995, to promote family values 
and encourage fathers to be active and committed to their families.
    General Newton. Yes, the Air Force considered a paternity leave 
policy after the Navy raised the issue of 21 days of paternity leave in 
fall of 2007. I have not implemented specific guidelines since the 
current leave authority (30 days/year) provides adequate leave for 
military fathers. However, we are still analyzing the various options 
available to us.

    11. Senator McCaskill. Lieutenant General Rochelle, Vice Admiral 
Harvey, Lieutenant General Coleman, and Lieutenant General Newton, does 
your Service currently support instituting a paternity leave policy? If 
so, what are you considering? If not, please explain why not?
    General Rochelle. The Army supports the DOD proposal to amend title 
10, U.S.C., section 702, authorizing up to 21 days of permissive 
temporary duty (TDY) for servicemembers paternity leave in conjunction 
with the birth of a new child. The legislative proposal is consistent 
with recent congressional change to section 701 authorizing up to 21 
days of administrative leave for a servicemember adopting a child. 
Paternity leave, as with all other leave categories, would be granted 
on an individual basis dependent on the unit's mission and operational 
circumstances.
    Admiral Harvey. Navy supports establishing a paternity leave policy 
that provides Service Secretaries discretionary authority to grant up 
to 21 days permissive TDY to be used in connection with the birth of a 
servicemember's natural child. Requests for paternity leave would be 
considered on a case-by-case basis, and approved when possible; 
consistent with unit mission, operational circumstances, and each 
servicemember's billet.
    General Coleman. The Marine Corps supports and implemented a 
paternity leave policy, under the authority of administrative absence, 
on 4 October 1995.
    General Newton. Military members accrue 30 days of leave annually 
and the use of ordinary leave for military fathers to take time-off to 
be with the mothers and newborns is effective and meets the needs of 
families and the mission. Moreover, the average leave balance at the 
end of fiscal year 2007 was 34.75 days (enlisted) and 42.4 days 
(officer). The Air Force continues to study a policy proposed by the 
Navy for 21 days of paternity leave. We understand the rationale, but 
with over 15,000 new dependents born to Air Force families yearly we 
are considering the impacts of having those fathers out for 21 days 
each. We will continue to analyze all options.

                         maternity leave policy
    12. Senator McCaskill. Lieutenant General Rochelle, Vice Admiral 
Harvey, Lieutenant General Coleman, and Lieutenant General Newton, I 
want to address the current post-maternity deferment from deployment 
policy for Active Duty military mothers and the disparity between the 
Services on the length of this deferment. I recently wrote to Secretary 
Gates about this matter and ask that my letter be entered into the 
record of this hearing. Further, I ask Secretary Chu to ensure that 
Secretary Gates' response to my letter also be submitted to this 
committee and entered into the record of this hearing.
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
    I would like each of you to briefly comment on your Service's 
deferment policy and to explain why the Service has followed such a 
policy. Please be specific about any medical considerations that have 
been taken into consideration in establishing and following the policy.
    General Rochelle. Current Army policy requires a 4-month Postpartum 
Operational Deferment period for a female soldier after the birth of a 
child. The Army Postpartum Operational Deferment policy is based on and 
matches the designated guidelines established by OSD.
    The Army recognizes the merit in lengthening the Postpartum 
Operational Deferment period, and intends to lengthen that period to 6 
months once Active Army units return to a 12-month deployment rotation 
policy from the 15-month deployment rotation policy that is currently 
in place.
    Admiral Harvey. Following a 2-year medical readiness review, Navy 
modified its postpartum operational deferment policy from 4 to 12 
months in OPNAVINST 6001.1C, and has received overwhelming positive 
feedback from the fleet. Our decision was based on extensive review of 
medical research on postpartum depression, Shaken Baby Syndrome (SBS), 
and the long-term benefits of breastfeeding. Our review informed that:

         20 percent of postpartum women experience depression at some 
        point in the year following delivery. Longer deferment resulted 
        in fewer cases requiring personnel replacement as a result of 
        late-onset depression in theater.
         30 percent of SBS cases identified within DOD between 2004-
        2005 occurred in Navy or Marine Corps families. SBS cases were 
        often the result of parental stress and lack of sleep in the 
        early stages of infant development. By extending operational 
        deferment, the risk of SBS is lowered because frequent training 
        schedules necessitating time away from home and inconsistent 
        sleep patterns are no longer factors.
         The American Academy of Pediatrics, American Academy of 
        Family Physicians, Department of Health and Human Services, and 
        the Surgeon General of the United States recommend 
        breastfeeding infants exclusively for 6 months and continuing 
        to breastfeed for 12 months while incorporating complimentary 
        foods for the health and wellness of mother and child. In 
        addition, a 2005 Navy Pregnancy and Parenthood Survey 
        identified the 4-month deferment period as a key deterrent to 
        continue breastfeeding. We believe that a 12-month deferment 
        period will increase breastfeeding continuation rates and 
        workplace productivity, thereby decreasing health care costs 
        over time.
    With respect to changing Navy demographics, the following is 
offered for consideration:

         In the last 15 years, the percentage of women serving in the 
        Navy has risen from 10 to 15 percent of the total force. Women 
        now account for 22 percent of the U.S. Naval Academy's freshman 
        class and 25 percent of freshmen participating in the Naval 
        Reserve Officers Training Corps Program. The proportion of 
        women in each program is expected to reach 30 percent by 2018.
         As Navy becomes an increasingly technical force, retaining 
        women in critical skill sets, such as surface warfare, aviation 
        warfare, and health professions, is essential.
         According to Navy's 2008 Pregnancy & Parenthood Survey, a 12-
        month deployment deferment policy positively influences the 
        retention decisions of women by 47 percent and those of men by 
        10 percent.

    In summary, the 12-month deferment policy is based on a 
preponderance of medical evidence and the impact of changing Navy 
demographics on operational readiness. In order to assess the impact of 
this policy change, the Navy will continue to monitor retention rates 
as well as the physical and mental health and well-being of female 
sailors over the next several years.
    General Coleman. Pregnant marines will not normally be transferred 
to deploying units from the time of pregnancy confirmation up to 6 
months after the date of delivery. Pregnant marines are afforded a 6-
month deferment from deployment after the date of delivery. The 
deferment option is provided to the marine, not the commander. The 
marine may waive the deployment deferment period. Commanders have the 
option of extending this deferment if, in consultation with the Health 
Care Provider (HCP), it is deemed necessary for the health of the 
mother or child. On 12 June 2007, we reduced the deferment period, from 
12 months to 6 months, after extensively reviewing the former policy. 
Marine Corps policies are constantly reviewed to ensure their 
applicability to the force, and this review was no different. During 
the review and staffing process it was determined a 6-month deferment 
provided the best balance between ensuring the health of the mother and 
child and the requirements of a naval career. This change complies with 
DOD Instruction 1342.19 (Family Care Plans), which states ``Military 
mothers of newborns shall receive a 4-month deferment from duty away 
from the home station for the period immediately following the birth of 
a child.''
    General Newton. Our Air Force Instruction guidance allowing a 4-
month post pregnancy deferment for deployments is consistent with 
deferments for assignment. In fact, the guidance in our deployment 
instruction (10-403, Attachment 2, table A2.1, Note 6) references our 
assignments instruction stating that ``members are deferred from 
deployments for 4 months after birth of baby'' (extensions approved at 
unit/CC discretion) per AFI 36-2110, para 2.39.4 and Table 2.2 Rule 1. 
Both AFIs are based on DOD Directive 1315.7, in Aug 91 that established 
a ``4-month deferment after childbirth to duty away from the home 
station.'' We are unaware of what medical considerations may have been 
taken into consideration when DOD Directive 1315.7 was published.
                                 ______
                                 
            Question Submitted by Senator Lindsey O. Graham
                              nominations
    13. Senator Graham. Secretary Chu, I was pleased to hear you do not 
anticipate any problems with implementation of the provision requiring 
The Judge Advocates General (TJAG) of the Army, Navy, and Air Force to 
serve in the rank of lieutenant general or vice admiral. In order to 
ensure the maximum effectiveness of the TJAGs, I believe this needs to 
be implemented quickly. Do you have an indication of when the 
nominations will be forwarded to the Senate for confirmation?
    Secretary Chu. At this time, we do not have a clear indication of 
when the nominations will be forwarded to the Senate. The Department 
will immediately attend to these nominations upon receipt from the 
Secretaries of the Military Departments.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss
                      base realignment and closure
    14. Senator Chambliss. Secretary Chu and Lieutenant General 
Rochelle, as you are well aware, both Fort Stewart and Fort Benning in 
the State of Georgia are in the process of growing as a result of the 
Grow the Army plan and the Base Realignment and Closure (BRAC) process, 
and we welcome that growth and look forward to having more Army 
soldiers and their families residing in the State of Georgia.
    This growth does bring challenges, and one specific challenge that 
I've been aware of and working to address for several years now is the 
growth in the number of students at local school districts resulting 
from an influx of military-connected children. No school district is 
going to turn away additional students, and I know that the folks in 
Muscogee County, Chattahoochee County, and Liberty County are eager to 
accommodate new Army families and their children into their school 
districts--and they will do so.
    I have had a very difficult time getting accurate estimates from 
the Army regarding how many soldiers and, consequently, how many 
school-aged children will be relocating to Georgia bases. The estimates 
have varied widely and have made it very difficult for local school 
districts to predict and plan how to accommodate this growth. However, 
everyone agrees that, at least at Fort Benning, they will experience a 
growth of several thousand students. But this is not just a Georgia 
issue. Bases and communities in Virginia, North Carolina, Kentucky, and 
Kansas will be affected as well.
    As you can well-understand, any additional facilities and teachers 
required to accommodate additional students will need to be funded in 
advance of the students arriving. Local communities are challenged to 
pay for these expenses, especially when the tax base for doing so does 
not exist, or will likely be made up of nonresidents who may not be 
paying income and property tax.
    I would appreciate your comments on what policies the Army and DOD 
have established to address this issue and how you are partnering with 
communities around bases experiencing this growth. I would also 
appreciate your assurances that making sure this transition is seamless 
and doing everything you can to help local communities prepare for this 
growth will remain a priority for DOD and the Army.
    Secretary Chu. DOD clearly recognizes the importance of quality 
educational opportunities for all military families. We are working in 
close collaboration with all key stakeholders to engage affected 
communities and assist them in finding viable solutions to the 
projected school growth. Understanding that in order to prepare 
adequately, a community must first have reliable growth projections, 
the military Services have carefully identified the school-age growth 
projections for each community. Dialogue is continuous between the 
installation commanders and local educational agencies about timing, 
projected growth, and the dynamic nature of the challenge.
    These projections will be provided to Congress in the very near 
future as directed in section 574 (c) of the John Warner National 
Defense Authorization Act (NDAA) for Fiscal Year 2007. In addition, the 
Office of the Under Secretary of Defense for Personnel and Readiness 
(Military Community and Family Policy), in coordination with the Army, 
the Department of Education's Offices of Elementary and Secondary 
Education and Management, and the Department of Defense Office of 
Economic Adjustment, has conducted site visits to a representative 
sample (Fort Benning, Fort Bliss, Fort Drum, and Fort Riley) of growth 
locations to provide program stakeholders (Federal, State, and local) 
with on-the-ground knowledge of issues surrounding mission growth, 
improve communications among all partners, identify gaps/lags in 
capacities, and to more extensively document the specific requests for 
Federal action to assist communities and States responding to student 
migration.
    Of note, the visit to El Paso and Fort Bliss, TX, highlights the 
strong set of partnerships in place to support Fort Bliss's mission, 
soldiers, and families. There is close cooperation between Fort Bliss 
and the surrounding community and the nine independent school 
districts. Representatives from the installation, community, and school 
districts meet regularly to discuss the impact of growth. An example of 
the consolidated planning process is the El Paso Independent School 
District. The voters of the most heavily affected of the region's 
school districts voted in favor of a $230 million bond, of which $101 
million will go to support growth at Fort Bliss. Additionally, Texas 
has two State programs for funding construction: (1) an instructional 
facilities allotment that all Local Education Authorities (LEAs) are 
eligible to receive, and (2) an interest allotment for the lowest 
income LEAs that have the lowest (tax) bases.
    Besides reporting school-age growth projections, the report to 
Congress will include recommendations from the Office of Economic 
Adjustment for means of assisting affected local educational agencies 
in accommodating increases in enrollment of military students as well 
as the DOD plan for outreach regarding information on the assistance to 
be provided to local educational agencies (LEAs) that experience growth 
in the enrollment of military students.
    In order to effectively focus the DOD outreach effort, we have 
leveraged the expanded authority that DOD received in the NDAA for 
Fiscal Year 2007. The Secretary of Defense can now use funds of the DOD 
Education Activity (DODEA) to share its expertise and experience with 
LEAs as military dependent students transition from DOD schools to 
LEAs, including transitions resulting from the closure or realignment 
of military installations under a base closure law, global rebasing, 
and force restructuring. Under this expanded authority, DODEA is in the 
process of creating educational partnerships with LEAs who educate 
military students. Launched October 1, 2007, the DODEA Educational 
Partnership Directorate (EPD) promotes quality education and seamless 
transitions for military students. More specifically, EPD:

         1. Develops partnerships with military-connected schools and 
        districts that focus on research-based educational programs and 
        best practices, seamless transitions, and deployment support 
        services,
         2. Facilitate agreements at the local and State levels to 
        positively impact military children's education and wellbeing, 
        and
         3. Extend opportunities for student learning via online and 
        other research-based models.

    Finally, to support the transition of children impacted by 
permanent change of station moves, as well as moves promulgated by BRAC 
and force realignment, the Department has partnered with the Council of 
State Governments to develop an Interstate Compact designed to mitigate 
the difficulties children in military families experience when 
transitioning between school systems. Legislatures in 14 States are 
currently considering the Compact. Once adopted by 10 States, the 
Compact will be enforced.
    General Rochelle. The Army and DOD are partnering with local 
communities to deal with community needs, such as schools, housing, and 
community activities, associated with Army stationing and growth. 
Garrison commanders and staff regularly engage with community leaders 
and have school liaison officers who facilitate communication with 
local education agencies to help communities deal with stationing and 
growth. The DOD, Office of Economic Adjustment regularly provides 
funding and planning support to communities experiencing growth from 
Defense actions. The planning connection between the installation, 
local education agency and the U.S. Department of Education for 
financial Impact Aid Assistance continues to be our most effective 
means to support seamless growth in communities around our 
installations.

    15. Senator Chambliss. Secretary Chu, in last year's National 
Defense Authorization Act we established the Yellow Ribbon 
Reintegration Program which I worked on with several other Senators. 
This is an extremely important program for the National Guard and 
Reserve and provides continuous support to our deploying servicemembers 
by creating a national combat veteran reintegration program to provide 
servicemembers and their families support services during their entire 
deployment cycle. I was pleased to see in your written statement that 
DOD is fully committed to implementing this program and that you are 
moving quickly to stand up an interim Office for Reintegration 
Programs.
    Please provide additional detail on how this program is proceeding, 
the resources that you believe will be necessary to fully implement the 
program, and whether DOD has those resources and if you are requesting 
specific resources to carry out this program in the fiscal year 2009 
budget.
    Secretary Chu. We will have the Office for Reintegration Programs 
established by the end of March, with the Deputy Assistant Secretary of 
Defense for Reserve Affairs (Manpower and Personnel) designated as the 
director of that office. For interim staffing until we can establish 
the permanent manpower requirements, we have asked the Reserve 
components to assist by providing one person each. The NDAA for Fiscal 
Year 2008 also provides for an Advisory Board and a Center of 
Excellence. These organizations will be operational soon.
    To support National Guard and Reserve members, and their families 
throughout the deployment cycle, we already have pilot programs in 15 
States that provide services and support to Reserve component members 
and their families. We plan to expand the program to all 54 States and 
territories.
    The Department is developing the funding requirements for the 2010 
budget and future budget submissions. Since funding for this program 
was not included in the Defense appropriations for 2008 or in the 
President's budget submission for 2009, we must seek supplemental 
funding as a bridge to support this program. We do not have funds 
available in 2008 or the President's budget to fully implement the 
program without obtaining supplemental funding.

    [Whereupon, at 4:57 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2009

                              ----------                              


                       WEDNESDAY, APRIL 16, 2008

                               U.S. Senate,
                         Subcommittee on Personnel,
                               Committee on Armed Services,
                                                    Washington, DC.

 TESTIMONY OF MILITARY BENEFICIARY ORGANIZATIONS REGARDING THE QUALITY 
 OF LIFE OF ACTIVE, RESERVE, AND RETIRED MILITARY PERSONNEL AND THEIR 
                             FAMILY MEMBERS

    The subcommittee met, pursuant to notice, at 2:37 p.m. in 
room SR-232A, Russell Senate Office Building, Senator E. 
Benjamin Nelson (chairman of the subcommittee) presiding.
    Committee members present: Senators Ben Nelson and Graham.
    Committee staff member present: Leah C. Brewer, nominations 
and hearings clerk.
    Majority staff members present: Jonathan D. Clark, counsel; 
Gabriella Eisen, counsel; and Gerald J. Leeling, counsel.
    Minority staff members present: Diana G. Tabler, 
professional staff member; and Richard F. Walsh, minority 
counsel.
    Staff assistants present: Ali Z. Pasha and Brian F. Sebold.
    Committee members' assistants present: Andrew R. 
Vanlandingham, assistant to Senator Ben Nelson; Jennifer Cave, 
assistant to Senator Warner; Lenwood Landrum, assistant to 
Senator Sessions; Mark J. Winter, assistant to Senator Collins; 
and Andrew King, assistant to Senator Graham.

   OPENING STATEMENT OF SENATOR E. BENJAMIN NELSON, CHAIRMAN

    Senator Ben Nelson. Good afternoon. This Personnel 
Subcommittee hearing will come to order.
    The subcommittee meets today to receive testimony from 
military beneficiary organizations regarding the quality of 
life of Active, Reserve, and retired military personnel and 
their family members in review of the National Defense 
Authorization Requet for Fiscal Year 2009 and the Future Years 
Defense Program.
    This subcommittee is responsible for the most important 
aspect of the United States military system: our men and women 
and their families. These great Americans have volunteered to 
serve our Nation, so we have a special responsibility to 
provide for their quality of life.
    The repeated and extended deployments and the intensity of 
the conflicts in Iraq and in Afghanistan are taking a toll on 
the health of our troops and their families. This hearing will 
help us to learn about the concerns and needs of our military 
members and their families from the beneficiary organizations 
that stay in constant contact with them and represent their 
interests.
    It's been an honor to be able to work with my ranking 
member, Senator Graham, in this effort. We have exchanged 
positions a time or two, but, we, along with the rest of the 
subcommittee, aim to do everything we can to ensure that our 
servicemembers and their families have a quality of life 
commensurate with the sacrifices they make on a daily basis.
    I'd like to express my personal appreciation to the many 
organizations that assist and represent the interests of our 
military personnel and their families. You do a great service 
to our Nation, and you deserve to be recognized for what you 
do.
    Although it would be ideal to hear the testimony of each of 
the organizations, that's not possible. That's why we reach out 
to The Military Coalition (TMC), a consortium of 33 service and 
veterans organizations, to present the collective views of the 
organizations.
    We're pleased to welcome our witnesses here this afternoon: 
Colonel Steve Strobridge, U.S. Air Force (Ret.), and Master 
Chief Petty Officer Joseph L. Barnes, U.S. Navy (Ret.). They 
are the co-chairman of TMC. Colonel Strobridge is the Director 
of Government Relations for the Military Officers Association 
of America, and Master Chief Barnes is the National Executive 
Director of the Fleet Reserve Association.
    We also welcome Kathleen Moakler, Director of Government 
Relations for the National Military Family Association. She 
also serves as the co-chair of the Survivor Committee of TMC. 
Michael Cline is the Executive Director of the Enlisted 
Association of the National Guard of the United States 
(EANGUS). He serves as the co-chair of the Guard and Reserve 
Committee of TMC. Ms. Meredith Beck is the National Policy 
Director of the Wounded Warrior Project, an organization 
devoted to the care and treatment of our wounded warriors.
    We look forward to learning from our witnesses about the 
needs and concerns of our military personnel, their families, 
and their employers. I, again, want to thank all of the 
organizations that serve our military personnel and their 
families for your continuing support, especially the support to 
our wounded warriors and their families.
    Senator Graham, it's been a pleasure to work with you over 
these years, and I look forward to being able to continue to do 
that. We serve as bipartisan as any group can serve, and, with 
that, maybe you have an opening statement you'd like to make.

             STATEMENT OF SENATOR LINDSEY O. GRAHAM

    Senator Graham. Very briefly. What you said is absolutely 
true, it's been a pleasure working with you and your staff. I 
think the subcommittee has the right spirit about the way we 
should approach our job when it comes to the military 
community, and you've really been a pleasure and joy to work 
with.
    I want to recognize Meredith. She did my defense work 
before she went on to bigger and better things, and has done a 
good job with the Wounded Warrior Project.
    Thank you all for coming. Thank you all, all of you, for 
what you do every day.
    I'm ready to listen and learn.
    Senator Ben Nelson. Before we proceed to opening 
statements, we've received prepared statements from TMC, the 
Fleet Reserve Association, the National Military Family 
Association, EANGUS, the Wounded Warrior Project, and the 
Reserve Officers Association. Without objection, all of these 
statements will be included in the record.
    Ms. Beck, would you like to begin the process today?

   STATEMENT OF MEREDITH M. BECK, NATIONAL POLICY DIRECTOR, 
                    WOUNDED WARRIOR PROJECT

    Ms. Beck. Yes, sir. Thank you.
    Sir, before I begin, I'd like to recognize two people who 
are in the audience: Sarah and Ted Wade. Ted was injured in 
Iraq on February 14, 2004, and the two of them together have 
overcome just about every obstacle, and have created a success 
out of the program. So they have brought a tremendous amount of 
knowledge, expertise, experience, emotion, and devotion to 
this, and information to the Wounded Warrior Project, and I'd 
like to acknowledge them.
    Senator Ben Nelson. Thank you.
    Ms. Beck. Mr. Chairman, thank you for the opportunity to 
testify before you today regarding the needs of our Nation's 
most recent generation of wounded servicemembers. My name is 
Meredith Beck. I'm the policy director for the Wounded Warrior 
Project. As a result of our direct and daily contact with this 
most recent generation of wounded warriors, we have a unique 
perspective on their needs and the obstacles they face as they 
attempt to reintegrate into their communities.
    With respect to case management, many of our families state 
that they need a case manager to manage their case managers. 
Therefore, Wounded Warrior Project (WWP) was pleased that the 
Senior Oversight Committee (SOC) charged with resolving these 
issues created the Federal Recovery Coordinator (FRC) Program. 
However, with the limited number of individuals serving as 
FRCs, we must use our resources wisely and effectively. 
Currently, the FRCs seem to be focused on those in the 
hospitals, yet it is important to remember that this program 
was created as a result of the study of the Walter Reed 
scandal, and we must not only serve those who are injured 
tomorrow, but also those who were injured during the previous 
years of the conflict.
    There's a common and dangerous misperception that if you 
are injured earlier on, then all of your problems have been 
solved. I can only tell you from personal experience, those 
families are often the ones in need of the most help. They are 
the bow wave, often finding the problems and facing them alone. 
WWP understands that the SOC is reviewing a range of options to 
address this look-back issue, and we encourage the swift 
implementation of such a plan.
    In addition, the FRC can only be successful if he or she 
has the authority to break through the current barriers of both 
agencies. Part of that authority would have to include the 
overlap of benefits and services, which, to a certain extent, 
was included in last year's defense authorization bill. A 
successful overlap would allow the recovery coordinator or case 
manager concurrent access to the Department of Defense (DOD) 
and Department of Veterans Affairs (VA) benefits necessary for 
the care and rehabilitation of severely injured servicemembers. 
In other words, the provision rightfully recognizes that an 
individual's care should be based on his medical condition and 
not on his status as Active Duty or retired. However, WWP is 
concerned that the regulations prescribed in accordance with 
the law will miss the spirit with which the provision was 
drafted. For example, the provision authorizes the Secretary to 
offer severely injured veterans the same medical care and 
benefits as those on Active Duty if they are, ``not reasonably 
available to such a member in the VA.'' The VA offers excellent 
services for many, but, due to insufficient funding, 
inconsistency in service, and differences in generational 
needs, what is offered on paper may not, in some cases, be 
sufficient to meet the needs of our severely injured 
population. Therefore, we encourage strong oversight of the 
implementation of this provision to ensure its success, not 
only in policy, but also in practice.
    Finally, with respect to case management, it is imperative 
that we take steps to promote the visibility of all of these 
case managers. Currently, there is a myriad of case managers 
both within DOD and VA that many times they're either 
overburdened or unused because the injured don't know where to 
begin. Without visibility, the servicemembers are lost and 
organizations like WWP, the Military Officers Association of 
America, the National Military Family Association (NMFA), and 
others are unable to plug those we find back into the system 
quickly and effectively.
    With respect to deferment, unlike burn patients and 
amputees, those with severe brain injuries appear to be boarded 
out of the military very quickly, some within days or even 
weeks of their devastating injury. While this process has 
implications for all, for traumatic brain injury (TBI) patients 
the availability of options in their medical care is at stake. 
While they do have access to the VA in many cases, private 
therapies for which they were eligible while on Active Duty 
become unavailable once retired. Unfortunately, even though 
TBIs are considered the signature injury of the recent 
conflicts, once medically retired, TRICARE no longer covers 
cognitive rehabilitation, as it is considered unproven. While 
WWP is familiar with a number of families who disagree with 
such a characterization, following the successful 
rehabilitation of their loved ones--the Wades are a prime 
example--and strongly encourage the coverage of cognitive 
therapy, we must take steps in the short-term to facilitate the 
transition of our most severely injured. Therefore, WWP is 
seeking legislation to establish a 1-year deferment for the 
Marine Expeditionary Brigade (MEB)/Physical Evaluation Board 
(PEB) process, unless initiated by the family, for severe TBI 
patients.
    Severe TBI is a devastating and life-altering wound that 
causes uncertainty and anguish to the affected servicemembers 
and their families. Delaying the MEB/PEB will allow the 
patient's condition to stabilize, provide a standard period of 
time for coverage under TRICARE, and allow the family to fully 
understand their options before being removed from the familiar 
military environment. It is the moral thing to do.
    With respect to TRICARE eligibility for parents and next of 
kin, most agree that, due to the advances in medicine, we are 
able to save those we otherwise would not have been able to 
save in previous generations. However, we must now provide them 
with the most appropriate and best quality of care. In some 
cases, the most appropriate care at home includes parents and 
spouses who leave their jobs to become full-time caregivers. 
Family caregivers offer the severely injured love, continuity, 
flexibility, and dignity that cannot be found through a 
contract agency. Unfortunately, however, when family members 
leave their jobs, they often lose their health insurance. 
Fortunately, spouses are eligible for TRICARE through their 
injured servicemembers, but parents and next of kin are not 
included in this coverage; therefore, we are requesting 
legislation allowing the parents and next of kin to be fully 
eligible for TRICARE if they are providing those services.
    It's our responsibility to ensure that the family members 
providing the care have the tools to maintain their health, 
giving the servicemember the best chance of recovery.
    Lastly, with respect to DOD-VA collaboration, while there 
are still many issues to address, we've been very impressed 
with the level of involvement of the leadership of both 
agencies. However, with all of the legislative proposals and 
policy revisions, it is imperative that a joint permanent 
structure be in place within both agencies to evaluate the 
changes, monitor the systems, and make further recommendations 
for process improvement. It must be structured in a way not to 
be bogged down in bureaucracy, and must have a clearly defined 
mission with the appropriate authority to make changes and 
recommendations, as warranted.
    These issues have received much attention over the past 
several months, but will likely fade from the national stage 
over time. Without such a joint structure in place, other 
issues will arise, and we may, though well-intentioned, find 
ourselves in the same situation, 3 to 5 years from now.
    Finally, while the agencies share joint responsibility for 
resolving this problem, WWP strongly believes that Congress 
must also re-evaluate its current means of addressing these 
issues. Due to the committee's jurisdictional boundaries, it is 
often difficult to address issues facing these injured and 
transitioning servicemembers. For example, under the Traumatic 
Servicemembers Group Life Insurance, a small portion of the 
servicemember's paycheck goes into the DOD and, if required, is 
paid out through the VA. Without overlapping jurisdiction, 
these injured brave men and women will continue to be stuck in 
limbo, because there's no mechanism to resolve problems. 
Therefore, WWP is proposing the creation of a Joint Select 
Subcommittee on Transition between both the Armed Services and 
Veterans Affairs Committees in both the House and the Senate. 
This subcommittee would not require additional members, simply 
the shared jurisdiction and participation of those already in 
place. Such an action would signify to injured servicemembers 
and their families that Congress understands their needs and is 
willing to take the difficult steps to resolve their problems.
    Thank you, and I'll look forward to your questions.
    [The prepared statement of Ms. Beck follows:]
                 Prepared Statement by Meredith M. Beck
    Mr. Chairman, Senator Graham, and members of the committee, thank 
you for the opportunity to testify before you today regarding the needs 
of our Nation's most recent generation of wounded servicemembers. My 
name is Meredith Beck, and I am the National Policy Director for the 
Wounded Warrior Project (WWP). As a result of our direct, daily contact 
with this most recent generation of wounded warriors, we have a unique 
perspective on their needs and the obstacles they face as they attempt 
to reintegrate into their communities.
                            case management
    As many of our families state that they need a case manager to 
manage their case managers, WWP was pleased that the Senior Oversight 
Committee (SOC) charged with resolving these issues followed the 
recommendation of the Dole-Shalala Commission to improve the case 
management process through the creation of a Federal recovery 
coordinator (FRC). The FRC's serve as long-term oversight for the 
development and implementation of the individual's recovery plan, and 
we are pleased to report that most of the families who have come into 
contact with an FRC are very excited about the program.
    However, with a limited number of individuals serving as FRC's, we 
must use our resources wisely and effectively. Currently, the FRC's 
seem to be focused on those in the hospitals. Yet, it is important to 
remember that this program was created as a result of the study of the 
Walter Reed scandal, and we must not only serve those who are injured 
tomorrow, but also those who were injured during the earlier days of 
the current conflicts.
    There is a common and dangerous misperception that if you were 
injured earlier on, then all of your problems have been solved. I can 
only tell you from personal experience, those families are often the 
ones in need of the most help--they are the bow wave, often finding the 
problems and facing them alone. WWP understands that the SOC is 
reviewing a range of options to address this ``lookback'' issue, and we 
encourage the swift implementation of such a plan.
    In addition, the FRC can only be successful if he/she has the 
authority to break through the current barriers within both agencies. 
Part of that authority would have to include the overlap of benefits 
and services which, to a certain extent, was included in section 1631 
of the National Defense Authorization Act for Fiscal Year 2008. A 
successful overlap would allow the recovery coordinator or case manager 
concurrent access to the Department of Defense (DOD) and Department of 
Veterans Affairs (VA) benefits necessary for the care and 
rehabilitation of severely injured servicemembers. In other words, the 
provision rightfully recognizes that a severely injured servicemember's 
care should be based on his medical condition and not on his status as 
active duty or retired.
    However, WWP is concerned that the regulations proscribed in 
accordance with the law will miss the spirit with which the provision 
was drafted. For example, the provision authorizes the Secretary to 
offer severely injured veterans the same medical care and benefits as 
those on active duty if they are, ``not reasonably available to such 
former member in the VA.'' The VA offers excellent services for many, 
but, due to insufficient funding, inconsistency in service, and 
differences in generational needs, what is offered on paper may not, in 
some cases, be sufficient to meet the needs of our severely injured 
population. Therefore, we encourage strong oversight of the 
implementation of this provision to ensure its success not only in 
policy, but also in practice.
    Finally, with respect to case management, it is imperative that we 
take steps to promote visibility of all the case managers who provide 
services to injured servicemembers. Currently, there is such a myriad 
of case managers both within DOD and VA that, many times, they are 
either overburdened or unused because the injured don't know where to 
begin. For example, the FRCs are VA employees who are based in Military 
Treatment Facilities. In addition, active duty servicemembers are being 
treated in VA facilities. Without visibility, the servicemembers are 
lost and organizations like WWP, MOAA, NMFA and others are unable to 
plug those we find back into the system quickly and effectively.
                               deferment
    Unlike burn patients and amputees, those with severe brain injuries 
appear to be ``boarded out'' of the military very quickly, some within 
days or weeks of their devastating injury. While this process has many 
implications for all, for traumatic brain injury (TBI) patients, the 
availability of options in their medical care is at stake.
    While they do have access to the VA, in many cases, private 
therapies for which they were eligible while on active duty become 
unavailable once retired. Unfortunately, even though traumatic brain 
injuries are considered by many to be the ``signature injury'' of the 
recent conflicts, once medically retired, TRICARE does not cover 
cognitive rehabilitation, as it is considered unproven. While WWP is 
familiar with a number of families who disagree with such a 
characterization following the successful rehabilitation of their loved 
ones and strongly encourage the coverage of cognitive therapy, we must 
take steps in the short term to facilitate the transition of our most 
severely injured. Therefore, the WWP is seeking legislation to 
establish a 1 year deferment for the Marine Expeditionary Brigade 
(MEB)/Physical Evaluation Board (PEB) process unless initiated by the 
family for severe TBI patients.
    A severe traumatic brain injury is a devastating and life-altering 
wound that causes uncertainty and anguish for the affected 
servicemember and his/her family. Delaying the individual MEB/PEB will 
allow the patient's condition to stabilize, provide a standard period 
of time for coverage under TRICARE, and allow the family to fully 
understand their options before being removed from the familiar 
military environment. In addition, this step will allow the VA to 
follow a path already initiated by the DOD to confer with private 
facilities, learn from successful models, and further enhance their 
services. Furthermore, allowing the family and the injured individual a 
period of time to adjust to their new, often tragically different 
situation, shows compassion, reflects the sacrifice of the most 
severely injured, and will result in a more positive environment for 
the entire family.
              tricare eligibility for parents/next of kin
    Most agree that, due to advances in medicine, we are able to save 
those we otherwise may not have been able to save in previous 
generations. However, we must now provide them with the most 
appropriate and best quality of care. In some cases, the most 
appropriate care at home includes parents and spouses who leave their 
jobs to become full-time caregivers. Family caregivers offer the 
severely injured love, continuity, flexibility, and dignity that cannot 
be found through a contract agency.
    Unfortunately, however, when family members leave their jobs, they 
often lose their health insurance. Fortunately, spouses are eligible 
for TRICARE through their injured servicemembers, but, parents/next of 
kin are not included in this coverage. Therefore, WWP is requesting 
legislation allowing parents/next of kin to be fully eligible for 
TRICARE if they are providing full-time caregiving services. It is our 
responsibility to ensure that family members providing this care have 
the tools to maintain their own health, giving the servicemember the 
best chance at recovery.
                          dod/va collaboration
    With respect to DOD/VA collaboration, while there are still many 
issues to address, WWP has been very impressed with the level of 
involvement of the leadership of both DOD and the VA in the previously 
mentioned SOC. However, with all of the legislative proposals and 
policy revisions, it is imperative, consistent with the recommendation 
of the Veterans Disability Benefits Commission that a joint, permanent 
structure be in place within the agencies to evaluate the changes, 
monitor the systems, and make further recommendations for process 
improvement. This office must be structured in a way so as to not get 
bogged down in bureaucracy and must have a clearly defined mission with 
the appropriate authority to make necessary changes or recommendations 
as warranted. In addition, to facilitate coordination, the office 
should absorb the functions of the other smaller offices that have 
arisen within both agencies over time. While the SOC has recently been 
working diligently on these issues there is no guarantee that this will 
continue to be the case as administrations and leadership changes. 
These issues have received much attention over the past several months, 
but will likely fade from the national stage over time. Without such a 
joint structure in place, other issues will arise, and we may, though 
well-intentioned, find ourselves in the same situation 3 or 5 years 
from now.
    It is not only DOD and VA who need to collaborate more fully. 
Others such as the Social Security Administration, Medicare, the 
Department of Labor, and private entities need to be included in these 
discussions. For example, an injured servicemember recently contacted 
WWP because he was understandably confused. He had been rated as 
unemployable by the VA but was told he did not qualify for Social 
Security Disability benefits because he was able to work. In addition, 
the Social Security Administration has had a difficult time getting 
medical records necessary for evaluation from DOD. These agencies must 
work together to resolve, where possible, inconsistencies in their 
policies or the goal of ``seamless transition'' will never be achieved.
    While the agencies share joint responsibility for resolving these 
problems, WWP believes that Congress must also re-evaluate its current 
means of addressing these issues. Due to the committee's jurisdictional 
boundaries, it is often difficult to address the issues facing these 
injured and transitioning servicemembers. For example, under the 
Traumatic Servicemembers Group Life Insurance, a small portion of a 
servicemembers paycheck is designated each month for the fund. If an 
individual is injured, that insurance money is then paid through the 
VA, often while the servicemember is still on active duty. If a problem 
arises with the program, of which several have, which Congressional 
committee is charged with resolving it? Without overlapping 
jurisdiction, these injured brave men and women will continue to be 
stuck in limbo. Therefore, WWP is proposing the creation of a Joint 
Select Subcommittee on Transition Issues between both the Armed 
Services and Veterans Affairs Committees in both the House and Senate. 
This subcommittee would not require additional members, simply the 
shared jurisdiction and participation of those already in place. Such 
an action would signify to injured servicemembers and their families 
that Congress understands their needs and is willing to take the 
difficult steps to resolve their problems.
    Mr. Chairman, thank you again for the opportunity to testify before 
you today, and I look forward to answering your questions.

    Senator Ben Nelson. Thank you.
    Master Chief Barnes?

 STATEMENT OF MASTER CHIEF PETTY OFFICER JOSEPH L. BARNES, USN 
 (RET.), NATIONAL EXECUTIVE DIRECTOR, FLEET RESERVE ASSOCIATION

    Master Chief Barnes. Mr. Chairman, Senator Graham, thank 
you for this opportunity to present the concerns of TMC.
    The extensive Coalition statement reflects the consensus of 
TMC organizations and extensive work by eight legislative 
committees, each comprised of representatives from the 
Coalition's nearly three dozen military and veterans 
organizations. I will briefly address key Active Duty and 
retiree recommendations, and my colleagues will then address 
other issues.
    But first, I wish to thank you and the entire subcommittee 
for the steadfast and strong support of our military personnel, 
retirees, veterans, and their families and survivors, and 
particularly for recently enacted Wounded Warrior enhancements.
    Sustaining adequate Active, Guard, and Reserve end 
strengths to effectively prosecute the war effort and other 
demanding operational commitments is vital to our national 
security, and TMC urges strong support for Army and Marine 
Corps end-strength increases in fiscal year 2009. Wearing down 
the force contributes to serious morale, readiness, and 
retention challenges.
    Restoring military pay comparability remains a top 
priority, and TMC urges this distinguished subcommittee to 
authorize at least a 3.9 percent pay hike. We appreciate your 
leadership, authorizing past higher than the increase in the 
Economic Cost Index (ECI) Active Duty pay hikes. Despite 
significant progress on compensation levels, there's a 
significant lag between ECI data collection and the 
implementation date, and a 3.4 percent pay gap remains.
    Housing standards determine local housing allowance rates, 
which need to be revised to more appropriately reflect where 
servicemembers are living. For example, only E-9s, which 
comprise 1 and one-quarter percent of the enlisted force, are 
eligible for Basic Allowance for Housing (BAH) for single-
family detached homes. TMC supports integrating the Guard and 
Reserve Montgomery GI Bill (MGIB) and the Active Duty MGIB laws 
under title 38, along with other MGIB reform initiatives.
    In considering the transfer of education benefits to 
spouses, it's important to not forget the approximately 20,000 
currently serving Veterans Education Assistance Program (VEAP)-
era personnel who are not authorized to enroll in the MGIB.
    The Coalition appreciates the extension of the combat-
related special compensation to disabled retirees who were 
forced to retire before attaining 20 years of service, and for 
those rated unemployable by the VA. However, major inequities 
remain, and TMC urges this distinguished subcommittee to act on 
recommendations of the Veterans Disability Benefits Commission 
and implement a plan to eliminate the reduction of VA 
disability compensation for military retired pay for all 
disabled retirees.
    Finally, the Coalition remains committed to adequate 
funding to ensure access to the commissary benefit for all 
beneficiaries, and moral, welfare, and recreation programs must 
be adequately funded, accordingly.
    Providing adequate programs, facilities, and support 
services for personnel impacted by Base Realignment and Closure 
(BRAC) actions, rebasing initiatives, and global repositioning 
is very important, particularly during wartime, which alone 
results in significant stress on servicemembers and their 
families due to demanding operational commitments, repeated 
deployments, and other service requirements.
    Thank you, again, for the opportunity to present our 
recommendations. Kathy Moakler will now discuss family 
readiness, military spouse, and survivor issues.
    [The prepared statement of Master Chief Petty Officer 
Barnes follows:]
Prepared Statement by Master Chief Petty Officer Joseph L. Barnes, USN 
                                 (Ret.)
                              introduction
    Mr. Chairman, the Fleet Reserve Association (FRA) salutes you, 
members of the subcommittee, and your staff for the strong and 
unwavering support of programs essential to active duty, Reserve 
component, and retired members of the uniformed Services, their 
families, and survivors. The subcommittee's work has greatly enhanced 
care and support for our wounded warriors, improved military pay, 
eliminated out-of-pocket housing expenses, improved health care, and 
enhanced other personnel, retirement and survivor programs. This 
support is critical to maintaining readiness and is invaluable to our 
uniformed services engaged throughout the world fighting the global war 
on terror, sustaining other operational commitments and fulfilling 
commitments to those who've served in the past.
    FRA's 2008 priorities include full funding for Department of 
Defense (DOD) and Veterans Administration (VA) health care, annual 
active duty pay increases that are at least a half percent above the 
Employment Cost Index, to help close the pay gap between active duty 
and private sector pay, full concurrent receipt of military retired pay 
and VA disability compensation, and enhanced family readiness via 
improved communications and awareness initiatives related to benefits 
and quality of life programs.
    Additional issues include the introduction and enactment of 
legislation to eliminate inequities in the Uniformed Service Former 
Spouses Protection Act (USFSPA), streamlining the voting process for 
overseas military personnel, additional reform of the Montgomery GI 
Bill (MGIB) to provide adequate funding to keep pace with rising 
college costs to improve benefits for reservists and push for an open 
enrollment for those who did not enroll in the Veterans Education 
Assistance Program (VEAP) or the MGIB. In addition to the Navy and 
Marine Corps, FRA also proudly represents the U.S. Coast Guard and 
closely monitors benefits and quality of life programs to ensure parity 
for Coast Guard personnel.
    Excluding supplemental appropriations, the United States spent less 
than 4 percent of its GDP on national defense in 2008. From 1961-1963, 
the military consumed 9.1 percent of GDP annually. The active duty 
military has been stretched to the limit since September 11, and has 
expanded by only 30,000 personnel. FRA strongly supports funding to 
support the anticipated increased end strengths in fiscal year 2009 and 
beyond since the current end strength is not adequate to meet the 
demands of fighting the War on Terror and sustaining other operational 
commitment throughout the world. ``Measuring governmental costs against 
the economy as a whole is a good proxy for how much of the Nation's 
wealth is being diverted to a particular enterprise.'' \1\
---------------------------------------------------------------------------
    \1\ John Cranford, CQ Weekly, February 10, 2007; ``Political 
Economy: High, and Low, Cost of War''
---------------------------------------------------------------------------
    Over the past several years, the Pentagon has been constrained in 
its budget even as it has been confronted with rising personnel costs, 
aging weapon systems, worn out equipment, and dilapidated facilities.
    For these reasons, FRA strongly supports H.J. Res. 26 sponsored by 
Representative Trent Franks, and S.J. Res. 67 sponsored by Senator 
Elizabeth Dole which would ensure that annual defense spending is 
maintained at a minimum of 4 percent of GDP.
    This statement lists the concerns of our members, keeping in mind 
that the Association's primary goal is to endorse any positive safety 
programs, rewards, quality of life improvements that support members of 
the uniformed services, particularly those serving in hostile areas, 
and their families and survivors.
                     wounded warriors improvements
    FRA is especially grateful for the inclusion of the Wounded Warrior 
assistance provisions as part of the National Defense Authorization Act 
(NDAA) for Fiscal Year 2008. Key elements of the House and Senate-
passed versions of the act, plus elements of the Dole-Shalala 
Commission recommendations establish new requirements to provide the 
people, training and oversight mechanisms needed to restore confidence 
in the quality of care and service received by our wounded warriors and 
their families. Maintaining an effective delivery system between DOD 
and VA to ensure seamless transition and quality services for wounded 
personnel, particularly those suffering from Post-Traumatic Stress 
Disorder and Traumatic Brain Injuries is very important to our 
membership.
    FRA recommends that this distinguished subcommittee monitor the 
implementation of these wounded warrior programs to include periodic 
oversight hearings to ensure the creation and full implementation of a 
joint electronic health record that will help ensure a seamless 
transition from DOD to VA for wounded warriors, and establishment and 
operation of the Wounded Warriors Resource Center as a single point of 
contact for servicemembers, their family members, and primary care 
givers.
    Unfortunately, legislation has been enacted addressing many of 
these issues during the past 20 plus years, and it took a major news 
organization's coverage last year to help advance these important 
support programs for our Nation's heroes. Authorization is one thing--
full implementation is another. Regarding this--our members continue to 
ask what are the government's priorities?
                              health care
    The Task Force on the Future of Military Health Care recently 
issued its final report with recommendations that urged Congress to 
shift higher health care costs to retirees, including TRICARE-for-Life 
beneficiaries, through higher fees, deductibles, and pharmacy co-pays 
that would be adjusted regularly to cover the cost of health care 
inflation. The initial TFL annual enrollment fee proposed is $120. The 
reference to ``fairness to the American taxpayer'' elicited bitter 
reaction by some of our older members who served before the recent and 
significant pay and benefit enhancements were enacted and receive 
significantly less retired pay than those serving and retiring in the 
same pay grade with the same years of service today. They clearly 
recall promises made to them about the benefit of health care for life 
in return for a career in the military with low pay and demanding duty 
assignments. Many believe they are entitled to free health care for 
life based on the government's past commitments and are angered by 
reference to taxpayer fairness given their sacrifices in service to our 
Nation. (The same ``fairness'' sentiment can be easily understood in 
conjunction with how our wounded warriors have been treated.)
    FRA reiterates TMC's appreciation to this distinguished 
subcommittee for refusing to allow the implementation of the Department 
of Defense's drastic health care fee increases during the past 2 years. 
As stated in FRA's testimony to the Task Force on March 7, 2007:
    DOD, Congress and FRA all have reason to be concerned about the 
rising cost of military health care. But it is important to recognize 
that the problem is a national one, not military-specific. It's also 
important, in these times of focusing on benefit costs, to keep in 
perspective that military service is much different than work in the 
corporate world and the government's unique responsibility to provide 
health care and other benefits for a military force that serves and has 
served under extraordinarily arduous conditions to protect and preserve 
our freedoms and security.
    Adequately funding health care benefits for all beneficiaries is 
part of the cost of defending our Nation.
                      health care survey responses
    FRA launched a web survey in March 2006, and obtained more than 800 
responses. From these the Association learned that there is a strong 
opposition to the proposed fee increases within the senior enlisted and 
retiree communities.

         Over 90 percent of respondents opposed the 
        administration's TRICARE fee increases.
         More than 84 percent would participate in a mail-order 
        prescription program if it meant they did not have to pay a co-
        payment.
         More than 75 percent said that health care benefits 
        influenced their decision to remain in the military.
         More than 57 percent said that health care benefits 
        influenced their decision to join the military.
         One active duty survey respondent reflects these 
        sentiments: ``I am third generation Navy, and after 30 years of 
        service, I am extremely concerned about the erosion of medical, 
        as well as other benefits. I have a very unique historical view 
        of how much benefits that were believed to be everlasting for 
        both active and retired servicemembers have been decreased or 
        terminated. The medical coverage was fundamental for my 
        continued service after my initial enlistment. This once again 
        is simply a break in the faith. This philosophy needs to be 
        suspended and the faith reaffirmed for past present and future 
        military generations.''
         A retiree stated: ``My spouse and I have relied on the 
        Navy and the Military Health Care System to provide us with all 
        our medical needs. We expect health care to continue without 
        monetary increase, throughout our remaining years. We both 
        provided our country with a valuable service in the defense 
        posture of this country. We stood ready at the call without 
        complaint. We now expect the high quality of care that we were 
        led to believe would be available at no cost throughout our 
        remaining years if we used the Military Health Care System and 
        facilities. I do not expect to absorb increasing cost for 
        health care, when my retired pay does not increase with the 
        cost of health care increases.''
                              troop morale
    The proposed health care fee increases are a morale issue within 
the senior enlisted active duty communities who view this as reducing 
the value of their future retiree benefits. They are aware of the 
government's failures to honor past commitments and sensitive to 
threats to their retiree benefits. Eroding benefits for career service 
can only undermine long-term retention/readiness.
    Today's sailors, marines, and coast guardsmen are very much aware 
of Congress' actions toward those who preceded them in service. Strong 
support for the enactment of TRICARE for Life was based in part on the 
fact that inadequate retiree health care was affecting attitudes and 
career decisions among active duty troops. Today, despite the 
significant progress in restoring retiree benefits, arguing that 
funding for retiree health care and other promised benefits negatively 
impacts military readiness is fueling resentment and anger in retiree 
communities and raising concerns within the senior career enlisted 
force about their future benefits.
    The 8 percent increase in TRICARE Reserve Select premiums imposed 
within a short period after implementation of the program prompted 
similar reaction within Reserve communities and FRA appreciates 
attention to addressing the cost projection formula for adjusting 
annual fees to ensure that future adjustments are based on more 
realistic actual cost data for this benefit.
                         legislative proposals
    FRA strongly supports ``The Military Health Care Protection Act'' 
(S. 604) sponsored by Senators Frank Lautenberg (D-NJ) and Chuck Hagel 
(R-NB) that would limit annual TRICARE fee increases to the amount of 
the Consumer Price Index and ``The Military Retiree Health Care 
Protection Act'' (H.R. 579) sponsored by Representatives Chet Edwards 
(D-TX) and Walter Jones (R-NC).
                           concurrent receipt
    FRA continues its unwavering support for the full concurrent 
receipt of military retired pay and veterans' disability compensation 
for all disabled retirees. Provisions of the NDAA for Fiscal Year 2008 
reflect progress toward this goal. FRA's membership appreciates the 
support of this distinguished subcommittee in addressing the 
elimination of the Concurrent Retirement and Disability Pay phase-in 
for retirees rated less than 100 percent IU (retroactive to 1 January 
2005) which will be effective on 1 October 2008, and expanding the 
Combat Related Special Compensation for Chapter 61 retirees that took 
effect when the bill became law and will be retroactive to 1 January 
2008. As stated in the TMC statement, major inequities remain that 
require the subcommittee's attention.
                basic allowance for housing improvements
    FRA's January 2007 online survey of enlisted active duty personnel 
indicates that 68.8 percent believe Basic Allowance for Housing (BAH) 
rates are inadequate, and housing allowances were rated second only to 
pay in order of importance of quality of life programs. The need to 
update the standards used to establish BAH rates is clear since only 
married E-9s now qualify for BAH based on single family housing costs 
and the Association continues to advocate for legislation authorizing 
more realistic housing standards, particularly for career senior 
enlisted personnel.
                           mgib improvements
    A priority concern for senior enlisted leaders is ensuring that 
many senior enlisted personnel who entered service during the VEAP era 
(1977-1985), have an opportunity to sign up for the MGIB. Understanding 
the challenges of split jurisdiction over active and Reserve benefits, 
FRA urges authorization of an open enrollment period affording enlisted 
leaders the opportunity to sign up for MGIB benefits. FRA supports Rep. 
Tim Walberg's legislation, ``The Montgomery GI Bill Enhancement Act'', 
(H.R. 4130), which would allow retirees and active duty personnel who 
were on active duty before 1985 and did not participate in VEAP to 
sign-up for the more generous MGIB.
    In 1976, Congress created the VEAP as a recruitment and retention 
tool for the post-Vietnam era. Congress greatly expanded education 
benefits in 1984 and allowed individuals with VEAP accounts to transfer 
their benefits to the new MGIB in 1996 (P.L. 104-275). Individuals who 
were on active duty before 1985 and did not participate in VEAP were 
not eligible to sign-up for MGIB, leaving a gap in available coverage 
for certain career military personnel. Congress has voted several times 
in the last decade to allow VEAP participants opportunities to transfer 
to MGIB. Yet, there has never been an opportunity for those who did not 
have VEAP accounts to sign up for the new program, excluding them from 
taking advantage of these improved educational benefits.
    According to 2007 data, over 5,000 marines that were then on active 
duty were affected by this inequity.
    FRA is also supporting ``The Post-September 11 Veterans Educational 
Assistance Act'' (S. 22), and salutes Senator James Webb for his 
leadership on this issue. The legislation would provide servicemembers 
who have served since 11 September 2001 with improved educational 
benefits similar to those provided to World War II-era veterans. Among 
other improvements, Senator Webb's bill would provide 4 years of full-
time college benefits after personnel serve 36 months or more on active 
duty and eliminate the $1,200 enrollment fee. FRA believes this bill is 
a step in the right direction but is concerned about creating an 
entirely new MGIB program rather than making reforms in the current 
programs.
    Other much needed education reform include in-State tuition 
eligibility for servicemembers and their families; integrating MGIB 
laws under title 38; and restoring Reserve MGIB rates to the intended 
levels.
                                 voting
    Only 47.6 percent of overseas military voters who requested an 
absentee ballot actually had their votes counted in 2006 according to a 
recent report of the U.S. Election Assistance Commission (September 
2007). Despite efforts to remedy past problems, voting from overseas is 
a long and cumbersome process and paper ballots from military personnel 
are frequently contested because they arrive late and often without 
postage or a postmark date.
    FRA is concerned about these statistics, since according to the New 
York Times, the Department of Defense has spent more than $30 million 
over the last 6 years to find an efficient way for servicemembers 
living abroad to cast their votes.
    The Uniformed and Overseas Citizens Voting Act of 1986 and the Help 
America Vote Act of 2002 address voting rights of active duty military 
personnel and all citizens that are outside the country during an 
election. Despite these efforts serious challenges still exist that 
include interfacing and lack of uniformity with state and local 
election officials.
    If electronic communications are secure enough for our Nation's 
most sensitive secrets and for transferring huge sums of money, then 
FRA asks why is it not possible to develop and implement a system for 
the military and Federal employees who are stationed overseas to vote 
by secure electronic means?
    FRA appreciates the introduction of ``The Military Voting 
Protection Act'' (H.R. 5673) by Congressman Kevin McCarthy (CA) that 
directs the Secretary of Defense to collect the absentee ballots of 
overseas military voters, and deliver the ballots to state election 
officials via air transport. Although, the Association believes 
legislation could more effectively streamline the current process by 
allowing servicemembers to request and receive an absentee ballot 
electronically but continue to return the signed completed ballot by 
regular mail as is done now. The bill should also require states to 
identify one state official to administer absentee ballots from 
overseas military rather than county clerks and other local officials; 
limit participation only to military personnel and Federal employees 
overseas; and shift Federal responsibility away from DOD to another 
agency such as the U.S. Election Assistance Commission.
    In recent years, Congress has recognized the need for electronic 
voting for servicemembers who are deployed overseas, and has mandated 
DOD's Federal Voting Assistance Program to administer a pilot program 
for internet voting since 2000. Unfortunately many states and local 
election jurisdictions refused to participate.
    The Association seeks support for improved active duty voter 
participation in Federal elections and to expedite the military mail 
processing of overseas ballots.
                     predatory lending protections
    FRA has been in the forefront of ensuring active duty personnel and 
their dependents have adequate protections against predatory lenders 
who target military personnel and their families, and appreciates 
support from this distinguished subcommittee and the full committee to 
establish a 36 percent cap on pay day loans per provisions in the NDAA 
for Fiscal Year 2007. This is an important readiness issue and FRA is 
monitoring implementation of these requirements and recently expressed 
concern to DOD about press reports indicating that predatory lenders 
are making an end run around recently implemented DOD regulations (DOD-
2006-0S-0216).
    The regulation implementing the law excludes credit cards, 
overdraft loans, and all forms of open-ended credit from the 36 percent 
rate cap. The Navy Times (31 Dec. 2007), however, indicates that some 
predatory lenders are charging as much as 584 percent annual percentage 
rate (APR) on these type of loans to servicemembers.
    The Association believes that the current regulation is too narrow 
and should include all loans to servicemembers and their dependents 
except for mortgages and loans secured by collateral.
             uniform services former spouses protection act
    FRA continues to advocate for hearings and the introduction of 
legislation addressing the inequities of the USFSPA. The Association 
believes that USFSPA should be more balanced in its protection for both 
the servicemember and the former spouse and that Congress needs to 
review and amend so that the Federal Government is required to protect 
its servicemembers against State courts that ignore its provisions.
    FRA has long supported several recommendations in the Department of 
Defense's September 2001 report, which assessed USFSPA inequities and 
offered recommendations for improvement. Last year, the Department sent 
a more extensive list of recommendations to staff of the House and 
Senate Armed Services Committees regarding amending the USFSPA that 
include the following FRA supported provision:

         Base former spouse award amount on member's grade/
        years of service at the time of divorce (and not retirement)
         Prohibit award of imputed income while still on active 
        duty
         Permit designation of multiple Survivor Benefit Plan 
        (SBP) beneficiaries
         Permit SBP premiums to be withheld from former 
        spouse's share of retired pay if directed by the court

    Few provisions of the USFSPA protect the rights of the 
servicemember and none are enforceable by the Department of Justice or 
DOD. If a State court violates the right of the servicemember under the 
provisions of USFSPA, the Solicitor General will make no move to 
reverse the error. Why? Because the act does not have the enforceable 
language required for Justice or the Defense Department to react. The 
only recourse is for the servicemember to appeal to the court, which in 
many cases gives that court jurisdiction over the member. Some State 
courts also award a percentage of veterans' compensation to ex-spouses, 
a clear violation of U.S. law; yet, nothing has been done to stop this 
transgression.
    FRA believes Congress needs to take a hard look at the USFSPA with 
the intent to amend it so that the Federal Government is required to 
protect its servicemembers against State courts that ignore provisions 
of the act.
                        reserve early retirement
    FRA is disappointed that the effective date of a key provision in 
the NDAA for Fiscal Year 2008, the Reserve retirement age provision 
that is reduced by 3 months for each cumulative 90-days ordered to 
active duty is effective upon the enactment of the legislation and NOT 
retroactive to 7 October 2001 as addressed in the floor amendment to 
the Senate version of the bill. Consistent with TMC, FRA strongly 
endorses ``The National Guardsmen and Reservists Parity for Patriots 
Act'' (H.R. 4930), sponsored Rep. Joe Wilson (SC) and ``The National 
Guard and Reserve Retired Pay Equity Act'' (S. 2836) sponsored by Sen. 
Saxby Chamblis (GA).
                   mandate travel cost re-imbursement
    FRA appreciates the NDAA for Fiscal Year 2008 provision (Section 
631) that permits travel reimbursement for weekend drills, not to 
exceed $300, if the commute is outside the normal commuting distance. 
The Association urges the subcommittee to make this a mandatory 
provision. This is a priority issue with many enlisted reservists who 
are forced to travel lengthy distances to participate in weekend drill 
without any reimbursement for travel costs. Providing travel 
reimbursement for drill weekends would assist with retention and 
recruitment for the Reserves--something particularly important is to 
increased reliance on these personnel in order to sustain our war and 
other operational commitments.
                               conclusion
    FRA is grateful for the opportunity to present these 
recommendations to this distinguished subcommittee. The Association 
reiterates its profound gratitude for the extraordinary progress this 
subcommittee has made in advancing a wide range of military personnel 
benefits and quality-of-life programs for all uniformed services 
personnel and their families and survivors. Thank you again for the 
opportunity to present the FRA' views on these critically important 
topics.

    Senator Ben Nelson. Thank you.
    Ms. Moakler?

   STATEMENT OF KATHLEEN B. MOAKLER, DIRECTOR OF GOVERNMENT 
        RELATIONS, NATIONAL MILITARY FAMILY ASSOCIATION

    Ms. Moakler. Chairman Nelson, Senator Graham, thank you for 
the many military-family-friendly provisions included in the 
National Defense Authorization Act (NDAA) for Fiscal Year 2008.
    We are happy that you have recognized the important role 
that families play in supporting our servicemembers in all 
stages of deployment. Excellent support programs exist. It is 
important to find out which programs families are finding most 
effective, and focus resources toward supporting those 
programs. The evaluation process and the reports required in 
the NDAA for Fiscal Year 2008 should help accomplish that.
    Enhancements to the Family Medical Leave Act (FMLA) on 
behalf of the families of the wounded are most timely and have 
already been implemented. We also appreciate the FMLA changes 
proposed for families in the midst of deployment, and hope 
they, too, can be implemented soon.
    You also recognized the excellence of the Yellow Ribbon 
Reintegration Program from Minnesota by calling for it to be 
implemented by the Reserve component in all States and 
territories. We recognize its excellence, as well, but feel the 
implementation would be carried out more thoroughly across the 
board if the program were adequately funded. The reintegration 
process, taking the initiative to educate families along with 
the returning servicemember, acknowledging the challenges of 
reconnecting as a family, and providing information and tools 
to accomplish this is too important to ask already thin 
financial resources to be stretched further.
    As deployments continue, military families can be stressed 
to the breaking point. We emphatically ask that you recognize 
that greater access to mental health care and counseling for 
returning servicemembers and families is vital. Military 
children, the treasure of many military families, have 
shouldered the burden of sacrifice with great pride. Many 
programs have been created with the goal of providing support 
and coping skills to our military children during this great 
time of need. We appreciate this subcommittee's requirement to 
report from DOD on programs that touch military children and 
their caregivers, and hope the report results can be quickly 
transformed into more effective programs.
    Family members with special needs require extra 
consideration. We recommend extending the Extended Care Health 
Option (ECHO) program for 1 year for eligible families who are 
retiring or being medically retired to aid in transition to 
civilian support programs.
    A fully funded, robust family readiness program is crucial 
to military readiness. As deployments continue, families must 
know there is a secure, yet flexible, set of support services 
available to them to reinforce readiness and build resiliency.
    While military childcare centers have consistently been 
ranked highest in national ratings, families still experience 
access problems. Despite new centers and funding provided last 
year, there is still a shortfall of over 30,000 spaces. 
Increased needs for respite care for both the families of the 
deployed and families with special needs also add new strains 
to the system. While some of the Services have broadened access 
to childcare for geographically dispersed families, especially 
for Guard and Reserve families, some have not. We ask the 
subcommittee remain committed to helping all military families 
access quality childcare.
    Education is important in military families. The education 
of military children is a prime concern for their parents. The 
need for DOD-provided supplemental funding for Impact Aid is 
increasing, and we ask for that increased funding. We also ask 
this subcommittee to allow all school districts experiencing a 
significant growth in their military student population due to 
BRAC, global rebasing, or installation housing changes to be 
eligible for the additional funding currently available only to 
districts with an enrollment of at least 20 percent military 
children.
    Military spouses face unique employment challenges as they 
deal with deployments and relocations. We appreciate the 
partnerships being developed between DOD and the Services with 
the Department of Labor and employers. Extending military-
spouse preference to all Federal agencies would expand 
employment opportunities for this most mobile of workforces. 
Spouses value education as a way to enhance their 
employability. We hope that ways can be found to implement a 
broader transferability of the GI Bill or tuition assistance 
for military spouses.
    Despite the implementation of long-awaited full-
replacement-value reimbursement, servicemembers still have 
concerns as they anticipate moving from one installation to 
another. Permanent change-of-station (PCS) allowances have not 
kept up with today's expenses. PCS mileage rates have not been 
adjusted since 1985. Temporary lodging expenses have not been 
increased in 7 years. If they are moving to an installation 
that is receiving a huge influx of troops and families, they 
may be confronted with insufficient housing capacity, both on 
and off the installations, overcrowded schools, and a shortage 
of other community support structures.
    We hear from military spouses how they would like to have a 
professional equipment weight allowance, whether it is for the 
items they collect as they run much-needed in-home daycare or 
the paperwork and resources they accumulate as volunteer family 
readiness group leaders.
    TMC urges the subcommittee to upgrade PCS allowances to 
better reflect the expenses members are forced to incur in 
complying with government-directed moves.
    We also urge the subcommittee to closely monitor rebasing 
and BRAC plans and schedules to ensure sustainment and timely 
development of adequate family support, quality-of-life 
programs.
    We appreciate your continuing attention to the needs of the 
families of those who have made the greatest sacrifice: the 
survivors of those who have died as a result of Active Duty 
service. TMC views the special survivor allowance as a first 
step toward the repeal of the Survivor Benefit Plan (SBP)-
Dependency and Indemnity Compensation (DIC) offset. We would 
urge the subcommittee to expand eligibility for this allowance 
to all SBP-DIC survivors.
    We hear from the survivors of retirees that the practice of 
recouping the final month's retired pay adds an unnecessary 
financial stressor at a time the survivor is dealing with reams 
of paperwork.
    We thank you for your consideration of all these issues.
    [The prepared statement of Ms. Moakler follows:]
               Prepared Statement by Kathleen B. Moakler
    Mr. Chairman and distinguished members of this subcommittee, the 
National Military Family Association (NMFA) would like to thank you for 
the opportunity to present testimony today on the quality of life of 
military families. Once again, we thank you for your focus on the many 
elements of the quality of life package for servicemembers and their 
families: access to quality health care, robust military pay and 
benefits, support for families dealing with deployment, special care 
for the families of the wounded, and of those who have made the 
greatest sacrifice.
    NMFA endorses the recommendations contained in the statement 
submitted by The Military Coalition. In this statement, NMFA will 
expand on several issues of importance to military families:

          I. Family Readiness
          II. Family Health
          III. Families and Deployment
          IV. Wounded Families
          V. Families in Transition
          VI. Pay and Compensation
          VII. Families and Community
                            family readiness
    Today's military families are required to be in a constant state of 
readiness. They are preparing for deployment, experiencing a 
deployment, or recovering from a deployment until it is time to prepare 
for another one. Family readiness calls for coordinated programs and 
the information delivery system necessary to create a strong foundation 
of family preparedness for the ongoing and unique challenges of 
military family life.
    NMFA is most grateful for the provisions included in the National 
Defense Authorization Act (NDAA) for Fiscal Year 2008. This 
subcommittee listened to the family concerns presented in our testimony 
last year and provided legislative changes that will greatly benefit 
military families. NMFA maintains the Department of Defense (DOD) and 
the Services provide many great programs to support military families 
during all stages of deployment. It is imperative, as the conference 
language emphasizes, ``support is continuously available to military 
families in peacetime and war, as well as during periods of force 
structure change and relocation of military units.'' NMFA appreciates 
the emphasis on a consistent support structure for both active duty and 
Reserve component, and the recommended inclusion of family support 
programs in the planning and budgeting process.
    We are especially interested in the congressional mandate for DOD 
to measure the effectiveness and performance of these support programs. 
Developing standardized metrics and ensuring all programs are properly 
evaluated against those metrics will ensure only the most effective and 
necessary programs continue to receive funding while indicating any 
shortfalls in coverage where new or expanded programs may be required. 
We look forward to participating in the surveys and reading the outcome 
of the required reports.
    The establishment of a DOD Military Family Readiness Council will 
elevate the importance of family readiness and the programs that 
support family readiness. We hope to work closely with the Council and 
to participate wherever possible in the formulation of its 
recommendations.
    Since the beginning of the global war on terror, family programs 
have made great progress. Outreach to families is constantly evolving. 
We continue to hear from more and more families who access Military 
OneSource for information and counseling sessions. NMFA regards 
Military OneSource (www.militaryonesource.com), DOD's version of an 
employee assistance program, as a solid resource for servicemembers, 
military families and their extended family members, regardless of 
Service affiliation or geographical location.
    The DOD web portal www.militaryhomefront.dod.mil and the Service 
Web sites continue to adapt to the changing needs of families. The 
Army, including the Army Reserve, has been promoting virtual family 
readiness groups as one way for the geographically dispersed units to 
come together for support and information. The DOD Office of Family 
Policy is reaching out to service providers with their traveling Joint 
Family Assistance Workshop highlighting DOD resources. They also train 
service providers--relocation managers, financial counselors, state 
family assistance coordinators and others--on the most effective use of 
resources, cross training them to be information and referral 
specialists.
    While we often think of family readiness in terms of military 
readiness, recent natural disasters have placed military families in 
the position of literally running for their lives. We are all familiar 
with the devastation families impacted by Hurricane Katrina. The 
wildfires in California this year found many military installations in 
its path. It was encouraging to observe how the Navy and Marines used 
the lessons learned in Katrina to alert families to the fire danger and 
to establish safe locations for military families, with one-stop aid 
centers to help them. Quick coordination of services was apparent and 
lessened the blow to the military families who found themselves 
displaced because of the fires. Military families, like all American 
families, should be ready for emergencies. Installation and command 
programs that foster emergency preparedness are another way to foster 
family readiness.
Child Care
    The Services--and families--continue to tell NMFA more child care 
spaces are needed to fill the ever growing demand. We hear good news 
stories like this from Fort Irwin, CA.

          In recent months the Child Development Center (CDC) has 
        extended hourly care on a trial basis to see if longer hours 
        would be sufficiently used to warrant the changes. This 
        resulted from requests from families for longer hourly care 
        hours which typically were only available from 0900-1400. 
        Longer free respite hours are now available for all deployed 
        families and limited respite hours are available for Rear 
        Detachment families.

    But, we also hear other stories from families:

          We continue to struggle with the child care programs that 
        were created to assist Guard and Reserve specifically. It is 
        unfortunate that I will not even recommend the Operation Child 
        Care benefit to my families any longer because they have 
        actually been told that Air Force/ANG/AFR families do not 
        qualify to use the program. Families who have been denied 
        services or hit a brick wall when pursuing the program feel 
        angry, let down and disappointed. This really hampers morale so 
        why bother to add stress to an already stressful situation for 
        them.

    NMFA is very grateful for the additional Child Care Centers (CDC) 
Congress included in the Military Construction Appropriations Act for 
Fiscal Year 2008. However, the new Centers and funding will only 
provide 10 percent of the full time slots currently needed. There is 
still a shortfall of 31,500 spaces. These figures do not include drop-
in and respite care shortages, which exist throughout the force. 
Multiple deployments have diminished the number of child care 
providers, both Center and home-based because Child and Youth Service 
(CYS) programs have historically counted heavily on the ranks of 
military spouses to fill these positions. Service CYS programs report a 
growing shortage of spouses willing to provide child care as the stress 
of single parenting and the worry over the deployed servicemember takes 
its toll.
    The partnerships between the Services and the National Association 
of Child Care Resource and Referral Agencies (NACCRRA) are helping and 
have grown over the past 2 years; however, not all families qualify for 
the subsidies and not all programs are the same. NMFA was disappointed 
to learn the Air Force is no longer providing funding for Air Force 
families not currently enrolled in either Military Child Care in Your 
Neighborhood or Operation Military Child Care. Currently approximately 
800 Air Force families receive assistance through these programs. 
However, over 375 families remain on indefinite wait lists due to lack 
of Air Force funding. In addition, Title 32 families are now eligible 
for NACCRRA programs, but Air Force families will continue to be denied 
these programs. Additional challenges to expanding the Military Child 
Care in Your Neighborhood program are related to accreditation. DOD 
CDCs are nationally accredited; as a result, civilian centers desiring 
to participate in the Military Child Care in Your Neighborhood program 
must be accredited. Earning accreditation is an expensive and complex 
procedure. Perhaps, an incentive could be provided to participating 
civilian child care centers to receive their accreditation. Not only 
would military children benefit, but all children using the Center 
would benefit as well.
    As always, getting the word out to families that such programs 
exist is challenging. Military OneSource must do a better job of 
putting the NACCRRA programs at the top of their list when referring 
families to CDCs within their neighborhood. Too often, a family will 
call OneSource and receive the closest child care option to their home 
address, NOT the program that is currently working with the military 
and providing subsidies.
    Innovative strategies are also needed when addressing the 
unavailability of after-hour child care (before 6 a.m. and after 6 
p.m.) and respite care. The Army, as part of the funding attached to 
its Army Family Covenant is rolling out more spaces for respite care 
for families of deployed soldiers. Respite care is needed across the 
board for the families of the deployed and for special needs families. 
Families often find it difficult to obtain affordable, quality care 
especially during hard-to-fill hours and on weekends. Both the Navy and 
the Air Force have piloted excellent programs that provide 24/7 care. 
The Navy has Centers in Norfolk and Hawaii, which provide a home-like 
atmosphere for children of sailors working late nights or varying 
shifts. The Air Force provides Extended Duty Child Care and Missile 
Care (24-hour access to child care for servicemembers working in the 
missile field). These innovative programs must be expanded to provide 
care to more families at the same high standard as the Services' 
traditional child development programs.
    NMFA urges Congress to ensure resources are available to meet 
thechild care needs of military families to include hourly, drop-in and 
increased respite care for families of deployed servicemembers and 
families with special needs members.
Working with Youth
    Older children and teens must not be overlooked. School personnel 
need to be educated on issues affecting military students and be 
sensitive to their needs. To achieve this goal, schools need tools. 
Parents need tools too. Military parents constantly seek more resources 
to assist their children in coping with military life, especially the 
challenges and stress of frequent deployments. Parents tell NMFA 
repeatedly they want resources to ``help them help their children.'' 
Support for parents in their efforts to help children of all ages is 
increasing but continues to be fragmented. New Federal, public-private 
initiatives, increased awareness, and support by DOD and civilian 
schools educating military children have been developed; however, many 
military parents are either not aware such programs exist or find the 
programs do not always meet their needs.
    NMFA is working to meet this pressing need through its Operation 
Purplesummer camps. Unique in its ability to reach out and gather 
military children of different age groups (7-18), Services, and 
components, Operation Purple provides a safe and fun environment in 
which military children feel immediately supported and understood. Last 
year, 4,000 campers, primarily the children of deployed servicemembers, 
were able to attend camp. Our ultimate goal for 2008, with the support 
of private donors, is to send 10,000 military children to camp. 
Additionally, NMFA hopes to expand the camp experience to more children 
of the wounded and bereaved, and a program addressing the family as a 
unit.
    NMFA appreciates the provisions in the NDAA for Fiscal Year 2008 
instructing DOD to report on the effects of deployment of children of 
all ages. Through its Operation Purple camps (OPC), NMFA has begun to 
identify the cumulative effects multiple deployments are having on the 
emotional growth and well being of military children and the challenges 
posed to the relationship between deployed parent and child in this 
very stressful environment. Understanding a need for qualitative 
analysis of this information, NMFA contracted with the RAND corporation 
to conduct a pilot study aimed at the current functioning and wellness 
of military children attending Operation Purple camps and assessing the 
potential benefits of the OPC program in this environment of multiple 
and extended deployments. The results of this pilot study will be 
available later this spring. NMFA also plans an additional longitudinal 
study over the next several years.
Education of Military Children
    As increased numbers of military families move into new communities 
due to Global Rebasing and Base Realignment and Closure (BRAC), their 
housing needs are being met further and further away from the 
installation. Thus, military children may be attending school in 
districts whose familiarity with the military lifestyle may be limited. 
Educating large numbers of military children will put an added burden 
on schools already hard-pressed to meet the needs of their current 
populations. Impact Aid has traditionally helped to ease this burden; 
however, the program remains underfunded. NMFA remains appreciative of 
the additional funding you provide to civilian school districts 
educating large numbers of military children. However, NMFA was 
disappointed to learn the DOD supplement to Impact Aid was once again 
funded at only $30 million for fiscal year 2008 for school districts 
with more than 20 percent military enrollment and only $10 million was 
provided to school districts experiencing significant shifts in 
military dependent attendance due to force structure changes, with 
another $5 million for districts educating severely-disabled military 
children.
    While the total funding available to support civilian schools 
educating military children is greater than in recent years, we urge 
Congress to further increase funding for schools educating large 
numbers of military children. This supplement to Impact Aid is vital to 
school districts that have shouldered the burden of ensuring military 
children receive a quality education despite the stresses of military 
life. NMFA also encourages this subcommittee to make the additional 
funding for school districts experiencing growth available to all 
school districts experiencing significant enrollment increases and not 
just to those districts meeting the current 20 percent enrollment 
threshold. We also urge you to authorize an increase in the level of 
this funding until BRAC and Global Rebasing moves are completed. The 
arrival of several hundred military students can be financially 
devastating to any school district, regardless of how many of those 
students the district already serves. Because military families cannot 
time their moves, they must find available housing wherever they can. 
Why restrict DOD funding to local school districts trying to meet the 
needs of military children simply because they did not have a large 
military child enrollment to begin with?
    NMFA congratulates the DOD Office of Personnel and Readiness and 
the Council of State Governments (CSG) for drafting the new Interstate 
Compact on Educational Opportunity for Military Children. This compact 
is intended to bring States together to allow for the uniform 
treatment, at the State and local district level, of military children 
transferring between school districts and States. Since July 2006, CSG 
has worked with a variety of Federal, State, and local officials as 
well as national stakeholder organizations representing education 
groups and military families to create the new interstate compact. NMFA 
was pleased to participate on both the Advisory Group and Drafting Team 
for the compact. Currently, many States are considering joining the 
compact, and legislatures in several have already filed bills to allow 
their States to participate. NMFA is very excited to see this important 
State legislation going forward.
    NMFA asks Congress to increase the DOD supplement to Impact Aid to 
$50 million to help districts better meet the additional demands caused 
by large numbers of military children, deployment-related issues, and 
the effects of military programs and policies. We also ask Congress to 
allow all school districts experiencing a significant growth in their 
military student population due to BRAC, Global Rebasing, or 
installation housing changes to be eligible for the additional funding 
currently available only to districts with an enrollment of at least 20 
percent military children.
Spouse Education
    Since 2004, NMFA has been fortunate to sponsor our Joanne Holbrook 
Patton Military Spouse Scholarship Program, with the generosity of 
donors who wish to help military families. In 2007, NMFA published 
Education and the Military Spouse: The Long Road to Success, based on 
spouse scholarship applicant survey responses, identifying education 
issues and barriers specific to military spouses. The entire report may 
be found at www.nmfa.org/education.
    The survey found military spouses, like their servicemembers and 
the military as a whole, value education and set education goals for 
themselves. Yet, military spouses often feel their options are limited. 
Deployments, the shortage of affordable and quality child care, 
frequent moves, the lack of educational benefits and tuition assistance 
for tuition are discouraging.
    For military spouses, the total cost of obtaining a degree can be 
significantly higher than the cost for civilian students. The unique 
circumstances that accompany the military lifestyle have significant 
negative impacts upon a spouse's ability to remain continuously 
enrolled in an educational program. Military spouses often take longer 
than the expected time to complete their degrees. More than one-third 
of those surveyed have been working toward their goal for 5 years or 
more.
    The report offers recommendations for solutions that Congress could 
provide. Some, like the recently announced partnership between the 
Department of Labor (DoL) and DOD to designate military spouses as an 
eligible group for DoL training and education funds have been 
implemented. Others include:

         Ensuring installation education centers have the 
        funding necessary to support spouse education programs and 
        initiatives,
         Providing additional child care funding to support 
        child care needs of military spouse-scholars,
         Providing additional funding for education benefits 
        under the ``Spouses to Teachers'' program,
         Helping to defray additional costs incurred by 
        military spouses who ultimately spend more than civilian 
        counterparts to obtain a degree. Some possibilities include:

                 Removing housing allowances from FAFSA 
                calculations to allow more spouses to qualify for need-
                based financial aid programs,
                 Providing tuition assistance to spouses,
                 Providing an additional education tax credit 
                to military spouses.

    Also in the spouse suggestions was expanded eligibility for the 
transfer of Montgomery G.I. Bill education benefits. NMFA wishes to 
thank President George W. Bush for his recognition of the importance of 
educational opportunities to military spouses in his recent State of 
the Union address. NMFA hears often from military spouses who wish they 
had access to the unused Montgomery G.I. Bill education benefits of 
their servicemember. They feel this would greatly assist them in the 
pursuit of educational and career objectives. Expanding the existing 
G.I. Bill transferability pilot has been a top issue for the Army-wide 
Army Family Action Plan delegates for several years. NMFA believes that 
expanding the Montgomery G.I. Bill benefit to eligible dependents would 
go a long way in making education more affordable for them.
    We have concerns, however, on how to ensure an equitable 
disbursement of this benefit and how the expansion of this program will 
be funded. We feel the sooner in a servicemember's career that spouses 
could avail themselves of this benefit, the greater the positive impact 
would be on the spouse's education. Although these benefits are 
currently available through some Services, we believe that all military 
spouses of eligible servicemembers should be eligible. In addition, we 
would hope transference of G.I. benefits would not preclude the 
servicemember from receiving re-enlistment or other incentive bonuses. 
It is difficult for families to make the choice between the short-term 
benefit of bonuses and the long-term effect of additional education of 
the spouse on the family. NMFA realizes that extending educational 
benefits to military children may have unintended effects on future 
recruitment of those same military children. It is a complex issue and 
we welcome a full discussion of any legislation that may be proposed 
with Congress and the Services.
Spouse Employment, Unemployment
    NMFA applauds the DOD, and DoL, and the Department of Veteran 
Affairs (VA) for the new Military Spouse Career Advancement Initiative, 
which creates a more accessible education system for military spouses 
along with targeting careers in high-growth sectors. The Military 
Spouse Career Advancement Initiative will provide more than $35 million 
to military spouses in 8 States on 18 military installations, and set 
up accounts for eligible spouses in those States to cover expenses 
directly related to post-secondary education and training. NMFA 
believes this is an important first step to helping spouses advance 
their careers, but we would like to see this pilot program expanded. 
NMFA supports H.R. 2682 which expands the Workforce Opportunity Tax 
Credit for employers who hire spouses of active duty and Reserve 
component servicemembers, and to provide tax credits to military 
spouses to offset the expense in obtaining career licenses and 
certifications when servicemembers are relocated to a new duty station 
within a different State.
    Expanding spouse hiring preference beyond the DOD to the entire 
Federal Government is another avenue to enhancing employment 
opportunities and career development for military spouses.
Financial Readiness
    Financial readiness is a critical component of family readiness. 
NMFA completely supports the Military Lending Act (MLA) and is 
following its implementation and enforcement closely. This legislation 
was desperately needed to protect servicemembers and their families 
from unscrupulous business practices. Last year we expressed our 
concern that many lenders would attempt to exploit loopholes in the 
narrow definitions contained in the regulation to circumvent the intent 
of this important legislation. Unfortunately, our fears have been 
realized. Covered products are so narrowly defined, lenders have 
changed their product to fit the regulations. Payday loans have become 
revolving credit loans addressed in the MLA. The Refund Anticipation 
Loans (RALs) regulated in the MLA that were addressed were re-packaged 
as well by tax preparation companies. Although they meet the letter of 
the law, the new products use a debit card as a vehicle for the loan. 
One debit card has an expiration date of August. If the taxpayer fails 
to spend the entire refund by the expiration date a fee is charged to 
get the remainder of the tax refund back. Installment loans, rent to 
own, and credit cards are still not addressed.
    While we fully recognize expanding this regulation could impede the 
ability of some servicemembers and their families to obtain short-term 
loans, we believe this risk is justified given the negative impact of 
the use of predatory loans. Military banks and credit unions have 
worked diligently to develop excellent alternatives to payday loans. 
Small dollar, short-term loan products are available to servicemembers 
through reputable lenders and should be marketed to pull families away 
from predatory lenders. We look forward to the congressionally-mandated 
DOD report on the MLA due in April 2008. We also believe better 
education about other available resources and improved financial 
education for both the servicemember and spouse will also reduce the 
risk. NMFA contends that legitimate lenders have no need to fear an 
interest rate cap of 36 percent. We encourage DOD to continue to make 
military families aware of the need to improve their money management 
skills and avoid high cost credit cards and other lenders. DOD must 
continue to monitor high cost, low value financial products targeted at 
military families.
    NMFA asserts that the protections provided under the Military 
Lending Act must be strengthened to eliminate loopholes that will 
diminish the protection for servicemembers and their families. We urge 
Congress to monitor DOD's implementation of the legislative provision 
to ensure full protections are made available to military families.
    Family readiness is directly linked to servicemember readiness. 
NMFA asks Congress to direct DOD to maintain robust family readiness 
programs addressing child care, youth services, education of military 
children, spouse employment and education, and financial literacy and 
to see that resources are in place to accomplish this goal.
                             family health
    Family readiness calls for access to quality health care and mental 
health services. Families need to know the various elements of their 
military health care system (MHS) are coordinated and working as a 
synergistic system. NMFA is concerned the DOD military health care 
system may not have all the resources it needs to meet both the 
military medical readiness mission and provide access to health care 
for all beneficiaries. It must be funded sufficiently, so the direct 
care system of military treatment facilities (MTF) and the purchased 
care segment of civilian providers can work in tandem to meet the 
responsibilities given under the TRICARE contracts, meet readiness 
needs, and ensure access for all military beneficiaries.
The Military Health Care System
    Officials of the DOD often speak of ``the MHS.'' There are annual 
MHS conferences, a MHS Web site (www.tricare.mil), and a MHS Strategic 
Plan. The current round of TRICARE contracts require coordination of 
many health care activities in markets with multiple MTFs and Memoranda 
of Understanding to govern the relationships between TRICARE 
contractors and individual MTFs. Battlefield medicine has never been 
more joint and is supported by the coordination of many elements. While 
NMFA believes DOD has made some progress in living up to the rhetoric 
regarding a military health ``system'', we still see too many 
separations between and within Services. We agree with the statement of 
the Task Force on the Future of Military Health Care that there is a 
``lack of integration (within the MHS, which) diffuses accountability 
for fiscal management, result (ing) in misalignment of incentives, and 
limits the potential for continuous improvement in the quality of care 
delivered to beneficiaries.'' NMFA feels there have been many missed 
opportunities resulting in inefficiencies, higher costs, and decreased 
beneficiary satisfaction. For example:

         In a market served by several military hospitals and 
        clinics, one MTF decides to limit the items carried in its 
        pharmacy. While this decision saves money for this particular 
        MTF, it shifts pharmacy costs to other local MTFs or to DOD as 
        a whole when beneficiaries opt to obtain their medications in 
        the more expensive retail pharmacies.
         In another market with several MTFs, local commanders 
        work together to share providers in order to keep care within 
        the MTF direct care side of the system and avoid the costs of 
        moving more patients to the more expensive purchased care side. 
        This arrangement, while sucessful, depends on the individuals 
        involved and could change when commanders are replaced.
         In Alaska, several factors are in play: different 
        Services, geographical boundaries, and a lack of a robust 
        civilian network specialty care. Currently, the solution is to 
        fly the servicemember, family member(s), or retiree to the 
        nearest MTF--Madigan Army Medical Center in Washington State 
        rather than finding care close to home.

    NMFA thanks this subcommittee for supporting continued funding to 
provide for a robust military health care system. This system must 
continue to meet the needs of servicemembers and the DOD in times of 
armed conflict. It must also acknowledge that military members and 
their families are indeed a unique population with unique duties, who 
earn an entitlement to a unique health care program.
    The proposals by DOD and the Task Force on the Future of Military 
Health Care to raise TRICARE fees by exorbitant amounts have resonated 
throughout the beneficiary population. Beneficiaries see these 
proposals as a concentrated effort by DOD to change their earned 
entitlement to health care into an insurance plan. NMFA appreciates the 
concern shown by Members of Congress since the release of DOD's 
proposals regarding the need for more information about the budget 
assumptions used to create the proposals, the effects of possible 
increases on beneficiary behavior, the need for DOD to implement 
greater efficiencies in the Defense Health Care Program (DHP), and the 
adequacy of the DHP budget as proposed by DOD. We appreciate the many 
questions Members of Congress are asking about these proposals and urge 
Congress to continue its oversight responsibilities on these issues.
TRICARE
    In the ongoing debate about whether or not to raise TRICARE 
beneficiary fees, NMFA believes it is important for everyone 
participating in that debate to understand the difference between 
TRICARE Prime and TRICARE Standard and to distinguish between creating 
a TRICARE Standard enrollment fee and raising the Standard deductible 
amount. TRICARE Prime has an enrollment fee for military retirees; 
however, it offers enhancements to the health care benefit. These 
enhancements include: lower out-of-pocket costs, access to care within 
prescribed standards, additional preventive care, assistance in finding 
providers, and the management of one's health care. In other words, 
enrollment fees for Prime are not to access the earned entitlement, but 
for additional services. These fees, which have not changed since the 
start of TRICARE, are $230 per year for an individual and $460 per year 
for a family.

------------------------------------------------------------------------
                                         Prime             Standard
------------------------------------------------------------------------
Enrollment fees.................  $230/year for an    None
                                   individual; $460/
                                   year for a family.
Annual Deductibles..............  None..............  $150/individual;
                                                       $300 for a family
Outpatient co-payment (Prime)/    $12...............  25 percent of
 cost share (Standard) for                             allowed charges
 individual providers.                                 1,2
Inpatient co-payment/cost share   None..............  25 percent of
 for individual providers.                             allowed charges
                                                       1,2
Daily inpatient hospitalization   Greater of $11 per  Lesser of $535/day
 charge.                           day or $25 per      or 25 percent of
                                   admission.          billed charges if
                                                       treated in non-
                                                       network hospital
                                                       3
Emergency Services co-payment/    $30...............  25 percent of
 cost share.                                           allowed charges
Ambulance Services co-payment/    $20...............  25 percent of
 cost share.                                           allowed charges
Preventive Examinations (such     None..............  25 percent cost
 as: blood pressure tests,                             share 1,2
 breast exams, mammograms,
 pelvic exams, PAP smears,
 school physicals) co-payments/
 cost shares.
------------------------------------------------------------------------
\1\ Providers may charge 15 percent above the TRICARE allowable and the
  beneficiary is responsible for this additional cost, making the
  potential cost share 40 percent.
\2\ If care is accessed from a TRICARE Prime/Extra network provider the
  cost share is 20 percent.
\3\ If care is received in a TRICARE Prime/Extra network hospital, the
  daily hospitalization rate is the lesser of $250/day or 25 percent of
  negotiated charges.
(For a more detailed comparison of TRICARE costs, go to: http://
  www.tricare.mil/tricarecost.cfm)

TRICARE Prime
    DOD's proposal to increase TRICARE Prime enrollment fees, while 
completely out-of-line dollar wise, was not unexpected. While Congress 
temporarily forestalled increases over the past 2 years, NMFA believes 
DOD officials continue to support large increased retiree enrollment 
fees for TRICARE Prime, combined with a tiered system of enrollment 
fees and TRICARE Standard deductibles. The Task Force on the Future of 
the Military Health Care report, recently recommended the same. NMFA 
believes DOD's tiered system based on rank was arbitrarily devised and 
failed to acknowledge the needs of the most vulnerable beneficiaries: 
survivors, wounded servicemembers, and their families. NMFA does 
consider the Task Force's tiered system to be more palatable since it 
is based on retiree pay rather than rank.
    NMFA acknowledges the annual Prime enrollment fee has not increased 
in more than 10 years and that it may be reasonable to have a mechanism 
to increase fees. With this in mind, NMFA has presented an alternative 
to DOD's proposal should Congress deem some cost increase necessary. 
The most important feature of our proposal is that any fee increase be 
no greater than the percentage increase in the retiree cost-of-living 
adjustment (COLA). If DOD thought $230/$460 was a fair fee for all in 
1995, then it would appear that raising the fees simply by the 
percentage increase in retiree pay is also fair. NMFA also suggests it 
would be reasonable to adjust the TRICARE Standard deductibles by tying 
increases to the percent of the retiree annual COLA.
TRICARE Standard
    NMFA remains especially concerned about what seems to be the intent 
of DOD and the Task Force on the Future of Military Health Care to 
create a TRICARE Standard enrollment fee. TRICARE Standard, as the 
successor to CHAMPUS, is an extension of the earned entitlement to 
health care. Charging a premium (enrollment fee) for TRICARE Standard 
moves the benefit from an earned entitlement to an opportunity to buy 
into an insurance plan. We are pleased the Task Force did not recommend 
an enrollment fee for active duty family members. We note, however, 
Standard is the only option for many retirees, their families, and 
survivors because TRICARE Prime is not offered everywhere. Also, using 
the Standard option does not guarantee beneficiaries access to health 
care, which beneficiaries opting to use Standard rather than Prime 
understand. DOD or the Task Force has not linked any guarantee of 
access to a Standard enrollment fee.
    We also ask what additional services beneficiaries who enroll in 
Standard will receive after paying the enrollment fee. Or, will they 
only be paying for the ``privilege'' of having to seek their own 
providers, often filing their own claims, meeting a deductible, paying 
a 20 to 25 percent cost share for their care (plus an additional 15 
percent if the provider does not participate in the claim), and being 
liable for a daily hospitalization charge of up to $535? Because they 
recognize the cost liabilities of being in Standard, we know most will 
continue to bear the cost of a TRICARE supplemental insurance policy.
    NMFA opposes DOD's proposal to institute a TRICARE Standard 
enrollment fee and believes Congress should reject this proposal 
because it changes beneficiaries' entitlement to health care under 
TRICARE Standard to just another insurance plan. However, we would be 
remiss if we did not ask the many questions beneficiaries have about 
how a Standard enrollment fee would be implemented and its implications 
regarding access to care:

          1. How much will it cost to implement the enrollment fee, 
        including the education efforts, additional tasks imposed on 
        the TRICARE contractors, and the inevitable cost of handling 
        appeals from beneficiaries whose claims were denied because 
        they did not know they had lost their benefit?
          2. What type of open enrollment season will be needed to 
        provide retirees with the opportunity to coordinate coverage 
        between TRICARE and their employer-sponsored insurance?
          3. Will retirees who do not enroll in Prime and do not pay a 
        premium (enrollment fee) for Standard be refused space 
        available care in MTFs, including their emergency rooms?
          4. Will these same retirees be refused pharmaceutical 
        services at MTFs or be unable to use TRICARE retail network 
        pharmacies and the TRICARE mail order pharmacy (TMOP)?
          5. Will retirees who only use Standard as a wrap-around to 
        their employer-provided health care insurance pay the same 
        premium (enrollment fee) as those who will use Standard as 
        their primary coverage?

    NMFA is most appreciative of efforts by Congress to force DOD to 
improve TRICARE Standard. Congressionally-mandated surveys of providers 
have pointed out some issues related to providers' reluctance to treat 
TRICARE patients, including the perennial complaints of complicated 
paperwork and low reimbursement rates. We appreciate Congress' 
requirement of DOD to report on patient satisfaction.
Pharmacy
    It has been theorized there is a relationship between medication 
co-payments and the use of generics by beneficiaries: as the difference 
in co-payment widens between two groups (generics and preferred-band 
named medication to non-preferred brand named drugs), beneficiaries 
will chose the lower costing medications. In fact, the Task Force used 
this assumption when designing their pharmacy tier and co-payment 
structure. However, some studies have shown a high co-payment does not 
necessarily drive beneficiaries to choose lower costing medications. 
One study found participants did not switch to the lower cost generics, 
finding there was a decrease in overall medication purchases by 
consumers. This decrease in drug utilization meant consumers were no 
longer adhering to or complying with their medication regime, which 
could lead to increased Emergency Room visits and in-patient hospital 
stays. It is believed the unexpected outcome resulted from the lack of 
education by the insurer to the beneficiaries. Results may have been 
different if they had been told the reason behind the large increases 
and provided information on ways to lower their drug costs through the 
purchase of generics and preferred-brand named drugs. As we all know, 
DOD infrequently contacts its beneficiaries, even though military 
associations have asked for years for this to be done. NMFA cautions 
DOD about generalizing findings of certain beneficiary behaviors and 
automatically applying them to our Nation's unique military population. 
NMFA encourages Congress to require DOD to utilize peer-reviewed 
research involving beneficiaries and prescription drug benefit options, 
along with performing additional research involving military 
beneficiaries, before making any recommendations on prescription drug 
benefit changes such as co-payment and tier structure changes for 
military servicemembers, retirees, their families, and survivors.
    NMFA appreciates the inclusion of Federal pricing for the TRICARE 
retail pharmacies in the NDAA for Fiscal Year 2008. However, we will 
need to examine its effect on the cost of medications for both 
beneficiaries and DOD. Also, we will need to see how this may 
potentially impact the overall negotiation of future drug prices by 
Medicare and civilian private insurance programs.
    NMFA appreciates the establishment of the Beneficiary Advisory 
Panel (BAP), which gave beneficiaries a voice in DOD process to move 
medications to the Uniform Formulary's third tier. The BAP has played 
an important role, but, at times it has been limited in its ability to 
be effective. NMFA requests Congress require the BAP play a more 
substantial role in the formulary-setting process, have access to drug 
cost data on medications being considered, have BAP comments directly 
incorporated in the decisionmaking process, and require formal feedback 
by DOD addressing why recommendations by the BAP were not taken into 
consideration.
TRICARE for Life Enrollment Fees
    NMFA applauds the congressional creation of TRICARE for Life (TFL). 
The reasons behind the creation of this benefit was to right an 
injustice. We should not let this get lost when the Task Force's 
recommendation, to include an enrollment fee for retired servicemembers 
over 65, is discussed by DOD. NMFA strongly believes an enrollment fee 
for TFL is not appropriate for many reasons. The fee will create 
additional financial burdens on a population who has limited income and 
is currently paying for Medicare Part B at $94 a month. The current 
system does not really encourage wellness and prevention. It is 
important to maintain continuity of care and access to prevention 
programs for Medicare eligible retirees because it will stabilize this 
group known for its co-morbidities and lead to more cost-effective care 
for both Medicare and TRICARE. Also, being part of TRICARE allows 
beneficiaries to access medications through MTFs and TMOP, which 
creates a lower individual out-of-pocket burden and provides 
significant costs savings for DOD and ultimately Medicare, making the 
beneficiary a good steward of our tax dollars. Certainly, a victory for 
everyone involved.
TRICARE Reimbursement
    NMFA has been encouraged by the TRICARE contractors' efforts to 
speed payments, especially to providers who choose to file claims 
electronically. TRICARE is no longer the slowest payer, but it remains 
the lowest payer. TRICARE rates are tied to Medicare rates, which often 
mean providers are reluctant to accept too many TRICARE beneficiaries. 
The passage of the Medicare, Medicaid, and SCHIP Extension Act of 2007 
in December was important to TRICARE beneficiaries because it prevented 
a scheduled 10.1 percent cut to Medicare physician reimbursement rate 
for 6 months and provided a half-percent update in payments. NMFA is 
concerned that continuing pressure to lower Medicare reimbursement 
rates will create a hollow benefit for TRICARE beneficiaries. As 
Congress takes up Medicare legislation this summer, NMFA requests 
consideration of how this legislation will also impact military 
families' health care, especially access to mental health services.
    NMFA believes tying increases in TRICARE enrollment fees to the 
percentage increase in the retiree COLA is a fair way to increase 
beneficiary cost shares should Congress deem an increase necessary.
    NMFA encourages Congress to direct DOD to continue efforts to gain 
real efficiencies, improve the quality of care, and access before 
passing additional costs on to beneficiaries.
    NMFA believes Congress and DOD must address the reasons why 
providers do not accept TRICARE Standard. There should be NO enrollment 
fee for TRICARE Standard and TFL. Further research should be done on 
the pharmacy benefit's impact on beneficiaries.
Improving Access to Care
    MHS funding shortfalls are experienced first-hand by military 
families enrolled in TRICARE Prime when they find their MTF cannot meet 
prescribed access standards. No one is more cognizant of the need for 
superior health care to be provided to servicemembers in harm's way 
than their families. However, a contract was made with those who 
enrolled in Prime. Beneficiaries must seek care in the manner 
prescribed in the Prime agreement, but in return they are given what 
are supposed to be guaranteed access standards. When an MTF cannot meet 
those standards, appointments within the civilian TRICARE network must 
be offered. In many cases, this is not happening and families are told 
to call back next week or next month. In other cases, MTFs must send 
enrolled beneficiaries to providers in the civilian network, thus 
increasing costs to the system as a whole.
    Because operational requirements have reduced the number of 
uniformed health care personnel available to serve in the MTF system, a 
more coordinated approach is needed to optimize care and enable MTFs to 
meet access standards. We continue to hear difficulties in the Service 
contracting process are preventing MTFs from filling open contract 
provider slots and thus optimizing care within their facilities or 
increasing the overall numbers of health care providers to help 
backfill forward deployed health care personnel. NMFA suggests DOD 
reassess the resource sharing program used prior to the implementation 
of the T-Nex contracts and take the steps necessary to ensure MTFs meet 
access standards with high quality health care providers.
    MTFs must have the resources and the encouragement to ensure their 
facilities are optimized to provide high quality, coordinated care for 
the most beneficiaries possible. They must be held accountable for 
meeting stated access standards. If funding or personnel resource 
issues are the reason access standards are not being met, then 
assistance must be provided to ensure MTFs are able to meet access 
standards, support the military mission, and continue to provide 
quality health care.
DOD Must Look for Savings
    The Task Force on the Future of Military Health Care, along with 
the Government Accountability Office, highlighted DOD had no single 
point of accountability for costs. In fact, the Task Force went as far 
as to say ``DOD cannot provide financial statements that are reliable 
or that account with a high level of confidence the true and accurate 
costs of health care in the MHS.'' Given this information, how can we 
know what DOD's cost for beneficiary health care really is? We ask 
Congress to establish better oversight for DOD's accountability in 
becoming more cost-efficient.
    We have two possible recommendations:

         Require the Comptroller General to audit MTFs on a 
        random basis until all have been examined for their ability to 
        provide quality health care in a cost-effective manner;
         Create an oversight committee, similar in nature to 
        the Medicare Payment Advisory Commission, which provides 
        oversight to the Medicare program and makes annual 
        recommendations to Congress. The Task Force often stated it was 
        unable to address certain issues not within their charter or 
        the timeframe in which they were commissioned to examine the 
        issues. This Commission would have the time to examine every 
        aspect in a nonbiased manner.

    According to the Task Force on the Future of Military Health Care, 
DOD's organizational structure is a large, inflexible, disintegrated 
system that leads to negative outcomes at the operational level. The 
Task Force noted fragmentation still exists within the MHS, which is 
unable to effectively leverage resources to meet common or shared 
requirements. The Task Force recommended DOD needed greater flexibility 
and alignment at all levels in order to provide better decisionmaking 
based on cost-effectiveness and to plan properly to manage prudently 
its direct versus purchased health care services. DOD and the Task 
Force have made recommendations for beneficiaries to pay enrollment 
fees, higher co-pays and deductibles. NMFA believes DOD must first make 
the health care side of its house run more efficiently. Large private 
sector Health Care Organizations have incorporated best business 
practices and centralized their resources. However, DOD continues to 
split health care resources between three Services, and within the 
Services and between the TRICARE contractors. Why should military 
families have to pay for DOD's inability to gain control of their 
health care costs through streamlining their organization? One solution 
would be to move toward a Unified ``Joint'' Medical Command structure, 
which was recommended by the Defense Health Board in 2006.
    In recent years at the annual TRICARE conferences and other venues, 
DOD officials have discussed the benefits of disease management, 
especially for certain chronic illnesses. These benefits flow to the 
beneficiaries through better management of their conditions and to DOD 
through patients' decreased need for costly emergency room visits or 
hospitalizations. However, more needs to be done. NMFA does not support 
the recommendation of the Task Force on the Future of Military Health 
Care to carve out one regional TRICARE contractor to provide both the 
pharmacy and health care benefit. We agree a link between pharmacy and 
disease management is necessary, but feel this pilot would only further 
erode DOD's ability to maximize potential savings through TMOP. NMFA 
was also disappointed to find no mention of disease management or a 
requirement for coordination between the pharmacy contractor and 
Managed Care Support Contractors in the Request for Proposals for the 
new TRICARE pharmacy contract. The ability certainly exists for them to 
share information bi-directional.
    Despite the successes of the TRICARE Next Generation (T-Nex) 
managed care support contracts, NMFA remains concerned that efforts to 
optimize the MTFs have not met expectations in terms of increasing or 
even maintaining access for TRICARE beneficiaries. NMFA believes 
optimizing the capabilities of the facilities of the direct care system 
through timely replacement construction, funding allocations, and 
innovative staffing would allow more beneficiaries to be cared for in 
the MTFs, which DOD asserts is the least costly venue. The Task Force 
made recommendations to make DOD MHS more cost-efficient. NMFA 
supports: the MHS must be appropriately sized, resourced, and 
stabilized; and make changes in its business and health care practices.
    NMFA is dismayed that DOD has taken only small steps to encourage 
migration to the TMOP. Its marketing effort to promote the use of the 
TMOP came only after NMFA and other associations raised the issue in 
congressional testimony in their push for the implementation of 
significant cost-saving measures prior to any increase in TRICARE fees. 
Promoting use of the TMOP makes sense, as it provides significant 
savings to beneficiaries, as well as huge savings to the Department. 
The creation of the Members Choice Center by DOD and Express Scripts in 
August 2007, to provide personal assistance in transferring 
beneficiaries' prescriptions from TRICARE Retail Pharmacies (TRRx) to 
TMOP, has provided more than $800,000 in savings to beneficiaries and 
$9.3 million to DOD. Significant savings have also been seen in the 
over-the-counter (OTC) demonstration project for select Proton Pump 
Inhibitors. In just 6 months, roughly 14,000 beneficiaries have 
participated with huge savings to beneficiaries and DOD. We are 
confident similar results will be seen with the second OTC 
demonstration project for select Antihistamine products. NMFA believes 
it is imperative all of the medications available through TRRx should 
also be made available through TMOP. Medications treating chronic 
conditions, such as asthma, diabetes, and hypertension should be made 
available at the lowest level of co-payment regardless of brand or 
generic status. We agree with the recommendations of the Task Force on 
the Future of Military Health Care that OTC drugs be a covered pharmacy 
benefit and there be a zero co-pay for TMOP Tier 1 medications.
    NMFA strongly suggests that DOD look within itself for cost savings 
before first suggesting that beneficiaries bear the burden! We 
encourage DOD to investigate further cost saving measures such as: a 
systemic approach to disease management, a concentrated marketing 
campaign to increase use of the TMOP, eliminating contract 
redundancies, holding DOD more accountable, moving towards a Unified 
Medical Command, and optimizing MTFs.
Support for Families With Special Needs
    NMFA is grateful to Congress for expanding health care and other 
support services to military dependent children with autism in the NDAA 
for Fiscal Year 2008. This complicated condition places a burden on 
many military families. Frequent military moves make it difficult for 
these children to receive a consistent level of services. Approximately 
12 percent of military children have disabilities, of which autism is 
only one condition affecting military special needs children. While 
grateful for the increased support targeted at military children with 
autism, NMFA urges Congress and DOD to ensure a comparable level of 
support for all military special needs families. Deployment of a 
servicemember removes a caregiver from the home, making managing 
therapy and doctors' appointments, negotiating with school officials 
for suitable services, and caring for other children in the family 
difficult for the parent remaining behind.
    In the NDAA for Fiscal Year 2002, Congress authorized the Extended 
Care Health Option (ECHO) to provide additional benefits to active duty 
with a qualifying mental or physical disability in recognition of 
extraordinary challenges faced by active duty families because of the 
servicemember's deployment or frequent relocations that often make 
accessing services in the civilian community difficult. We applaud 
Congress and DOD desire to create a robust health care and educational 
service for special needs children. But, these robust services do not 
follow them when they retire. NMFA has encouraged the Services to allow 
these military families the opportunity to have their final duty 
station be in an area of their choice. This will allow them to move up 
on waiting lists for local services before retirement. Because not all 
servicemembers can have such an assignment, NMFA suggests ECHO be 
extended for 1 year after retirement for those who were already 
enrolled in ECHO prior to retirement.
    We remain concerned that military servicemembers with special needs 
family members continue to battle a lack of information or support and 
are often frustrated by the failure of the military health care and 
family support systems to work together and with civilian agencies to 
support their families' needs.
Guard and Reserve Family Health Care
    Despite increased training opportunities for families, the problem 
still persists of educating Guard and Reserve family members about 
their benefits. New and improved benefits do not always enhance the 
quality of life of Guard and Reserve families as intended because these 
families lack the information about how to access these benefits. NMFA 
is grateful to Congress for its initial efforts to enhance the 
continuity of care for National Guard and Reserve members and their 
families by creating TRICARE Reserve Select. We continue to monitor 
this new program closely, watching both premium increases and 
beneficiaries access to providers. Because TRICARE Reserve Select is 
basically the TRICARE Standard benefit, access to providers within 
certain standards is not guaranteed. Because Guard and Reserve members 
are paying premiums for this program, however, we believe they will 
expect DOD to ensure providers are available and willing to treat 
beneficiaries in this program.
    TRICARE Reserve Select is not the complete answer to Guard and 
Reserve families' health care needs. Information and support are 
improving for Guard and Reserve families who must transition into 
TRICARE; however, NMFA believes that going into TRICARE may not be the 
best option for all of these families. Guard and Reserve servicemembers 
who have been mobilized should have the same option as their peers who 
work for the Department of Defense: DOD should pay their civilian 
health care premiums. The ability to stay with their civilian health 
care plan is especially important when a Guard or Reserve family member 
has a special need. We appreciate the provision in the NDAA for Fiscal 
Year 2008 that provided for a stipend for that purpose but the need is 
just as great for a family member with a chronic condition, or in the 
midst of treatment. NMFA also believes that paying a subsidy to a 
mobilized Guard or Reserve member for their family's coverage under 
their employer-sponsored insurance plan may also prove to be more cost-
effective for the government than subsidizing 72 percent of the costs 
of TRICARE Reserve Select for Guard or Reserve members not on active 
duty.
    Emphasis must continue on promoting continuity of care for families 
of Guard and Reserve servicemembers. NMFA's recommendation to enhance 
continuity of care for this population is to allow members of the 
Selected Reserve to choose between buying into TRICARE when not on 
active duty or receive a DOD subsidy allowing their families to remain 
with their employer-sponsored care when mobilized.
                        families and deployment
    Families are impacted differently in all phases of deployment. They 
may be preparing for a first deployment. They may be in the first few 
months, adjusting to life without that all important partner, parent, 
son or daughter. They may be feeling the strain as months 6, 7 or 8 go 
by, as the tension of loved one in danger or the strain of keeping 
things ``normal'' begin to show. They may be experiencing the 
anticipation of reunion. But even with reunion there are worries, as we 
heard from one young man: ``Will my dad still like me?'' With return 
and reunion, families struggle to re-acquaint themselves with the 
member who has returned. Will she be the same as before? Did he suffer 
a traumatic brain injury (TBI)? How do we cope with his isolation or 
changes in personality?
    Each deployment is different. The needs of each family are 
different as well. We hear from families that they are weary. A recent 
article in USA Today highlighted the burn-out of family readiness group 
leaders and commander's spouses, family members who support other 
families in the unit, dealing with the problems at the other end of the 
phone, expressed in the commissary line or shared at the child care 
center. We appreciate the emphasis by the Services on the importance of 
training these important volunteers. Having attended several regional 
training sessions, we have seen first hand the tools and training that 
these volunteers are equipped with. It does take a measure of 
individual insight to know when a family member needs a good listener 
and when they need more help than the volunteer is able to provide. 
Care for these caregivers is essential. It is difficult to mandate or 
legislate relief for volunteers. NMFA hopes that professional staff 
members and commanders at the unit and installation levels are aware of 
the stress that these volunteers live with and look for ways to relieve 
them of some of these responsibilities. We applaud the Army's infusion 
of family readiness support assistants to units down to the battalion 
level to help relieve some of the overworked volunteers. But we want to 
make sure that there is a distinction between administrative help and 
the counseling that many of our deployed families need. We want to make 
sure that this additional staff support is available across all 
Services and components.
    NMFA is pleased that DOD is reaching out to servicemembers and 
families to gauge their needs. Defense Secretary Robert M. Gates' 
recent visit with soldiers and families at Ft. Campbell revealed many 
of the same concerns that NMFA hears from families. The impact of 
extended deployments was a significant concern of families there. 
Secretary Gates stated ``There is no question that 15-month deployments 
are a real strain, not only on the soldiers, but (also) on the families 
they leave behind.'' NMFA has said before, missing one birthday, one 
Christmas, one anniversary can be viewed as just part of the 
deployment. When two Christmases go by, or dad or mom has not been 
there for two birthdays in a row, the sacrifice can seem too great.
    The Services are also reaching out to the families of individual 
augmentees, those ``onesies and twosies'' who often are far from the 
unit headquarters of the deploying unit or may get lost in the shuffle. 
The Navy has developed a number of new initiatives in support of 
individual augmentee (IA) sailors and their families. One such 
initiative is the new Fleet and Family Support Centers (FFSC) and 
Expeditionary Combat Readiness Center (ECRC) individual augmentee 
newsletter. This newsletter will be published monthly to inform 
augmentees and their families of programs and services available to 
them. The ECRC Care Line can be reached via phone at 877-364-4302, 
email at [email protected], or online at http://www.ecrc.navy.mil/.
    Fleet and Family Support Centers (FFSC) have also created programs 
and services to keep IAs and their families informed. Among them are 
Virtual Individual Augmentee Discussion Groups hosted by Fleet and 
Family Support Centers worldwide. Discussion Groups will be available 
to help IA family members stay connected to other Navy families who are 
experiencing an IA deployment. Participation is via Internet and 
telephone.
Guard and Reserve
    NMFA would like to thank Congress for authorizing many provisions 
within the NDAA for Fiscal Year 2008 that affect our Guard and Reserve 
families. We now ask Congress to fund these important provisions to 
help improve the quality of life for our Guard and Reserve families, 
who have sacrificed greatly in support of our Nation. In the recently 
released final report from the Commission on the National Guard and 
Reserves the commissioners stated ``Reserve Component family members 
face special challenges because they are often at a considerable 
distance from military facilities and lack the on-base infrastructure 
and assistance available to active duty families.'' The report also 
stated ``Military family members today believe that all families in the 
community should enjoy a comparable level of ``purple'' support 
services, regardless of Service or component--with adequate funding and 
staffing resources.'' The report recognized the importance of Military 
OneSource to Reserve component families. While citing a robust 
volunteer network as crucial, the report also stated that family 
readiness suffers when there are too few paid staff professionals 
supporting the volunteers. These findings resonate with support 
recommendations made by NMFA through the years. NMFA thanks the 
Commission for recognizing the importance of family support to the 
National Guard and Reserve.
    The Yellow Ribbon Reintegration program was extremely successful in 
the State of Minnesota. Best practices always deserve to be shared. 
NMFA thanks this subcommittee for including provisions to implement the 
Yellow Ribbon program in all States and territories. This program 
should provide National Guard and Reserve members and their families 
with sufficient information, services, referral, and proactive outreach 
opportunities throughout the entire deployment cycle. We are well aware 
that members of the Reserve components face a host of unique challenges 
upon returning to their families, hometowns, and civilian jobs. NMFA is 
concerned, however, that a lack of funding may diminish the impact of 
this critical program. We urge Congress to fully fund this initiative 
supporting the men and women of our Reserve components and their 
families who have answered the call to protect our Nation. We must not 
forget that reintegration programs must address the needs of the entire 
family, including children.
    NMFA supports the institution of the Yellow Ribbon Reintegration 
program in all States and territories but asks that the program be 
fully funded to be most effective.
Military Family Life Consultants
    As this DOD program has matured, NMFA hears good things about the 
Military Family Life Consultant (MFLC) program. More servicemembers and 
families are familiar with the program and expect to see the counselors 
in their communities. We heard from one Marine family who said:

          As a Marine Corps wife and a medical provider at Quantico, I 
        can tell you the family life consultants have been a God send. 
        Quick access for marines to get counseling for combat 
        operational stress, stress management and spouse education post 
        deployment. They are so accommodating to the marines schedule 
        and they work closely with deployment health issues and mental 
        health clinic.

    Installations and commanders are also recognizing them as resource 
multipliers. Said one family support professional:

          The MFLC program works hard to make services available to 
        families. New MFLCs are announced in the post paper as she or 
        he is assigned. MFLCs attend post activities to meet families, 
        pass out phone numbers and make themselves available to 
        families. I have personally met them on playgrounds, at 
        workshops offered through MCEC, and through MOPs meeting 
        groups.

    MFLCs are also an integral part of NMFA's Operation Purple (OP) 
Camps. Through the support of DOD every OP camp, with the exception of 
the western region, has assigned an MFLC mental health consultant (NMFA 
wishes to thank the TriWest Health Care Alliance which supports OP 
camps in the west through a similar program).
    MFLCs fill an important need in the overall support of military 
families. The program's success warrants its continued authorization 
and funding.
                            wounded families
Wounded Servicemembers Have Wounded Families
    Post-deployment transitions can be especially problematic for 
injured servicemembers and their families. NMFA asserts that behind 
every wounded servicemember is a wounded family. Spouses, children, 
parents, and siblings of servicemembers injured defending our country 
experience many uncertainties. Fear of the unknown and what lies ahead 
in future weeks, months, and even years, weighs heavily on their minds. 
Other concerns include the injured servicemember's return and reunion 
with their family, financial stresses, and navigating the transition 
process to the VA.
    The system should alleviate, not heighten these concerns, and 
provide for coordination of care that starts when the family is 
notified the servicemember has been injured and ends with the DOD and 
VA working together to create a seamless transition as the injured 
servicemember transfers from active duty status to veteran status. NMFA 
congratulates Congress on the NDAA for Fiscal Year 2008 Wounded Warrior 
Act, in which many issues affecting this population were addressed. We 
also appreciate the work DOD and the VA have done in establishing the 
Senior Oversight Committee (SOC) to address the many issues highlighted 
by the three Presidential Commissions. However, more still needs to 
done. NMFA recently heard the SOC is now meeting monthly rather than 
weekly. There is certainly more work to be done. We urge Congress to 
establish an oversight committee to monitor DOD and VA's partnership 
initiatives, especially with the upcoming administration turnover and 
the disbandment of the SOC early this year.
    It is NMFA's belief the government, especially the VA, must take a 
more inclusive view of military families. Those who have the 
responsibility to care for the wounded servicemember must also consider 
the needs of the spouse, children, and the parents of single 
servicemembers and their siblings. According to the TBI Task Force, 
family members are very involved with taking care of their loved one. 
As their expectations for a positive outcome ebbs and flows throughout 
the rehabilitation and recovery phases, many experience stress and 
frustration and become emotional drained. NMFA recommends care for the 
families of the wounded/ill/injured should include support, assistance, 
and counseling programs. NMFA recently held a focus group composed of 
wounded servicemembers and their families to learn more about issues 
affecting them. They said following the injury, families find 
themselves having to redefine their roles. They must learn how to 
parent with an injury and become a spouse/lover with an injury. Each 
member needs to understand the unique aspects the injury brings to the 
family unit. Reintegration programs become a key ingredient in the 
family's success. NMFA believes we need to focus on treating the whole 
family with programs offering skill based training for coping, 
intervention, resiliency, and overcoming adversities. Parents need 
opportunities to get together with other parents who are in similar 
situations and share their experiences and successful coping methods. 
DOD and VA need to provide family and individual counseling to address 
these unique issues. A retreat for the entire family and for the couple 
provides an opportunity to reconnect and bond as a family again.
    Caregivers of the severely wounded, ill, and injured services 
members, such as those with severe TBI, must be trained through a 
standardized program, certified, and compensated. Caregivers need to be 
recognized for the important role they play in the care of their loved 
one. Without them, their quality of life would be significantly 
compromised. Additional financial burdens would be placed on the DOD 
and the VA health care systems. NMFA has heard from caregivers the 
difficult decisions they have to make over their loved one's bedside 
following the injury. Many don't know how to proceed because they don't 
know what their loved one's wishes were. We support the recently 
released TBI Task Force recommendation for DOD to require each 
deploying servicemember to have a medical power of attorney and a 
living will. The NDAA for Fiscal Year 2008 authorized an active-duty 
TRICARE benefit for severely wounded/ill/injured servicemembers, but 
not for their family members. This needs to be rectified to include the 
servicemember's spouse and children. NMFA recommends an active duty 
benefit like the surviving spouse benefit for 3 years for the family 
members of those who are medically retired.
    The impact of the wounded/ill/injured on children is often 
overlooked and underestimated. Military children experience a 
metaphorical death of the parent they once knew and must make many 
adjustments as their parent recovers. Many families relocate to be near 
the MTF or the VA Polytrauma Center in order to make rehabilitation 
process more successful. As the spouse focuses on the rehabilitation 
and recovery, older children take on new roles. They may become the 
caregivers for other siblings, as well as for the wounded parent. Many 
spouses send their children to stay with neighbors or extended family 
members, as they tend to their wounded/ill/injured spouse. Children get 
shuffled from place to place until they can be reunited with their 
parents. Once reunited, they must adapt to the parent's new injury and 
living with the ``new normal.'' Brooke Army Medical Center has 
recognized a need to support these families and has allowed for the 
system to expand in terms of guesthouses co-located within the hospital 
grounds. The on-base school system is also sensitive to issues 
surrounding these children. Unfortunately, not all families enjoy this 
type of support. NMFA is concerned the impact of the injury is having 
on our most vulnerable population, military children. NMFA believes we 
need research to better understand this phenomenon and identify 
effective support programs for these children.
    NMFA strongly suggests research on families, especially children of 
wounded/ill/injured servicemembers; standardized training, 
certification, and compensation for caregivers; individual and family 
counseling and support programs; and a reintegration program that 
provides an environment rich for families to reconnect. An oversight 
committee to monitor DOD's and VA's continued progress toward seamless 
transition.
Mental Health
    As the war continues, families' need for a full spectrum of mental 
health services--from preventative care to stress reduction techniques, 
to individual or family counseling, to medical mental health services--
continues to grow. The military offers a variety of mental health 
services, both preventative and treatment, across many helping agencies 
and programs. However, as servicemembers and families experience 
numerous lengthy and dangerous deployments, NMFA believes the need for 
confidential, preventative mental health services will continue to 
rise. It will also remain high for some time even after military 
operations scale down. Successful return and reunion programs will 
require attention over the long term, as well as a strong partnership 
at all levels between the various mental health arms of the DOD and VA.
    The Army's Mental Health Advisory Team (MHAT) IV report links the 
need to address family issues as a means for reducing stress on 
deployed servicemembers. The team found the top non-combat stressors 
were deployment length and family separation. They noted that soldiers 
serving a repeat deployment reported higher acute stress than those on 
their first deployment and the level of combat was the key ingredient 
for their mental health status upon return. They found there was no 
difference in Services. Multiple deployers reported higher acute stress 
than first-time deployers, which is a difference from the MHAT III that 
found those who redeploy were better prepared due to improved pre-
deployment training. They also acknowledged deployment length was 
causing higher rates of martial problems. Given all the focus on mental 
health prevention, the study found current suicide prevention training 
was not designed for a combat/deployed environment. Recent reports on 
the increased number of suicides in the Army also focused on tour 
lengths and relationship problems.
    DOD's Task Force on Mental Health stated timely access to the 
proper mental health provider remains one of the greatest barriers to 
quality mental health services for servicemembers and their families. 
NMFA and the families it serves have noted with relief more providers 
are deployed to theaters of combat operations to support 
servicemembers. The work of these mental health professionals with 
units and individuals close to the combat action they experience have 
proved very helpful and will reduce the stress that impedes 
servicemembers' performance of their mission and their successful 
reintegration with their families.
    While families are pleased more mental health providers are 
available in theater to assist their servicemembers, they are less 
happy with the resulting limited access to providers at home. DOD's 
Task Force on Mental Health found families are reporting an increase 
difficulty in obtaining appointments with social workers, 
psychologists, and psychiatrists at their military hospitals and 
clinics. The military fuels the shortage by deploying some of its child 
and adolescent psychology providers to the combat zones. Providers 
remaining at home stations report they are frequently overwhelmed 
treating active duty members who either have returned from deployment 
or are preparing to deploy to fit family members into their schedules, 
which could lead to compassion fatigue. Creating burnout and 
exacerbating the problem.
    In the seventh year of the global war on terror, care for the 
caregivers must become a priority. NMFA hears from the senior officer 
and enlisted spouses who are so often called upon to be the strength 
for others. We hear from the health care providers, educators, rear 
detachment staff, chaplains, and counselors who are working long hours 
to assist servicemembers and their families. Unless these caregivers 
are also afforded respite care, given emotional support through their 
command, and effective family programs, they will be of little use to 
those who need their services most.
    Thousands of servicemember parents have been away from their 
families and placed into harm's way for long periods of time. Military 
children, the treasure of many military families, have shouldered the 
burden of sacrifice with great pride and resiliency. Many programs, 
both governmental and private, have been created with the goal of 
providing support and coping skills to our military children during 
this great time of need. Unfortunately, many support programs are based 
on vague and out of date information.
    Given this concern, NMFA has partnered with RAND Corporation to 
research the impact of war on military children with a report due in 
April 2008. In addition, NMFA held its first ever Youth Initiatives 
Summit for Military Children, ``Military Children in a Time of War'' 
last October. All panelists agreed the current military environment is 
having an effect on military children. Multiple deployments are 
creating layers of stressors, which families are experience at 
different stages. Teens especially carry a burden of care they are 
reluctant to share with the nondeployed parent in order to not ``rock 
the boat.'' They are often encumbered by the feeling of trying to keep 
the family going, alongside anger over changes in their schedules, 
increase responsibility, and fear for their deployed parent. Children 
of the National Guard and Reserve face unique challenges as there are 
no military installations for them to utilize. They find themselves 
``suddenly military'' without resources to support them. School systems 
are generally unaware of this change in focus within these family units 
and are ill prepared to lookout for potential problems caused by these 
deployments. Also vulnerable are children who have disabilities that 
are further complicated by deployment. Their families find stress can 
be overwhelming, but are afraid of reaching out for assistance for fear 
of retribution on the servicemember.
    NMFA recommends research to:

         Gain a better understanding of the impact of war, 
        especially multiple and extended deployments;
         Identify and fund effective programs to address this 
        issue;
         Educate those who are at the touch point of our 
        military children on how to provide support, such as clergy, 
        child care providers, and teachers; and
         Encourage DOD to reach out and partner with those 
        private and nongovernmental organizations who are experts in 
        their field on children and adolescents to identify and 
        incorporate best practices in the prevention and treatment of 
        mental health issues affecting our military children.

    National provider shortages in this field, especially in child and 
adolescent psychology, are exacerbated in many cases by low TRICARE 
reimbursement rates, TRICARE rules, or military-unique geographical 
challenges: large populations in rural or traditionally underserved 
areas. Many mental health providers are willing to see military 
beneficiaries in a voluntary status. However, these providers often 
tell us they will not participate in TRICARE because of what they 
believe are timeconsuming requirements and low reimbursement rates. 
More must be done to persuade these providers to participate in TRICARE 
and become a resource for the entire system, even if that means DOD 
must raise reimbursement rates.
    Many mental health experts state that some post-deployment problems 
may not surface for several months or years after the servicemember's 
return. We encourage Congress to request DOD to include families in its 
Psychological Health Support survey; perform a pre and post-deployment 
mental health screening on family members (similar to the PDHA and 
PDHRA currently being done for servicemembers as they deploy into 
theater); and sponsor a longitudinal study, similar to DOD's Millennium 
Cohort Study, in order to get a better understanding of the long-term 
effects of war on our military families.
    NMFA is especially concerned not as many services are available to 
the families of returning National Guard and Reserve members and 
servicemembers who leave the military following the end of their 
enlistment. They are eligible for TRICARE Reserve Select, but as we 
know Guard and Reserve are often located in rural areas where there may 
be no mental health providers available. We ask you to address the 
distance issues families face in linking with military mental health 
resources and obtaining appropriate care. Isolated Guard and Reserve 
families do not have the benefit of the safety net of services provided 
by MTFs and installation family support programs. Families want to be 
able to access care with a provider who understands or is sympathetic 
to the issues they face. NMFA recommends the use of alternative 
treatment methods, such as telemental health; increasing mental health 
reimbursement rates for rural areas; modifying licensing requirements 
in order to remove geographical practice barriers that prevent mental 
health providers from participating in telemental health services; and 
educating civilian network mental health providers about our military 
culture.
    Mental health professionals must have a greater understanding of 
the effects of mild TBI in order to help accurately diagnose and treat 
the servicemember's condition. They must be able to deal with 
polytrauma--Post-Traumatic Stress Disorder (PTSD) in combination with 
multiple physical injuries. NMFA appreciates Congress establishing a 
Center of Excellence for TBI and PTSD. For a long time, the Defense and 
Veterans Brain Injury Center (DVBIC) has been the lead agent on TBI. 
Now with the new Center, it is very important DVBIC become more 
integrated and partner with other Services in researching TBI. Also, we 
need more education to civilian health care providers on how to 
identify signs and symptoms of mild TBI and PTSD.
    DOD must balance the demand for mental health personnel in theater 
and at home to help servicemembers and families deal with unique 
emotional challenges and stresses related to the nature and duration of 
continued deployments. We ask you to continue to put pressure on DOD to 
step up the recruitment and training of uniformed mental health 
providers and the hiring of civilian mental providers to assist 
servicemembers in combat theaters AND at home stations to care for the 
families of the deployed and servicemembers who have either returned 
from deployment or are preparing to deploy.
    DOD should increase reimbursement rates to attract more providers 
in areas were there is the greatest need. TRICARE contractors should be 
tasked with stepping up their efforts to attract mental health 
providers into the TRICARE networks and to identify and ease the 
barriers providers cite when asked to participate in TRICARE.
                         families in transition
Survivors
    NMFA applauds the enhancement of medical benefits included in the 
NDAA for Fiscal Year 2006 making surviving children eligible for full 
medical benefits to age 21 (or 23 if they are enrolled in college) 
bringing them in line with the active duty benefit for dependent 
children. To complete the benefit package, we ask Congress to allow 
surviving children to remain in the TRICARE Dental Program until they 
age out of TRICARE and, in cases where the surviving family had 
employer-sponsored dental insurance, treat them as if they had been 
enrolled in the TRICARE Dental Program at the time of the 
servicemember's death.
    Because the VA has as part of its charge the ``care for the widow 
and the orphan,'' NMFA was concerned about recent reports that many Vet 
Centers did not have the qualified counseling services they needed to 
provide promised counseling to survivors, especially to children. DOD 
and the VA must work together to ensure surviving spouses and their 
children can receive the mental health services they need. New 
legislative language governing the TRICARE behavioral health benefit 
may also be needed to allow TRICARE coverage of bereavement or grief 
counseling. While some widows and surviving children suffer from 
depression or some other medical condition for a time after their loss, 
many others simply need counseling to help in managing their grief and 
helping them to focus on the future. Many have been frustrated when 
they have asked their TRICARE contractor or provider for ``grief 
counseling'' only to be told TRICARE does not cover ``grief 
counseling.'' Available counselors at military hospitals can sometimes 
provide this service and certain providers have found a way within the 
reimbursement rules to provide needed care, but many families who 
cannot access military hospitals are often left without care because 
they do not know what to ask for or their provider does not know how to 
help them obtain covered services. Targeted grief counseling when the 
survivor first identifies the need for help could prevent more serious 
issues from developing later.
    NMFA recommends that surviving children be allowed to remain in the 
TRICARE Dental Program until they age out of TRICARE eligibility. We 
also recommend that grief counseling be more readily available to 
survivors.
    NMFA appreciates the work being done by DOD and the Services to 
provide training to casualty assistance officers and to make sure 
survivors are receiving accurate information in a timely manner. The 
survivor notebook provided by DOD and the Services, The Days Ahead: 
Essential Papers for Families of Fallen Servicemembers, has received 
praise from survivors and families and has enhanced the information 
being provided by the Services. The Army Long Term Family Case 
Management Office--the one-stop resolution and assistance for benefits, 
outreach, advocacy, and support--for their improvements to the case 
management system and continued communication with families to further 
refine their services and response time.
    NMFA still believes the benefit change that will provide the most 
significant long-term advantage to the financial security of all 
surviving families would be to end the Dependency and Indemnity 
Compensation (DIC) offset to the Survivor Benefit Plan (SBP). Ending 
this offset would correct an inequity that has existed for many years. 
Each payment serves a different purpose. The DIC is a special indemnity 
(compensation or insurance) payment paid by the VA to the survivor when 
the servicemember's service causes his or her death. It is a flat rate 
payment of $1,091 for the surviving spouse and $271 for each surviving 
child. The SPB annuity, paid by 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 becomes eligible for DIC.
    Surviving active duty spouses can make several choices, dependent 
upon their circumstances and the ages of their children. Because SBP is 
offset by the DIC payment, the spouse may choose to waive this benefit 
and select the ``child only'' option. In this scenario, the spouse 
would receive the DIC payment and the children would receive the full 
SBP amount until each child turns 18 (23 if in college), as well as the 
individual child DIC until each child turns 18 (23 if in college). Once 
the children have left the house, this choice currently leaves the 
spouse with an annual income of $13,092, a significant drop in income 
from what the family had been earning while the servicemember was alive 
and on active duty. The percentage of loss is even greater for 
survivors whose servicemembers served longer. Those who give their 
lives for their country deserve more fair compensation for their 
surviving spouses.
    NMFA appreciates the establishment of a special survivor indemnity 
allowance as a first step in the process to eliminate the DIC offset to 
SBP. As written, the NDAA for Fiscal Year 2008 only provides this 
allowance to survivors of military retirees who paid premiums for the 
Survivor Benefit Plan and survivors of gray area reservists who have 
signed up for SBP but had not yet begun paying premiums. The House 
version of the NDAA for Fiscal Year 2008 extended this allowance to all 
surviving spouses, including those survivors of active duty deaths. 
NMFA believes that eligibility for this special allowance should be 
extended to all survivors.
    NMFA believes several other adjustments could be made to the 
Survivor Benefit Plan. These include allowing payment of the SBP 
benefits into a Special Needs Trust in cases of disabled children and 
allowing SBP eligibility to switch to children if a surviving spouse is 
convicted of complicity in the member's death.
    NMFA has always emphasized that servicemembers and families 
understand there is a package of survivor benefits. While NMFA 
understands the impetus for allowing a servicemember to designate 
payment of the death gratuity in 10 percent increments to persons other 
than their primary next of kin, it begs the question ``what is the 
purpose of the death gratuity?'' The death gratuity was originally 
intended to act as a financial bridge, to help with living expenses 
until other benefits such as the Dependency and Indemnity Compensation 
(DIC) payment, the Survivor Benefit annuity, and Social Security 
benefits begin to be paid. The death gratuity is not an insurance 
payment, even though its $100,000 payment is bigger than many civilian 
life insurance plans. NMFA is concerned that families may be left 
without that financial bridge if the servicemember designates someone 
other than their primary next of kin to receive the entire death 
gratuity. We do appreciate the provision language that requires 
notification of the spouse if the servicemember does change designees. 
We will monitor with interest the effects of this change on surviving 
families.
    NMFA recommends that eligibility for the special survivor indemnity 
allowance be expanded to include all SBP-DIC survivors. We also ask the 
DIC offset to SPB be eliminated to recognize the length of commitment 
and service of the career servicemember and spouse
Families on the Move
    NMFA is gratified that DOD has begun to implement the ``Families 
First'' program for Permanent Change of Station (PCS) moves with the 
launching of the full replacement value (FRV) component late last year. 
This program is long overdue. It will provide much needed protections 
to military families entrusting their most precious possessions to 
movers. We ask Congress to monitor additional issues related to 
Families First to ensure all components are brought online in a timely 
manner. NMFA will monitor the implementation of the provision included 
in the NDAA for Fiscal Year 2008 that requires the servicemember to 
comply with reasonable restrictions or conditions prescribed in order 
to receive payment for damaged or lost items. NMFA is concerned that 
this language, coupled with the small business language in the 
Conference Report, could be used to diminish or destroy this important 
benefit families have waited so long to receive. NMFA asks Congress to 
ensure full replacement value coverage is not diminished or lost now 
that families finally have the benefit.
    We also ask Congress to recognize that military spouses accumulate 
professional goods over the course of a military career. Frequent moves 
make it difficult to establish and maintain professional materials used 
for a job or volunteer activities that will ultimately count against 
the family's weight allowance when the time to move arrives. Military 
members are permitted a professional goods weight allowance to 
compensate for the computers, books and equipment that must accompany 
them from duty station to duty station. We request that spouses be 
provided this professional courtesy as well.
    NMFA was disappointed this subcommittee's recommendation for 
shipment of a second vehicle to non-foreign overseas duty stations was 
dropped in conference. A PCS move to an overseas location can be 
especially stressful. Military families are faced with the prospect of 
being thousands of miles from extended family and living in a foreign 
culture. At many overseas locations, there are insufficient numbers of 
government quarters resulting in the requirement to live on the local 
economy away from the installation. Family members in these situations 
can begin to feel extremely isolated; for some the only connection to 
anything familiar is the local military installation. Unfortunately, 
current law permits the shipment of only one vehicle to an overseas 
location, including Alaska and Hawaii. Since most families today have 
two vehicles, they sell one of the vehicles.
    Upon arriving at the new duty station, the servicemember requires 
transportation to and from the place of duty leaving the military 
spouse and family members at home without transportation. This lack of 
transportation limits the ability of spouses to secure employment and 
the ability of children to participate in extra curricular activities. 
While the purchase of a second vehicle alleviates these issues, it also 
results in significant expense while the family is already absorbing 
other costs associated with a move. Simply permitting the shipment of a 
second vehicle at government expense could alleviate this expense and 
acknowledge the needs of today's military family.
    NMFA requests that Congress ease the burden of military PCS moves 
on military families by authorizing a professional goods weight 
allowance for military spouses and by authorizing the shipment of a 
second vehicle for families assigned to an overseas location on 
accompanied tours.
Pay and Compensation
    NMFA thanks members of this subcommittee for their recognition that 
servicemembers and their families deserve a comprehensive benefit 
package consistent with the extraordinary demands of military service. 
We ask you to continue to evaluate changing circumstances that may 
diminish the value of that package and threaten the retention of a 
quality force. We also ask you to recognize the interaction between the 
various elements of the compensation package and how they affect 
families' eligibility for certain State and Federal programs. Despite 
regular annual pay increases, in addition to targeted raises, over the 
past several years, military pay for some servicemembers still lags 
behind civilian pay. NMFA was disappointed to see the additional one 
half percent above ECI provision was stripped from the NDAA for Fiscal 
Year 2008 during conference. We encourage Congress to consider 
extending the pay raise for 2009 by an additional one-half percent over 
the ECI.
Military Allowances and Safety Net Programs
    In congressional testimony since 2003, NMFA has raised a 
longstanding frustration for military families: the confusion involved 
in how and when military allowances are counted to determine 
eligibility for military and civilian programs. NMFA again reinforces 
the need for Members of Congress, as well as State officials, to assist 
in bringing a sense of order in how military allowances are counted for 
Federal and State programs. We ask you to help ensure equitable access 
to these safety net services and protect families against disruptions 
in benefit eligibility caused by the receipt of deployment pays. No 
family should have to face the prospect of losing valuable benefits for 
a disabled child because a servicemember has received deployment 
orders. Families living off the installation are often there only 
because of insufficient on-base housing, yet endure higher expenses 
than families living on an installation. Ideally, therefore, NMFA 
believes tax-free allowances such as BAH should not be counted under 
any safety net program, which is how they are now treated in 
determining eligibility for the Earned Income Tax Credit. NMFA 
understands this could increase the number of military families 
eligible for some of these programs, but believe this increase is 
justified given the need for equitable treatment of all servicemembers, 
as well as the loss of spouse income due to military relocations and 
high operations tempo.
    Inconsistent treatment of military allowances in determining 
eligibility for safety net programs creates confusion and can exact a 
financial penalty on military families. A start in correcting this 
inequity would be to adopt a common standard in how BAH should be 
counted in eligibility formulas and to ensure that the receipt of 
deployment-related allowances do not cause military family members to 
become ineligible for support services for which they would otherwise 
be eligible.
Flexible Spending Accounts
    Flexible Spending Accounts have done a great deal to help Federal 
employees and corporate civilian employees defray out-of-pocket costs 
for both their health care and dependent care needs. NMFA believes this 
important program should be extended to military servicemembers, and 
urges Congress to work with the Department of Defense to accomplish 
this much needed change. It is imperative that we include active duty 
and Selected Reserve members in this cost saving benefit.
    NMFA asks that a flexible spending account benefit be extended to 
military families.
Commissaries and Exchanges
    The commissary is a key element of the total compensation package 
for servicemembers and retirees and is valued by them, their families, 
and survivors. NMFA surveys indicate that military families consider 
the commissary one of their most important benefits. In addition to 
providing average savings of more than 30 percent over local 
supermarkets, commissaries provide an important tie to the military 
community. Commissary shoppers get more than groceries at the 
commissary. They gain an opportunity to connect with other military 
family members and to get information on installation programs and 
activities through bulletin boards and installation publications. 
Finally, commissary shoppers receive nutrition information and 
education through commissary promotions and educational campaigns 
contributing to the overall health of the entire beneficiary 
population.
    NMFA is concerned that there will not be enough commissaries to 
deal with the areas experiencing substantial growth. The surcharge was 
never intended to pay for DOD and Service transformation. Additional 
funding is needed to ensure commissaries are built in areas that are 
gaining personnel as a result of these programs.
    The military exchange system serves as a community hub, in addition 
to providing valuable cost savings to members of the military 
community. Equally important is the fact that exchange system profits 
are reinvested in important Morale Welfare and Recreation (MWR) 
programs, resulting in quality of life improvements for the entire 
community. We believe that every effort must be made to ensure that 
this important benefit and the MWR revenue is preserved, especially as 
facilities are down-sized or closed overseas. Exchanges must also 
continue to be responsive to the needs of deployed servicemembers in 
combat zones.
Military Housing
    In the past few years, privatized housing has changed the lifestyle 
for the military families who live there. New or renovated housing with 
spacious floor plans, new appliances and amenities you would find the 
new suburban subdivisions have gone a long way to improving the quality 
of life for military families. However, there are still a few things 
that need to be addressed.
    With rebasing, as more installations become joint, there is a need 
for a single unified definition of adequate housing. Currently some 
servicemembers are receiving refunds of part of their BAH while members 
of other Services living in identical units are not. The only 
difference is the individual Service definition of ``adequate 
housing''. This situation creates a disparity in benefit between 
servicemembers of equal rank. In addition, there are concerns that DOD 
is not adequately monitoring construction contracts. Air Force 
privatization contracts have fallen hopelessly behind schedule in some 
areas leaving sizeable wait lists for housing that should already be 
complete and occupied. Better oversight is absolutely necessary. NMFA 
appreciates the provision in the NDAA for Fiscal Year 2008 calling for 
a report on this issue.
    Commanders must be held accountable for privatized communities. 
These housing areas remain the responsibility of the installation 
Commander even when managed by a private company. Military members 
should not be on wait lists while civilians occupy housing. While 
privatization contracts permit other occupants for vacant units, 
Commanders must ensure that privatized housing is first and foremost 
meeting the needs of the active duty population of the installation. In 
some cases this will require modification or renegotiation of 
contracts. On an aesthetic and health care note, NMFA asks that a 
minimum number of non-smoking quarters be designated at each 
installation. Non-smokers, especially in multi-family dwellings, are 
being forced to live with second hand smoke in far too many cases. NMFA 
has received complaints from families who are suffering health 
consequences of living with a neighbor's smoking habit. This is 
unacceptable.
    NMFA feels there needs to be a review of BAH standards. While 
families who live on the installation are better off, families living 
off the installation are forced to absorb more out-of-pocket expenses 
in order to live in a home that will meet their needs. In the 
calculation for BAH there is no regard for family size. In addition, 
the standards are based on an outdated concept of what would constitute 
a reasonable dwelling. For example, in order to receive BAH for a 
single family dwelling a servicemember must be an E9. However, if that 
same servicemember lived in military housing, he or she would likely 
have a single family home at the rank of E6 or E7. BAH standards should 
mirror the type of dwelling a servicemember would occupy if government 
quarters were available.
                         families and community
    Higher stress levels caused by open-ended and multiple deployments 
require a higher level of community support. Military families, 
especially those geographically dispersed, often look to support 
programs in their communities because of their proximity and 
familiarity.
    A question is often asked about whether there is a sense of 
detachment between the civilian community and military servicemembers 
and their families. A small part of the Nation is being asked to assume 
duties and sacrifices while the rest of the Nation goes about their 
business, oblivious to the contributions of the few. To recognize the 
sacrifices and the day-to-day needs of America's military family 
members, NMFA worked with the U.S. Family Health Plan, a TRICARE 
provider, to implement a public service campaign urging citizens to 
``support, befriend, remember and appreciate'' military family members. 
The campaign consists of national print, radio, TV, online and in-
cinema public service announcements (PSAs). The messages are moving and 
emotional, designed to get people thinking about the families who 
contribute to the Nation's well-being every day, during war as well as 
peace. For example, the PSAs suggest having coffee with a soldier's 
parents, hiring a military spouse and mentoring a military child. 
Thirty- and 15-second video PSAs were shown to approximately 3.4 
million moviegoers in 205 theatres this past summer. The videos along 
with four radio PSAs, may be downloaded from http://
www.yearofthemilitaryfamily.org/.
    NMFA often learns of other community programs that are reaching out 
to military families. Some of these are initiatives funded by other 
Federal agencies. Many of these programs are highlighted on the America 
Supports You Web site. In North Carolina, Essential Life Skills for 
Military Families is a 12-hour workshop series designed for National 
Guard and Reserve component couples. The sessions offer to help 
military families deal with the unique challenges they experience as a 
citizen soldier family. Held in their own communities, the classes are 
taught by local Cooperative Extension Family and Consumer Sciences 
Agents. Funding for this project was provided by the United States 
Department of Health and Human Services, Administration for Children 
and Families. The program addresses marriage and family relationships, 
parenting, balancing military and family needs, financial literacy, 
legal issues and building a support network in your own community.
    NMFA is also partnering with the United Way's 2-1-1 program. This 
hotline program provides health and human service information to 
callers around the United States. The program is robust in some areas, 
like Texas and still in the development stage in others. NMFA is 
offering military family friendly information and resources through 
webinars and conferences to the 2-1-1 information and referral 
operators so that they can send military families who call the hotline 
to already existent military resources like Military OneSource or State 
Joint Family Assistance Centers.
    Military families share a bond that is unequaled in the civilian 
world. They support each other through hardship, deployments, PCS 
moves, and sometimes, the loss of a loved one. The military community 
is close knit and must be so. It is imperative that our Nation ensure 
the necessary infrastructure and support components are in place to 
support families regardless of where they happen to be located 
geographically. More importantly, we ask you and other Members of 
Congress to ensure that the measures undertaken today in the interest 
of cutting costs and improving efficiency do not also destroy the sense 
of military community so critical to the successful navigation of a 
military lifestyle. Educating families on what support is being 
provided helps reduce the uncertainty for families.
    Preparation and training are essential in reaching families and 
making sure they are aware of additional resources available to them. 
While NMFA appreciates the extraordinary support that was made 
available to address the special needs of the families during 
deployment extensions and last year's ``Surge'', our Nation must ensure 
this level of support is available to all families day-in and day-out. 
Military family support and quality of life facilities and programs 
require dedicated funding, not emergency funding. Military families are 
being asked to sustain their readiness. The least their country can do 
is make sure their support structure is consistently sustained as well. 
Strong families equal a strong force. Family readiness is integral to 
servicemember readiness. The cost of that readiness is an integral part 
of the cost of the war and a national responsibility. We ask Congress 
to shoulder that responsibility as servicemembers and their families 
shoulder theirs.

    Senator Ben Nelson. Thank you.
    Sergeant Cline?

  STATEMENT OF MASTER SERGEANT MICHAEL P. CLINE, USA (RET.), 
EXECUTIVE DIRECTOR, ENLISTED ASSOCIATION OF THE NATIONAL GUARD 
                      OF THE UNITED STATES

    Sergeant Cline. Thank you.
    Mr. Chairman, Senator Graham, we thank you for holding 
these hearings on behalf of the men and women who make up our 
Nation's National Guard and Reserve component.
    Thanks to the diligent work of Congress and this 
subcommittee, the National Guard and Reserves have proven they 
are a ready, reliable, and relevant force. Today, almost 
700,000 National Guard and Reserve members have been called to 
Active Duty for Operation Enduring Freedom (OEF) and Operation 
Iraqi Freedom (OIF), and 173,000 have been deployed multiple 
times. More than 527 National Guard members have made the 
ultimate sacrifice for freedom.
    Mr. Chairman, one of the most asked-about issues that faces 
the Associations of TMC is the early retirement provision 
passed last year. It was signed into law by the President in 
January of this year. However, this vital piece of legislation 
didn't provide retroactively back to October 2001, when our 
Guard and Reserve members began deploying. EANGUS and the 
member organizations of TMC are opposed to the lack of 
retroactivity. We believe it sends a message, loud and clear, 
that the budget of the United States has a higher priority than 
the lives sacrificed in its defense.
    Although the estimates by the Congressional Research 
Service (CRS) is in excess of $2 billion over 10 years, we 
believe the demographics used by the CRS are overinflated. 
Based on the Defense Advisory Committee on Military 
Compensation Report in 2005, only 47 percent of officers and 15 
percent of enlisted will remain in uniform long enough to 
qualify for retirement. Of the Guard's end strength of 
approximately 460,000, only 5,227 of those will be eligible for 
early retirement. Even if you include the Federal Reserves, the 
costs will not amount to $2 billion over 10 years. We ask the 
committee to endorse Senator Chambliss' bill, S. 2836, to 
include retroactivity, those who have so proudly answered the 
call of our country. In this year of political chaos and debate 
over the war in Iraq, we don't ask that you endorse the war, 
but we do ask that you support those who have answered the call 
to duty. Please support our troops.
    We are most grateful to Congress for adopting the 10-year 
post-service readjustment benefit for National Guard and 
Reserve veterans of Iraq and Afghanistan, and others who have 
served on Active Duty on contingency operations, but additional 
upgrades are needed to fully match the MGIB with the needs of 
all warriors who serve in the 21st century. We ask that you 
authorize a month-for-month MGIB entitlement for reservists who 
serve multiple Active Duty tours for up to 36 months; integrate 
our Reserve and Active Duty MGIB laws under title 38, restore 
basic Reserve MGIB benefits for drill service for 47 to 50 
percent of the Active Duty rates, change the ``14 years from 
date of eligibility'' rule to ``as long as you're a member in 
good standing'' in the Guard and Reserve, and, last, authorize 
upfront reimbursement of tuition or training coursework.
    The Commission on the National Guard and Reserves rendered 
their report on January 31 of this year. It made 95 
recommendations. The majority of the document discounts the 
importance of the Reserves and a militia. The report recommends 
diminishing the full-time support workforce in the Guard and 
replacing them with Active component soldiers. Today, with 
heavier commitments and more deployments, full-time support is 
critical to the mission for success. This necessary full-time 
force pays dividends in preparing lives for war, and cannot be 
sacrificed on the economic altar. We oppose degrading the full-
time support program for the Guard and Reserve.
    EANGUS agrees with the Commission that the Chief of the 
National Guard Bureau should be promoted to general and have a 
seat on the Joint Chiefs of Staff. There is no representation 
that relates the homeland security mission so critical to 
America. The Chief of the National Guard Bureau brings that 
focus to the panel. Likewise, the top officers at Northern 
Command (NORTHCOM) need to be National Guard, due to the 
complexity of coordinating with individual States and their 
governments.
    Duty status reform--either on Active Duty or not, the 
Commission considers in-Active Duty training as Active Duty, 
and therefore, recommends adjusting the pay from receiving 1 
day's pay per drill period to 1 day's pay for 1 day's work. 
This will reduce the DOD's liability for pay, benefits, and 
retirement, but it also reduces the financial benefit to Guard 
and Reserve members to include a reduction of retirement points 
and potential recruiting and retention problems. We stand 
opposed to this recommendation.
    Mr. Chairman, Senator Graham, thank you for the opportunity 
to express the views of TMC. We look forward to working with 
your subcommittee.
    [The prepared statement of Sergeant Cline follows:]
       Prepared Statement by MSG Michael P. Cline, USA (Retired)
    Mr. Chairman, Senator Graham, and distinguished members of the 
subcommittee, the Enlisted Association of the National Guard of the 
United States appreciates the opportunity to submit our views regarding 
the Defense Department's budget submission for fiscal year 2009 and its 
possible effect on the National Guard.
    The Enlisted Association of the National Guard of the United States 
is the only military service association that solely represents the 
interests of every enlisted soldier and airmen in the Army and Air 
National Guard. Our constituency base is comprised of over 414,000 
soldiers and airmen, their families, and a large retiree membership. 
The Enlisted Association of the National Guard of the United States 
receives no Federal funds or Federal grants.
    The Army and the Air National Guard are part of the ``Reserve 
component,'' a term which is commonly used to refer collectively to the 
seven individual Reserve components of the Armed Forces. The role of 
the Reserve component as codified in law is to ``provide trained units 
and qualified persons available for active duty in the Armed Forces, in 
time of war or national emergency, and at such other times as the 
national security may require, to fill the needs of the Armed Forces 
whenever more units and persons are needed than are in the regular 
components.''
    The war on terror has taxed the resources of the U.S military and, 
in particular, the Army. The Army has responded by relying very heavily 
on the citizen soldiers of the National Guard and Reserves. Currently, 
the Reserve component has over 95,000 service men and women on active 
duty. Since the beginning of the war on terror, 527 National Guardsmen 
have been killed in action or suffered disease or non-battle related 
mortality. Thousands more have been wounded and their lives have been 
changed forever. On the other hand, involvement of the Reserves in the 
war on terror has filled the ranks with the most combat experienced 
force since World War II.
    We would like to highlight a few issues we hope will be taken into 
consideration during the committee's review of the fiscal year 2009 
budget and the Future Years Defense Program.
                            early retirement
    We greatly appreciate the subcommittee's support for earlier 
retirement eligibility. In Public Law 110-181, signed by President Bush 
on January 28, 2008, the provisions for earlier retirement were a 
significant advance on this issue. This issue is the number one 
priority issue for our association, and the number one issue that the 
three senior enlisted leaders of the National Guard Bureau face as they 
travel and talk with Guard members. But as pleased as we are with the 
provisions in that law, we are deeply concerned that the provisions are 
not retroactive to the beginning of the war on terror. Over 600,000 
reservists have served in the war, around the world, since September 
11, 2001. Without the retroactivity, it screams to those veterans that 
their service doesn't count as much as it should.
    We see the provisions as a tangible incentive for those members 
with 20 years of service or more, our most experienced force. They have 
no bonus or other incentives to stay, and they cannot retire and 
receive an immediate annuity. By allowing the possibility of earlier 
retirement, it incentivizes their service and they will stay with the 
Guard. When they stay, we all win, retaining their vast and important 
experience. The same senior enlisted leaders at the National Guard 
Bureau will tell you that they are losing that experience just after 20 
years of service, and the earlier retirement eligibility is just the 
incentive needed to retain them in boots.
    So we thank you for what you've done so far, and encourage you to 
continue to work on this issue to include the 600,000 who have 
valiantly served their country by making this law retroactive to 
September 11.
                              compensation
    We thank the subcommittee for its work on raising the pay of 
military members above the ECI. We believe there is still a pay gap 
between what military members are paid and what their comparable 
civilian counterparts earn, despite what the Defense Department says. 
The Department includes in its calculations the intangible benefits a 
military member receives, which are difficult to quantify. For example, 
they include commissary privileges--quantifying that benefit will 
differ from person to person, depending on whether or not they use the 
commissary and if they do, how much. We do not believe the intangible 
benefits can be used in the metrics to compute the pay gap.
    Our members are civilians when not in Federal service, and they 
experience that gap once they are ordered to active duty. For some, it 
has caused their families to rely on government programs and to even 
consider bankruptcy as avenues to solve their dire financial problems. 
We encourage the subcommittee to continue to strive to close the pay 
gap, which will have a profound effect in the lives of our members and 
their families.
    Bonuses and other forms of cash compensation that the subcommittee 
has authorized not only attracted but motivated our citizen soldiers 
and airmen to serve their country and then remain in that service. 
Recruiting and retention of National Guard members is at an all time 
high, and all of them are volunteers. We don't view returning to 
conscription a viable alternative to the benefits the National Guard 
enjoys today.
    We do ask the subcommittee to consider raising the amount of Family 
Serviceman's Group Life Insurance payable for children from $10,000 to 
$25,000, remaining at no cost to the military member. The cost of care 
and even funerals has risen, and $10,000 would be only a partial 
reimbursement against any costs for a child.
                          inactive duty travel
    Our association and its members greatly appreciate the 
subcommittee's authority for inactive duty travel that was in Public 
Law 110-181, amending title 37, U.S.C., to allow for payment of travel 
and expenses related to inactive duty training outside of normal 
commuting distances. The law allows for payment of up to $300 per round 
trip with conditions. It was a good first step. However, with the 
increasing cost of fuel, as well as the impact on airline tickets, this 
very issue alone could determine whether a Guard member decides to stay 
or leave the Service.
    We would encourage the subcommittee to remove the restrictions and, 
for the most part, limit the determining factor to the normal commuting 
distance. In the case of the Virgin Islands and Hawaii, where the Guard 
is spread out over several islands, we would ask the subcommittee to 
place exceptions in title 37, section 408a, for those two geographic 
locations so that they don't have to meet the normal commuting distance 
restriction.
                         tricare fee increases
    For yet another year, the Defense Department has provided Congress 
a budget with false assumptions regarding the savings that will be 
accrued to fund TRICARE, and have asked for increases in fees, co-
payments and deductibles. As the Government Accountability Office (GAO) 
report on TRICARE Reserve Select shows, the Defense Department is 
really not a reliable source for estimating its costs for health care 
programs. The GAO report doesn't mention the initial $300 million that 
Congress gave the Department for TRICARE Reserve Select in fiscal year 
2004 for a pilot project that never was. The GAO report says in fiscal 
year 2005, the Department estimated its costs for the program to be $70 
million, and actual costs were $5 million. In fiscal year 2006, after 
raising rates for users 8.5 percent, the Department estimated the 
program costs to be $442 million, and their actual costs were $40 
million. It is evident to the average person that the Department can't 
estimate costs for health care. The GAO report also said that the 
Department doesn't have a reliable or accurate accounting system.
    We believe all military members, and especially our National Guard 
members, have paid the cost of health care with their service and their 
lives. The Future of Military Health Care Task Force reported that the 
military health care system needs to be very generous, and we agree. 
The Task Force reported that the military health care system should not 
be free, and we agree--and the price is being paid every minute of 
every day in the lives of our soldiers and airmen and their families. 
The Task Force reported that the military health care system should be 
fair to the American taxpayer, and we agree, once the American taxpayer 
makes the same sacrifices that members of the military make, and the 
numbers say that less than 1 percent of the American taxpayers are 
willing to serve their Nation in its military forces.
    We thank the subcommittee for not raising the fees, co-payments and 
deductibles on TRICARE, and urge the subcommittee to require a greater 
accountability of the Defense Department before any other sacrifices, 
monetary or otherwise, are required of our members or veterans.
    A related issue is the provider fee schedule, and its tie to 
Medicare rates. More than a legislative band-aid needs to be applied to 
revamp the provider fees, to prevent the decrease of fees and increase 
the pool of eligible providers, especially in rural areas. This affects 
TRICARE Standard and TRICARE Reserve Select. As an example, the TRICARE 
fee schedule is so little, most providers in the State of Alaska will 
not accept TRICARE (acknowledging there is a provider access problem in 
Alaska as well) rendering TRICARE Reserve Select a useless benefit to 
many of those Guard and Reserve members who live in the State.
    We also suggest the subcommittee consider allowing gray area 
retirees the option to buy into TRICARE Reserve Select at the same rate 
as currently serving members. When our Guard members retire prior to 
reaching age 60 or in conjunction with the early retirement provisions 
in Public Law 110-181, they will have a lapse in health care. We 
propose the subcommittee consider allowing this small group of retirees 
the ability to buy into TRICARE at the same rate as those on TRICARE 
Reserve Select.
                             dental funding
    One of the largest readiness needs, other than equipment, for the 
National Guard is dental treatment prior to mobilization and 
deployment. Currently authorized just prior to mobilization, during the 
alert period, there is still a problem with dental readiness and 90 
days just isn't enough time to diagnose and treat our National Guard. 
In addition, dental insurance rates through the TRICARE Reserve Dental 
Program are steep. Family coverage for National Guard members is almost 
$84 per month, and our Individual Ready Reserve cousins pay over $101 
monthly, and rates are set to increase in February next year another 5 
percent. When added to TRICARE Reserve Select rates, our citizen 
soldiers and airmen and their families are paying $337 monthly for 
basic services. That's a lot of money for over a third of our members, 
and they will make an economic decision to self insure rather than to 
pay those premiums. When they decide to self insure, military readiness 
for deployment is severely degraded.
    We seek your help in providing authority for the dental readiness 
of our members. Whether through additional government subsidizing of 
the dental contractor, space available treatment in military or 
veterans treatment facilities, or another idea that the subcommittee 
may have, something must be done to relieve this situation, and we 
request your assistance.
                           montgomery gi bill
    Education benefits were once the prime reason Guard members 
enlisted but at this particular time it is no longer is as much of a 
motivator. We are distressed by that fact, and have long been promoters 
of the educational benefits of military service. We recommend the 
subcommittee amend title 10, U.S.C., and move the entire Montgomery GI 
Bill program into Title 38. The Defense Department recently testified 
that they have no opposition to this action. Further, we recommend the 
subcommittee fix the inequities between active and Reserve benefits and 
reset the benefit to 47 percent of the active duty benefit--those 
benefits have shrunk to less than 29 percent of the active duty benefit 
in the last 8 years. Additionally, we recommend that the subcommittee 
authorize transferability of benefits from the servicemember to his/her 
spouse or family member should the servicemember be unable to use his/
her educational benefit. We also recommend to the subcommittee that 
consideration be given to expansion of benefits based on cumulative 
periods of active duty due to multiple deployments of Guard and Reserve 
members. Finally, we recommend that the 14-year time limit on Chapter 
1606 benefits be lifted, and eligibility for entitlements be extended 
to a set period of time (i.e. 15 years) after separation from service, 
without tying expiration of benefits to the date of initial 
eligibility.
          report, commission on the national guard and reserve
    The Commission on the National Guard and Reserve rendered their 
report on January 31, 2008, and made 95 recommendations. In a macro 
sense, we disagree with the Commission's recommendations. The report 
takes a precarious step towards assimilating the National Guard into 
the Active Forces, losing its Constitutional mandate and charter, and 
relegating the Guard to limited roles and missions. As a trade-off, the 
report recommends more joint assignments, commensurate rank with 
responsibility, and accountability of Active component commanders for 
Reserve strength and readiness. Although a few of the recommendations 
seem worthy of consideration, the majority of the document discounts 
the militia as nothing more than bill payers for active duty billets 
and structure.
    One recommendation is for the Department of Homeland Security to 
determine civil support requirements, not the Defense Department. We do 
not believe that the Department of Homeland Security has the capability 
or expertise resident in the agency to determine the homeland security 
requirements for the Guard. We oppose the Department of Homeland 
Security determining or dictating requirements for the National Guard.
    The report recommends diminishing the full-time support workforce 
in the Guard and replacing them with Active component soldiers. The 
Guard had such an arrangement in the early-1980s, when the Guard first 
started their Active Guard Reserve program. Today, with heavier 
commitments and more deployments with which to deal, full time support 
is critical to mission success. The Army Guard is funded for less than 
60 percent of their full-time support requirements. The Air Guard is 
somewhat better. This necessary full-time force pays dividends in 
preparing lives for war, and cannot be sacrificed on the economic 
altar. We oppose any degradation of the full-time support program.
    We agree with the Commission that the Chief, National Guard Bureau, 
should be promoted to General and have a seat on the Joint Chiefs of 
Staff. Traditionally, the Joint Chiefs have all been Active component 
officers, all fine men. However, they are combat-oriented, wartime 
focused officers. There is no representation that relates the homeland 
security mission so critical to America. The Chief, National Guard 
Bureau, brings that focus to the panel. Likewise, the top officers at 
Northern Command need to be National Guard, either Army or Air, due to 
the complexity of coordinating with individual States and their 
governments. An Active component officer knows little to nothing of 
communicating with State governments, especially for emergency planning 
and response.
    The commission recommended revamping the retirement system, taking 
the views of the Defense Advisory Committee on Military Compensation 
from 2006. Although the recommendation is close to what the Guard 
currently has, it will be a tremendous culture change for the Active 
component. Without more specificity on the recommendation, it only 
causes confusion and distrust in the process and the system, two 
undesirable qualities in a time of war. We believe the parent Services, 
as well as the U.S. Coast Guard, Public Health Service, and National 
Oceanic and Atmospheric Administration, will all have concerns about 
this recommendation, even though the report was not inclusive of those 
organizations.
    It recommends shifting capabilities currently resident in the Guard 
that are not required for its State missions but are required for its 
Federal missions either to the Federal Reserve components or to the 
active duty military, as appropriate. This means the Guard will do 
homeland security and civil support missions only and no longer have 
combat roles or missions. It would be impossible for the Army or Air 
Force to prosecute the war on terror without the Guard, and impossible 
for the Active components to recruit, train, and retain the thousands 
of people it would need to replace the Guard capability. We oppose this 
recommendation.
    Another recommendation is for duty status reform--taking 29 
statuses down to 2, either on active duty or not. The Commission 
considers inactive duty training as active duty, and therefore 
recommends adjusting the pay from receiving one day's pay per drill 
period to one day's pay for one day. The Commission recommends 
implementing this within 2 years and completing it within 5 years. This 
may reduce duty statuses and the Defense Department's liability for 
pay, benefits and retirement, but it also reduces the financial benefit 
for the Guard member, to include a reduction of retirement points and 
eventual retirement compensation (and possibly survivors benefit 
annuity payments to surviving spouses). We stand opposed to this 
recommendation.
    We do agree that Basic Allowance for Housing, which pays a reduced 
housing allowance for periods of active duty of less than 30 days, can 
be eliminated altogether and any period of active duty would receive 
prorated housing allowance.
        space available travel privileges for surviving spouses
    When a military member passes away, the surviving spouse is no 
longer eligible to use the space available travel benefit since that 
spouse no longer has a sponsor with whom to travel. There is no cost to 
the government associated with this benefit--if there is a seat 
available on the military aircraft, the spouse fills the seat. If there 
is no seat, the spouse does not fly. If there is a small cost to fly, 
the spouse pays the cost. The spouse would have to comply with all 
space available standards, such as carrying their own luggage, climbing 
stairs unassisted, and being financially responsible during their 
travel.
    We believe this benefit is earned by the spouse with the years of 
sacrifice the spouse endured while their military member served our 
great nation. Such a small change in the law is the right thing to do 
for them, as they are one of the few classes of beneficiaries unable to 
travel on a military aircraft. We encourage the subcommittee to 
consider legislation to allow surviving spouses to fly on military 
aircraft space available.
                          equipment shortages
    Our soldiers and airmen will not remain in the National Guard if 
they have no equipment on which to train, either for sustainment after 
returning from deployment or in preparation for deployment. As much as 
TRICARE is a readiness issue, so is equipment and both have personnel 
implications in recruiting and retention of Guard members.
    Within the last couple of weeks, you have heard the testimony of 
the Reserve chiefs, to include the Chief of the National Guard Bureau, 
with regard to equipment shortfalls in the Guard. Much of the Guard's 
equipment has been moved to Iraq, and we believe some of that 
equipment, which was supposed to come back from theater, has been given 
to the Iraqi Army. A major news source reported in mid-March that 
refurbished U.S. humvees, which have been used by U.S. forces and were 
scheduled to be sent home, had been transferred to the Iraqi Army. A 
total of 8,500 vehicles are part of this action.
    Testimony has likened the Guard equipment problem to a local fire 
or police department being called for help, and not showing up with its 
required equipment to address the situation. Billions and billions of 
dollars have been authorized and appropriated by Congress, and the 
Department cannot accurately track those appropriations down to the end 
item being purchased. Indeed, there is doubt that the monies earmarked 
for Guard equipment were ever used for that purpose.
    We want to go on record with our appreciation for the National 
Guard and Reserve Equipment Account, for without it our Guard would be 
seriously without any necessary supplies and equipment. We implore the 
subcommittee to work with the appropriators to ensure the 
accountability for equipment procurement has proper oversight.
    We thank you for the opportunity to express the views of the 
Enlisted Association of the National Guard of the United States and 
look forward to working with the subcommittee. We know the subcommittee 
is well aware of the National Guard, the capabilities it brings to the 
table, and the undeniable devotion to this Nation the National Guard 
has in its citizen soldiers and airmen.

    Senator Ben Nelson. Thank you, Sergeant.
    Colonel Strobridge?

 STATEMENT OF COL. STEVEN P. STROBRIDGE, USAF (RET.), DIRECTOR 
   OF GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION OF 
                            AMERICA

    Colonel Strobridge. Thank you, Mr. Chairman and Senator 
Graham. My portion of the Coalition testimony will address 
health care issues.
    We certainly fully support the comments Meredith made on 
care for wounded warriors and their families, and we applaud 
what the committee did in first-step actions in this year's 
NDAA, but we do think that is only a first step, and we have a 
long way to go.
    In that regard, continued collaboration between this 
committee and the Veterans Affairs Committee is going to be 
absolutely essential. We still have a lot of problems to deal 
with on that front.
    Meredith mentioned some of the eligibility continuity 
problems encountered by families after disability retirement. 
We believe that members and families who are forced from Active 
Duty because of service-caused disabilities should retain 
Active-Duty-level TRICARE coverage for 3 years. The new law 
does that only for the servicemember, and only when VA care is 
not available. That's too limited and too vague for troops and 
families facing extended rehab requirements after leaving 
Active Duty. Families shouldn't be caught between differing 
definitions of what VA care is available, as they are now. We 
allow 3 years Active-Duty-level coverage for survivors when a 
servicemember dies on Active Duty. To us, the severely wounded 
and their families deserve no less. Examples of those kinds of 
things--Meredith mentioned the cognitive therapy issue. We have 
people who are in the ECHO program who lose their benefits when 
they're retired, per diem for family caregivers, those kinds of 
issues.
    We're also concerned that there's no central oversight to 
ensure that all departments and Services implement best 
practices from all the various ongoing military, VA, and 
civilian test projects on TBI and post-traumatic stress 
disorder. We urge including this responsibility under the newly 
legislated DOD-VA Interagency Program Office or establishing a 
related office for that purpose.
    Finally, we support the disability retirement model in 
which DOD accepts VA-assigned disability ratings, but we still 
need to address interservice differences on what conditions are 
deemed unfitting or pre-existing. We oppose doing away with the 
DOD disability retirement system, as some have envisioned, 
which would substantially reduce retirement benefits for many 
wounded warriors, and we don't think that was the intent of 
this exercise.
    On TRICARE fees, we oppose the large increases proposed by 
DOD in the recent task force report, and we urge restoring the 
$1.2 billion budget cut. We think it's wrong that the task 
force focused only on cost to the government, with barely a 
sentence on what military people earn for their career of 
sacrifice. In 2001, the new administration's officials praised 
TRICARE for Life, but now act as if no one expected that health 
care expenses for retirees over 65 would be very high. We can't 
see what changed during the past 6 years of war that makes the 
military community any less deserving of their benefit.
    The plan to raise drug co-pays 100 to 400 percent would put 
them higher than most civilian plans. The Blue Cross/Blue 
Shield plan that the Military Officers Association offers every 
one of our employees has lower co-pays, across the board, than 
DOD proposes. DOD would quintuple the retail generic co-pay 
from $3 to $15. That's more than 87 percent of civilian plans 
charge. Wal-Mart offers generics to anybody who walks in the 
door, for $4 for 400 generic drugs.
    The Coalition believes military benefits should be driven 
by standards and principles, not the budget. Just as we have 
statutory standards for most other major compensation elements, 
we urge the subcommittee to put some standards in this year's 
defense bill using S. 604 as the model. Fundamental among these 
are that military retirement and health benefits are the 
primary offset for the extraordinary sacrifices inherent in two 
or three decades of military service, that military people pay 
steep premiums for care, over and above the cash fees they pay 
in retirement, and pay them up front in service and sacrifice 
over multiple decades; and, finally, that the percentage 
increase in fees in any year shouldn't exceed the percentage 
increase in military compensation.
    Two years ago, you met with us and DOD leaders to urge us 
to work together to find ways to reduce costs in ways that 
don't hurt military people. We took that very seriously, and we 
identified 16 ways, and have offered, repeatedly, to partner 
with the DOD on those. The DOD has refused, until just 
recently. Thanks to Dr. Casscells and General Granger, they're 
now looking at several of our proposals. We will be willing 
partners in that effort, if we're allowed.
    One final item, a recent GAO report confirmed that Guard 
and Reserve members are overcharged for TRICARE Reserve Select 
by about $50 for single people and $175 a month for families. 
We urge the subcommittee to cut TRS fees and direct refunds. We 
continue to believe--and the Guard and Reserve Commission 
agreed--that the government will save money and Reserve 
families will be better served by authorizing an optional 
subsidy to continue their civilian family coverage when 
mobilized, just as we already do for DOD civilians who are 
mobilized as Guard or Reserve members.
    That concludes my remarks. Thank you very much for your 
consideration.
    [The prepared statement of The Military Coalition follows:]
              Prepared Statement by The Military Coalition
    Mr. Chairman and distinguished members of the committee. On behalf 
of The Military Coalition, a consortium of nationally prominent 
uniformed services and veterans' organizations, we are grateful to the 
committee for this opportunity to express our views concerning issues 
affecting the uniformed services community. This statement provides the 
collective views of the following military and veterans' organizations, 
which represent approximately 5.5 million current and former members of 
the 7 uniformed services, plus their families and survivors.

         Air Force Association
         Air Force Sergeants Association
         Air Force Women Officers Associated
         American Logistics Association
         American Veterans
         Army Aviation Association of America
         Association of Military Surgeons of the United States
         Association of the United States Army
         Chief Warrant Officer and Warrant Officer Association, 
        U.S. Coast Guard
         Commissioned Officers Association of the U.S. Public 
        Health Service, Inc.
         Enlisted Association of the National Guard of the 
        United States
         Fleet Reserve Association
         Gold Star Wives of America, Inc.
         Jewish War Veterans of the United States of America
         Marine Corps League
         Marine Corps Reserve Association
         Military Chaplains Association of the United States of 
        America
         Military Officers Association of America
         Military Order of the Purple Heart
         National Association for Uniformed Services
         National Military Family Association
         National Order of Battlefield Commissions
         Naval Enlisted Reserve Association
         Naval Reserve Association
         Noncommissioned Officers Association
         Reserve Enlisted Association
         Reserve Officers Association \1\
---------------------------------------------------------------------------
    \1\ The Reserve Officers Association supports the non-health care 
portion of the testimony.
---------------------------------------------------------------------------
         Society of Medical Consultants to the Armed Forces
         The Retired Enlisted Association
         United States Army Warrant Officers Association
         United States Coast Guard Chief Petty Officers 
        Association
         Veterans of Foreign Wars of the United States
         Veterans' Widows International Network

    The Military Coalition, Inc., does not receive any grants or 
contracts from the Federal Government.
                           executive summary
Wounded Warrior Issues
    Joint Transition Office
    The Coalition is encouraged with the creation of a joint DOD-VA 
office to oversee development of a bidirectional electronic medical 
record. However, we strongly recommend that the subcommittee upgrade 
the scope of responsibilities and span of authority for the new DOD-VA 
Interagency Program Office to include top-down planning and execution 
of all ``seamless transition'' functions, including the joint 
electronic health record; joint DOD/VA physical; implementation of best 
practices for traumatic brain injury (TBI), post-traumatic stress 
disorder (PTSD), and special needs care; care access/coordination 
issues; and joint research.
    The Coalition believes authorizing 3 years of their active-duty-
level health care benefit for service-disabled members and their 
families after separation or retirement is essential to align stated 
``seamless transition'' intentions with the realities faced by disabled 
members and families.
    Disability Retirement Reform
    The Coalition urges the subcommittee to ensure any legislative 
changes to the military disability evaluation and retirement systems do 
not reduce compensation and benefit levels for disabled servicemembers.
    The Coalition does not support proposals to do away with the 
military disability retirement system and shift disability compensation 
responsibility to the VA.
    The Coalition urges an expanded review of all administrative and 
disciplinary separations since October 7, 2001, for members with recent 
combat experience to assess whether the behavior that led to separation 
may have been due to service-caused exposure.
Active Force Issues
    End Strength and Associated Funding
    The Coalition strongly urges the subcommittee to sustain projected 
increases in ground forces and provide additional recruiting, 
retention, and support resources as necessary to attain/sustain them.
    The Coalition urges the subcommittee to reconsider the consistency 
of projected reductions of Navy and Air Force forces with long-term 
readiness needs.
    Compensation and Special Incentive Pay
    The Coalition urges the subcommittee to propose a military pay 
raise of at least 3.9 percent for fiscal year 2009 (one-half percentage 
point above private sector pay growth) and to continue such half-
percent annual increases over the employment cost index (ECI) until the 
current 3.4 percent pay comparability gap is eliminated.
    The Coalition also urges the subcommittee to continue periodic 
targeted pay raises as appropriate to recognize the growing education 
and technical qualifications of enlisted members and warrant officers 
and sustain each individual grade/longevity pay cell at the minimum 
70th percentile standard.
    Access to Quality Housing
    The Military Coalition urges reform of military housing standards 
that inequitably depress BAH rates for mid- to senior-enlisted members 
by relegating their occupancy to inappropriately small quarters.
    Family Readiness and Support
    The Coalition urges the subcommittee to support increased family 
support funding and expanded education and other programs to meet 
growing needs associated with increased ops tempo, extended deployments 
and the more complex insurance, retirement, and savings choices faced 
by over-extended military families.
    Spouse Employment
    The Coalition urges the subcommittee to support legislation which 
would expand the Workforce Opportunity Tax Credit for employers who 
hire spouses of Regular and Reserve component servicemembers.
    Additionally, the Coalition supports providing tax credits to 
offset military spouses' expenses in obtaining career-related licenses 
or certifications when servicemembers are relocated to a different 
State.
    Flexible Spending Accounts
    TMC urges the subcommittee to continue pressing the DOD until 
servicemembers are provided the same eligibility to participate in 
Flexible Spending Accounts (FSAs) that all other Federal employees and 
corporate employees enjoy. Additionally, we support S.773.
    Permanent Change of Station Allowances
    The Military Coalition urges the subcommittee to upgrade permanent 
change-of-station allowances to better reflect the expenses members are 
forced to incur in complying with government-directed relocations, with 
priority on adjusting flat-rate amounts that have been eroded by 
years--or decades--of inflation, and shipment of a second vehicle at 
government expense to overseas accompanied assignments.
    Base Realignment and Closure/Rebasing/Military Construction/
        Commissaries
    The Coalition urges the subcommittee to closely monitor rebasing/
base realignment and closure (BRAC) plans and schedules to ensure 
sustainment and timely development of adequate family support/quality 
of life programs. At closing and gaining installations, respectively--
to include housing, education, child care, exchanges and commissaries, 
health care, family centers, unit family readiness, and other support 
services.
    Morale, Welfare, and Recreation Programs
    TMC urges the subcommittee to ensure that DOD funds MWR programs at 
least to the 85 percent level for Category A programs and 65 percent 
for Category B requirements.
    Education Enhancements
    TMC urges the subcommittee to work with the Veterans Affairs 
Committee to establish the benchmark level of Montgomery GI Bill (MGIB) 
education benefits at the average cost of attending a 4-year public 
college, and support continuous in-State tuition eligibility for 
servicemembers and their families in the State in which the member is 
assigned and the member's home State of record once enrolled as a 
student.
National Guard and Reserve Issues
    Reserve Retirement and `Operational Reserve' Policy
    TMC strongly urges further progress in revamping the Reserve 
retirement system in recognition of increased service and sacrifice of 
National Guard and Reserve component members, including at a minimum, 
extending the new authority for a 90-day=3-month reduction to all 
National Guard and Reserve members who have served since September 11.
    A Total Force Approach to the Montgomery GI Bill
    TMC urges Congress to integrate Guard and Reserve and active duty 
MGIB laws into Title 38. In addition, TMC recommends restoring basic 
Reserve MGIB rates to approximately 50 percent of active duty rates and 
authorizing upfront reimbursement of tuition or training coursework for 
Guard and Reserve members.
    Family Support Programs and Benefits
    TMC urges Congress to continue and expand its emphasis on providing 
consistent funding and increased outreach to connect Guard and Reserve 
families with relevant support programs.
    Tangible Support for Employers
    The Coalition urges Congress to support needed tax relief for 
employers of Selected Reserve personnel and reinforce the Employer 
Support for Guard and Reserve Program.
    Seamless Transition for Guard and Reserve Members
    The Coalition urges the subcommittee to continue and expand its 
efforts to ensure Guard and Reserve members and their families receive 
needed transition services to make a successful readjustment to 
civilian status.
Retirement Issues
    Concurrent Receipt
    The Coalition urges the subcommittee to act expeditiously on the 
recommendations of the Veterans' Disability Benefits Commission and 
implement a plan to eliminate the deduction of VA disability 
compensation from military retired pay for all disabled military 
retirees.
    Uniformed Services Retiree Entitlements and Benefits
    TMC urges the subcommittee to resist initiatives to ``civilianize'' 
the military retirement system in ways that reduce the compensation 
value of the current retirement system and undermine long-term 
retention.
    Permanent ID Card Reform
    The Coalition urges the subcommittee to direct the Secretary of 
Defense to authorize issuance of permanent military identification 
cards to uniformed services family members and survivors who are age 65 
and older.
Survivor Issues
    Survivor Benefit Plan-Dependency and Indemnity Compensation Offset
    The Coalition strongly urges the subcommittee to take further 
action to expand eligibility for the special survivor indemnity 
allowance to include all Survivor Benefit Plan (SBP)-Dependency and 
Indemnity Compensation (DIC) survivors and continue progress toward 
completely repealing the SBP-DIC offset for this most-aggrieved group 
of military widows.
    Final Retired Paycheck
    TMC urges the subcommittee to end the insensitive practice of 
recouping the final month's retired pay from the survivor of a deceased 
retired member.
Health Care Issues
    Full Funding for the Defense Health Program
    The Military Coalition strongly urges the subcommittee to take all 
possible steps to restore the reduction in TRICARE-related budget 
authority and ensure continued full funding for Defense Health Program 
needs.
    Protecting Beneficiaries Against Cost-Shifting
    The Coalition urges the subcommittee to require DOD to pursue 
greater efforts to improve TRICARE and find more effective and 
appropriate ways to make TRICARE more cost-efficient without seeking to 
``tax'' beneficiaries and make unrealistic budget assumptions.
    TMC Health Care Cost Principles
    The Coalition most strongly recommends Rep. Chet Edwards' and Rep. 
Walter Jones' H.R. 579 and Sen. Frank Lautenberg's and Sen. Chuck 
Hagel's S. 604 as models to establish statutory findings, a sense of 
Congress on the purpose and principles of military health care 
benefits, and explicit guidelines for and limitations on adjustments.

         Active duty members and families should be charged no 
        fees except retail pharmacy co-payments, except to the extent 
        they make the choice to participate in TRICARE Standard or use 
        out-of-network providers under TRICARE Prime.
         For retired and survivor beneficiaries, the percentage 
        increase in fees, deductibles, and co-payments that may be 
        considered in any year should not exceed the percentage 
        increase beneficiaries experience in their compensation.
         The TRICARE Standard inpatient copay should not be 
        increased further for the foreseeable future. At $535 per day, 
        it already far exceeds inpatient copays for virtually any 
        private sector health plan.
         There should be no enrollment fee for TRICARE Standard 
        or TRICARE For Life (TFL), since neither offers assured access 
        to TRICARE-participating providers. An enrollment fee implies 
        enrollees will receive additional services, as Prime enrollees 
        are guaranteed access to participating providers in return for 
        their fee. Congress already has required TFL beneficiaries to 
        pay substantial Medicare Part B fees to gain TFL coverage.
         There should be one TRICARE fee schedule for all 
        retired beneficiaries, just as all legislators, Defense leaders 
        and other Federal civilian grades have the same health fee 
        schedule. The TRICARE schedule should be significantly lower 
        than the lowest tier recommended by the DOD, recognizing that 
        all retired members paid large upfront premiums for their 
        coverage through decades of arduous service and sacrifice.
    TRICARE Standard Enrollment
    The Coalition strongly recommends against establishment of any 
TRICARE Standard enrollment system; to the extent enrollment may be 
required, any beneficiary filing a claim should be enrolled 
automatically, without denying the claim. No enrollment fee should be 
charged for TRICARE Standard until and unless the program offers 
guaranteed access to a participating provider.
    Private Employer Incentive Restrictions
    The Coalition recommends Congress modify the law restricting 
private employer TRICARE incentives to explicitly exempt employers who 
offer only cafeteria plans (i.e., cash payments to all employees to 
purchase care as they wish) and employers who extend specific cash 
payments to any employee who uses health coverage other than the 
employer plan (e.g., FEHBP, TRICARE, or commercial insurance available 
through a spouse or previous employer).
    Provider Participation Adequacy
    The Coalition urges the subcommittee to continue monitoring DOD and 
Government Accountability Office (GAO) reporting on provider 
participation to ensure proper follow-on action.
    Administrative Deterrents to Provider Participation
    The Coalition urges the subcommittee to continue its efforts to 
reduce administrative impediments that deter providers from accepting 
TRICARE patients.
    TRICARE Reimbursement Rates
    The Coalition urges the subcommittee to exert what influence it can 
to persuade the Finance Committee to reform Medicare/TRICARE statutory 
payment formula. To the extent the Medicare rate freeze continues, we 
urge the subcommittee to encourage the DOD to use its reimbursement 
rate adjustment authority as needed to sustain provider acceptance.
    Additionally, The Coalition urges the subcommittee to require a 
Comptroller General report on the relative propensity of physicians to 
participate in Medicare vs. TRICARE, and the likely effect on such 
relative participation of a further freeze in Medicare/TRICARE 
physician payments along with the affect of an absence of bonus 
payments.
    Minimize Medicare/TRICARE Coverage Differences
    The Coalition urges the subcommittee to align TRICARE coverage to 
at least match that offered by Medicare in every area and provide 
preventive services at no cost.
    TRICARE Reserve Select (TRS) Premium
    The Coalition recommends reducing TRS premiums to $48/month 
(single) and $175/month (family), as envisioned by the GAO, with 
retroactive refunds as appropriate. For the future, the percentage 
increase in premiums in any year should not exceed the percentage 
increase in basic pay.
    The Coalition further recommends that the subcommittee request a 
report from the Department of Defense (DOD) on options to assure TRS 
enrollees' access to TRICARE-participating providers.
    Private Insurance Premium Option
    The Coalition recommends developing a cost-effective option to have 
DOD subsidize premiums for continuation of a Reserve employer's private 
family health insurance during periods of deployment as an alternative 
to permanent TRICARE Reserve Select coverage.
    Involuntary Separatees
    The Coalition recommends authorizing 1 year of post-Transitional 
Assistance Management Program (TAMP) TRS coverage for every 90 days 
deployed in the case of returning members of the Individual Ready 
Reserve (IRR) or members who are involuntarily separated from the 
Selected Reserve. The Coalition further recommends that voluntarily 
separating reservists subject to disenrollment from TRS should be 
eligible for participation in the Continued Health Care Benefits 
Program (CHCBP).
    Gray Area Reservists
    The Coalition urges the subcommittee to authorize an additional 
premium-based option under which members entering ``gray area'' retiree 
status would be able to avoid losing health coverage.
    Reserve Dental Coverage
    The Coalition supports providing dental coverage to reservists for 
90 days pre- and 180 days post-mobilization (during TAMP), unless the 
individual's dental readiness is restored to T-2 condition before 
demobilization.
    Restoration of Survivors' TRICARE Coverage
    The Coalition recommends restoration of TRICARE benefits to 
previously eligible survivors whose second or subsequent marriage ends 
in death or divorce.
    TRICARE Prime Remote Exceptions
    The Coalition recommends removal of the requirement for the family 
members to reside with the active duty member to qualify for the 
TRICARE Prime Remote Program, when the family separation is due to a 
military-directed move or deployment.
    Base Realignment and Closure, Rebasing, and Relocation
    The Coalition recommends codifying the requirement to provide a 
TRICARE Prime network at all areas impacted by BRAC or rebasing. 
Additionally, we recommend that DOD be required to provide an annual 
report to Congress on the adequacy of health resources, services, 
quality and access of care for those beneficiary populations affected 
by transformation plans.
    Pharmacy Co-payment Changes
    The Coalition recommends deferral of any pharmacy copay increases 
pending assessment of the effects of the new Federal pricing law on 
usage and cost patterns for the different venues, and that the 
subcommittee instead urge DOD to pursue copay reductions and ease prior 
authorization requirements for medications for chronic diseases, based 
on private sector experience that such initiatives reduce long-term 
costs associated with such diseases.
    Rapid Expansion of ``Third Tier'' Formulary
    The Coalition urges the subcommittee to reassert its intent that 
the Beneficiary Advisory Panel (BAP) should have a substantive role in 
the formulary-setting process, including access to meaningful data on 
relative drug costs in each affected class, consideration of all BAP 
comments in the decisionmaking process, and formal feedback concerning 
rationale for rejection of BAP recommendations.
    Referral and Authorization System
    The Coalition recommends that Congress require a cost analysis 
report, including input from each Managed Care Support Contractor, 
concerning the referral process within DOD and reliance on Civilian 
Network Providers within an MTF's Prime Service Area.
    Deductibility of Health and Dental Premiums
    The Coalition urges all Armed Services Committee members to seek 
the support of the Finance Committees to approve legislation to allow 
all military beneficiaries to pay TRICARE-related insurance premiums in 
pre-tax dollars, to include TRICARE dental premiums, TRICARE Reserve 
Select premiums, TRICARE Prime enrollment fees, premiums for TRICARE 
Standard supplements, and long-term care insurance premiums.
                                overview
    Mr. Chairman, The Military Coalition (TMC) thanks you and the 
entire subcommittee for your continued, steadfast support of our active 
duty, Guard, Reserve, retired members, and veterans of the uniformed 
services and their families and survivors. the subcommittee's work last 
year generated ground-breaking, innovative improvements in military end 
strength, currently serving pay, survivor benefits, disabled retiree 
programs, and of most significance, improvements in wounded warrior 
benefits, care, and treatment. These enhancements will definitely make 
a positive difference in the lives of active, Guard and Reserve 
personnel, retirees, survivors, and families.
    As our men and women in uniform continue to prosecute the global 
war on terror, the Coalition believes it is critical that the Nation 
support our troops with the appropriate resources. The services have 
reported that they are wearing out equipment at a record pace; however, 
the Coalition is concerned that we are wearing out our people in 
uniform at even a faster pace. The current rate of deployments and the 
accompanied stress to our troops and their families put at risk the 
readiness of our servicemembers.
    The men and women in uniform, active duty, Guard, and Reserve, are 
answering the call--but not without ever-greater sacrifice. Currently, 
over 615,000 National Guard and Reserve members have been called to 
active Federal service for the war on terrorism. Over 150,000 have had 
two or more deployments, putting particular stress on these members' 
civilian careers and employers. The ``total force'', with the support 
of their families, continues to endure mounting stress brought about by 
repeated deployments and ever-increasing workloads. Therefore, now is 
not the time to scrimp on the needs for our troops and their families.
    Over the past several years, the Pentagon has repeatedly sought to 
curb spending on military personnel and facilities to fund operational 
requirements. In the process, the DOD has imposed dramatic force 
reductions in the Air Force and the Navy, tried to deter military 
retirees from using their earned health coverage by proposing large 
TRICARE fee increases, and cut back on installation quality of life 
programs.
    The Coalition believes these efforts to rob personnel to fund 
operations will only make the uniformed services more vulnerable to 
future readiness problems. We agree with the Chairman of the Joint 
Chiefs of Staff, who has stated that 4 percent of gross domestic 
product (GDP) should be the ``absolute floor'' for the overall military 
budget. If we want a strong national defense, we have to pay for a 
strong military force as well as replace and upgrade aging, war-worn 
weapons and equipment.
    The Coalition is encouraged by Congress' strong support for 
continued increases to Army and Marine Corps end strength, in 
recognition that our troops and families are dangerously overburdened. 
We believe the country must follow through on future planned increases, 
regardless of troop withdrawals from Iraq, and that these should be 
funded through permanent increases in the defense budget, not 
supplemental appropriations that undermine essential, long-term 
commitments. It's been proven that our military didn't have sufficient 
forces to meet the requirements of the current war. It would be 
inexcusable not to be better prepared for future contingencies.
    In our statement today, The Military Coalition offers its 
collective recommendations on what needs to be done to address 
important personnel-related issues in order to sustain long-term 
personnel readiness.
                         wounded warrior issues
    Last February, a series of articles in the Washington Post titled 
``The Other Walter Reed'' profiled shocking cases of wounded 
servicemembers who became lost in military health care and 
administrative systems upon being transferred to outpatient 
rehabilitative care.
    Subsequently, the national media ran many stories of seriously 
wounded troops warehoused in substandard quarters, waiting weeks and 
months for medical appointments and evaluation board results, left 
pretty much on their own to try and navigate the confusing maze of 
medical system and benefit and disability rules, and low-balled into 
disability separations rather than being awarded the higher benefits of 
military disability retirement.
    Interviews with family members--spouses, children, and parents--
revealed heartbreaking real life dramas of those who quit their jobs 
and virtually lived at military hospitals to become caregivers to 
seriously wounded troops. Left with diminishing resources and 
unfamiliar with military benefit and disability rules, they were 
severely disadvantaged in trying to represent the interests of their 
wounded spouses and children who couldn't stand up for themselves.
    These issues drew the attention of the President and Congress, 
leading to the immediate appointment of multiple special commissions 
and task forces charged with investigating the problems and identifying 
needed solutions. The Coalition is very grateful for the work of the 
Dole-Shalala Commission, the Marsh-West Independent Review Group, the 
VA Interagency Task Force on Returning Veterans, the Mental Health Task 
Force, and the previously authorized Veterans' Disability Benefits 
Commission. The Coalition endorses the vast majority of these groups' 
recommendations, and we're pleased that the subcommittee made a 
conscientious effort to address many of them in the Wounded Warrior Act 
provisions of the National Defense Authorization Act (NDAA) for Fiscal 
Year 2008.
    Congress and TMC agree that our Nation's service men and women have 
earned first class care and assistance, both during recuperation and 
following separation or retirement from the military.
    We are gratified at the sincere and unprecedented leadership 
efforts in the Departments of Defense and Veterans' Affairs and the 
Armed Services and Veterans' Affairs Committees to transform the system 
to make this long overdue goal a reality.
    But years of bureaucratic and parochial barriers can't be swept 
away as easily as we all would wish. The good work done in 2007 was 
only a modest first step on the path to transforming military and 
veterans programs to meet the pressing needs of wounded and disabled 
members and their families. We're still a long, long way from achieving 
the ``seamless transition'' goal.
Joint Transition Office
    The Coalition believes one critical problem is bureaucratic 
stovepiping in each department. While both DOD and VA are making great 
efforts to cooperate, there is no permanent joint activity or office 
whose primary mission is to jointly plan and execute the seamless 
transition strategy and then exercise productive oversight over the 
longer-term process. There's no doubt about the good intentions of 
leadership, but to sustain the effort for the long term requires a 
change in organizational structure. Periodic meetings, after which the 
DOD and VA participants return to their separate offices on opposite 
sides of the Potomac, won't sustain the effort after the horror stories 
fade from the headlines.
    This simply can't be someone's part-time job. It requires a full-
time joint Federal transition office, staffed by full-time DOD, service 
and VA personnel working in the same office with a common joint 
mission: developing, implementing and overseeing the Joint Executive 
Council's strategic plan. This office's responsibilities should 
include:

         Joint In-Patient Electronic Health Record--The NDAA 
        for Fiscal Year 2008 took the first step in authorizing a DOD/
        VA Interagency Program Office to oversee this specific 
        initiative, which TMC has been seeking for years. But we 
        believe the 2012 objective for implementing this system is too 
        long to wait. Congress must press DOD and VA to speed delivery 
        as soon as humanly possible, with concrete timelines and 
        milestones for action. TMC also believes that the same logic 
        that necessitates a joint office's oversight of this specific 
        initiative is equally applicable in other areas, and that the 
        interagency office's area of responsibility should be expanded 
        accordingly.
         Special Needs Health Care--Polytrauma Rehabilitation 
        Centers were established to meet the specialized clinical care 
        needs of patients with multiple trauma conditions. They provide 
        comprehensive inpatient rehabilitation services for individuals 
        with complex cognitive, physical and mental health sequelae of 
        severe disabling trauma. These centers require special 
        oversight in order to ensure the required resources are 
        available to include specialized staff, technical equipment and 
        adequate bed space. This oversight must be a joint effort since 
        it provides a significant piece of the health care continuum 
        for severely injured personnel.
         PTSD, Traumatic Brain Injuries (TBI), and Mental 
        Health/Counseling--The Coalition strongly supports the 
        provisions in the NDAA for Fiscal Year 2008 establishing 
        Centers of Excellence for these programs. We simply must have 
        some central monitoring, evaluation, and crossfeed to take best 
        advantage of the wide variety of current and planned DOD, 
        Service, and VA programs and pilot projects aimed at 
        destigmatizing, identifying, and treating TBI and PTSD. The 
        Coalition believes it also is important to ensure that TBI and 
        PTSD are identified and treated as combat injuries rather than 
        mental health problems. The Coalition is doubtful whether these 
        centers, by themselves, will be in a position to ensure 
        coordination and implementation of best practices across all 
        departments and Services.
         Caregiver Initiatives--Several wounded warrior 
        provisions in the recently enacted NDAA provide additional 
        support for the caregiver of the wounded warrior, typically a 
        family member. However, we believe more needs to be done to 
        strengthen support for families, to include the authorization 
        of compensation for family member caregivers of severely 
        injured who must leave their employment to care for the 
        servicemember.
         Access to Care--A significant impediment to the 
        ``seamless transition'' goal is that there are significant 
        differences between health coverage and some other entitlements 
        when a member transitions from active military Service to 
        separated or retired status. TRICARE benefits for disability 
        retirees and families are not the same as they were on active 
        duty, and there are significant differences between coverage 
        and availability of programs between TRICARE and the VA. When a 
        member dies on active duty, Congress has deemed that the 
        member's family should be eligible for 3 years of active-duty-
        level TRICARE coverage to assist in the family's transition. 
        TMC believes strongly that members who are disabled 
        significantly by military service deserve equal treatment. The 
        NDAA for Fiscal Year 2008 authorized continued active-duty 
        level coverage, but only for the servicemember, and then only 
        in cases where VA coverage is not available. TMC believes this 
        limitation significantly undermines the seamless transition 
        goal for wounded/disabled members whose rehabilitation and 
        recovery may continue long after the time they leave active 
        duty. Their needs--and those of their families--should not be 
        inhibited by higher copays, deductibles, and coverage decreases 
        the moment they are separated or retired from active duty. 
        Allowing disabled members and their families to retain their 
        active duty military health care benefit for 3 years after 
        separation or retirement is essential to align our stated 
        intentions with the realities faced by disabled members and 
        families.
         Joint Research-Combined Research Initiatives would 
        further enhance the partnership between VA and DOD. Since many 
        of the concerns and issues of care are shared, joint 
        collaboration of effort in the area of research should enable 
        dollars to go much further and provide a more standardized 
        system of health care in the military and veteran communities. 
        Furthermore, research must also be performed jointly and across 
        all military departments and with other practicing health care 
        agencies to ensure timely integration of these findings in the 
        diagnosis and treatment of wounded and disabled patients.

    The Coalition is encouraged with the creation of a joint DOD-VA 
office to oversee development of a bi-directional electronic medical 
record. However, we strongly recommend that the subcommittee upgrade 
the scope of responsibilities and span of authority for the new DOD-VA 
Interagency Program Office to include top-down planning and execution 
of all ``seamless transition'' functions, including the joint 
electronic health record; joint DOD/VA physical; implementation of best 
practices for TBI, PTSD, and special needs care; care access/
coordination issues; and joint research.
    The Coalition believes authorizing 3 years of their active-duty-
level health care benefit for service-disabled members and their 
families after separation or retirement is essential to align stated 
``seamless transition'' intentions with the realities faced by disabled 
members and families.
    Disability Retirement Reform--Several of the Walter Reed task 
forces and commissions recommended significant changes to the DOD 
Disability Evaluation System (DES), and the NDAA for Fiscal Year 2008 
includes several initiatives requiring joint DOD/VA DES pilot programs; 
use of the VA Schedule for Rating Disabilities; review of medical 
separations with disability ratings of 20 percent or less; and enhanced 
disability severance pay. These changes will hopefully improve the 
overall DES and correct the reported ``low-ball'' ratings awarded some 
wounded warriors.
    The Coalition is very supportive of the current DOD/VA disability 
rating pilot, which has the potential to help streamline transition 
from active duty into veteran/retired status. However, we believe 
further legislative efforts are required to curb service differences in 
determining whether a condition existed prior to service. To this end, 
language in the NDAA for Fiscal Year 2008 aimed at addressing this 
problem may actually have exacerbated it by amending only a part of the 
relevant provisions of law.
    The Coalition does not support proposals to simply do away with the 
military disability retirement system and shift disability compensation 
responsibility to the VA. While this proposal seems administratively 
simple, and supports our long-standing ``concurrent receipt'' goal of 
ensuring proper vesting of service-based retirement for members who 
suffer from service-caused disabilities, it poses two significant risks 
that TMC deems unacceptable. First, it would cause significant 
compensation reductions for some severely disabled personnel--up to 
$1,000 a month or more in some cases, and even more for some Guard and 
Reserve members who suffer severe disabilities. Second, it would 
eliminate the 30 percent-disability retirement threshold that now 
establishes eligibility for retiree TRICARE coverage for disabled 
members and their families. TMC believes there must continue to be a 
statutory military disability threshold above which the member is 
considered a military retiree (not simply a separatee and veteran) and 
eligible for all the privileges of military retirement, including 
TRICARE coverage. The Coalition objects strongly to establishing 
disability ratings, compensation, or health care eligibility based 
whether the disability was incurred in combat vice non-combat.
    The Coalition strongly supports the recent NDAA requirement for a 
case review of members separated with 20 percent or lower ratings since 
Oct. 7, 2001. There is evidence that many received ``low-ball'' ratings 
that did not adequately reflect the degree of their disabilities and 
unfairly denied them eligibility for military disability retired pay 
and health coverage.
    But we believe the subcommittee did not go far enough to correct 
past inequities. The Coalition is aware of many cases of ``model 
troops'' who fell into depression, drug use, and disciplinary 
situations after one or more combat tours, and who subsequently 
received administrative or disciplinary discharges.
    The Coalition urges the subcommittee to ensure any legislative 
changes to the military disability evaluation and retirement systems do 
not reduce compensation and benefit levels for disabled servicemembers. 
The Coalition does not support proposals to do away with the military 
disability retirement system and shift disability compensation 
responsibility to the VA.
    The Coalition urges an expanded review of all administrative and 
disciplinary separations since Oct. 7, 2001 for members with recent 
combat experience to assess whether the behavior that led to separation 
may have been due to service-caused exposure.
                          active force issues
    The subcommittee's key challenges will be to fend off those who 
wish to cut needed personnel and quality of life programs while working 
with DOD and the Administration to reduce the stress on the force and 
their families already subjected to repeated, long-term deployments. 
Rising day-to-day workloads for non-deployed members and repeated 
extensions of combat tours creates a breeding ground for retention 
problems. Meeting these challenges will require a commitment of 
personnel and resources on several fronts.
End Strength and Associated Funding
    The Coalition was encouraged when the subcommittee ensured that the 
Army and Marine Corps authorized end strengths continued to grow in 
fiscal year 2008, and we are further encouraged that the DOD has asked 
for additional manpower increases for the Army and Marine Corps over 
the next 4 years.
    Congress must ensure these increases are sufficient to ease force 
rotation burdens and the services are fully funded in order to achieve 
the new end strength. Increasing end strength is not a quick fix that 
will ease the stressors on currently serving servicemembers and their 
families.
    Some already speculate that the planned increases may not be needed 
if we can reduce the number of troops deployed to Iraq. The Coalition 
believes strongly that the increases are essential to future readiness, 
regardless of force levels in Iraq. We know we didn't have enough 
troops to fight the current war without imposing terrible penalties on 
military members and families, and we must build our force management 
plans to avoid having to do so when the Nation is faced with another 
major unexpected contingency requirement.
    For too long, we have planned only for the best-case scenario, 
which ignores our responsibility to the Nation to be prepared for 
unexpected and less-favorable scenarios, which could well arise 
anywhere around the globe, including the Far East.
    A full range of funding is required to support this necessary end 
strength, including housing, health care, family programs, and child 
care. Having the services absorb these costs out of pocket is self-
defeating.
    Furthermore, as the Army and Marine Corps increase over the next 4 
years, the Coalition remains concerned that ongoing Navy and Air Force 
active and Reserve personnel cuts are driven by budget considerations 
rather than operational requirements. We believe it is increasingly 
likely that future experience will prove these cutbacks ill-advised, 
and urge the subcommittee to reconsider their consistency with long-
term readiness needs.
    The Coalition strongly urges the subcommittee to sustain projected 
increases in ground forces and provide additional recruiting, 
retention, and support resources as necessary to attain/sustain them.
    The Coalition urges the subcommittee to reconsider the consistency 
of projected reductions of Navy and Air Force forces with long-term 
readiness needs.
Compensation and Special Incentive Pays
    The Coalition is committed to ensuring that pay and allowance 
programs are equitably applied to the seven uniformed services. In that 
regard, the Coalition urges the subcommittee to be mindful that 
personnel and compensation program adjustments for DOD forces should 
also apply to uniformed members of the Coast Guard, NOAA Corps, and 
Public Health Service.
    Since the turn of the century, Congress and DOD have made 
significant progress to improve the lives of men and women in uniform 
and their families. Since 1999, when military pay raises had lagged a 
cumulative 13.5 percent behind the private sector pay comparability 
standard, the subcommittee has narrowed that gap to 3.4 percent. Each 
year during that span, the subcommittee has ensured at least some 
progress in shrinking that disparity further. TMC is grateful for that 
progress, and believes strongly that it should continue until full pay 
comparability is restored.
    DOD uses the 70th percentile of earnings of private workers of 
comparable age, experience and education as a standard to help 
rebalance the military pay table through special targeted pay increases 
depending on grade and longevity status. The Coalition believes this 
measure is useful as one tool in the process of establishing the proper 
progression of the pay table, and needs to be monitored and applied as 
necessary in the future. But it does not, by itself, supplant overall 
growth in the ECI as the measure of pay comparability, nor does it 
erase the remaining 3.4 percent gap between military pay raises and 
private sector pay growth.
    The Coalition believes Congress will never find a better 
opportunity to phase out the remaining gap than today's conditions when 
private sector pay growth is relatively low. In assessing the proper 
amount to reduce the pay gap, Congress also should consider that 
today's troops are working much harder--and their families sacrificing 
much more--for their modest raises.
    This year, we expect the Defense budget will propose a 3.4 percent 
raise for military personnel in 2009--a percentage equal to the growth 
in private sector pay 2 years earlier in 2007. The Coalition believes 
strongly that this is not the time to end Congress' steady path of 
progress in reducing the military pay comparability gap.
    The Coalition urges the subcommittee to propose a military pay 
raise of at least 3.9 percent for fiscal year 2009 (one-half percentage 
point above private sector pay growth) and to continue such half-
percent annual increases over the ECI until the current 3.4 percent pay 
comparability gap is eliminated.
    The Coalition also urges the subcommittee to continue periodic 
targeted pay raises as appropriate to recognize the growing education 
and technical qualifications of enlisted members and warrant officers 
and sustain each individual grade/longevity pay cell at the minimum 
70th percentile standard.
Access to Quality Housing
    Today's housing allowances come much closer to meeting military 
members' and families' housing needs than in the past, thanks to the 
conscientious efforts of the subcommittee in recent years.
    But the Coalition believes it's important to understand that some 
fundamental flaws in the standards used to set those allowances remain 
to be corrected, especially for enlisted members.
    The Coalition supports revised housing standards that are more 
realistic and appropriate for each pay grade. Many enlisted personnel 
are unaware of the standards for their respective pay grade and assume 
that their BAH level is determined by a higher standard or by the type 
of housing for which they would qualify if they live on a military 
installation. For example, only 1.25 percent of the enlisted force (E-
9) is eligible for BAH sufficient to pay for a three-bedroom single-
family detached house, even though thousands of more junior enlisted 
members do, in fact, reside in detached homes. The Coalition believes 
that as a minimum, this BAH standard (single-family detached house) 
should be extended gradually to qualifying servicemembers beginning in 
grade E-8 and subsequently to grade E-7 and below over several years as 
resources allow.
    The Military Coalition urges reform of military housing standards 
that inequitably depress BAH rates for mid to senior enlisted members 
by relegating their occupancy to inappropriately small quarters.
Family Readiness and Support
    A fully funded, robust family readiness program continues to be 
crucial to overall readiness of our military, especially with the 
demands of frequent and extended deployments.
    Resource issues continue to plague basic installation support 
programs. At a time when families are dealing with increased 
deployments, they are being asked to do without. Often family centers 
are not staffed for outreach. Library and sports facilities hours are 
being abbreviated or cut altogether. Manpower for installation security 
is being reduced. These are additional sacrifices that we are imposing 
on our families left behind while their servicemembers are deployed.
    In a similar vein, the Coalition believes additional authority and 
funding is needed to offer respite and extended child care for military 
families. These initiatives should be accompanied by a more aggressive 
outreach and education effort to improve members' and families' 
financial literacy. We should ensure members are aware of and 
encouraged to use child care, mental health support, spousal 
employment, and other quality-of-life programs that have seen recent 
growth. However, this education effort should also include expanded 
financial education initiatives to inform and counsel members and 
families on life insurance options, Thrift Savings Plan, IRAs, flexible 
spending accounts, savings options for children's education, and other 
quality of life needs.
    In particular servicemembers must be educated on the long-term 
financial consequences of electing to accept the much lower-value 
$30,000 REDUX retention bonus after 15 years of service vice sustaining 
their full High-3 retirement benefit.
    The Coalition urges the subcommittee to support increased family 
support funding and expanded education and other programs to meet 
growing needs associated with increased ops tempo, extended deployments 
and the more complex insurance, retirement, and savings choices faced 
by over-extended military families.
Spouse Employment
    The Coalition is pleased that movement is being made to enhance the 
total force spouse employment opportunities through a test program and 
strong partnerships between DOD, Department of Labor, service 
organizations, employers, and others; however, more needs to be done.
    More and more military spouses are in the workforce than in the 
past, but challenges in finding jobs after relocation adversely impact 
the military families' financial stability and satisfaction with 
military life. Spouse employment helps contribute to a strong military 
and helps in retention of our high quality, All-Volunteer Force. 
Defense leaders repeatedly acknowledge, ``We recruit servicemembers, 
but we retain families.''
    One of the greatest frustrations for working spouses is the career 
and financial disruption associated with military-directed relocations. 
If we're serious about retaining more military families, we must get 
serious about easing this significant career and military life 
dissatisfier.
    The Coalition urges the subcommittee to support legislation which 
would expand the Workforce Opportunity Tax Credit for employers who 
hire spouses of Regular and Reserve component servicemembers.
    Additionally, the Coalition supports providing tax credits to 
offset military spouses' expenses in obtaining career-related licenses 
or certifications when servicemembers are relocated to a different 
State.
Flexible Spending Accounts
    The Coalition cannot comprehend the DOD's continuing failure to 
implement existing statutory authority for active duty and Selected 
Reserve members to participate in FSAs, despite both Armed Services 
Committees' prodding on this subject.
    All other Federal employees and corporate civilian employees are 
able to use this authority to save thousands of dollars a year by 
paying out-of-pocket health care and dependent care expenses with pre-
tax dollars. It is unconscionable that the Department has failed to 
implement this money-saving program for the military members who are 
bearing the entire burden of national sacrifice in the global war on 
terrorism.
    TMC urges the subcommittee to continue pressing the DOD until 
servicemembers are provided the same eligibility to participate in FSAs 
that all other Federal employees and corporate employees enjoy. 
Additionally, we support S. 773.
Permanent Change of Station Allowances
    Permanent Change of Station (PCS) allowances have continually 
failed to keep pace with the significant out-of-pocket expenses 
servicemembers and their families incur in complying with government-
directed moves.
    For example, PCS mileage rates still have not been adjusted since 
1985. The current rates range from 15 to 20 cents per mile--an ever-
shrinking fraction of the 50.5 cents per mile rate authorized for 
temporary duty travel. Also, military members must make any advance 
house-hunting trips at personal expense, without any government 
reimbursements such as Federal civilians receive.
    Additionally, the overwhelming majority of service families consist 
of two working spouses, making two privately owned vehicles a 
necessity. Yet the military pays for shipment of only one vehicle on 
overseas moves, including moves to Hawaii and Alaska. This forces 
relocating families into large out-of-pocket expenses, either by 
shipping a second vehicle at their own expense or selling one car 
before leaving the States and buying another upon arrival. The 
Coalition is greatly disappointed that, for 2 consecutive years, a 
subcommittee proposal to authorize shipping two vehicles to non-foreign 
duty locations outside of CONUS has been dropped in conference.
    The Coalition is grateful that the senior enlisted PCS weight 
allowance tables were increased slightly in the NDAA for Fiscal Year 
2006; however, we believe that these modification need to go further 
for personnel in pay grades E-7, E-8, and E-9 to coincide with 
allowances for officers in grades O-4, O-5, and O-6 respectively. The 
personnel property weight for a senior E-9 leader without dependents 
remains the same as for a single O-3 despite the normal accumulation of 
household goods over the course of a career.
    Four years ago, the subcommittee authorized the Families First 
initiative. Among its provisions was full replacement value (FRV) 
reimbursement for household goods damaged during PCS moves. We are 
grateful that this first FRV phase has begun but will continue to 
monitor its implementation. The next phase, focusing on survey results 
and real time access to the progress of household goods in the moving 
process has yet to be fully implemented. We will continue to monitor 
the progress and hope that Congress will be doing the same.
    Aside from that long-delayed initiative the last real adjustment in 
PCS expenses was 7 years ago in 2001, when this subcommittee upgraded 
PCS per diem (but not mileage) rates and raised the maximum daily 
Temporary Lodging Expense (TLE) allowance from $110 to $180 a day for a 
PCSing family, among certain other adjustments, including the increase 
in the junior enlisted weight allowances. That TLE amount is supposed 
to cover a family's food and lodging expenses while in temporary 
quarters at the gaining or losing installation. Today, after 7 years of 
inflation, it's hardly adequate to cover the daily expenses of a family 
of four or five anywhere in America, let alone a family ordered to 
relocate to San Diego or Washington, DC.
    The Coalition also supports authorization of a dislocation 
allowance for servicemembers making their final ``change of station'' 
upon retirement from the uniformed services and a 500-pound 
professional goods weight allowance for military spouses.
    We cannot avoid requiring members to make regular relocations, with 
all the attendant disruptions in their children's education and their 
spouses' careers. The Coalition believes strongly that the Nation that 
requires military families to incur these disruptions should not be 
making them bear the attendant high expenses out of their own pockets.
    The Military Coalition urges the subcommittee to upgrade permanent 
change-of-station allowances to better reflect the expenses members are 
forced to incur in complying with government-directed relocations, with 
priority on adjusting flat-rate amounts that have been eroded by 
years--or decades--of inflation, and shipment of a second vehicle at 
government expense to overseas accompanied assignments.
Base Realignment and Closure/Rebasing/Military Construction/
        Commissaries
    TMC remains concerned about inadequacy of service implementation 
plans for DOD transformation, global repositioning, Army modularity, 
and BRAC initiatives. Given the current wartime fiscal environment, TMC 
is greatly worried about sustaining support services and quality of 
life programs for members and families. These programs are clearly at 
risk--not a week goes by that the Coalition doesn't hear reports of 
cutbacks in base operation accounts and base services because of 
funding shortfalls.
    Feedback from the installation level is that local military and 
community officials often are not brought ``into the loop'' or provided 
sufficient details on changing program timetables to plan, seek, and 
fund support programs (housing, schools, child care, roads, and other 
infrastructure) for the numbers of personnel and families expected to 
relocate to the installation area by a specific date.
    We believe it is important to note that the commissary is a key 
element of the total compensation package for servicemembers and 
retirees. In addition to providing average savings of 30 percent over 
local supermarkets, commissaries provide an important tie to the 
military community. Shoppers get more than groceries at the commissary. 
It is also an opportunity to connect with other military family members 
and to get information on installation programs and activities through 
bulletin boards and installation publications. Finally, shoppers 
receive nutrition information and education through commissary 
promotions and educational campaigns contributing to the overall health 
of the entire beneficiary population.
    The Coalition urges the subcommittee to closely monitor rebasing/
BRAC plans and schedules to ensure sustainment and timely development 
of adequate family support/quality of life programs. At closing and 
gaining installations, respectively--to include housing, education, 
child care, exchanges and commissaries, health care, family centers, 
unit family readiness, and other support services.
Morale, Welfare, and Recreation Programs
    The availability of appropriated funds to support MWR activities is 
an area of continuing concern. TMC strongly opposes any DOD initiative 
that withholds or reduces MWR appropriated support for Category A and 
Category B programs or that reduces the MWR dividend derived from 
military base exchange programs.
    Servicemembers and their families are reaching the breaking point 
as a result of the war and the constant changes going on in the force. 
It is unacceptable to have troops and families continue to take on more 
responsibilities and sacrifices and not give them the support and 
resources to do the job and to take care of the needs of their 
families.
    TMC urges the subcommittee to ensure that DOD funds MWR programs at 
least to the 85 percent level for Category A programs and 65 percent 
for Category B requirements.
Education Enhancements
    Providing quality education for all military children is a key 
recruiting and retention standard that has been historically supported 
by the subcommittee.
    The Coalition is concerned that there was no increase in the amount 
of the DOD Supplement to Impact Aid. The need for supplemental funding 
as school districts receive more military children as rebasing is 
implemented is increasing. We believe that the funding should reflect 
this greater impact.
    Servicemembers have seen the value of their MGIB dramatically 
diminish due to double digit education inflation. The Coalition 
recommends tying the MGIB education benefit level to the average cost 
of a 4-year public college.
    Furthermore, service families facing several duty location changes 
during a career often encounter problems establishing State residency 
for the purpose of obtaining in-State tuition rates for military 
children and spouses. The Coalition supports authorizing in-State 
college tuition rates for servicemembers and their families in the 
State in which the member is assigned and the member's home State of 
record. The in-State tuition should remain continuous once the military 
member or family member is established as a student.
    TMC urges the subcommittee to work with the Veterans' Affairs 
Committee to establish the benchmark level of MGIB education benefits 
at the average cost of attending a 4-year public college, and support 
continuous in-State tuition eligibility for servicemembers and their 
families in the State in which the member is assigned and the member's 
home State of record once enrolled as a student.
                national guard and reserve force issues
    Every day somewhere in the world, our National Guard and Reserves 
are answering the call to service. Although there is no end in sight to 
their participation in homeland security, overseas deployment and 
future contingency operations, Guard and Reserve members have 
volunteered for these duties and accept them as a way of life in the 
21st century.
    Since September 11, 2001, more than 615,000 National Guard and 
Reserve service men and women have been called to active Federal 
service for the war on terrorism and more than 150,000 have served 
multiple deployments. They are experiencing similar sacrifices as the 
active-Duty Forces. However, readjusting to home life, returning to 
work and the communities and families they left behind puts added 
stress on Guard and Reserve members. Unlike active duty members, whose 
combat experience enhances their careers, many Guard Reserve members 
return to employers who are unhappy about their active duty service and 
find that their civilian careers have been inhibited by their prolonged 
absences. Further, despite the continuing efforts of the subcommittee, 
most Guard and Reserve families do not have the same level of 
counseling and support services that the active duty members have.
    All Guard and Reserve components are facing increasing challenges 
involving major equipment shortages, end-strength requirements, 
wounded-warrior health care, assistance and counseling for Guard and 
Reserve members for pre-deployment and post-deployment contingency 
operations.
    Congress and the DOD must provide adequate benefits and personnel 
policy changes to support our troops who go in harm's way.
Reserve Retirement and `Operational Reserve' Policy
    The assumption behind the 1948-vintage G-R retirement system--
retired pay eligibility at age 60--was that these servicemembers would 
be called up only infrequently for short tours of duty, allowing the 
member to pursue a full-time civilian career with a full civilian 
retirement. Under the ``Operational Reserve'' policy, reservists will 
be required to serve 1-year active duty tours every 5 or 6 years.
    Repeated, extended activations devalue full civilian careers and 
impede reservists' ability to build a full civilian retirement, 401(k), 
etc. Regardless of statutory reemployment protections, periodic long-
term absences from the civilian workplace can only limit Guard and 
Reserve members' upward mobility, employability and financial security. 
Further, strengthening the Reserve retirement system is needed as an 
incentive to retain critical mid-career officers and NCOs for a full 
Reserve career to meet long-term readiness needs.
    The Coalition is grateful for the NDAA for Fiscal Year 2008 
provision that would lower the Reserve retirement age by 3 months for 
each cumulative 90 days of active duty on contingency operation orders. 
TMC appreciates the importance of this small first step, but is very 
concerned that the new authority authorizes such credit only for 
service in 2008 and beyond--ignoring the extreme sacrifices of those 
who have borne the greatest burden of sacrifice in the war on terror 
for one, two, three or more combat tours in the past 6 years.
    TMC strongly urges further progress in revamping the Reserve 
retirement system in recognition of increased service and sacrifice of 
National Guard and Reserve component members, including at a minimum, 
extending the new authority for a 90 day=3 month reduction to all 
National Guard and Reserve members who have served since September 11.
A Total Force Approach to the MGIB
    The Nation's active duty, National Guard, and Reserve Forces are 
operationally integrated under the Total Force policy. But educational 
benefits under the MGIB do not reflect the policy nor match benefits to 
service commitment.
    TMC is grateful that the NDAA for Fiscal Year 2008 addressed a 
major inequity for operational reservists by authorizing 10 years of 
post-service use for benefits earned under Chapter 1607, 10 U.S.C.
    But this change will require the DOD, not the VA to pay the costs 
of readjustments for reservists. At a hearing on January 17, 2008, a 
senior DOD official acknowledged that the DOD no longer should control 
Chapter 1607.
    In addition, basic Reserve MGIB benefits for initial service entry 
have lost proportional parity with active duty rates since September 
11. These relative benefits have spiraled down from a historic ratio of 
47-50 percent of active duty MGIB levels to less than 29 percent--at a 
time when Guard and Reserve recruitment continues to be very 
challenging.
    TMC urges Congress to integrate Guard and Reserve and active duty 
MGIB laws into Title 38. In addition, TMC recommends restoring basic 
Reserve MGIB rates to approximately 50 percent of active duty rates and 
authorizing upfront reimbursement of tuition or training coursework for 
Guard and Reserve members.
Family Support Programs and Benefits
    The Coalition supports providing adequate funding for a core set of 
family support programs and benefits that meet the unique needs of 
Guard and Reserve families with uniform access for all servicemembers 
and families. These programs would promote better communication with 
servicemembers, specialized support for geographically separated Guard 
and Reserve families and training and back up for family readiness 
volunteers. This access would include:

         Web-based programs and employee assistance programs 
        such as Military OneSource and Guard Family.org.
         Enforcement of command responsibility for ensuring 
        that programs are in place to meet the special needs of 
        families of individual augmentees or the geographically 
        dispersed.
         Expanded programs between military and community 
        religious leaders to support servicemembers and families during 
        all phases of deployments.
         Availability of robust preventive counseling services 
        for servicemembers and families and training so they know when 
        to seek professional help related to their circumstances.
         Enhanced education for Guard and Reserve family 
        members about their rights and benefits.
         Innovative and effective ways to meet the Guard and 
        Reserve community's needs for occasional child care, 
        particularly for preventive respite care, volunteering, and 
        family readiness group meetings and drill time.
         A joint family readiness program to facilitate 
        understanding and sharing of information between all family 
        members, no matter what the service.

    The Coalition recognizes the subcommittee's longstanding interest 
and efforts on this topic, including several provisions in the NDAA for 
Fiscal Year 2008. The Coalition will monitor the results of the surveys 
and increased oversight called for in the provisions and looks forward 
to working closely with the Family Readiness Council.
    TMC urges Congress to continue and expand its emphasis on providing 
consistent funding and increased outreach to connect Guard and Reserve 
families with relevant support programs.
Tangible Support for Employers
    Employers of Guard and Reserve servicemembers shoulder an extra 
burden in support of the national defense. The new ``Operational 
Reserve'' policy places even greater strain on employers. For their 
sacrifice, they get plaques to hang on the wall.
    For Guard and Reserve members, employer `pushback' is listed as one 
of the top reasons for reservists to discontinue Guard and Reserve 
service. If we are to sustain a viable Guard and Reserve Force for the 
long term, the Nation must do more to tangibly support employers of the 
Guard and Reserve and address their substantive concerns, including 
initiatives such as:

         Tax credits for employers who make up any pay 
        differential for activated employees.
         Tax credits to help small business owners hire 
        temporary workers to fill in for activated employees.
         Tax credits for small manufacturers to hire temporary 
        workers.

    The Coalition urges Congress to support needed tax relief for 
employers of Selected Reserve personnel and reinforce the Employer 
Support for Guard and Reserve Program.
    Seamless Transition for Guard and Reserve Members--Over 615,000 
members of the Guard and Reserve have been activated since September 
11. Congressional hearings and media reports have documented the fact 
that at separation, many of these servicemembers do not receive the 
transition services they and their families need to make a successful 
readjustment to civilian status. Needed improvements include but are 
not limited to:

         Funding to develop tailored Transition Assistance 
        Program (TAP) services in the hometown area following release 
        from active duty.
         Expansion of VA outreach to provide ``benefits 
        delivery at discharge'' services in the hometown setting.
         Authority for mobilized Guard and Reserve members to 
        file ``FSA'' claims for a prior reporting year after return 
        from active duty.
         Authority for employers and employees to contribute to 
        401k and 403b accounts during mobilization.
         Enactment of academic protections for mobilized Guard 
        and Reserve students including: academic standing and refund 
        guarantees; and, exemption of Federal student loan payments 
        during activation.
         Automatic waivers on scheduled licensing/
        certification/promotion exams scheduled during a mobilization.
         Authority for reemployment rights for Guard and 
        Reserve spouses who must suspend employment to care for 
        children during mobilization.

    The Coalition appreciates the work of this subcommittee in seeking 
to address some of these needs in the NDAA for Fiscal Year 2008, but 
more remains to be done.
    The Coalition urges the subcommittee to continue and expand its 
efforts to ensure Guard and Reserve members and their families receive 
needed transition services to make a successful readjustment to 
civilian status.
                           retirement issues
    The Military Coalition is extremely grateful to the subcommittee 
for its support of maintaining a strong military retirement system to 
help offset the extraordinary demands and sacrifices inherent in a 
career of uniformed service.
Concurrent Receipt
    In the NDAA for Fiscal Year 2004, Congress acknowledged the 
inequity of the disability offset to earned retired pay and established 
a process to end or phase out the offset for all members with at least 
20 years of service and at least a 50 percent disability rating. That 
legislation also established the Veterans' Disability Benefits 
Commission and tasked the Commission to review the disability system 
and recommend any further adjustments to the disability offset law.
    Now the Commission has provided its report to Congress, in which it 
recommended an end to the VA compensation offset for all disabled 
military retirees, regardless of years of service, percentage of 
disability, or source of the service-connected disability (combat vs. 
non-combat).
    In the interim, congressional thinking has evolved along similar 
lines. The Coalition is thankful for the subcommittee's efforts in the 
NDAA for Fiscal Year 2008 to extend Combat-Related Special Compensation 
to disabled retirees who had their careers forced into retirement 
before attaining 20 years of service, as well as ending the offset for 
retirees rated unemployable by the VA.
    Despite this important progress, major inequities still remain that 
require the subcommittee's immediate attention. Many retirees are still 
excluded from the same principle that eliminates the disability offset 
for those with 50 percent or higher disabilities. The Coalition agrees 
strongly with the Veterans' Disability Benefits Commission that 
principle is the same for all disabled retirees, including those not 
covered by concurrent receipt relief enacted so far.
    The one key question is, ``Did the retired member fully earn his or 
her service-based retired pay, or not, independent of any disability 
caused by military service in the process?'' The Coalition and the 
Disability Commission agree that the answer has to be ``Yes.'' Any 
disability compensation award should be over and above service-earned 
retired pay.
    If a service-caused disability is severe enough to bar the member's 
continuation on active duty, and the member is forced into medical 
retirement short of 20 years of service, the member should be 
``vested'' in service-earned retired pay at 2.5 percent times pay times 
years of service.
    To the extent that a member's military disability retired pay 
exceeds the amount of retired pay earned purely by service, that 
additional amount is for disability and therefore is appropriately 
subject to offset by VA disability compensation.
    The principle behind eliminating the disability offset for Chapter 
61 retirees with less than 20 years of service with combat-related 
disabilities is no less applicable to those who had their careers cut 
short by other service-caused conditions. It is simply inappropriate to 
make such members fund their own VA disability compensation from their 
service-earned military retired pay, and it is unconscionable that 
current law forces thousands of severely injured members with as much 
as 19 years and 11 months of service to forfeit most or all of their 
earned retired pay.
    The Coalition urges the subcommittee to act expeditiously on the 
recommendations of the Veterans' Disability Benefits Commission and 
implement a plan to eliminate the deduction of VA disability 
compensation from military retired pay for all disabled military 
retirees.
Uniformed Services Retiree Entitlements and Benefits
    The Coalition awaits the results of the 10th Quadrennial Review of 
Military Compensation, which was tasked with reviewing the 
recommendations of the Defense Advisory Committee on Military 
Compensation (DACMC). The Coalition does not support the DACMC (nor the 
Commission on the National Guard and Reserve) recommendations to modify 
the military retirement system to more closely reflect civilian 
practices, including vesting for members who leave Service short of a 
career and delaying retired pay eligibility for those who serve a 
career.
    Many such proposals have been offered in the past, and have been 
discarded for good reasons. The only initiative to substantially 
curtail/delay military retired pay that was enacted--the 1986 REDUX 
plan--had to be repealed 13 years later after it began inhibiting 
retention.
    The Coalition believes such initiatives to ``civilianize'' the 
military retirement system in ways that reduce the value of the current 
retirement system and undermine long-term retention are based on a 
seriously flawed premise. The reality is that unique military service 
conditions demand a unique retirement system. Surveys consistently show 
that the military retirement system is the single most powerful 
incentive to serve a full career under conditions few civilians would 
be willing to endure for even 1 year, much less 20 or 30. A civilian-
style retirement plan would be appropriate for the military only if 
military service conditions were similar to civilian working 
conditions--which they most decidedly are not. The Coalition believes 
strongly that, if such a system as recommended by the DACMC existed for 
today's force under today's service conditions, the military services 
would already be mired in a much deeper and more traumatic retention 
crisis than they have experienced for many of the past several years.
    TMC urges the subcommittee to resist initiatives to ``civilianize'' 
the military retirement system in ways that reduce the compensation 
value of the current retirement system and undermine long-term 
retention.
Permanent Identification Card Eligibility
    The advent of TFL, expiration of TFL-eligible spouses' and 
survivors' military identification cards--and the threatened denial of 
health care claims--have caused many frail and elderly members and 
their caregivers significant administrative and financial distress.
    Previously, those who lived miles from a military installation or 
who resided in nursing homes and assisted living facilities simply did 
not bother to renew their identification cards upon the 4 year 
expiration date. Before enactment of TFL, they had little to lose by 
not doing so. But now, identification card expiration cuts off their 
new and all-important health care coverage.
    Congress has agreed with the Coalition's concerns that a 4-year 
expiration date is reasonable for younger family members and survivors 
who have a higher incidence of divorce and remarriage, but it imposes 
significant hardship and inequity upon elderly dependents and 
survivors.
    In the NDAA for Fiscal Year 2005, Congress authorized permanent ID 
cards for spouses and survivors who have attained age 75 (vs. the 
Coalition-recommended age 65), recognizing that many elderly spouses 
and survivors with limited mobility or who live in residential care 
facilities find it difficult or impossible to renew their military ID 
cards. Subsequently, Congress expanded that eligibility to permanently 
disabled dependents of retired members, regardless of age.
    Coalition associations continue to hear from a number of 
beneficiaries below the age of 75 who are disabled, living in 
residential facilities, are unable to drive, or do not live within a 
reasonable distance of a military facility. The threat of loss of 
coverage is forcing many others to try to drive long distances--
sometimes in adverse weather and at some risk to themselves and 
others--to get their cards renewed.
    For administrative simplicity, the Coalition believes the age for 
the permanent ID card for spouses and survivors should coincide with 
the advent of TFL. To the extent an interim step may be necessary, the 
eligibility age could be reduced to 70.
    The Coalition urges the subcommittee to direct the Secretary of 
Defense to authorize issuance of permanent military identification 
cards to uniformed services family members and survivors who are age 65 
and older.
                            survivor issues
    The Coalition is grateful to the subcommittee for its significant 
efforts in recent years to improve the SBP. We particularly note that, 
as of April 1, thanks to this subcommittee's efforts, the minimum 
annuity for all SBP beneficiaries, regardless of age will be 55 percent 
of covered retired pay.
    We also appreciate Congress' initiative in last year's defense bill 
that establishes a special survivor indemnity allowance that is the 
first step in a longer-term effort to phase out the DIC offset to SBP 
when the member died of a service-caused condition.
SBP-DIC Offset
    The Coalition believes strongly that current law is unfair in 
reducing military SBP annuities by the amount of any survivor benefits 
payable from the VA DIC program.
    If the surviving spouse of a retiree who dies of a service-
connected cause is entitled to DIC from the Department of Veterans 
Affairs and if the retiree was also enrolled in SBP, the surviving 
spouse's SBP benefits are reduced by the amount of DIC. A pro-rata 
share of SBP premiums is refunded to the widow upon the member's death 
in a lump sum, but with no interest. This offset also affects all 
survivors of members who are killed on active duty.
    The Coalition believes SBP and DIC payments are paid for different 
reasons. SBP is purchased by the retiree and is intended to provide a 
portion of retired pay to the survivor. DIC is a special indemnity 
compensation paid to the survivor when a member's service causes his or 
her premature death. In such cases, the VA indemnity compensation 
should be added to the SBP the retiree paid for, not substituted for 
it. It should be noted as a matter of equity that surviving spouses of 
Federal civilian retirees who are disabled veterans and die of 
military-service-connected causes can receive DIC without losing any of 
their Federal civilian SBP benefits.
    The Coalition is concerned that, in authorizing the special 
survivor indemnity allowance in last year's NDAA, the conferees did not 
use the precise language proposed by this subcommittee, but adopted a 
technical language change that had the effect of limiting eligibility 
for the new allowance to survivors of members who were either retired 
or in the ``gray area'' Reserve at the time of death. That is, it 
excluded survivors of members who died while serving on active duty.
    The Coalition believes strongly that the latter group of survivors 
is equally deserving of the new allowance. Some have argued that relief 
should be allowed only for those who paid a cash premium in retirement. 
The Coalition strongly disagrees, noting that a severely injured member 
who dies 1 month after his military disability retirement and who paid 
1 month of SBP premiums is little different than the case of a member 
who is more severely injured and expires more rapidly. Further, the new 
law authorizes coverage for ``gray area'' retirees who have paid no 
premiums, since their retired pay and SBP premiums don't begin until 
age 60.
    But the Coalition believes the issue goes beyond any such hair-
splitting. The reality is that, in every SBP/DIC case, active duty or 
retired, the true premium extracted by the service from both the member 
and the survivor was the ultimate one--the very life of the member--and 
that the service was what caused his or her death.
    The Coalition knows that the subcommittee is aware that the 
military community (and especially the survivors concerned) view the 
amount of the new allowance--$50 per month initially, and growing to 
$100 over the course of several years--as grossly inadequate. We 
appreciate that the subcommittee could have elected to do nothing 
rather than incur the expected negative feedback about the small 
amount. In that regard, we applaud you for having the courage to 
acknowledge the inequity and take this first step, however small, to 
begin trying to address it.
    But we also urge the subcommittee to work hard to accelerate 
increases in the amount of the allowance, to send the much-needed 
message to these survivors who have given so much to their country that 
Congress fully intends to find a way to address their loss more 
appropriately.
    The Coalition strongly urges the subcommittee to take further 
action to expand eligibility for the special survivor indemnity 
allowance to include all SBP-DIC survivors and continue progress toward 
completely repealing the SBP-DIC offset for this most-aggrieved group 
of military widows.
Final Retired Paycheck
    The Military Coalition believes the policy requiring recovery of a 
deceased member's final retired paycheck from his or her survivor 
should be changed to allow the survivor to keep the final month's 
retired pay.
    Current regulations require the survivor to surrender the final 
month of retired pay, either by returning the outstanding paycheck or 
having a direct withdrawal recoupment from her or his bank account.
    The Coalition believes this is an extremely insensitive policy 
imposed by the government at a most traumatic time for a deceased 
member's next of kin. Unlike his or her active duty counterpart, a 
retiree's survivor receives no death gratuity. Many older retirees do 
not have adequate insurance to provide even a moderate financial 
cushion for surviving spouses. Very often, the surviving spouse already 
has had to spend the final month's retired pay before being notified by 
the military finance center that it must be returned. Then, to receive 
the partial month's pay of the deceased retiree up to the date of 
death, the spouse must file a claim for settlement--an arduous and 
frustrating task, at best--and wait for the military's finance center 
to disburse the payment. Far too often, this strains the surviving 
spouse's ability to meet the immediate financial obligations 
commensurate with the death of the average family's ``bread winner.''
    TMC urges the subcommittee to end the insensitive practice of 
recouping the final month's retired pay from the survivor of a deceased 
retired member.
                           health care issues
    The Coalition very much appreciates the subcommittee's strong and 
continuing interest in keeping health care commitments to military 
beneficiaries. We are particularly grateful for your support for the 
last 2 years in refusing to allow the DOD to implement disproportional 
beneficiary health fee increases.
    The Coalition is more than willing to engage substantively in 
TRICARE fee and copay discussions with DOD. In past years, the 
Coalition and the DOD have had regular and substantive dialogues that 
proved very productive in facilitating reasonably smooth implementation 
of such major program changes as TRICARE Prime and TRICARE for Life. 
The objective during those good-faith dialogues has been finding a 
balance between the needs of the Department and the needs of 
beneficiaries.
    It is a great source of regret to the Coalition that there has been 
substantively less dialogue on the more recent fee increase 
initiatives. From its actions, it is hard to draw any other conclusion 
than the Department's sole concern is to extract a specified amount of 
budget savings from beneficiaries. The savings are intended to come 
from increased revenues from higher fees and less utilization by 
military retirees. The Coalition and Congressional Budget Office 
believe that DOD's approach will not achieve the projected savings.
    The unique package of military retirement benefits--of which a key 
component is a top-of-the-line health benefit--is the primary offset 
afforded uniformed servicemembers for enduring a career of unique and 
extraordinary sacrifices that few Americans are willing to accept for 1 
year, let alone 20 or 30. It is an unusual--and essential--compensation 
package that a grateful Nation provides for the relatively few who 
agree to subordinate their personal and family lives to protecting our 
national interests for so many years.
Full Funding for the Defense Health Program
    The Coalition very much appreciates the subcommittee's support for 
maintaining--and expanding where needed--the health care benefit for 
all military beneficiaries, consistent with the demands imposed upon 
them.
    The DOD, Congress, and The Military Coalition all have reason to be 
concerned about the rising cost of military health care. But it is 
important to recognize that the bulk of the problem is a national one, 
not a military-specific one. To a large extent, military health cost 
growth is a direct reflection of health care trends in the private 
sector.
    It is true that many private sector employers are choosing to shift 
an ever-greater share of health costs to their employees and retirees. 
In the bottom-line-oriented corporate world, many firms see their 
employees as another form of capital, from which maximum utility is to 
be extracted at minimum cost, and those who quit are replaceable by 
similarly experienced new hires. But that can't be the culture in the 
military's closed personnel, all volunteer model, whose long-term 
effectiveness is utterly dependent on establishing a sense of mutual, 
long-term commitment between the servicemember and his/her country.
    Some assert active duty personnel costs have increased 60 percent 
since 2001, of which a significant element is for compensation and 
health costs. But much of that cost increase is due to conscious 
decisions by Congress to correct previous shortfalls--including easing 
the double-digit military ``pay gap'' of that era and correcting the 
unconscionable situation before 2001 when military beneficiaries were 
summarily dropped from TRICARE coverage at age 65. Additionally, much 
of the increase is due to the cost of war and increased operating tempo 
(OPTEMPO).
    Meanwhile, the cost of basic equipment soldiers carry into battle 
(helmets, rifles, body armor) has increased 257 percent (more than 
tripled) from $7,000 to $25,000 since 1999. The cost of a Humvee has 
increased seven-fold (600 percent) since 2001 (from $32,000 to 
$225,000).
    While we have an obligation to do our best to intelligently 
allocate these funds, the bottom line is that maintaining the most 
powerful military force in the world is expensive--and doubly so in 
wartime.
    The Coalition assumes that DOD will again propose a reduction to 
the defense health budget based on the assumption that Congress will 
approve beneficiary fee increases for fiscal year 2009 at least as 
large as those as outlined last year. The Coalition objects strongly to 
the administration's arbitrary reduction of the TRICARE budget 
submission. DOD has typically overestimated its health care costs as 
evidenced by a recent GAO report on the TRICARE Reserve Select 
premiums. The Coalition deplores this inappropriate budget 
``brinksmanship'', which risks leaving TRICARE significantly 
underfunded, especially in view of statements made for the last 2 years 
by leaders of both Armed Services Committees that the Department's 
proposed fee increases were excessive.
    The Coalition understands only too well the very significant 
challenge such a large and arbitrary budget reduction would pose for 
this subcommittee if allowed to stand. If the reduction is not made up, 
the Department almost certainly will experience a substantial budget 
shortfall before the end of the year. This would then generate 
supplemental funding needs, further program cutbacks, and likely 
efforts to shift even more costs to beneficiaries in future years--all 
to the detriment of retention and readiness.
    The Coalition particularly objects to DOD's past imposition of 
``efficiency wedges'' in the health care budget, which have nothing to 
do with efficiency and everything to do with imposing arbitrary budget 
cuts that impede delivery of needed care. We are grateful at the 
subcommittee's strong action on this topic, and trusts in your 
vigilance to ensure that such initiatives will not be part of this 
year's budget process.
    The Military Coalition strongly urges the subcommittee to take all 
possible steps to restore the reduction in TRICARE-related budget 
authority and ensure continued full funding for Defense Health Program 
needs.
Protecting Beneficiaries Against Cost-Shifting
    The Task Force on the Future of Military Health Care had a great 
opportunity for objective evaluation of the larger health care issues. 
Unfortunately, the Coalition believes the Task Force missed that mark 
by a substantial margin.
    The bulk of its report cites statistics provided by the DOD and 
focuses discussions of cost-sharing almost solely on government costs, 
while devoting hardly a sentence to what the Coalition views as an 
equally fundamental issue--the level of health coverage that members 
earn by their arduous career service, the value of that service as an 
in-kind, upfront premium pre-payment, and the role of lifetime health 
coverage as an important offset to the unique conditions of military 
service. The Task Force focused on what was ``fair to the taxpayer'' 
and felt the benefit should be ``generous but not free''.
    The Task Force gave short shrift to what the Coalition sees as a 
fundamental point--that generations of military people have been told 
by their leaders that their service earned them their health care 
benefit, and the DOD and Congress reinforced that perception by 
sustaining flat, modest TRICARE fees over long periods of time. But now 
the Department and the Task Force assert that the military retirement 
health benefit is no longer earned by service. They now say beneficiary 
costs should be ``restored'' to some fixed share of DOD costs, even 
though no such relationship was ever stated or intended in the past. 
The Task Force report acknowledges that DOD cost increases over the 
intervening years have been inflated by military/wartime requirements, 
inefficiency, lack of effective oversight, structural dysfunction, or 
conscious political decisions by the Administration and Congress. Yet 
they assert that the government should foist a fixed share of those 
costs on beneficiaries anyway.
    The Coalition believes the Task Force's fee recommendations (see 
charts below)--which actually propose larger fee increases than DOD 
had--would be highly inequitable to beneficiaries and would pose a 
significant potential deterrent to long-term career retention.
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
    The Task Force cited GAO and other government reports to the effect 
that DOD financial statements and cost accounting systems are not 
auditable because of system problems and inadequate business processes 
and internal controls. Despite those statements, the Task Force 
accepted DOD data as the basis for assessing and proposing beneficiary 
cost-sharing percentages. The Coalition has requested information 
concerning the 1996 calculation and has never received an adequate 
accounting as to what was included in the calculation.
    The Task Force refers to its fee increases as ``modest'' and 
suggests the changes would be more generous than those offered by 75 
percent to 80 percent of all organizations in the private sector that 
offer health care benefits. The Coalition finds it telling that the 
Task Force would be content that 20 percent to 25 percent of U.S. firms 
offer their employees--most of whom never served 1 day for their 
country--a better benefit than the DOD provides in return for two or 
three decades of service and sacrifice in uniform.
    The Coalition is very grateful that Congress has expressed a much 
greater recognition of beneficiary perspectives, and has sought a more 
comprehensive examination of military health care issues. In that 
regard, the Coalition testimony will outline several specific concerns 
and address some principles that the Coalition believes need to be 
addressed in statute, just as there are statutory standards and 
guidelines for other major compensation elements--pay raises, housing 
and subsistence allowances, retired pay COLAs, etc.
People vs. Weapons
    Defense officials have provided briefs to Congress indicating that 
the rising military health care costs are ``impinging on other service 
programs.'' Other reports indicate that DOD leadership is seeking more 
funding for weapons programs by reducing the amount it spends on 
military health care and other personnel needs.
    The Military Coalition continues to assert that such budget-driven 
trade-offs are misguided and inappropriate. Cutting people programs to 
fund weapons ignores the much larger funding problem, and only makes it 
worse.
    The Coalition believes strongly that the proposed defense budget is 
too small to meet national defense needs. Today's defense budget (in 
wartime) is only about 4 percent of GDP, well short of the average for 
the peacetime years since World War II.
    The Coalition believes strongly that America can afford to and must 
pay for both weapons and military health care.
Military vs. Civilian Cost-Sharing Measurement
    Defense leaders assert that substantial military fee increases are 
needed to bring military beneficiary costs more in line with civilian 
practices. But merely contrasting military vs. civilian cash cost-
shares is a grossly misleading, ``apple-to-orange'' comparison.
    For all practical purposes, those who wear the uniform of their 
country are enrolled in a 20- to 30-year pre-payment plan that they 
must complete to earn lifetime health coverage. In this regard, 
military retirees and their families paid enormous ``upfront'' premiums 
for that coverage through their decades of service and sacrifice. Once 
that pre-payment is already rendered, the government cannot simply 
pretend it was never paid, and focus only on post-service cash 
payments.
    The DOD and the Nation--as good-faith employers of the trusting 
members from whom they demand such extraordinary commitment and 
sacrifice--have a reciprocal health care obligation to retired 
servicemembers and their families and survivors that far exceeds any 
civilian employer's to its workers and retirees.
    The Task Force on the Future of Military Health Care acknowledges 
that its recommendations for beneficiary fee increases, if enacted, 
would leave military beneficiaries with a lesser benefit than 20-25 
percent of America's corporate employees. The pharmacy copayment 
schedule they propose for military beneficiaries is almost the same--
and not quite as good in some cases--as the better civilian programs 
they reviewed.
    The Coalition believes that military beneficiaries from whom 
America has demanded decades of extraordinary service and sacrifice 
have earned coverage that is the best America has to offer--not just 
coverage that is at the 75th percentile of corporate plans.
Large Retiree Fee Increases Can Only Hurt Retention
    The reciprocal obligation of the government to maintain an 
extraordinary benefit package to offset the extraordinary sacrifices of 
career military members is a practical as well as moral obligation. 
Mid-career military losses can't be replaced like civilians can.
    Eroding benefits for career service can only undermine long-term 
retention/readiness. Today's troops are very conscious of Congress' 
actions toward those who preceded them in service. One reason Congress 
enacted TFL is that the Joint Chiefs of Staff at that time said that 
inadequate retiree health care was affecting attitudes among active 
duty troops.
    The current Joint Chiefs have endorsed increasing TRICARE fees only 
because their political leaders have convinced them that this is the 
only way they can secure funding for weapons and other needs. The 
Military Coalition believes it is inappropriate to put the Joint Chiefs 
in the untenable position of being denied sufficient funding for 
current readiness needs if they don't agree to beneficiary benefit 
cuts.
    Those who think retiree health care isn't a retention issue should 
recall a quote by then Chief of Naval Operations and now Chairman of 
Joint Chiefs of Staff, Admiral Mike Mullen, in a 2006 Navy Times:
    ``More and more sailors are coming in married. They talk to me more 
about medical benefits than I ever thought to when I was in my mid-20s. 
I believe we have the gold standard . . . for medical care right now, 
and that's a recruiting issue, a recruiting strength, and it's a 
retention strength.''
    That's more than backed up by two independent Coalition surveys. A 
2006 Military Officers Association of America survey drew 40,000 
responses, including more than 6,500 from active duty members. Over 92 
percent in all categories of respondents opposed the DOD-proposed plan. 
There was virtually no difference between the responses of active duty 
members (96 percent opposed) and retirees under 65 (97 percent 
opposed). A Fleet Reserve Association survey showed similar results.
    Reducing military retirement benefits would be particularly ill-
advised when recruiting is already a problem and an overstressed force 
is at increasing retention risk.
Proposed Increases Far Exceed Inflation Increases
    The increases proposed by the administration and the Task Force are 
grossly out of line with TRICARE benefit levels originally enacted by 
Congress, even allowing for interim inflation since current fees were 
established.
    If the $460 family Prime enrollment fee had been increased by the 
same Consumer Price Index (CPI) percentage increase as retired pay, it 
would be $642 for fiscal year 2009--far less than either the $1512 
envisioned in the fiscal year 2008 budget request or the $900-$1,700 
cited by the Task Force as its ultimate target fees.
    If the $300 deductible for TRICARE Standard were CPI-adjusted for 
the same period, it would be $419 by 2009--far short of the $1,210 in 
annual deductible and new fees proposed by DOD in 2007, or the $610-
$1,080 Task Force target.
    Further, both the administration and the Task Force propose 
adjusting beneficiary fees by medical cost growth, which has been two 
to three times the inflation-based increase in members' retired pay. 
The Task Force estimates the annual increase would be 7.5 percent.
    Both methodologies would ensure that medical costs would consume an 
ever-larger share of beneficiaries' income with each passing year. The 
Coalition realizes that this has been happening to many private sector 
employees, but believes strongly that the government has a greater 
obligation to protect the interests of its military beneficiaries than 
private corporations feel for their employees.
    Pharmacy copay increases proposed by the Task Force are even more 
disproportional. They would increase retail copays from $3 (generic), 
$9 (brand), and $22 (nonformulary) to $15, $25, and $45, respectively. 
Those represent increases of 400 percent, 178 percent, and 100 percent, 
respectively. Despite citing experience in civilian firms that 
beneficiary use of preferred drugs increased when their copays were 
reduced or eliminated, the Task Force actually proposes the highest 
percentage copay increases for the medications TRICARE most wants 
beneficiaries to use. That huge increase for retail generics flies in 
the face of recent commercial initiatives such as Wal-Mart's offering 
of many generics to the general public for a $4 copay. If the purpose 
is to push military beneficiaries to use Wal-Mart instead of TRICARE, 
it might indeed save the government some money on those medications, 
but it won't make military beneficiaries feel very good about their 
military pharmacy benefit. It shouldn't make Congress feel good about 
it, either.
    The Coalition particularly questions the need for pharmacy copay 
increases now that Congress has approved Federal pricing for the 
TRICARE retail pharmacy system.
Retirees Under 65 ``Already Gave'' 10 percent of Retired Pay
    The large proposed health fee increases would impose a financial 
``double whammy'' on retirees and survivors under age 65.
    Any assertion that military retirees have been getting some kind of 
``free ride'' because TRICARE fees have not been increased in recent 
years conveniently overlooks past government actions that have 
inflicted far larger financial penalties on every retiree and survivor 
under 65--penalties that will grow every year for the rest of their 
lives.
    That's because decades of past budget caps already depressed 
lifetime retired pay by an average of 10 percent for military members 
who retired between 1984 and 2006. For most of the 1980s and 1990s, 
military pay raises were capped below private sector pay growth, 
accumulating a 13.5 percent ``pay gap'' by 1998-99--a gap which has 
been moderated since then but persists at 3.4 percent today.
    Every member who has retired since 1984--exactly the same under-65 
retiree population targeted by the proposed TRICARE fee increases--has 
had his or her retired pay depressed by a percentage equal to the pay 
gap at the time of retirement. That depressed pay will persist for the 
rest of their lives, with a proportional depression of SBP annuities 
for their survivors.
    As a practical example, a member who retired in 1993--when the pay 
gap was 11.5 percent--continues to suffer an 11.5 percent retired pay 
loss today. For an E-7 who retired in 1993 with 20 years of service, 
that means a loss of $2,000 this year and every year because the 
government chose to cap his military pay below the average American's. 
An O-5 with 20 years of service loses more than $4,300 a year.
    The government has spent almost a decade making incremental 
reductions in the pay gap for currently serving members, but it still 
hasn't made up the whole gap--and it certainly hasn't offered to make 
up those huge losses for members already retired. Under such 
circumstances, it strikes the Coalition as ironic that defense 
officials now propose, in effect, billing those same retirees for 
``back TRICARE fee increases''.
Fee-Tiering Scheme Is Inappropriate
    Both the administration and the Task Force have proposed multi-
tiered schemes for proposed beneficiary fee increases, with the 
Administration's based on retired pay grade and the Task Force's based 
on retired pay amount. The intent of the plan is to ease opposition to 
the fee increases by introducing a means-testing initiative that 
penalizes some groups less than others.
    The Coalition rejects such efforts to mask a fundamental inequity 
by trying to convince some groups that the inequity being imposed on 
them is somehow more acceptable because even greater penalties would be 
imposed on other groups.
    Any such argument is fundamentally deceptive, since the Task Force 
plan envisions adjusting fee levels by medical inflation (7-8 percent a 
year), while retired pay thresholds would be adjusted by retiree COLAs 
(2-3 percent a year). That would guarantee ``tier creep''--shifting 
ever greater numbers of beneficiaries into the top tier every year.
    Surveys of public and private sector health coverage indicate that 
less than 1 percent of plans differentiate by salary. No other Federal 
plan does so. The Secretary of Defense has the same coverage as any GS 
employee, and the Majority Leader of the Senate has the same coverage 
as any Senate's lowest-paid staff member.
    The Coalition believes strongly that all military retirees earned 
equal health benefits by virtue of their career service, and that the 
lowest fee tier proposed by either the Administration or the Task Force 
would be an excessive increase for any military beneficiary (see chart 
at appendix A).
TRICARE for Life (TFL) Trust Fund Accrual Deposit Is Dubious Excuse
    According to DOD, most of the growth in defense health spending (48 
percent) was attributable to the establishment of the accrual 
accounting methodology for the TFL trust fund (which doesn't affect 
current outlays). The next largest contributor is medical care cost 
inflation (24 percent). Increase in usage by retirees and their 
dependents under age 65 accounted for 7 percent of the increase. Other 
benefit enhancements weigh in at 5 percent while global war on terror 
and other factors account for the remaining 15 percent. However, the 
affect of shifting beneficiaries from military treatment facilities to 
the civilian network was not discussed.
    When the DOD began arguing 3 years ago that the trust fund deposit 
was impinging on other defense programs, the Coalition and the 
subcommittee agreed that that should not be allowed to happen. When the 
Administration refused to increase the budget top line to accommodate 
the statutorily mandated trust fund deposit, Congress changed the law 
to specify that the entire responsibility for TFL trust fund deposits 
should be transferred to the Treasury. Subsequently, Administration 
budget officials chose to find a way to continue charging that deposit 
against the defense budget anyway.
    In the Coalition's view, this represents a conscious and 
inappropriate Administration decision to cap defense spending below the 
level needed to meet national security needs. If the Administration 
chooses to claim to Congress that its defense budget can't meet those 
other needs, then Congress (which directed implementation of TFL and 
the trust fund deposit) has an obligation to increase the budget as 
necessary to meet them.
TRICARE For Life Enrollment Fee is Inappropriate
    The Coalition disagrees strongly with the Task Force's 
recommendation to impose a new $120 annual enrollment fee for each TFL 
beneficiary. The Task Force report acknowledged that this would be 
little more than a ``nuisance fee'' and would be contrary to Congress' 
intent in authorizing TFL.
    The Task Force report cites data highlighting that costs are higher 
for beneficiaries age 65 and older, as if neither the Administration 
nor Congress envisioned in 2001 that older beneficiaries might need 
more medications and more care.
    Congress authorized TFL in 2001 in recognition that, prior to that 
date, most older beneficiaries had to pay for all of their care out of 
their own pockets after age 65, since most had been summarily ejected 
from any military health or pharmacy coverage. Congress also required 
that, to be eligible for TFL, beneficiaries must enroll in Medicare 
Part B, which already entails a substantial and rapidly growing annual 
premium. Therefore, TRICARE only pays the portion of costs not covered 
by Medicare.
    When the current administration came to office in 2001, military 
and civilian Defense leaders praised TFL, as enacted, as an appropriate 
benefit that retirees had earned and deserved for their career service. 
The Coalition asks, ``What has changed in the 6 intervening years of 
war that has somehow made that service less meritorious?''
Alternative Options to Make TRICARE More Cost-Efficient
    The Coalition continues to believe strongly that the DOD has not 
sufficiently investigated other options to make TRICARE more cost-
efficient without shifting costs to beneficiaries. The Coalition has 
offered a long list of alternative cost-saving possibilities, 
including:

         Promote retaining other health insurance by making 
        TRICARE a true second-payer to other insurance (far cheaper to 
        pay another insurance's copay than have the beneficiary migrate 
        to TRICARE).
         Reduce or eliminate all mail-order co-payments to 
        boost use of this lowest-cost venue.
         Change electronic claim system to kick back errors in 
        real time to help providers submit ``clean'' claims, reduce 
        delays/multiple submissions.
         Size and staff military treatment facilities (least 
        costly care option) in order to reduce reliance on non-MTF 
        civilian providers.
         Promote programs to offer special care management 
        services and zero copays or deductibles to incentivize 
        beneficiaries to take medications and seek preventive care for 
        chronic or unusually expensive conditions.
         Promote improved health by offering preventive and 
        immunization services (e.g., shingles vaccine, flu shots) with 
        no copay or deductible.
         Authorize TRICARE coverage for smoking cessation 
        products and services (it's the height of irony that TRICARE 
        currently doesn't cover these programs that have been long and 
        widely acknowledged as highly effective in reducing long-term 
        health costs).
         Reduce long-term TRICARE Reserve Select costs by 
        allowing members the option of a government subsidy (at a cost 
        capped below TRS cost) of civilian employer premiums during 
        periods of mobilization.
         Promote use of mail-order pharmacy system via mailings 
        to users of maintenance medications, highlighting the 
        convenience and individual expected cost savings.
         Encourage retirees to use lowest-cost-venue military 
        pharmacies at no charge, rather than discouraging such use by 
        limiting formularies, curtailing courier initiatives, etc.

    The Coalition is pleased that the DOD has begun to implement at 
least some of our past suggestions, and stands ready to partner with 
DOD to investigate and jointly pursue these or other options that offer 
potential for reducing costs.
TRICARE Still Has Significant Shortcomings
    While DOD chooses to focus its attention on the cost of the TRICARE 
program to the government, the Coalition believes there is insufficient 
acknowledgement that thousands of providers and beneficiaries continue 
to experience significant problems with TRICARE. Beneficiaries at many 
locations, particularly those lacking large military populations, 
report difficulty in finding providers willing to participate in the 
program. Doctors complain about the program's low payments and 
administrative hassles. Withdrawal of providers from TRICARE networks 
at several locations has generated national publicity.
    Of particular note is a 2007 GAO survey of Guard and Reserve 
personnel, also cited by the DOD Task Force on the Future of Military 
Health Care, in which almost one-third of respondents reported having 
difficulty obtaining assistance from TRICARE, and more than one-fourth 
reported difficulty in finding a TRICARE-participating provider.
    That problem is getting worse rather than better. The Task Force 
report stated that all military beneficiary categories report more 
difficulty than civilians in accessing care, and that military 
beneficiaries' reported satisfaction with access to care declined from 
2004 to 2006. The problem is exacerbated in areas like Alaska where a 
combination of physician shortages and an unwillingness to take TRICARE 
make it very difficult to find a physician.
    The Coalition urges the subcommittee to require DOD to pursue 
greater efforts to improve TRICARE and find more effective and 
appropriate ways to make TRICARE more cost-efficient without seeking to 
``tax'' beneficiaries and make unrealistic budget assumptions.
TMC Health Care Cost Principles
    The Military Coalition believes strongly that the current fee 
controversy is caused in part by the lack of any statutory record of 
the purpose of military health benefits and the degree to which cost 
adjustments are or should be allowable. Under current law, the 
Secretary of Defense has broad latitude to make administrative 
adjustments to fees for TRICARE Prime and the pharmacy systems. As a 
practical matter, the Armed Services Committees can threaten to change 
the law if they disapprove of the Secretary's initiatives. But absent 
such intervention, the Secretary can choose not to increase fees for 
years at a time or can choose to quadruple fees in 1 year.
    Until recently, this was not a particular matter of concern, as no 
Secretary had previously proposed dramatic fee increases. Given recent 
years' precedents, the Coalition believes strongly that the 
subcommittee needs to establish more specific and permanent principles, 
guidelines, and prohibitions to protect against dramatic administrative 
fluctuations in this most vital element of servicemembers' career 
compensation incentive package.
    Other major elements of the military compensation package have much 
more specific standards in permanent law. There is a formula for the 
initial amount of retired pay and for subsequent annual adjustments. 
Basic pay raises are tied to the ECI, and housing and food allowances 
are tied to specific standards as well.
    A 2006 survey of military retirees indicates that 65 percent of 
retirees under 65 have access to private health insurance. What the 
Task Force report does not measure is the percent of retirees that do 
not embark on a second career and thus depend solely on their 
retirement income. If fees are allowed to be tiered, up to one third of 
retirees could see a large portion of their retirement eaten up by 
health care costs.
    The Coalition most strongly recommends Rep. Chet Edwards' and Rep. 
Walter Jones' H.R. 579 and Sen. Frank Lautenberg's and Sen. Chuck 
Hagel's S. 604 as models to establish statutory findings, a sense of 
Congress on the purpose and principles of military health care 
benefits, and explicit guidelines for and limitations on adjustments.

         Active duty members and families should be charged no 
        fees except retail pharmacy co-payments, except to the extent 
        they make the choice to participate in TRICARE Standard or use 
        out-of-network providers under TRICARE Prime.
         For retired and survivor beneficiaries, the percentage 
        increase in fees, deductibles, and co-payments that may be 
        considered in any year should not exceed the percentage 
        increase beneficiaries experience in their compensation.
         The TRICARE Standard inpatient copay should not be 
        increased further for the foreseeable future. At $535 per day, 
        it already far exceeds inpatient copays for virtually any 
        private sector health plan.
         There should be no enrollment fee for TRICARE Standard 
        or TIRCARE For Life (TFL), since neither offers assured access 
        to TRICARE-participating providers. An enrollment fee implies 
        enrollees will receive additional services, as Prime enrollees 
        are guaranteed access to participating providers in return for 
        their fee. Congress already has required TFL beneficiaries to 
        pay substantial Medicare Part B fees to gain TFL coverage.
         There should be one TRICARE fee schedule for all 
        retired beneficiaries, just as all legislators, Defense leaders 
        and other Federal civilian grades have the same health fee 
        schedule. The TRICARE schedule should be significantly lower 
        than the lowest tier recommended by the DOD, recognizing that 
        all retired members paid large upfront premiums for their 
        coverage through decades of arduous service and sacrifice.

TRICARE Standard Enrollment
    Last year, the DOD proposed requiring beneficiaries to take an 
additional step of signing an explicit statement of enrollment in 
TRICARE Standard. The Department proposed a one-time $25 enrollment 
fee. The Task Force on the Future of Military Health Care also endorsed 
enrollment, and proposed an annual enrollment fee of $120.
    The proposals are based on three main arguments:

         Enrollment is needed to define the population that 
        will actually use the program
         Enrollment would allow more accurate budgeting for 
        program needs
         The fee would help offset DOD's cost of implementing 
        the enrollment system (DOD rationale) and ``impose some 
        personal accountability for health care costs'' (Task Force 
        rationale).

    The Coalition believes none of these arguments stands up to 
scrutiny.
    Department officials already know exactly which beneficiaries use 
TRICARE Standard. They have exhaustive records on what doctors they've 
seen and what medications they've used on what dates and for what 
conditions. They already assess trends in beneficiary usage and project 
the likely effect on those trends for current and future years--such as 
the effect of changes in private employer changes on the likely return 
of more beneficiaries to the TRICARE system.
    The DOD does not have a good record on communicating policy changes 
to Standard beneficiaries. That means large numbers of beneficiaries 
won't get the word, or appreciate the full impact if they do get it. 
They have always been told that their eligibility is based on the 
Defense Enrollment Eligibility Reporting System. A single, bulk-mail 
communication can't be expected to overwrite decades of experience.
    Hard experience is that many thousands of beneficiaries would learn 
of the requirement only when their TRICARE Standard claims are rejected 
for failure to enroll. Some would involve claims for cancer, auto 
accidents and other situations in which it would be unacceptable to 
deny claims because the beneficiary didn't understand an administrative 
rule change. DOD administrators who casually dismiss this argument as 
involving a relative minority of cases see the situation much 
differently if they found their family in that situation--as hundreds 
or thousands of military families certainly would.
    Inevitably, most beneficiaries who do receive and understand the 
implications of an enrollment requirement will enroll simply ``to be 
safe'', even if their actual intent is to use VA or employer-provided 
coverage for primary care--thus undercutting the argument that 
enrollment would increase accuracy of usage projections.
    The arguments for a Standard enrollment fee also don't hold water. 
First, it's inequitable to make beneficiaries pay a fee to cover the 
cost of an enrollment system that's established solely for the benefit 
and convenience of the government, with no benefit whatsoever for the 
beneficiary. Second, the Task Force acknowledges that a $120 fee is 
more a ``nuisance fee'' than a behavior modifier, and existing 
deductibles and copays provide a much more immediate ``accountability'' 
sense to the beneficiary. Third and most important, one who pays an 
enrollment fee expects something extra in return for the fee. An 
enrollment fee for TRICARE Prime is reasonable, because it buys the 
beneficiary guaranteed access to a participating provider. TRICARE 
Standard provides no such guarantee, and in some locations it's very 
difficult for beneficiaries to find a TRICARE provider.
    For all these reasons, establishing an enrollment requirement will 
neither better define the user population nor better define budget 
needs.
    The Coalition believes the real intent of the enrollment proposal 
is simply to reduce TRICARE costs by allowing DOD to reject payment for 
any claims by beneficiaries who fail to enroll.
    To the extent any enrollment requirement may still be considered 
for TRICARE Standard, such enrollment should be automatic for any 
beneficiary who files a TRICARE claim. Establishing an enrollment 
requirement must not be allowed to become an excuse to deny claims for 
members who are unaware of the enrollment requirement.
    The Coalition strongly recommends against establishment of any 
TRICARE Standard enrollment system; to the extent enrollment may be 
required, any beneficiary filing a claim should be enrolled 
automatically, without denying the claim. No enrollment fee should be 
charged for TRICARE Standard until and unless the program offers 
guaranteed access to a participating provider.
Private Employer Incentive Restrictions
    Current law, effective January 1, 2008, bars private employers from 
offering incentives to TRICARE-eligible employees to take TRICARE in 
lieu of employer-sponsored plans. This law is well-intended, but 
inadvertently imposes unfair penalties on many employees of companies 
that are not, in fact, attempting to shift costs to TRICARE.
    The Armed Services Committees have tasked the Secretary of Defense 
for a report on the issue, which may not protect current beneficiaries 
and, even with a favorable response, in no way restricts future 
Secretaries of Defense who may impose a strict interpretation of the 
law.
    In the meantime, Coalition associations have heard from hundreds of 
TRICARE beneficiaries whose civilian employers are using the new law to 
bar equal payments to TRICARE beneficiaries that are available to other 
company employees (e.g., if the company offers $100 per month to any 
employee who uses insurance available through a spouse's coverage or a 
previous employer).
    TRICARE coverage is an extremely important career benefit that is 
earned by decades of service in uniform. TMC believes it is 
contradictory to the spirit of this earned benefit to impose statutory 
provisions that deny access to TRICARE by those who have earned it or 
that deny TRICARE beneficiaries the same options available to non-
TRICARE beneficiaries who work for the same civilian employer.
    The Coalition recommends Congress modify the law restricting 
private employer TRICARE incentives to explicitly exempt employers who 
offer only cafeteria plans (i.e., cash payments to all employees to 
purchase care as they wish) and employers who extend specific cash 
payments to any employee who uses health coverage other than the 
employer plan (e.g., FEHBP, TRICARE, or commercial insurance available 
through a spouse or previous employer).
TRICARE Standard Improvements
    The Coalition very much appreciates the subcommittee's continuing 
interest in the specific problems unique to TRICARE Standard 
beneficiaries. In particular, we applaud your efforts to expand TRICARE 
Standard provider and beneficiary surveys and establish Standard 
support responsibilities for TRICARE Regional Offices. These are needed 
initiatives that should help make it a more effective program. We 
remain concerned, however, that more remains to be done. TRICARE 
Standard beneficiaries need assistance in finding participating 
providers within a reasonable time and distance from their home. This 
will become increasingly important with the expansion of TRICARE 
Reserve Select, as these individuals are most likely not living within 
a Prime Service Area.
Provider Participation Adequacy
    We are pleased that Congress added the requirement to survey 
beneficiaries in addition to providers. The Coalition believes this 
will help correlate beneficiary inputs with provider inputs for a more 
accurate view of participation by geographic location.
    The Coalition is concerned that DOD has not yet established any 
standard for the adequacy of provider participation. Participation by 
half of the providers in a locality may suffice if there is not a large 
Standard beneficiary population. The Coalition hopes to see an 
objective participation standard (perhaps number of beneficiaries per 
provider) that would help shed more light on which locations have 
participation shortfalls of Primary Care Managers and Specialists that 
require positive action.
    The Coalition is grateful to the subcommittee for provisions in the 
NDAA for Fiscal Year 2008 that will require DOD to establish benchmarks 
for participation adequacy and follow-up reports on actions taken.
    The Coalition urges the subcommittee to continue monitoring DOD and 
GAO reporting on provider participation to ensure proper follow-on 
action.
Administrative Deterrents to Provider Participation
    The Coalition is pleased that Congress has directed DOD to modify 
current claims procedures to be identical to those of Medicare. We look 
forward to implementation with the next generation of Managed Care 
Support Contracts. Feedback from providers indicates TRICARE imposes 
additional administrative requirements on providers that are not 
required by Medicare or other insurance plans. On the average, about 50 
percent of a provider's panel is Medicare patients, whereas only 2 
percent are TRICARE beneficiaries. Providers are unwilling to incur 
additional administrative expenses that affect only a small number of 
patients. Thus, providers are far more prone to non-participation in 
TRICARE than in Medicare.
    TRICARE still requires submission of a paper claim to determine 
medical necessity on a wide variety of claims for Standard 
beneficiaries. This thwarts efforts to encourage electronic claim 
submission and increases provider administrative expenses and delays 
receipt of payments. Examples include speech therapy, occupational/
physical therapy, land or air ambulance service, use of an assistant 
surgeon, nutritional therapy, transplants, durable medical equipment, 
and pastoral counseling.
    Another source of claims hassles and payment delays involve cases 
of third party liability (e.g., auto insurance health coverage for 
injuries incurred in auto accidents). Currently, TRICARE requires 
claims to be delayed pending receipt of a third-party-liability form 
from the beneficiary. This often delays payments for weeks and can 
result in denial of the claim (and non-payment to the provider) if the 
beneficiary doesn't get the form in on time. Recently, a major TRICARE 
claims processing contractor recommended that these claims should be 
processed regardless of diagnosis and that the third-party-liability 
questionnaire should be sent out after the claim is processed to 
eliminate protracted inconvenience to the provider of service.
    Additionally, changes to the TRICARE pharmacy formulary are 
becoming increasingly burdensome for providers. The number of 
medications added to non-formulary status ($22 copay) has increased 
tremendously, and changing prescriptions has added to the providers' 
workload, as have increases in prior-authorization (Step Therapy) 
requirements. The increase in the number of third tier drugs and DOD's 
reliance on pharmacy medical necessity requests has increased provider 
workload to the extent that many now charge beneficiaries extra to 
complete this form. For others, it's yet another TRICARE-unique 
administrative hassle that makes them less likely to agree to see 
TRICARE beneficiaries.
    The Coalition urges the subcommittee to continue its efforts to 
reduce administrative impediments that deter providers from accepting 
TRICARE patients.
TRICARE Reimbursement Rates
    Physicians consistently report that TRICARE is virtually the 
lowest-paying insurance plan in America. Other national plans typically 
pay providers 25-33 percent more. In some cases the difference is even 
higher.
    While TRICARE rates are tied to Medicare rates, TRICARE Managed 
Care Support Contractors make concerted efforts to persuade providers 
to participate in TRICARE Prime networks at a further discounted rate. 
Since this is the only information providers receive about TRICARE, 
they see TRICARE as even lower-paying than Medicare.
    This is exacerbated by annual threats of further reductions in 
TRICARE rates due to the statutory Medicare rate-setting formula. 
Doctors are unhappy enough about reductions in Medicare rates, and many 
already are reducing the number of Medicare patients they see.
    But the problem is even more severe with TRICARE, because TRICARE 
patients typically comprise a small minority of their beneficiary 
caseload. Physicians may not be able to afford turning away large 
numbers of Medicare patients, but they're more than willing to turn 
away a small number of patients who have low-paying, high-
administrative-hassle TRICARE coverage.
    Congress has acted to avoid Medicare physician reimbursement cuts 
for the last 4 years, but the failure to provide a payment increase for 
2006 and 2007 was another step in the wrong direction, according to 
physicians. Further, Congress still has a long way to go in order to 
fix the underlying reimbursement determination formula.
    Correcting the statutory formula for Medicare and TRICARE physician 
payments to more closely link adjustments to changes in actual practice 
costs and resist payment reductions is a primary and essential step. We 
fully understand that is not within the purview of this subcommittee, 
but we urge your assistance in pressing the Finance Committee for 
action.
    In the meantime, the rate freeze for 2006 and 2007 along with a 
small increase for the first part of 2008 makes it even more urgent to 
consider some locality-based relief in TRICARE payment rates, given 
that doctors see TRICARE as even less attractive than Medicare. 
Additionally, the Medicare pay package that was enacted in Public Law 
109-432 included a provision for doctors to receive a 1.5 percent bonus 
next year if they report a basic set of quality-of-care measures. The 
TRICARE for Life beneficiaries should not be affected as their claims 
are submitted directly to Medicare and should be included in the 
physicians' quality data. But there's been no indication that TRICARE 
will implement the extra increases for treating beneficiaries under 65, 
and this could present a major problem. If no such bonus payment is 
made for TRICARE Standard patients, then TRICARE will definitely be the 
lowest payer in the country and access could be severely decreased.
    The TRICARE Management Activity has the authority to increase the 
reimbursement rates when there is a provider shortage or extremely low 
reimbursement rate for a specialty in a certain area and providers are 
not willing to accept the low rates. In some cases a State Medicaid 
reimbursement for a similar service is higher than that of TRICARE. As 
mentioned previously, the Department has been reluctant to establish a 
standard for adequacy of participation and should use survey data to 
apply adjustments nationally.
    The Coalition urges the subcommittee to exert what influence it can 
to persuade the Finance Committee to reform Medicare/TRICARE statutory 
payment formula. To the extent the Medicare rate freeze continues, we 
urge the subcommittee to encourage the DOD to use its reimbursement 
rate adjustment authority as needed to sustain provider acceptance.
    The Coalition urges the subcommittee to require a Comptroller 
General report on the relative propensity of physicians to participate 
in Medicare vs. TRICARE, and the likely effect on such relative 
participation of a further freeze in Medicare/TRICARE physician 
payments along with the affect of an absence of bonus payments.
Minimize Medicare/TRICARE Coverage Differences
    A 2006 DOD report to Congress contained the coverage differences 
between Medicare and TRICARE. The report showed that there are at least 
a few services covered by Medicare that are not covered by TRICARE. 
These include an initial physical at age 65, chiropractic coverage, 
respite care, and certain hearing tests. We believe TRICARE coverage 
should at least equal Medicare's in every area and include recommended 
preventive services at no cost. As an example, the Army Medical 
department has implemented the ``Adult Pneumovax'' program and projects 
savings of $500 per vaccine given.
    Our military retirees deserve no less coverage than is provided to 
other Federal beneficiaries.
    The Coalition urges the subcommittee to align TRICARE coverage to 
at least match that offered by Medicare in every area and provide 
preventive services at no cost.
National Guard and Reserve Health Care
    The Coalition is grateful to the subcommittee for its leadership in 
extending lower-cost TRICARE eligibility to all drilling National Guard 
and Reserve members. This was a major step in acknowledging that the 
vastly increased demands being placed on Selected Reserve members and 
families needs to be addressed with adjustments to their military 
compensation package.
    While the subcommittee has worked hard to address the primary 
health care hurdle, there are still some areas that warrant attention.
    TRICARE Reserve Select (TRS) Premium
    The Coalition believes the premium-setting process for this 
important benefit needs to be improved and was incorrectly based upon 
the basic Blue Cross Blue Shield option of the FEHBP. This adjustment 
mechanism has no relationship either to the Department's military 
health care costs or to increases in eligible members' compensation.
    When the program was first implemented, the Coalition urged DOD to 
base premiums (which were meant to cover 28 percent of program costs) 
on past TRICARE Standard claims data to more accurately reflect costs. 
Now a GAO study has confirmed that DOD's use of Blue Cross Blue Shield 
data and erroneous projections of participation resulted in 
substantially overcharging beneficiaries.
    GAO found that DOD projected costs of $70 million for fiscal year 
2005 and $442 million for fiscal year 2006, whereas actual costs proved 
to be $5 million in fiscal year 2005 and about $40 million in fiscal 
year 2006. GAO found that DOD estimates were 72 percent higher than the 
average single member cost and 45 percent higher than average family 
cost. If DOD were to have used actual fiscal year 2006 costs, the 
annual individual premium would have been $48/month instead of $81/
month. The corresponding family premium would have been $175/month 
instead of $253/month.
    GAO recommended that DOD stop basing TRS premiums on Blue Cross 
Blue Shield adjustments and use the actual costs of providing the 
benefit. DOD concurred with the recommendations and says, ``it remains 
committed to improving the accuracy of TRS premium projections.'' 
However, GAO observed that DOD has made no commitment to any timetable 
for change.
    The Coalition believes our obligation to restrain health cost 
increases for Selected Reserve members who are periodically being asked 
to leave their families and lay their lives on the line for their 
country is should be even greater than our obligation to restrain 
government cost increases. These members deserve better than having 
their health premiums raised arbitrarily by a formula that has no real 
relationship to them.
    The Coalition believes strongly that TRS premiums should be reduced 
immediately to $48/month (single) and $175/month (family), with 
retroactive refunds to those who were overcharged in the past.
    For the future, as a matter of principle, the Coalition believes 
that TRS premiums should not be increased in any year by a percentage 
that exceeds the percentage increase in basic pay.
    The Coalition also is concerned that members and families enrolled 
in TRS are not guaranteed access to TRICARE-participating providers and 
are finding it difficult to locate providers willing to take TRICARE. 
As indicated earlier in this testimony, the Coalition believes that 
members who are charged a fee for their health coverage should be able 
to expect assured access, and hopes the subcommittee will explore 
options for assuring such access for TRS enrollees.
    The Coalition recommends reducing TRS premiums to $48/month 
(single) and $175/month (family), as envisioned by the GAO, with 
retroactive refunds as appropriate. For the future, the percentage 
increase in premiums in any year should not exceed the percentage 
increase in basic pay.
    The Coalition further recommends that the subcommittee request a 
report from the DOD on options to assure TRS enrollees' access to 
TRICARE-participating providers.
Private Insurance Premium Option
    The Coalition thanks Congress for authorizing subsidy of private 
insurance premiums for reservists called to active duty in cases where 
a dependent possesses a special health care need that would be best met 
by remaining in the member's civilian health plan.
    The Coalition believes Congress is missing an opportunity to reduce 
long-term health care costs by failing to authorize eligible members 
the option of electing a partial subsidy of their civilian insurance 
premiums during periods of mobilization. Current law already authorizes 
payment of up to 24 months of FEHBP premiums for mobilized members who 
are civilian employees of the DOD.
    Congress directed GAO to review this issue and submit a report in 
April 2007--a report that, to our knowledge, has not been completed. We 
hope that report will address not only the current wartime situation, 
but the longer-term peacetime scenario. Over the long term, when Guard 
and Reserve mobilizations can be expected at a considerably lower pace, 
the Coalition believes subsidizing continuation of employer coverage 
during mobilizations periods offers considerable savings opportunity 
relative to funding year-round family TRICARE coverage while the member 
is not deployed.
    In fact, the Department could calculate a maximum monthly subsidy 
level that would represent a cost savings to the government, so that 
each member who elected that option would reduce TRICARE costs.
    The Coalition recommends developing a cost-effective option to have 
DOD subsidize premiums for continuation of a Reserve employer's private 
family health insurance during periods of deployment as an alternative 
to permanent TRICARE Reserve Select coverage.
    Involuntary Separatees
    The Coalition believes it is unfair to deny TRS coverage for IRR 
members who have returned from deployment or terminate coverage for 
returning members who are involuntarily separated from the Selected 
Reserve (other than for cause).
    The Coalition recommends authorizing 1 year of post-TAMP TRS 
coverage for every 90 days deployed in the case of returning members of 
the IRR or members who are involuntarily separated from the Selected 
Reserve. The Coalition further recommends that voluntarily separating 
reservists subject to disenrollment from TRS should be eligible for 
participation in the CHCBP.
    Gray Area Reservists
    The Coalition is sensitive that Selected Reserve members and 
families have one remaining ``hole'' in their military health coverage. 
They are eligible for TRS while currently serving in the Selected 
Reserve, then lose coverage while in ``Gray area'' retiree status, then 
regain full TRICARE eligibility at age 60.
    The Coalition believes some provision should be made to allow such 
members to continue their TRICARE coverage in gray area status. 
Otherwise, we place some members at risk of losing family health 
coverage entirely when they retire from the Selected Reserve. We 
understand that such coverage likely would have to come with a higher 
premium.
    The Coalition urges the subcommittee to authorize an additional 
premium-based option under which members entering ``gray area'' retiree 
status would be able to avoid losing health coverage.
    Reserve Dental Coverage
    The Coalition remains concerned about the dental readiness of the 
Reserve Forces. Once these members leave active duty, the challenge 
increases substantially, so the Coalition believes the services should 
at least facilitate correction of dental readiness issues identified 
while on active duty. DOD should be fiscally responsible for dental 
care to reservists to ensure servicemembers meet dental readiness 
standards when DOD facilities are not available within a 50 mile radius 
of the members' home for at least 90 days prior and 180 days post 
mobilization.
    The Coalition supports providing dental coverage to reservists for 
90 days pre- and 180 days post-mobilization (during TAMP), unless the 
individual's dental readiness is restored to T-2 condition before 
demobilization.
Consistent Benefit
    As time progresses and external changes occur, we are made aware of 
pockets of individuals who for one reason or another are denied the 
benefits that they should be eligible for. DOD and its health 
contractors were leaders in modifying policy and procedures to assist 
Katrina victims. Additionally, Congress' action to extend eligibility 
for TRICARE Prime coverage to children of deceased active duty members 
was truly the right thing to do.
    Restoration of Survivors' TRICARE Coverage
    When a TRICARE-eligible widow/widower remarries, he/she loses 
TRICARE benefits. When that individual's second marriage ends in death 
or divorce, the individual has eligibility restored for military ID 
card benefits, including SBP coverage, commissary/exchange privileges, 
etc.--with the sole exception that TRICARE eligibility is not restored.
    This is out of line with other Federal health program practices, 
such as the restoration of CHAMPVA eligibility for survivors of 
veterans who died of service-connected causes. In those cases, VA 
survivor benefits and health care are restored upon termination of the 
remarriage.
    Remarried surviving spouses deserve equal treatment.
    The Coalition recommends restoration of TRICARE benefits to 
previously eligible survivors whose second or subsequent marriage ends 
in death or divorce.
    TRICARE Prime Remote Exceptions
    Longer deployments and sea/shore and overseas assignment patterns 
leave many military families faced with tough decisions. A spouse and 
children may find a greater level of support by residing with or near 
relatives during extended separations from the active duty spouse. DOD 
has the authority to waive the requirement for the spouse to reside 
with the servicemember for purposes of TRICARE Prime Remote eligibility 
if the service determines special circumstances warrant such coverage. 
We remain concerned about the potential for inconsistent application of 
eligibility. The special authority is a step in the right direction, 
but there is a wide variety of circumstances that could dictate a 
family separation of some duration, and the Coalition believes each 
family is in the best situation to make its own decision.
    The Coalition recommends removal of the requirement for the family 
members to reside with the active duty member to qualify for the 
TRICARE Prime Remote Program, when the family separation is due to a 
military-directed move or deployment.
Base Realignment and Closure, Rebasing, and Relocation
    Relocation from one geographic region to another and base closures 
brings multiple problems. A smooth health care transition is crucial to 
the success of DOD and Service plans to transform the force. That means 
ensuring a robust provider network and capacity is available to all 
beneficiary populations, to include active and Reserve component and 
retirees and their family members, and survivors at both closing and 
gaining installations. It is incumbent upon the Department and its 
Managed Care Support Contractors to ensure smooth beneficiary 
transition from one geographic area to another. We stress the 
importance of coordination of construction and funding in order to 
maintain access and operations while the process takes place.
    The Coalition recommends codifying the requirement to provide a 
TRICARE Prime network at all areas impacted by BRAC or rebasing. 
Additionally, we recommend that DOD be required to provide an annual 
report to Congress on the adequacy of health resources, services, 
quality and access of care for those beneficiary populations affected 
by transformation plans.
Pharmacy
    The TRICARE Pharmacy benefit must remain strong to meet the 
pharmaceutical needs of millions of military beneficiaries. While we 
are pleased at the overall operation of the program, the Coalition has 
significant concerns about certain recent trends.
    Beneficiary Migration
    One issue highlighted by the Task Force report is that a large 
share of the growth in retail pharmacy use has been the result of 
beneficiaries migrating from military treatment facilities to local 
retail pharmacies. In that regard, the number of beneficiaries using 
only military pharmacies declined by 900,000 between fiscal year 2002 
and fiscal year 2007, whereas the number of beneficiaries using only 
retail pharmacies increased by about 1,000,000 in the same period.
    Some of the shift is because enactment of TFL and TSRx meant that 
Medicare beneficiaries who live some distance from military 
installations no longer have to make long treks to the military 
pharmacy.
    But the change also coincides with the onset of increased wartime 
deployments and installation security measures. The deployment of large 
numbers of military medical professionals has forced shifting more 
beneficiaries of all kinds to see civilian providers, which reduces 
proximity access to the military pharmacy and ease the convenience of 
using retail stores. Increased installation security measures also 
increase the ``hassle factor'' for retirees to use on-base facilities. 
Finally, local budget pressures and DOD ``core formulary'' guidance 
removes many medications from the installation formulary that retirees 
use, leaving many no choice but to use alternative venues.
    Coalition associations have heard anecdotal reports that some local 
commanders have actively discouraged retirees from using the military 
pharmacies, primarily for budget savings purposes. What's worse is that 
MTFs have failed to educate beneficiaries of the next most cost-
effective venue--the TRICARE Mail Order Pharmacy (TMOP).
    The point is that it is inappropriate to punish beneficiaries 
(through higher retail copayments) for migration that may be dictated 
more by military operational and budget requirements than by retiree 
preferences.
    Pharmacy Co-payment Changes
    The Coalition thanks the subcommittee for freezing pharmacy co-
payments for fiscal year 2008. The Coalition believes strongly that 
uniformed services beneficiaries deserve more stability in their 
benefit levels, and that DOD has not performed due diligence in 
exploring other ways to reduce pharmacy costs without shifting such 
increased expense burdens to beneficiaries. The DOD Health Care Task 
Force would dramatically raise most military pharmacy copays. For 
example, they'd raise the copay for generic drugs purchased in retail 
pharmacies from the current $3 to $15. But Wal-Mart is now dispensing 
generic drugs to the general public for $4. Shouldn't the military 
pharmacy benefit be better than what civilians can get through Wal-
Mart?
    One important consideration in the mail-order-vs.-retail discussion 
is that some medications are simply not appropriate or available for 
delivery through the TMOP. If the purpose of imposing higher retail 
copays is to incentivize beneficiaries to use military or mail-order 
pharmacies, application of this philosophy is inappropriate when the 
beneficiary has no access to those lower-cost venues.
    The Coalition believes any further discussion of pharmacy copayment 
increases should be deferred pending review of the implications of 
requiring Federal pricing in the retail system. We believe that this 
action by Congress in the fiscal year 2008 has shifted the dynamic of 
pharmacy costs, and that the primary cost differential may no longer be 
the venue of dispensing.
    Rather, the Coalition urges the subcommittee to consider the 
findings of RAND, Pharma, and others cited by the Task Force that 
considerable cost savings can be gained by establishing positive 
motivations for beneficiaries with chronic diseases to take any of the 
medications--regardless of generic, brand, or nonformulary--that reduce 
the adverse effects of their conditions over the long term. Those steps 
included eliminating copays for the lowest-cost and most effective 
medications, reducing copays for some effective nonformulary 
medications, and reducing prior authorization requirements that impede 
beneficiaries from using the medications they and their doctors believe 
are best for them.
    We note with regret that the Department has declined to comply with 
Congress' urging to eliminate copayments for generic medications in the 
mail-order system--a recommendation echoed by the Task Force. In this 
case, the administrative cost of processing the co-pay actually wipes 
out a large percentage of the co-pay revenue.
    The Coalition believes pharmacy cost growth concerns have missed 
the mark by focusing on current-year dollars rather than long-term 
effects. For example, the Task Force report highlights as part of the 
cost ``problem'' that some drugs, including medications to treat 
diabetes, grew more than 15 percent in a single year. Viewed in terms 
of long-term effects, it's a good thing to identify patients who have 
diabetes and a good thing for diabetes patients to take their 
medications. So growing use (and cost) of medications for such chronic 
diseases is a positive, not a negative, and the copay structure should 
be remodeled to incentivize beneficiaries and make it as easy as 
possible for them to take whatever medication will mitigate the effects 
of their condition through whatever venue they are most likely to be 
satisfied with and therefore will be most likely to take their 
medications.
    The Coalition recommends deferral of any pharmacy copay increases 
pending assessment of the effects of the new Federal pricing law on 
usage and cost patterns for the different venues, and that the 
subcommittee instead urge DOD to pursue copay reductions and ease prior 
authorization requirements for medications for chronic diseases, based 
on private sector experience that such initiatives reduce long-term 
costs associated with such diseases.
    Rapid Expansion of ``Third Tier'' Formulary
    The Coalition very much appreciated the efforts of Congress to 
protect beneficiary interests by establishing a statutory requirement 
for a BAP to give beneficiary representatives an opportunity in a 
public forum to voice our concerns about any medications DOD proposes 
moving to the third tier ($22 co-pay). We were further reassured when, 
during implementation planning, Defense officials advised the BAP that 
they did not plan on moving many medications to the third tier.
    Unfortunately, this has not been the case. To date, DOD has moved 
over 90 medications to the third tier. While the BAP did not object to 
most of these, the BAP input has been universally ignored in the small 
number of cases when it recommended against a proposed 
reclassification. The Coalition is also concerned that the BAP has been 
denied access to information on relative costs of the drugs proposed 
for reclassification and the DOD has established no mechanism to 
provide feedback to the BAP on why its recommendations are being 
ignored.
    The Coalition believes Congress envisioned that the BAP would be 
allowed substantive input in the Uniform Formulary decision process, 
but that has not happened. In fact, BAP discussion issues and 
recommendations (other than the final vote tallies) are routinely 
excluded from information provided to the Assistant Secretary of 
Defense (Health Affairs) for decisionmaking purposes, and there has 
been no formal feedback to the BAP on the reasons why their 
recommendations were not accepted.
    Although Congress has tasked GAO for a report on the effectiveness 
of the BAP process, that report has not been issued to date.
    The Coalition urges the subcommittee to reassert its intent that 
the BAP should have a substantive role in the formulary-setting 
process, including access to meaningful data on relative drug costs in 
each affected class, consideration of all BAP comments in the 
decisionmaking process, and formal feedback concerning rationale for 
rejection of BAP recommendations.
TRICARE Prime and MCSC Issues
    DOD and its health contractors are continually trying to improve 
the level of TRICARE Prime service. We appreciate their inclusion of 
Coalition associations in their process improvement activities and will 
continue to partner with them to ensure the program remains 
beneficiary-focused and services are enhanced, to include: beneficiary 
education, network stability, service level quality, uniformity of 
benefit between regions (as contractors implement best business 
practices), and access to care.
    Referral and Authorization System
    There has been much discussion and consternation concerning the 
Enterprise Wide Referral and Authorization System. Much time, effort, 
and money have been invested in a program that has not come to 
fruition. Is adding to the administrative paperwork requirements and 
forcing the civilian network providers into a referral system really 
accomplishing what DOD set out to do? Rather than forcing unique 
referral requirements on providers, perhaps DOD should look at 
expanding its Primary care base in the Prime Service Areas and capture 
the workload directly.
    The Coalition recommends that Congress require a cost analysis 
report, including input from each Managed Care Support Contractor, 
concerning the referral process within DOD and reliance on Civilian 
Network Providers within an MTF's Prime Service Area.
Health-Related Tax Law Changes
    The Coalition understands fully that tax law changes are not within 
the subcommittee's jurisdiction. However, there are numerous military-
specific tax-related problems that are unlikely to be addressed without 
the subcommittee's active advocacy and intervention with members and 
leaders of the Finance Committee.
    Deductibility of Health and Dental Premiums
    Many uniformed services beneficiaries pay annual enrollment fees 
for TRICARE Prime, TRICARE Reserve Select, and premiums for 
supplemental health insurance, such as a TRICARE supplement, the 
TRICARE Dental and Retiree Dental Plans, or for long-term care 
insurance. For most military beneficiaries, these premiums are not tax-
deductible because their annual out-of-pocket costs for health care 
expenses do not exceed 7.5 percent of their adjusted gross taxable 
income.
    In 2000, a Presidential directive allowed Federal employees who 
participate in FEHBP to have premiums for that program deducted from 
their pay on a pre-tax basis. A 2007 court case extended similar pre-
tax premium payment eligibility to certain retired public safety 
officers. Similar legislation for all active, Reserve, and retired 
military and Federal civilian beneficiaries would restore equity with 
private sector employees and retired public safety officers.
    The Coalition urges all Armed Services Committee members to seek 
the support of the Finance Committee to approve legislation to allow 
all military beneficiaries to pay TRICARE-related insurance premiums in 
pre-tax dollars, to include TRICARE dental premiums, TRICARE Reserve 
Select premiums, TRICARE Prime enrollment fees, premiums for TRICARE 
Standard supplements, and long-term care insurance premiums.
                               conclusion
    The Military Coalition reiterates its profound gratitude for the 
extraordinary progress this subcommittee has made in advancing a wide 
range of personnel and health care initiatives for all uniformed 
services personnel and their families and survivors. The Coalition is 
eager to work with the subcommittee in pursuit of the goals outlined in 
our testimony. Thank you very much for the opportunity to present the 
Coalition's views on these critically important topics.

    Senator Ben Nelson. Thank you very much, Colonel.
    The first question I have--and we'll start with you, 
Colonel, and then open it up to the panel--is with respect to 
the co-pay. I know you're objecting to the amount of the 
increase. Would you oppose any increase, or is it because this 
increase is such a high percentage increase--is there any room 
for negotiation here, between the DOD and the retired 
servicemember?
    Colonel Strobridge. Sir, I think we come back to the issue 
that--what we want to do is get out of the drill where the 
budget drives the negotiation, where all we're talking about is 
money. That's where we come down to the principles that we'd 
like to put in law to recognize that military people do pay 
more than cash. You'll notice, we have always supported S. 604, 
which does not say--we recognize that it's unrealistic to say 
``no fee increases, ever.'' What we're trying to do is 
establish reasonable principles. What S. 604 does is, it puts 
some constraints on the Secretary's authority, so you don't go 
10 years recommending no increases and then try to quadruple 
them in 1 year. S. 604 says, we'll put that cap at saying the 
percentage increase in any year can't exceed the percentage 
increase in compensation.
    Senator Ben Nelson. You certainly have a sympathetic ear--
--[laughter] with us, because we've been concerned about that 
steep increase all of a sudden after 10 years of nothing.
    Colonel Strobridge. Yes, sir.
    Senator Ben Nelson. So, that's why I want to explore if 
there was any room for negotiation.
    Would there be any other comments about that? Do you share 
Colonel Strobridge's view, or are we faced with the choice, 
doing what he's suggesting--TRICARE for Life, with no change?
    Master Chief Barnes. Senator, I would concur with the 
Colonel's remarks. I would also expand on his comments with 
regard to career enlisted personnel that retired before the 
significant pay hikes that have been enacted since 1999. The 
drastic nature of these hikes after no adjustments, which DOD 
was authorized to implement since, I believe, 1995, has been 
met with serious concern.
    Also, it's a morale issue within the ranks of those 
currently serving, and we hear a great deal of comment about 
that, and anxiety about what the future holds.
    Ms. Beck. Sir, if I could, on a related issue, those who 
are medically retired and are so severely injured that they're 
actually eligible for Medicare, they not only have to pay these 
fees, they have to pay for Medicare Part B, as well. So, what 
it turns out is, the person who is the most severely injured 
ends up paying the most for their care, and I'm not sure that 
that's quite what we intended on that issue. So, that's a 
related issue to address.
    Senator Ben Nelson. Ms. Moakler?
    Ms. Moakler. You brought up TRICARE for Life. We do believe 
that those folks who are paying for TRICARE for Life are 
already paying more than those who are paying for the retiree 
care of TRICARE Prime. So we certainly would not like to see an 
extra payment for those folks for TRICARE for Life, because 
they're already paying in other ways.
    We agree with TMC, that we would not like to see the 
drastic increase, but we do believe that there is a call for a 
certain increase to go along with rising medical prices. We 
wouldn't like to see increase in the co-payments at this time.
    Senator Ben Nelson. In terms of access to health care, what 
are you hearing from your membership about access to health 
care under TRICARE? Obviously, there may be some differences 
between Guard and Reserve and others, but generally what are 
you hearing?
    Ms. Beck?
    Ms. Beck. The access question coming from the doctors is 
that it's so difficult for them to take TRICARE, due to the 
bureaucratic issues, that they actually usually have to hire 
someone, in addition to the people that they have, just to 
process their bills for TRICARE. The servicemembers themselves 
are--it's not necessarily a question of the TRICARE, they--
again, on the injured side; they get caught between the two 
systems, in that one is supposed to be paying for it; the other 
one's supposed to be paying for it, and then no one's paying 
for it. So, the question for them is--you can be in the most 
urban area and still be stuck without care.
    The Wades are a good example, again. They live in Chapel 
Hill, in the Research Triangle, and they weren't able to access 
the care that they needed, because of the restrictions in 
TRICARE on cognitive therapy, and then due to certain 
restrictions within the VA. So, it's not a Guard and Reserve 
issue, but it's also an issue of regulations that are in place, 
and not allowing people to enjoy the benefits of that.
    Senator Ben Nelson. Having a care-manager assigned, would 
that be beneficial in trying to smooth out those challenges 
that occur because you have a couple of different programs?
    Ms. Beck. The recovery coordinators that have been 
established have been tremendously helpful to the families who 
have received them. It takes a very proactive person to 
understand both of these systems, as well as the private 
sector, and to understand how to maneuver between them. The 
problem is, there are currently only six Federal recovery 
coordinators, with approximately 50-some servicemembers that 
they're serving. While that has been very helpful, without that 
overlap of benefits that Steve mentioned and that was included, 
and the proper implementation of that, then we're not going to 
be giving them the authority they need to resolve the problems. 
Often, they run up against the law in providing the services.
    Colonel Strobridge. Sir, if I may comment on that.
    One of the things that we've heard for years is anecdotal 
evidence--``Gee, I can't find a doctor to take either Medicare 
or TRICARE in this area or that area.'' We appreciate what the 
committee's done to try to help us survey participation. That's 
been a big help. But, because of this annual problem with the 
Medicare cuts, and because TRICARE is tied to those cuts, we're 
really seeing an escalation of that. It's ironic that you 
mention it, because last week we got a letter from my spouse's 
doctor saying, ``We're dropping you.'' They had previously 
stopped taking new TRICARE patients, but had grandfathered her. 
Now we have a letter saying, ``I'm sorry, we're just not going 
to put up with it, this sort of annual cuts is--and, plus, the 
administrative requirements--is too much of a hassle.''
    So, even in this area, where there are a lot of doctors, 
you can find people who accept TRICARE patients, but it can 
take some effort. More and more of those are saying--even 
military people, who are very sympathetic--``look, I just can't 
lose money this way.''
    Senator Ben Nelson. Sergeant?
    Sergeant Cline. Mr. Chairman, as you're aware--and I know 
Senator Graham is well aware of this--because of the remote 
locations of Guard and Reserve people, multiply that problem 
out there with them trying to gain access. We know for a fact 
that in Alaska most doctors will not accept TRICARE because of 
the bureaucracy that they have to go through.
    Ms. Moakler. We're hearing from families about their 
problems with access to specialty care, because so many in the 
military treatment facilities, so many of the specialty care 
doctors are in theater, and there may not be robust enough 
support in the network to take care of those families.
    Senator Ben Nelson. That might be true even in the Active 
Duty situation, as well?
    Ms. Moakler. Yes.
    Colonel Strobridge. Sir, something that I meant to put in 
my testimony, and I just remembered it, and Meredith talked 
about the mental health issue, and we all know the terrible 
problem we had, the national problem with not enough mental 
health providers to see these folks. It's even worse with 
TRICARE, because, last year, you may know that Medicare, and 
thus TRICARE, actually cut the amounts they pay mental health 
providers. So it's tougher to get them than anybody else. We 
are going to have a real disaster coming up.
    One of the things that I meant to ask you was to look at 
increasing payments, statutorily, for TRICARE for mental health 
providers. We have to do almost anything possible to try to 
find ways to get people the care that they're not getting now. 
If we have to increase it until we do something else--to me, 
that's something we really need to look at.
    Ms. Beck. One last point. The question that Steve mentioned 
on mental health, one proposal would be to allow Active Duty to 
use some of the 200-and-some vet centers that are around the 
country to, not only get the help that they need, but also to 
avoid the stigma of having to report through the chain of 
command.
    Senator Ben Nelson. There are efforts, in some areas to try 
to coordinate Active Duty care with veterans programs, veterans 
hospitals, clinics, and what have you, recognizing that many 
Guard and Reserve members are, in fact, stranded away in remote 
locations by comparison. So making that available seems to be 
one of the answers to the problem that we ought to take under 
advisement to make sure that the mental health care is being 
adequately compensated.
    Master Chief Barnes. Senator, if I could also expand on the 
Guard and Reserve remote access issue, this is also a serious 
issue for personnel serving on Active Duty on recruiting duty, 
also with members of the United States Coast Guard that rely on 
the system for care. Many of them are assigned some distance 
from military treatment facilities, and this is a big challenge 
for them.
    Senator Ben Nelson. Well noted, thank you.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman. As always, this is 
very informative.
    What did people do before TRICARE?
    Colonel Strobridge. They used CHAMPUS and had similar 
problems.
    Senator Graham. Okay. Right, and before CHAMPUS?
    Colonel Strobridge. That was before my time, Senator. 
[Laughter.]
    Senator Graham. Basically, what we're talking about is 
third-party payer coverage has worked its way into the military 
community, which has been a good thing. Because if you go back 
before CHAMPUS, you'd go to a VA center or some other DOD 
facility; if you were lucky, you would get in. So, the whole 
idea of expanding the network to include private hospitals and 
private physicians has been a good idea. The problems you're 
talking about are just endemic to third-party payment--the 
coverage issue.
    There are a thousand anecdotal stories about chelation 
therapy. Now, Medicare may not authorize that, there may be a 
body of people saying, ``That sounds good, but we don't think 
it's something we want to invest in.'' So, that's why this is 
important for you to tell us the type of services that are 
available out there and you're not getting covered, and we can 
look at it and see whether or not, from our point of view, it 
should be added to the mix.
    In 1987, when TRICARE came along, you're right, there have 
been no premium increases. We have to deal with it. But, I 
agree with you, they've just dumped it all over, all at one 
time.
    In terms of a good deal, in 1987 9 percent of the Services 
were covered by the patient. Now, that ratio has changed to 
where it's not 9 percent anymore, it's a lot less. So, from the 
government's point of view, the amount of coverage being 
offered is out of kilter with the private sector, but, at the 
same time, you don't make it all up at once, and you don't put 
a burden on people that 400 percent premium increase.
    It is budget-driven, to some extent, I'll be honest with 
you. Since there's not unlimited resources to run every program 
in the government, 12 percent, 14 percent of the budget in 
DOD's going to be health care in the next 20 years, and that 
competes with all the other things that are important to 
families and readiness.
    So, what I want to do is take your 16 suggestions about how 
to save money, sit down, go over it myself with DOD, then come 
up with a way to implement some premium changes that are not 
draconian, look at how you can save money and how you can 
expand services. The one thing I want to look at TRICARE is how 
to make it--not just from the costs--a better quality benefit. 
There are probably some things that could be offered in TRICARE 
that are not being offered that would keep you out of the 
hospital. There are some things that we could do.
    Now, when it comes to coordinating between the DOD and the 
VA, that is being a military lawyer for 25 years, one of the 
big things you want to do is keep everybody on Active Duty who 
wants to stay on Active Duty. One of the big fights that most 
servicemembers have is, they don't want to leave the military. 
So, we want to make sure that those medical boards that are 
held give people a chance to make the case that, ``I can still 
serve.'' Then, to those who obviously can't serve, to make it 
just as painless as possible, not get caught up in this 
bureaucracy.
    The committees coordinating is never going to happen, I 
think, until you get a seamless system out there that works, 
because the committee oversight probably just makes no sense.
    So, I'm going to focus on trying to make sure that, from 
the moment you leave the battlefield, injured, that there is no 
gap in coverage, and that you have as much access as possible 
from every available system, whether it be DOD, VA, or the 
private sector, and you get what you need, because that's the 
whole point of the Wounded Warrior Act.
    Now this idea of GI benefits, that's going to be a big 
issue in this Congress. The one thing that I've been thinking 
of for quite a long time is, how can you take that GI benefit 
and use it to the maximum benefit of the servicemember and 
their families? That's where transferability needs to be put in 
the mix. I am convinced that a lot of people would stay on 
Active Duty if their benefit could be transferred to their 
spouse or their children. After 3 years, you get 36 months of 
tuition assistance at $1,100. The average cost of a State 
school now, Mr. Chairman, is $1,500. So, we need to bump it up. 
We need to bump up the benefit.
    I think what we need to add into the mix is maybe after 6 
years of Active Duty service, you could transfer half your 
benefit to your spouse or your child; and after 12 years, you 
could transfer all of it. Half the people eligible for VA 
educational benefits never avail themselves of it. So, my 
program may actually be more expensive than some other ideas 
out there, but I think it would make the program more 
meaningful.
    The goal is that, if you'll serve our country to the 12-
year point, that, when it comes time to send a kid to college, 
that you'll have that college paid for through your VA 
benefits; you may not use it, but your child can use it, and I 
think that would really help families out there a lot.
    So, those are the type of things that we're talking about, 
and the VEAP--who mentioned that?
    Master Chief Barnes. I did.
    Senator Graham. We're not going to leave those people 
behind.
    Master Chief Barnes. Thank you.
    Senator Graham. Now, that's just the right thing to do. 
Whatever I do is going to include a benefit for those folks. 
Going back to 2001 is a good idea in terms of the early 
retirement.
    But, having said all of that, every benefit that we build 
into the system has an out-year cost, and the goal is to treat 
people fairly, to get the best health care we can as soon as we 
can to those who are the most severely injured, to make it an 
attractive endeavor to stay in the military--that a rewarding 
career that has a benefit to you and the ones that you love 
most, and that when your 20 years are up, or your 30 years are 
up, you can look back with pride and say, ``Not only did I 
serve my country well, but I'll have a lifetime annuity and 
access to decent health care.'' That's the goal.
    So your testimony, as far as I'm concerned, Mr. Chairman, 
is invaluable, and we're going to deal with the growth of 
medical costs in the budget; we're going to phase in some 
increases that have to be confronted in a way that's not 
draconian, so we can get this back on a sustainable field.
    Just as important to me is to, maybe, expand TRICARE, in 
terms of what's available out there, to make it a more robust 
benefit, a benefit that keeps people well. I think we could do 
more there.
    So, I just appreciate your testimony, and we'll be rolling 
out a veterans GI enhanced benefit bill here soon that will 
have transferability in it, something I think will help 
families out there.
    God bless you.
    Senator Ben Nelson. Thank you.
    Master Chief Barnes. Thank you for your leadership on all 
these issues, Senator. Very much appreciated.
    Senator Graham. I think Senator Nelson and I understand 
that we have this job at an unbelievable time. No one has ever 
envisioned a war like this. It's an All-Volunteer Force. There 
are more contractors in theater, in many ways, than our Active 
Duty people. We've never gone to war with a contract force like 
this. We've never gone to war with this much participation by 
the Guard and Reserve over a sustained period. So it's now time 
to reshape the benefit package to meet the reality of a war 
that is forever changed the Guard and Reserve. I think it's 
forever changed the family service component of the volunteer 
force. We're going to get more soldiers and more marines. 
That's coming, and that will help.
    Ms. Beck. Sir, if I could, one point on that, this is a 
different type of warfare than we've ever experienced, and we 
have far fewer casualties than we've had in the past, and this 
is an opportunity to take those families who are injured and 
who are so severely injured, and treat them as individuals, and 
not as a statistic or a number or a category.
    Senator Graham. Absolutely.
    Ms. Beck. It'll save money in the long term to do it right 
the first time.
    Senator Graham. That's the least we can do, and the 
casualties that we have sustained have been, in many cases--
there are people living in this war that would have never lived 
through any other war. That is the great news, and hats off to 
the doctors and nurses and health care providers who have 
pulled them off the battlefield, and back home. But, some of 
them are coming back home in really, really bad shape. So we'll 
do our part to help them.
    Sergeant Cline. Senator, if I can add something--while 
you're looking at the health care benefit, one of the things 
that has recently come to light is--the Task Force on Health 
Care said that they could save $24 million for every 1 percent 
that move to the TRICARE mail-order pharmacy program. What we 
would like to see is that that mail-order pharmacy be at no 
cost to the member, and it would save TRICARE an immense 
amount--currently, only 8 percent of the people out there are 
using the mail-order pharmacy.
    Senator Graham. I've heard that. A lot of pharmacies push 
back. But it makes sense to me, particularly about some 
average, everyday drugs, that you just go get them refilled.
    Thank you all.
    Senator Ben Nelson. Thank you, Senator Graham.
    Clearly, the stress on the families, as well as the 
servicemembers, has been incredible. Changing the Guard and 
Reserve to an operational force, as opposed to their previous 
capacity, I think, has changed, significantly, the nature of 
the military for the future. Obviously, the TRICARE program and 
other benefits programs have to be patterned to deal with the 
reality of where the Guard and Reserve, for example, are, as 
well as the Active Duty. So, I think that we have a lot to do, 
but I think we have some sort of a blueprint as to how to go 
about doing this.
    In that regard, if I could move from talking about the 
health care portion and go more to the cumulative effect of 
being at war for over 6 years, and what the implications are to 
the family. Both the Army Chief of Staff and the Commandant of 
the Marine Corps have referred to what they call, 
``brittleness'' of military families because of this cumulative 
effect of 6 years. I'd ask you to comment on what your members 
tell you about the impact on military families of 15-month 
deployments, although we're seeking to have that changed.
    Ms. Moakler. I think the 15-month deployments, we were 
hearing from families that the servicemember was missing two 
Christmases or two birthdays or two anniversaries. Somehow that 
just made that second iteration that much more poignant and 
harder to deal with, and families are getting tired. They were 
resilient in the first deployment. They figured, ``We've 
already been through it once, so we can certainly get through 
another deployment.'' But, each deployment is different, 
because the families are not in the same place. The couple with 
no children the first deployment might have toddlers the second 
deployment, or you might have an elderly parent that now the 
spouse that's left behind has to shoulder the burden for. So, 
it's a continual learning experience, because it's never the 
same.
    I can attest to this, because my daughter had two 
deployments--the burden is still there. The burden is always 
there. But, the way that you have to react to different things 
that happen to the deployment is always a challenge.
    Colonel Strobridge. Sir, I think we're almost in a surreal 
situation. We've been in situations in the past, back when we 
were capping pay raises and everybody was saying, ``Gee, you 
can't keep doing this. You're going to have a problem, sooner 
or later,'' and everybody would say, ``Gee, retention is 
fine.'' That's kind of what we're hearing now. Everybody says, 
``Gosh, retention is fine, and it's even higher in the deployed 
units.'' It's almost as if they're saying people like being 
deployed. Well, that just defies common sense. To us, it's sort 
of like driving in the rearview mirror. If you're only 
measuring what's happened in the past, and not listening to 
people about what they're saying they're going to do, you're 
headed for a problem. I realize it's very difficult to do much 
about it. You either have to deploy less or get a much bigger 
force, and either of those is pretty hard to do in the short 
term, but I just can't help feeling we're whistling past the 
graveyard on retention.
    Senator Ben Nelson. We had a letter: this is the most 
unusual letter that I can recall, saying, ``Please deploy my 
son.'' [Laughter.]
    That is the exception, and for obvious reasons. Some of the 
rest of you might have some thoughts about this, from your own 
experience and talking to your members.
    Master Chief Barnes. Mr. Chairman, I just want to comment 
on the impact to the individual augmentees with regard to the 
Navy. I believe the total is in the 10,000 to 11,000 range.
    When these individual augmentees receive orders, they are 
pulled out, and that impacts staffing, manning, based on their 
job specialty and what have you, certain job specialties, 
ratings in the Navy are significantly more impacted than 
others. It's my understanding that the Navy's continuing 
drawdown does not take that into effect, and that's a concern, 
and I've heard it voiced informally in interaction with 
uniformed senior enlisted leaders. So, I just wanted to make 
that point with regard to the Navy, and the Coalition--it's 
referenced in our statement--the Coalition remains concerned 
about the ambitious continuing drawdown with both the Air Force 
and the Navy, given the challenges associated with bringing 
personnel back, should the drawdown have to be reversed. It's 
impossible to just grow these folks with technical skills 
overnight.
    Senator Graham. Mr. Chairman, I don't mean to interrupt, 
but that's a good point. The Air Force and the Navy--the Air 
Force is running, for the most part, Camp Bucca, the largest 
military prison, probably, ever in history. You have an Air 
Force where a lot of enlisted guys are driving trucks from 
Kuwait. Then, there's just a ton of Navy people out there, 
doing things to augment the Army and the Marine Corps. That's 
why I share your concern about drawing the Air Force--the Air 
Force gave up on end strength so they could just have some 
money to put into an aging air fleet. The bottom line is, Mr. 
Chairman, the country doesn't spend enough on defense. We're at 
about 3.6 of GDP; historically, it's been over 5 percent since 
Vietnam; it was 18 or 19 percent during World War II. Part of 
the problem, I think, is we just don't have enough money to 
meet all of our defense needs.
    Sergeant Cline. Mr. Chairman, while we see in the Guard and 
Reserve some pushback from first-time enlistees who have been 
mobilized, and it may have some impact on our career guardsmen 
and reservists, but where we're starting to see problems arise 
now is with the employers. When a soldier is gone for 2 or 3 
years, it has a definite impact, and we're starting to see more 
and more of that as employers are not hiring Guard and Reserve 
people, and are starting to give them more hassles where 
they've had to turn to the Department of Labor to get resolved.
    Senator Ben Nelson. There certainly has been a lot of 
forbearance on the part of employers in many cases, but it has 
to wear thin at some point when you have the multiple 
deployments, and not very clear on whether there'll be another 
deployment in the near future, having gone through the military 
as much as the deployments have.
    Ms. Moakler, you stated that the NMFA held a summit on 
military children in a time of war, and I think that's an 
excellent amount of research that, I'm sure, was compiled. Can 
you tell us more, from your perspective, about that project?
    Ms. Moakler. We have piggybacked the research, as it is, on 
our Operation Purple Camps. It provided a perfect area to look 
at the children. We surveyed not only the children but also the 
parents. The children, on how they felt that they were dealing 
with deployment; and the parents, on how they felt the children 
were dealing with deployments. The survey was done, the 
research is being done by the RAND Corporation, and the results 
will be released within the next week or two. But, overall, 
we're concerned about what the impact is going to be on these 
children.
    Senator Ben Nelson. What age of children did they test?
    Ms. Moakler. They were campers, 6 or 7 years old, to 18 
years old.
    But, we're also working with the 0-3 folks, looking at the 
impact of deployments on very young children, and that they are 
also included when we are looking at the overall effects of 
deployment on children.
    Senator Ben Nelson. Will the study tell us whether there 
are differences between the reaction of younger children versus 
older children?
    Ms. Moakler. The study that's coming out right now will 
not. We expect to do expanded research. We just received 
funding to do that over the next several years, and we're 
hoping to include the effect on younger children in that 
research.
    Senator Ben Nelson. In terms of childcare, Ms. Moakler, you 
stated that the NMFA was disappointed to learn that the Air 
Force is no longer funding Air Force families that are not 
currently enrolled in either Military Child Care in Your 
Neighborhood or Operation Military Child Care, leaving over 375 
Air Force families on an indefinite wait-list. Can you tell us 
more about the programs and what the lack of funding is 
depriving these families of?
    Ms. Moakler. The Military Child Care in Your Neighborhood 
is a program that is available to folks who are located near 
military installations. It's a program that's available in the 
capital region. It would be available outside of any major 
installation, to accept the overflow or the inadequacies of the 
spaces that are available at the Child Development Center on 
the installation. What it does is, it subsidizes the children 
of mostly Active Duty servicemembers for childcare in civilian 
child development centers.
    The Operation Military Child Care is a program that is 
specifically for activated Guard and Reserve, and gives a 
subsidy to those families and allows them to have childcare 
when the servicemember is deployed.
    Just recently, we learned that the Air Force is not funding 
this program. They are continuing to fund those families that 
were already in the program, but they are not allowing any new 
families to take part in the program, causing a lot of 
consternation with folks who read about the programs, 
understand that they're out there, and then suddenly find the 
door shut in their face. The Air Force has piggybacked on the 
Navy program to pay for those positions that are already 
occupied by families, but we are concerned that we have an 
unequal benefit for those families, and we're not offering the 
same benefit to those Air Guard, Air Force Reserve, and, 
indeed, Active Duty Air Force families that are available to 
the families of the other Services.
    Senator Ben Nelson. So, the other Services are making those 
funds available.
    Ms. Moakler. Yes. Originally, it was a DOD program run out 
of global war on terrorism funds, and then those funds went 
away, and the other Services absorbed that cost.
    Senator Ben Nelson. Sounds like one of those budget issues, 
Colonel, that you referenced earlier.
    The service requirement for members who leave service short 
of 20 years and delay the date at which a servicemember may 
draw retired pay, the Commission believes the current 
generation of young people today would prefer and expect such a 
retirement system. You've already raised the question about the 
retirement program. What, besides extending Senator Chambliss's 
bill, should be done for military retirement? Is there 
anything, beyond what's currently before us?
    Colonel Strobridge. Sir, the things that are out there now, 
I think we have a lot of doubts about. The things that are 
coming out of the Defense Advisory Committee on Military 
Compensation and the Guard and Reserve Commission, where 
they're talking about merging the retirement systems and having 
early vesting and delay payment of retired pay on immediate 
annuity until 57 to 62, I think those of us who have been force 
managers in the past have a lot of concern. I look at today's 
force and try to put myself in the shoes, as hard as it would 
be, of a person with 10 years of service who's facing orders 
for their third or fourth tour in Iraq, and they have a choice 
between saying, ``I'll let you take part of your retirement if 
you walk, but if you stay and serve a career, you have to stay 
until age 57 and keep doing this to get an immediate 
annuity''--we don't see that as a positive retention tool.
    Senator Ben Nelson. More of a disincentive for retention, 
isn't it?
    Colonel Strobridge. Exactly. Historically, sir, over the 
last several decades, we've had lots of retirement proposals. 
For very good reasons, most of them have been looking to save 
money, one way or another. The thing we're concerned about is, 
if you have a new proposal that essentially pays a lot of money 
to people who voluntarily leave, who don't get money now, that 
money is probably going to come from the pockets of the people 
who stay for a career, and we're very concerned about that.
    Senator Ben Nelson. In the corporate world when they do 
that, it's usually considered a buy-out for a reduction in the 
number of personnel; whereas, with the military, we're 
constantly looking for ways to retain more, with bonuses and 
other incentives, and then you face certain disincentive 
programs. It's in conflict.
    Colonel Strobridge. Right. The concern we have about the 
health care, very frankly, one of the big ones, is, it's 
tantamount to a reduction of a couple thousand dollars a year 
in retirement benefits, which reduces the pull to retirement. 
So to us, any of these things--the retirement system is the big 
force-management tool, the 20-year ``cliff vesting,'' there's 
no doubt, it's a very blunt instrument. But somebody from the 
CRS used a phrase I like what it lacks in subtlety, it makes up 
for in impact. [Laughter.]
    It's a very powerful tool, and I think we have to be very 
careful to mess with it. I think one of the reasons we're still 
seeing the retention we are, despite all these terrible things 
we're imposing on people, is the power of the 20-year 
retirement system.
    Master Chief Barnes. Mr. Chairman, I just wanted to expand 
on Steve's comments.
    There's a really strong emphasis on comparing military 
benefits to civilian benefits. A point we continually make is 
that service in the military is much different than working in 
the civilian world.
    The second point is, there's also a dollars-and-cents 
aspect of cost analysis that is usually predominant, not taking 
into consideration the importance of military service, and the 
value of military service, in conjunction with maintaining our 
national defense and security.
    Sergeant Cline. Mr. Chairman, I would like to just reflect 
on the Guard and Reserve. Going to age 62, I believe, with the 
increased operational tempo (OPTEMPO) of the Guard and Reserve, 
the fact that, just a few short years ago, we mobilized 50,000 
national guardsmen to serve down in the Gulf Coast for 
Hurricane Katrina, there is not a day that goes by that the 
National Guard isn't being mobilized for one thing or another, 
and the OPTEMPO keeps getting bigger and bigger and bigger. 
What we're doing is, we're saying, ``Well, we're not going to 
give you an early retirement, we're going to defray it for 
another 2 years.'' I think it would be a big dissatisfaction to 
our Guard and Reserve members.
    Senator Ben Nelson. Yes, we should not lose sight of the 
fact that the Guard, in particular, is under the direction of 
the Governor for domestic issues such as disasters and, like in 
your State--having been a Governor and having had a TAG report 
to me, I'm very much aware, and very sensitive to making sure 
that our Guard is able to be responsive to the needs of the 
State when those needs arise. So, we absolutely need to keep 
that in mind, because that's potentially part of the OPTEMPO 
that can be faced. You can be deployed back, you can be 
deployed domestically in your State for 2 or 3 or more weeks to 
respond to a national disaster. That's not necessarily on the 
drawing board of the Guard planning here in Washington, at the 
Pentagon.
    Sergeant Cline. Yes, sir.
    Senator Ben Nelson. What about full-time staffing? Sergeant 
Cline, you state in your testimony that with the heavier 
commitments and more deployments, the Guard's full-time support 
program is critical to mission success and the Army Guard is 
funded for less than 60 percent of their full-time support 
requirements. The last Baseline Requirements Assessment 
performed by the Army Guard, according to the information 
provided to the subcommittee, was completed back in 1999. Would 
you agree that the Army and the Air Force should complete a 
top-to-bottom reassessment of full-time manning requirements 
before Congress increases these levels beyond the agreed-upon 
ramp that DOD is currently considering?
    Sergeant Cline. I don't think you can stop the ramp, sir. 
The reason I say that is, when you already have an understaffed 
force, that you need to get up to this 90 or 95 percent level 
of full-time manning. You have to remember these are the people 
that work day-in and day-out to support these guardsmen. 
They're the ones that are at the armories helping to recruit 
soldiers and airmen. When the call from the Governor comes, 
they're the ones that are on the phone getting these soldiers 
and airmen to report in so that we can deploy. They're also the 
ones that are making sure that our equipment is maintained at a 
level that we can deploy, whether it be for a domestic mission 
or OEF or OIF. So, I think while we wait for a study, I think 
we have to continue on the Army's ramp to bring that full-time 
manning level up.
    One of the things that we're concerned with is, back in the 
1970s and 1980s we used to have an Active-Duty Army advisor in 
a lot of units. We find that most Active component soldiers do 
not understand the National Guard. Then you also have the 
problem that if the Governor calls, what's this Active-Duty 
soldier to do? Can he deploy with the unit? Then you have the 
rotational problem. You don't have that history of somebody 
being in that unit that knows the people, knows the unit, knows 
the mission.
    Senator Ben Nelson. So, bringing in Active-Duty personnel 
to fill those slots is not the answer to the staffing issue.
    Sergeant Cline. Not in our opinion, it's not, sir. I think 
the Active Guard Reserve program that we currently have, and 
the military technician program we have, have been a huge 
success. These people are overworked; in my opinion, underpaid; 
and they continue to perform, day-in and day-out.
    Senator Ben Nelson. Any other thoughts with regard to that? 
I guess, primarily, the Army-Air Force.
    One other subject in the prepared testimony by TMC, it 
advocates the adoption of flexible spending accounts for 
servicemembers. Since TRICARE covers and pays for many types of 
care that traditional civilian health plans don't, perhaps 
somebody could explain the benefits that a servicemember and/or 
his dependents could realize from a flexible spending account.
    Colonel Strobridge. Yes, sir. It's really ironic that just 
about the only people in America who don't have access to 
flexible spending accounts are military people--Active-Duty, 
Guard, and Reserve. When you look at the military program, 
people have expenses for things like eyeglasses, contacts, 
copayments on braces, copayments on pharmaceuticals--childcare 
is a big one. We deploy a parent; obviously, they need more 
childcare, which is one of the elements of the flexible 
spending account. Yet these folks are the only people in 
America that we don't allow this tax deduction for. We realize 
that is not under your jurisdiction. We appreciate the support 
that the committee has given us on this. The odd thing is, it 
doesn't take a law change. DOD has the authority to do it. They 
have just chosen not to, for some unknown reason. To us--we 
just can't understand why military people shouldn't be able to 
use the same benefit that everybody else in America has.
    Senator Ben Nelson. At least we ought to write a letter to 
DOD and ask them why they draw a distinction between TRICARE 
beneficiaries and the rest of the population.
    Colonel Strobridge. But, please remember, it's not just 
health care, it is childcare, as well.
    Senator Ben Nelson. Sure.
    Ms. Beck. Sir, and there are, again, a number of things 
that TRICARE does not cover, that could be helpful in this 
arena. Medicare--there are certain prosthetics that Medicare 
will cover and TRICARE won't. The co-pay for that is $20,000. 
So, to be able to accommodate that with that type of care would 
be helpful.
    Senator Ben Nelson. Have you developed any idea of what 
level the flexible spending account should be? From what figure 
to what figure would you be recommending? Or have you looked at 
it, at that level?
    Colonel Strobridge. Sir, all we've proposed is, make them 
eligible for the same program that is currently available to 
Federal civilians, just like we've done with the Thrift Savings 
Plan. To us, that would be perfectly acceptable.
    Senator Ben Nelson. One further thing. Chief Barnes, in 
your written testimony, you advocate a larger role for the DOD 
in providing the opportunity for overseas servicemembers to 
vote. Obviously, with this election coming up, it's important 
for us to have more information about your thoughts. How can 
Congress or DOD improve the current system, keeping in mind 
that, under the U.S. Constitution, voting is primarily a matter 
of State law and that DOD is somewhat limited in what it can 
require of servicemembers? So, we're at somewhat of a 
disadvantage, but do you have any thoughts about how we might 
be able to overcome that disadvantage?
    Master Chief Barnes. Yes, Mr. Chairman. Thank you for that 
question.
    We are very concerned about statistics that indicate that 
less than half of the absentee ballots that were cast in the 
last presidential election were actually counted, because of 
various challenges associated with casting those ballots, with 
requesting absentee ballots, with regard to postmarks, with 
regard to how the ballots are handled, as you say, at the State 
level. We believe that there's an opportunity to perhaps 
explore using technology more effectively, to request ballots 
and communicate the need for ballots, and then submit them via 
regular channels or cast the ballots via the mail service. We 
are working with the Pew Charitable Trusts on this issue, 
trying to learn more about this. We're also mindful that 
considerable resources have been committed to demonstrations of 
voting via the Internet, and there have been security concerns, 
and those have not been successful. So, thank you for that 
question. We continue working that issue.
    Senator Ben Nelson. I think it's legitimate to continue to 
work on it. I really do, and I hope that you're able to come up 
with some suggestions that will work. There are security 
issues, obviously. There are States that are moving away from 
the voting machines, going back to paper ballots. So, the U.S. 
mail probably will continue to be a significant part of the 
process. But, I hope that we could find a way to facilitate, so 
that you don't end up with, as many as you are suggesting, 
maybe half of the ballots not getting counted because of 
technical deficiencies, which are important and can't be 
ignored, but how do we get the process streamlined to where we 
don't run into those, where you have a postmark problem or 
delay in getting the ballot? Technology may be able to help us 
in that regard, at least.
    Master Chief Barnes. Yes, sir. The participation in the 
process is very important. It's a high priority for the 
Association and our Coalition partner organizations. We 
appreciate your attention to that, and we will continue working 
this issue and share any additional information we may have on 
that, or recommendations, to yourself and the staff.
    Senator Ben Nelson. Sure. Thank you.
    We're coming close to the time to end. But, before we do, 
what have we not asked that we should have? What do we not know 
that we should know, from your perspective? Please feel free.
    Colonel?
    Colonel Strobridge. I think the only comment that I would 
like to add when Senator Graham was talking about the relative 
share of DOD costs, one of the things that we think is 
essential to recognize on that--and, very frankly, when DOD 
talks about that, we have a great deal of problem with it--is 
not to recognize that costs have an increase, but the other 
part of that equation, whenever you're dealing with a fraction, 
you have a numerator and a denominator. That denominator is 
influenced by procurement holidays--if the denominator goes 
down, all of a sudden the percentage that's consumed by health 
care is bigger. The other part is that the DOD health care 
system is not built for efficiency. It says, very frankly, that 
the retired customer is last. They get whatever is left. The 
DOD health care system is built for readiness. When we deploy 
people overseas, we deploy the doctors, and that means that the 
patients have to go downtown, which is more expensive. We have 
commanders robbing money from the hospitals to meet their 
readiness costs; that means you reduce the number of drugs in 
the formulary, people have to go downtown. The commander 
doesn't care, because that cost goes to DOD.
    We have three different Services competing for money, we 
have three contractors competing for money--four contractors, 
with the pharmacists. A lot of them don't talk to each other. A 
lot of them don't like each other. The last thing they do, 
really, is work together effectively.
    So to us, a big share of the cost increases that DOD talks 
about are readiness-driven cost increases, they're costs of 
doing military business. To us, the beneficiaries should not 
share any percentage of that. So, talking about percentage of 
DOD cost, to us, doesn't make any sense. That's why we come 
back to the standard of saying it should be tracked to their 
income increases, not to DOD costs. We've pushed a lot of 
initiatives to try to reduce DOD costs. DOD has resisted them.
    Master Chief Barnes. Mr. Chairman, an issue that is very 
challenging is reform of the Uniformed Services Former Spouses 
Protection Act. We're mindful that, I believe, for the second 
year in a row, the Department has forwarded some 
recommendations from the study to look at that issue. So, I'd 
just bring that to your attention. That's addressed in our 
statement also.
    Senator Ben Nelson. Okay.
    Ms. Moakler. I agree with Joe Barnes on that. We do believe 
that there are inequities, and that both sides would be well 
served by implementing the recommendations of the DOD report.
    I just want to remind the committee about expectations of 
military families. We have wonderful programs out there. We 
want to fulfill the expectation of military families, that they 
be able to access them, no matter where they go, no matter what 
installation they're at, no matter the state of that 
installation because of BRAC or reorganization, or depending on 
the component to which they belong. The President, in his State 
of the Union Address, established an expectation for military 
families on this transferability of the GI Bill. We hope that 
if and when it is included in a new GI Bill, or changes to the 
GI Bill, that we consider all the ramifications so that we 
don't disappoint any of those spouses and children who are 
expecting to be able to access that across the board.
    Ms. Beck. I was just going to touch, one last time, on the 
idea of the oversight. Since September 11, we have changed our 
force structure, we've changed how we go to war, but we haven't 
structurally addressed how we treat these servicemembers when 
they come back either injured or severely injured. While we 
debate back and forth over whose responsibility they are to 
take care of, they fall through the cracks. Starting with 
Congress having that joint committee, that Joint Subcommittee 
on Transition, or something similar to it, would be hugely 
beneficial to the servicemembers directly. It may not be the 
most interesting topic in the world to them, and they not know 
it, but having that joint oversight would really help to 
address a number of the near misses as we discuss this.
    Senator Ben Nelson. It would be wonderful if we can 
implement the changes that will be necessary to make sure that 
it is seamless.
    Ms. Beck. These agencies are blurring the lines, and now 
we're asking Congress to do the same thing.
    Senator Ben Nelson. It's not that there's no interest or 
that there's no effort, because there is both interest and 
effort, it's just that it's a herculean task to be able to 
overcome it and accomplish that desired seamless service.
    Sergeant Cline?
    Sergeant Cline. Sir, one of the biggest problems that we're 
having in the mobilization process is dental funding and 
readiness. Ninety days is just not enough time to get a soldier 
ready to go, or an airmen ready to go, before they actually 
deploy. The current Delta Dental Program will not take somebody 
who's enrolled in a program from a category 3 to a category 2 
for mobilization purposes. So, we need to improve that dental 
program, but we also need to give the Services the ability--and 
they know, a year out now, what units are going to go. In rare 
cases, some units don't have that flexibility. But, we need to 
start allowing dental readiness as soon as we know a unit's 
going to deploy, start the process then, not wait until 90 days 
out, where we have to pull somebody's teeth to get them to be 
able to deploy.
    Colonel Strobridge. Sir, I'm a little concerned that we may 
have talked about a couple of things so often that I want to 
make sure that I foot-stomp a couple of specific examples, and 
they entail mandatory spending, which I know is difficult for 
the committee. We'll be dealing with amendments, I'm sure. But, 
a couple of specific examples.
    The committee did a wonderful thing last year in taking 
care of the combat-related special compensation for the people 
under 20. We are very grateful for that. The Disability 
Commission, though--and most of us have recognized that making 
a distinction between combat-related and noncombat-related is 
an awfully tough thing to do. We have a case of a person who 
pre-flighted a combat mission in an aircraft in bad weather, 
slipped on the wing, fell off and broke his back on the 
equipment. That was deemed noncombat-related. It was a weather 
condition. These are the kinds of distinctions that we make.
    We have, now, under current law, with all the good things 
that Congress has done, a person who is early-retired with 15 
years of service and a 50 percent disability is now a noncombat 
disability and is on their way to have that phased out over a 
period of about 4 more years.
    A person who has a 10 percent combat-related disability 
with 20 years, gets their full retired pay.
    But, a person who is in that circumstance, a person with 19 
years, 7 months of service, has to lose their full disability, 
full retired pay. We just think that's wrong. We need to do 
something for the high-disability people who are forced into 
retirement before 20 years of service for noncombat reasons. We 
have to do something to ease that inequity.
    The other thing is the survivors. We realize that Congress 
did the $50 last year. You didn't have to do that, and we have 
spent a lot of effort trying to make sure that the survivors 
who see that as a slap in the face, very frankly, understand 
that this was done by people who are trying to take a step to 
help.
    One thing I ask you to be aware of, just because it was 
brought forcefully to us, that even with that, and with the 
modest increases that go forth, just the COLA adjustments on 
the current DIC means they're losing another $20 a month every 
year that goes by. We would ask you, in your deliberation in 
conference and on the amendments, to be sensitive to that. 
We're hoping, now that Congress has recognized the inequity, to 
get to the point where we can look ahead and see an end to 
that, or see significant progress, where the amount of money 
those widows are losing every month isn't increasing. We need 
to make real progress toward eliminating the offset.
    Senator Ben Nelson. Anything further?
    Sergeant Cline. I'd like to add something to surviving 
spouses, something that won't cost the government anything. 
That's to give surviving spouses space-A privileges. The 
airplane is going to go to a location. If there's a seat 
available on there--that spouse has made the ultimate 
sacrifice. Why not give them the seat on that aircraft, if it's 
available? Knowing that if they have to pay their own way home, 
they know that. Chances are, most of them won't take the 
benefit, but it's Congress, the DOD saying, ``We recognize your 
sacrifice, and we're going to make this available to you as a 
benefit.''
    Senator Ben Nelson. Sounds like something that should be 
considered. I'm sure there's a bureaucracy associated with that 
sort of thing that will have an idea or two about it.
    Sergeant Cline. Leave it up to DOD, sir. There's always a 
bureaucracy.
    Senator Ben Nelson. Thank you, everybody. I appreciate your 
candor, your suggestions, and we will take them under 
consideration.
    [The prepared statement of the Reserve Officers Association 
follows:]
 Prepared Statement by the Reserve Officers Association of the United 
                                 States
                              introduction
    The Reserve Officers Association (ROA) thanks the chairman and 
members of the committee for the provisions passed in the National 
Defense Authorization Act for Fiscal Year 2008. With over 100 
provisions that help serving members and their families, at least 24 
directly affected ROA members. ROA further applauds the ongoing efforts 
by this committee to address recruiting and retention as this will be 
an ongoing challenge as we continue to fight a war.
                           executive summary
    The ROA tries to look beyond just benefits for our members with a 
focus on building a Reserve component for the 21st century. In keeping 
with our Congressional Charter we attempt to ``promote the development 
and execution of a military policy for the United States that will 
provide adequate national security.''
    The ROA Calendar Year 2008 Legislative Priorities are:

         Assure that the Reserve and National Guard continue in 
        a key national defense role, both at home and abroad.
         Reset the whole force to include fully funding 
        equipment and training for the National Guard and Reserves.
         Providing adequate resources and authorities to 
        support the current recruiting and retention requirements of 
        the Reserves and National Guard.
         Support citizen warriors, families, and survivors.

    Issues supported by the ROA are:
Recommendations on the Commission on the National Guard and Reserves' 
        Final Report.
         A report by the Department of Defense (DOD) on how to 
        develop a framework for an Integrated Total Force utilizing a 
        continuum of service for both Active and Reserve components.
         A study by DOD on what statutory and policy changes 
        would be required to create an Operational Reserve that is 
        sustainable.
         Reports from Departments of Defense and Homeland 
        Security further developing the framework of homeland security 
        and defense, clarifying statutory responsibilities, and further 
        defining the roles of the National Guard and Reserve in the 
        homeland.
         A need for hearings about the Reserve Force Policy 
        Board structure and authority.
         Various other provisions.
Changes to retention policies:
         Continue to support incentives for affiliation, 
        reenlistment, retention, and continuation in the Reserve 
        component.
         Permit service beyond the current ROPMA limitations.
         Ensure that new non-prior servicemembers, who are over 
        40 years of age, are permitted to qualify for non-regular 
        retirement.
         Continue to correct and improve legislation on 
        reducing the Reserve component retirement age.
         Permit mobilized retirees to earn additional 
        retirement points.
Pay and Compensation:
         Ensure Army policy on mobilization and allowances 
        doesn't destabilize retention.
         Seek differential pay for Federal employees.
         Provide professional pay for Reserve component medical 
        professionals.
         Eliminate the 1/30th rule for Aviation Career 
        Incentive Pay, Career Enlisted Flyers Incentive Pay, Diving 
        Special Duty Pay, and Hazardous Duty Incentive Pay.
         Simplify the Reserve duty order system without 
        compromising drill compensation.
Education:
         Place all GI Bill funding and administration belongs 
        under the jurisdiction of the Senate and House committees on 
        Veteran Affairs.
         Include deployed reservists under MGIB-Active to allow 
        qualification by accumulating active duty time; earning up to 
        36 months of benefit at 100 percent.
         Extend MGIB-SR, chapter 1606, eligibility for 10 years 
        following separation or transfer from the Selected Reserve in 
        paid drill status.
         Return the MGIB-SR (Chapter 1606) payment rate to 47 
        percent of MGIB-Active.
         Include 4-year as well as 6-year reenlistment 
        contracts to qualify for a prorated MGIB-SR (Chapter 1606) 
        benefit.
         Stipulate that Reserve component personnel can use 
        their education benefits while mobilized.
         Transfer unused benefits for career servicemembers to 
        family members.
         Allow use of the MGIB benefit to pay off student 
        loans.
Spouse Support:
         Repeal the SBP-Dependency Indemnity Clause (DIC) 
        offset.
Health Care:
         Medical and Dental Readiness
         Continuity of Health Care
         Parity of Care for Reserve Component Wounded
         TRICARE Fee Recommendations.

    Only issues needing additional explanation are included below. 
Self-explanatory or issues covered by other testimony will not be 
elaborated upon, but ROA can provide further information if requested.
      final report: commission for the national guard and reserves
    The ROA was extremely pleased with much of what we found in the 
final report from the Commission on the National Guard and Reserves 
(CNGR). The Commission got the big issues right.
    ROA has participated in this process since its inception over 2 
years ago, and are gratified to see many of our ideas and 
recommendations reflected in today's report. While there may be some 
differences in opinion on specifics, ROA certainly concurs with the 
Commission's main conclusions:

         That a strong Reserve component is essential to 
        sustaining the All-Volunteer Force.
         That since 2001, the availability of the Reserve and 
        National Guard for worldwide missions has saved the country 
        from a draft.
         That the men and women of the Guard and Reserve have 
        performed magnificently.
         That the Reserve component is an extraordinary 
        ``bargain'' for the taxpayers.
         That the Nation needs both an ``Operational'' and a 
        ``Strategic'' Reserve, and that an effective ``continuum of 
        service'' policy is essential to achieving the right balance 
        between these two parts of our Reserve.
         That the Nation's employers play a critical role in 
        the success of the Reserve components and deserve additional 
        support.

    ROA is concerned about how some others are reading the report. ROA 
believe that some may be drawing the wrong conclusions on three very 
important issues.

          1. Should the National Guard should be exclusively a homeland 
        defense force? ROA believes that the National Guard and 
        Reserves should be trained and equipped for service both at 
        home and abroad. This is not a big change from today, except 
        that the Department of Defense (DOD) has not bought enough 
        equipment or provided enough training. What the CNGR report 
        recommends is that DOD expressly recognizes that both home and 
        overseas missions are important, and that equipment and 
        training decisions must reflect that reality.
          2. Does the report propose to cut the pay of reservists? It 
        says exactly the opposite. What the Commission did say was that 
        the old way of calculating reservists pay was a problem, and 
        should be simplified. Anyone who has served in the Reserves 
        knows that to be the case. The Commission expressly says this 
        simplification should be done ``. . . without reducing 
        compensation for current servicemembers.''
          3. Is the concept of a sustainable ``Operational'' Reserve 
        achievable? ROA believes that it is. ROA likes the Commission's 
        idea of carefully identifying units and individuals in the 
        operational portion of the National Guard and Reserve, while 
        others are identified as being in the ``Strategic'' Reserve. 
        Some units can fill both roles depending on where they are in 
        the readiness cycle. ROA agrees with the idea that these 
        different parts of the Reserve could be equipped and funded in 
        accordance with their missions, and that Congress should put 
        controls in place to make sure that is happening.

    ROA also supports.

         The office of the Assistant Secretary of Defense for 
        Reserve Affairs must be strengthened. We don't favor 
        eliminating that office. We continue to recommend the 
        appointment of an Undersecretary, perhaps combining the 
        responsibilities of Reserve Affairs and Homeland Defense. (#95)
         That all Reserve component chiefs should be appointed 
        from the Reserve component of that Service. (#93) USNR and 
        USMCR are current exceptions.
         The Reserve Force Policy Board needs to be examined. 
        Section 1823 of the National Defense Authorization Act of 2008 
        mandated that the Secretary of Defense reports to Congress on 
        the organization, membership, functions, procedures and 
        legislative framework of the Reserve Forces Policy Board (RFPB) 
        no later than July 1, 2008.

    To assist in the information gathering process for this report, the 
ROA recently held a forum on the Reserve Forces Policy Board that 
reviewed all major aspects of its role, organization, membership, 
functions, and procedures. The forum participants reached the following 
conclusions--most of them on a unanimous basis:

          (1) The RFPB must report directly to the Secretary of 
        Defense. The present system of reporting ``through'' other 
        offices in the DOD has caused the Board's advice to be less 
        effective than if received by the Secretary of Defense 
        directly.
          (2) The RFPB must function as a truly independent Board, with 
        all members being free to give their unvarnished opinions 
        without regard to those of their superiors.
          (3) The role of the RFPB is primarily to provide Secretary of 
        Defense with policy advice. In accomplishing this purpose it 
        has an information gathering and dissemination role as well as, 
        in a more limited way, an action role, primarily in sharing its 
        findings.
          (4) A majority of the participants thought the current 
        membership on the RFPB should be maintained and augmented. This 
        would include continuing representation from all the Reserve 
        components, regular officers, representation by each Service's 
        Assistant Secretaries for Manpower and Reserve Affairs, and an 
        appointment of a chairman. Noncommissioned officers be added to 
        the Board.
          (5) The Commission on the National Guard and Reserves 
        recommended composing the Board entirely from persons ``. . . 
        from civilian life.'' Forum participants unanimously disagreed 
        with this view, but a minority did believe that augmenting the 
        Board with some non-DOD civilians was appropriate.
          (6) The participants believed that the RFBP annual report the 
        to the Secretary of Defense should continue to be transmitted 
        to the President and Congress as provided in 10 U.S.C. 
        113(c)(2).

     As different groups have differing opinions, congressional 
hearings on the RFPB should be conducted at the earliest possible time 
this year. ROA's hope is that early hearings will permit legislative 
action on this topic this year.

    The CNGR has made a number of additional recommendations which can 
be included in this year's National Defense Authorization Act. ROA 
supports the following.

         Requiring total force equipment requirements to be 
        included in service and joint planning and delivery. CNGR 
        recommendation (#42)
         Requiring the active services should conduct a 
        baseline review of Reserve component equipment requirements. 
        (#44)
         Amending the mobilization statutes to involuntarily 
        mobilize for 60 days in 4 months, 120 days in 2 years for 
        natural or manmade disasters. (#8)
         Directing a report on current Reserve component 
        systems for developing and maintaining a civilian skills 
        database and recommend methods of standardization between the 
        Services. (#19)
         Removing Reserve designators from all titles, 
        signature blocks, and unit designators. (#85)
         Eliminating the 30 day minimum on Active Duty for 
        receipt of Basic Allowance for Housing. (#52)
         Reimbursing servicemembers for travel expenses in 
        excess of 50 miles at discretion of Service Secretaries, 
        delegatable to Reserve component Chief (#53).
         Amending law to permit Reserve component members to 
        use MGIB-SR after their discharge, as long as they are subject 
        to recall. (#54).
         Expanding DOD's authority to pay a stipend or tax 
        credit as reimbursement for cost of keeping employer health 
        care. (#63).
         Increasing DOD funding to family support services to 
        include paid staff. (#65)
         Implementing an information campaign to educate 
        Reserve component members and families about Military OneSource 
        (#66)
         Expanding efforts to educate families about benefits, 
        health care, family support programs, potential demobilization 
        issues, and other family concerns. (#67) * Directing all 
        Federal agencies to follow guidance on appropriate behavior 
        with regard to employees who are reservists: compliance to 
        USERRA. (#70)
         Revising pre-deployment health assessment to establish 
        baseline health data on psychological as well as physical 
        health. (#74).
         Resuming monthly drills immediately after 
        demobilization. (#75)
         Providing transition assistance information not just 
        at TAMP but at first several post demobilization drills, and 
        include family members. (#79)
         Tracking post-deployment health reassessments to 
        ensure they are completed within 90-180 days. Provide 
        appropriate counseling and health care. (#76)
         Developing protocols to ensure needed services are 
        available to Reserve component members who do not demobilize at 
        their home or who are [Individual Mobilization Augmentees or] 
        Individual Ready Reserve members. (#77)
         Providing demobilized Reserve component members with 
        one year of dental care coverage through military treatment, 
        Veteran Affairs Hospitals, or contracted civilians. (#78)
         Establishing a single reintegration standard of care, 
        regardless of frequency of tours, or Service/Reserve component 
        component category. (#80)

    The DOD should be directed to study the following on how to:

         Qualitatively assess and credit proficiency based on 
        knowledge, skills, and abilities on Active and Reserve joint 
        duty. (#16)
         Implement a combined pay and personnel system. (#21)
         Remove all vestiges of cultural prejudice between 
        Reserve component and AD which remain in law. (#84)
         Resolve problems in providing family health support to 
        families outside of Military Treatment Facility networks. (#61)
         Replacing Social Security Numbers as a DOD unique 
        identifier. (#60)
         Develop an expanded joint family assistance program 
        via Internet and phone. (#64)
         Expand ESGR mission to help employers find information 
        on a wide range of topics including: Department of Labor, Small 
        Business Administration, Department of Veterans Affairs, health 
        issues including traumatic brain injury and post-traumatic 
        stress disorder. Also, to hire more ombudsmen, and if any 
        changes to the reporting path to the Secretary of Defense are 
        needed. (#68)
         Have the Reserve Forces Policy Board Employer Advisory 
        council report directly to Secretary of Defense. (#69)
         Have DOD explore creating and implementing a 
        ``contracted Reserve,'' seeking volunteer civilian employers 
        and employees to provide the U.S. Government with specialized 
        skills in the Reserve Force. (#72)

    ROA concurs with the Commission that creating a Reserve and 
National Guard for the 21st century is essential. The country cannot 
have an All-Volunteer Force unless it has a strong and capable Reserve 
component--unless we want to go back to the draft.
         pay and compensation discussion--proposed legislation
Retirement:
    ROA would like to thank the committee for passing the early 
retirement benefit in the National Defense Authorization Act for Fiscal 
Year 2008, as a good first step toward changing the retirement 
compensation for serving Guard and Reserve members.

    1. ROA endorses S.2836, the National Guard and Reserve Retirement 
Pay Equity Act, which is a corrective measure to the National Defense 
Authorization Act for Fiscal Year 2008, including those Guard and 
Reserve members who have been mobilized since September 11, 2001. Over 
600,000 were excluded. ROA recognizes the expense of this corrective 
measure scored by CBO at $1.8 billion over 10 years, but some times 
fair trumps fiscal.
    2. With changes in the maximum recruitment age, ROA urges Congress 
to ensure that new non-prior servicemembers, who are over 40 years old, 
are permitted to qualify for non-regular retirement. While Congress 
took action to extend the military Mandatory Retirement Age (MRA) to 62 
years, services aren't necessary electing to increase their MRA 
policies.
    3. An additional problem has arisen for O-4 officers who, after a 
break in service, have returned to the Reserve component. After being 
encouraged to return a number of officers find they are not eligible 
for non-regular retirement. When reaching 20 years of commissioned 
service they find they may have only 15 good Federal years. Current 
policy allows these individuals to have only 24 years of commissioned 
time to earn 20 good Federal years. ROA urges Congress to make changes 
to allow O-4s with 14 to 15 good Federal years to remain in the Reserve 
until they qualify for non-regular retirement.
Differential Pay for Federal Reservists:
    The Federal Government is one of the largest employers of Guard and 
reservists. While DOD asks private employers to support deployed 
employees, and praises employers who pay the differential between 
civilian and military salaries, the Federal Government does not have a 
similar practice. Federal pay differential should be viewed as a no 
cost benefit, as this pay has been budgeted to Federal agencies before 
the individual Guard or Reserve member is recalled. As the pay 
differential will be less than the agency's budgeted pay, there will be 
a net savings. Because of this, ROA feels that each Federal agency, and 
not the DOD, should pay this differential. ROA urges Congress to enact 
legislation that would require a Federal agency to pay the difference 
between the Federal Government civilian and military pays of its 
reservist-employees who are mobilized.
Education:
    Montgomery ``GI'' Bill-Selected Reserve (MGIB-SR): To assist in 
recruiting efforts for the Marine Corps Reserve and the other uniformed 
services, ROA urges Congress to reduce the obligation period to qualify 
for MGIB-SR (Section 1606) from 6 years in the Selected Reserve to 4 
years in the Selected Reserve plus 4 years in the Individual Ready 
Reserve, thereby remaining a mobilization asset for 8 years.
                      medical and dental readiness
    Medical and dental screening and care in advance of mobilization 
were authorized in section 701 of the National Defense Authorization 
Act (NDAA) for Fiscal Year 2004 for 90 days prior to activation. This 
has not solved the problem as medical and dental readiness is still the 
number one disqualifier preventing mobilization.
    ROA supports legislation introduced this week by Senator Clinton 
(NY) that was entitled ``National Guard and Reserve Medical Readiness 
Act'' which lengthens the eligibility period for medical and dental 
screening and care.
    Because of the changing status of Guard and Reserve members between 
inactive and active status, health care for reservists is a complex 
challenge. Prior to mobilization some members are without coverage, 
many have opted into the new TRICARE Reserve Select, still others 
covered by employment health coverage. Once alerted, these individuals 
are covered by TRICARE.
    Currently, the burden to maintain such readiness falls upon the 
individual reservist. Even individuals who participate in TRICARE 
Reserve Select and the TRICARE Dental Plan have to pay premiums for 
these health plans. Unit commanders are hesitant to direct individuals 
to maintain certain medical and dental standards because the individual 
would carry the cost of corrective measures.
    The Commission on the National Guard and Reserves recommends that 
in order to enhance medical readiness, and sustain an Operational 
Reserve (#34) DOD must:

         Have annual dental and medical screening
         Adopt policies for individuals to be medically ready
         Hold units responsible for medical & dental readiness.
                       continuity of health care
    Some Reserve component members who have taken TRICARE Reserve 
Select Health coverage are nearing retirement, and have recognized that 
once they leave the Selected Reserve that they will not have TRS 
coverage.

         ROA recommends a Gray area retiree buy-in to TRS. TRS 
        buy-in would be at the full monthly cost, but at least this 
        would provide a continuity of coverage for those waiting for 
        TRICARE retirement.
               parity medical care for wounded reservists
    Suggested Enhancements:

         The DOD needs an electronic medical records system 
        that is compatible with the systems from the Veterans Affairs.
         The interagency DOD and DoVA connectivity and 
        cooperation needs to continue to be enhanced to better serve 
        those that have served.
         Reservists need proper education and counseling in 
        benefits, allowances, and assistance that are offered to 
        wounded service personnel. A reservist returns to a civilian 
        community that may not have a nearby military installation.
         Wounded warriors should be assigned to units local to 
        their homes for the purpose of accountability and tracking 
        their progress through the medical system. The military needs 
        to take responsibility for monitoring and advocating for their 
        people until they are fully integrated into the Veterans 
        Affairs system.
         Reservists should have the option to return home while 
        awaiting surgery, physical therapy or other medical treatment. 
        They should also have the choice to receive these services from 
        local TRICARE medical professionals at DOD expense.
         Line of duty determinations must be made in a timely 
        manner, with the ability to perform home status duty, while 
        waiting the outcome from medical or physical evaluation boards.
         Long waits for medical or physical evaluation boards, 
        in some cases a year or more, without drilling can cause 
        reservists to lose a satisfactory year. These non-qualifying 
        years can affect promotion opportunities and retirement 
        eligibility.
         Benefits must be equal for all wounded warriors. All 
        disparity in annual disability payments between the Active and 
        Reserve components must be eliminated.
         Extensive mental health assessments should be given 
        immediately upon return to home units with follow-up 
        assessments as prescribed by mental health officials. When 
        reservists return to their civilian lives they may develop 
        mental complications not previously noticed.
         Traumatic Brain injury is the signature wound from 
        Iraq. Predeployment baseline tests should be taken to measure 
        changes in returning warriors.
                      tricare fee recommentations
    Encourage hearings on recommendations and fee structures made by 
the Task Force on the future of Military Health care.
TRICARE Prime:
         Adjustments to the enrollment fee are acceptable if 
        tied to true health care costs.
         It is important to review the independently evaluation 
        of the current total cost of DOD health care benefits. Such an 
        audit will permit Congress to validate proposals made by all 
        parties.
         Cost-sharing adjustments should be spread over at 
        least 5 years to permit household budgets to adjust.
         Annual increases should not be tied to the market-
        driven Federal Employee Health Benefits Plan (FEHBP).
TRICARE Standard:
         ROA does not endorse an annual enrollment fee for 
        either DOD or VA beneficiaries.
         If TRICARE Standard requires beneficiary enrollment, 
        it should be only a one-time minimal administrative fee.
         Adjustments to TRICARE Standard should be made to the 
        deductibles.
         Because of larger co-payments of 25 percent after the 
        deductible, the costs of TRICARE standard must to be analyzed 
        from a total cost rather than initial cost perspective. TRICARE 
        Standard's cost deductible automatically adjusts with 
        escalating health care costs.
         TRICARE standard deductible increases should not be 
        rolled over into TRS as reservists pay more upfront. Family 
        Premiums and deductible for an operational reservist are $3,336 
        per year for calendar year 2007 compared to a proposed combined 
        cost of $1,120 for TRICARE Standard in fiscal year 2008.
TRICARE Reserve Select (TRS):
         Review and reduce the TRS premium structure found to 
        be excessive by GAO.
         Continue to improve health care continuity to all 
        drilling reservists and their families by:

                 providing the individual reservist an option 
                of DOD paying a stipend toward employer's health care.
                 allowing demobilized reservists, involuntarily 
                returning to IRR, 1 year of TRS coverage for each 3 
                months of service.
                 allowing demobilized Retirees to qualify for 
                coverage provided the IRR.
                 allowing demobilized FEHBP the option of TRS 
                coverage.
                 extending military coverage for restorative 
                dental care following deployment as a means to insure 
                dental readiness for future mobilization.
                 requiring physicians who accept Medicare must 
                accept TRICARE.
Pharmacy Co-payments:
         ROA believes higher retail pharmacy co-payments should 
        not apply on initial prescriptions, but on maintenance refills 
        only.
         ROA supports DOD efforts to enhance the mail-order 
        prescription benefit.
                               conclusion
    ROA reiterates its profound gratitude for the progress in providing 
parity on pay and compensation between the Active and Reserve 
components, yet the subcommittee also understands the difference in 
service between the two components.
    ROA looks forward to working with the personnel subcommittee where 
we can present solutions to these and other issues, and offers our 
support in anyway.

    Senator Ben Nelson. This subcommittee is now adjourned.
    [Questions for the record with answers supplied follow:]
         Questions Submitted by Senator Hillary Rodham Clinton
          mental and dental readiness of the reserve component
    1. Senator Clinton. Colonel Strobridge and Sergeant Cline, in your 
prepared testimony, you identified medical and/or dental care as a 
major readiness challenge. Indeed, lack of medical or dental readiness 
often means that our Guard and Reserve units must deploy with less than 
100 percent of their personnel or reach into other units to fill their 
empty positions. Earlier this year, the Commission on the National 
Guard and Reserves found that ``five of the seven Reserve components 
are not satisfactorily meeting the Department of Defense (DOD) medical 
readiness standards,'' defined as 75 percent of personnel being rated 
fully medically ready.
    The DOD's own assessment identifies only the Air Guard and the Navy 
Reserve as meeting medical readiness standards in the second half of 
fiscal year 2007. The Reserve components that have been most stressed 
by the wars in Iraq and Afghanistan--the Army National Guard, Army 
Reserve, and Marine Corps Reserve--are the first, second, and fourth 
least medically ready of the five Reserve components, according to DOD. 
The problem is particularly acute among the Army National Guard and 
Army Reserve where only 21.3 percent and 23.7 percent of soldiers were 
rated fully medically ready in the first quarter of fiscal year 2008.
    Ensuring individual medical readiness among our National Guard and 
Reserves is both a quality of life issue for our brave citizen-soldiers 
and a national security imperative. The era of the weekend warrior--of 
service in the National Guard and Reserves meaning a commitment of 1 
weekend a month and 2 weeks a year--has ended, and we must step up to 
ensure that the benefits, including medical and dental care, to which 
they are entitled, are adequate to meet their needs.
    Considering this deeply concerning National Guard and Reserve 
medical and dental readiness data, what steps has DOD taken to improve 
readiness levels among the Guard and Reserves?
    Colonel Strobridge. MOAA and the Coalition don't feel qualified to 
try to detail the Defense Department's actions in this area, and would 
defer to the Department to do so. We note, however, that DOD itself and 
the Commission on the National Guard and Reserves acknowledge 
significant shortcomings in medical readiness especially in Reserve 
component ground forces. For one example, DOD created a joint 
partnership Federal Strategic Health Alliance (FEDS-HEAL), a joint 
initiative of support services between the DOD, Veterans Health 
Administration and Federal Occupational Health. More information is 
available at http://fhp.osd.mil/about.jsp?topic=6#feds-heal and http://
www.navy.mil/search/display.asp?story--id=33268.
    Sergeant Cline. Enlisted Association of the National Guard of the 
United States (EANGUS) cannot speak for the Defense Department, and we 
believe this question should be directed to the Department for a 
definitive answer.
    As stated in a recent news article (http://www.ngb.army.mil/news/
archives/2008/03/032008-dental--health.aspx), the Army National Guard 
and the Department of the Army signed a memorandum of agreement on 
February 11, 2008, which is likely to result in $107 million for dental 
treatment for all soldiers who are non-deployable due to dental issues. 
Currently, only soldiers whose units have been alerted for mobilization 
are funded for dental treatment. 55 percent of all Army Guard members 
fall into non-deployable readiness status due to dental issues, either 
because they have not been examined recently or need corrective dental 
measures. The funding for the dental work is expected to arrive in 
fiscal year 2009 but added treatments could begin sooner. The 
memorandum signed in February will allow for treatment for all Guard 
members regardless of their alert status. The $107 million earmarked 
for dental treatment would represent an increase of about $50 million 
from the current $50-$60 million spent annually on dental exams and 
treatment during alerts. The vast majority of the corrective dental 
procedures would be contracted out to civilian dentists and clinics. 
The Army National Guard currently has only 156 dentists in its ranks 
out of a total of about 350,000 soldiers. We commend the Army for its 
efforts, but believe this effort should have begun in March 2003 and 
not March 2008.
    As evidenced in a recent Government Accountability Office (GAO) 
report (http://www.gao.gov/new.items/d08104.pdf), the Defense 
Department has a history of overestimating its medical costs and 
overcharging its beneficiaries, and then disregarding the 
recommendations to change their processes. In this particular study, 
the GAO found that TRICARE Reserve Select (TRS) beneficiaries were 
overcharged for their portion of the health care premiums due to 
overestimates of costs by DOD. In our opinion, DOD has received 
literally millions and millions of taxpayer dollars to operate TRS, 
beginning in fiscal year 2004 with a $300 million down payment, and has 
not provided any greater access to providers or increase in quality of 
care for our National Guard members. TRS is not a viable program at all 
in the State of Alaska, where almost 4,400 Guard members (about 9.5 
percent of the National Guard) (http://www.gov.state.ak.us/omb/results/
view--details.php?p=190) are assigned, due to restrictions in the 
TRICARE Operations Manual. This practice of overestimation and 
overcharging continues today without relief from DOD.
    TRICARE Reserve Dental program is expensive, especially when the 
premiums are combined with TRS premiums. For member and family 
coverage, the cost is about $84 per month, and is scheduled to increase 
another $4 per month in February 2009. Coupled with TRS family rates, 
Guard members must pay about $337 per month for medical and dental 
premiums using TRICARE, not including co-payments and deductibles. In 
times of financial stress and difficulty, TRICARE dental is one of the 
first expenses to be jettisoned from the family budget. Without dental 
coverage, dental readiness suffers.

    2. Senator Clinton. Colonel Strobridge and Sergeant Cline, have 
those efforts produced any results?
    Colonel Strobridge. MOAA is not satisfied with the results as 
reported by DOD. It is inconsistent to tout an ``operational Reserve'' 
policy but not provide the resources and authority for members of the 
National Guard and Reserve Forces to maintain Active Duty medical 
readiness standards. In our view, it's not enough simply to expect 
reservists to meet deployment health standards without underwriting the 
cost to do so.
    Sergeant Cline. It is too early to determine if the limited efforts 
of the Defense Department or the Department of the Army have produced 
any results. Results have to be quantifiable, and there are no 
quantitative standards for medical or dental readiness for homeland 
security or homeland defense. In the 6 years of its existence, Northern 
Command (NORTHCOM) has yet to fully embrace the National Guard or set 
any quantitative measures on which to base individual or unit readiness 
for homeland security or defense missions.

    3. Senator Clinton. Colonel Strobridge and Sergeant Cline, what 
efforts should DOD be taking that they have not taken?
    Colonel Strobridge. MOAA would recommend:

          (a) Making the Department responsible for facilitating 
        correction of dental readiness issues identified while on 
        Active Duty. That is, the Department should pay the cost of 
        care for at least 90 days pre-mobilization and 180 days post-
        mobilization, unless the individual's dental readiness is 
        restored to P-2 condition before demobilization.
          (b) Holding leaders accountable for their unit medical and 
        dental readiness (e.g., issuing reminders of 6 month dental 
        exams, annual/physicals).
          (c) Authorize more mobile medical/dental units that can 
        deploy to serve Reserve units and locations far from military 
        installations.
          (d) Increase partnership with the VA to allow servicemembers 
        to use VA facilities for medical and dental care.
          (e) Maximize participation in TRS health coverage by reducing 
        premiums, as recommended by the GAO. The GAO indicated premiums 
        are 72 percent too high for single members and 45 percent too 
        high for family coverage.

    Sergeant Cline. In our opinion, the Defense Department is relying 
on either the civilian health care system or the individual reservist's 
financial solvency to maintain combat readiness. It would seem to the 
casual observer that if the Defense Department wanted to ensure combat 
readiness medically and dentally, they would provide adequate providers 
and services to achieve that goal, which they do not for Guard members 
who do not live close to Federal enclaves. If they provide medical and 
dental combat readiness to the Active Forces at no cost, they should 
provide parity with their operational Reserves, which they do not.
    In addition, DOD and NORTHCOM have yet to determine any 
quantitative measures on which to base individual or unit readiness for 
homeland security or defense missions. The Commission on the National 
Guard and Reserve recommended the Department of Homeland Security (DHS) 
determine these metrics, but DHS is not suited nor staffed nor able to 
adequately determine standards or metrics for homeland security. In the 
absence of action by DHS, NORTHCOM should have already developed these 
standards and metrics by utilizing the extensive expertise of the 
National Guard, but has shunned anything but cursory involvement from 
the Guard.

    4. Senator Clinton. Colonel Strobridge and Sergeant Cline, what 
legislative steps could be taken in the near-term to improve the 
medical and dental readiness of our reservists?
    Colonel Strobridge. MOAA would recommend statutory adjustments as 
necessary to implement the initiatives mentioned in response to the 
previous question, especially the pre- and post-mobilization dental 
coverage and the adjustment of the TRS premiums.
    Sergeant Cline. We support Senate Bill 2854 that would extend 
TRICARE benefits to Guard members upon receipt of alert orders, which 
is typically happening about 1 year out from the date of mobilization. 
However, this only really helps Army Guard members, and not Air Guard 
members. The Air Guard is already incorporated into the Air Force AEF 
cycles, and they don't receive alert orders. Refining the legislation 
to allow for TRICARE 1 year out from date of AEF rotation for the Air 
Forces will solve that discrepancy in the bill.

                    traumatic brain injury patients
    5. Senator Clinton. Ms. Beck, in your testimony, you noted that 
medical boards are initiating the process of medical retirement too 
quickly for the most severely injured traumatic brain injury (TBI) 
patients, limiting access to critical services. You reported that 
TRICARE does not cover cognitive rehabilitation services for the 
medically retired, leading to a dangerous termination of care. In a 
study released April 17, 2008, the RAND Corporation found a lack of 
coordination between the DOD and the Department of Veteran's Affairs 
(VA) for those servicemen and women with severe TBI, leaving families 
to ``navigate these systems alone,'' severely impacting quality of life 
for servicemembers and families. For those most severely impacted by 
TBI as a result of their service to our country, we should make a full 
range of service options available.
    Considering the current situation for severely injured TBI 
patients, what is the demonstrated impact on their health as a result 
of rushed medical retirement?
    Ms. Beck is no longer with the Wounded Warrior Project and 
therefore no answers have been provided for the record.

    6. Senator Clinton. Ms. Beck, what services did they lose access to 
immediately?
    Ms. Beck is no longer with the Wounded Warrior Project and 
therefore no answers have been provided for the record.

    7. Senator Clinton. Ms. Beck, how were their families and 
caregivers impacted?
    Ms. Beck is no longer with the Wounded Warrior Project and 
therefore no answers have been provided for the record.

    8. Senator Clinton. Ms. Beck, what legislative steps could be taken 
in the near-term to improve health care options for severely wounded 
TBI patients?
    Ms. Beck is no longer with the Wounded Warrior Project and 
therefore no answers have been provided for the record.
                                 ______
                                 
             Question Submitted by Senator Saxby Chambliss
                       reserve retirement system
    9. Senator Chambliss. Colonel Strobridge, Master Chief Barnes, and 
Sergeant Cline, first let me express my gratitude to all your 
organizations for the service and dedication you invest in continuous 
support to our military and military communities. Colonel Strobridge, 
in your testimony, you urge the subcommittee to continue to progress 
towards revamping our Reserve retirement system and continue to provide 
adequate compensation to our National Guard and Reserve Forces. The 
National Defense Authorization Act (NDAA) for Fiscal Year 2008 included 
a provision that reduces the age at which Guard and Reserve members can 
receive retired pay by 3 months for every 90 days a member serves in a 
deployed status per fiscal year. Also, just recently I, along with a 
dozen other members of the Senate, introduced the National Guard and 
Reserve Retired Pay Equity Act of 2008 which would make the provision 
in the NDAA for Fiscal year 2008 retroactive to September 11, 2001.
    From your associations' perspective, I would appreciate your 
feedback on how these provisions will help shape and incentivize our 
Reserve component forces, and any additional ways that you think we 
should craft the Reserve retirement benefit that would help best shape 
and incentivize our servicemembers.
    Cololonel Strobridge. MOAA and The Military Coalition strongly 
support your National Guard and Reserve Retired Pay Equity Act, Senator 
Chambliss. We believe we must, at a bare minimum, credit all activated 
service since September 11, 2001, for retirement age recalculation 
purposes. To say that future service warrants adjustment to the Reserve 
retirement age, but multiple combat tours already served do not, is 
just a miscarriage of justice. As for other ways to properly 
incentivize our servicemembers, one way would be to credit all 
activated service since the onset of Gulf War I, for the same reason. 
We believe that interim service in Iraq, Kuwait, Kosovo, et cetera, is 
no less worthy of recognition for this purpose.
    Master Chief Barnes. FRA believes that reform of the Reserve 
retirement program is an equity issue given the significantly increased 
reliance on these personnel to support of the war on terror and other 
demanding operational commitments. Reform of the Reserve retirement 
system is overdue and a top concern for Reserve senior enlisted 
leaders. This is also essential to retaining critical mid-career 
personnel for a full careers. The Association appreciates the NDAA for 
Fiscal Year 2008 provision that would lower the Reserve retirement age 
by 3 months for each cumulative 90 days of Active Duty on contingency 
operation orders and views this as a first step on this issue. At a 
minimum, the new authority should be expanded to include all Reserve 
personnel who've served since September 11, 2001. Regarding other ways 
to improve the Reserve retirement benefit package, FRA strongly 
supports the improvements to other retention and retirement related 
programs including Reserve health care coverage and options, increased 
MGIB program funding, improving family readiness, and ensuring adequate 
transition support when reservists transition to retiree status.
    Sergeant Cline. We at EANGUS see the early retirement provisions as 
an incentive for those who have the most experience in the Guard, those 
with over 20 years of honorable and selfless service. Currently, those 
in this category have no bonuses or special incentives to remain in our 
forces, and are leaving us prematurely. Early retirement provisions 
that Senator Chambliss championed give them an incentive to remain 
until they are closer to age 55 or 60, and the Guard retains their 
skills, talents, abilities, and valuable experience, and we thank him 
for his leadership and tenaciousness in this issue.
    The 2006 Defense Advisory Committee on Military Compensation 
reported that, of all who serve in the military, only 47 percent of the 
officers and 15 percent of the enlisted force serve long enough to 
achieve eligibility for retirement at 20 years. In addition, of those 
who achieve retirement eligibility at 20 years service, only 10 percent 
of officers and less than 5 percent of enlisted remain until 30 years 
service. http://www.defenselink.mil/prhome/docs/dacmc--retirement--
705.pdf (page 4).
    When applying these metrics against National Guard demographics, 
only 5,227 of a possible 460,000 force will reach 30 years service and 
possibly be eligible for early retirement. Of those 5,227, a certain 
percentage of those will be dual-status military technicians who will 
want to serve until age 60 or beyond to reach full annuity status for 
their civil service retirement, reducing the number below 5,000 for 
certain.
    Those with over 20 years service need and deserve an incentive to 
remain in service to their Nation, beyond their patriotism, that is 
tangible and materially affects them and their families. We support 
such legislative efforts to make the provisions in Public Law 110-181 
retroactive to September 11, 2001. With well over 600,000 National 
Guard and reservists who already have mobilized and deployed in the war 
on terror, not making the provisions retroactive totally discounts 
their courageous service and sends the wrong message. This wrong 
message to them will definitely have an effect on future retention and 
recruiting, for as the Army Guard and now the Army have discovered, the 
best recruiters for the military are those serving in the military. 
Word of mouth and individual referrals are the key to successful 
recruiting and retention. By intentionally excluding those who have 
already served, the price to raise and maintain an All-Volunteer Force 
will be steep. We believe it is key to include this group in the 
provisions, and applaud the legislation for retroactivity.

    [Whereupon, at 4:12 p.m., the subcommittee adjourned.]

                                 
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