[Congressional Record Volume 143, Number 152 (Tuesday, November 4, 1997)]
[Senate]
[Page S11678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Mr. Inhofe, Mr. Akaka, Mr. Conrad, 
        Mr. Reid, Ms. Collins, Mr. Craig, Mr. Daschle, Mr. Murkowski, 
        and Ms. Snowe):
  S. 1359. A bill to amend title 38, United States Code, to limit the 
amount of recoupment from veterans' disability compensation that is 
required in the case of veterans who have received certain separation 
payments from Department of Defense; to the Committee on Veterans' 
Affairs.


          the veterans' disability benefits relief act of 1997

  Mr. JEFFORDS. Mr. President, today I rise to introduce the Veterans' 
Disability Benefits Relief Act. This legislation would address an 
unfair provision that double taxes veterans who participate in military 
downsizing programs run by the Department of Defense [DOD].
  Mr. President, since 1991, in an effort by the DOD to downsize the 
armed services, certain military personnel have been eligible for 
either the special separation benefit [SSB] or the voluntary separation 
incentive [VSI] program. However, SSB or VSI recipients who are 
subsequently diagnosed with a service-connected disability must offset 
the full SSB/VSI amount paid to that individual by withholding amounts 
that would be paid as disability compensation by the Department of 
Veterans Affairs [VA].
  Additionally, veterans who participate in the DOD's downsizing by 
selecting an SSB lump sum payment or a VSI monthly annuity payment, are 
forced to pay back the full, pretax amount in disability compensation--
offsetting money that the veteran would never see with or without a 
service-connected disability. This is a gross injustice to veterans by 
double taxing their hard-earned compensation.
  My bill would ease this double taxation for all members who accept an 
SSB or VSI payment package and make these alterations retroactive to 
December 5, 1991. Thus, service members not able to receive payment 
concurrently since 1991 will be reimbursed for their lost compensation 
portion that was taxed. The cost of this bill was estimated by CBO to 
be only $195 million over 25 years. This is a fraction of a percentage 
of our annual spending on compensation and benefits for former military 
personnel. I urge Congress to correct this injustice to our Nation's 
veterans and provide these veterans with the proper compensation they 
deserve.
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