[Congressional Record Volume 147, Number 54 (Thursday, April 26, 2001)]
[Senate]
[Pages S4006-S4007]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HUTCHINSON (for himself and Mr. Warner):
  S. 789. A bill to amend title 37, United States Code, to establish an 
education savings plan to encourage reenlistments and extensions of 
service by members of the Armed Forces in critical specialties, and for 
other purposes; to the Committee on Armed Services.
  Mr. HUTCHINSON. Mr. President, today I am introducing a bill that 
will provide military personnel the ability to provide for the 
education of their spouses and children in return for their commitment 
to continue to serve in the armed forces.
  The purpose of this bill is to promote retention of members of the 
armed forces in critical specialties by establishing a bonus savings 
plan that will provide significant resources for meeting the expenses 
encountered by service members in providing for the education of 
members of their families.
  I met with the Senior Enlisted Advisors of the four armed services 
and the Coast Guard. These Senior Enlisted Advisors are the top 
enlisted person in their respective services. Their job is to advise 
the Service Chief on matters pertaining to enlisted personnel. These 
experienced senior leaders are among the most significant resources 
available to the generals and admirals, and those of us here in 
Congress, as we seek answers to questions on recruiting, retention, and 
quality of life. These enlisted leaders know first-hand and fully 
understand the life, the demands on and concerns of enlisted personnel 
in their services.
  In my meeting with the Senior Enlisted Advisors, I sought their 
insight on what factors enlisted service members consider when making 
that critical decision as to whether to continue their active service 
or leave the military. I found myself talking to the very people who 
have faced the stress of these decisions; who have sat with their 
spouses and families and discussed whether to stay in the military or 
leave and seek a career outside the military. They were very frank and 
candid in their discussions.
  One thing I learned is that, like many of us, enlisted service 
members share the goal of giving their children better opportunities 
than they had. To a person, the Senior Enlisted Advisors said that 
being able to provide educational opportunities for their families is 
an important goal and would be a powerful retention tool.
  My bill will provide enlisted service members in critical 
specialties, who agree to serve a six-year term, resources that can be 
applied to cover the expenses of higher education for their families. 
Let me explain how this will work.
  Service members, officers or enlisted, in critical specialties, who 
reenlist or extend their service commitment for six years will receive 
United States Savings Bonds that can be redeemed to cover educational 
expenses. When these Savings Bonds are redeemed to cover educational 
costs, the income, under the current tax code, is tax exempt. My bill 
does not modify the tax code. My proposal will take advantage of 
current tax law as it pertains to United States Savings Bonds used for 
educational purposes.
  Military personnel who have less than three years of service when 
they reenlist or extend their commitment will receive Savings Bonds 
with a face value of $5,000. For those service members who have between 
three and nine years of service when they reenlist or extend their 
commitment will receive Savings Bonds with a face value of $15,000. 
Those members with more than nine years of service who reenlist or 
extend their commitment will receive Savings Bonds with a face value of 
$30,000.
  A Service Member who reenlists at the two-year point and receives 
$5,000 in Savings Bonds subsequently reenlists at the end of his six-
year commitment--now with eight years of service--would receive an 
additional $10,000 in Savings Bonds, for a total of $15,000. This 
service member could reenlist again at the conclusion of the second 
six-year term,--now in his 14th year--and would receive an additional 
$15,000 for a career total of $30,000 in United States Savings Bonds 
that can be used for educational purposes. All tax free.
  My bill will provide military personnel the capability to provide for 
the education of their spouses and children while investing in America.
  I am introducing this bill today to enhance the benefits President 
Bush announced at Fort Stewart, Georgia, on Monday. The President 
announced that his budget will include $5.7 billion in additional 
benefits for military personnel; $1.4 billion to increase military

[[Page S4007]]

pay and allowances; $3.9 billion for military health care; and $0.4 
billion for improvements to military housing. These increases are much 
needed and the announcement was enthusiastically received by the men 
and women at Fort Stewart, Georgia who know the sacrifices they are 
required to make in service of their country. My bill enhances 
President Bush's initiatives by providing educational opportunities 
that are unavailable today to the children of military personnel. I 
will hold hearings later this year in the Armed Services Committee to 
further develop each of these initiatives.
  My bill furthers the educational opportunities for military families, 
increases military readiness by retaining the highly-trained and 
experienced military personnel we need to continue to be the preeminent 
military force in the world, and accomplished these lofty goals by 
investing in America. I urge my colleagues to examine my bill and join 
Senator Warner and I as cosponsors of this important initiative.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 789

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PURPOSE.

       It is the purpose of this Act to promote the retention of 
     members of the Armed Forces in critical specialties by 
     establishing a bonus savings plan that provides significant 
     resources for meeting the expenses encountered by the members 
     in providing for the education of the members of their 
     families and other contingencies.

     SEC. 2. EDUCATION SAVINGS PLAN FOR REENLISTMENTS AND 
                   EXTENSIONS OF SERVICE IN CRITICAL SPECIALTIES.

       (a) Establishment of Savings Plan.--(1) Chapter 5 of title 
     37, United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 323. Incentive bonus: savings plan for education 
       expenses and other contingencies

       ``(a) Benefit and Eligibility.--The Secretary concerned 
     shall purchase United States savings bonds under this section 
     for a member of the armed forces who is eligible as follows:
       ``(1) A member who, before completing three years of 
     service on active duty, enters into a commitment to perform 
     qualifying service.
       ``(2) A member who, after completing three years of service 
     on active duty but not more than nine years of service on 
     active duty, enters into a commitment to perform qualifying 
     service.
       ``(3) A member who, after completing nine years of service 
     on active duty, enters into a commitment to perform 
     qualifying service.
       ``(b) Qualifying Service.--For the purposes of this 
     section, qualifying service is service on active duty in a 
     specialty designated by the Secretary concerned as critical 
     to meet requirements (whether such specialty is designated as 
     critical to meet wartime or peacetime requirements) for a 
     period that--
       ``(1) is not less than six years; and
       ``(2) does not include any part of a period for which the 
     member is obligated to serve on active duty under an 
     enlistment or other agreement for which a benefit has 
     previously been paid under this section.
       ``(c) Forms of Commitment to Additional Service.--For the 
     purposes of this section, a commitment means--
       ``(1) in the case of an enlisted member, a reenlistment; 
     and
       ``(2) in the case of a commissioned officer, an agreement 
     entered into with the Secretary concerned.
       ``(d) Amounts of Bonds.--The total of the face amounts of 
     the United States savings bonds purchased for a member under 
     this section for a commitment shall be as follows:
       ``(1) In the case of a purchase for a member under 
     paragraph (1) of subsection (a), $5,000.
       ``(2) In the case of a purchase for a member under 
     paragraph (2) of subsection (a), the amount equal to the 
     excess of $15,000 over the total of the face amounts of any 
     United States savings bonds previously purchased for the 
     member under this section.
       ``(3) In the case of a purchase for a member under 
     paragraph (3) of subsection (a), the amount equal to the 
     excess of $30,000 over the total of the face amounts of any 
     United States savings bonds previously purchased for the 
     member under this section.
       ``(e) Total Amount of Benefit.--The total amount of the 
     benefit payable for a member when United States savings bonds 
     are purchased for the member under this section by reason of 
     a commitment by that member shall be the sum of--
       ``(1) the purchase price of the United States savings 
     bonds; and
       ``(2) the amounts that would be deducted and withheld for 
     the payment of individual income taxes if the total amount 
     computed under this subsection for that commitment were paid 
     to the member as a bonus.
       ``(f) Amount Withheld for Taxes.--The total amount payable 
     for a member under subsection (e)(2) for a commitment by that 
     member shall be withheld, credited, and otherwise treated in 
     the same manner as amounts deducted and withheld from the 
     basic pay of the member.
       ``(g) Repayment for Failure To Complete Obligated 
     Service.--(1) If a person fails to complete the qualifying 
     service for which the person is obligated under a commitment 
     for which a benefit has been paid under this section, the 
     person shall refund to the United States the amount that 
     bears the same ratio to the total amount paid for the person 
     (as computed under subsection (e)) for that particular 
     commitment as the uncompleted part of the period of 
     qualifying service bears to the total period of the 
     qualifying service for which obligated.
       ``(2) Subject to paragraph (3), an obligation to reimburse 
     the United States imposed under paragraph (1) is for all 
     purposes a debt owed to the United States.
       ``(3) The Secretary concerned may waive, in whole or in 
     part, a refund required under paragraph (1) if the Secretary 
     concerned determines that recovery would be against equity 
     and good conscience or would be contrary to the best 
     interests of the United States.
       ``(4) A discharge in bankruptcy under title 11 that is 
     entered less than five years after the termination of an 
     enlistment or other agreement under this section does not 
     discharge the person signing such reenlistment or other 
     agreement from a debt arising under the reenlistment or 
     agreement, respectively, or this subsection.
       ``(h) Relationship to Other Special Pays.--The benefit 
     provided under this section is in addition to any other bonus 
     or incentive or special pay that is paid or payable to a 
     member under any other provision of this chapter for any 
     portion of the same qualifying service.
       ``(i) Regulations.--This section shall be administered 
     under regulations prescribed by the Secretary of Defense for 
     the armed forces under his jurisdiction and by the Secretary 
     of Transportation for the Coast Guard when the Coast Guard is 
     not operating as a service in the Navy.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by adding at the end the following new item:

``323. Incentive bonus: savings plan for education and other 
              contingencies.''.

       (b) Effective Date.--Section 323 of title 37, United States 
     Code (as added by subsection (a)), shall take effect on 
     October 1, 2001, and shall apply with respect to 
     reenlistments and other agreements for qualifying service 
     (described in that section) that are entered into on or after 
     that date.
                                 ______