[Congressional Record Volume 149, Number 16 (Wednesday, January 29, 2003)]
[Senate]
[Pages S1739-S1740]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU:
  S. 235. A bill to amend the Internal Revenue Code of 1986 to clarify 
the treatment of dependent care assistance programs sponsored by the 
Department of Defense for members of the Armed Forces of the United 
States; to the Committee on Finance.
  Ms. LANDRIEU. Mr. President, I rise today to reintroduce two bills 
that I originally sponsored in the 107th Congress. As our Nation 
prepares to go to war with Iraq and continues the war against 
terrorism, my bills will give additional tax relief to military 
families. One will give tax relief to a small group of men and women in 
our armed services stationed on the island of Diego Garcia in the 
Indian Ocean, supporting the war on terrorism in Afghanistan. The 
second bill will exclude from gross income child care benefits paid to 
members of our armed forces. These are small measures, but both will be 
of great benefit to the men and women serving our country.
  Diego Garcia is a British Territory lying seven degrees South 
Latitude off the coast of India, in the middle of the Indian Ocean. The 
island is 40 miles around and encompasses an area of 6,720 acres, most 
of it dominated by a large lagoon. The land mass is actually very 
small. It is home to a joint British--United States Naval Support 
Facility, and while there are only a small handful of British Royal 
Navy personnel on the island, there is a larger, tight-knit team of 
American Air Force, Navy, Marine Corps and Army personnel there. These 
men and women serving on Diego Garcia have been supporting B-52 bombing 
missions and other operations over Afghanistan. They will be called 
into service in the event of war with Iraq, they served this purpose in 
the previous Gulf War.
  As a Nation, we provide members of our armed forces with a variety of 
benefits, all of them deserved. They receive hardship duty pay of $150 
per month for serving in austere regions of the World. They get 
imminent danger pay of $150 per month as compensation for being in 
physical danger. One of the most generous benefits for those serving in 
the war on terrorism is the combat zone tax exclusion. Enlisted members 
of the armed services do not pay Federal taxes on their compensation 
for any month of service inside a combat zone. Officers pay tax on any 
amount of income over the highest salary for enlisted personnel. Both 
officers and enlisted personnel have to serve one day in the combat 
zone to get this benefit for the entire month. The exclusion only 
applies to personnel who receive imminent danger pay.
  On Diego Garcia, the pilots and flight crews who fly the missions 
over Afghanistan are eligible for the combat zone income tax exclusion 
because they receive imminent danger pay. Many of them are from the 2nd 
Bomb Wing and the 917th Wing. Both units call Barksdale Air Force Base 
in Louisiana their home. But the men and women who load the bombers, 
fuel them, and maintain them are not eligible because they do not enter 
the combat zone. Barksdale is also their home base. My office was 
contacted by some of the Barksdale officers who fly the bombing 
missions about this discrepancy. They asked me to help out their 
support crews, a gesture of selflessness that I seek to honor today.
  I recognize that the support crews may not receive imminent danger 
pay, but their situation is not too different from Naval personnel 
performing the

[[Page S1740]]

same tasks on ships in the Arabian Sea. Naval support crews receive 
imminent danger pay and are eligible for the tax exclusion, but they do 
not enter Afghanistan.
  Diego Garcia is a beautiful place, but is a long way from home. The 
least we could do is treat everyone who has served on the island the 
same. That is what my bill will do.
  My second bill will correct an omission in the Tax Reform Act of 
1986. That Act contained a provision consolidating the laws regarding 
the tax treatment of certain military benefits. The Conference Report 
to that Act contains a long list of benefits to be excluded from gross 
income of military personnel. According to the report, this list was to 
be exhaustive. The problem is that child care benefits are not on that 
list.
  I do not know if this omission was intentional. Perhaps at that time, 
child care benefits were relatively unknown in the military. The 
Conference Report gives the Treasury Secretary the authority to expand 
the list of eligible benefits, but so far no Secretary has chosen to 
provide any guidance to the Department of Defense as to how these 
benefits should be treated for tax purposes. While military families 
are not currently being taxed for child care benefits, the Department 
of Defense has indicated that it would like Congress to clarify that 
child care benefits are not subject to tax. My bill will give our 
military families and the Department of Defense a greater degree of 
certainty.
  I am pleased that my dependent care provision has been included in S. 
19, the Veterans and Military Personnel Fairness Act of 2003. The same 
provision had been included in a similar package in the last Congress. 
I urge the Finance Committee to consider this package very soon and to 
include my Diego Garcia bill in the final package.
  Throughout our history, in time of war we have worked to make sure 
that our armed forces have everything they need and we have spared no 
expense in meeting that need. But the men and women on the ground often 
have families back at home. We should make sure that we support them as 
well. I urge my colleagues to support this legislation.
                                 ______