[Congressional Record Volume 149, Number 85 (Wednesday, June 11, 2003)]
[House]
[Pages H5254-H5257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BEING FAIR TO VETERANS
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from Florida (Mr. Miller) is recognized
for 60 minutes as the designee of the majority leader.
Mr. MILLER of Florida. Mr. Speaker, I was hoping that my colleague
would remain in the Chamber for the next hour while we talk a little
bit about exactly what the Committee on Veterans Affairs has done and
the discussion of the cuts that are being made to the veterans budget.
We will get into that a little bit later. But tonight I want to talk
about something called SBP, and we will discuss it in great length. But
I want to introduce you to somebody first. Her name is Dottie Welch.
Dottie's story goes something like this: When Lt. Colonel Roger Welch
of the United States Army retired and signed up for the military
survivor benefit plan, better known now as SBP, years ago, he was told
that in the event of his death, SBP would pay his wife, Dottie, 55
percent of his retirement pay for the rest of her life.
When he signed an irrevocable agreement to pay annually-increasing
SBP premiums for the rest of his life, he did not know that his wife's
future SBP benefit actually would be one-third less than what they were
led to believe.
When Roger died in June of 2002, Dottie was dismayed to learn that
there would be an offset, an offset based on her husband's Social
Security-covered military earnings, that would reduce her benefits.
With Social Security survivor benefits and the reduced SBP annuity, her
total income is $384 a month less than she and Roger thought she would
have to live on.
Dottie thinks the Social Security offset is just plain wrong. No one
will tell her why it is there and why it is so large. Her husband,
Roger, only had 5 years of military service covered by Social Security.
Dottie Welch's case highlights one significant inequity of the
military SBP and the reason why so many retirees and survivors are
upset about its current situation.
Unfortunately, this is only the first of several ways that Uniform
Service Survivor Benefits relative to premiums being paid fall far
short of what retirees and survivors were promised and what is afforded
survivors of other Federal retirees.
There are three major SBP inequities. But before I go into those
inequities tonight, I would like to pause for a moment and recognize my
good friend from South Carolina (Mr. Wilson), who has been a stalwart
supporter of the veterans of this country.
I yield to the gentleman.
Mr. WILSON of South Carolina. Mr. Speaker, it is an honor to be here
tonight to join my friend, the gentleman from Florida (Mr. Miller), who
has authored H.R. 548, the Military Survivors Benefit Improvement Act
of 2003. The gentleman is a champion of veterans and veterans' spouses
because his Pensacola community has some of the highest concentrations
of veterans in America. I am particularly happy to see his efforts,
because I am a veteran myself.
Under the current plan, thousands of retirees and spouses who
enrolled in the original survivors benefit plan have come to receive
approximately 23 percent less coverage than they had initially
anticipated. Since its inception, the government's cost share has
steadily dwindled from 40 percent to 17 percent. It is our intention to
revise the plan in order to reinstate the original coverage offered by
the 1972 version of the survivor benefits plan.
{time} 1815
I believe there is no better way to convey the importance of this
legislative revision than to examine the hardships felt by a South
Carolina family who put their trust and their money in the original
version of the 1972 survivors benefit plan.
Donna Fleming of Mt. Pleasant in Charleston County, South Carolina,
became a widow in 1998. Her husband had served in the United States
Army and upon retirement had sought the benefits of SBP. Like many
Americans enrolled in the plan, the couple was unaware of the age 62
offset benefit reduction provision, and were subsequently confronted
with the news of the offset years later.
Donna's husband has since passed, and she has managed to meet her
daily expenses through SBP, occasionally dipping into her savings for
major bills. However, Donna will soon be 62, and still has not received
notification as to the exact amount of the offset. She expects that it
may be more than $6,000 a year, $500 a month. She then will be forced
to draw from her savings more and more.
Mr. Speaker, this is not the intent of the original legislation. It
is every family's fear that their loved ones may face financial
hardship following their death, and in Donna's case, that fear has
become reality. In her words, ``This country owes military families,
for which they have dedicated their entire lives.''
Please join us in supporting H.R. 548, the Military Survivors Benefit
Improvement Act of 2003. Join us in restoring justice for those
enrolled in this plan for our Nation's military personnel, their
devoted spouses, and their loving families.
Mr. MILLER of Florida. Mr. Speaker, I thank my good friend, the
gentleman from South Carolina (Mr. Wilson), for his comments and his
support of veterans' issues. I also wish to add my congratulations and
best wishes to him as he very soon becomes one of those retirees after
serving many years in the Army Guard in his home State.
Mr. Speaker, there are three major SBP inequities. One is that
thousands of people who bought SBP coverage were not briefed that most
survivors' SBP annuities would be reduced substantially after age 62;
two, the 40 percent government subsidy envisioned by Congress and
touted by the services to encourage retirees' participation has plunged
to 17 percent; three, the government provides Federal civilian
survivors a substantially higher share of retired pay for life with no
benefit reduction at any age.
The impact of these inequities is, as Members can imagine,
devastating to many survivors, because SBP is not exactly a king's
ransom at 55 percent of retired pay. At 35 percent, SBP provides only a
poverty level or lower annuity for most survivors, even those of
relatively senior officers.
So I am here tonight to provide more specifics on how the military
SBP program is not providing, is not providing the level of protection
military survivors need and deserve and were expecting; and why my
bill, H.R. 548, the Military Survivors Benefit Improvement Act of 2003,
is what is needed now to fix the current problem.
The first issue that we need to discuss tonight is something that I
call the benefit reduction shock. It is incredulous to many that such
an important feature of SBP, the reduced age 62 annuity that applies to
the vast majority of military survivors, was never explained to
retirees being asked to sign up for the program in the seventies and in
the early eighties, but it is true.
I have in my hand a copy of the actual SBP Election Form 5002 signed
by a retired member in 1982 in two different places. It specifies that
SBP will
[[Page H5255]]
pay the survivor 55 percent of the member's retired pay. Nowhere, even
in the fine print, does it mention any lower figure. We can only
speculate about how or why this key fact was omitted, but it hardly
matters now to those who were misled by the forms and by the briefings.
Certainly, the offset was extremely complicated for retirement
counselors to explain, and it was almost impossible to tell any
particular retiree at that point what SBP amount his or her survivor
would actually receive after attaining the age of 62.
For members who attained retirement eligibility before 1985, the
offset represented the amount of the survivors' Social Security benefit
that was attributable to the Member's Social Security-covered military
earnings, because the military only came under the Social Security
system in 1957, and that amount varied widely for different retirees,
and the rules for the calculation of Social Security benefits due to
military versus civilian employment are arcane at best.
When they first learned of the age 62 benefit reduction, years,
sometimes decades, after they purchased SBP, many older retirees and
survivors expressed outrage in the mistaken belief that Congress had
changed the law on them after the fact.
Not so. The age 62 reduction was part of the initial SBP law enacted
in 1972, but this critical piece of information did not find its way
into most military retirement briefings and SBP election forms until
many years later after complaints, years after complaints started to
roll in.
Large numbers of retirees and survivors feel betrayed by what they
perceive as a bait-and-switch under which they were asked to sign
irrevocable contracts to pay lifetime SBP premiums without being told
what the annuity level they were actually buying was.
Dottie Welch is far from the only spouse who is very much aware of
the impact of the Social Security offset. One survivor's husband was a
Navy hard-hat diver during World War II, then an electronics technician
on a nuclear submarine until his retirement in 1966. When he died in
May of 2002, his widow had no idea she would be hit by the offset. ``I
was shocked. I almost fell out of the chair, and wondered why God
hadn't taken me too,'' she says today.
In the grief that followed her husband's death, this 78-year-old
widow also faced numerous family bills and health problems. When her
SBP annuity started, she was stunned to find out that it was one-third,
one-third less than what she had expected. Now faced with $21,000 in
bills, she was advised to declare bankruptcy, and feared she would lose
her home trying to pay her debts. Her financial struggles eventually
led her to the Navy-Marine Corps Relief Society for a grant to help her
get back on her feet financially.
Not one member of our greatest American generation should find
themselves under this kind of stress while getting over the death of
their spouse and trying to do something with the large bills that were
facing them.
In an attempt to reduce this kind of confusion, in 1985 Congress
established a two-tier system, not linked to Social Security, that
actually provides an SBP survivor 55 percent of retired pay until age
62, and 35 percent after that age. But making the age 62 reduction
clear for the post-1985 retirees did not make it any fairer, and it did
not change the fact that thousands upon thousands of earlier
participants had not been told of the age 62 annuity reduction.
Also in 1985, Congress shocked the survivor community by repealing
the 1984 legislation that would have barred any SBP Social Security
offset for survivors who earned their Social Security benefits from
their own work history rather than the military retiree's, as assumed
under the original offset law. This only further highlighted the
unfairness of the offset to thousands of widows who had pursued their
own military or civilian careers.
Now, the second issue, another broken promise. When SBP was enacted
in 1972, Congress set the premium formula in law with the intent that
retirees' monthly premium payments would cover 60 percent, 60 percent
of the long-term costs of the survivor benefits, with the government
paying the remaining 40 percent. The formula was based on the program
cost assumptions prepared by the Department of Defense actuaries
concerning future inflation rates, pay raises, longevity of retirees,
and survivors' longevity, et cetera.
But actual experience in later years proved the actuaries' original
estimates had been far too conservative, as inflation was lower than
predicted and retirees lived and paid premiums longer than anticipated.
Because retiree premiums were locked into law and covered a greater
portion of the program costs than had been projected, the government
reaped an economic windfall, and found its share of the cost for the
SBP program was much lower than anticipated. By 1988, retiree premiums
covered 77 percent of the SBP costs, and DOD's share had dropped to 23
percent.
To its credit, Congress acted in 1990 to restore the intended 60/40
balance by reducing retiree premiums to 6.5 percent of retired pay, but
the overconservative actuarial assumptions have continued to work
against, work against retirees for the last decade, with the result
that the Federal subsidy for SBP has continued to decline. As of 2003,
the government's share has dropped from 40 percent to 17 percent,
leaving retirees once more paying a higher-than-intended share of the
benefit.
The only fair way to restore the proper cost balance between the
retirees and the government is to reduce the premium, or increase the
SBP benefit. The former benefits primarily retirees, while the latter
benefits the survivors. Since retiree premiums were reduced to restore
the 60/40 balance in 1990, Congress should restore the government's
intended 40 percent cost share by raising the benefit for survivors. My
bill does exactly that.
Now, the third issue. It is the military-civilian inequity. No less
compelling than the misleading of enrollees and the decline of the
intended subsidy is the stunning disparity that exists between benefits
and subsidy levels the government offers military versus Federal
civilian survivors.
In contrast to the military SBP subsidy of, remember, 17 percent,
currently, the SBP for Federal civilian employees under the post-1984
Federal Employee Retirement System provides a 33 percent subsidy. For
those under the pre-1984 Civil Service Retirement System the subsidy is
48 percent, and at 48 percent, it is nearly three times as high as the
military's.
Even more important, the Federal Employment Retirement System
survivors receive 50 percent of retired pay, and the other survivors
under the old Civil Service Retirement System receive 55 percent for
life, with no benefit reduction, no benefit reduction, at age 62.
{time} 1830
Although Federal civilian premiums are higher, military retirees pay
SBP premiums for a far longer period of time than do most civilians
because they are required to retire at a younger age. Because their
mortality rates are not much different, this means that Federal
civilian retirees have a far more advantageous benefit-to-premium
ratio, as indicated on these charts.
Now, military retirees particularly pay SBP premiums about twice as
long, twice as long as Federal civilians because they retire at younger
ages, but their spouses' longevity is about the same. So military SBP
enrollees see a lower return and a much lower government subsidy.
Remember Dottie? My bill is the needed fix for the three major
inequities of the Survivor Benefit Plan. We must keep faith with the
older retirees and with the survivors. We must restore the intended 40
percent Federal subsidy, and we must put SBP on an equal footing with
its Federal civilian equivalent.
The Military Survivors Benefit Improvement Act of 2003, my bill,
accomplishes these three things. For these reasons, the 33 military and
veterans associations of the military coalition have endorsed my bill
and have made its passage one of their top priorities in the 108th
Congress.
H.R. 548 will balance equity and will balance cost considerations by
phasing out the SBP age 62 benefit reduction over the next 5 years. And
upon enactment, the age 62 benefit increase phase-in will begin at 40
percent on October 1 of 2004 and continually annually each year after
through the year of 2007
[[Page H5256]]
until the benefits are restored to a full 55 percent as was the desire
of Congress.
In order to offset part of the costs of the benefit increase, H.R.
548 authorizes an open season provision in the legislation that would
allow more retirees to participate, generating SBP program savings, and
significantly reducing the outlays.
Now, Congress has already acknowledged the need for this particular
piece of legislation. The fiscal year 2001 Defense Authorization Act
included a provision asserting the sense of Congress that there should
be enacted legislation to reduce and eventually eliminate the different
levels of SBP annuity for surviving spouses who are under age 62 and
those who are 62 and older. But we have failed to follow through on
that commitment for the last 2 years. It is time for us to fix this
problem. Military widows and widowers have waited long enough in their
fight for fairness. Now is the time for Congress to step up and enact
relief for the aging survivors of our greatest generation. World War II
and Korean War retirees, and the following generations of retirees and
survivors, deserve no less than the SBP deal they were promised and the
one the government already provides for other Federal survivors.
Now, a quick time line of H.R. 548. It was introduced on February 5
of 2003. And upon introduction, we had 118 bipartisan co-sponsors. That
is 27 percent of the entire House of Representatives. On that day it
was referred to the Committee on Armed Services. On February 28 of
2003, it was referred to the Total Force subcommittee, and on the same
date executive comment was requested from DOD. Now, over 3 months later
I urged DOD to act on this request.
On March 7 of 2003, a letter was sent to the gentleman from Iowa
(Chairman Nussle) and the ranking member, the gentleman from South
Carolina (Mr. Spratt), of the House Committee on the Budget urging
support to include budget authority in fiscal year 2004 in our budget
resolution. On the letter there were 36 bipartisan co-signers,
including numerous members of the Committee on the Budget, the
Committee on Armed Services, and the Committee on Veterans Affairs.
Today this bill has 268 bipartisan co-sponsors. That equates to 62
percent of this House.
All Americans should urge their Representatives to co-sponsor H.R.
548 and their Senators to co-sponsor Senate bill 451, introduced by
Senator Olympia Snowe of Maine.
Again, who supports H.R. 548? The number one legislative priority of
the Military Officers Association of America and the 108th Congress.
Additionally, the bill is strongly endorsed by the Military Coalition,
a consortium of 33 nationally prominent military and veterans
organizations representing more than 5.5 million members of uniformed
services, active, reserved, retired, survivors, veterans and their
families; and there are many, many others that have sent letters of
support for this bill.
There are others that are tracking similar legislation in this body.
I would note tonight that H.R. 1726, the Military Surviving Spouses
Equity Act, sponsored by the gentleman from South Carolina (Mr. Brown),
repeals the offset from surviving spouse annuities under the military
Survivor Benefit Plan for amounts paid by the Secretary of Veterans
Affair as dependency and indemnity compensation, or DIC. It provides
for the recoupment of certain amounts previously paid SBP recipients in
the form of retired pay refund. It was filed on April 10 of 2003. It
has been referred to the Committee on Armed Services. It has 24 co-
sponsors. And I want to commend my colleague, the gentleman from South
Carolina (Mr. Brown), for his efforts to restore equity to this aspect
of SBP; and I am proud to be an original co-sponsor of this
legislation.
H.R. 1653, sponsored by the gentleman from New Jersey (Mr. Saxton),
would change the effective date for the paid-up coverage under the
military Survivor Benefit Plan from October 1 of 2008 to October 1 of
2003. It has 25 co-sponsors, and I am an original co-sponsor of this
particular bill. It was filed on April 7, and it too has been referred
to the House Committee on Armed Services.
A third piece of legislation, H.R. 1592, the Military Survivors
Equity Act. It has been sponsored by my colleague, the gentleman from
California (Mr. Filner), and it would repeal the two-tier annuity
computation system applicable to annuities under the SBP plan for
retired members of the Armed Forces so that there would be no reduction
in such an annuity when the beneficiary becomes 62 years of age. It was
filed on April 3 of this year, referred to the Committee on Armed
Services; and it has 5 co-sponsors as this time. Both the Filner bill
and my bill fulfill the 2001 sense of Congress resolution to reduce and
eventually eliminate this SBP reduction. Again, both these bills go a
long way to fulfilling the sense of Congress and that resolution to
reduce and eventually eliminate this SBP reduction.
Let me talk a little bit about the VA budget for 2004. Our service
men and women who continue to fight for our freedom and security around
the world must know that Americans are united in their support for them
and for their safe return. We in Congress, along with President Bush,
support not only the troops in the field but also the scores of
veterans who have already given so much to this country.
Unfortunately, there have been false reports, false reports
circulating that Congress is actually cutting veterans benefits. Here
are the facts of the congressional budget for fiscal year 2004 relating
to veterans spending. This budget will allow us to fully meet our
commitments to more than 2.6 million disabled veterans and widows who
rely on VA benefit checks every month. It calls for $33.8 billion in
mandatory spending. This is the highest spending ever in this area. It
also calls for $30 billion, a 12.9 percent increase in discretionary
spending. Nearly 90 percent of this funding is for veterans' medical
care. These are the indisputable facts of this year's Federal budget
for veterans.
House Members, particularly the Republicans, along with President
Bush, are committed to ensuring that those who have served their
country with pride, with valor and dignity receive the best of
America's appreciation. Any suggestion otherwise is simply untrue, is
not supported by the facts.
During January, I had the opportunity to visit with some of our men
and women in uniform stationed in Germany, Italy, and France. And I was
struck by their professionalism and commitment to their assigned
duties. They were proud to serve. It is just as simple as that.
Two weeks ago, I visited North Korea where freedom is nowhere to be
found and democratic thought is oppressed. We are truly blessed to live
in a world of freedom and democracy and where life, liberty, and the
pursuit of happiness are abundant and, I would submit, many times taken
for granted.
Defense of the principles and values that we hold so dearly as a
Nation leads our men and women into conflicts around the globe. Many
return home after giving the ultimate sacrifice in defense of such
values. But to those who do return, we can never say thanks enough.
Today, as we continue to rely on our Armed Forces in the war against
terrorism, we look to our veterans for their example of courage and
sacrifice. It is their selfless service that has made our Nation strong
and our world a better place. America's veterans deserve our respect,
our deepest respect, and enduring appreciation, as do their spouses who
choose to marry members of our armed services and to share with them
all the joys and sacrifices of their active duty careers.
The Survivor Benefit Plan is not to military spouses what Congress
had intended or what enrollees were promised. The program is not
providing the level of protection military survivors need and deserve.
Retirees and survivors deserve no less in the SBP deal than they were
promised. This Congress needs to step up and deliver what the aging
survivors of our greatest generation retirees were promised. And we
need to provide at the proper level the protection necessary for future
generations of retirees. Congress must act to fix this problem now.
Mr. FILNER. Mr. Speaker and colleagues, I rise today to speak about a
military widow in my Congressional District who has written to me about
her Military Survivor Benefits Plan, known as SBP.
[[Page H5257]]
She writes: ``My husband, who served in the Army for 20 years, died
in July, 1995. I was then 61 years old. I was doing okay, paying my
monthly bills and having enough left for groceries, but when I turned
62, I was notified my SBP was reduced from $476 to $302. What a shock!
This was my grocery money they took from me. I hope that nobody else
has to go through what I have. I cry every day and night. Not only have
I lost my husband, I lost my money, my pride, my dignity.'' These words
from the widow of one of our nation's veterans should be seared into
the mind of every member of Congress.
Tomorrow, along with a number of my colleagues, I will be signing a
discharge petition for H.R. 303, a bill to provide what is known as
concurrent receipt to our disabled military retirees. If this law is
passed, these retirees would be able to receive both their military
retired pay, which they earned, and their VA disability compensation,
which they deserve! As you know, both the House and the Senate passed
concurrent receipt during the last session of Congress--and only in the
Conference, was it diluted to almost nothing. We are again fighting to
correct this grave injustice.
I am here today to state that there is another equally deserving
group that we must include in this fight--the widows of our military
retirees! Not only are many of our military retirees being denied their
rightful benefits while they are alive, their spouses are being denied
their rightful benefits upon their death.
The law to reduce the benefits received by military retired widows
when they turn 65 is misleading and unfair. It is time to change this
law! Most of these military widows are living on small incomes, but
even people with substantial incomes would have a tough time coping
with a reduction from 55 percent of their retirement benefits to 35
percent.
My bill, H.R. 1592, the Military Survivors Equity Act, would
immediately eliminate this callous and absurd reduction in benefits
that now burdens our military widows. My colleague form Florida, Mr.
Miller, has introduced H.R. 548, a bill that would increase the post-62
SBP annuity so that it reaches 55 percent of the military retired pay
by 2007. Both bills fulfill the 2001 ``sense of Congress'' resolution
to reduce and eventually eliminate this SBP reduction. The passage of
this legislation is a top priority for the Military Officers
Association of America, and the Veterans of Foreign Wars has also
voiced their support for these bills. The Democratic Salute to Veterans
and the Armed Forces legislative package, recently released, also calls
for an end to this unfair reduction of benefits.
I encourage members from both sides of the aisle to work with
Congressman Miller and me to stop the pain and anguish we are causing
our military widows and to show respect for the tremendous sacrifices
made by our veterans and their families. We must pass this legislation
to make this the compassionate and effective Survivors Benefits Plan it
should be.
____________________