[Congressional Record Volume 150, Number 49 (Thursday, April 8, 2004)]
[Senate]
[Pages S4048-S4049]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN:
  S. 2309. A bill to amend the Internal Revenue Code of 1986 to provide 
for a refundable wage differential credit for activated military 
reservists; to the Committee on Finance.
  Mr. DORGAN. Mr. President, I rise today to introduce legislation to 
provide a financial safety net for the families of our young men and 
women who proudly serve in the Nation's military Reserve and National 
Guard.
  Our country is demanding that our military reservists and members of 
the National Guard play a more crucial and sustained role in 
supplementing the activities of our traditional armed forces than at 
any other time in our recent history. In response to the Iraq War and 
homeland security needs, the country has called up hundreds of 
thousands of our Reserve and National Guard members for extended tours 
of duty of up to 18 months.
  Today, roughly 175,000 members of the reserve components are on 
active duty. About 40 percent of the troops now going into Iraq are 
reservists. Reserve component leaders expect the total number of 
guardsmen and reservists on active duty for the war on terrorism to 
remain above 100,000 for the next two years.
  Since September 11, 2001, more than 60 percent of North Dakota's 
guardsmen and reservists have been called to duty. One of the issues I 
hear most often about from those service members and their families is 
how hard it is for them to make ends meet on their military incomes.
  When Guard members or reservists are mobilized, it has an enormous 
impact not only on their lives, but also on the lives of their loved 
ones. In many cases when an individual is mobilized, his or her family 
may experience a significant loss of income. This is because active 
duty military compensation often falls below what reservists earn in 
civilian income. These income losses are often exacerbated by the 
additional family expenses that are associated with military 
activation, such as the cost of long distance phone calls and the need 
for extra day care.
  Clearly this is a major financial problem for many reservists and 
their families. The Pentagon's Reserve Forces Policy Board says that a 
significant number of mobilized Reserve component members earn less 
than their private sector and civilian salaries while on active duty. 
The most recent information provided on mobilization income loss comes 
from a Pentagon survey in the year 2000. Some 41 percent of guardsmen 
and reservists who were mobilized that year reported income losses 
ranging from $350 per month to more than $3,000 per month. Self-
employed reservists reported an average income loss of $1,800 per 
month. Physicians and registered nurses in private practice reported an 
average income loss of as much as $7,000 per month.
  Those were big losses. But when that survey was conducted in 2000, 
reservists were mobilized for an average of

[[Page S4049]]

only 3.6 months. Today mobilizations of 14 to 18 months are common. So 
the annual losses in wages are much, much bigger.
  The loss of income that reservists and guardsmen incur when they are 
ordered to leave their good-paying private sector or civilian jobs to 
serve their country often creates an unmanageable financial burden. 
This further disrupts the lives of their families who are already 
trying to cope with the emotional stress and hardship caused by the 
departure of a beloved spouse, or parent who has been ordered to active 
duty.
  In the mid-1990s the Pentagon tried to address this problem by 
offering members of the National Guard and Reserve the opportunity to 
buy insurance to protect against income loss upon mobilization. The 
program sold coverage for income losses of up to $5,000 per month. 
Unfortunately, the program was poorly planned and executed, and 
Congress had to appropriate substantial money to bail out the program 
before it was terminated. Since then the private sector has shown 
little interest in reviving the mobilization income insurance program.
  We need to find another way to deal with the issue. I believe that 
the federal government should try to help alleviate the financial havoc 
created for activated reservists, guardsmen, and their families. The 
bill I am introducing today will help in this endeavor.
  Specifically, my legislation provides a fully refundable, 100-percent 
income tax credit of up to $20,000 annually to a military reservist on 
active duty based upon the difference in wages paid in his or her 
private sector or civilian job and the military wages paid upon 
mobilization. For this purpose, a qualified military reservist is a 
member of the National Guard or Ready Reserve who is mobilized and 
serving for more than 90 days. The benefit of this activated military 
reservist tax credit is available for tax years beginning after 
December 31, 2003.
  We owe a great deal to those Americans who put on their uniforms and 
serve in the military in the most difficult of circumstances. We can 
never fully repay that debt. However, we can do much more to remove the 
immediate financial burden that many National Guard and Reserve 
families experience when a family member is ordered to active duty. 
This legislation will provide those families with some much-needed 
financial assistance. I urge my colleagues in the Senate to support my 
efforts to get this tax relief measure enacted into law as soon as 
possible.
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