[Congressional Record Volume 151, Number 18 (Thursday, February 17, 2005)]
[Senate]
[Pages S1631-S1632]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself and Mr. Shelby):
  S. 417. 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, 
along with Senator Shelby, 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 reservists and Guard members for extended tours of 
duty of up to 18 months.
  Today, almost 184,000 National Guardsmen and reservists are on active 
duty. Military leaders expect the total number of reservists and 
Guardsmen on active duty for the war on terrorism to remain above 
100,000 for the indefinite future.
  Since September 11, 2001, more than 2,000 of North Dakota's Guardsmen 
and reservists have been called to duty and placed in harms way around 
the globe. 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 serious loss of income. This is because active duty 
military compensation often falls below what reservists earn in 
civilian income. In addition, some reservists experienced continuing 
financial losses after return to civilian life due to neglected 
businesses or professional practices.
  These income losses are often exacerbated by the additional family 
expenses that are associated with military activation, such as the need 
for extra day care.
  The Pentagon doesn't track the number of reservist families who have 
to live on diminished incomes during deployment. But it is clearly a 
significant problem. The Pentagon's Reserve Forces Policy Board says 
that one-third of all mobilized Reserve component members earn less 
than their private sector and civilian salaries while on active duty. 
Other estimates are even higher. For example, 45 percent of reserve 
officers and 55 percent of enlisted members who were activated for the 
1990 Gulf War reported income loss. And a 1998 survey of junior 
enlisted members of the California National Guard's 40th Infantry 
Division showed that the great majority risked cutting their household 
income somewhere between 16 percent and more than 65 percent if they 
were called to active duty.
  The most recent information on mobilization income loss comes from 
the year 2000. Some 41 percent of Guardsmen and reservists who were 
mobilized that year reported income losses ranging from $350 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 only 3.6 months. Today 
mobilizations of up 14 to 18 months are common. So the cumulative 
impact of lost wages is 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 that 
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, father or mother who has been ordered to active duty.
  In the mid-1990s the Pentagon tried to deal with this problem by 
offering members of the National Guard and Reserve the opportunity to 
buy insurance to guard against their risk of being called to active 
duty and losing income. 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 not shown any interest in reviving the mobilization income 
insurance program. Thus, we need to find another way to deal with the 
issue. The solution I propose is one suggested by the Pentagon's 
Reserve Forces Policy Board, that is, an income loss tax credit.
  The legislation that Senator Shelby and I are introducing provides a 
fully refundable, 100-percent income tax credit of up to $20,000 
annually to a military reservists 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.
  In conclusion, 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 reserve 
and National Guard 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.
  Mr. SHELBY. Mr. President, I rise today to introduce legislation with 
Senator Dorgan to provide a financial safety net for the families of 
our servicemembers who proudly serve in our Nation's military Reserve 
and National Guard.
  Today, our National Guard and Reserve units are being called upon 
more than ever and are being asked to serve their country in a very 
different way than in the past. The Global War on Terror and the high 
operational tempo of our military require that our Reserve components 
play a more active role in the total force.
  In the past, our Reservists were exactly what their name implied--a 
backup force called upon one weekend a month and two weeks a year. 
However, as the Cold War melted away, so did much of our military. 
Active Duty numbers were reduced as our major threat, the Soviet Union, 
fell apart. Since this reduction in our Active Duty armed forces, the 
burden has fallen to the Reservists to ``pick up the slack.''
  Unlike any other time in our Nation's history, we now depend heavily 
on our Reserve component and have called on many of them to participate 
in major deployments, including Operation Enduring Freedom and 
Operation Iraqi Freedom. These deployments frequently necessitate 
extended tours of duty, many of them exceeding twelve months, for these 
citizen-soldiers.
  These long tours and frequent activations have a profound and 
disruptive effect on the lives of these men and women and on the lives 
of their families and loved ones. Many of our reservists suffer a 
significant loss of income when they are mobilized--forcing them to 
leave often higher paying civilian jobs to serve their country. Such 
losses can be compounded by additional family expenses associated with 
military activation, including the cost of long distance phone calls 
and the need for

[[Page S1632]]

additional child care. These circumstances create a serious financial 
burden that is extremely difficult for reservists' families to manage. 
We can and should do more to alleviate this financial burden.
  Previously, 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 in the mid-
1990s. 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 
even though the Reserve Forces Policy Board has sighted income 
protection as one of its top recommendations.
  It is critical that we find another way to deal with the issue. 
Therefore, Senator Dorgan and I have proposed the Military Reserve 
Mobilization Income Security Act. This legislation would provide a 
completely refundable income tax credit of up to $20,000 annually to a 
military reservist called to active duty. The amount of the tax credit 
would be based upon the difference between wages paid by the 
reservist's civilian job and the military wages paid upon mobilization. 
The tax credit would be available to members of the National Guard or 
Ready Reserve who are serving for more than 90 days and would vary 
according to their length of service.
  Now is the time to recognize the service and sacrifice of the men and 
women who are in the Reserves. At a time when the Nation is once again 
calling them to active duty to execute the war in Iraq, fight the War 
on Terrorism, and to defend our homeland it is imperative that Congress 
recognize the vital role these soldiers play within our military and 
acknowledge that the success of our military depends on these troops.
  I believe that what Senator Dorgan and I are doing with this bill is 
the least we can do for these men and women and their families. It is 
not too much to ask of our Nation and more importantly, it is the right 
thing to do.
                                 ______