[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Senate]
[Pages 2623-2643]
[From the U.S. Government Publishing Office, www.gpo.gov]




 SOLDIERS', SAILORS', AIRMEN'S AND MARINES' BILL OF RIGHTS ACT OF 1999

  The PRESIDING OFFICER. Under the previous order, the Senate will now

[[Page 2624]]

proceed to the consideration of S. 4 for debate only.
  The clerk will report the bill.
  The legislative clerk read as follows:

       A bill (S. 4) to improve pay and retirement equity for 
     members of the Armed Forces, and for other purposes.

  The Senate proceeded to consider the bill which had been reported 
from the Committee on Armed Services, with an amendment to strike all 
after the enacting clause and inserting in lieu thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Soldiers', Sailors', 
     Airmen's, and Marines' Bill of Rights Act of 1999''.

                      TITLE I--PAY AND ALLOWANCES

     SEC. 101. FISCAL YEAR 2000 INCREASE AND RESTRUCTURING OF 
                   BASIC PAY.

       (a) Waiver of Section 1009 Adjustment.--Any adjustment 
     required by section 1009 of title 37, United States Code, in 
     the rates of monthly basic pay authorized members of the 
     uniformed services by section 203(a) of such title to become 
     effective during fiscal year 2000 shall not be made.
       (b) January 1, Increase in Basic Pay.--Effective on January 
     1, 2000, the rates of monthly basic pay for members of the 
     uniformed services shall be increased by 4.8 percent.
       (c) Basic Pay Reform.--(1) Effective on July 1, 2000, the 
     rates of monthly basic pay for members of the uniformed 
     services within each pay grade are as follows:
       

                        COMMISSIONED OFFICERS \1\
 Years of service computed under section 205 of title 37, United States
                                  Code
------------------------------------------------------------------------
    Pay Grade     2 or less    Over 2     Over 3     Over 4     Over 6
------------------------------------------------------------------------
O-10 \2\........      $0.00      $0.00      $0.00      $0.00       $0.00
O-9.............       0.00       0.00       0.00       0.00        0.00
O-8.............   6,594.30   6,810.30   6,953.10   6,993.30    7,171.80
O-7.............   5,479.50   5,851.80   5,851.50   5,894.40    6,114.60
O-6.............   4,061.10   4,461.60   4,754.40   4,754.40    4,772.40
O-5.............   3,248.40   3,813.90   4,077.90   4,127.70    4,291.80
O-4.............   2,737.80   3,333.90   3,556.20   3,606.04    3,812.40
O-3 \3\.........   2,544.00   2,884.20   3,112.80   3,364.80    3,525.90
O-2 \3\.........   2,218.80   2,527.20   2,910.90   3,000.00    3,071.10
O-1 \3\.........   1,926.30   2,004.90   2,423.10   2,423.10    2,423.10
                 -------------------------------------------------------
                    Over 8    Over 10    Over 12    Over 14     Over 16
                 -------------------------------------------------------
O-10 \2\........      $0.00      $0.00      $0.00      $0.00       $0.00
O-9.............       0.00       0.00       0.00       0.00        0.00
O-8.............   7,471.50   7,540.80   7,824.60   7,906.20    8,150.10
O-7.............   6,282.00   6,475.80   6,669.00   6,863.10    7,471.50
O-6.............   4,976.70   5,004.00   5,004.00   5,169.30    5,791.20
O-5.............   4,291.80   4,420.80   4,659.30   4,971.90    5,286.00
O-4.............   3,980.40   4,251.50   4,464.00   4,611.00    4,758.90
O-3 \3\.........   3,702.60   3,850.20   4,040.40   4,139.10    4,139.10
O-2 \3\.........   3,071.10   3,071.10   3,071.10   3,071.10    3,071.10
O-1 \3\.........   2,423.10   2,423.10   2,423.10   2,423.10    2,423.10
                 -------------------------------------------------------
                   Over 18    Over 20    Over 22    Over 24     Over 26
                 -------------------------------------------------------
O-10 \2\........      $0.00  $10,655.1  $10,707.6  $10,930.2  $11,318.40
                                     0          0          0
O-9.............       0.00   9,319.50   9,453.60   9,647.70    9,986.40
O-8.............   8,503.80   8,830.20   9,048.00   9,048.00    9,048.00
O-7.............   7,985.40   7,985.40   7,985.40   7,985.40    8,025.60
O-6.............   6,086.10   6,381.30   6,549.00   6,719.10    7,049.10
O-5.............   5,436.00   5,583.60   5,751.90   5,751.90    5,751.90
O-4.............   4,808.70   4,808.70   4,808.70   4,808.70    4,808.70
O-3 \3\.........   4,139.10   4,139.10   4,139.10   4,139.10    4,139.10
O-2 \3\.........   3,071.10   3,071.10   3,071.10   3,071.10    3,071.10
O-1 \3\.........   2,423.10   2,423.10   2,423.10   2,423.10   2,423.10
------------------------------------------------------------------------
\1\ Basic pay for these officers is limited to the rate of basic pay for
  level V of the Executive Schedule.
\2\ While serving as Chairman or Vice Chairman of the Joint Chiefs of
  Staff, Chief of Staff of the Army, Chief of Naval Operations, Chief of
  Staff of the Air Force, Commandant of the Marine Corps, or Commandant
  of the Coast Guard, basic pay for this grade is calculated to be
  $12,441.00, regardless of cumulative years of service computed under
  section 205 of title 37, United States Code. Nevertheless, basic pay
  for these officers is limited to the rate of basic pay for level V of
  the Executive Schedule.
\3\ Does not apply to commissioned officers who have been credited with
  over 4 years of active duty service as an enlisted member or warrant
  officer.


  COMMISSIONED OFFICERS WITH OVER 4 YEARS OF ACTIVE DUTY SERVICE AS AN
                   ENLISTED MEMBER OR WARRANT OFFICER
 Years of service computed under section 205 of title 37, United States
                                  Code
------------------------------------------------------------------------
    Pay Grade     2 or less    Over 2     Over 3     Over 4     Over 6
------------------------------------------------------------------------
O-3E \4\........      $0.00      $0.00      $0.00  $3,364.80   $3,525.90
O-2E \4\........       0.00       0.00       0.00   3,009.00    3,071.10
O-1E \4\........       0.00       0.00       0.00   2,423.10    2,588.40
                 -------------------------------------------------------
                    Over 8    Over 10    Over 12    Over 14     Over 16
                 -------------------------------------------------------
O-3E \4\........  $3,702.60  $3,850.20  $4,040.40  $4,200.30   $4,291.80
O-2E \4\........   3,168.60   3,333.90   3,461.40   3,556.20    3,556.20
O-1E \4\........   2,683.80   2,781.30   2,877.60   3,009.00    3,009.00
                 -------------------------------------------------------
                   Over 18    Over 20    Over 22    Over 24     Over 26
                 -------------------------------------------------------
O-3E............  $4,416.90  $4,416.90  $4,416.90  $4,416.90   $4,416.90
O-2E............   3,556.20   3,556.20   3,556.20   3,556.20    3,556.20
O-1E............   3,009.00   3,009.00   3,009.00   3,009.00   3,009.00
------------------------------------------------------------------------
\4\ While serving as Sergeant Major of the Army, Master Chief Petty
  Officer of the Navy, Chief Master Sergeant of the Air Force, Sergeant
  Major of the Marine Corps, or Master Chief Petty Officer of the Coast
  Guard, basic pay for this grade is $4,701.00, regardless of cumulative
  years of service computed under section 205 of title 37, United States
  Code.
\5\ In the case of members in the grade E-1 who have served less than 4
  months on active duty, basic pay is $930.30.



                            WARRANT OFFICERS
 Years of service computed under section 205 of title 37, United States
                                  Code
------------------------------------------------------------------------
    Pay Grade     2 or less    Over 2     Over 3     Over 4     Over 6
------------------------------------------------------------------------
W-5.............      $0.00      $0.00      $0.00      $0.00       $0.00
W-4.............   2,592.00   2,788.50   2,868.60   2,947.50    3,083.40
W-3.............   2,355.90   2,555.40   2,555.40   2,588.40    2,694.30

[[Page 2625]]

 
W-2.............   2,063.40   2,232.60   2,232.60   2,305.80    2,423.10
W-1.............   1,719.00   1,971.00   1,971.00   2,135.70    2,232.60
                 -------------------------------------------------------
                    Over 8    Over 10    Over 12    Over 14     Over 16
                 -------------------------------------------------------
W-5.............      $0.00      $0.00      $0.00      $0.00       $0.00
W-4.............   3,217.20   3,352.80   3,485.10   3,622.20    3,753.60
W-3.............   2,814.90   2,974.20   3,071.10   3,177.00    3,298.20
W-2.............   2,555.40   2,852.60   2,749.80   2,844.30    2,949.00
W-1.............   2,332.80   2,433.30   2,533.20   2,634.00    2,734.80
                 -------------------------------------------------------
                   Over 18    Over 20    Over 22    Over 24     Over 26
                 -------------------------------------------------------
W-5.............      $0.00  $4,475.10  $4,628.70  $4,782.90   $4,937.40
W-4.............   3,888.00   4,019.00   4,155.60   4,289.70    4,427.10
W-3.............   3,418.50   3,539.10   3,659.40   3,780.00    3,900.90
W-2.............   3,058.40   3,163.80   3,270.90   3,378.30    3,378.30
W-1.............   2,835.00   2,910.90   2,910.90   2,910.90    2,910.90
------------------------------------------------------------------------


                            ENLISTED MEMBERS
 Years of service computed under section 205 of title 37, United States
                                  Code
------------------------------------------------------------------------
    Pay Grade     2 or less    Over 2     Over 3     Over 4     Over 6
------------------------------------------------------------------------
E-9 \4\.........      $0.00      $0.00      $0.00      $0.00       $0.00
E-8.............       0.00       0.00       0.00       0.00        0.00
E-7.............   1,765.80   1,927.80   2,001.00   2,073.00    2,147.70
E-6.............   1,518.90   1,678.20   1,752.60   1,824.30    1,899.30
E-5.............   1,332.60   1,494.00   1,566.00   1,640.40    1,714.50
E-4.............   1,242.90   1,373.10   1,447.20   1,520.10    1,593.90
E-3.............   1,171.50   1,260.60   1,334.10   1,335.90    1,335.90
E-2.............   1,127.40   1,127.40   1,127.40   1,127.40    1,127.40
E-1.............  \5\ 1,005   1,005.60   1,005.60   1,005.60    1,005.60
                        .60
                 -------------------------------------------------------
                    Over 8    Over 10    Over 12    Over 14     Over 16
                 -------------------------------------------------------
E-9 \4\.........      $0.00  $3,015.30  $3,083.40  $3,169.80   $3,271.50
E-8.............   2,528.40   2,601.60   2,669.70   2,751.60    2,840.10
E-7.............   2,220.90   2,294.10   2,367.30   2,439.30    2,514.00
E-6.............   1,973.10   2,047.20   2,118.60   2,191.50    2,244.60
E-5.............   1,789.50   1,861.50   1,936.20   1,936.20    1,936.20
E-4.............   1,593.90   1,593.90   1,593.90   1,593.90    1,593.90
E-3.............   1,335.90   1,335.90   1,335.90   1,335.90    1,335.90
E-2.............   1,127.40   1,127.40   1,127.40   1,127.40    1,127.40
E-1.............   1,005.60   1,005.60   1,005.60   1,005.60    1,005.60
                 -------------------------------------------------------
                   Over 18    Over 20    Over 22    Over 24     Over 26
                 -------------------------------------------------------
E-9 \4\.........  $3,373.20  $3,473.40  $3,609.30  $3,744.00   $3,915.80
E-8.............   2,932.50   3,026.10   3,161.10   3,295.50    3,483.60
E-7.............   2,588.10   2,660.40   2,787.60   2,926.20    3,134.40
E-6.............   2,283.30   2,283.30   2,285.70   2,285.70    2,285.70
E-5.............   1,936.20   1,936.20   1,936.20   1,936.20    1,936.20
E-4.............   1,593.90   1,593.90   1,593.90   1,593.90    1,593.90
E-3.............   1,335.90   1,335.90   1,335.90   1,335.90    1,335.90
E-2.............   1,127.40   1,127.40   1,127.40   1,123.20    1,127.40
E-1.............   1,005.60   1,005.60   1,005.60   1,005.60   1,005.60
------------------------------------------------------------------------
\4\ While serving as Sergeant Major of the Army, Master Chief Petty
  Officer of the Navy, Chief Master Sergeant of the Air Force, Sergeant
  Major of the Marine Corps, or Master Chief Petty Officer of the Coast
  Guard, basic pay for this grade is $4,701.00, regardless of cumulative
  years of service computed under section 205 of title 37, United States
  Code.
\5\ In the case of members in the grade E-1 who have served less than 4
  months on active duty, basic pay is $930.30.

     SEC. 102. PAY INCREASES FOR FISCAL YEARS AFTER FISCAL YEAR 
                   2000.

       (a) ECI+0.5 Percent Increase for All Members.--Section 
     1009(c) of title 37, United States Code, is amended to read 
     as follows:
       ``(c) ECI+0.5 Percent Increase for All Members.--Subject to 
     subsection (d), an adjustment taking effect under this 
     section during a fiscal year shall provide all eligible 
     members with an increase in the monthly basic pay by the 
     percentage equal to the sum of one percent plus the 
     percentage calculated as provided under section 5303(a) of 
     title 5 (without regard to whether rates of pay under the 
     statutory pay systems are actually increased during such 
     fiscal year under that section by the percentage so 
     calculated).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2000.

     SEC. 103. SPECIAL SUBSISTENCE ALLOWANCE.

       (a) Allowance.--(1) Chapter 7 of title 37, United States 
     Code, is amended by inserting after section 402 the following 
     new section:

     ``Sec. 402a. Special subsistence allowance

       ``(a) Entitlement.--Upon the application of an eligible 
     member of a uniformed service described in subsection (b), 
     the Secretary concerned shall pay the member a special 
     subsistence allowance for each month for which the member is 
     eligible to receive food stamp assistance.
       ``(b) Covered Members.--An enlisted member referred to 
     subsection (a) is an enlisted member in pay grade E-5 or 
     below.
       ``(c) Termination of Entitlement.--The entitlement of a 
     member to receive payment of a special subsistence allowance 
     terminates upon the occurrence of any of the following 
     events:
       ``(1) Termination of eligibility for food stamp assistance.
       ``(2) Payment of the special subsistence allowance for 12 
     consecutive months.
       ``(3) Promotion of the member to a higher grade.
       ``(4) Transfer of the member in a permanent change of 
     station.
       ``(d) Reestablished Entitlement.--(1) After a termination 
     of a member's entitlement to the special subsistence 
     allowance under subsection (c), the Secretary concerned shall 
     resume payment of the special subsistence allowance to the 
     member if the Secretary determines, upon further application 
     of the member, that the member is eligible to receive food 
     stamps.
       ``(2) Payments resumed under this subsection shall 
     terminate under subsection (c) upon the occurrence of an 
     event described in that subsection after the resumption of 
     the payments.
       ``(3) The number of times that payments are resumed under 
     this subsection is unlimited.
       ``(e) Documentation of Eligibility.--A member of the 
     uniformed services applying for the special subsistence 
     allowance under this section shall furnish the Secretary 
     concerned with such evidence of the member's eligibility for 
     food stamp assistance as the Secretary may require in 
     connection with the application.
       ``(f) Amount of Allowance.--The monthly amount of the 
     special subsistence allowance under this section is $180.

[[Page 2626]]

       ``(g) Relationship to Basic Allowance for Subsistence.--The 
     special subsistence allowance under this section is in 
     addition to the basic allowance for subsistence under section 
     402 of this title.
       ``(h) Food Stamp Assistance Defined.--In this section, the 
     term `food stamp assistance' means assistance under the Food 
     Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
       ``(i) Termination of Authority.--No special subsistence 
     allowance may be made under this section for any month 
     beginning after September 30, 2004.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by inserting after the item relating to section 
     402 the following:

``402a. Special subsistence allowance.''.

       (b) Effective Date.--Section 402a of title 37, United 
     States Code, shall take effect on the first day of the first 
     month that begins not less than 180 days after the date of 
     the enactment of this Act.
       (c) Annual Report.--(1) Not later than March 1 of each year 
     after 1999, the Secretary of Defense shall submit to Congress 
     a report setting forth the number of members of the uniformed 
     services who are eligible for assistance under the Food Stamp 
     Act of 1977 (7 U.S.C. 2011 et seq.).
       (2) In preparing the report, the Secretary shall consult 
     with the Secretary of Transportation (with respect to the 
     Coast Guard), the Secretary of Health and Human Services 
     (with respect to the commissioned corps of the Public Health 
     Service), and the Secretary of Commerce (with respect to the 
     commissioned officers of the National Oceanic and Atmospheric 
     Administration), who shall provide the Secretary of Defense 
     with any information that the Secretary determines necessary 
     to prepare the report.
       (3) No report is required under this section after March 1, 
     2004.

                     TITLE II--RETIREMENT BENEFITS

     SEC. 201. RETIRED PAY OPTIONS FOR PERSONNEL ENTERING 
                   UNIFORMED SERVICES ON OR AFTER AUGUST 1, 1986.

       (a) Reduced Retired Pay Only for Members Electing 15-Year 
     Service Bonus.--(1) Paragraph (2) of section 1409(b) of title 
     10, United States Code, is amended by inserting after ``July 
     31, 1986,'' the following: ``has elected to receive a bonus 
     under section 318 of title 37,''.
       (2)(A) Paragraph (2)(A) of section 1401a(b) of title 10, 
     United States Code, is amended by striking ``The Secretary 
     shall increase the retired pay of each member and former 
     member who first became a member of a uniformed service 
     before August 1, 1986,'' and inserting ``Except as otherwise 
     provided in this subsection, the Secretary shall increase the 
     retired pay of each member and former member''.
       (B) Paragraph (3) of such section 1401a(b) is amended by 
     inserting after ``August 1, 1986,'' the following: ``and has 
     elected to receive a bonus under section 318 of title 37,''.
       (3) Section 1410 of title 10, United States Code, is 
     amended by inserting after ``August 1, 1986,'' the following: 
     ``who has elected to receive a bonus under section 318 of 
     title 37,''.
       (b) Optional Lump-Sum Bonus at 15 Years of Service.--(1) 
     Chapter 5 of title 37, United States Code, is amended by 
     adding at the end the following new section:

     ``Sec. 318. Special pay: 15-year service bonus elected by 
       members entering on or after August 1, 1986

       ``(a) Payment of Bonus.--The Secretary concerned shall pay 
     a bonus to a member of a uniformed service who is eligible 
     and elects to receive the bonus under this section.
       ``(b) Eligibility for Bonus.--A member of a uniformed 
     service serving on active duty is eligible to receive a bonus 
     under this section if the member--
       ``(1) first became a member of a uniformed service on or 
     after August 1, 1986;
       ``(2) has completed 15 years of active duty in the 
     uniformed services; and
       ``(3) if not already obligated to remain on active duty for 
     a period that would result in at least 20 years of active-
     duty service, executes a written agreement (prescribed by the 
     Secretary concerned) to remain continuously on active duty 
     for five years after the date of the completion of 15 years 
     of active-duty service.
       ``(c) Election.--(1) A member eligible to receive a bonus 
     under this section may elect to receive the bonus. The 
     election shall be made in such form and within such period as 
     the Secretary concerned requires.
       ``(2) An election made under this subsection is 
     irrevocable.
       ``(d) Notification of Eligibility.--The Secretary concerned 
     shall transmit a written notification of the opportunity to 
     elect to receive a bonus under this section to each member 
     who is eligible (or upon execution of an agreement described 
     in subsection (b)(3), would be eligible) to receive the 
     bonus. The Secretary shall complete the notification within 
     180 days after the date on which the member completes 15 
     years of active duty. The notification shall include the 
     procedures for electing to receive the bonus and an 
     explanation of the effects under sections 1401a, 1409, and 
     1410 of title 10 that such an election has on the computation 
     of any retired or retainer pay which the member may become 
     eligible to receive.
       ``(e) Form and Amount of Bonus.--A bonus under this section 
     shall be paid in one lump sum of $30,000.
       ``(f) Time for Payment.--Payment of a bonus to a member 
     electing to receive the bonus under this section shall be 
     made not later than the first month that begins on or after 
     the date that is 60 days after the Secretary concerned 
     receives from the member an election that satisfies the 
     requirements imposed under subsection (c).
       ``(g) Repayment of Bonus.--(1) If a person paid a bonus 
     under this section fails to complete the total period of 
     active duty specified in the agreement entered into under 
     subsection (b)(3), the person shall refund to the United 
     States the amount that bears the same ratio to the amount of 
     the bonus payment as the unserved part of that total period 
     bears to the total period.
       ``(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 
     agreement under this section does not discharge the member 
     signing such agreement from a debt arising under the 
     agreement or this subsection.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by adding at the end the following new item:

``318. Special pay: 15-year service bonus elected by members entering 
              on or after August 1, 1986.''.

       (c) Conforming Amendments to Survivor Benefit Plan 
     Provisions.--(1) Section 1451(h)(3) of title 10, United 
     States Code, is amended by inserting ``of certain members'' 
     after ``retirement''.
       (2) Section 1452(i) of such title is amended by striking 
     ``When the retired pay'' and inserting ``Whenever the retired 
     pay''.
       (d) Related Technical Amendments.--(1) Section 1401a(b) of 
     title 10, United States Code, is amended--
       (A) by striking the heading for paragraph (1) and inserting 
     ``Increase required.--'';
       (B) by striking the heading for paragraph (2) and inserting 
     ``Percentage increase.--''; and
       (C) by striking the heading for paragraph (3) and inserting 
     ``Reduced percentage for certain post-august 1, 1986 
     members.--''.
       (2) Section 1409(b)(2) of title 10, United States Code, is 
     amended by inserting ``certain'' after ``Reduction applicable 
     to'' in the paragraph heading.
       (3)(A) The heading of section 1410 of such title is amended 
     by inserting ``certain'' before ``members''.
       (B) The item relating to such section in the table of 
     sections at the beginning of chapter 71 of title 10, United 
     States Code, is amended by inserting ``certain'' before 
     ``members''.

     SEC. 202. PARTICIPATION IN THRIFT SAVINGS PLAN.

       (a) Participation Authority.--(1)(A) Chapter 3 of title 37, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 211. Participation in Thrift Savings Plan

       ``(a) Authority.--A member of the uniformed services 
     serving on active duty for a period of more than 30 days may 
     participate in the Thrift Savings Plan in accordance with 
     section 8440e of title 5.
       ``(b) Rule of Construction Regarding Separation.--For the 
     purposes of section 8440e of title 5, the following actions 
     shall be considered separation of a member of the uniformed 
     services from Government employment:
       ``(1) Release of the member from active-duty service (not 
     followed by a resumption of active-duty service within 30 
     days after the effective date of the release).
       ``(2) Transfer of the member by the Secretary concerned to 
     a retired list maintained by the Secretary.''.
       (B) The table of sections at the beginning of such chapter 
     is amended by adding at the end the following:

``211. Participation in Thrift Savings Plan.''.

       (2)(A) Subchapter III of chapter 84 of title 5, United 
     States Code, is amended by adding at the end the following:

     ``Sec. 8440e. Members of the uniformed services on active 
       duty

       ``(a) Participation Authorized.--(1) A member of the 
     uniformed services authorized to participate in the Thrift 
     Savings Plan under section 211(a) of title 37 may contribute 
     to the Thrift Savings Fund.
       ``(2) An election to contribute to the Thrift Savings Fund 
     under paragraph (1) may be made only during a period provided 
     under section 8432(b) for individuals subject to this 
     chapter.
       ``(b) Applicability of Thrift Savings Plan Provisions.--
     Except as otherwise provided in this section, the provisions 
     of this subchapter and subchapter VII of this chapter shall 
     apply with respect to members of the uniformed services 
     making contributions to the Thrift Savings Fund as if such 
     members were employees within the meaning of section 
     8401(11).
       ``(c) Maximum Contribution From Basic Pay.--The amount 
     contributed by a member of the uniformed services for any pay 
     period out of basic pay may not exceed 5 percent of such 
     member's basic pay for such pay period.
       ``(d) Other Member Contributions.--A member of the 
     uniformed services making contributions to the Thrift Savings 
     Fund out of basic pay may also contribute (by direct transfer 
     to the Fund) any part of any special or incentive pay that 
     the member receives under section 308, 308a, 308f, or 318 of 
     title 37. No contribution made under this subsection shall be 
     subject to, or taken into account for purposes of, the first 
     sentence of section 8432(d), relating to the applicability of 
     any limitation under section 415 of the Internal Revenue Code 
     of 1986.

[[Page 2627]]

       ``(e) Agency Contributions Generally Prohibited.--Except as 
     provided in section 211(c) of title 37, no contribution under 
     section 8432(c) of this title may be made for the benefit of 
     a member of the uniformed services making contributions to 
     the Thrift Savings Fund under subsection (a).
       ``(f) Benefits and Elections of Benefits.--In applying 
     section 8433 to a member of the uniformed services who has an 
     account balance in the Thrift Savings Fund--
       ``(1) any reference in such section to separation from 
     Government employment shall be construed to refer to an 
     action described in section 211(b) of title 37; and
       ``(2) the reference in section 8433(g)(1) to contributions 
     made under section 8432(a) shall be treated as being a 
     reference to contributions made to the Fund by the member, 
     whether made under section 8351, 8432(a), or this section.
       ``(g) Basic Pay Defined.--For purposes of this section, the 
     term `basic pay' means basic pay that is payable under 
     section 204 of title 37.''.
       (B) The table of sections at the beginning of chapter 84 of 
     title 5, United States Code, is amended by adding after the 
     item relating to section 8440d the following:

``8440e. Members of the uniformed services on active duty.''.

       (3) Section 8432b(b) of title 5, United States Code, is 
     amended--
       (A) in paragraph (1), by striking ``Each employee'' and 
     inserting ``Except as provided in paragraph (4), each 
     employee'';
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3) the following new 
     paragraph (4):
       ``(4) No contribution may be made under this section for a 
     period for which an employee made a contribution under 
     section 8440e.''.
       (4) Section 8473 of title 5, United States Code, is 
     amended--
       (A) in subsection (a), by striking ``14 members'' and 
     inserting ``15 members''; and
       (B) in subsection (b)--
       (i) by striking ``14 members'' and inserting ``15 
     members'';
       (ii) by striking ``and'' at the end of paragraph (8);
       (iii) by striking the period at the end of paragraph (9) 
     and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(10) 1 shall be appointed to represent participants 
     (under section 8440e) who are members of the uniformed 
     services.''.
       (5) Paragraph (11) of section 8351(b) of title 5, United 
     States Code, is redesignated as paragraph (8).
       (b) Applicability.--The authority of members of the 
     uniformed services to participate in the Thrift Savings Plan 
     under section 211 of title 37, United States Code (as added 
     by subsection (a)(1)), shall take effect on July 1, 2000.
       (c) Regulations.--Not later than 180 days after the date of 
     the enactment of this Act, the Executive Director appointed 
     by the Federal Thrift Retirement Investment Board shall issue 
     regulations to implement section 8440e of title 5, United 
     States Code (as added by subsection (a)(2)) and section 211 
     of title 37, United States Code (as added by subsection 
     (a)(1)).

     SEC. 203. SPECIAL RETENTION INITIATIVE.

       Section 211 of title 37, United States Code, as added by 
     section 202, is amended by adding at the end the following:
       ``(c) Agency Contributions for Retention in Critical 
     Specialties.--(1) The Secretary concerned may enter into an 
     agreement with a member to make contributions to the Thrift 
     Savings Fund for the benefit of the member if the member--
       ``(A) is in a specialty designated by the Secretary as 
     critical to meet requirements (whether such specialty is 
     designated as critical to meet wartime or peacetime 
     requirements); and
       ``(B) commits in such agreement to continue to serve on 
     active duty in that specialty for a period of six years.
       ``(2) Under any agreement entered into with a member under 
     paragraph (1), the Secretary shall make contributions to the 
     Fund for the benefit of the member for each pay period of the 
     6-year period of the agreement for which the member makes a 
     contribution out of basic pay to the Fund under this section. 
     Paragraph (2) of section 8432(c) applies to the Secretary's 
     obligation to make contributions under this paragraph, except 
     that the reference in such paragraph to contributions under 
     paragraph (1) of such section does not apply.''.

                 TITLE III--MONTGOMERY GI BILL BENEFITS

     SEC. 301. INCREASE IN RATES OF EDUCATIONAL ASSISTANCE FOR 
                   FULL-TIME EDUCATION.

       (a) Increase.--Section 3015 of title 38, United States 
     Code, is amended--
       (1) in subsection (a)(1), by striking ``$528'' and 
     inserting ``$600''; and
       (2) in subsection (b)(1), by striking ``$429'' and 
     inserting ``$488''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 1999, and shall apply with 
     respect to educational assistance allowances paid for months 
     after September 1999. However, no adjustment in rates of 
     educational assistance shall be made under subsection (g) of 
     section 3015 of title 38, United States Code, for fiscal year 
     2000.

     SEC. 302. TERMINATION OF REDUCTIONS OF BASIC PAY.

       (a) Repeals.--(1) Section 3011 of title 38, United States 
     Code, is amended by striking subsection (b).
       (2) Section 3012 of such title is amended by striking 
     subsection (c).
       (3) The amendments made by paragraphs (1) and (2) shall 
     take effect on the date of the enactment of this Act and 
     shall apply to individuals whose initial obligated period of 
     active duty under section 3011 or 3012 of title 38, United 
     States Code, as the case may be, begins on or after such 
     date.
       (b) Termination of Reductions in Progress.--Any reduction 
     in the basic pay of an individual referred to in section 
     3011(b) of title 38, United States Code, by reason of such 
     section 3011(b), or of any individual referred to in section 
     3012(c) of such title by reason of such section 3012(c), as 
     of the date of the enactment of this Act shall cease 
     commencing with the first month beginning after such date, 
     and any obligation of such individual under such section 
     3011(b) or 3012(c), as the case may be, as of the day before 
     such date shall be deemed to be fully satisfied as of such 
     date.
       (c) Conforming Amendment.--Section 3034(e)(1) of title 38, 
     United States Code, is amended in the second sentence by 
     striking ``as soon as practicable'' and all that follows 
     through ``such additional times'' and inserting ``at such 
     times''.

     SEC. 303. ACCELERATED PAYMENTS OF EDUCATIONAL ASSISTANCE.

       Section 3014 of title 38, United States Code, is amended--
       (1) by inserting ``(a)'' before ``The Secretary shall 
     pay''; and
       (2) by adding at the end the following new subsection (b):
       ``(b)(1) When the Secretary determines that it is 
     appropriate to accelerate payments under the regulations 
     prescribed pursuant to paragraph (6), the Secretary may make 
     payments of basic educational assistance allowance under this 
     subchapter on an accelerated basis.
       ``(2) The Secretary may pay a basic educational assistance 
     allowance on an accelerated basis only to an individual 
     entitled to payment of the allowance under this subchapter 
     who has made a request for payment of the allowance on an 
     accelerated basis.
       ``(3) In the event an adjustment under section 3015(g) of 
     this title in the monthly rate of basic educational 
     assistance will occur during a period for which a payment of 
     an allowance is made on an accelerated basis under this 
     subsection, the Secretary shall--
       ``(A) pay on an accelerated basis the amount the allowance 
     otherwise payable under this subchapter for the period 
     without regard to the adjustment under that section; and
       ``(B) pay on the date of the adjustment any additional 
     amount of the allowance that is payable for the period as a 
     result of the adjustment.
       ``(4) The entitlement to a basic educational assistance 
     allowance under this subchapter of an individual who is paid 
     an allowance on an accelerated basis under this subsection 
     shall be charged at a rate equal to one month for each month 
     of the period covered by the accelerated payment of the 
     allowance.
       ``(5) A basic educational assistance allowance shall be 
     paid on an accelerated basis under this subsection as 
     follows:
       ``(A) In the case of an allowance for a course leading to a 
     standard college degree, at the beginning of the quarter, 
     semester, or term of the course in a lump-sum amount 
     equivalent to the aggregate amount of monthly allowance 
     otherwise payable under this subchapter for the quarter, 
     semester, or term, as the case may be, of the course.
       ``(B) In the case of an allowance for a course other than a 
     course referred to in subparagraph (A)--
       ``(i) at the later of (I) the beginning of the course, or 
     (II) a reasonable time after the request for payment by the 
     individual concerned; and
       ``(ii) in any amount requested by the individual concerned 
     up to the aggregate amount of monthly allowance otherwise 
     payable under this subchapter for the period of the course.
       ``(6) The Secretary shall prescribe regulations for 
     purposes of making payments of basic educational allowance on 
     an accelerated basis under this subsection. Such regulations 
     shall specify the circumstances under which accelerated 
     payments should be made and include requirements relating to 
     the request for, making and delivery of, and receipt and use 
     of such payments.''.

     SEC. 304. TRANSFER OF ENTITLEMENT TO EDUCATIONAL ASSISTANCE.

       (a) Authority To Transfer to Family Member.--Subchapter II 
     of chapter 30 of title 38, United States Code, is amended by 
     adding at the end the following new section:

     ``Sec. 3020. Transfer of entitlement to basic educational 
       assistance

       ``(a) The Secretary may, for the purpose of enhancing 
     recruiting and retention, and at the Secretary's sole 
     discretion, permit an individual entitled to educational 
     assistance under this subchapter to elect to transfer such 
     individual's entitlement to such assistance, in whole or in 
     part, to the individuals specified in subsection (b).
       ``(b) An individual's entitlement to educational assistance 
     may be transferred when authorized under subsection (a) as 
     follows:
       ``(1) To the individual's spouse.
       ``(2) To one or more of the individual's children.
       ``(3) To a combination of the individuals referred to in 
     paragraphs (1) and (2).
       ``(c)(1) An individual electing to transfer an entitlement 
     to educational assistance under this section shall--
       ``(A) designate the individual or individuals to whom such 
     entitlement is being transferred and

[[Page 2628]]

     the percentage of such entitlement to be transferred to each 
     such individual; and
       ``(B) specify the period for which the transfer shall be 
     effective for each individual designated under subparagraph 
     (A).
       ``(2) The aggregate amount of the entitlement transferable 
     by an individual under this section may not exceed the 
     aggregate amount of the entitlement of such individual to 
     educational assistance under this subchapter.
       ``(3) An individual electing to transfer an entitlement 
     under this section may elect to modify or revoke the transfer 
     at any time before the use of the transferred entitlement. An 
     individual shall make the election by submitting written 
     notice of such election to the Secretary.
       ``(d)(1) The use of any entitlement transferred under this 
     section shall be charged against the entitlement of the 
     individual making the transfer at the rate of one month for 
     each month of transferred entitlement that is used.
       ``(2) Except as provided in paragraph (3), an individual 
     using entitlement transferred under this section shall be 
     subject to the provisions of this chapter in such use as if 
     such individual were entitled to the educational assistance 
     covered by the transferred entitlement in the individual's 
     own right.
       ``(3) Notwithstanding section 3031 of this title, a child 
     shall complete the use of any entitlement transferred to the 
     child under this section before the child attains the age of 
     26 years.
       ``(e) In the event of an overpayment of educational 
     assistance with respect to an individual to whom entitlement 
     is transferred under this section, such individual and the 
     individual making the transfer under this section shall be 
     jointly and severally liable to the United States for the 
     amount of the overpayment for purposes of section 3685 of 
     this title.
       ``(f) The Secretary shall prescribe regulations for 
     purposes of this section. Such regulations shall specify the 
     manner and effect of an election to modify or revoke a 
     transfer of entitlement under subsection (c)(3).''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 3019 the following new item:

``3020. Transfer of entitlement to basic educational assistance.''.

                            TITLE IV--REPORT

     SEC. 401. ANNUAL REPORT ON EFFECTS OF INITIATIVES ON 
                   RECRUITMENT AND RETENTION.

       (a) Requirement for Report.--On December 1 of each year, 
     the Secretary of Defense shall submit to Congress a report 
     that sets forth the Secretary's assessment of the effects 
     that the provisions of this Act and the amendments made by 
     the Act are having on recruitment and retention of personnel 
     for the Armed Forces.
       (b) First Report.--The first report under this section 
     shall be submitted not later than December 1, 2000.

  Mr. WARNER. Madam President, my distinguished colleague and ranking 
member of the Senate Armed Services Committee desires to make a 
request.
  Mr. LEVIN. I thank my good friend from Virginia.


                         Privilege of the Floor

  Madam President, I ask unanimous consent that Gary Leeling of the 
Armed Services Committee staff be permitted privileges of the floor 
during debate on S. 4.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. Madam President, it is the intention of the Senator from 
Virginia, in his capacity as chairman of the Armed Services Committee, 
to make an opening statement regarding this very important piece of 
legislation. I shall be followed by my distinguished colleague, the 
ranking member, and then we ask other Members, particularly those on 
the committee, to join us in the Chamber such that we can, hopefully, 
this afternoon in a very material and constructive way, begin the 
Senate's deliberation on this absolutely critical piece of legislation.
  Today, the Senate begins consideration of S. 4, the Soldiers', 
Sailors', Airmen's and Marines' Bill of Rights Act of 1999. The bill is 
an integral part of the national security element of the Republican 
agenda, I might say, Madam President, that Senator Lott and other 
leaders announced in the January 19 timeframe of this year.
  Last fall, Senator Lott, in an excellent exchange of letters with the 
President and Republican chairmen, identified key problems with the 
military pay levels and the military pay system. Following this 
exchange of letters, the Armed Services Committee held hearings on 
September 29, 1998, and again on January 5, 1999, the first business 
this year, in which General Shelton and the service chiefs described 
the many problems--underline ``many''--military services are 
experiencing because of the years of shortfalls in funding.
  During these hearings, particular emphasis was put on readiness, the 
retention of highly trained people and the inability--very critical, 
Madam President--the inability today of the military services to 
achieve their recruiting goals; that is, the young men and young women 
in their very first step, often their first job, full-time job, they 
have ever had. We have experienced here in the past year substantial 
shortfalls, and one of the many purposes of this bill is to try to 
address that problem.
  I say with a great sense of pride that the Joint Chiefs, individually 
and collectively, showed great courage in their presentations both last 
September and again this January. They spoke candidly of the problems 
borne by the men and women in the military today and how increased 
defense funding was needed in order to begin to alleviate these serious 
problems. General Shelton and the service chiefs urged the President 
and the Congress to support a military pay raise that would begin to 
address the inequities between military pay and civilian wages and to 
resolve the inequity of what is known as the Redux retirement system.
  Senators Lott, McCain and Roberts took the initiative and showed 
leadership in developing early drafts of this legislation. These 
Senators worked within the Armed Services Committee to craft a bill 
that would address the problems identified by the Joint Chiefs in a 
comprehensive and responsible manner. When the Armed Services Committee 
reported this bill out on February 2, 1999, 18 of 20 members of that 
committee voted in favor of the bill. The two remaining members voted 
present, and we will hear from them. I don't say that by way of 
criticism. They have their own views. And one, of course, is my 
distinguished friend and colleague, the ranking member.
  S. 4 will provide military personnel a 4.8-percent pay raise on 
January 1, 2000, and will require that future military pay raises be 
based on the Annual Employment Costs Index plus one-half a percent. The 
bill restructures the military pay tables to recognize the value of 
promotions and to weight the pay raise toward mid-career, 
noncommissioned officers and officers where retention is most critical. 
The Joint Chiefs testified that there is a pay gap between military and 
private sector wages of approximately 14 percent. This bill moves 
aggressively to close this gap and ensure military personnel are 
compensated in an equitable manner.
  The bill provides military personnel who entered the service after 
July 1, 1986, the option to revert to the previous military retirement 
system that provided a 50-percent multiplier to their base pay averaged 
over their highest 3 years, and includes cost of living adjustments or 
to accept in the alternative a $30,000 bonus and remain under the Redux 
retirement system.
  The Joint Chiefs testified that the Redux retirement system is 
responsible for an increasing number of mid-career military personnel 
deciding to leave the service. S. 4 will offer these highly trained 
personnel an attractive incentive to continue to serve a full career.
  Now, Madam President, in total fairness on this, and to be very 
candid, there are differences of opinion on the manner in which this 
bill approaches the retirement system, both the 50 percent and the 
$30,000 bonus. General Shelton, in particular, has counseled me on 
several occasions in a very friendly and forthright way, expressing 
some of his concerns, and, indeed, he has written me on these points. 
So we are going to have to consider very carefully in the course of our 
floor deliberations here in the next few days exactly what those 
concerns are and is this bill drafted correctly.
  Now, to continue, we will establish a thrift savings plan that will 
allow service members to save up to 50 percent of their base pay before 
taxes and will permit them to directly deposit their enlistment and 
reenlistment bonuses into their thrift savings plan.
  In a separate section, the bill authorizes service Secretaries to 
match the thrift savings plan contributions of those service members 
serving in critical--and the operative word here is ``critical''--
specialties for a period of 6

[[Page 2629]]

years in return for a 6-year service commitment--those specialties, 
primarily high-tech specialties, which today are, in the job market, 
among the strongest committed to young people to come into the private 
sector. And the Department of Defense has to have a compensation 
package so that we can fairly compete with these offers from the 
private sector and to fairly treat those who have gone through this 
arduous period of technical training, to fairly treat them in 
recognition of their abilities in this high-tech arena. This is a 
powerful tool to assist the services in retaining key personnel in the 
most critical specialties.
  Senator McCain, on another part of this bill, was the key proponent 
of an initiative that would authorize a special subsistence allowance 
to assist the most needy junior military personnel who are eligible for 
food stamps under other programs. This allowance would provide those 
families an additional $180 a month and would reduce the number of 
military families on the food stamp rolls.
  Now, that is an important initiative likewise that will require a 
good deal of deliberation on this floor because there are some concerns 
about it in the Department of Defense. But I think it is a bold 
initiative and we don't want, to the extent we can avoid it, to have 
the young men and women of the Armed Forces having to rely on food 
stamps to support their families.
  During the markup of S. 4 in the Armed Services Committee, we 
incorporated several provisions from S. 169, a bill introduced by 
Senator Cleland and cosponsored by the Democratic members of the 
committee. The committee agreed to include a series of provisions that 
will enhance the current Montgomery GI bill benefit. These enhancements 
will eliminate the $1,200 annual cost-share by service members, will 
increase educational benefits payments, will permit monthly benefit 
payments to be paid in a lump sum at the beginning of a semester or 
schoolterm, and, finally, will at the discretion of the service 
Secretary permit the service member to transfer educational benefits to 
his or her dependents. Now, Madam President, if the Senate will indulge 
me in just a personal recollection, I am privileged to stand here as a 
U.S. Senator from Virginia I think solely as a consequence of my very 
modest active duty in the closing months of World War II, and then once 
again during the Korean service. That modest service of active duty 
enabled me to have the GI bill, which gave me, first, my degree in 
general engineering, followed then, for service in the Korean conflict, 
by a degree in law. So this Senator wants to support in every way the 
same opportunities that were accorded to me, which enabled me to 
achieve the goals that I set for myself, for this next generation. So I 
salute Senator Cleland and I hope we can find a means to finance this 
very important initiative by this extraordinary soldier, citizen, and 
now Senator from the great State of Georgia.
  I want to make it clear to my colleagues that enhancing Montgomery GI 
bill benefits is a matter before the committee and we have so notified 
the committee. The Armed Services Committee included these legislative 
provisions, which were recommended in the recent report of the 
Commission on Service Members and Veterans Transition Assistance, 
because these increased benefits will certainly be strong incentives 
for continued military service. I am confident that Senator Specter 
and, indeed, Senator Rockefeller and others will bring to the attention 
of the Senate in these few days of deliberation their views on this 
part of my bill.
  When the Armed Services Committee reported S. 4 to the Senate, the 
CBO cost estimate was not available. I have now received the estimate 
for S. 4 from the Congressional Budget Office, and I ask unanimous 
consent that this last estimate be made part of the Record, together 
with an analysis made by our own staff which in many ways simplifies 
the comprehensive report of this important piece of work.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                Washington, DC, February 12, 1999.
     Hon. John W. Warner,
     Chairman, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 4, the Soldiers', 
     Sailors', Airmen's, and Marines' Bill of Rights Act of 1999.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                                Barry B. Anderson,
                                   (For Dan L. Crippen, Director).
       Enclosure.

               Congressional Budget Office Cost Estimate


s. 4--soldiers', sailors', airmen's, and marines' bill of rights act of 
                                  1999

       Summary: S. 4 would increase various elements of 
     compensation for current and former members of the armed 
     forces. Specifically, it would increase pay for military 
     personnel, provide a special allowance for low-income 
     members, increase retirement benefits for certain members, 
     increase educational benefits, and allow members on active 
     duty to participate in the Thrift Savings Plan.
       Assuming appropriation of the necessary amounts, enactment 
     of the bill would raise discretionary spending by about $1.1 
     billion in 2000 and $13.8 billion over the 2000-2004 period. 
     In 2009, those costs would total about $6.5 billion. Because 
     the increase in retirement benefits would apply only to 
     members who entered the service after July 1986, annual costs 
     would continue to rise for a few years after 2009. Additional 
     benefits earned under the proposal between August 1, 1986, 
     and the effective date would add about $4.5 billion to the 
     unfunded liability of the military retirement trust fund.
       Because the bill would affect direct spending and revenues, 
     pay-as-you-go procedures would apply. Increased educational 
     benefits and higher annuities for certain military retirees 
     would increase direct spending by about $765 million a year 
     over the 2000-2004 period. In 2009 direct spending costs 
     would total about $2.6 billion. The annual direct spending 
     costs for military retirement would eventually be about 11 
     percent higher than spending under current law. Greater use 
     of education benefits under the bill would raise long-run 
     costs by about $3 billion a year. By allowing servicemembers 
     to participate in the Thrift Savings Plan, the bill would 
     lower revenues by $311 million over the 2000-2004 period and 
     about $141 million by 2009.
       Section 4 of the Unfunded Mandates Reform Act excludes from 
     the application of that act any legislative provisions that 
     are necessary for the national security. That exclusion might 
     apply to the provisions of this bill. In any case, the bill 
     contains no intergovernmental or private-sector mandates.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of S. 4 is shown in Table 1, assuming that 
     the bill will be enacted by October 1, 1999. Spending from 
     the bill would fall under budget functions 700 (veterans' 
     benefits and services), 050 (national defense), and 600 
     (income security).

                                TABLE 1.--ESTIMATED COSTS OF S. 4, AS REPORTED BY THE SENATE COMMITTEE ON ARMED SERVICES
                                                        [By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              DIRECT SPENDING AND REVENUES
 
Proposed Changes:
    Estimated Budget Authority......................       537       599       870       887       927     1,108     1,435     1,940     2,270     2,633
    Estimated Outlays...............................       537       599       870       887       927     1,108     1,435     1,940     2,270     2,633
    Revenues........................................       -10       -44       -67       -86      -103      -113      -120      -127      -134      -141
 
                                                           SPENDING SUBJECT TO APPROPRIATIONS
 
Proposed Changes:
    Estimated Authorization Level...................     1,089     2,196     3,118     3,505     3,980     4,373     4,852     5,422     5,952     6,548
    Estimated Outlays...............................     1,075     2,164     3,103     3,487     3,963     4,354     4,832     5,400     5,928     6,520
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 2630]]

       Basis of estimate: The budgetary impact of the bill would 
     stem from three sets of provisions: those affecting military 
     retirement programs, pay of current members, and veterans' 
     education. Table 2 shows the costs of provisions affecting 
     military pay and retirement benefits that would raise direct 
     spending, lower revenues, and raise discretionary costs to 
     the Department of Defense (DoD). Table 3 shows the increase 
     in direct spending that would result from provisions raising 
     veterans' education benefits.

          TABLE 2.--ESTIMATED COSTS OF PROVISIONS AFFECTING MILITARY COMPENSATION IN S.4, AS REPORTED BY THE SENATE COMMITTEE ON ARMED SERVICES
                                                    [Outlays by fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Category                     1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            SPENDING SUBJECT OF APPROPRIATION
 
Spending Under Current Law for Military       70,367    73,005    68,472    70,590    70,633    70,633    73,033    70,633    68,233    70,633    70,633
 Personnel \1\............................
                                           =============================================================================================================
Proposed Changes:
    Retirement Benefits...................         0       674       862     1,437     1,453     1,541     1,550     1,597     1,709     1,760     1,767
    Retention Initiative..................         0         2         7        15        23        28        31        33        35        37        39
    Pay Increases.........................         0       386     1,269     1,625     1,985     2,368     2,773     3,202     3,656     4,131     4,714
    Subsistence Allowance.................         0        13        26        26        26        26         0         0         0         0         0
                                           -------------------------------------------------------------------------------------------------------------
      Subtotal............................         0     1,075     2,164     3,103     3,487     3,963     4,354     4,832     5,400     5,928     6,520
                                           =============================================================================================================
Spending Under S. 4 for Military Personnel    70,367    74,080    70,636    73,693    74,120    74,596    77,387    74,465    73,633    76,561    77,153
 \1\......................................
 
                                                                     DIRECT SPENDING
 
                                                                  Retirement Annuities
 
Spending Under Current Law................    31,935    32,884    33,887    34,871    34,956    37,026    38,125    39,233    40,360    41,500    42,657
Proposed Changes..........................         0         1         1         2         2         3         3         5        25        66       125
Spending Under S. 4.......................    31,935    32,885    33,888    34,873    35,958    37,029    38,128    39,238    40,385    41,566    42,782
 
              Food Stamps
 
Spending Under Current Law................    20,730    21,399    22,431    23,251    23,913    24,629    25,303    26,005    26,715    27,426    28,152
Proposed Changes..........................         0        -3        -5        -5        -5        -5         0         0         0         0         0
Spending Under S. 4.......................    20,730    21,396    22,426    23,246    23,908    24,624    25,303    26,005    26,715    27,426    28,152
 
                                                                        REVENUES
 
Thrift Savings Plan.......................         0       -10       -44       -67       -86      -103      -113      -120      -127      -134      -141
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The 1999 level is the estimated spending from amounts appropriated for 1999 and prior years. The current law amounts for 2000-2009 assume that
  appropriations remain at the 1999 Level. If they are adjusted for inflation, the base amounts would rise by about $2,500 million per year, but the
  estimated changes would remain as shown.
 
Sources: Congressional Budget Office and Joint Committee on Taxation.

     Retirement benefits
       S. 4 contains provisions that would allow current members 
     to participate in the Thrift Savings Plan and increase 
     retirement benefits for members who entered the service after 
     July 31, 1986, and are covered under the system known as 
     REDUX.
       Background. The Military Retirement Reform Act of 1986 
     (REDUX) governs the retirement of military personnel who 
     initially entered the armed forces after July 31, 1986. Under 
     REDUX a retiree's initial annuity ranges from 40 percent to 
     75 percent of the individual's highest three years of basic 
     pay. Retirees with 20 years of service will receive 40 
     percent, and the fraction will grow with each additional year 
     of service and reach the maximum at 30 years of service. When 
     the retiree is 62 years old, the annuity is raised in most 
     cases to equal 2.5 percent of the average of the highest 36 
     months of basic pay for each year of service up to maximum of 
     75 percent. Also, under REDUX cost-of-living adjustments 
     (COLAs) equal the change in the Consumer Price Index (CPI) 
     less 1 percentage point. However, when the retiree reaches 
     age 62 the annuity is raised to reflect all of the CPI growth 
     until that point, but thereafter annual COLAs continue to 
     equal the CPI less one percentage point.
       Current law provides two different formulas for other 
     individuals who become eligible for nondisability retirement 
     benefit but are not covered by REDUX. Military personnel who 
     first became members of the armed forces before September 8, 
     1980, receive retired pay equal to a multiple of their 
     highest amount of basic pay; the multiple is 2.5 percent for 
     every year of service up to 75 percent. Retirees who first 
     became members of the armed forces between September 8, 1980, 
     and July 31, 1986, receive retired pay based on the average 
     of the highest 36 months of basic pay and the multiplier of 
     2.5 percent for each year of service. Annuities for both of 
     these groups are fully adjusted for changes in the CPI.
       Repeal of REDUX/Optional Lump-Sum Bonus. Under section 201, 
     members who under current law would retire under REDUX would 
     face a choice upon reaching 15 years of service. They could 
     elect to receive a lump-sum bonus of $30,000 and retire under 
     the REDUX plan or they could forgo that payment and upon 
     retirement receive annuities under the plan in effect for 
     retirees who first became members of the armed forces between 
     September 8, 1980, and July 31, 1986. CBO estimates that 
     total costs to DoD under the provision would total about $674 
     million in 2000 and average about $1.4 billion a year through 
     2009.
       Accrual Costs. Prior to 2009 the primary budgetary impact 
     would stem from the payments that DoD would make to the 
     military retirement trust fund. The military retirement 
     system is financed in part by payments from appropriated 
     funds to the military retirement trust fund based on an 
     estimate of the system's accruing liabilities. Repealing 
     REDUX would increase payments from the military personnel 
     accounts to the military retirement fund (a DoD outlay in 
     budget function 050) to finance the increased liability to 
     the fund resulting from additional years of service under a 
     more generous system.
       CBO estimates that the resulting increase in discretionary 
     spending from the accrual payments would average about $0.8 
     billion by 2004 and about $1.0 billion over the next 10 
     years. The costs to DoD would increase each year because not 
     all military personnel are covered by REDUX. Under current 
     law the percentage of the force covered by REDUX will grow 
     until everyone in the force will have entered military 
     service after July 31, 1986.
       Accrual costs depend on many factors, including 
     endstrengths, projected years of service at the time of 
     retirement, grade structure or salary history, and projected 
     rates of military pay raises, inflation, and interest rates. 
     CBO's assumptions are consistent with the ones used recently 
     by DoD's actuaries. The estimates also assume that in the 
     long run annual pay raises are 4.0 percent, changes in the 
     CPI are 3.5 percent a year, and interest rates for the trust 
     fund's holdings of Treasury securities are 6.5 percent 
     annually. CBO's assumptions about how many individuals would 
     choose lump-sum payments instead of a higher retirement 
     annuity are explained in the following paragraph.
       Lump-sum Payments. In addition, CBO estimates that DoD 
     would spend about $500 million a year for the lump-sum 
     payments, assuming that 50 percent of enlisted personnel and 
     about 40 percent of officers would elect to receive the lower 
     annuity in retirement. That estimate is based on DoD's 
     experience under two buy-out programs in recent years. The 
     Voluntary Separation Incentive (VSI) and the Special 
     Separation Benefit (SSB) were two programs that DoD used 
     extensively during the 1992-1996 period. VSI was a payment 
     over a period of years, and SSB was a lump-sum payment that 
     had a lower present value than VSI. About 86 percent of 
     enlisted personnel selected SSB, and about half of the 
     officers did. Because the present value of forgoing the 
     annuity reduction under REDUX is significantly greater than 
     $30,000 and because that difference tends to be greater than 
     the difference between VSI and SSB, CBO assumes that smaller 
     fractions of officers and enlisted personnel would opt for 
     the lump-sum payment than chose SSB. The members who would be 
     affected by this provision entered service in 1986; thus, 
     they would not be eligible for the lump-sum payment until 
     2001.
       Direct Spending Under Section 201. Section 201 would also 
     increase direct spending from the military retirement trust 
     fund by $1 million in 2000 and by about $233 million over the 
     2000-2009 period. The outlay impact before 2006 is primarily 
     due to higher cost-of-living allowances for individuals who 
     receive a disability annuity. Starting in 2006 the impact is 
     almost all due to regular retirements. In the long run, 
     direct spending for military retirement would be about 11 
     percent higher than under current law.
       Thrift Savings Plan. Section 202 would allow members of the 
     uniformed services on active duty for a period of more than 
     30 days to participate in the Thrift Savings Plan (TSP). 
     Contributions would be capped at 5.0

[[Page 2631]]

     percent of basic pay plus any part of special or incentive 
     pay that a member receives. The Joint Committee on Taxation 
     estimates that the revenue loss caused by deferred income tax 
     payments would total $10 million in 2000, $103 million in 
     2004, and about $141 million by 2009.
       Special Retention Initiative. Under section 203, the 
     Secretary of Defense could make additional contributions to 
     TSP for military personnel in designated occupational 
     specialties or as part of an agreement for an extended term 
     of service. CBO estimates that the discretionary costs from 
     the resulting agency contributions to TSP would total $2 
     million in 2000 and would increase to $28 million by 2004, 
     based on DoD's use of similar authority to award bonuses for 
     enlistment or reenlistment.
     Compensation of military personnel
       S. 4 contains two sets of provisions that would affect 
     compensation for those currently serving in the military. One 
     would increase annual pay raises and change the table 
     governing pay according to grade and years of service. The 
     other would increase compensation to members who would 
     otherwise be eligible for food stamps.
       Pay Increases. Sections 101 and 102 contain provisions that 
     would provide across-the-board and targeted pay raises. 
     Across-the-board pay raises would be a total of 4.8 percent 
     in 2000 and 0.5 percent above the Employment Cost Index (ECI) 
     in future years. Because those raises would be 0.5 percent 
     above the full ECI raise called for in current law, CBO 
     estimates that incremental cost would be about $197 million 
     in 2000 and average about $1.7 billion over the 2000-2009 
     period. The estimate is based on current projections of 
     military strength levels and its distribution by pay grade.
       Additional pay raises would be targeted at personnel in 
     specific grades and with certain years of service. The 
     changes to the military pay table would increase basic pay by 
     about $189 million in 2000 and an average of about $860 
     million annually over the 2000-2009 period, based on the pay 
     schedule and pay raises specified in the bill as well as 
     current projections of military strength levels and its 
     distribution by pay grade.
       Special Subsistence Allowance. Section 103 would create a 
     new allowance through 2004 for military personnel who qualify 
     for food stamps. Eligibility for the allowance would 
     terminate if the member no longer qualified for food stamps 
     due to promotions, pay increases, or transfer to a different 
     duty station. In addition, a member would not be eligible for 
     the allowance after receiving it for 12 consecutive months, 
     although they would be able to reapply. CBO estimates that 
     the allowance would increase personnel costs by roughly $13 
     million in 2000 and $26 million annually through 2004, based 
     on information from DoD on the number of military personnel 
     who currently receive food stamps.
       CBO estimates that most of the 11,000 personnel in grades 
     E-5 or below will remain on food stamps and apply for the 
     special subsistence allowance. However, the additional $180 
     of monthly income would replace the average household's 
     monthly food stamp benefit by $54, resulting in savings of 
     about $7 million each year in the Food Stamp program over the 
     2001-2004 period. The special subsistence allowance might 
     also serve as an incentive for eligible but nonparticipating 
     military personnel to apply for food stamps. CBO estimated 
     that 1,500 additional service members who participate in the 
     Food Stamp program in an average month at an annual cost of 
     $2 million. Thus, this provision is estimated to result in a 
     net savings to the Food Stamp program of $3 million in 2000 
     and $5 million each year over the 2001-2004 period.
     Veterans' readjustment benefits
       As shown in Table 3, the bill contains four provisions that 
     would raise direct spending for veterans' readjustment 
     benefits, specifically the Montgomery GI Bill (MGIB).
       Rates of Assistance. Section 301 would raise the rate of 
     educational assistance to certain veterans with service on 
     active duty. Participating veterans who served at least three 
     years on active duty would receive as much as $600 a month 
     instead of $528 a month as under current law. Similar 
     veterans with at least two years of active duty would be 
     eligible for a maximum benefit of $488 a month, an increase 
     of $59 dollars a month. Under section 301, the cost-of-living 
     allowance scheduled for 2000 would not occur. CBO estimates 
     that this provision would increase direct spending by over 
     $100 million a year over the next 10 years, based on current 
     rates of participation in this program.
       Termination of Member Contributions. Section 302 would 
     eliminate the contribution that MGIB participants pay under 
     current law. Unless members elect not to participate in the 
     MGIB, current law requires a contribution of $1,200 toward 
     the program. Based on current rates of participation, which 
     is nearly universal, CBO estimates that this provision would 
     result in forgone receipts of about $195 million a year.
       Accelerated Payments. Section 303 would permit veterans to 
     receive a lump-sum payment for benefits they would receive 
     monthly over the term of their training, for example, a 
     semester in college or the period of a course's instruction 
     for other forms of training. CBO estimates that this 
     provision would increase direct spending in 2000 by about 
     $134 million and by about $27 million in 2001. Increased 
     costs would occur initially as payments from one fiscal year 
     are made in the preceding year. There would be no net effect 
     in subsequent years because in a given year payments shifted 
     to the preceding year would be offset by payments shifted 
     from the following year. CBO estimates that about 50 percent 
     of MGIB beneficiaries would elect to receive an accelerated 
     payment in 2000 and that a total of 60 percent would make 
     that election in 2001 and later years. The estimate is also 
     based on current rates of participation in this program.

    TABLE 3.--ESTIMATED COSTS OF PROVISIONS AFFECTING VETERANS' READJUSTMENT BENEFITS IN S. 4, AS REPORTED BY THE SENATE COMMITTEE ON ARMED SERVICES
                                                    [Outlays by fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Category                     1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     DIRECT SPENDING
 
Spending Under Current Law for Veterans'       1,374     1,366     1,372     1,385     1,397     1,400     1,405     1,411     1,424     1,446     1,472
 Readjustment Benefits....................
                                           =============================================================================================================
Proposed Changes:
    Rates of Assistance...................         0        98       100       101       103       104       105       106       108       110       113
    Member Contributions..................         0       197       195       195       195       195       195       195       195       195       195
    Accelerated Payments..................         0       134        27         0         0         0         0         0         0         0         0
    Transfer of Entitlement...............         0       110       281       577       592       630       805     1,129     1,612     1,899     2,200
                                           -------------------------------------------------------------------------------------------------------------
      Subtotal--Proposed Changes..........         0       539       603       873       890       929     1,105     1,430     1,915     2,204     2,508
                                           =============================================================================================================
Spending Under S. 4 for Veterans'              1,374     1,905     1,975     2,258     2,287     2,329     2,510     2,841     3,339     3,650     3,980
 Readjustment Benefits....................
--------------------------------------------------------------------------------------------------------------------------------------------------------

       Transfer of Entitlement. Section 304 would provide DoD with 
     the authority to allow military personnel to transfer their 
     entitlement to MGIB benefits to any combination of spouse and 
     children. CBO expects that DoD would use the authority in 
     2000 to enhance recruiting and retention and that the benefit 
     would be limited to current members of the armed forces and 
     those who might join for the first time. Over the first five 
     years almost all of the estimated costs would stem from 
     transfers to spouses, who would tend to train on a part-time 
     basis. Transfers to members' children are estimated to begin 
     in 2004, and spending for children's education would account 
     for more than half of the program's cost beginning in 2006. 
     CBO estimates that the provision would raise costs by about 
     $110 million in 2000, about $2.2 billion over the first five 
     years, and about $9.8 billion over the 2000-2009 period. In 
     the long run, costs would rise to about $3 billion a year. If 
     the benefit were awarded to current veterans. CBO estimates 
     that the costs would be a couple of billion dollars higher 
     over the 2000-2009 period.
       CBO assumes that about 35 percent of all MGIB participants 
     would transfer their entitlement to their spouses and 
     children. Currently, about half of all MGIB participants do 
     not use their benefits, thus about 70 percent of the 
     remaining half are expected to transfer it. CBO estimates 
     that about a third of the transfers would be to spouses and 
     that eventually about 200,000 spouses each year would receive 
     a benefit for part-time training, averaging about $2,700 in 
     fiscal year 2000. CBO estimates that in the long run over 
     500,000 children of members or former members would use the 
     educational assistance each year but that level would not be 
     reached until about 2013. Full-time students would receive 
     about $5,400 in 2000 under the bill.
       Pay-as-you-go considerations: Section 252 of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 sets up pay-
     as-you-go procedures for legislation affecting direct 
     spending or receipts. The net changes in outlays and 
     governmental receipts that are subject to pay-as-you-go 
     procedures are shown in the following table. For the purposes 
     of enforcing pay-as-you-go procedures, only the effects in 
     the current year, the budget year, and the succeeding four 
     years are counted.

[[Page 2632]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal years, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays........................         0       537       599       870       887       927     1,108     1,435     1,940     2,270     2,633
Changes in receipts.......................         0       -10       -44       -67       -86      -103      -113      -120      -127      -134      -141
--------------------------------------------------------------------------------------------------------------------------------------------------------

       Intergovernmental and private-sector impact: Section 4 of 
     the Unfunded Mandates Reform Act excludes from the 
     application of that act any legislative provisions that are 
     necessary for the national security. That exclusion might 
     apply to the provisions of this bill. In any case, the bill 
     contains no intergovernmental or private-sector mandates.
       Previous CBO estimate: On September 28, 1998, CBO prepared 
     a cost estimate for a proposal to repeal the Military 
     Retirement Reform Act of 1986 (REDUX). This estimate relies 
     on many of the same actuarial assumptions, models, and 
     estimates from the Office of the Actuary at DoD that CBO used 
     in the earlier estimate. However, this estimate also reflects 
     the provisions of S. 4 that would offer certain members an 
     option to stay under the REDUX system and that would raise 
     the pay base applicable to computing the costs of military 
     retirement.
       Estimate prepared by: Federal Cost: The estimates for 
     defense programs were prepared by Jeannette Deshong (military 
     and civilian personnel) and Dawn Sauter (Military retirement 
     and veterans' benefits). They can be reached at 226-2840. 
     Valerie Baxter prepared the estimates for food stamps. She 
     can be reached at 226-2820. Impact on State, Local, and 
     Tribal Governments: Leo Lex (225-3220). Impact on the Private 
     Sector: R. William Thomas (226-2900).
       Estimate approved by: Paul N. Van de Water, Assistant 
     Director for Budget Analysis.

                            The Cost of S. 4


                              Major Points

       Majority of the discretionary incremental increase in S. 4 
     over the Administration's plan is due to the larger pay 
     raises after FY 00, (4.4% in S. 4 versus 3.9% in the budget 
     request).
       Direct spending in S. 4 is attributable to changes in the 
     Montgomery GI Bill (MGIB).
       Revenue loss in S. 4 is due to the institution of a 
     military Thrift Savings Plan (TSP).
       The direct spending and the loss of revenues makes S. 4 
     subject to a budget point of order.
       Background. The Congressional Budget Office (CBO) has 
     provided a cost estimate of S. 4, The Soldiers' Sailors', 
     Airmen's and Marines' Bill of Rights Act of 1999 and the cost 
     for the Administration's pay raise and retirement plan. In 
     developing the cost of the Administration's plan, CBO used 
     two different sets of economic assumptions, making a direct 
     comparison to S. 4 difficult. One cost estimate developed by 
     CBO, costs the Administration's plan using lower ECIs than 
     what is currently reflected in the budget request (this plan 
     is listed as CBO's ECIs). The second cost estimate of the 
     Administration's plan reflects the budget request (this plan 
     is listed as OMB's ECIs). The basic difference between the 
     two CBO estimates is the size of the military pay raise after 
     fiscal year 2000. Currently, the fiscal year 2000 defense 
     budget request programs future raises at 3.9%. CBO believes 
     that an ECI in the future will be lower and this could lower 
     future pay raises to 3.2%.
       Using the pay raise that is currently in the budget request 
     (3.9%), provides for a more direct comparison to S. 4. If 
     ECIs are lowered in the future, subsequent budget requests 
     will reflect this new economic assumption. Summary of the 
     costs for the Administration's plan and S. 4 are below. More 
     detailed CBO cost estimates are attached.

                        [In billions of dollars]
------------------------------------------------------------------------
                                         FY00        FYDP      FY 00-09
------------------------------------------------------------------------
S. 4:
  Discretionary Spending............      1.075      18.146      40.826
  Direct Spending...................       .537       4.928      13.206
  Loss of Revenues..................      (.010)      (.423)      (.522)
Administration's Plan (OMB ECI):
  Discretionary Spending............      1.497      15.764      35.767
  Direct Spending...................       .001        .008        .351
  Loss of Revenues..................         NA          NA          NA
Administration's Plan (CBO ECI):
  Directionary Spending.............      1.497      13.889      24.281
  Direct Spending...................       .001        .008        .351
  Loss of Revenues..................         NA          NA          NA
S. 4 vs Administration's Plan (OMB
 ECI):
  Discretionary Spending............      (.422)      2.382       5.059
  Direct Spending...................       .536       4.920       8.147
  Loss of Revenues..................      (.010)      (.423)      (.522)
------------------------------------------------------------------------


  Mr. WARNER. Madam President, the CBO estimates that enactment of S. 4 
will raise discretionary spending by about $1.1 billion in fiscal year 
2000 and $13.8 billion over the 2000-2004 time period. There are, of 
course, direct spending and forgone tax revenue issues that we will 
have to overcome. I have been working with Senator Domenici, Senator 
Stevens, and others to address these issues in the budget resolution 
and the defense authorization bill, which are ongoing deliberations.
  The important perspective to consider here is that, even though this 
bill is expensive, the alternative is unacceptable. I wish to stress 
that: The alternative is unacceptable. We, simply, as a nation--the 
leader of the world, with the strongest and the largest armed force of 
any nation in the world, an armed force which is deployed overseas, 
now, in many places, preserving freedom and trying to secure freedom 
for others--we simply cannot allow the best military force in the world 
to wither and atrophy. We must be prepared to pay the price in dollars 
to fulfill our constitutional duties ``To raise and support Armies,'' 
and ``To provide and maintain a Navy.'' As I and other Members of the 
Senate--and that is of course taken from the Constitution. And 
subsequent thereto we have the Air Force, and of course the Marines 
have been with us forever, but that is the wording out of the 
Constitution.
  As I and the other Members of the Senate have visited military bases 
here in the United States, in Bosnia, and in other deployment areas, we 
have found that our young service men and women and their families are 
doing a tremendous job, under adverse conditions in many cases--
tremendous stress on the family--and how proud we are, particularly of 
the many wives and others in the families who make this system work. It 
is a family matter.
  In order to demonstrate to these highly trained and dedicated 
military personnel that we appreciate their sacrifices and 
contributions, we must move quickly to pass this legislation. Such 
action will permit military personnel and their families to make the 
decision, hopefully, to continue to serve and will assist the military 
services in recruiting the high-quality force we have worked so hard to 
achieve. And that means front-end acquisition at the recruiting 
stations.
  I am proud to be a cosponsor of this important legislation and again 
salute those of my colleagues who were the early pioneers--Senators 
Lott, McCain, Roberts, and others--and I am proud to join with them 
today in presenting this bill to the Senate.
  Also, Madam President, I want to bring to the attention of the Senate 
a very important letter which arrived here just late Friday from the 
Secretary of Defense. I ask unanimous consent to have this printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                         Secretary of Defense,

                                Washington, DC, February 19, 1999.
     Hon. John W. Warner,
     Chairman, Committee on Armed Services,
     U.S. Senate, Washington, DC.
       Dear John: I am following up on the comments General 
     Shelton and I made concerning S. 4, the Soldiers', Sailors', 
     Airmen's and Marines' Bill of Rights Act of 1999 during our 
     posture hearing before your committee. First, let me thank 
     you for your early action to endorse the President's 
     initiative to improve compensation for our military 
     personnel. I fully appreciate the desire of the Committee to 
     take the lead for the Senate on these important matters. 
     Unfortunately, there are a number of elements of the bill 
     which cause concern and the Department has not had an 
     opportunity to testify on this bill and outline concerns. So 
     I am taking this opportunity to present to you our 
     reservations.
       Again, let me emphasize that I sincerely appreciate your 
     endorsing key elements of the Department's proposal, 
     including: (1) a large across-the-board pay raise increase 
     for military service members; (2) substantial increases in 
     retirement benefits, such that all members can receive a 
     retirement pay that is 50% of their average high salary at 20 
     years, vice 40% for many members; and (3) reform of the 
     military pay tables, including increased raises for 
     promotions. I especially appreciate your endorsement of pay 
     table reform which more than anything will correct pay 
     inequities. These three items are fully funded in the defense 
     budget I submitted last month.
       S. 4 proposes even larger pay raises, higher cost-of-living 
     adjustments, and other items which are not in the budget I 
     submitted. I estimate that these additional items will cost 
     $7 billion in discretionary funding through FY2005. I am 
     concerned that until there is a budget resolution that sets 
     the defense budget level, this bill constitutes an unfunded 
     requirement on the Department. Absent an increase in the 
     topline for Defense, these items

[[Page 2633]]

     will only displace other key elements of our program. It 
     could be counterproductive and completely contrary to our 
     mutual desire not to undercut our modernization effort and 
     other readiness priorities. For these reasons, it is 
     imperative to proceed within the regular authorization 
     process and after we have agreement on a budget topline.
       S. 4 also contains expanded education benefits for veterans 
     and their dependents that would incur costs in addition to 
     the $7 billion noted above. These benefit proposals stem in 
     part from the just-released Report of the Congressional 
     Commission on Servicemembers and Veterans Transition 
     Assistance. The Department was not asked to testify before 
     the Senate Armed Services committee on S. 4 and the Senate 
     Veterans Affairs Committee held only one hearing on the 
     commission's report. As the Department had only a limited 
     opportunity to review and comment on the commission's 
     recommendations, I believe that the commission's significant 
     policy changes contained in S. 4 warrant additional study. 
     Implementing these expanded levels would equate to a 36% 
     increase before inflation within one year. I believe the 
     impact of last year's increases should be considered before 
     enacting further changes.
       I appreciate the Committee's intent to address the 
     legitimate needs of servicemembers regarding pay and 
     retirement. However, I am concerned that S. 4 could have the 
     opposite effect by raising hopes that cannot be fulfilled 
     until the final budget number is set. Resolving these 
     questions within the normal authorization and budget 
     processes is by far the most desirable approach.
           Sincerely,
                                                       Bill Cohen.

  Mr. WARNER. ``Dear John,'' writes our former colleague Senator Cohen,

       I am following up on the comments General Shelton and I 
     made concerning S. 4, the Soldiers', Sailors', Airmen's and 
     Marines' Bill of Rights Act of 1999 during our posture 
     hearing before your committee. First, let me thank you for 
     your early action to endorse the President's initiative to 
     improve compensation for our military personnel. I fully 
     appreciate the desire of the Committee to take the lead for 
     the Senate on these important matters. Unfortunately, there 
     are a number of elements of the bill which cause concern and 
     the Department has not had an opportunity to testify on this 
     bill and outline our concerns. So I am taking this 
     opportunity to present to you our reservations.

  On the question of the opportunity to testify, of course we had the 
two hearings, one in September and again this January, so there was a 
great deal of testimony that was used directly in formulating this 
bill. However, the subcommittee, under the distinguished chairman 
Senator Allard, will be meeting this week to take up further hearings 
on the bill.

       Again, let me emphasize that I sincerely appreciate your 
     endorsing key elements of the Department's proposal, 
     including: (1) a large across-the-board pay raise increase 
     for military service members; (2) substantial increases in 
     retirement benefits, such that all members can receive a 
     retirement pay that is 50% of their average high salary at 20 
     years, vice 40% for many members; and (3) reform of the 
     military pay tables, including increased raises for 
     promotions, I especially appreciate your endorsement of pay 
     table reform which more than anything will correct pay 
     inequities. These three items are fully funded in the defense 
     budget I submitted last month.
       S. 4 proposes even larger pay raises, higher cost-of-living 
     adjustments, and other items which are not in the budget I 
     submitted. I estimate that these additional items will cost 
     $7 billion in discretionary funding through FY2005. I am 
     concerned that until there is a budget resolution that sets 
     the defense budget level, this bill constitutes an unfunded 
     requirement on the Department. Absent an increase in the 
     topline for Defense, these items will only displace other key 
     elements of our program. It could be counterproductive and 
     completely contrary to our mutual desire not to undercut our 
     modernization effort and other readiness priorities. For 
     these reasons, it is imperative to proceed within the regular 
     authorization process and after we have agreement on a budget 
     topline.

  That is constructive criticism, but at the same time I think it is 
very important, and again I commend our leadership, that we lay this 
bill down today to send a signal to the men and women of the Armed 
Services that the U.S. Senate on the first bill, really, to be taken up 
in this new Congress--that is the type of priority that we attach their 
pay, retirement, and other benefits.

       S. 4 also contains expanded education benefits for veterans 
     and their dependents that would incur costs in addition to 
     the $7 billion noted above. These benefit proposals stem in 
     part from the just-released Report of the Congressional 
     Commission on Service-members and Veterans Transition 
     Assistance. The Department was not asked to testify before 
     the Senate Armed Services Committee on S. 4 and the Senate 
     Veterans Affairs Committee held only one hearing on the 
     commission's report. As the Department had only a limited 
     opportunity to review and comment on the commission's 
     recommendations, I believe that the commission's significant 
     policy changes contained in S. 4 warrant additional study.

  I assure my good friend, Secretary Cohen, that study is ongoing and 
will be thoroughly debated here in the coming days.

       Implementing these expanded levels would equate to a 36% 
     increase before inflation within one year. I believe the 
     impact of last year's increases should be considered before 
     enacting further changes.
       I appreciate the Commission's intent to address the 
     legitimate needs of servicemembers regarding pay and 
     retirement. However, I am concerned that S. 4 could have the 
     opposite effect by raising hopes that cannot be fulfilled 
     until the final budget number is set. Resolving these 
     questions within the normal authorization and budget 
     processes is by far the most desirable approach.
  I can respect that viewpoint from our good friend, our recently 
departed colleague. But nevertheless, we are going to forge ahead and 
do our very best to achieve the basic goals for which he, I think, very 
courteously applauds us as a committee and those Members who have 
worked on it.
  Madam President, following his letter, I would like to put in a 
letter by the military coalition which, again, draws the debate lines 
on these several points that I have raised. I will perhaps refer to 
this later, but at this time, I want to yield the floor so my 
distinguished colleague can give his remarks.


                         Privilege of the Floor

  Madam President, I ask unanimous consent that the staff members of 
the Committee on Armed Services, appearing on the list which is 
appended hereto, be extended the privilege of the floor during the 
consideration of S. 4.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. I thank the Chair.
  Mr. LEVIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Mr. LEVIN. Madam President, Members of this body are keenly aware of 
the demands we place on our troops, the circumstances in which they 
live and work and the fact we often pay them less and expect them to do 
far more than employers in the private sector.
  I commend Secretary Cohen, General Shelton, and the Joint Chiefs of 
Staff for recognizing that military recruitment and retention has begun 
to suffer and for acting forcefully to address this problem.
  The fiscal year 2000 defense budget includes funding for an across-
the-board increase in military salaries, targeted pay raises to better 
reward performance, and a change to the military retirement system to 
place service members who entered after 1986 on a footing more 
comparable to those who entered the service at an earlier date. These 
changes should help provide fairer compensation to our men and women in 
uniform, and we should act together to enact them into law.
  The bill before us contains provisions similar to those proposed by 
Secretary Cohen's budget, but there are several ways in which the 
benefits offered by S. 4 are even more generous. It includes the 
following: First, the administration proposal contains a 4.4-percent 
across-the-board pay increase. S. 4 contains a 4.8-percent pay raise.
  Second, the administration budget assumes, but does not require, pay 
raises of 3.9 percent a year for the remainder of the FYDP. S. 4 
mandates in permanent law raises of .5 percent more than the employment 
cost index.
  Third, the administration proposal would restore the same 50 percent 
of base pay for post-1986 retirees as for pre-1986 retirees. S. 4 would 
provide the same change while also restoring the more generous pre-1986 
full CPI COLAs. Under S. 4, post-1986 retirees could accept a one-time, 
lump-sum payment of $30,000 and opt out of this generous retirement 
system.
  Fourth, S. 4 authorizes active duty service members to participate in 
the Thrift Savings Plan for Federal employees. The administration 
proposal contained no similar provision.

[[Page 2634]]

  Fifth, S. 4 contains a special allowance for service members who are 
eligible to receive food stamps. The administration proposal contained 
no similar provision.
  And sixth, S. 4 contains provisions first proposed by Senator Cleland 
and consistent with the recommendations of the Congressional Commission 
on Service Members and Veterans Transition Assistance to improve the 
educational benefits provided to service members through the GI bill. 
The administration proposal contained no similar provision.
  I have some concerns about a number of these provisions, but there is 
little doubt that they would substantially improve the pay and benefits 
available to members of the Armed Forces. The GI bill provisions, in 
particular, should provide substantial incentives to help address the 
current recruiting and retention problems facing the military services, 
while offering our men and women in uniform an educational opportunity 
in the proudest tradition of our country.
  For this reason, I agree with the sponsors of the bill that we should 
do what we can to make these benefits a reality. So on that question, I 
hope there is no Member of this body, and I know there is no member of 
the Armed Services Committee not in agreement that we should do what we 
can to make these benefits in S. 4 a reality.
  But the question is, How can we best make that happen. Do we best 
serve the interests of the troops by bringing this bill to the floor 
for consideration before we have passed a budget resolution and before 
we know whether money will be available to pay for this bill? Do we 
best serve our troops by separating the pay and the benefits issues 
from the rest of the authorization, even if that can force us to delay 
improvements in living and working conditions, and even if that forces 
us to postpone the introduction of new equipment? Or would we better 
serve the interest of our troops by considering the provisions of this 
bill in our normal authorization process after the budget resolution 
has been passed and we have had an opportunity to conduct hearings on 
the specifics of the proposal in our Personnel Subcommittee?
  Madam President, I want to alert my colleagues that regardless of 
whether we pass this bill now or later, we will have to face up to some 
significant issues down the road. Our military leaders have told us 
that they want us to change the military retirement system, but the 
proposals in S. 4 are very different from their proposal. Indeed, 
Secretary Cohen and General Shelton recently testified that they would 
support the added benefits in this bill only if--and I emphasize only 
if--they are paid for without cutting into other defense programs. At 
this point in the legislative cycle, before we have agreed upon a 
budget, we cannot give them that assurance, and we cannot give our 
troops that assurance.
  For this reason, the Secretary of Defense wrote the committee last 
Friday to express strong concerns about whether this bill could be paid 
for without an adverse impact on national defense. My good friend, 
Senator Warner, has read the letter, but I am just going to focus on a 
couple of paragraphs in that letter because of Secretary Cohen's 
concerns about whether this bill could be paid for without an adverse 
impact on the national defense.
  Here is what Secretary Cohen wrote in part:

       S. 4 proposes even larger pay raises, higher cost-of-living 
     adjustments, and other items which are not in the budget I 
     submitted. I estimate that these . . . items will cost $7 
     billion in discretionary funding through FY2005. I am 
     concerned that until there is a budget resolution that sets 
     the defense budget level, this bill constitutes an unfunded 
     requirement on the Department. Absent an increase in the 
     topline for Defense, these items will only displace other key 
     elements of our program. It could be counterproductive and 
     completely contrary to our mutual desire not to undercut our 
     modernization effort and other readiness priorities. For 
     these reasons, it is imperative to proceed within the regular 
     authorization process and after we have agreement on a budget 
     topline.

  And further on, Secretary Cohen said the following:

       I appreciate the committee's intent to address the 
     legitimate needs of servicemembers regarding pay and 
     retirement. However, I am concerned that S. 4 could have the 
     opposite effect by raising hopes that cannot be fulfilled 
     until the final budget number is set. Resolving these 
     questions within the normal authorization and budget 
     processes is by far the most desirable approach.

  Madam President, this is an expensive bill. The Congressional Budget 
Office estimates that the enhanced pay in benefits provided for in S. 4 
will cost almost $12 billion more than the administration proposal over 
the next 6 years. The increases over the President's budget include 
added costs of $5.6 billion for the more generous pay raises in the 
bill, $1.2 billion for the enhanced retirement and Thrift Savings Plan 
provisions, $100 million for the special subsistence allowance, and 
$4.9 billion for the new GI bill provisions.
  For several reasons, it would appear possible that these estimates 
may be understated.
  First, the CBO estimate assumes that 50 percent of the enlisted 
personnel and about 40 percent of officers would elect to receive a 
$30,000 lump-sum bonus in lieu of a higher annuity in retirement. 
However, the Chairman of the Joint Chiefs of Staff has raised serious 
concerns about the $30,000 buyout, and testified that the Chiefs will 
recommend that the troops opt instead for the more expensive retirement 
annuity.
  Second, while the current law governing military pay raises includes 
a discretionary formula, setting the COLA at .5 percent below the rate 
of inflation, allowing the President to take into account a broad array 
of factors, this bill would establish a mandatory COLA at .5 percent 
above the rate of inflation forever. The CBO estimate addresses the 
change in the anticipated formula, but because CBO estimates are 
limited to a narrow budget window, that estimate does not address the 
added cost to the pay raise that goes on without any time limit 
whatsoever.
  And third, and finally, if Congress stands by the historic concept of 
pay equity and provides annual pay increases for civilian employees of 
the Federal Government equal to those proposed in this bill for members 
of the military services, the Department of Defense would face a 
substantial bill for increased civilian pay as well; and, of course, 
our overall budget outside of the Department of Defense would also have 
a substantial bill for increased civilian pay as well.
  Madam President, little consideration appears to have been given to 
how we will pay for these increased benefits. At least three 60-vote 
points of order could be made against this bill under the provisions of 
the Budget Act--because it would exceed mandatory spending allocations, 
it would reduce revenues, and it would increase the deficit. That stark 
fact should demonstrate that we are considering this bill outside the 
normal legislative cycle. There could be serious consequences to acting 
on a major spending authorization for fiscal year 2000 and beyond 
separate from the authorization bill of which it is a part and before 
we have even considered the budget resolution for fiscal year 2000.
  Do we intend to revise the budget agreement to pay for this bill? If 
so, where will the money come from? Will we take it out of surplus? Or 
will we make some as yet unspecified cuts in the already tight budget 
for domestic programs to pay for it? At this early point in the 
legislative cycle, we simply do not know. We can only say that unlike 
the administration's pay and retirement proposal, which was fully paid 
for in the President's budget, this bill represents a promise to the 
troops that may or may not be possible to redeem.
  If the defense budget is not substantially increased, and if the bill 
before us is adopted by the House and becomes law, we would need to cut 
the readiness and modernization accounts to offset the costs of this 
bill. As the Secretary of Defense has pointed out, such cuts coming at 
a time when our senior military leadership have already expressed 
concerns about our readiness could have a serious impact on our 
national security. For this reason, the Secretary of Defense and the 
Chairman of the Joint Chiefs of Staff stated that they would support 
the increased benefits contained in the bill only if the additional 
money does not come out of other defense programs.

[[Page 2635]]

  Now that is really the key to this. Will these benefits, which we all 
would like to see put in place, come from other defense programs or 
will there be a new budget agreement? We do not know. We should know 
before we act on this bill; but we are not going to know. This bill 
comes to the floor without knowing the answer to that critical 
question: whether or not these benefits are going to come out of other 
defense programs or whether there will be a new budget agreement which 
lifts the cap for defense.
  When Secretary Cohen and General Shelton testified before the Armed 
Services Committee on February 3, the Secretary stated that any further 
increases to military pay and benefits should be considered in 
conjunction with the defense authorization bill. And here is what the 
Secretary said:

       [W]e do have to propose this as a package, because if we 
     raise expectations unrealistically and we cannot fulfill them 
     we have done a disservice to our troops. Secondly, if we are 
     going to take it out of the readiness accounts and 
     procurement, we have also done a disservice. So the package 
     that we have put together we think makes sense and we hope 
     that any variation will be paid for, period.

  That is pretty stark and pretty succinct. It comes from our top 
military leadership that ``we hope that any variation will be paid for, 
period.'' The increases in this bill above the increases in the 
President's budget are not paid for in this bill. The Secretary of 
Defense says, ``we hope that any variation will be paid for, period.''
  Now, we are not doing the troops a favor if we say that we are going 
to increase their benefits but then do not follow through with the 
appropriation that is necessary to increase their benefits. I do not 
think there is a member of the Armed Services Committee or a Member of 
this body who does not believe we should increase the benefits as much 
as we can to our troops. They deserve it. But we are doing this in a 
vacuum, separate from the defense authorization bill. And that opens 
the possibility that we would be passing a bill which says we will give 
you these extra benefits but then down the line when it comes to an 
appropriations process or a budget process there is no added funds for 
defense, and then either these benefits are not funded later on, which 
would be terrible after we promised them, or we will take the increase 
out of readiness or modernization or out of housing or some other 
needed aspect of our defense budget.
  So I believe that every Member of this body would like to support the 
improved pay and benefits that would be afforded to our men and women 
in uniform by this bill. And the question is not whether this 
additional step is a desirable one--it is--but we should take it only 
if we can pay for it. And we have to know whether or not we are going 
to be able to pay for it or else we could be doing damage to morale 
instead of increasing the needed benefits for our troops.
  So, for this reason, I may offer an amendment at an appropriate time 
to express the sense of the Senate that the provisions of this bill are 
subject to further consideration in the authorization and the 
appropriation process, after we have agreed on a budget resolution and 
a determination can then be made whether sufficient funds are available 
to pay for the bill and a sufficient determination could be made as to 
what impact those changes will have, if any, on needed readiness and 
modernization programs in the Department of Defense.
  I believe that approach would give us an opportunity both to do what 
this bill does, which is to send an early message to the troops, which 
the sponsors of the bill have suggested, while at the same time 
demonstrating some care and some caution by indicating, consistent with 
the request from the Secretary of Defense, which is now in the Record, 
that the bill will receive further consideration as part of this year's 
defense authorization bill, after we have passed a budget and after we 
know how much money will be available for national defense.
  Madam President, I yield the floor, and I thank the Chair.
  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. WARNER. Madam President, I think the argument has been framed. My 
friend and colleague points up his desire to follow the procedures that 
he and I followed for 21 years as a member of the Armed Services 
Committee. But, Madam President, I accept responsibility for bringing 
up this bill early and encouraging our leadership to give me their 
support. And here is the reason. Let me just give you one example of 
the problems we are seeing in our military today.
  During fiscal year 1998, the military lost 1,641 more pilots than 
they expected.
  They very carefully planned for a certain amount of attrition through 
retirements at the end of 20 years--or whenever it may be--and for 
those persons who decided not to make the military a career, it was 
time to accept other challenges. Those figures show you have to retain 
a certain percentage in each of those key pay grades of pilots in order 
to keep the airplane flying, in order to fulfill the missions abroad. 
President Clinton has sent the men and women of the Armed Forces of the 
United States abroad more than any other President in the history of 
this great Nation. We need these people, particularly the airmen. We 
are 1,641 airmen short.
  Let's translate that into dollars. The average cost to train a 
military pilot is about $5.8 million. To replace 1,600 pilots will cost 
the Department of Defense over $9 billion--repeat, $9 billion. If the 
enhanced benefits within this bill--the subject of criticism by my 
colleague--can reduce the unprogrammed losses of pilots by even one-
third, we will have more than made up for the additional costs of S. 4 
compared to what the Department of Defense bill sent up. There is an 
example.
  If you need one more, it is right here. Last year, the Army missed 
the recruiting goals by about 800. The Navy missed their recruiting 
goals by 7,000. So far this year, the Army has failed to meet the first 
quarter of this new fiscal year goals by 2,500. According to the Army's 
own estimates, they will in 1999--unless this bill and other signals 
that we send change the course--they will in 1999 have 10,000 fewer 
recruits than what they need to man the forces all over the world.
  What does that mean, Madam President? That means that some soldier 
must stay that added time overseas on an assignment, away from his 
family, or be recalled from his assignment here in the United States to 
go overseas and replace another, more often than he or she ever 
anticipated. As a result, these people are getting out of the middle 
pay grades and the youngsters aren't coming in.
  I will take responsibility for bringing up this bill. I will take 
responsibility for going in for the high figures for this pay increase. 
Yes, we will accept that, because in any negotiation that I have to 
undertake with the chairman of the Appropriations Committee and the 
chairman of the Budget Committee, I want to go in with a top figure, 
hoping I can do better than what the administration came up with in 
their pieces of legislation.
  These are the problems we are facing, the real problems--shortfalls, 
shortfalls, shortfalls--resulting in loss of time with family, fewer 
skills, and the inability to attract and find young men and women to 
come into the services.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Mr. LEVIN. Madam President, I agree with my good friend from Virginia 
in terms of the need to both attract and retain people. It is also 
important that we pay for the benefits in this bill.
  We are not doing anybody a favor if we say we are going to increase 
the pay, and then we cut their housing. We are not doing anybody a 
favor if we say there will be an added pay increase to what the 
President proposes, and then cut flying hours and steaming hours so 
that people don't have the training that they want as members of the 
military.
  I don't know of anybody who is more keenly aware of the need to both 
recruit and retain people than our Secretary of Defense. I can't think 
of anybody other than the Chairman of the

[[Page 2636]]

Joint Chiefs and the Joint Chiefs themselves who are more keenly aware 
of these shortfalls. That is why we have these increases in the 
President's budget. But the Secretary of Defense, who is responsible 
for increasing recruitment and retention, has proposed a budget to us 
which he believes will do just that. He says in his letter to both the 
chairman and to me:

       . . . it is imperative to proceed within the regular 
     authorization process and after we have agreement on a budget 
     topline.

  The reason he said that is because, ``It could be counterproductive 
and completely contrary to our mutual desire not to undercut our 
modernization effort and other readiness priorities'' to do otherwise.
  So in terms of the benefits in this bill, I am not one who is 
criticizing the benefits in this bill at all. I commend these benefits. 
I just want to pay for them. That is the only issue. Whether we are 
going to pay for these benefits or we are just going to say in a bill 
that these benefits are going to be increased, without knowing where 
the increase is coming from, without knowing whether the budget 
resolution is going to put more money in for defense, without knowing 
whether or not these increases in benefits, this pay, and retirement 
are going to come out of readiness, modernization, housing, or where 
they will come from in there is not a top line.
  The benefits, it seems to me, are appropriate. But paying for them is 
essential, or else we are going to unleash two things. One is false 
hopes, which will then be dashed, which is, it seems to me, the worst 
of all worlds--false hopes in our uniformed military people that they 
will be getting a pay raise larger than the one proposed by the 
President. Or we are going to be carrying through with the provisions 
of this bill, and unless there is an increase in the top line, we will 
be seeing a degradation in readiness or modernization or housing or 
other important needs, both of the Nation and of our uniformed military 
personnel.
  So I am very supportive of the benefits in this bill. What I am 
pointing out is the missing part of this bill. This is half a bill. 
This isn't a full bill. This is half of the bill. This is increasing 
the benefits but it is not saying how we will pay for those benefits. 
It is half the ledger without the other half of the ledger. That is the 
problem with this bill.
  It seems to me what we should do is what the Secretary of Defense has 
suggested, which is to make these benefits part of the overall 
authorization bill, which is where they belong and where, 
traditionally, they have always been lodged and where they have always 
been considered.
  We, hopefully, can provide these benefits. I hope and pray we can 
provide these benefits. They are useful benefits. But we have to pay 
for them or else we are not doing the responsible and thoughtful thing. 
We must pay for them as the Secretary of Defense has urged us to do. 
Otherwise, in his words,

       I am concerned that S. 4 could have the opposite effect by 
     raising hopes that could not be fulfilled until the final 
     budget number is set.

  And the ``opposite effect'' that he is referring to is addressing the 
legitimate needs of service members regarding pay and retirement.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.


                         Privilege of the Floor

  Mr. ALLARD. Madam President, I ask unanimous consent Doug Flanders of 
my staff have floor privileges during the entire debate on the Senate 
floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALLARD. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. ROBB. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROBB. Madam President, I express my appreciation to my 
colleagues, particularly the Senator from Colorado, for giving me a 
moment to get over to the floor before he begins his address.


                         Privilege of the Floor

  Mr. ROBB. Madam President, I ask unanimous consent that during the 
floor consideration of S. 4, Herb Cupo, a congressional fellow from the 
Department of the Navy, be granted floor privileges.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROBB. Madam President, as a cosponsor of S. 4, the Soldiers', 
Sailors', Airmen's and Marines' Bill of Rights Act of 1999, I am 
pleased that we are moving forward on this legislation.
  S. 4 provides the resources to begin to reverse the steady downward 
spirals we have seen in military retention and recruiting.
  S. 4 provides significant pay raises, improved retirement pay, and 
enhanced GI bill benefits. It is an important step--one of several--
that the Congress must take this year to help the military pull out of 
what the Chairman of the Joint Chiefs describes as ``a nosedive that 
might cause irreparable damage to this great force.'' It is also a 
strong signal to our most important military asset--our men and women 
in uniform, and their families--that we are serious about taking care 
of them.
  Being a cosponsor, however, hasn't alleviated my concern that we may 
be moving too quickly on this legislation. This bill has substantial 
budgetary implications, many of which we are only beginning to 
quantify.
  Specifically, we don't know yet exactly what this bill will cost, nor 
whether it is structured to best fix ongoing retention and recruiting 
problems. Moreover, we haven't yet taken the time to assess where any 
additional defense dollars should be spent in the broader context. For 
example, if we put some of these additional funds toward new equipment, 
we could improve our ability to fight in future wars, and by providing 
our troops with higher quality, more reliable equipment, we also 
improve recruiting and retention. This is just one of many examples of 
why I believe--as the ranking member of the committee believes--that it 
is important to think through any defense budget increases in a 
strategic and not just a piecemeal manner.
  Now, one way to improve the bill to ensure that we are improving 
recruiting and retention in a more direct and cost-effective manner is 
to closely align any pay increases with problem specialties. Along with 
Senators Cleland and Kennedy, I intend to offer a ``Special and 
Incentive Pay Amendment'' to S. 4, which I filed on February 3.
  This amendment targets certain smaller categories of military service 
where our retention challenges are particularly daunting, categories 
where we recruit highly skilled personnel, provide them costly 
training, and then fight to induce these individuals to remain on 
active duty when they face uniquely difficult or dangerous missions, 
coupled with powerful financial incentives to leave the military for 
the civilian sector. Examples include career enlisted fliers, Navy 
SEALS, and Navy surface warfare officers.
  Only 25 percent of our surface warfare officers remain on active duty 
through their department head tour, which normally comes between the 
sixth and eighth year of commissioned service. During the drawdown, 
this wasn't a particular problem, but now with smaller numbers of ships 
in the fleet, we simply don't have the officers to maintain and man 
critical at-sea billets.
  In the Navy SEAL community, attrition has increased over 15 percent 
in the past 3 years, while demand for these highly trained individuals 
by our warfighting CINCs has increased sharply.
  In fiscal year 1998, manning in another category of highly trained 
and difficult individuals--Navy divers--was below 85 percent. That same 
year, only about 60 percent of our military career linguists met or 
exceeded the minimum requirements in listening or reading proficiency. 
A host of retention problems exist for nuclear-qualified officers and 
enlisted personnel as well.
  The amendment does several things. It establishes a special pay for 
surface

[[Page 2637]]

warfare officers and Navy SEALS to encourage them to remain in the 
service at critical points. It provides added incentive pay for our 
Navy and Air Force enlisted aircrews. Several existing bonuses are 
increased, including those for divers, nuclear qualified officers, 
linguists, and other critical specialties. Finally, the enlisted bonus 
ceiling is increased.
  These are critical remedies for critical specialties. The Nation 
simply can't afford to continue to pay as much as we do to recruit and 
train these talented individuals only to see them leave the service out 
of frustration over the inadequacies of their pay and benefits.
  Madam President, this special and incentive pay amendment to S. 4 is 
exactly the kind of targeted ``fix'' Congress can and should support, 
and I hope our colleagues will support it when we bring S. 4 up for the 
votes.
  I also intend to offer an amendment to modify existing title 37 
legislation with respect to the bonuses we pay to our career aviation 
officers.
  The impact of poor officer retention has been particularly hard on 
our pilot communities. For example, overall Navy pilot retention 
decreased to 39 percent in fiscal year 1997 and further declined to 32 
percent in fiscal year 1998. This trend is expected to continue for the 
foreseeable future.
  While continuation of midlevel officers represents the greatest 
aviation retention challenge, there has also been an increase in 
resignations of more senior aviators, particularly due to intense 
competition from private industry. To address these problems, the 
services have identified a requirement for greater flexibility with 
their principal aviation retention shaping tool known as aviation 
continuation pay, or ACP.
  The amendment that I have just described would allow the services to 
do just that. ACP is currently limited to 14 years, and only covers 
officers in the grades 0-5 and below. This amendment would pay ACP up 
to 25 years, and expand eligibility one grade to cover officers at the 
0-6 level. The maximum aviation continuation payment allowed for each 
year of additional obligation would go up from $12,000 to $25,000.
  Finally, the provision recognizes the aggregate retention needs of 
the services by eliminating the requirement to annually define critical 
aviation specialties.
  These refinements to title 37, along with other innovative 
compensation initiatives this body will consider, should begin to 
reverse the steady downward trends in aviation retention by allowing 
each service to tailor compensation programs to meet their specific 
retention challenges and accommodate their unique career path 
requirements.
  I might add that both of these amendments I have referred to have the 
full support of the Department of Defense.
  With that, Madam President, I yield the floor. Again, I thank my 
distinguished colleague from Colorado for his courtesy.
  Mr. THURMOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. THURMOND. Madam President, S. 4, The Soldiers', Sailors', 
Airmen's and Marines' Bill of Rights Act of 1999, may be the most 
significant national security legislation approved by the Senate this 
year. It will provide the basis for major improvements in the welfare 
of our military personnel and their families, recruiting and retention 
and, in turn, the readiness of our Armed Forces.
  Although I was a cosponsor of the bill introduced by the leadership, 
the bipartisan bill reported out by the Armed Services Committee is a 
stronger piece of legislation because it includes a provision revising 
the benefits under the Montgomery GI bill. This provision proposed by 
Senator Cleland will be a major recruiting incentive and provide 
significant educational benefits to our military personnel and 
indirectly to families.
  Madam President, despite initial criticism by some officials in the 
Department of Defense, the provision in the bill providing an option to 
the career service member to choose a $30,000 bonus and stay in REDUX 
or a 50 percent retirement is gaining support among the military 
community. The initial criticism that by choosing the bonus over full 
retirement would short change the individual was based on incomplete 
data. The fact is that a Sergeant First Class in the Army who retires 
at 20 years under REDUX, who invested the bonus five years earlier in a 
tax deferred stock fund, would gain $46,000 more in lifetime benefits 
than an identical retiree under the full retirement plan.
  Madam President, I understand there are concerns, which I share, 
regarding the potential cost of the bill. Although we have to consider 
cost, we must also remember that we have the best all-volunteer 
military in the World. If we are to maintain that caliber force, we 
must be prepared to pay for it. I support the bill before us and urge 
the Senate to demonstrate bipartisan support for the bill and for our 
soldiers, sailors, airmen and Marines.
  Madam President, as a final comment, I want to congratulate our new 
Chairman of the Armed Services Committee, Senator Warner, and the 
Majority Leader, Senator Lott, for designating S. 4 as the first bill 
considered by the Committee and the Senate. This gesture sends a strong 
message to our military personnel that they and our national security 
are foremost in the Senate's interest.
  Madam President, I ask unanimous consent that a letter from the 
Chamber of Commerce of the United States of America on this subject be 
printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

         Chamber of Commerce of the United States of America,
                                Washington, DC, February 18, 1999.
     Hon. Strom Thurmond,
     U.S. Senate, Washington, DC.
       Dear Senator Thurmond: The U.S. Chamber of Commerce, the 
     world's largest business federation, representing more than 
     three million businesses and organizations of every size, 
     sector, and region, strongly urges you to support S. 4, the 
     Soldiers', Sailors', Airmen's, and Marines' Bill of Rights 
     Act of 1999.
       After many years of defense spending cuts, it is now time 
     to reverse the trend and begin focusing on appropriate 
     measures to ensure the United States Military is able to 
     recruit and retain skilled military personnel. Under the 
     provisions of S. 4, the basic pay for members of the 
     uniformed services would increase by 4.8%, effective January 
     1, 2000.
       The U.S. Chamber is concerned about military retention and 
     readiness because without these fundamental aspects of a 
     strong National Security policy, the continued prosperity of 
     the United States economy would be threatened. Within this 
     policy, the United States must stem the erosion of qualified 
     personnel from our armed forces to ensure an adequate level 
     of readiness. Although S. 4 will not address all aspects of 
     military retention, it will send a strong signal that the 
     United States recognizes and appreciates the critical work of 
     members of the United States Military. Thank you in advance 
     of your support for S. 4.
           Sincerely,

                                              R. Bruce Josten,

                                         Executive Vice President,
                                               Government Affairs.

  Mr. ALLARD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.
  Mr. ALLARD. Madam President, I thank the Senator from South Carolina 
for his remarks, and I appreciate the leadership he has shown over the 
years on the issues that are important to the Armed Services Committee, 
on which I serve with him. It is an honor to serve on the committee 
with both he and Senator Warner as chairman.
  First, I want to commend the Chairman for his efforts. Senator 
Warner's leadership on ushering S. 4 to the Senate floor has been 
significantly important. Without his insistence and courage to move 
ahead, we could not be where we are today on this bill.
  I'm glad this is the first bill to come before the Senate, not just 
for substantive reasons but for the message we are sending to our men 
and women in uniform. They put their lives on the line everyday for our 
freedom and they need to know they will receive what they earn. We need 
to continually send the message that we care about them and the 
families they have to leave while on duty.
  Unfortunately, I believe this message has not been sent during the 
last six years. From the Secretary of Defense

[[Page 2638]]

down, we have been hearing the difficulty the services have had in 
recruiting and retaining their service personnel, and complaints about 
the gap between the military and civilian pay. During the last six 
years, the defense budget has decreased 25 percent in real economic 
terms, while at the same time our troops have been sent abroad 45 
times--and this doesn't include the latest journey into Kosovo. I do 
not now want to argue the need for all these deployments, but I will 
say that we cannot keep asking our armed services to do more and more 
while giving them less and less. This trend must be reversed and fast. 
S. 4 is the first step in changing this downward trend. But, better pay 
and benefits is only one step in improving the quality of life for our 
soldiers. Soon, we must address the problems of frequent deployments, 
prolonged absences, readiness shortfalls and the other myriad problems 
facing our military or else all the important changes in this bill will 
be lost.
  The first problem I want to address is the issue of pay. If we want 
to keep the best and brightest then we need to pay them at levels 
favorable with salaries in the private sector. The current pay gap is 
anywhere between 5.5 to 13.5 percent and is projected to exceed 15 
percent by the year 2005. Pay raises have lagged behind the average 
private sector raises for 12 of the last 16 years. I agree with 
Secretary Cohen and General Shelton when they say that we can never pay 
our military personnel enough, but we can pay them too little--and that 
is what has been done over the last decade.
  S. 4 provides a much needed 4.8 percent pay raise, the first major 
raise since 1982. I point out that the 4.8-percent pay raise is the 
first major pay raise since 1982.
  This may not erase the pay gap problem, but at least it is a start to 
giving the military what they deserve for the long hours they provide 
in the defense of our Nation.
  One horrendous example of this low pay is the enlisted soldiers on 
food stamps. The first time I heard that we had military personnel on 
food stamps I was outraged. Thanks to Senator McCain's and Senator 
Roberts' efforts, S. 4 will address this problem.
  According to the Department of Defense, over 11,000 service members 
are eligible to receive food stamps. Almost as staggering as this 
problem was the response given to it by the administration. According 
to a 1997 AP story in the Colorado Springs Gazette newspaper, Pentagon 
spokesman Kenneth Bacon said, ``It's too bad, but it's a function of 
the size of their family more than anything else.'' He said that the 
problem has been around for decades. He said today, ``More soldiers are 
married and have families than in the past.''
  While I agree with size of the families being a factor, I disagree 
that this is just ``too bad.'' It is wrong and must be addressed 
immediately. But since that statement in 1997, the administration has 
done nothing to fix the problem. That is why I am happy that S. 4 will 
no longer just say ``too bad.'' This bill will provide $180 per month 
subsistence pay for enlisted personnel in grades E-5 and below who 
voluntarily demonstrate an eligibility for food stamps. The allowance, 
along with the pay raise, is estimated to help nearly 10,000 military 
personnel climb above the food stamp wage scale.
  Also, a January 31, 1999, Denver Post article highlights another 
problem associated with low pay, and that is retaining highly trained 
personnel. The 3d Space Operations Squadron, whose personnel fly our 
military satellites from Schriever Air Force Base in Colorado Springs, 
has starting salaries of $13,000. However, it should be of no surprise 
that these highly trained personnel are being coaxed to leave the 
military for the private sector with starting salaries of over $50,000. 
While there is no way the military can compete with salaries such as 
these, a pay raise will help ease the problems of keeping these 
personnel.
  The article also points out that the 3rd Space Operation has a 
turnover as high as 45 percent. With the commercial space industry 
booming, especially in Colorado, many of these companies will pay top 
dollar for these young men and women who haven't even been certified on 
satellites but have the highly technical training. This results in 
higher spending in order to train the new people for the vacant slots.
  At this point, I ask unanimous consent to have printed in the Record 
this Denver Post article.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                 [From the Denver Post, Jan. 31, 1999]

    Satellite Savvy Draws Dollars--Air Force Training in Big Demand

                            (By Erin Emery)

       Schriever Air Force Base.--Airman Faith Boyd is a 20-
     something mom with a high school diploma and a job in which 
     making a mistake can have life-and-death consequences for 
     warriors in the field.
       Boyd works behind the razor-sharp fences at Schriever Air 
     Force Base, a place that some people say has the feel of a 
     top-secret Area 51. Here, on the barren plains 15 miles east 
     of Colorado Springs, the nation's Department of Defense 
     satellites--about 60 of them worth $40 billion--are 
     controlled.
       Boyd, 23, works in an air-conditioned room full of 
     computers with other Generation Xers. She's assigned to the 
     3rd Space Operations Squadron, where the mission is weighted 
     in responsibility. The job: manage and maintain satellites 
     that relay communications for the military.
       Starting salary: $13,000 a year.
       In two years, though, when Boyd's four-year commitment to 
     the Air Force is completed, headhunters who recruit for 
     companies like Lockheed-Martin, Motorola and Boeing will wine 
     and dine her and try to coax her to leave the Air Force for a 
     job in the private sector.
       Starting salary: $55,000 annually.
       ``I do feel lucky,'' said Boyd, who also helps teach 
     newcomers to be satellite systems operators.
       The robust commercial space industry is a $51 billion 
     enterprise worldwide that is expected to triple in size by 
     2006. As it continues to grow, so will demand for people who 
     can control the satellites.
       ``You've heard of this guy Bill Gates?'' Col. Mike Kelly, 
     deputy commander of the 50th Space Operations Group at 
     Schriever said of the head of Microsoft. ``He's putting up 
     Teledesic. He's going to fly a constellation of 288 
     satellites, the `Internet in the Sky,' and he's going to need 
     some people to fly them.''
       One of the places that recruiters will look is Schriever, 
     at 2 SOPS and across the hall, at the 3rd Space Operations 
     Squadron, where young people are controlling the Global 
     Positioning System, a constellation of satellites that relay 
     highly accurate navigational information. Last year, turnover 
     was as high as 45 percent, said Maj. Lee-Volker Cox, 
     operations flight commander. Some of that turnover 
     represented people transferring to other jobs in the 
     military.
       ``I think that probably the biggest retention issue facing 
     Space Command is the growth of the civilian space industry,'' 
     said Capt. Paul Hermann, a 1990 Air Force Academy graduate 
     who works in 2nd Space Operations Squadron. ``There is no 
     place for those companies to go and get qualified people to 
     do jobs.''


                         experience hard to get

       There are about 560 satellites in space, and 1,000 more are 
     scheduled to be launched in the next decade.
       Schriever Air Force Base is one of the few places in the 
     world where young people can get hands-on experience flying 
     satellites.
       ``When you're looking for people in the satellite control 
     business, that certainly is one of the places where you want 
     to look,'' said Paul Unger, a vice president of Chicago-based 
     A T Kearney Executive Search, which recruits people for 
     executive jobs in the satellite industry. ``It's one of those 
     disciplines that you really have to be a by-the-book person. 
     You have to be very disciplined to follow procedures, but you 
     have to be able to snap into action and solve very complex 
     problems that, at times, don't have by-the-book solutions.''
       But while companies are dangling big dollars in front of 
     people, the Air Force is doing everything it can to keep 
     them--except pay them $55,000 salaries.
       The Air Force is offering a $4,000 signing bonus to people 
     who agree to work in jobs like Boyd's and enlist for six 
     years instead of four.


                         weighing the benefits

       Air Force officials are stressing the multitude of benefits 
     offered in the service that may not be found in the private 
     sector: free day care, free legal service and free membership 
     to a base fitness center, Plus, airmen can get college 
     credits for completing technical training and they get a 
     stipend toward tuition to earn a college degree.
       Across the military services, a 4.4 percent pay increase--
     the largest pay increase for service members in several 
     years--kicks in Jan. 1, 2000.
       Only five years ago, there wasn't much opportunity in the 
     Air Force for enlisted people like Boyd. Officers out-
     numbered enlisted personnel three to one; now it is the other 
     way around.

[[Page 2639]]

       The Air Force has standardized the procedures--the commands 
     that airmen type into computers--for contacting what people 
     in the industry call ``birds.''
       ``The procedures say, `If this happens, do this,' '' said 
     Capt. Porf Dubon, who writes instructions for satellite 
     operators.
       Standardizing procedures has resulted in dramatic changes 
     in personnel, mainly in their ages.
       ``There can be nights when probably the oldest person is 25 
     or 26 years old,'' said Dubon, 32. ``There can be nights when 
     you'll have a crew of 18- to 20-year-olds here by themselves.
       Some team members have college degrees, while others have 
     high school diplomas.
       After joining the Air Force, airmen take a test that 
     measures aptitude for various professions. Those who have a 
     knack for electronics get the opportunity to come to 
     Schriever and learn to fly satellites. After six months of 
     school--eight hours a day--they go to work controlling 
     satellites but are shadowed by someone with more experience 
     until they become certified satellite systems operators.


                          headhunters calling

       Sgt. James Butler, 30, who trains people to be satellite 
     systems operators, said headhunters call him about twice a 
     week.
       While some companies are offering $55,000 to do the same 
     job he does in the Air Force, if Butler willing to move, he 
     could make $65,000 or more in Virginia or Maryland.
       ``No degree, just experience,'' Butler said. ``We've had 
     calls from people who will pay $40,000 a year and the people 
     haven't run ops yet, they're not even certified but they've 
     had the training.''
       Even though Butler, who has been in the Air Force for 11 
     years, could practically double his salary if he took a job 
     with a private firm, he'll probably stay put. He has only 
     nine years until retirement.
       The military is trying to improve its retirement plan so 
     that personnel who entered after 1986 will get 50 percent of 
     their basic pay after 20 years of service, not the current 40 
     percent.
       Though $55,000 a year looks pretty good, retirement at age 
     39 looks even better.

  Mr. ALLARD. The retention problem is not just felt at space command 
but cuts across all the services. Secretary Cohen, General Shelton, and 
all the service secretaries and chiefs say that the men and women are 
our greatest assets, but, unfortunately, we are losing our greatest 
assets in mass numbers.
  I ask the rhetorical question of whether we would let our planes and 
ships disappear. Then why should we stand by and let this happen? 
Planes, ships, tanks, guns, and the rest are useless without properly 
trained personnel.
  The Air Force has stated they are 855 pilots short this year and 
expect to be short 2,000 pilots by the year 2002. This leaves the Air 
Force with less experienced pilots and higher training costs. Their 
enlisted retention is no better.
  I would like to refer the Members of the Senate to a chart that I 
have drawn up here which points out the enlisted retention rate for 
1998. The first term reenlistment goal is 55 percent, but in 1998 it 
was only 54 percent. The second term reenlistment goal is 75 percent 
but only achieved 69 percent. The career goal is 95 percent while only 
getting 93 percent reenlistment. This is the first time that the Air 
Force has failed to meet its retention goals in all three categories 
since 1981.
  Some may believe these numbers are acceptable, but each and every 
percentage loss hurts the war-fighting skills and readiness across the 
board for the Air Force.
  For the Navy, we only have to look at the recent examples of the USS 
Enterprise. While deployed in the gulf, the USS Enterprise was short 
nearly 600 sailors.
  I look again to another chart where we talk about the Navy 1998 
officer retention rates: surface warfare officers retention, only 25 
percent, against a steady state need of 38 percent. Like the Air Force, 
the Navy aviator retention was 39 percent in 1997 and further dropped 
to 32 percent in 1998, which falls short of the 35-percent level 
required to fill critical department head and flight leader positions. 
Submarine officers had a 27-percent retention rate, which is far short 
of the 38 percent needed in fiscal year 2001 in order to meet the 
stated manning requirements. For the vaunted SEAL forces, their rates 
have fallen to a dismal 58 percent from a historical level of over 80 
percent.
  The only good news comes from the Army and the Marines. These 
branches have met their retention goals but have said that they are 
having major problems in critical war-fighting skill areas which must 
be addressed to stay at current readiness.
  All of these numbers are not to glaze people's eyes over but to open 
some eyes to the problems our military is facing. These retention 
problems are real and must be addressed. Inadequate retention only 
heightens the problems of longer deployments, increased frequency of 
deployment, and longer work hours due to less personnel.
  This not only places our military in precarious and dangerous 
situations, but places great stress on their families and loved ones.
  S. 4 addresses these problems through pay table reforms that focus 
the emphasis on those retention problem areas--midcareer NCOs and 
officers. It will reward promotion and achievement over longevity with 
bumps in pay ranging from 4.8 percent to 10.3 percent. Plus, we provide 
new incentives to the services to address their other specific problem 
retention areas.
  According to the Pentagon, another retention problem, and one of the 
major complaints, is the current Redux retirement system for those who 
entered service after 1986. I understand the repeal of the current 
system is one area that is problematic for some Senators. But we have 
taken the Secretary, the JCS, and all the service secretaries and 
chiefs at their word that Redux needs to be repealed. No matter how one 
comes down on this issue, if the retirement system is a retention 
problem, it simply cannot be ignored. That is why S. 4 addresses the 
problem in what I believe is a responsible manner. Service personnel 
who entered the military on or after August 1, 1986, will be given the 
option to return to the pre-1986 retirement system of 50 percent of 
base pay for the average of the 3 highest years or take a $30,000 bonus 
to stay in the Redux system, which is 40 percent of the 3 high years.
  In addition, the bill allows service members to participate in the 
Thrift Savings Plan by placing up to 5 percent of their pretax base pay 
into one, or any combination, of the TSP's funds --the G, or government 
securities fund; the F, or bond fund; the C, or common stock fund.
  Further, the bill allows service members to place any enlistment, 
reenlistment, and the $30,000 lump-sum bonuses into their TSP.
  Unlike General Shelton, I don't find the $30,000 bonus an insult, but 
an innovation in providing more market base and higher yielding--a 
higher yielding retirement fund.
  To show you how this can work, here is a chart from an article in the 
Army Times. It is the third chart I am showing here on the floor where 
it shows the various pay grades and how the retirement options might be 
affected through those pay grades.
  If we look at E-6 with 20 years, the Redux was $378,394; pre-1986 it 
was $489,942; but then we go to the Redux/bonus and then the buildup in 
the bond fund is substantial, the buildup shown on the chart would be 
$477,174; and if the Redux was invested in a higher yield fund such as 
the stock fund, we would look at somewhere around $553,826.
  These figures have been projected on this chart through the various 
grades of E-7 for 20 years, E-7 for 23 years, E-8 for 28 years, and E-9 
for 30 years, with the concomitant change in bonus, and how those 
dollars would build up within those funds, and they are substantial.
  I think it is an innovative and very interesting approach to dealing 
with the retirement and retention problems of our military services.
  Another interesting aspect from this article is, according to the 
Retired Officers Association, for every service member who accepted 
this bonus, the Government will save about $66,000 per member. In the 
end, the service men and women could have a higher retirement, while at 
the same time saving the Government money. Insulting? No. Innovative? I 
say yes.
  On a side note, I want to give credit to our very able committee 
staffer, Charlie Abell, for this idea and congratulate him for this 
innovation.

[[Page 2640]]

Some ask, ``Will they use this bonus wisely?'' I believe if we can ask 
our military men and women to take care of billion-dollar equipment and 
put their lives on the line for us, we should be able to trust them 
with their own money.
  Second, as everyone knows, financial counseling is a must for anyone 
who plans for retirement. I hope the military is currently providing 
these services. Let's give the military the option and ability to 
control their own retirement and best fit it to their needs.
  A final effort in this bill is to use Government matching funds for 
TSP accounts or Thrift Savings Plan accounts as a retention tool. We 
give the service Secretaries the flexibility to offer up to 5 percent 
matching contributions for 6 years in return for a 6-year commitment in 
skill areas that they deem necessary. This gives the services the 
ability to fix their own needs with all the tools available to them.
  Finally, I want to touch on the problem of recruitment. All we have 
to do is look to the front page of the February 17, 1999, Washington 
Post. The below-the-fold headline reads, ``Military Lags in Filling 
Ranks.'' In the story, Army Secretary Caldera says that the Department 
of Defense needs to allow the Army to recruit more high school dropouts 
with GEDs to make up the 10,000-soldier shortfall this year.
  At this time, I ask unanimous consent to have the Washington Post 
article printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Feb. 17, 1999]

                     Military Lags in Filling Ranks

                            (By Dana Priest)

       Army Secretary Louis Caldera argued yesterday that the 
     Defense Department should allow the Army to recruit more high 
     school dropouts with equivalency diplomas to help make up a 
     projected shortfall of as many as 10,000 soldiers this year.
       Caldera's idea, which would require a change in standard 
     adopted five years ago, reflects growing alarm within the 
     Army, Navy and Air Force that they are failing to attract 
     enough recruits from the new generation of young adults and 
     that the shortage will only get worse if the trend is not 
     reversed.
       ``Frankly, right now we have rules that don't make sense,'' 
     he said. The rules have ``put us in a box that really hurts. 
     Every day we turn away people who want to join.''
       Like the Air Force and Navy, the Army is facing the worst 
     peacetime recruiting shortfall in its history. Of the major 
     services, only the Marines have attracted a sufficient number 
     of recruits in recent years.
       Contributing factors include a strong economy, fewer 
     surviving military veterans to act as role models for their 
     sons and daughters, and a less adventurous mission as the 
     services adjust to the post-Cold War world without a clearly 
     defined enemy.
       Caldera said the Army should adopt other means of testing a 
     potential recruit's abilities and should allow in more high 
     school dropouts who have passed high school equivalency 
     tests.
       ``The Army is an institution that should not write off 
     young people in America who need a second chance,'' he added 
     at a breakfast with defense reporters. ``The military should 
     not be the one that slams the door of opportunity in your 
     face.''
       Under Defense Department policy, 10 percent of new recruits 
     are allowed to be high school dropouts who have passed the 
     high school equivalency test and score well on armed services 
     entrance exams. But for many years, especially during the 
     downsizing of the 1990s, the services set much higher 
     standards in practice. They either required that all new 
     recruits have high school diplomas or allowed in only a few 
     with the equivalent of a diploma.
       But as downsizing bottomed out several years ago and the 
     economy got stronger, recruiting stations went empty.
       The Army fell 2,300 short of its recruiting goal in the 
     first quarter of fiscal year 1999 and Caldera said the 
     projected shortfall could go as high as 10,000 this year.
       The Navy faced 6,900 empty positions last year. Although it 
     has reached its goal in the first quarter of fiscal year 
     1999, last month it announced it will increase from 5 to 10 
     percent the number of high school dropouts it accepts.
       The Air Force, which has faced a severe pilot shortage for 
     several years, projected it will be 2,000 pilots short of the 
     13,641 it says it needs by 2002. In addition, the Air Force 
     had a shortfall of 421 in its enlisted ranks for the first 
     quarter of this fiscal year and continued to slip in the 
     second quarter, said Air Force officials.
       ``We're coming up on the greatest shortage we've ever had 
     in peacetime,'' said Lt. Col. Russ Frasz, an Air Force 
     recruiting official.
       The services have responded to the problem with signing 
     bonuses, retention bonuses and more money for college 
     education. They have also put thousands more recruiters into 
     the field and tens of millions of dollars into new 
     advertising campaigns.
       The Navy, for example, put 500 more recruiters on the 
     streets last year, opened 150 new recruiting stations and 
     increased its advertising budget this fiscal year from $58 
     million to $70 million.
       What it got in return was 9,012 new sailors, nearly 800 
     more than it needed. But that was only for the first quarter 
     of the year and, given the shortfall in recent years, no one 
     in the Navy is relaxed about the future.
       ``We are getting back on track but there is still hard work 
     to do,'' said Rear Adm. Barbara McGann, the Navy's top 
     recruiting official.
       Caldera, a lawyer and former member of the California 
     legislature who took over as Army secretary in July, said the 
     long-term solution involves more than money and advertising.
       Civilian leaders who grew up in the activist 1960s have 
     failed to make the case to the new generation that military 
     service should be a civic responsibility, he said, adding: 
     ``There are young people out there who are hungry for someone 
     to talk to them about responsibility.''


                              help wanted

       Most branches of the military have not been meeting their 
     recruitment goals.

                       [Fiscal year first quarter]
------------------------------------------------------------------------
                                        1998--              1999--
             Branch              ---------------------------------------
                                    Goal     Actual     Goal     Actual
------------------------------------------------------------------------
Army............................    72,550    71,749    12,420    10,120
Air Force.......................    13,986    13,338     7,532     7,111
Navy............................    55,321    48,429     8,216     9,012
------------------------------------------------------------------------
Source: Defense Department.
 

  Mr. ALLARD. Madam President, if you look at this chart we see the 
problems the services are having in recruiting. This is the fourth 
chart on the floor that I have provided.
  In 1998 the Army fell almost 800 recruits short of their goal, and 
are over 2,000 recruits short of their first quarter goal.
  If we look at the Air Force, the Air Force's 1998 number was 600 
recruits short of their goal and over 400 recruits short in the first 
quarter.
  Also, for the first time ever the Air Force will advertise on 
television to increase their lagging numbers.
  The Navy's 1998 shortfall was 6,892 recruits. While it met its first 
quarter, they had to raise their high school dropout rate acceptance 
from 5 percent to 10 percent.
  These are troubling numbers and these numbers are one of the reasons 
why the Personnel Subcommittee, which I chair--my good friend, Senator 
Cleland, is the ranking member--has called for its first hearing to 
focus on recruitment and retention problems. We cannot allow our armed 
services to become hollow due to the lack of personnel. The best way to 
ensure that we recruit and retain the best and brightest is to pay them 
the wages they deserve and provide the benefits to keep them.
  While S. 4 does not directly address recruitment, it does make 
changes which we believe will assist our military recruiters. Beyond 
the pay raise incentives, the bill enhances the Montgomery GI bill 
benefits. S. 4 will eliminate the $1,200 contribution required of 
members who elect to participate in the GI bill, increase monthly GI 
bill benefits anywhere between $60 to $70, allow service members to 
transfer education benefits to immediate family members, and then to 
accelerate lump-sum benefits for an entire term, semester, or quarter 
at college, and full amounts for courses not leading to a college 
degree.
  The Armed Services Committee believes that these enhancements will 
make entering the military more attractive to more people, especially 
when the private sector offers so many more options than in the past.
  I will conclude with a few personal thoughts. I understand that this 
bill is not acceptable to all Senators, but if you plan on voting no, I 
ask that you think about a few people--the young service man or woman 
who is about to be sent to Kosovo, or the service member who is coming 
back from Bosnia, or even second tour of Bosnia; or about the pilot 
patrolling the no-fly zone in

[[Page 2641]]

Iraq; or the sailor who is doing double duty because his ship is 
undermanned and so he will have to be away from his family longer than 
necessary. How will you tell them that they are not worth the extra 
money in S. 4?
  Let me finish with a statement from a letter which I believe was 
printed in the National Association of Uniformed Services Journal and 
reprinted in the Northern Colorado chapter of the Retired Officers 
Association's newsletter, entitled, ``Why Am I Getting Out?''

       The bottom line is ``Patriotism is great, but it doesn't 
     put food on the table or provide for your family.'' One 
     soldier who requires food stamps is a shame. We can do better 
     for those from whom we ask so much.

  Madam President, I yield the floor.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Madam President, I am honored to join with the 
distinguished Senators who have been sponsoring and working for the 
passage of the bill that we believe will help our soldiers, sailors, 
airmen, and marines to increase their pay, their retirement benefits, 
and other benefits. They will know that this Nation affirms them, 
believes in them, and cares about them, and is not going to stand by 
and allow recruitment and retention to go in the tank and to not give 
them the kind of pay and benefits they have to have to live in this 
world.
  We have taken advantage of them in many ways, and it is time to put 
an end to that. We have done a lot of things to reduce our defense 
structure. In 1992, we had 1.8 million men and women in the services. 
By the year 2000, we will be at 1.38 million. We will drop another 24 
percent during this period of time. But we, at the same time, increased 
the pressures and responsibilities our service men and women are 
facing. They are being sent around the world at greater and greater 
rates.
  The operational tempo--the OPTEMPO they call it--has never been 
higher. I had the opportunity recently to be with an Air Force officer 
in Montgomery, AL, at Maxwell Air Force Base. He told me he was in 
Bosnia and received orders to be stationed in Korea. He called his wife 
who was then in Montgomery and explained this situation to her, and she 
replied, ``Well, you can go to Korea, I'm going back to North 
Carolina.''
  These kinds of assignments may sound easy to people sitting in 
Washington, but it is important to families. They will do it. Our 
soldiers and sailors give of themselves and sacrifice on a regular 
basis, but they need to know we care about them, that we are willing to 
pay them a decent wage, that we are going to maintain good retirement 
benefits and health care benefits for them.
  There has been a lack of confidence in that, and that, I believe, is 
one reason retention is down--that and a good economy; people have more 
choices. We have reduced our enlistment rates. It is harder and harder 
to enlist and most of the services are not meeting their enlistment 
rates now, their goals.
  It is a matter of real importance. I salute Senator Wayne Allard who 
chairs our Personnel Subcommittee on Armed Services for his leadership, 
and Senator John Warner, the chairman of the committee, who made this a 
top priority. We don't want to wait around with it. We want to pass it 
early this session, and we want to be able to send a message to the men 
and women who stand ready at any time to defend this Nation, to send 
them the message that we care about them, we are hearing their 
concerns, and we are going to respond to them.
  I recently had a conversation with a senior retired officer. We were 
talking about the need to restore the 50-percent retirement. He said 
one of the concerns that he had and that he was hearing among our 
service men and women is that older NCO's --noncommissioned officers--
are saying to younger NCO's, ``Well, I got a 50-percent retirement; 
sorry, you're not going to get that,'' and it makes them feel less 
appreciated. It makes them feel like they are not getting a fair shake, 
and it makes them more and more willing to give up a service that they 
may really love and enjoy and believe in and take a job in the private 
sector.
  So I think there are a lot of reasons why changing this retirement 
benefit from 40 to 50 percent is what we need to do, and I salute 
Senator Allard for it.
  I am also an absolutely committed supporter of the Federal 
Government's Thrift Plan. I think it is one of the best ideas that has 
been done for the men and women who work for the U.S. Government, and 
extending it to the military is a great idea. It should be done. They 
will make their contributions, in effect, to an IRA.
  As years go by, they will see that fund--that is, their fund--
increase and increase over the years. They will feel that that is an 
additional benefit, an additional basis to stay in the active service 
of their country in the military and not get out at an earlier time.
  I think it is also terrible, really shameful, that we have allowed 
large numbers of our service men and women to have to ask for food 
stamps. They qualify for food stamps. That is something we must end. I 
believe this bill understood that, and it will end that and give them 
the opportunity to receive other compensations than having to go down 
to the food stamp office to ask for those benefits. I think we owe them 
that.
  Finally, Madam President, let me just say this. I talked to a senior 
officer just today about the military and about this bill. He was 
extraordinarily supportive of it, but he told me this. He said it is 
really more than just the money. Our people who make their career in 
the service of this country, who are prepared at any time to give their 
life for their country, those people, those men and women, are 
committed to public service. And what we need to do most of all is to 
affirm them and to raise up the respect we give to them. They are 
prepared, at a moment's notice, to go in harm's way for the people of 
this country.
  So I believe this bill, in a way, does that. It is saying: We are 
hearing your concerns. We are going to move promptly. We are going to 
make this legislation one of the top priorities of this Congress. We 
are going to move it out of here quickly. And we are going to get a 
raise to you and retirement changes that will benefit you, that will 
end food stamps for you, and give you a Thrift Plan opportunity you 
have never had before. We are going to say we care about what you are 
doing. We thank you for your service.
  I believe that is the kind of signal we need to send. It is not all. 
We have to deal with such things as spare parts, a national missile 
defense. We have to decide whether we have enough people in the 
military now. All these kinds of things we are going to be dealing with 
later on in the year. But right now we need to move with this 
legislation.
  I thank the majority leader, Trent Lott, for being an early sponsor 
and supporter of it and for making a commitment to bring it up at an 
early time. And again, let me say how much I have been honored to serve 
with Senator Wayne Allard. He chairs the subcommittee where this 
legislation has begun. He is doing an outstanding job for our Nation in 
so many different ways but particularly as chairman of this 
subcommittee. I am also pleased to see Senator Levin here. He is the 
ranking member of this committee and is committed to our Nation's 
strength and defenses. And it is a pleasure to see that this 
legislation is moving forward in an expeditious manner.
  Thank you, Madam President.
  Mr. ALLARD addressed the Chair.
  The PRESIDING OFFICER (Mr. Bunning). The Senator from Colorado is 
recognized.
  Mr. ALLARD. I would just like to state that that was a great 
statement that my colleague from Alabama made. And I just want him to 
know what a pleasure and honor it is for me to be able to serve on 
Armed Services with him. We came together into this august body, and I 
look forward to many

[[Page 2642]]

years of working with him and trying to shore up the defense of this 
country.
  Mr. JEFFORDS. Mr. President, I have long been a strong advocate for a 
well-educated American work-force. Vermont's quality of life is related 
closely to the educational opportunities available to her citizens. 
Education is a cornerstone of our healthy economy. These same notions 
apply with similar effect to our men and women in the military. Modern, 
technologically advanced systems and complex missions depend on the 
skills and wisdom of well-educated personnel. S. 4 modestly enhances 
the educational opportunities for our men and women on active duty. It 
should do the same for the members of our Guard and Reserve.
  Consequently, I strongly urge my fellow Senators to support the three 
education-related amendments which Senator Cleland and I will be 
offering to S. 4, the appropriately named ``Soldiers', Sailors', 
Airmen's and Marines' Bill of Rights.'' It is appropriate because one's 
use of the term ``Bill of Rights'' invariably suggests the concepts of 
fairness and equity.
  Perhaps Secretary of Defense William Cohen had this in the back of 
his mind in September of 1997 when he instructed the Department of 
Defense to eliminate ``all residual barriers, structural and cultural'' 
to effective integration of the Guard, Reserve and Active Components 
into a ``seamless Total Force.'' Precisely one year later his Deputy, 
John Hamre, looked back to that day and observed:

       We have made great progress integrating our active and 
     Reserve forces into one team, trained and ready for the 21st 
     century. Our military leaders are getting the message. 
     Structural and cultural barriers that reduce readiness and 
     impedes interoperability between active and Reserve personnel 
     are gradually being eliminated. We must now assess the 
     progress we have made, acknowledge those barriers to 
     integration that still exist, and, most importantly, set our 
     plans into motion.

  If these wise words are to have full effect we must work to rectify 
an oversight in S. 4, which, as written, enhances educational benefits 
for a portion of our seamless Total Force but neglects the remainder. 
Consequently, to promote parity among all components of our military I 
will be offering the following three amendments:
  The first: Allow members of the Guard and Reserve the ability to 
accelerate payments of educational assistance in the same manner 
currently provided in S. 4 to the Active Duty military.
  The second: Allow members of the Guard and Reserve the ability to 
transfer their entitlement to educational assistance to their family 
members in the same manner currently provided in S. 4 to the Active 
Duty military.
  The third: Allow members of the Guard and Reserve who have served at 
least ten years in the Selected Reserve, an eligibility period of five 
years after separation from the military to use their entitlement to 
educational benefits. (Active duty military members have a ten year 
period.)
  Just a few weeks ago, four Reserve Component members lost their lives 
when their KC-135 went down in Germany while flying active duty 
missions for the Air Force. Death did not discriminate between Active 
and Reserve Components. Nor should S. 4.
  The opportunity to face this ultimate risk will only increase as we 
do place greater demands on our Guard and Reserve units to participate 
in our global missions. Since Operation Desert Storm the pace of 
operations has swelled by more than 300% for the Guard alone and is 
widely expected to climb higher.
  We all know the value of the Guard and Reserve for missions close to 
home. In Vermont they saved our citizens from the drastic effects of 
record setting ice storms last winter. Recently, other units helped 
with hurricanes in Florida, North Carolina and South Carolina. They 
assist our citizens during droughts and blizzards. They enrich our 
communities with Youth Challenge programs and they conduct an ongoing 
war on drugs. Just last year we added protection of the U.S. from 
weapons of mass destruction to that list, and the list keeps growing.
  It is now time to bring their educational benefits in balance.
  As many of you know, I believe in the value of life-long learning to 
our society. Access to continuing education has become an essential 
component to one's advancement through all stages of modern careers. S. 
4 modestly improves this access for our brave men and women on active 
duty. It should do the same for our Guard and Reserves.
  I urge my colleagues to help bring parity, equity and fairness to the 
educational opportunities available to all components of our military. 
The Guard and Reserve have been called upon increasingly to contribute 
to the Total Force. They face similar challenges to recruiting and 
retention. They should have similar access to educational 
opportunities.
  Mr. President, let me now turn to another important amendment Senator 
Cleland and I will be introducing. Specifically, we propose allowing 
our men and women in the Guard and Reserve the opportunity to 
participate in the Thrift Savings Plan (TSP) in the same manner S. 4 
provides to their colleagues on active duty.
  Allowing members of the Guard and Reserve to participate in the 
Federal Employees TSP is long overdue and I strongly support the 
proposal to make it law. This program is good for federal workers and 
it would benefit members of the Guard and Reserve financially for them 
to participate in the TSP. Under this system, they would be the sole 
contributors to their accounts, much like civil servants who are under 
the old Civil Service Retirement System. Since there would be no 
federal match to their accounts the cost would be very low to the 
branches of the military and to the taxpayers, as well. Additional 
savings in individual accounts will be important to those individuals 
who serve our nation in regular, but temporary capacities. The payroll 
deduction feature of the TSP is an easy way to save. The accounts are 
managed prudently by the Thrift Savings Board. Participation in the 
system is high and satisfaction with it is also very high.
  Those of us on the Health, Education, Labor, and Pension Committees 
have been spending quite a bit of energy trying to encourage Americans 
to save more money. As a New Englander, I speak for my constituents 
when I say that we know a lot about THRIFT. This is a good amendment 
that will encourage thrift and I hope my colleagues will support it.
  Given that our Guard and Reserve are shouldering an increasing share 
of our world-wide missions, they should have the same savings 
opportunity that S. 4 gives to the active duty. Now is the time to 
ensure that our reserve component personnel are not overlooked.
  Mr. BURNS. Mr. President, I am pleased to rise to join my Senate 
colleagues in supporting the Soldiers', Sailors', Airmen's, and 
Marines' Bill of Rights as it comes to the floor for debate. As a 
former Marine, I am especially proud that the Senate Armed Services 
Committee has recognized the important contribution of my branch of 
service by including Marines in the title of this bill.
  This bipartisan legislation addresses the critical need of improving 
retention in our military services. We've heard much over the past 
months about the impending crisis in maintaining the force strength of 
our military. For example, the Air Force has missed its recruitment 
targets for the past three months, in all three of its recruitment 
categories. This is the first time that the Air Force has ever faced 
this problem. It is critical that we intervene now while the problem is 
still manageable. This bill concentrates on improving the 
attractiveness of a career in the military, not only for new recruits, 
but also for second and third term re-enlistments.
  First, this bill raises the pay of service personnel to keep salaries 
competitive with civilian equivalents. Second, it provides incentives 
for active duty personnel to keep longer service commitments by 
repairing the damage done in 1986 to the military retirement system. 
Third, this bill provides service members with the opportunity to save 
for their own retirement by allowing military personnel to contribute 
up to

[[Page 2643]]

5% of their base pay, before taxes, into the Thrift Savings Plan. 
Finally, this bill enhances the Montgomery GI Bill educational 
benefits. I'm also aware that some of my colleagues will be offering 
other amendments that will further enhance the incentives for long term 
service. These collective changes encourage both current and 
prospective service members to make the military an attractive 
alternative for an extended career.
  One of the first commitments in the Constitution is to provide for 
the common defense. We're demonstrating our commitment to the 
Constitution and our nation's defense today by taking this first step 
in improving the long-neglected quality of life for our service 
members. As we have already seen, when we don't take care of the people 
who are out in harm's way, they end up leaving the service. We have 
almost reached the point of needlessly risking the lives of those 
members choosing service careers due to the increased commitments 
required of them.
  So, we shouldn't just stop with this bill and call our work complete. 
Pay and Retirement incentives are not the only concerns voiced by 
military personnel when they discuss quality of life. They care about 
being able to participate in their family's activities. They want to be 
able to help raise their children. They want to provide a home for 
their families where the roofs don't leak and the water and sewer 
systems work. They want to be trained to handle the weapons they must 
use to maximize their ability to survive in a firefight. In our push to 
pass this piece of legislation, let's not forget these other quality of 
life issues that service men and women weigh when they consider the 
military as a life-long career. As a next step, we should commit to 
eliminating the military construction backlog that has grown to a 100-
plus-year maintenance cycle at its current funding level. Those who 
have seen military action in the Gulf or Panama or other regions will 
ask how Veterans are treated. We should commit to improving veterans' 
heath care and access to the VA system. No service member is naive 
enough to believe that military life will be easy or without sacrifice. 
However, we shouldn't intentionally be making the sacrifice for duty 
greater than it needs to be. Nor should we let the administration's 
promise of improving true quality of life stop at pay and retirement 
benefits. We owe it to our service members to continue addressing all 
areas of quality of life to make sure that our commitment of defense 
for the citizens of the United States is both real and effective. I'll 
be using my position on the Appropriations Committee as well as 
chairing the Military Construction Subcommittee to push for additional 
improvements in these other important quality of life issues.
  But let's not forget why we are here today. As demonstrated globally, 
the quality of our uniformed service personnel is second to none. By 
providing focused incentives for increasing the attractiveness of a 
military career, we ensure that our services will sustain its worldwide 
competitive edge. We owe it to the parents, spouses, and children of 
our service members to make sure that their physical devotion to 
patriotism doesn't come at fiscal expense. This bill is a critical 
first step in meeting our commitments to both family and country. I 
strongly encourage my colleagues to vote for its passage.
  Mr. ALLARD. Mr. President, I yield back the remainder of my time, and 
I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Bunning). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ALLARD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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