[Congressional Record (Bound Edition), Volume 149 (2003), Part 11]
[House]
[Pages 14427-14430]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         BEING FAIR TO VETERANS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Florida (Mr. Miller) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. MILLER of Florida. Mr. Speaker, I was hoping that my colleague 
would remain in the Chamber for the next hour while we talk a little 
bit about exactly what the Committee on Veterans Affairs has done and 
the discussion of the cuts that are being made to the veterans budget. 
We will get into that a little bit later. But tonight I want to talk 
about something called SBP, and we will discuss it in great length. But 
I want to introduce you to somebody first. Her name is Dottie Welch.
  Dottie's story goes something like this: When Lt. Colonel Roger Welch 
of the United States Army retired and signed up for the military 
survivor benefit plan, better known now as SBP, years ago, he was told 
that in the event of his death, SBP would pay his wife, Dottie, 55 
percent of his retirement pay for the rest of her life.
  When he signed an irrevocable agreement to pay annually-increasing 
SBP premiums for the rest of his life, he did not know that his wife's 
future SBP benefit actually would be one-third less than what they were 
led to believe.
  When Roger died in June of 2002, Dottie was dismayed to learn that 
there would be an offset, an offset based on her husband's Social 
Security-covered military earnings, that would reduce her benefits. 
With Social Security survivor benefits and the reduced SBP annuity, her 
total income is $384 a month less than she and Roger thought she would 
have to live on.
  Dottie thinks the Social Security offset is just plain wrong. No one 
will tell her why it is there and why it is so large. Her husband, 
Roger, only had 5 years of military service covered by Social Security.
  Dottie Welch's case highlights one significant inequity of the 
military SBP and the reason why so many retirees and survivors are 
upset about its current situation.
  Unfortunately, this is only the first of several ways that Uniform 
Service Survivor Benefits relative to premiums being paid fall far 
short of what retirees and survivors were promised and what is afforded 
survivors of other Federal retirees.
  There are three major SBP inequities. But before I go into those 
inequities tonight, I would like to pause for a moment and recognize my 
good friend from South Carolina (Mr. Wilson), who has been a stalwart 
supporter of the veterans of this country.
  I yield to the gentleman.
  Mr. WILSON of South Carolina. Mr. Speaker, it is an honor to be here 
tonight to join my friend, the gentleman from Florida (Mr. Miller), who 
has authored H.R. 548, the Military Survivors Benefit Improvement Act 
of 2003. The gentleman is a champion of veterans and veterans' spouses 
because his Pensacola community has some of the highest concentrations 
of veterans in America. I am particularly happy to see his efforts, 
because I am a veteran myself.
  Under the current plan, thousands of retirees and spouses who 
enrolled in the original survivors benefit plan have come to receive 
approximately 23 percent less coverage than they had initially 
anticipated. Since its inception, the government's cost share has 
steadily dwindled from 40 percent to 17 percent. It is our intention to 
revise the plan in order to reinstate the original coverage offered by 
the 1972 version of the survivor benefits plan.

                              {time}  1815

  I believe there is no better way to convey the importance of this 
legislative revision than to examine the hardships felt by a South 
Carolina family who put their trust and their money in the original 
version of the 1972 survivors benefit plan.
  Donna Fleming of Mt. Pleasant in Charleston County, South Carolina, 
became a widow in 1998. Her husband had served in the United States 
Army and upon retirement had sought the benefits of SBP. Like many 
Americans enrolled in the plan, the couple was unaware of the age 62 
offset benefit reduction provision, and were subsequently

[[Page 14428]]

confronted with the news of the offset years later.
  Donna's husband has since passed, and she has managed to meet her 
daily expenses through SBP, occasionally dipping into her savings for 
major bills. However, Donna will soon be 62, and still has not received 
notification as to the exact amount of the offset. She expects that it 
may be more than $6,000 a year, $500 a month. She then will be forced 
to draw from her savings more and more.
  Mr. Speaker, this is not the intent of the original legislation. It 
is every family's fear that their loved ones may face financial 
hardship following their death, and in Donna's case, that fear has 
become reality. In her words, ``This country owes military families, 
for which they have dedicated their entire lives.''
  Please join us in supporting H.R. 548, the Military Survivors Benefit 
Improvement Act of 2003. Join us in restoring justice for those 
enrolled in this plan for our Nation's military personnel, their 
devoted spouses, and their loving families.
  Mr. MILLER of Florida. Mr. Speaker, I thank my good friend, the 
gentleman from South Carolina (Mr. Wilson), for his comments and his 
support of veterans' issues. I also wish to add my congratulations and 
best wishes to him as he very soon becomes one of those retirees after 
serving many years in the Army Guard in his home State.
  Mr. Speaker, there are three major SBP inequities. One is that 
thousands of people who bought SBP coverage were not briefed that most 
survivors' SBP annuities would be reduced substantially after age 62; 
two, the 40 percent government subsidy envisioned by Congress and 
touted by the services to encourage retirees' participation has plunged 
to 17 percent; three, the government provides Federal civilian 
survivors a substantially higher share of retired pay for life with no 
benefit reduction at any age.
  The impact of these inequities is, as Members can imagine, 
devastating to many survivors, because SBP is not exactly a king's 
ransom at 55 percent of retired pay. At 35 percent, SBP provides only a 
poverty level or lower annuity for most survivors, even those of 
relatively senior officers.
  So I am here tonight to provide more specifics on how the military 
SBP program is not providing, is not providing the level of protection 
military survivors need and deserve and were expecting; and why my 
bill, H.R. 548, the Military Survivors Benefit Improvement Act of 2003, 
is what is needed now to fix the current problem.
  The first issue that we need to discuss tonight is something that I 
call the benefit reduction shock. It is incredulous to many that such 
an important feature of SBP, the reduced age 62 annuity that applies to 
the vast majority of military survivors, was never explained to 
retirees being asked to sign up for the program in the seventies and in 
the early eighties, but it is true.
  I have in my hand a copy of the actual SBP Election Form 5002 signed 
by a retired member in 1982 in two different places. It specifies that 
SBP will pay the survivor 55 percent of the member's retired pay. 
Nowhere, even in the fine print, does it mention any lower figure. We 
can only speculate about how or why this key fact was omitted, but it 
hardly matters now to those who were misled by the forms and by the 
briefings.
  Certainly, the offset was extremely complicated for retirement 
counselors to explain, and it was almost impossible to tell any 
particular retiree at that point what SBP amount his or her survivor 
would actually receive after attaining the age of 62.
  For members who attained retirement eligibility before 1985, the 
offset represented the amount of the survivors' Social Security benefit 
that was attributable to the Member's Social Security-covered military 
earnings, because the military only came under the Social Security 
system in 1957, and that amount varied widely for different retirees, 
and the rules for the calculation of Social Security benefits due to 
military versus civilian employment are arcane at best.
  When they first learned of the age 62 benefit reduction, years, 
sometimes decades, after they purchased SBP, many older retirees and 
survivors expressed outrage in the mistaken belief that Congress had 
changed the law on them after the fact.
  Not so. The age 62 reduction was part of the initial SBP law enacted 
in 1972, but this critical piece of information did not find its way 
into most military retirement briefings and SBP election forms until 
many years later after complaints, years after complaints started to 
roll in.
  Large numbers of retirees and survivors feel betrayed by what they 
perceive as a bait-and-switch under which they were asked to sign 
irrevocable contracts to pay lifetime SBP premiums without being told 
what the annuity level they were actually buying was.
  Dottie Welch is far from the only spouse who is very much aware of 
the impact of the Social Security offset. One survivor's husband was a 
Navy hard-hat diver during World War II, then an electronics technician 
on a nuclear submarine until his retirement in 1966. When he died in 
May of 2002, his widow had no idea she would be hit by the offset. ``I 
was shocked. I almost fell out of the chair, and wondered why God 
hadn't taken me too,'' she says today.
  In the grief that followed her husband's death, this 78-year-old 
widow also faced numerous family bills and health problems. When her 
SBP annuity started, she was stunned to find out that it was one-third, 
one-third less than what she had expected. Now faced with $21,000 in 
bills, she was advised to declare bankruptcy, and feared she would lose 
her home trying to pay her debts. Her financial struggles eventually 
led her to the Navy-Marine Corps Relief Society for a grant to help her 
get back on her feet financially.
  Not one member of our greatest American generation should find 
themselves under this kind of stress while getting over the death of 
their spouse and trying to do something with the large bills that were 
facing them.
  In an attempt to reduce this kind of confusion, in 1985 Congress 
established a two-tier system, not linked to Social Security, that 
actually provides an SBP survivor 55 percent of retired pay until age 
62, and 35 percent after that age. But making the age 62 reduction 
clear for the post-1985 retirees did not make it any fairer, and it did 
not change the fact that thousands upon thousands of earlier 
participants had not been told of the age 62 annuity reduction.
  Also in 1985, Congress shocked the survivor community by repealing 
the 1984 legislation that would have barred any SBP Social Security 
offset for survivors who earned their Social Security benefits from 
their own work history rather than the military retiree's, as assumed 
under the original offset law. This only further highlighted the 
unfairness of the offset to thousands of widows who had pursued their 
own military or civilian careers.
  Now, the second issue, another broken promise. When SBP was enacted 
in 1972, Congress set the premium formula in law with the intent that 
retirees' monthly premium payments would cover 60 percent, 60 percent 
of the long-term costs of the survivor benefits, with the government 
paying the remaining 40 percent. The formula was based on the program 
cost assumptions prepared by the Department of Defense actuaries 
concerning future inflation rates, pay raises, longevity of retirees, 
and survivors' longevity, et cetera.
  But actual experience in later years proved the actuaries' original 
estimates had been far too conservative, as inflation was lower than 
predicted and retirees lived and paid premiums longer than anticipated. 
Because retiree premiums were locked into law and covered a greater 
portion of the program costs than had been projected, the government 
reaped an economic windfall, and found its share of the cost for the 
SBP program was much lower than anticipated. By 1988, retiree premiums 
covered 77 percent of the SBP costs, and DOD's share had dropped to 23 
percent.
  To its credit, Congress acted in 1990 to restore the intended 60/40 
balance by reducing retiree premiums to 6.5 percent of retired pay, but 
the overconservative actuarial assumptions

[[Page 14429]]

have continued to work against, work against retirees for the last 
decade, with the result that the Federal subsidy for SBP has continued 
to decline. As of 2003, the government's share has dropped from 40 
percent to 17 percent, leaving retirees once more paying a higher-than-
intended share of the benefit.
  The only fair way to restore the proper cost balance between the 
retirees and the government is to reduce the premium, or increase the 
SBP benefit. The former benefits primarily retirees, while the latter 
benefits the survivors. Since retiree premiums were reduced to restore 
the 60/40 balance in 1990, Congress should restore the government's 
intended 40 percent cost share by raising the benefit for survivors. My 
bill does exactly that.
  Now, the third issue. It is the military-civilian inequity. No less 
compelling than the misleading of enrollees and the decline of the 
intended subsidy is the stunning disparity that exists between benefits 
and subsidy levels the government offers military versus Federal 
civilian survivors.
  In contrast to the military SBP subsidy of, remember, 17 percent, 
currently, the SBP for Federal civilian employees under the post-1984 
Federal Employee Retirement System provides a 33 percent subsidy. For 
those under the pre-1984 Civil Service Retirement System the subsidy is 
48 percent, and at 48 percent, it is nearly three times as high as the 
military's.
  Even more important, the Federal Employment Retirement System 
survivors receive 50 percent of retired pay, and the other survivors 
under the old Civil Service Retirement System receive 55 percent for 
life, with no benefit reduction, no benefit reduction, at age 62.

                              {time}  1830

  Although Federal civilian premiums are higher, military retirees pay 
SBP premiums for a far longer period of time than do most civilians 
because they are required to retire at a younger age. Because their 
mortality rates are not much different, this means that Federal 
civilian retirees have a far more advantageous benefit-to-premium 
ratio, as indicated on these charts.
  Now, military retirees particularly pay SBP premiums about twice as 
long, twice as long as Federal civilians because they retire at younger 
ages, but their spouses' longevity is about the same. So military SBP 
enrollees see a lower return and a much lower government subsidy.
  Remember Dottie? My bill is the needed fix for the three major 
inequities of the Survivor Benefit Plan. We must keep faith with the 
older retirees and with the survivors. We must restore the intended 40 
percent Federal subsidy, and we must put SBP on an equal footing with 
its Federal civilian equivalent.
  The Military Survivors Benefit Improvement Act of 2003, my bill, 
accomplishes these three things. For these reasons, the 33 military and 
veterans associations of the military coalition have endorsed my bill 
and have made its passage one of their top priorities in the 108th 
Congress.
  H.R. 548 will balance equity and will balance cost considerations by 
phasing out the SBP age 62 benefit reduction over the next 5 years. And 
upon enactment, the age 62 benefit increase phase-in will begin at 40 
percent on October 1 of 2004 and continually annually each year after 
through the year of 2007 until the benefits are restored to a full 55 
percent as was the desire of Congress.
  In order to offset part of the costs of the benefit increase, H.R. 
548 authorizes an open season provision in the legislation that would 
allow more retirees to participate, generating SBP program savings, and 
significantly reducing the outlays.
  Now, Congress has already acknowledged the need for this particular 
piece of legislation. The fiscal year 2001 Defense Authorization Act 
included a provision asserting the sense of Congress that there should 
be enacted legislation to reduce and eventually eliminate the different 
levels of SBP annuity for surviving spouses who are under age 62 and 
those who are 62 and older. But we have failed to follow through on 
that commitment for the last 2 years. It is time for us to fix this 
problem. Military widows and widowers have waited long enough in their 
fight for fairness. Now is the time for Congress to step up and enact 
relief for the aging survivors of our greatest generation. World War II 
and Korean War retirees, and the following generations of retirees and 
survivors, deserve no less than the SBP deal they were promised and the 
one the government already provides for other Federal survivors.
  Now, a quick time line of H.R. 548. It was introduced on February 5 
of 2003. And upon introduction, we had 118 bipartisan co-sponsors. That 
is 27 percent of the entire House of Representatives. On that day it 
was referred to the Committee on Armed Services. On February 28 of 
2003, it was referred to the Total Force subcommittee, and on the same 
date executive comment was requested from DOD. Now, over 3 months later 
I urged DOD to act on this request.
  On March 7 of 2003, a letter was sent to the gentleman from Iowa 
(Chairman Nussle) and the ranking member, the gentleman from South 
Carolina (Mr. Spratt), of the House Committee on the Budget urging 
support to include budget authority in fiscal year 2004 in our budget 
resolution. On the letter there were 36 bipartisan co-signers, 
including numerous members of the Committee on the Budget, the 
Committee on Armed Services, and the Committee on Veterans Affairs. 
Today this bill has 268 bipartisan co-sponsors. That equates to 62 
percent of this House.
  All Americans should urge their Representatives to co-sponsor H.R. 
548 and their Senators to co-sponsor Senate bill 451, introduced by 
Senator Olympia Snowe of Maine.
  Again, who supports H.R. 548? The number one legislative priority of 
the Military Officers Association of America and the 108th Congress. 
Additionally, the bill is strongly endorsed by the Military Coalition, 
a consortium of 33 nationally prominent military and veterans 
organizations representing more than 5.5 million members of uniformed 
services, active, reserved, retired, survivors, veterans and their 
families; and there are many, many others that have sent letters of 
support for this bill.
  There are others that are tracking similar legislation in this body. 
I would note tonight that H.R. 1726, the Military Surviving Spouses 
Equity Act, sponsored by the gentleman from South Carolina (Mr. Brown), 
repeals the offset from surviving spouse annuities under the military 
Survivor Benefit Plan for amounts paid by the Secretary of Veterans 
Affair as dependency and indemnity compensation, or DIC. It provides 
for the recoupment of certain amounts previously paid SBP recipients in 
the form of retired pay refund. It was filed on April 10 of 2003. It 
has been referred to the Committee on Armed Services. It has 24 co-
sponsors. And I want to commend my colleague, the gentleman from South 
Carolina (Mr. Brown), for his efforts to restore equity to this aspect 
of SBP; and I am proud to be an original co-sponsor of this 
legislation.
  H.R. 1653, sponsored by the gentleman from New Jersey (Mr. Saxton), 
would change the effective date for the paid-up coverage under the 
military Survivor Benefit Plan from October 1 of 2008 to October 1 of 
2003. It has 25 co-sponsors, and I am an original co-sponsor of this 
particular bill. It was filed on April 7, and it too has been referred 
to the House Committee on Armed Services.
  A third piece of legislation, H.R. 1592, the Military Survivors 
Equity Act. It has been sponsored by my colleague, the gentleman from 
California (Mr. Filner), and it would repeal the two-tier annuity 
computation system applicable to annuities under the SBP plan for 
retired members of the Armed Forces so that there would be no reduction 
in such an annuity when the beneficiary becomes 62 years of age. It was 
filed on April 3 of this year, referred to the Committee on Armed 
Services; and it has 5 co-sponsors as this time. Both the Filner bill 
and my bill fulfill the 2001 sense of Congress resolution to reduce and 
eventually eliminate this SBP reduction. Again, both these bills

[[Page 14430]]

go a long way to fulfilling the sense of Congress and that resolution 
to reduce and eventually eliminate this SBP reduction.
  Let me talk a little bit about the VA budget for 2004. Our service 
men and women who continue to fight for our freedom and security around 
the world must know that Americans are united in their support for them 
and for their safe return. We in Congress, along with President Bush, 
support not only the troops in the field but also the scores of 
veterans who have already given so much to this country.
  Unfortunately, there have been false reports, false reports 
circulating that Congress is actually cutting veterans benefits. Here 
are the facts of the congressional budget for fiscal year 2004 relating 
to veterans spending. This budget will allow us to fully meet our 
commitments to more than 2.6 million disabled veterans and widows who 
rely on VA benefit checks every month. It calls for $33.8 billion in 
mandatory spending. This is the highest spending ever in this area. It 
also calls for $30 billion, a 12.9 percent increase in discretionary 
spending. Nearly 90 percent of this funding is for veterans' medical 
care. These are the indisputable facts of this year's Federal budget 
for veterans.
  House Members, particularly the Republicans, along with President 
Bush, are committed to ensuring that those who have served their 
country with pride, with valor and dignity receive the best of 
America's appreciation. Any suggestion otherwise is simply untrue, is 
not supported by the facts.
  During January, I had the opportunity to visit with some of our men 
and women in uniform stationed in Germany, Italy, and France. And I was 
struck by their professionalism and commitment to their assigned 
duties. They were proud to serve. It is just as simple as that.
  Two weeks ago, I visited North Korea where freedom is nowhere to be 
found and democratic thought is oppressed. We are truly blessed to live 
in a world of freedom and democracy and where life, liberty, and the 
pursuit of happiness are abundant and, I would submit, many times taken 
for granted.
  Defense of the principles and values that we hold so dearly as a 
Nation leads our men and women into conflicts around the globe. Many 
return home after giving the ultimate sacrifice in defense of such 
values. But to those who do return, we can never say thanks enough.
  Today, as we continue to rely on our Armed Forces in the war against 
terrorism, we look to our veterans for their example of courage and 
sacrifice. It is their selfless service that has made our Nation strong 
and our world a better place. America's veterans deserve our respect, 
our deepest respect, and enduring appreciation, as do their spouses who 
choose to marry members of our armed services and to share with them 
all the joys and sacrifices of their active duty careers.
  The Survivor Benefit Plan is not to military spouses what Congress 
had intended or what enrollees were promised. The program is not 
providing the level of protection military survivors need and deserve.
  Retirees and survivors deserve no less in the SBP deal than they were 
promised. This Congress needs to step up and deliver what the aging 
survivors of our greatest generation retirees were promised. And we 
need to provide at the proper level the protection necessary for future 
generations of retirees. Congress must act to fix this problem now.
  Mr. FILNER. Mr. Speaker and colleagues, I rise today to speak about a 
military widow in my Congressional District who has written to me about 
her Military Survivor Benefits Plan, known as SBP.
  She writes: ``My husband, who served in the Army for 20 years, died 
in July, 1995. I was then 61 years old. I was doing okay, paying my 
monthly bills and having enough left for groceries, but when I turned 
62, I was notified my SBP was reduced from $476 to $302. What a shock! 
This was my grocery money they took from me. I hope that nobody else 
has to go through what I have. I cry every day and night. Not only have 
I lost my husband, I lost my money, my pride, my dignity.'' These words 
from the widow of one of our nation's veterans should be seared into 
the mind of every member of Congress.
  Tomorrow, along with a number of my colleagues, I will be signing a 
discharge petition for H.R. 303, a bill to provide what is known as 
concurrent receipt to our disabled military retirees. If this law is 
passed, these retirees would be able to receive both their military 
retired pay, which they earned, and their VA disability compensation, 
which they deserve! As you know, both the House and the Senate passed 
concurrent receipt during the last session of Congress--and only in the 
Conference, was it diluted to almost nothing. We are again fighting to 
correct this grave injustice.
  I am here today to state that there is another equally deserving 
group that we must include in this fight--the widows of our military 
retirees! Not only are many of our military retirees being denied their 
rightful benefits while they are alive, their spouses are being denied 
their rightful benefits upon their death.
  The law to reduce the benefits received by military retired widows 
when they turn 65 is misleading and unfair. It is time to change this 
law! Most of these military widows are living on small incomes, but 
even people with substantial incomes would have a tough time coping 
with a reduction from 55 percent of their retirement benefits to 35 
percent.
  My bill, H.R. 1592, the Military Survivors Equity Act, would 
immediately eliminate this callous and absurd reduction in benefits 
that now burdens our military widows. My colleague form Florida, Mr. 
Miller, has introduced H.R. 548, a bill that would increase the post-62 
SBP annuity so that it reaches 55 percent of the military retired pay 
by 2007. Both bills fulfill the 2001 ``sense of Congress'' resolution 
to reduce and eventually eliminate this SBP reduction. The passage of 
this legislation is a top priority for the Military Officers 
Association of America, and the Veterans of Foreign Wars has also 
voiced their support for these bills. The Democratic Salute to Veterans 
and the Armed Forces legislative package, recently released, also calls 
for an end to this unfair reduction of benefits.
  I encourage members from both sides of the aisle to work with 
Congressman Miller and me to stop the pain and anguish we are causing 
our military widows and to show respect for the tremendous sacrifices 
made by our veterans and their families. We must pass this legislation 
to make this the compassionate and effective Survivors Benefits Plan it 
should be.

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