[Senate Report 106-1]
[From the U.S. Government Publishing Office]
Calendar No. 13
106th Congress Report
1st Session SENATE 106-1
=======================================================================
THE SOLDIERS', SAILORS', AIRMEN'S AND MARINES' BILL OF RIGHTS ACT OF
1999
_______
February 2, 1999.--Ordered to be printed
_______
Mr. Warner, from the Committee on Armed Services, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 4]
The Committee on Armed Services, to which was referred the
bill (S. 4) having considered the same, reports favorably
thereon with an amendment and recommends that the bill do pass.
Purpose of the Bill
S. 4 would authorize a 4.8 percent military pay raise,
effective January 1, 2000, reform the military pay tables,
revise the military retirement system, authorize active duty
military personnel to participate in the Thrift Savings Plan,
revise benefits under the Montgomery G.I. Bill, authorize a
special subsistence allowance for junior enlisted military
personnel who demonstrate eligibility for food stamps, and
require an annual report on the impact of these programs on
recruiting and retention.
Committee Overview and Recommendations
The Committee on Armed Services held a series of two
hearings in which the Joint Chiefs of Staff testified to the
state of military readiness and recommended several legislative
proposals that, according to their testimony, would provide
remedies for the causative factors the services identified as
the reasons military personnel were leaving the service and
potential recruits were reluctant to enlist.
The first of these hearings was held on September 29, 1998
and the second was held January 5, 1999. During these hearings
the Joint Chiefs testified that, among their recommendations,
their highest priority was to repeal the ``Redux'' retirement
plan. The Military Retirement Reform Act of 1986, also known as
the ``Redux'' retirement plan, was enacted in July 1986. The
provisions of this Act changed the existing military retirement
program by reducing the multiplier used to calculate military
retired pay. Prior to this act, military retired pay was
calculated by multiplying two and one-half percent of the
average of the highest three years of basic pay by the number
of years of service. This formula resulted in service members
who served for 20 years receiving 50 percent of their average
of the highest three years of basic pay. The retired pay under
the pre-1986 retirement program is indexed to adjustment by the
full amount of the Consumer Price Index. Under the Military
Retirement Reform Act of 1986, military retired pay is
calculated by multiplying two and one-half percent of the
average of the highest three years of basic pay by the number
of years of service, less one percent for each year less than
30 years of service. This formula resulted in service members
who served for 20 years receiving 40 percent of their average
of the highest three years of basic pay until they reach age
62, at which time they receive 50 percent of their average of
the highest three years of basic pay. Annual cost-of-living
adjustments are limited to the Consumer Price Index less one
percent until the recipient reaches age 62. At age 62 retired
pay is adjusted with a one-time adjustment to restore the
purchasing power of the annuity. Annual cost-of-living
adjustments continue to be limited to the Consumer Price Index
less one percent.
The House report accompanying H.R. 4420, the Military
Retirement Reform Act of 1986 (H. Rept. 99-513), states that
the changes to the military retirement system were intended to
provide an incentive for service members who complete 20 years
of service to remain on active duty. In the statement of
managers accompanying the Military Retirement Reform Act of
1986 (Public Law 99-348), the conferees acknowledge that
changing one aspect of an integrated personnel and compensation
system could well engender need for adjustments in other
aspects of the system. The conferees stated:
As future career force needs develop, the management
tools for recruiting and retaining a career force may
require adjustment. The Conferees are confident that
the Department of Defense and the military services
will monitor this situation closely and provide the
Committees on Armed Service of the Senate and the House
of Representatives annually in posture statements their
assessments of the state of the career force, together
with recommendations for legislative action that may be
necessary to prudent management of the career force.
The testimony of the Joint Chiefs in September 1998 and
January 1999 fulfilled the expectations described by the
conferees in 1986. The Joint Chiefs made it clear that, in
their opinion based on the data available to them, the
incentive for career personnel to remain on active duty longer
than 20 years envisioned in the House report (H. Rept. 99-513)
was not asattractive as originally thought in 1986. The Joint
Chiefs testified that mid-career military personnel were deciding to
leave the service well before reaching 20 years of service. In exit
surveys, these departing personnel reported that dissatisfaction with
reduced retirement benefits was an important factor in their decision
to leave the service. The Joint Chiefs testified that, along with
repeal of the ``Redux'' retirement program, it was essential to close
the gap between military pay and private sector wages. General Shelton
testified that:
One can argue about how large the pay gap is
depending on the base selected, but the estimates range
from 8.5 percent to 13.5 percent, and very few deny
that the gap is real.
On December 21, 1998, the Secretary of Defense and General
Shelton announced their proposals for increasing military pay
and changing the military retirement system. In his statement,
Secretary Cohen said:
We must compensate men and women in uniform properly
in relation to their peers and in relation to the
larger economy. And the compensation system must help
the Services recruit and retain the high quality men
and women our defense requires. The leadership of the
Department of Defense and the military services are
deeply committed to providing for the welfare of the
men and women who serve the nation so well, and for
their families.
The proposal announced by Secretary Cohen and General Shelton,
while more modest in scale, are similar in construct and design
to those in this bill.
On January 19, the Majority Leader, along with the
Republican Members of the Armed Services Committee and others,
introduced S. 4, the Soldiers'', Sailors'', Airmen's and
Marines' Bill of Rights Act of 1999. Also on January 19, 1999,
Senator Cleland, along with the Democratic Members of the Armed
Services Committee and others, introduced S.169, the Military
Recruiting and Retention Improvement Act of 1999. Both bills
were referred to the Committee on Armed Services. The bill
reported by the Committee includes provisions from both of
these bills.
The Committee recommends the following specific provisions.
TITLE I--PAY AND ALLOWANCES
Section 101--Fiscal year 2000 increase and restructuring of basic pay
The committee recommends a provision that would waive
section 1009 of title 37, United States Code, and increase the
rates of basic pay for members of the uniformed services by 4.8
percent. This increase would be effective January 1, 2000. The
recommended provision, effective July 1, 2000, would
restructure the pay tables for the uniformed services to
relieve compression between grades by restoring significance to
promotion pay raises and eliminating inconsistencies in the
current pay tables. The proposed restructuring of the pay
tables would shift the emphasis toward promotion while reducing
and making longevity increases more uniform than those in the
current pay tables.
Section 102--Pay increases for fiscal years after fiscal year 2000
The committee recommends a provision that would amend
section 1009 of title 37, United States Code, to provide that
military pay raises after October 1, 2000 shall be equal to the
Employment Cost Index plus one-half percent. The committee
intends that future military pay raises exceed the annual
growth in private sector wages, as indicated by the Employment
Cost Index, to close the gap between military pay and private
sector wages. The committee recognizes that this formula may
require further adjustment in the future once the gap between
military and private sector wages is eliminated.
The committee is aware that military and civilian federal
employees have received similar pay raises for many years.
While the committee does not have jurisdiction over federal
civilian pay, it does believe that treating both military and
federal civilian compensation adjustments with parity has
served both entities well.
Section 103--Special subsistence allowance
The committee recommends a provision that would authorize a
special subsistence allowance of $180 per month payable to
enlisted personnel in grades E-5 and below who can demonstrate
eligibility for food stamps. This allowance would be payable
for a period of twelve months, unless one of the following
events occurred: the service member is no longer eligible for
food stamps; the service member is promoted to a higher grade;
or the service member is transferred in a permanent change of
station. Once the allowance is terminated, the service member
may re-apply for the allowance if he or she can demonstrate
continued eligibility for food stamps. The recommended
provision would require the Secretary of Defense to submit an
annual report on the number of military personnel eligible to
receive food stamps to the Committees on Armed Services of the
Senate and the House of Representatives, not later than March 1
of each year. The special subsistence allowance would be
effective within 180 days of enactment and would expire after
five years. The committee believes that the Nation should take
extraordinary measures to assist the neediest military families
who now require federal food stamp assistance. This allowance,
when combined with the 4.8 percent pay raise, restructuring of
the pay tables and the requirement for future pay raises to be
based on the Employment Cost Index plus one-half percent, is
estimated to assist nearly 10,000 military personnel to
discontinue the use of food stamps.
TITLE II--RETIREMENT BENEFITS
Section 201--Retired pay options for personnel entering uniformed
services on or after August 1, 1986
The committee recommends a provision that would afford
service members who entered the uniformed services on or after
August 1, 1986 the option to elect to retire under the pre-1986
military retirement plan or to accept a one-time $30,000 lump
sum bonus and to remain under the ``Redux'' retirement plan.
Service members would be permitted to select between the two
retirement programs within 180 days of completing 15 years of
service. Service members who elect to accept the lump sum bonus
would be obligated to serve the remaining five years to become
retirement eligible. Those who do not complete the required
service would be required to repay a pro-rated amount based on
the unserved amount of the obligation. Service members would be
permitted to elect to have the pre-tax value of the bonus
deposited directly into a Thrift Savings account. The committee
believes that affording service members an option fulfills the
request of the Joint Chiefs by permitting those who find the
``Redux'' retirement system as a disincentive to serving a full
career the opportunity to transfer to the pre-1986 retirement
plan. However, those who would prefer to receive a cash bonus
or those who seek the benefits of a Thrift Savings Plan may
elect to remain under the ``Redux'' retirement system. The
committee believes these options are both cost effective and
provide the necessary incentives for mid-career personnel to
remain on active duty.
Section 202--Participation in thrift savings plan
The committee recommends a provision that would, effective
July 1, 2000, authorize members of the uniformed services to
participate in the Thrift Savings Plan now available for
federal civil service employees. Service members would be
eligible to deposit up to five percent of their basic pay,
before tax, each month. The government is not required to match
the service member's contributions. In addition, service
members would be permitted to directly deposit special pays for
enlistment, reenlistment and the lump-sum for electing to
remain in the ``Redux'' retirement program, pre-tax, into their
Thrift Savings account. Participating in a Thrift Savings
account would encourage personal savings and enhance the
retirement income for service members, who currently do not
have access to a 401k savings plan. Under current Thrift
Savings Plan regulations, participants may borrow from their
accounts for such worthy purposes as college tuition and
purchasing a home. If enacted, military personnel would be able
to join other federal workers in a savings program that will
enhance the value of their retirement system and permit them to
improve their quality of life. The committee believes this
provision will be an important incentive for military personnel
and their families to remain on active duty.
Section 203--Special retention incentive
The committee recommends a provision that would authorize
service secretaries to make contributions to the Thrift Savings
Plan of a service member serving in a speciality designated as
critical to meet service requirements. The recommended
provision would be entirely discretionary and would permit the
service secretary to offer to make monthly contributions, up to
the maximum amount contributed by the service member, for a
period of six years in return for a six year service commitment
on the part of the service member. The Joint Chiefs testified
as to the difficulty the services are experiencing with mid-
career retention in critical specialities. Pilots, air crewmen,
special operations personnel, surface warfare officers, and
other critical military specialities have been identified as
examples of the hemorrhage of highly trained, experienced
military personnel. The committee believes this provision would
provide service secretaries a powerful tool to be used to
encourage personnel in the most critical specialities to remain
on active duty.
TITLE III--MONTGOMERY G.I. BILL BENEFITS
Section 301--Increase in rates of educational assistance for full-time
education
The committee recommends a provision that would increase
the monthly benefit under the Montgomery G.I. Bill, authorized
in Title VII of the National Defense Authorization Act for
Fiscal Year 1985 (Public Law 98-525), from $528 to $600 for
members who serve at least 3 years, and from $429 to $488 for
members with two year enlistments. Although Montgomery G.I.
Bill (MGIB) benefit levels are adjusted annually by the
increase in the Consumer Price Index, the benefits have not
kept up with the increase in cost of college education. The
committee concluded that the adverse ratio between the cost of
higher education and the benefits available to pay for it may
be one reason why veterans are not using the benefit that they
invested $1,200 to obtain. The committee believes that this
modest increase in the MGIB benefit will make this program a
more attractive recruiting incentive. This recommendation is
consistent with the recent recommendation of the Congressional
Commission on Servicemembers and Veterans Transition
Assistance.
Section 302--Terminations of reductions of basic pay
The committee recommends a provision that would eliminate
the $1,200 contribution required of members who elect to
participate in the Montgomery G.I. Bill program (MGIB), and to
absolve any balance of the $1,200 payroll deduction owed by
active duty members effective the date of enactment. Under the
current provisions of the MGIB program, recruits are enrolled
upon entering active duty and are given the option to
declineenrollment if they so desire. If they remain enrolled, $100 per
month is deducted from their basic pay for 12 months. Once enrolled,
members cannot disenroll and the money deducted is non- refundable,
except in cases of a service-connected death of the service member. The
committee believes that the elimination of the $1,200 pay reduction
will enhance the attractiveness of the MGIB as a recruiting incentive.
This recommendation is consistent with the recent recommendation of the
Congressional Commission on Servicemembers and Veterans Transition
Assistance.
Section 303--Accelerated payments of educational assistance
The committee recommends a provision that would permit
payment of accelerated ``lump sum'' benefits for an entire
term, semester, or quarter at colleges and for the entire
course for courses not leading to a college degree. Payment of
the Montgomery G.I. Bill (MGIB) benefit at a fixed monthly rate
constrains veterans and service members desiring to enroll in
certain courses of study. The committee believes that
permitting accelerated payments will make it easier to use the
MGIB benefits without increasing the cost of the benefits and
make the MGIB a more attractive recruiting and retention
incentive. This recommendation is consistent with the recent
recommendation of the Congressional Commission on
Servicemembers and Veterans Transition Assistance.
Section 304--Transfer of entitlement to educational assistance
The committee recommends a provision that would provide the
Services with the discretionary authority to permit service
members to transfer their Montgomery G.I. Bill (MGIB) benefits
to immediate family members. Many service members reluctantly
leave the service to take advantage of more lucrative
opportunities so they can afford a college education for their
family members. This provision gives them a vehicle to finance
a college education for family members while remaining in the
service. The committee believes that the ability to transfer
MGIB benefits to family members will prove to be a powerful
retention incentive. This recommendation is consistent with the
recent recommendation of the Congressional Commission on
Servicemembers and Veterans Transition Assistance.
TITLE IV--REPORT
Section 401--Annual report on effects of initiatives on recruitment and
retention
The committee recommends a provision that would require the
Department of Defense to report annually on the impact of the
initiatives contained in this bill on recruiting and retention.
This will ensure that Congress receives analysis and feedback
on the effectiveness of these programs on recruiting and
retention in the Services.
Committee Action
In accordance with the Legislative Reorganization Act of
1946, as amended by the Legislative Reorganization Act of 1970,
there is set forth below the committee vote to report the
Soldiers', Sailors', Airmen's and Marines' Bill of Rights Act
of 1999 (S. 4).
In favor: Warner, Thurmond, McCain, Smith, Inhofe,
Santorum, Snowe, Roberts, Allard, Hutchinson, Sessions,
Kennedy, Bingaman, Byrd, Robb, Cleland, Landrieu and Reed.
Opposed: None.
Present: Levin and Lieberman.
Congressional Budget Office Cost Estimate
It is not possible to include the Congressional Budget
Office cost estimate on this legislation because it was not
available at the time the report was filed. The committee will
publish in the Congressional Record information on the five-
year cost projections when such information is received from
the Congressional Budget Office.
Regulatory Impact
Paragraph 11(b) of rule XXVI of the Standing Rules of the
Senate requires that a report on the regulatory impact of a
bill be included in the report on the bill. The committee finds
that there is no regulatory impact in the case of S. 4.
Changes in Existing Law
Pursuant to the provisions of paragraph 12 of rule XXVI of
the Standing Rules of the Senate, the changes in existing law
made by certain portions of the bill have not been shown in
this section of the report because, in the opinion of the
committee, it is necessary to dispense with showing such
changes in order to expedite the business of the Senate and
reduce the expenditure of funds.
ADDITIONAL VIEWS OF SENATORS LEVIN, KENNEDY, BINGAMAN, BYRD, ROBB,
LIEBERMAN, CLELAND, LANDRIEU, AND REED
All of the Members of this Committee are in agreement that
we must provide fair compensation to the men and women of our
armed services for their outstanding performance and dedicated
service to our nation. We are all keenly conscious of the
demands that we place on our troops, the circumstances in which
they must live and work, and the fact that we often pay them
less, and expect them to do far more, than employers in the
private sector.
Secretary Cohen and the Joint Chiefs of Staff have made a
strong case that military recruitment and retention have begun
to suffer, in part, because of this pay gap with the private
sector. For this reason, the Administration has recommended
that we act to address this problem with 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. We concur in these three recommendations.
We also believe that the bill reported by the Committee has
been enhanced by adding provisions, first proposed by Senator
Cleland in S. 169 and consistent with the recommendations of
the Congressional Commission on Servicemembers and Veterans
Transition Assistance, to improve the educational benefits
provided to service members through the GI bill. These changes
should provide a substantial incentive to assist the services'
recruiting and retention, while providing our men and women in
uniform an educational opportunity in the proudest tradition of
our country.
At the same time, we believe that we do a disservice to our
military and to our nation by failing to give these far-
reaching measures the kind of serious, thoughtful consideration
that they deserve. Although the Joint Chiefs of Staff have
testified at two hearings that they want us to change the
military retirement system, the proposals in S. 4 are very
different from their proposals. We recommend that the Committee
ask the Joint Chiefs whether they support the retirement
proposals in this bill.
The Armed Services Committee has held two hearings in
recent months on the state of military readiness, but we have
not held a hearing on the specific proposals that are included
in this bill. While it is unlikely that the Department of
Defense would oppose a bill that does so much for the uniformed
military, it is not unreasonable to think that they might have
constructive changes to suggest. At the very least, we should
afford the Secretary of Defense, the Joint Chiefs of Staff, and
the Deputy Chiefs of Staff for Personnel an opportunity to
testify before acting on a bill that is likely to shape our
military force, and our defense budget, for the next
generation.
There are any number of questions that should be addressed
before this bill is taken up for consideration by the
fullSenate. For example:
How do the cost and benefits of the retirement
proposal in S. 4 differ from the cost and benefits of DOD's
proposal? Do the Joint Chiefs of Staff and the uniformed
military support the changes to the DOD proposal that we would
make in this bill, or do they prefer their own proposal?
What is the monetary difference in the benefits
available through the two military retirement systems for a
typical retiree? What was the basis for offering a $30,000 cash
payment as an alternative to the more generous, pre-1986
retirement benefits? Which alternative are most retirees likely
to select and what will the cost impact be?
How will civilian employees of the federal
government react to a provision that severs the traditional
link between military and civilian pay raises and codifies in
permanent law that the annual increase in military pay would be
one percent greater than the annual increase currently
applicable to Federal civilian pay?
By setting annual cost of living adjustments in
permanent law, will we commit ourselves to increasing military
pay faster than the rate of inflation, even after problems with
military recruiting and retention have been addressed?
Do the military services support the Thrift
Savings Plan proposal in the bill, or are they concerned that
it might undermine confidence in the military retirement
system?
Do we know which categories of members are most
likely to take advantage of the Thrift Savings Plan? How do
these categories relate to the categories of members that we
most need to attract and retain? Do we have any basis for
concluding that this proposal would have a greater impact on
recruiting and retention than more targeted spending, such as
increased special pays and bonuses?
Are members of the National Guard and Reserve
eligible to participate in the Thrift Savings Plan proposals?
Should they be?
Will the special subsistence allowance for those
who are eligible for food stamps create an inequity between
military families living on a base in military housing and
families living off base in private housing, since they receive
a cash housing allowance which counts as income for the purpose
of determining food stamp eligibility?
Will the special subsistence allowance increase
tensions between married and unmarried service members, since
it will provide an additional benefit for members with a large
number of dependents? How will it affect military families
living overseas, who are not eligible for food stamps?
We do not yet have a CBO estimate of how much this bill
will cost, but the Department of Defense has estimated that
these costs will exceed the cost of the proposal of Secretary
Cohen and the Joint Chiefs of Staff by more than $7 billion
over the next five years. The cost to the Department could be
increased even further, 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.
Consideration needs to be given to how Congress would pay for
those increased benefits.
At this early point in the legislative cycle, we do not yet
know how much money will be available for defense, or the full
extent of the other requirements that will be placed on those
funds. If the defense budget is not substantially increased, we
may need to make deep cuts in the readiness and modernization
accounts to pay for the changes proposed in this bill. 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.
We continue to believe that the proper way to address this
issue is to weigh this proposal against other military
requirements in our normal authorization process. At the very
least, we should wait until we have a defense budget and give
DOD an opportunity to testify on the budgetary impact of the
bill before the bill is brought to the full Senate.
We support efforts to improve our military pay and
retirement systems and to address the recruiting and retention
problems identified by the Joint Chiefs of Staff in a timely
manner. We must not, however, make promises of this kind to the
troops without carefully considering how much they will cost
and where the money will come from.
We urge the Committee to take additional time to carry out
its responsibility to the Senate in a thoughtful and deliberate
manner. We look forward to providing our troops with the pay
and retirement system they so rightly deserve.
Carl Levin.
Edward M. Kennedy.
Jeff Bingaman.
Robert C. Byrd.
Charles S. Robb.
Joseph I. Lieberman.
Max Cleland.
Mary L. Landrieu.
Jack Reed.
ADDITIONAL VIEWS OF SENATOR MAX CLELAND
I am pleased that two of the most important provisions of
my bill, S. 169, the Military Recruiting and Retention
Improvement Act of 1999, are included in the bill the Committee
has adopted.
All of us are very concerned about the recruiting and
retention challenges our Services are facing. We simply have to
support our troops if we are to maintain the strong, ready
force our Nation needs. We need programs that will motivate our
Nation's young men and women to serve, and to stay in the
Service once they are in.
I am particularly pleased that my proposal to enhance the
GI Bill is included in S. 4. When new recruits are asked why
they enlisted, more say it is to earn money for college than
any other reason. If education is our greatest attraction, we
need to enhance that incentive. The enhanced GI Bill benefits
included in S. 4 will do just that.
Currently, new recruits have to forfeit $100 a month for 12
months to enroll in the GI Bill program. That is a lot of
money, especially for young people, most of whom are just out
of high school and who have no savings. Eliminating the
requirement for our lowest paid members to forfeit $100 a month
will make the GI Bill a much more attractive and effective
recruiting tool.
My provision to allow service members to transfer GI Bill
benefits to members of their immediate family serves a two-fold
purpose, which will enhance recruiting and retention. First, it
allows family members to use the benefits while the military
member is still in the Service, preventing those benefits from
going unused. Second, allowing military family members to use
these valuable benefits sends them a strong signal that their
support and sacrifices are appreciated.
Finally, the enhancement of the GI Bill basic benefits will
help to defray spiraling college costs. This will serve to
enhance both recruiting and retention.
This combination of modifications to the current GI Bill
provides a powerful incentive for ambitious young Americans to
join the Service and to stay there. These changes are just the
beginning. The Congressional Commission on Service Members and
Veterans Transition Assistance made additional recommendations
to improve the GI Bill. All of these recommendations warrant
serious consideration outside of this bill.
I am also pleased that the bill reported out by the
Committee includes the provision of my bill to require DOD to
report annually on how well these recruiting and retention
incentives are working. This will give us the ability to make
mid-course adjustments, if we need to, so that we can assure
the taxpayers that they are getting the best value for their
investment. I fully expect these reports will reflect the
wisdom of the legislation we are advancing.
Again, I am very enthusiastic about the legislative package
that we are forwarding to the full Senate for consideration.
Max Cleland.