[Senate Report 117-113]
[From the U.S. Government Publishing Office]
Calendar No. 370
117th Congress} { Report
SENATE
2d Session } { 117-113
======================================================================
AIR AMERICA ACT OF 2021
__________
R E P O R T
OF THE
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
TO ACCOMPANY
S. 407
TO PROVIDE REDRESS TO THE EMPLOYEES OF AIR AMERICA
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
May 19 (legislative day May 17), 2022.--Ordered to be printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
WASHINGTON : 2022
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona RAND PAUL, Kentucky
JACKY ROSEN, Nevada JAMES LANKFORD, Oklahoma
ALEX PADILLA, California MITT ROMNEY, Utah
JON OSSOFF, Georgia RICK SCOTT, Florida
JOSH HAWLEY, Missouri
David M. Weinberg, Staff Director
Zachary I. Schram, Chief Counsel
Devin M. Parsons, Professional Staff Member
Pamela Thiessen, Minority Staff Director
Sam J. Mulopulos, Minority Deputy Staff Director
Amanda H. Neely, Minority Director of Governmental Affairs and General
Counsel
Laura W. Kilbride, Chief Clerk
Calendar No. 370
117th Congress} { Report
SENATE
2d Session } { 117-113
======================================================================
AIR AMERICA ACT OF 2021
_______
May 19 (legislative day of May 17), 2022.--Ordered to be printed
_______
Mr. Peters, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 407]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 407) to provide
redress to the employees of Air America, having considered the
same, reports favorably thereon with an amendment and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
IV. Section-by-Section Analysis of the Bill, as Reported.............4
V. Evaluation of Regulatory Impact..................................4
VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............8
I. PURPOSE AND SUMMARY
S. 407, the Air America Act of 2022, would qualify the
service of employees of Air America, Inc., between 1950 and
1976 as creditable for retirement benefits under the Civil
Service Retirement System (CSRS). Employees of Air America
served the U.S. government in a covert capacity to help achieve
foreign policy objectives during this time period, throughout
the Cold War, Korean War, and Vietnam War. The employees lost
access to retirement in 1985 when the Office of Personnel
Management (OPM) made a change to the Federal Personnel Manual
impacting federal contractors, which is how Air America
operated publicly. The bill provides a two-year window for Air
America employees or their survivors to apply for retirement
benefits, including retroactive benefits.
II. BACKGROUND AND NEED FOR THE LEGISLATION
In 1949, the Central Intelligence Agency (CIA) acquired Air
America, Inc., initially for anticommunist operations in
Asia.\1\ Between 1950 and 1976, the CIA, Department of Defense,
and Department of State directed and managed Air America and
its related corporate entities to carry out a number of
humanitarian and covert missions.\2\ Air America employed over
5,000 individuals to support various projects around the world,
including food drops, reconnaissance, and covert operations in
Vietnam, Korea, and the Bay of Pigs.\3\ Over 131 Americans
employed by Air America died during this time period, mostly
due to job-related incidents, and eight were missing in
action.\4\
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\1\Senate Select Committee to Study Governmental Operations with
Respect to Intelligence Activities, Foreign and Military Intelligence,
Book 1 (Apr. 1976) (S. Rept. 94-755) (www.intelligence.senate.gov/
sites/default/files/94755_I.pdf) (accessed Mar. 16, 2022).
\2\Id.
\3\Office of the Director of National Intelligence, Report on the
Retirement Benefits for Former Employees of Air America (July 2011)
(www.air-america.org/files/documents/201107_ODNI_Report.pdf) (accessed
Mar. 16, 2022).
\4\Id. at 3.
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Externally, Air America operated as a commercial entity
that generated profits by fulfilling government contracts.\5\
Employees of such entities were entitled to federal retirement
credit during the period when Air America operated. For
example, the Federal Personnel Manual Supplement of 1978
specified that an exclusion to federal retirement coverage
applied to:
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\5\Senate Select Committee, supra, note 1, at 209.
Employees paid on a contract or fee basis, except
employees who are citizens of the United States who are
appointed by a contract between the employees and the
Federal employing authority which requires their
personal services and are paid on the basis of units of
time.\6\
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\6\Civil Service Commission, Federal Personnel Manual Supplement
831-1, Subchapter S2. Coverage, S2-3. Exclusions by Regulation (Nov.
22, 1978).
Air America dissolved in 1976, following the withdrawal of
troops from Vietnam.\7\ Upon dissolution in 1976, Air America
deposited around $20 million into the U.S. Treasury.\8\ Of the
total deposited, 60 percent was apportioned to the Civil
Service Retirement Fund due to congressional appropriations
process requirements.\9\
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\7\Office of the Director of National Intelligence, supra, note 3,
at 6.
\8\Id. at 29; Senate Select Committee, supra, note 1, at 239; and
Central Intelligence Agency, Liquidation Plan (1976) (www.cia.gov/
readingroom/docs/197616.pdf).
\9\Air America, Air America Declassified: New Insights into the
Administration of Air America as an Instrument of U.S. Foreign Policy
and the Ongoing Legislative Effort for Proper Federal Recognition (May
31, 2019) (air-america.org/files/documents/symposium-booklet.pdf)
(accessed Mar. 16, 2022).
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In 1985, OPM changed the relevant portion of the Federal
Personnel Manual Supplement, replacing it with a policy to
apply retroactively that states:
Employment under a personal services contract is
creditable for civil service only if the individual is
serving a federal function under federal supervision
and Congress has given the agency the authority to
appoint individuals by contract or OPM has specifically
given an agency the authority to use a contract as an
appointing instrument for the particular type of
service involved.\10\
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\10\Office of Personnel Management, Federal Personnel Manual
Supplement 831-1, Subchapter S3-3(d) (Mar. 29, 1985).
The change in OPM policy resulted in Air America employees
losing access to federal retirement benefits, and the change
was upheld in court.\11\ Starting in 1962 and again in 1970,
Air America employees were offered voluntary savings plans
options.\12\ However, declassified documents show that the CIA
internally acknowledged that these voluntary savings options
were only meant to be supplementary to rather than replacements
for civil service retirement credit or the more robust
retirement plans offered by the CIA.\13\
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\11\See Horner v. Acosta, 803 F.2d 687 (Fed. Cir. 1986).
\12\Air America, supra, note 9, at 7.
\13\Id.
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Congress has previously used legislative corrective action
to protect the retirement benefits for individuals in unique
employment scenarios while serving U.S. missions abroad. For
example, the Foreign Service Act of 1980 included provisions to
ensure employees' service with Radio Free Europe is creditable
for the purpose of annuities under the Civil Service Retirement
Acts.\14\
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\14\See 5 U.S.C. Sec. 8332(11); also see Comptroller General of the
United States, Decision; Matter of James McCarger--Entitlement to Leave
(B-204097) (www.gao.gov/assets/b-204097.pdf) (accessed Mar. 16, 2022).
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The structure of employment at Air America and subsequent
impact on employee access to federal retirement has been
complicated by the undercover nature of the work, as well as
the covert government ownership and operation of the
corporation. However, declassified documents pursuant to the
Declassification Act of 2000 and additional materials the CIA
posted online in 2017 shed more light on Air America's
operations.\15\ The Air America Act of 2022 stems from the
declassified information, responding to it by narrowly
providing Air America employees and their survivors with hard-
earned federal retirement benefits for their brave service to
critical, and oftentimes hazardous, U.S. government operations
during the Cold War.
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\15\Air America, supra, note 9, at 2.
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III. LEGISLATIVE HISTORY
Senator Marco Rubio (R-FL) introduced S. 407, the Air
America Act of 2021, on February 24, 2021, with 28 original
cosponsors from both parties. The bill was referred to the
Committee on Homeland Security and Governmental Affairs. Five
Senators subsequently joined as cosponsors.
The Committee considered S. 407 at a business meeting on
February 2, 2022. Ranking Member Rob Portman and Chairman Gary
Peters offered a substitute amendment to clarify that there is
a two-year window after the bill takes effect for eligible
individuals to apply for benefits and add a rule of
construction to note that the bill does not set any type of
precedent for CSRS or any successor fund, among a few other
technical changes. The substitute amendment was adopted by
voice vote en bloc. The bill, as amended, was ordered reported
favorably by voice vote en bloc with Senators Peters, Carper,
Hassan, Sinema, Rosen, Padilla, Ossoff, Portman, Lankford,
Scott, and Hawley present.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section establishes the short title of the bill as the
``Air America Act of 2022.''
Sec. 2. Air America
Subsection (a) includes findings describing the background
and history of Air America, Inc., and the service of Air
America employees.
Subsection (b) defines the terms ``affiliated company,
``qualifying service,'' ``survivor,'' ``widow,'' ``widower,''
``dependent,'' and ``child'' in the context of this section.
Subsection (c) deems any period of qualifying service as
creditable service for the purposes of CSRS. Qualifying service
is service performed by U.S. citizen employees of Air America
between 1950 and 1976, as documented in attorney-certified
corporate records.
Subsection (d) authorizes individuals who performed
qualifying service or survivors of such individuals to submit
an application for retirement benefits to OPM within two years
after the bill takes effect upon enactment. These individuals
and survivors are entitled to the retirement benefits
retroactively. If the individual who performed the creditable
service became deceased before this bill's enactment, survivors
are eligible for a survivor annuity, which is 50 to 55 percent
of the annuity that would have been paid to the deceased
individual.
Subsection (e) deems the lump sum payment made by Air
America into the U.S. Treasury, a significant amount of which
was apportioned to the Civil Service Disability and Retirement
Fund, as satisfying title 5 requirements related to deductions,
contributions, and deposits.
Subsection (f) states that nothing in the bill shall be
construed to set any type of precedent for purposes of credit
toward CSRS or any successor fund.
Subsection (g) states that the bill shall take effect 30
days after the date of the bill's enactment.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 13, 2022.
Hon. Gary C. Peters,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 407, the Air America
Act of 2022.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Amber
Marcellino.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The bill would:
Make former employees of Air America
eligible to apply for a new civilian retirement benefit
based on their years of service in that program
Authorize payment of a new monthly
retirement benefit under the Civil Service Retirement
System to successful applicants
Authorize payment of a retroactive lump sum
payment to successful applicants for retirement
benefits that would have been paid from the time of
first retirement eligibility
Estimated budgetary effects would mainly stem from:
New retirement benefits paid to Air America
employees and certain survivors
Lump sum payments to former Air America
employees for retirement benefits accrued between the
time of assumed retirement and the commencement of a
new retirement annuity
Administrative costs to process the applications for
new benefits of the eligible population
Bill summary: S. 407 would establish the service of certain
former employees of Air America as creditable toward a federal
civil service retirement annuity under the Civil Service
Retirement System (CSRS). The bill also would allow surviving
spouses or children of those employees to apply for survivor
benefits.
Estimated federal cost: The estimated budgetary effect of
S. 407 is shown in Table 1. The costs of the legislation fall
within budget function 600 (income security).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 407
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By fiscal year, millions of dollars--
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2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2022-2026 2022-2031
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Increases or Decreases (-) in Direct Spending
Estimated
Budget Authority............................................ 0 7 3 1 1 1 1 1 1 1 11 15
Estimated Outlays........................................... 0 7 3 1 1 1 1 1 1 1 11 15
Increases or Decreases (-) in Spending Subject to Appropriation
[Estimated] Authorization................................... 0 * * * * n.e. n.e. n.e. n.e. n.e. * n.e
Estimated Outlays........................................... 0 * * * * n.e. n.e. n.e. n.e. n.e * n.e
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Components may not sum to totals because of rounding; n.e.= not estimated; * = between zero and $500,000.
Basis of estimate: For this estimate, CBO assumes the bill
will be enacted by the beginning of fiscal year 2023.
Direct spending: S. 407 would establish the service of
certain former employees of Air America (or specified
affiliated companies) between January 1, 1950, and December 31,
1976, as creditable toward a federal civil service retirement
annuity under the Civil Service Retirement System (CSRS). CBO
estimates that the additional retirement annuity and survivor
benefit payments authorized by the bill would increase direct
spending by $15 million over the 2022-2031 period.
Annuity Payments: CBO's estimate is based on data collected
in 2014 by the Air America Association (the most recent data
available) and was adjusted for expected mortality. That data
contains service record summaries for just over 400 former Air
America employees. CBO estimates that about 80 members of that
group are still living who would be eligible under S. 407 to
begin receiving a federal retirement benefit based on their Air
America (or related) service, provided that the period of
service meets the eligibility requirements for a CSRS benefit.
(There are several tiers of eligibility based on age and years
of service that can confer eligibility for a CSRS annuity; five
years of service is the minimum requirement.)
Using that data, CBO expects that the average person
eligible to apply for a new CSRS benefit under S. 407 is now
about 87 years of age and performed about nine years of Air
America service at a salary of just under $30,000. CBO
estimates that the average CSRS benefit would have been about
$3,800 per year at the time of first retirement eligibility--
about 25 years ago, on average. However, a new CSRS annuity
that would begin under S. 407 would incorporate the annual cost
of living increases (which have averaged about 2 percent per
year) that would have applied in the years since first
eligibility. Including those annual adjustments, CBO estimates
that the average new CSRS annuity under S. 407 would be about
$7,000. The total annual benefits paid to this group of people
would decline over time because the number of eligible people
cannot increase, they would have a limited time to apply for
the new benefit (two years after enactment), and they are
generally of advanced age. CBO estimates that new retirement
benefits for former Air America employees would increase direct
spending by about $2 million over the 2022-2031 period,
primarily in the first few years.
Lump-sum payments: In addition to a new monthly CSRS
retirement benefit, the former Air America employees also would
receive a retroactive lump-sum payment of the total benefits
that have accrued since their first eligibility for retirement.
CBO estimates that the average lump-sum payment would be about
$136,000 per person. Over the 2022-2031 period, CBO estimates
that the lump-sum payments would increase direct spending by $7
million (primarily in 2023).
Survivor benefits: In addition to retirement annuities for
former Air America employees, S. 407 also would allow survivors
(spouses or children) of former Air America employees who died
before enactment of the bill to apply for a survivor benefit,
at 55 percent of the former employee's full annuity amount.
Using the information about the number of former Air America
employees, CBO estimates that about 175 people would apply for
a survivor benefit under the bill, and their average annuity
would be about $4,700 per year. CBO projects that, over the
2022-2031 period, annuity payments to survivors under this
provision would increase direct spending by $6 million.
Spending subject to appropriation: The Air America
Association has collected identities and work history data for
many former Air America employees; as a result of their
outreach, CBO expects a moderately high participation rate if
the bill is enacted. However, the administrative cost of
successfully processing a benefit application for this group is
likely to be significantly higher than for current federal
employees. For Air America applicants, additional effort and
time will be required for the Office of Personnel Management
(OPM) to develop internal guidance and verification procedures
based on information provided by individuals rather than
employment records provided by an agency.
CBO estimates that the additional administrative costs
associated with processing Air America applications, for former
employees and survivors, under S. 407 would cost less than
$500,000 over the 2022-2026 period. That estimate is based on
data from OPM. In 2021 (the most recent data available), OPM
announced that the average unit cost of processing one type of
civil service retirement (those occurring under Voluntary Early
Retirement Authority or with Voluntary Separation Incentive
Payments) is $676.70 per application. Given the additional
administrative work involved, OPM expects the processing cost
for Air America applications to be higher than that average but
does not have an estimate of how much higher.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 1.
Increase in long-term deficits: CBO estimates that enacting
S. 407 would not increase on-budget deficits by more than $5
billion in any of the four consecutive 10-year periods
beginning in 2032.
Mandates: None.
Previous CBO estimate: On September 24, 2021, CBO
transmitted a cost estimate for H.R. 1297, Air America Act of
2021, as ordered reported by the House Committee on Oversight
and Reform on May 25, 2021. Both bills would provide eligible
former Air America employees the opportunity to apply for and
commence a civilian retirement benefit under CSRS, including a
lump sum payment for retroactive benefits that would have been
paid from time of first retirement eligibility. The Senate bill
contains a provision that would provide benefits for eligible
survivors of former Air America employees who have died prior
to enactment of the bill; the House bill does not. CBO's
estimates reflect those differences between the bills.
Estimate prepared by: Federal costs: Amber Marcellino;
Mandates: Andrew Laughlin.
Estimate reviewed by: Christina Hawley Anthony, Chief,
Projections Unit; H. Samuel Papenfuss, Deputy Director of
Budget Analysis.
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Because S. 407 would not repeal or amend any provision of
current law, it would make no changes in existing law within
the meaning of clauses (a) and (b) of paragraph 12 of rule XXVI
of the Standing Rules of the Senate.
[all]