[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 113-109]
BENEFICIARY AND ADVOCACY OVERVIEW
OF THE FISCAL YEAR 2015
PRESIDENT'S BUDGET
__________
HEARING
BEFORE THE
SUBCOMMITTEE ON MILITARY PERSONNEL
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
APRIL 9, 2014
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______
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SUBCOMMITTEE ON MILITARY PERSONNEL
JOE WILSON, South Carolina, Chairman
WALTER B. JONES, North Carolina SUSAN A. DAVIS, California
JOSEPH J. HECK, Nevada ROBERT A. BRADY, Pennsylvania
AUSTIN SCOTT, Georgia MADELEINE Z. BORDALLO, Guam
BRAD R. WENSTRUP, Ohio DAVID LOEBSACK, Iowa
JACKIE WALORSKI, Indiana NIKI TSONGAS, Massachusetts
CHRISTOPHER P. GIBSON, New York CAROL SHEA-PORTER, New Hampshire
KRISTI L. NOEM, South Dakota
Craig Greene, Professional Staff Member
Debra Wada, Professional Staff Member
Colin Bosse, Clerk
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2014
Page
Hearing:
Wednesday, April 9, 2014, Beneficiary and Advocacy Overview of
the Fiscal Year 2015 President's Budget........................ 1
Appendix:
Wednesday, April 9, 2014......................................... 21
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WEDNESDAY, APRIL 9, 2014
BENEFICIARY AND ADVOCACY OVERVIEW OF THE FISCAL YEAR 2015 PRESIDENT'S
BUDGET
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Davis, Hon. Susan A., a Representative from California, Ranking
Member, Subcommittee on Military Personnel..................... 2
Wilson, Hon. Joe, a Representative from South Carolina, Chairman,
Subcommittee on Military Personnel............................. 1
WITNESSES
Hayden, Col Michael F., USAF (Ret.), Director, Government
Relations, Military Officers Association of America; Co-Chair,
The Military Coalition......................................... 3
Jones, Rick, Legislative Director, National Association for
Uniformed Services; Co-Director, National Military and Veterans
Alliance....................................................... 5
APPENDIX
Prepared Statements:
Hayden, Col Michael F........................................ 26
Jones, Rick.................................................. 71
Wilson, Hon. Joe............................................. 25
Documents Submitted for the Record:
Statements from:
Air Force Association........................................ 98
Association of the United States Army........................ 89
Military Officers Association of America..................... 153
National Military Family Association......................... 114
Reserve Officers Association of the United States............ 100
The American Legion.......................................... 151
U.S. Naval Sea Cadet Corps................................... 149
Veterans of Foreign Wars of the United States................ 143
Witness Responses to Questions Asked During the Hearing:
Mrs. Davis................................................... 165
Questions Submitted by Members Post Hearing:
[There were no Questions submitted post hearing.]
BENEFICIARY AND ADVOCACY OVERVIEW OF THE FISCAL YEAR 2015 PRESIDENT'S
BUDGET
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Military Personnel,
Washington, DC, Wednesday, April 9, 2014.
The subcommittee met, pursuant to call, at 2:02 p.m., in
room 2118, Rayburn House Office Building, Hon. Joe Wilson
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. JOE WILSON, A REPRESENTATIVE FROM
SOUTH CAROLINA, CHAIRMAN, SUBCOMMITTEE ON MILITARY PERSONNEL
Mr. Wilson. Ladies and gentlemen, I would like to welcome
everyone to a meeting of the Military Personnel Subcommittee of
the House Armed Services Committee. The hearing will come to
order.
As we proceed, we will be hearing testimony from the
representatives of The Military Coalition and the National
Military and Veterans Alliance about military personnel issues
addressed in the President's budget submission for fiscal year
2015.
Veterans service organizations are vital to providing
firsthand advice and counsel to Members of Congress, and we
really appreciate you being here today.
Maintaining an All-Volunteer Force that has experienced
almost 13 years of persistent conflict is paramount for our
national security. The subcommittee remains committed to
ensuring that the men and women of our Armed Forces, military
families, and the retirees who have served before them receive
the benefits and entitlements they deserve.
The President's budget significantly reduces ground and air
force end strength and slows the growth of compensation and
personnel benefit programs for all service members, shifting
spending to other programs.
Our focus today is to discuss with the beneficiary and
advocacy organizations that represent military members, their
families, and retirees the reductions the Department
[Department of Defense] is proposing to create efficiencies in
personnel programs, to include pay, compensation, and health
care, and whether these proposals should wait until the
commission on military compensation is complete with its review
and recommendations.
Before I introduce our panel, let me offer Congresswoman
Susan Davis, the ranking member of the committee, of
California, an opportunity to make her opening remarks.
[The prepared statement of Mr. Wilson can be found in the
Appendix on page 25.]
STATEMENT OF HON. SUSAN A. DAVIS, A REPRESENTATIVE FROM
CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON MILITARY PERSONNEL
Mrs. Davis. Thank you. Thank you, Mr. Chairman.
Thank you both for being here.
I also want to welcome our beneficiary representatives,
Michael Hayden, who is representing The Military Coalition, and
Rick Jones, who is representing the National Military and
Veterans Alliance, big responsibility. A lot of people behind
you. Thank you both for being here to represent a collection of
military and veterans organizations.
We know that there were many organizations that would like
to have testified before the committee, and so we have a number
of their written testimonies that will be submitted for the
record. And, as you know, we could not accommodate everyone's
desire.
It has been several years since we had the beneficiary
organizations before the subcommittee. I believe that the last
beneficiary hearing also focused on proposed changes to the
defense health system that was included in the President's
budget. And here we are again, only this time the proposals
being put forth are even more extensive than just military
health care.
And so the committee is faced with assessing the impact of
several personnel and healthcare proposals that have been
included in the President's budget. These include a 1 percent
pay raise for the force, except for general and flag officers,
who would receive no pay raise in fiscal year 2015; an increase
in the out-of-pocket expenses for housing; a reduction in
appropriated support for the commissary system; travel and
transportation benefit changes; and a restructuring and fee
increase for the TRICARE system.
Individually, you know, maybe to some, that does not seem
significant, and the All-Volunteer Force may be able to
withstand these changes. However, we know that that is not the
case, that these changes are all being proposed as a package,
combined with significant drawdown in end strength for the Army
and for the Marine Corps, the realignment of forces in the Air
Force, and an improving economy, which does have an impact, we
know--which is a good thing, but it also has an impact. There
is concern that the collective change may have an adverse
impact on service members and their families and that they will
vote by leaving the Armed Forces.
Our Nation, as we know, is facing difficult economic times.
With the threat of sequestration in fiscal year 2016 and
beyond, the Department will be faced with making very difficult
decisions. And if we do not make any changes to personnel
costs, it will mean that there will be less resources for those
who do remain in uniform to train and be prepared to win our
Nation's wars.
That said, I also think that we need to take into account
the work of the Military Compensation and Retirement
Modernization Commission to ensure that we understand the
cumulative effects of all of these changes and the potential
impact to the recruitment and the retention of the All-
Volunteer Force.
We need to work together, and I know the chairman shares
that--to find a way forward that will continue to ensure the
benefits are there for those currently serving, especially
those who are in harm's way, and to ensure that the benefits
being provided are sustainable into the future. I look forward
to a productive dialogue on your thoughts of how we can move
forward.
Thank you, Mr. Chairman.
Mr. Wilson. Thank you, Ms. Davis.
Now I would like to welcome our distinguished witnesses:
Mr. Michael F. Hayden, Colonel, U.S. Air Force, retired,
the Director of Government Relations for the Military Officers
Association of America, MOAA. Colonel Hayden is representing
The Military Coalition.
And Mr. Rick Jones, Legislative Director, National
Association for Uniformed Services. Mr. Jones is representing
the National Military and Veterans Alliance.
I ask unanimous consent to enter a statement from the
Association of the United States Army, the Air Force
Association, the Retired Officers Association, the National
Military Family Association, the Veterans of Foreign Wars, the
Military Officers Association of America, and the U.S. Naval
Sea Cadets into the record.
Without objection, so ordered.
[The information referred to can be found in the Appendix
beginning on page 89.]
Mr. Wilson. Colonel Hayden, we will begin with your
testimony.
As a reminder, statements are to be held to 5 minutes. And
Craig Greene is going to make sure all of us stay within the 5-
minute rule. He is above reproach on his ability to keep time.
And then, following your presentation, Mr. Jones. Look
forward to this, obviously. And we do have your written
testimony. Following each of your testimony, we will have
rounds of 5 minutes each until adjournment.
So we now proceed with Colonel Hayden.
STATEMENT OF COL MICHAEL F. HAYDEN, USAF (RET.), DIRECTOR,
GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION OF AMERICA;
CO-CHAIR, THE MILITARY COALITION
Colonel Hayden. Chairman Wilson, Ranking Member Davis, and
distinguished members of the subcommittee, on behalf of our
coalition partners, I thank you for providing the opportunity
to testify today on the fiscal year 2015 budget proposals by
the Department of Defense.
At the heart of the budget challenges facing the Department
is the devastating effect of sequestration. Although the
Bipartisan Budget Act of 2013 mitigated the sequestration
spending cuts for fiscal year 2014 and 2015, the original
sequestration cuts for 2016 and beyond remain in effect and, we
believe, will place national security at risk if continued.
The coalition strongly urges Congress to eliminate
sequestration and fund our military levels that enable our
components of the Armed Forces to be adequately manned,
trained, and equipped to focus on the mission.
While debt reduction is a national priority, we believe
such a disproportionate share of this burden must not be
imposed on the Pentagon and especially on the backs of the
military members and their families. No Federal obligation is
more important than protecting national security, and the most
important element of national security is sustainment of a
dedicated, top-quality, career uniformed force.
The past 12 years of unprecedented demands and sacrifices
highlight how radically different military service conditions
are from civilian life. The only times the All-Volunteer Force
has been jeopardized has been through budget-driven cutbacks in
the military compensation package that gave insufficient weight
to the extraordinary demands and sacrifices inherent in a
service career.
Yet budget critics persist in asserting that military pay
and benefits since 2000 are unsustainable and they should be
slashed to resemble civilian benefit packages. We believe it is
important to put the growth-since-2000 argument in the proper
context to understand why military pay and benefits rose faster
than the average American's from 2000 to 2010.
Has cost growth gone up since then? Yes, certainly. But
using 2000 as a baseline without reflecting on the historical
context is grossly misleading. This implies that the turn of
the century was an appropriate benchmark for estimating what
reasonable personnel and healthcare spending should be, and
nothing could be further from the truth.
At that time, years of budget cutbacks had depressed
military pay to where a 13.5 percent pay gap existed. It cut
retirement value by 25 percent for those post-1986 entrants. It
had military families paying 18 to 20 percent out of pocket for
their housing costs. And it booted beneficiaries over the age
of 65 completely out of the military healthcare system.
As a result, retention was on the ropes and the Joint
Chiefs of Staff at the time were imploring Congress to fix the
problems to prevent a readiness crisis. And Congress worked
diligently over the next decade to restore military pay
comparability, to repeal the retirement cuts, to zero out the
housing costs, and to restore promised health care for older
retirees. And the coalition thanks you for that. In other
words, the cost growth was essential to keep the previous
cutbacks from breaking the career force.
Since then, Congress has implemented changes that have
slowed the growth to personnel: a 16 percent increase to
TRICARE Prime enrollment rates and significant increases to
pharmacy fees. And both will continue to increase in the future
years at the rate of inflation. A mandatory mail-order pilot
for maintenance meds for TRICARE for Life beneficiaries was
also implemented.
End-strength reductions to the tune of 124,000 service
members have already been started by the services, and this
budget calls for an extra 78,000-plus in end-strength cuts.
Since 2010, pay raises have dramatically slowed. They have
either kept pace with the private sector pay or, in the case of
this year, they have been capped below private sector.
The fact is that, since 2000, personnel and healthcare
costs experienced an average of about a 7.6 percent rate of
growth. But that cost growth was essential to keep the previous
compensation cutbacks from breaking the career force. And,
since 2010, personnel cost growth has already slowed to less
than 2 percent per year.
Between the fiscal year 2014 and 2015 pay caps, this
proposed BAH [Basic Allowance for Housing] change, the planned
reductions in the commissary, and the new healthcare fees, an
E-5 family of four would experience nearly a $5,000 loss in
purchasing power annually. For an O-3, that family of four
would experience nearly a loss of $6,000 annually.
These budget proposals would be major steps backwards
towards repeating the insidious measures which led to retention
and readiness problems in the past and would undo the needed
compensation improvements Congress put into place since 2000.
These piecemeal reductions are doubly inappropriate since the
congressionally directed commission could be offering even
broader reforms next year.
America will remain the world's greatest power only as long
as it continues to fulfill its reciprocal agreement to the only
weapons system that has never let our country down, and that is
our extraordinary, dedicated, top-quality All-Volunteer Force.
Thank you, and I look forward to your questions.
[The prepared statement of Colonel Hayden can be found in
the Appendix on page 26.]
Mr. Wilson. Thank you so much, Colonel. And we appreciate
your insight that you have presented.
Mr. Jones.
STATEMENT OF RICK JONES, LEGISLATIVE DIRECTOR, NATIONAL
ASSOCIATION FOR UNIFORMED SERVICES; CO-DIRECTOR, NATIONAL
MILITARY AND VETERANS ALLIANCE
Mr. Jones. Chairman Wilson, Ranking Member Davis, and
members of the subcommittee, thank you for the opportunity to
appear before you this afternoon.
National Military Veterans Alliance member organizations
are deeply troubled by the administration's budget plan,
constrained as it is by a cap limiting national security
resources. The plan makes steep reductions in force structure,
compensation, and benefits that we cannot support.
Certainly, progress must be made against the deficit and
national debt; however, defense spending is not the driver of
our national deficit or debt. It is a declining percentage of
our Nation's total economy. It is less than 18 percent of the
total Federal spending. Yet, under sequester, defense faced 50
percent of the cuts. It is disproportional. It is
disproportional by any measure, cutting defense too deeply, too
steeply, too quickly.
We were told it would never come into effect, yet we are
now in year 2 of this blunt approach. Sequestration was bad
policy when suggested, it was bad policy when accepted, it was
bad policy when it began, and it remains bad policy to let it
continue. To allow sequester-level cuts to persist would be a
huge strategic miscalculation. It is not in our country's best
interest. The National Military and Veterans Alliance urges you
to end sequestration on national security spending.
Regarding the Pentagon proposals, the proposals include
lower pay raise, increased out-of-pocket costs for housing,
lower savings at the commissaries, increased TRICARE fees. The
administration calls this a reasonable approach. In making the
case for higher TRICARE fees, Comptroller Robert Hale said
``Fee hikes would bring money to the Pentagon needed for
readiness.'' Secretary Hagel said, ``We have to burn personnel
costs to save readiness.''
Alliance organizations are all for military readiness. This
is a perilous time. Failure to ensure readiness presents an
unacceptable risk to our Nation and her troops. Readiness,
however, is the responsibility of all Americans. Peace and
national security are the most basic duty of the people as a
whole. We can't just place the burden on the backs of our
service members.
We commend members of the subcommittee for rejecting
previous plans to increase TRICARE fees. Pentagon leadership
used to say TRICARE costs were crippling national security,
eating us alive. In a letter to former Secretary Panetta, you
recognized that, instead of draining resources, the TRICARE
account served as a cash cow. It was raided to pay for cost
overruns in other programs. You noted that, in 2012, $708
million was stripped out of the TRICARE account, $772 million
taken out in fiscal year 2010, a whopping $1.36 billion taken
in fiscal 2011, and in fiscal 2013 $800 billion moved.
TRICARE is the most important noncash benefit provided to
those who serve a career in the military. It is a promised
benefit, part of a moral contract for a force that has served
us well. To uphold this moral contract with our men and women
in uniform, their families, and military retirees, we urge
rejection of the new Pentagon plan to set participation fees
for TRICARE programs.
On commissaries, you know that commissaries are a core
benefit of the military family, an integral part of total
compensation. Military families see a 30 percent savings in
shopping at commissaries. They save up to $4,400 a year. The
Pentagon plan would crush that savings, hitting families right
in the pocketbook.
The strangulation plan the Pentagon has foisted out would
mean higher prices at the commissaries, making commissary
shopping less attractive, resulting in fewer customer visits
and diminished sales. It would also cause a deep drop in sales
at exchanges--exchanges which pay for Morale, Welfare, and
Recreation programs, such as child care and sports programs for
the family.
Let me take an opportunity to praise this panel and the
full committee for its passage, as part of the 2010 National
Defense Authorization Act, the Military and Overseas Voter
Empowerment Act. The MOVE Act has removed many of the obstacles
for voting, particularly for members overseas. It has been
effective, but, like everything on Earth, it is not perfect. We
are asking you to take a second look at this and to consider
ending the waiver for States that miss the 45-day deadline to
mail ballots to those who request the right to vote.
We also ask you to take a look at the SBP-DIC bill
[Survivor Benefit Plan and Dependency and Indemnity
Compensation], concurrent receipt, and a number of other issues
that are outlined in the written testimony.
Thank you again very much for the opportunity to testify.
[The prepared statement of Mr. Jones can be found in the
Appendix on page 71.]
Mr. Wilson. Thank, again, both of you for being here today.
It really has been so helpful to all of us, in a bipartisan
manner, for the information that you have provided to correct
some misstatements that have been made to this committee about
eating the healthcare budget alive. The research that was
provided was very helpful to us so that we could best represent
our constituents. So thank you very much.
And, indeed, the point needs to be made, defense spending
is not driving the national debt; that, indeed, the primary
function of the national government should be national defense.
And so thank you for what you are doing to protect American
families.
And defense sequestration, it needs to be addressed. And we
will be having budget votes in the next 24 hours. And I am very
pleased, and good people can disagree, but Congressman Paul
Ryan does include addressing defense sequestration in one of
the votes we have tomorrow.
For both of you, the three options for TRICARE have allowed
family members and retirees to choose the best option for their
family. There is an effort promoting that just one TRICARE
option would be provided to streamline the system.
What do you think of these changes, and how would it impact
retirees?
And how will the co-pays impact retirees, Colonel?
Colonel Hayden. Thank you very much.
This consolidation effort, as we look at it, where you take
the TRICARE Prime, Standard, and Extra program and you
consolidate it into one, which much more looks like the old
CHAMPUS program from years back, is, from our perspective, the
service members, to include not just the retiree population, it
is also going to impact the currently serving family members,
that they are going to be paying more and they are going to get
less of a program associated with it.
For example, under the program, you take what is the
TRICARE Prime enrollment fee, they relabel it as a
participation fee. They keep the same value and keep it tied to
the cost-of-living adjustments for that retiree. And what you
end up losing here is the access standards that were guaranteed
under TRICARE Prime so that you would be guaranteed to be able
to get an appointment either in the MTF [military treatment
facility] or in the network associated with it. And that was
the whole purpose behind paying the enrollment fee in the first
place.
On top of it, for the retirees over age 65, a rehash of
what was somewhat the proposal from last year, that under this
they still wanted to do an enrollment fee for the TRICARE for
Lifers over age 65. And this time it is capped at 2 percent of
the retiree's pay. And there are some caps associated with it
for those that are
O-6s and below, as well as a higher cap for those in the out-
years for general officers and flag officers.
The real issue is that we just think that this is--and it
just flies in the face of the entire TRICARE for Life program
itself, paying an enrollment fee where they are already paying
Medicare Part B along with it. And there is no guaranteed
access or anything else associated with this thing. So it is
just foisting more fees onto the beneficiary, and that wasn't
part of the original bargain when TRICARE for Life was put
together.
And the ultimate issue is, when you go back and take a look
at the proposals, what does it do to the currently serving
family? And in there to encourage, if you would, those that go
and use the emergency rooms or they use the urgent care well,
now, those families that actually will have limited or no
access to military treatment facilities are going to end up
paying much more. If it is an issue that takes place if you
have a broken arm over the weekend or if you have someone who
falls, your child, and hits their head, they are now going to
pay a co-pay to go into that emergency room associated with it.
And from us, this just flies in the face of what we should be
providing to those military members and their families while
they are serving.
A lot of things transpired back in the late 1990s, where we
went from hospitals and we downsized to clinics, and the
clinics then no longer provided emergency-room care on the
weekends or in the evenings. And so, now, many of the service
members, even living on installations, if there is some kind of
pop-up requirement, some medical emergency that they have, they
are going to have to race off the installation and they are
going to second-guess that because they are going to think
about, do I want to pay the co-pay to go to the emergency room?
They are going to want to wait and say, maybe I can wait a day
until the military treatment facility actually opens up. And I
don't think we should actually be doing that to our military
members and their families.
Mr. Wilson. Thank you very much.
And Mr. Jones.
Mr. Jones. Agree completely with the Colonel.
It looks as though the Pentagon has decided that TRICARE
for Life was a mistake, and so they have decided to attach a
participation fee to it. We don't see it that way. We see
TRICARE as the provision from a grateful Nation for full,
affordable health care to those who have served. It is a
respect, in essence, a respect of the value that has been
received by the service that has been given. We stand in
freedom today because of that service, and that TRICARE for
Life is provided as part of the value that has been received by
the Nation.
We are very pleased with TRICARE for Life as it currently
stands. We like it. We think it works well in most instances.
And we disagree with the Pentagon on that issue.
Regarding the consolidation, it appears as though well, we
currently have Standard and we currently have Prime. Prime has
a fee attached to it. And it looks as though the consolidation
would squeeze Standard and Prime into one outfit, one function.
And, essentially, you would pay Prime and receive Standard. You
get less but pay more.
So we do not believe that that is the direction you should
follow either. It is not a good path.
Mr. Wilson. And thank both of you.
And as I conclude, I want to thank Mr. Jones for raising
the issue of commissaries. This is a worldwide system which is
beneficial to military families. It also provides employment
for dependents and spouses worldwide. It is unique. It just
simply can't be recreated without really having a negative
impact on military families.
I now proceed to Ms. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
And I know that this is tough for everybody. And I think
that the Congress has, certainly, great responsibility here,
having not been able to come to a resolution at a time that was
critically important for the country. And so I think we need to
acknowledge that and try and move forward.
I know how much time you spend with many of the people that
you work with. And I am, sort of, looking for some reaction
from folks and whether you have a sense from them that I think
what I understand from your comments, of course, is that the
sustainability issue is not really of so much concern. We
probably need to be concerned about it, but I think right now
there is not as much concern about that.
What is it that you are hearing in terms of how we might
prioritize some of this? You know, is there a difference, in
terms of the issues that we are speaking about right now? And
what is your sense?
We know that there have been surveys, better surveys than
we had in the past. Health care, certainly, is at the top of
those, in terms of benefits that people are experiencing. And
it matters a great deal whether you are talking to someone in
the active service today or retirees; of course that matters.
But what is it that you are pulling out of this that maybe
isn't quite as obvious here?
Colonel Hayden. It is an interesting point, because when
you go back to many of the surveys that are provided to service
members, their families, retirees, and you try to look at
prioritizing benefits, you can come up with statistically valid
information that shows, you know, pay is extremely important,
the retirement benefit happens to be important. Health care, of
course, extremely important. You can find surveys that come out
and say the commissary is a terrible benefit. And that is true
if you are talking to someone who is maybe an E-1 or an E-2
that has no kids. So the real issue is you have to go beyond
the surveys.
And the interesting part is what we are getting the
feedback from right now from retirees, from the currently
serving and we actually have with MOAA today over 25 currently
serving family members or currently serving members that are
storming the Hill in efforts to try get the message across on
what they feel about these things, the proposals that are
coming forward, and not to look at it as a priority message but
it is almost like a break-the-faith message is what they are
having.
Mrs. Davis. Uh-huh.
Colonel Hayden. If you are going to look at these
proposals, which we have characterized as almost Jello on the
wall, it is just that the Department wanted to come over, they
wanted to provide things, they think they can do these things
without hurting retention, which, in our past case, you know,
when you start doing pay caps, which is not just 1 year, they
are talking now 2 years, with an additional 4 years in this,
that we repeat the bad behaviors of the past, where it took
Congress 10 years to fix the pay gap that existed in the late
1990s.
So to prioritize associated with this, it typically depends
on the group that you are talking to. But our immediate
feedback that we have received is that these proposals need to
be blocked. They need to be looked at holistically. Congress
put together the commission that is looking at this right now,
and we are somewhat optimistic that they are looking at it just
that way.
Mrs. Davis. Do you think that----
Colonel Hayden. The feedback----
Mrs. Davis. If I could interrupt.
Colonel Hayden. Sure.
Mrs. Davis. Do you think that--who knows what exactly they
are going to come up with. But the fact that they are looking
at these issues and maybe looking at it more holistically,
understanding that they are a package of changes that would
have an impact on our families, would the same kind of
recommendations make a difference, coming from them? I mean, is
that part of what we are dealing with here?
Colonel Hayden. I think the difference is their charter.
The interesting part associated with it, they are not looking
at a budget-cutting drill, which this definitely is. This is
just ways to transfer money out of the MILPERS [Military
Personnel] account, out of the DHP [Defense Health Program]
account, and put it on the backs of the beneficiaries so that
they can free up additional funding for other priorities within
the Department.
The best part that we are getting from the commission
themselves is that they are trying to look at this and find out
if there is a way to provide the benefit that could be done
much more efficiently, much more cost-effectively, and at the
end actually could end up improving retention and recruiting,
which is the overall driver for strong readiness.
Mrs. Davis. Uh-huh.
Colonel Hayden. And, from our perspective, that is the way
you should be looking at these, instead of hoping that after 2
or 3 or 6 years of pay caps or eliminating--because what this
really is going to do with the commissary benefit is you end up
potentially just wiping the benefit completely out. And the
whole purpose behind that is, you have people that are going to
go from a 30 percent savings to a 10 percent savings in the
commissary. And at the end of the day, they are going to vote
with their feet. They are going to say, I am not going to go
and drive on the post, you know, where it is going to take me 2
gallons of gas to get there and back, to get a 10 percent
savings that we hope. And, ultimately, it is going to shutter
commissaries. That is what our bigger concern is. And there is
a definite need.
And that is why we are hoping a much more holistic approach
will be part of the solution here looking at these. I am not
saying we are going to embrace everything that comes out of
this commission. No. I think the important thing is to have the
commission do their work, let this come forward, and then let
it go through the due process and allow this committee to take
a very hard look at this to make sure we are not going to
damage the recruiting and retention in the future.
Mr. Jones. It is interesting that most people do think,
Ranking Member Davis, that pay is the most important thing and
health care is not the most important thing to Active Duty, it
is more important to retirees.
Interesting study I saw the other day, and I wish I could
recall from where exactly, but it listed the priorities for
Active Duty as being health care----
Mrs. Davis. Yeah, I----
Mr. Jones [continuing]. Because so many today are married.
It is an All-Volunteer Force. Health care was number one.
Education was number two. Pay was number three.
So I think health care is important all down the line, and
it is important to those families as a measure of quality of
life. So it does matter.
Mrs. Davis. Thank you.
Mr. Wilson. And thank you, Ms. Davis.
And we now proceed to Congressman Dr. Joe Heck of Nevada.
Dr. Heck. Thanks, Mr. Chairman.
Thank you both for being here today.
You know, Colonel Hayden, I think you just succinctly gave
the best analysis of the difference between the charter of the
commission and the budget drill going on inside the building.
And so thank you for putting that out there.
You know, one of the things that--the phrase that is always
thrown around is we have to keep faith with the men and women
of our military. And I recently heard someone say that, in the
current financial environment, that the phrase ``keeping
faith'' may take on a different definition, where in the past
``keeping faith'' was always about pay and benefits and the
promises made, whereas moving forward ``keeping faith'' may be
more about making sure the individual is trained and equipped.
Again, this idea of moving money from a MILPERS pot to a
readiness pot.
Your opinion on that changing definition?
Colonel Hayden. It is an interesting, what I would consider
more of, kind of, a bumper-sticker approach.
For several years now, we have had unsustainability; growth
is going through the roof, spiralling out of control. And now
we are going, well, we need to slow the growth in the personnel
accounts so that we have enough funding to provide for
readiness, to provide for the equipment and the training
associated with it.
We look at it as almost like a false choice. You need to
look at this as an entire package. You need to have the funding
there for the acquisition programs, for the training, the
equipment, definitely. But if you don't--if you start scraping
away at the pay and benefits, those things that you need in
order to sustain the All-Volunteer Force, at the end of the day
you may not have the trigger-pullers or the bomb-droppers that
you need. And that is where the real concern is for us. We are
repeating some of those same behaviors.
And, unfortunately, one of the bigger things that we are
leveraging in this debate right now is end strength. As to try
to balance the budget, if you would, or look at where the early
savings are, as a former force planner myself with the Air
Force, I was there, I knew what you could do with end strength:
quick fix, quick money, and you draw down the force in order to
go ahead and fund the F-35 or the F-22 program, which we did.
And you cut below, and you were sitting there going, we can go
down to 90 percent manning.
And I feel that, at the time, was a wrong maneuver that we
did in the Air Force. And I am looking at it right now that we
are just repeating that same bad behavior.
Dr. Heck. Mr. Jones, you know, we talk about and you both
mentioned some of the proposed changes in TRICARE. And I agree
that what the drill looks like is really not--although it is
being done under, quote, ``decreasing the cost of health
care,'' end quote, that we are really not decreasing the cost,
we are just shifting who is paying for it.
Mr. Jones. Yes, sir.
Dr. Heck. All right? So we are not decreasing cost.
But to that end, if, let's say, the commission or the
entities come forward and say, look, we are looking at ways to
try to actually decrease costs before coming to you and saying
we need more premiums, fees, and co-pays, like the
consolidation of TRICARE programs, irrespective of--let's say
it was done in a cost-neutral basis to the beneficiary, but
there are opportunities for efficiencies. And, yeah, you may
not get the appointment as quickly as you wanted, but this is a
way for us to try to actually decrease costs to stave off
increasing premiums and co-pays.
Mr. Jones, where do you think that would fall with the
community?
Mr. Jones. Well, it is interesting that you say that we
aren't really decreasing costs. If you push costs or shift
costs to the beneficiary, part of this package is to actually
reduce or slow the growth of TRICARE. The intent is people
won't go, may not go, be more hesitant to go to see a doctor.
But that is one of the elements of this.
We know that a couple years ago that was exactly what the
Department had in mind with rising TRICARE fees. They thought
fewer people would go, fewer people would participate in
TRICARE, and more people would jump the system and go into the
private sector or perhaps go into the exchange which is now out
there. So there is an element of decreasing costs with this
shift.
I may have missed your point, but----
Dr. Heck. Well, I guess, you know, if there are
recommendations to come back that would fundamentally change
the system, like, let's say, a consolidation of the TRICARE
programs, in an effort to truly decrease costs to the system so
that there was no increased cost to the beneficiary, is that
something that the community would be willing to look at and be
willing to support?
Mr. Jones. Yeah, we would be more than willing to look at
something like that.
Dr. Heck. Okay.
Colonel Hayden. And I have to agree. I think the real issue
here is, if it is transparent to the beneficiary or if the
beneficiary actually--and what the commission is telling us,
they are trying to figure out a way to even provide the
benefit, a better benefit, at even a potentially lower cost.
And that should be the premise behind it. It shouldn't just be
a cost-cutting drill. It shouldn't be just, well, let's do away
with TRICARE Prime because it is more expensive. And that is
what I think the real issue is.
We would be more than willing to take a hard look at these
kind of proposals that provide the same level of benefit or
better at a lower cost.
Dr. Heck. Thank you, Mr. Chairman. My time has expired.
Mr. Wilson. And thank you, Dr. Heck.
We now proceed to Congresswoman Carol Shea-Porter of New
Hampshire.
Ms. Shea-Porter. Thank you very much.
And thank you for being here.
And let me say, I started off very prejudiced, having been
a military spouse, and my father-in-law ran the commissary. So,
you know, I am starting off in a position of actually knowing
what this means to families.
So I wanted to start by talking about the commissaries. My
understanding is that a lot of the lower paid rank and file are
actually qualifying for food stamps or the SNAP [Supplemental
Nutrition Assistance Program] program. So what impact would
this have if we take the commissaries away and they lose,
basically, the savings that they have? Can you, kind of,
estimate the impact that you think this would have on these
families?
Mr. Jones. Well, your point is well-taken, that there is an
increase in food stamps in certain segments of the military,
and families in particular, of course. And it would, it would
hit them in the pocketbook. They would have to--the food stamps
and their budget for food would not go as far. Their other
payments for other concerns they may have for the family would
have to be reassessed.
So the point is well-taken. Food stamps only go so far, and
when you have an opportunity to save 30 percent of your food
costs at the commissary, your money goes further at the
commissary.
Colonel Hayden. As a former economist from way back when,
okay, I have, kind of, crunched some numbers associated with
this. And I actually got some numbers from the Department
itself. DECA [Defense Commissary Agency] estimates that annual
savings for a family of four shopping exclusively at the
commissary is around $4,500 a year that they wouldn't have--
that they don't have to pay because they don't use the Safeways
or the Giants outside the gate.
The interesting part is that, with this proposal, because
they go from what is a 30 percent savings, on the average, to
now around a 10 percent savings, ultimately, for that family of
four, they are going to lose $3,000 worth of purchasing power
every year. That means they are going to have to find that
$3,000 already within their budget to figure out how to pay and
put the groceries, if you would, onto that table day-in and
day-out.
So that is what we see as the true financial loss
associated with this.
Ms. Shea-Porter. I find this breaking a social contract.
You know, it has always been understood that if you served and
you put your life at risk and left your family or took your
family places they might not have chosen on their own, that
there would be, at the end of the rainbow, you know, there
would be this. So I am disturbed by pretty much all the changes
there.
But what is the tipping point? Because always in the
military, if you ask Active Duty, they will say, my dad served,
my mother served, my grandfather served, my grandmother served.
You know, there is a chain there. What is the tipping point, do
you think, where they start saying, I can do better on the
outside, this is just too much hassle, or a family member says,
that is it, I am done?
And I want to add to that, before you answer that, that I
can remember during the Vietnam era and my husband was at
Fitzsimmons Army Medical Center. And there were a lot of
unaccompanied men on their last tour of duty because their
wives and families were just shot, they had had it. And so they
did their last assignment without their spouse there, because
they were getting ready to retire and they wanted to finally go
home after 20 years or 25 years.
So what is the tipping point, do you think, where people
say, no, you know, looking at all of it, I just can't do it
anymore, love my country, but I can't do it anymore?
Mr. Jones. Kind of hard to determine what the tipping point
is, but, in conversation with our members, we note that there
is a loss of confidence and a hesitancy to recommend to the boy
next door, to the family friend whose child is thinking about
going military, a hesitancy to say, yes, this is a good way to
go.
Nevertheless, the military still represents an outstanding
pathway to becoming all--the old quote, ``all you can be.'' It
offers a lot in education, in advancement, in confidence. So
the military still stands as a great pathway in this country to
have a better life.
Colonel Hayden. I actually thought the tipping point was
going to be about 2007. When you looked at what was taking
place with the Army and the mid-level NCOs [noncommissioned
officers] and the mid-level officers, if you would, actually
junior and mid-level officers, and they were starting to show
some real strain, and the services, especially the Army, had to
start providing retention bonuses at very high numbers
associated with it in order to sustain that career force, if
you would, what you needed, that real experienced base in order
to continue to lead, and when you look at that timeframe,
prosecuting two wars, multiple deployments, 15-month
deployments at the time, all the other things that were going
on to the force, I thought that is where we were really
stretching it.
And the only thing that I really believe that saved us a
little bit, number one, were all the work that you were doing
to bring that compensation package back to where it needed to
be and, number two, we didn't have the greatest economy as we
were coming out after that shortly thereafter in 2008, which
kept a lot of the folks in. And that has retained a lot of the
folks.
I am more concerned right now that, with the rhetoric that
we are starting to see and with the forcing out that we are
doing with the end-strength reductions, we are hiding what
could be a retention problem. We are already hearing from the
service DCSPERs [Deputy Chiefs of Staff for Personnel], they
are talking about how recruiting is starting to tighten up
because the economy is starting to come back.
And our concern is that, if you start doing this, where the
economy starts coming up and at the very same time, you start
bringing down if you would, the compensation package needed to
sustain those people that have 10, 12, 15 years of service,
there you are going to start putting real readiness at risk.
Because you have to take 10 years, 12 years, 15 years to build
those NCO and that officer corps.
Ms. Shea-Porter. That is my concern, too. Thank you.
I yield back.
Mr. Wilson. And thank you, Ms. Shea-Porter.
We now proceed to Congressman Dr. Brad Wenstrup of Ohio.
What? I can't believe he left. Okay.
We have Congressman Austin Scott from the Republic of
Georgia.
Mr. Scott. It is Wednesday. It was time for you to have a
minor error, Chairman.
Gentlemen, thank you for being here today.
And I represent a tremendous number of men and women that
serve our country, both in the civilian role and in uniform.
And when I talk with the men and women back home, it just kind
of makes the problem worse, in how much of the cut they are
being asked to take. And when they look at us and they see us
pushing changes to their benefit programs, reducing the
promises that have been made to them, most of them tell me, I
understand that minor changes have to be made, I am willing to
take my share of them. Virtually every man and woman in uniform
that works at our base says, I will take my share. But when you
are funding free cell phones at the same time that you are
cutting my benefits, that shows a lack of priorities from
Congress.
And I would just like to say, you know, I am sorry that we
haven't been able to set our priorities any better than that as
a Congress. And to the men and women that are out there, I hear
you, I hear you loud and clear.
Dr. Heck mentioned something, and I agree with him, going
back to the cost of health care. The cost of health care in
this country far exceeds what a similar procedure costs in any
other country in the world. And you can get--a procedure may
cost $1,000 at one facility and $3,000 at another one, and
there is no correlation in price and quality of that procedure.
And it seems to me that if there were a way for us to work
with people like you to make sure that we were able to get the
highest quality health care at the lowest possible price, then
we could put that--we can do a better job of fulfilling that
promise to the men and women in uniform.
And so my question is, as we go through all of these budget
reductions and things that are being forced on the Pentagon,
are there alternative savings or reforms that you see or ways
that we could do this where we get the men and women that
deserve this benefit more for their dollar?
Colonel Hayden. I am more than willing to try to take this.
I actually think there are ways to improve the benefit. You
know, when you look at healthcare delivery, right now we have
somewhat service stovepipe, still, operations. DHA [Defense
Health Agency] was a step to try to consolidate some of this,
but we still have each of the surgeon generals that are
associated with it and they still have their own budgeting
authority associated with the programs.
Just when you look at economy of scale in purchasing, when
you need, you know, a piece of equipment in one hospital and
you still need another piece of equipment in a military
treatment facility, why not look at the economy of scale when
you start doing the purchasing? Just because you are in one
branch of the service and then another branch of the service
and you have your own budget pots, maybe there can be a better
way to do that, more of a purple way, if you would.
Look, the coalition--not all coalition members have taken
on and have agreed to a unified medical command, if you would.
But this economy of scale, at least on the budgeting aspects,
we can see that you could get some economy of scale on that.
Mr. Scott. Well----
Colonel Hayden. And that is just one step. There have been
several reports that have been out there before that have
pushed to do just that.
Mr. Scott. This is just somewhat brainstorming, but, you
know, the way we handle Medicare Advantage, the participant can
choose between different insurance carriers. And my
understanding is that with TRICARE there is just one insurance
carrier in the region that handles that, and there is no choice
for the consumer.
I wonder if we maybe took some of the things that we do in
Medicare Advantage, where we have given the consumer more
options, I wonder if we looked at trying that with TRICARE, if
that would give us the ability to maybe drive down some of
those costs.
With that said, Mr. Chairman, I will yield the 13 seconds
that I have left.
Mr. Wilson. Here, here. Thank you, Congressman Scott. Thank
you for your passion and concern.
We are going to proceed, if there are any further
questions--I just have one, because I just think a point that
both of you have made just needs to be restated. And, in
particular, that is the impact on families and the actual
fiscal, f-i-s-c-a-l, impact on a family. Because that is what
the people at home need to know and understand the consequence.
Because they can identify--Colonel, you have already indicated
a $5,000 net reduction in spendable capital.
So, both of you, if you could restate again, do you see the
additional cut of out-of-pocket housing expense, combined with
the reduced less-than-ECI [employment cost index] pay raise,
and an increase in commissary prices as a cut in the purchasing
power? And, again, an estimate from each of you on enlisted and
officers.
Colonel first and then Mr. Jones.
Colonel Hayden. It is definitely a loss of purchasing
power, at the end of the day. The annual loss that we found for
an E-5, 10 years of service, if you would, family of four, with
these proposals fully in place--and I consider this still a
very conservative estimate. I used DOD's numbers for the health
care, if you would, which was what they figured would be an
additional about $200 out of pocket that a family would see.
And I only did 2 years of the pay caps instead of the full 6
years of pay caps.
So, with that in place, at the end of the 2 to 3 years of
implementation associated with this, they are looking at a loss
of annual purchasing power of $5,000 for that E-5. And for that
O-3 family of four, it is almost $6,000.
Mr. Wilson. Sadly, that is a number that families can
understand.
Mr. Jones. It is a number that families can understand. And
we agree with the numbers. But there is also a retention here--
there is a cost to the country, as well. These folks who lose
that amount of money may decide that this is not the path they
want to follow, they don't want to follow a career in the
military, they don't want to serve in the military.
And that is a consequence of these proposals, a possible
consequence, a second-tier, third-tier, or fourth-tier
consequence that we haven't really looked at with this budget
plan that has come out from the Pentagon.
Mr. Wilson. And, Mr. Jones, thank you for pointing out
about retention. And people need to understand, the persons who
are serving in our military are very skilled. We are facing an
asymmetric, illegal enemy combatant, not in uniform, people who
use women and children as shields. We have really never seen
such conflict. And the training of our military personnel is
extraordinary to face people who would equally and
enthusiastically with a vehicle-borne IED [improvised explosive
device] blow up a group of children. How can you--the training
for this takes time.
So I want to thank you.
And anyone else, any further questions?
Yes, Ms. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
And I know in your positions you might not necessarily have
some of the input from the Guard and Reserve. But I am
wondering, certainly in terms of the commissary--and I think
some of the latest studies demonstrate that it is actually the
Guard and Reserve that are using food stamps at a fairly high
rate. Do you have any sense of that and the usage, in terms of
the commissaries, for the Guard and Reserve and how they would
be impacted by this?
I guess the food stamp really would indicate that, in their
regular jobs, in addition to the time that they deploy as Guard
and Reserve, you know, that they are struggling. And we know
that we have had, you know, a number of attempts to cut food
stamps, which has affected this group of folks.
Mr. Jones. You know, the economy has not been good, and we
have watched an explosion in food stamp usage. Whether it is
due to the economy or due to expansion of eligibility in food
stamps, no one is really sure at the present. But we just
recognize that, I think it is 41 million people today are on
food stamps, 7 million some 6, 7 years ago. I am not sure of
those, but I do recall reading an article on that.
But I do not have statistics on the Reserve use of food
stamps, just the knowledge that food stamps are being used in
the commissaries. And I spoke with someone just the other day
who said to me, it breaks my heart to see a young family at the
commissary using food stamps.
Mrs. Davis. Yeah. I know in our community, as well. I mean,
many groups have stepped in, actually, to provide help from
the--you know, vegetables and meals and a whole host of others
for our service members at Pendleton and other places.
Colonel Hayden. And we don't have the statistical
information associated with that. It is something that I could
take back and try to provide you some information that we have.
The one thing I do know about food stamps, and it is kind
of an interesting twist, at least for the currently serving,
the Active Duty force, if you would, when you take a look,
there are some rule sets associated with it, that if you are
living on post, of course, you are not receiving a housing
allowance associated with it. And so you could actually qualify
for food stamps living on post, where if you live off post and
are receiving a housing allowance, it then goes in and it shows
the scale associated with it, so you wouldn't be eligible to
receive the food stamps.
So it becomes one of those things, what counts, what
doesn't count, as you try to figure out the eligibility
criteria on this.
Mrs. Davis. Uh-huh.
Colonel Hayden. But I will go back and take a look at the
Guard and Reserve and get back to you.
[The information referred to can be found in the Appendix
on page 165.]
Mrs. Davis. Yeah, okay. Thank you.
And I know that we also have obviously had a chance to
speak to service chiefs on this issue. And probably in the next
few weeks, I think that, you know, they feel there is a case to
be made in terms of readiness and whether or not families would
trade off that, again, false choice, I think, as you are--but,
nevertheless, would they trade off training and access to
supplies, not to canonize ships, all those things, for other
changes that would be occurring.
I am sure you have had those discussions.
Mr. Jones. Just, when you put a cap on how much you are
going to allow for spending in defense, you make it an
arithmetic exercise, rather than basing the expense on your
national strategic plan or the threats that you face. I think
you are always going to have a problem in squeezing out some of
these very important programs that help the quality of life for
families and those who serve.
And that is what we are in this year, and there are
tradeoffs in that. And we just shouldn't be there, we should
not be there with our defense policy. This was the wrong way to
go. And, again, we were told we would never follow this path of
sequestration.
Mrs. Davis. Uh-huh.
Can I ask you, did you think that the commission, did they
ask the right questions? Do you think they were helpful in that
way as they interviewed you?
Mr. Jones. The Military Compensation Retirement----
Mrs. Davis. Right.
Mr. Jones. Their questions--you know, they are looking, I
think, at the right things at the present time. They may have
been the source for the earlier comment about the survey
putting health care, education, and pay in that order with our
young service members.
Mrs. Davis. Uh-huh. Thank you very much.
Thank you, Mr. Chairman.
Mr. Wilson. Thank you.
We now proceed to Congressman Scott.
Mr. Scott. Thank you, Mr. Chairman. I will make this brief.
Colonel Hayden, I think one thing that, I think, as we do
the arithmetic, as you said, Mr. Jones, in making sure that the
public understands the impact of this is, we are not talking
about $4,800 a year from somebody who makes $200,000 a year.
And so, you said this is for an E-5?
Colonel Hayden. The E-5 loses about 8 percent of their
regular military compensation [RMC] with this. The RMC, if you
would, was many times measured by the Department itself, and
about a 6 percent loss is what we calculated. And that is kind
of a back-of-the-envelope, so trust me on this, that is what we
are looking at. But about an 8 percent or a 6 percent reduction
in RMC.
Mr. Scott. But as a percentage of their disposable income,
it would be significantly higher. Just like every American,
they have car payments, they have other payments that come out
of their paycheck that are not optional, that they can't just
get rid of.
Colonel Hayden. This is money they have to find in their
current budget now.
Mr. Scott. That is absolutely right. And so, while it may
be 8 or 10 percent of pay, it may be 40 or 50 percent of
disposable income that they have after they have made their car
payment and other payments that they have.
So just, I appreciate what you are doing. Look forward to
working with the two of you and helping you.
Mr. Wilson. Thank you, Mr. Scott.
Dr. Heck.
Dr. Heck. Thanks, Mr. Chair.
And I just want to follow up on a couple things. Certainly,
I appreciate the perspective you give about the impact on
retention, but, you know, it is also going to impact
accessions, right? And we have seen recent surveys showing that
there is a much lower propensity towards military service of
men and women--or males and females in high school right now
for entering military service. Of course, part of that is due
to a resurging economy, but also many people are concerned
about what that phrase, ``keeping faith,'' is going to mean to
them, should they commit to time and service.
And, Mr. Jones, I think you said it very well, in that this
is turning into an arithmetic problem as opposed to a strategy
problem. And I think, although not in this subcommittee, but
that has been a discussion that we have had about the last QDR
[Quadrennial Defense Review], and really trying to develop a
QDR to a budget as opposed to the legislative mandate, which is
the 20-year outlook at low to moderate risk.
I agree that we need to withhold any decisions until we
hear from the commission. In fact, that was the point I brought
up when we had the Assistant Secretary and the G-1s here not
too long ago. So I appreciate you reiterating those points.
Thank you both for being here and representing the men and
women in uniform and our retiree population. We appreciate it.
I yield back.
Mr. Wilson. Thank you, Dr. Heck.
And, again, thank both of you for being here, Colonel
Hayden with The Military Coalition, and Mr. Rick Jones, who is
representing the National Military Veterans Alliance.
And I would like to remember that Mr. Jones actually served
at Moncrief Military Army Hospital at Fort Jackson, South
Carolina. And he is still beloved. So this is good.
And thank you all, your sincerity on behalf of the
military, military families, and retirees. Thank you.
And we are adjourned.
[Whereupon, at 3:03 p.m., the subcommittee was adjourned.]
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A P P E N D I X
April 9, 2014
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
April 9, 2014
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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DOCUMENTS SUBMITTED FOR THE RECORD
April 9, 2014
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
April 9, 2014
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RESPONSE TO QUESTION SUBMITTED BY MRS. DAVIS
Colonel Hayden. During the hearing, ranking member Susan Davis (D-
CA) requested information regarding food stamps/commissary and the
Reserve Component.
Interest in this issue surfaced following the February CNN Money
report that highlighted the use of food stamps or Supplemental
Nutrition Assistance Program (SNAP) benefits has increased at military
commissaries. The following chart was included in their article:
Military dollars spent on food stamps
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Y.
Source: Defense Commissary Agency
MOAA reached out to the Defense Commissary Agency (DeCA) and the
Department of Defense to see if they had any data as to why the
marketed increase since 2008. DeCA stated they were gathering
demographics, but as to date, have not shared the information.
Here is information that we have been able to gather that has led
to increase usage by service members, veterans, and their families who
may qualify for food stamps:
According to DOD, of the 44 million Americans who qualify
for food stamps, only 5,000 are active duty service members. The
military services have offered the Family Subsistence Supplemental
Allowance (FSSA) since 2001 specifically designed to lift the income of
a military family above the eligibility for food stamps.
Authorized commissary patrons as defined by Department of
Defense Instruction 1330.17, Armed Services Commissary Operations,
include active duty, Guard and Reserve members, military retirees,
Medal of Honor recipients, 100 percent disabled veterans, and their
authorized family members.
The 2004 National Defense Authorization Act opened up
access to the commissary for members of the Guard and Reserve. With the
proper ID, unlimited commissary shopping privileges are authorized for:
Ready Reserve members (Selected Reserve, IRR, and
Inactive National Guard)
Retired Guard members
``Gray Area'' Guard retirees not yet age 60
Dependents of these members with a DOD family member
ID
In the 2008 NDAA, The House bill contained a provision
(sec. 651) that would require the Secretary of Defense to revise
regulations to ensure access to the defense commissary and exchange
system by the surviving spouse and dependents of a veteran who had a
service-connected disability rated at 100 percent or total, although
the disability rating was awarded posthumously. The provision was not
adopted, but the conferees believed that this change could be done in
the regulations without the need for legislation. Accordingly, the
conferees direct the Secretary of Defense to revise the Department of
Defense regulations to provide access to the defense commissary and
exchange systems.
In 2009, as part of an involuntary separation incentive,
member of the Armed Forces who is involuntarily separated from active
duty under other than adverse conditions through Dec. 31, 2012 may
continue to use commissary and exchange privileges for a two-year
period beginning on the date of involuntary separation.
Unfortunately, we do not have a specific answer as to the cause of
the increase in use of food stamps at commissaries. We can only
speculate that the combination of increased access by survivors and/or
families, as well as the guard and reserve--all who could be eligible
for food stamps--and the downturn of the economy (and job market in
2008), could have led to more of this population becoming eligible for
food stamps and usage at commissaries. [See page 18.]
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