TESTIMONY OF
MASTER CHIEF JOSEPH L. BARNES, USN (RET.)
NATIONAL EXECUTIVE SECRETARY
FLEET RESERVE ASSOCIATION

BEFORE THE
SUBCOMMITTEE ON TOTAL FORCE
HOUSE ARMED SERVICES COMMITTEE
UNITED STATES HOUSE OF REPRESENTATIVES

REGARDING
MILITARY PERSONNEL POLICY, BENEFITS, AND COMPENSATION

 March 24, 2004

INTRODUCTION

Mr. Chairman and other distinguished Members of the Subcommittee: The Fleet Reserve Association (FRA) is grateful for the opportunity to present its military personnel goals for Fiscal Year 2005. Before continuing, I want to express deep appreciation on behalf of the Association's membership for the quality of life improvements for our Nation's men and women in the Uniformed Services implemented over the past few years. What this august group has done for our active duty, reserve, and retired service members is not only superlative but unusually generous for Congress in comparison with the previous two to three decades.

FRA salutes you for a job superbly done.

In light of the generosity of this Subcommittee and Congress the Association is hesitant to submit additional requests. However, in representing its membership, FRA must make an effort to voice concerns of the men and women serving in or having retired from the United States Navy, Marine Corps, and Coast Guard.

In the active force, the plea is for increased compensation to compensate for the arduous operational and personal tempos thrust upon the members of the uniformed services. Others prefer better housing, perhaps increased child-care programs, or any of the many programs and benefits available to them and their families. Reservists have their choices for enhanced retirement benefits, special pays, and increased MGIB proceeds. The retired community seeks positive changes to the Uniformed Services Survivor Benefit Plan (USSBP), full concurrent receipt of military retirement pay and VA service connected payments, and a reasonable access to health care services.

What follows is a list of issues that were submitted by the Association's membership and adopted at its 76th National Convention, San Diego, California, 31 August 2004. At the top, the three most important goals for each component (active duty, reserve, and retired personnel and their families) are listed. Following are goals most important to many FRA members that require your attention as you consider what personnel issues should have a place in the FY 2005 National Defense Authorization Act.

ACTIVE DUTY COMPONENT

Pay and Allowances. Always number one in most surveys completed by FRA and the active forces is pay and allowances. This distinguished Subcommittee, alerted to this fact for the past six years, has improved compensation that, in turn, enhanced the recruitment and retention of uniformed personnel in an all-volunteer environment. Adequate and targeted pay increases for middle grade and senior petty and noncommissioned officers have contributed to improved morale and readiness. With a uniformed community that is more than 50% married, satisfactory compensation relieves much, if not all the tension brought on by operational and personal tempos.

For the FY 2005, the Administration has recommended a 3.5 percent across the board basic pay increase for members of the Armed Forces. This is commensurate with the 1999 formula to provide increases of 0.5 percentage points greater than that of the previous year for the private sector. With the addition of targeted raises, the formula has reduced the pay gap with the private sector from 13.5% to 5.2% following the pay increase programmed for January 1, 2005.

FRA, however, is disappointed that the Office of Management and Budget (OMB) is opposed to targeted pay increases for certain enlisted and officer pay grades. This in the face of the Defense Department's projected recommendation to affect targeted pays along the line of those authorized for FY 2004. Targeting pay hikes for FY 2005 and FY 2006 will aide the Department's quest to increase basic pay for career personnel to equal those in the private sector earned by workers having similar education and experience levels. Comparability with private sector wage growth remains a fundamental underpinning of the all-volunteer force. To ignore it would result in severe consequences to the national defense.

FRA urges the Subcommittee to adopt a targeted pay table for FY 2005, at least proportionate to that of January 1, 2004, and ensure that uniformed members of the Public Health Service (USPHS) are included in the pay increase authorized for FY 2005.

RESERVE COMPONENT

Operational Tempo. The increase in the use of reserve units to serve along side active duty components in Iraq, as an example, has caused considerable challenges for individual reservists. Not only has their mobilization placed a strain on employment and income, but the family as well. Employer support, once strong, decreases as more essential employees are whisked-off to spend longer periods in uniform leaving the employer frustrated with having to find a replacement and, at the same time, hold the position open for the reservist's return.

FRA has always supported the Total Force Policy but is concerned that the sustained use of reserve forces will eventually harm the recruiting and retention of young men and women willing to serve as future citizen Sailors, Marines, and Coast Guardsmen. The United States must maintain a strong reserve force at all times in the event of a greater need than at the present.

FRA recommends that a review of the reserve's role in the Total Force Policy be affected at the earliest and that it provide recommendations to this Subcommittee on what enhancements are necessary to recruit and retain the number of reservists required for the defense of the United States. Recommendations may include such issues as tax relief, healthcare, retirement upgrades, improvements in the MGIB-SR, and family support programs.

RETIRED COMPONENT

Survivor Benefit Plan. FRA has experienced a greater concern for improving the Uniformed Services Survivor Benefit Program (USSBP) than any issue on its website (www.fra.org). With an average age of 68 on the Association's membership roll, the concern is justified. Most convincing is the need to revise the language in the current Plan to reduce the "social security offset" that penalizes annuitants at a time when the need is the greatest. Then there are the many members, age 70 and older, who have been paying into the Plan for more than 30 years with the only relief more than four years into the future.

There are three compelling reasons to amend the Plan. One, the cost of participating in USSBP has increased from 60% for the military retiree to more than 80% allowing the Department of Defense to renege on its original charge to provide 40% of the cost. Two, the USSBP was fashioned from the survivor program for retired federal employees, yet the military retiree on the average will pay more for participating in his or her Plan and the military retiree's survivor will receive a smaller annuity. Three, the military retiree on the average will pay into the USSBP over a longer period than the federal retiree. Although Congress has adopted a time for USSBP participants to halt payments of premiums (when payments of premiums equal 30 years and the military retiree is 70 years of age) the date is more than four years away. Military retirees enrolling on the initial enrollment date (1972) will this September be paying premiums for 32 years, by 2008, thirty-six years.

FRA recommends and urges the Subcommittee to adopt the House bill, H.R. 3763, that would amend the Uniformed Services Survivor Benefit Plan (USSBP) to restore the value of service members participating in the program by increasing the survivor annuity over a ten-year period to 55%, and the date 2008 to October 31, 2004 when certain participants attaining the age of 70 and having made payment to the Plan for at least 30 years are no longer required to make such payments.

ACTIVE DUTY (CONTINUED)

Basic Allowance for Housing (BAH). In concert with The Military Coalition, FRA supports revised housing standards that are more realistic and appropriate for each pay grade. Many enlisted personnel are unaware of the standards for their respective pay grade and assume they are entitled to a higher standard than authorized. Enlisted members, for example, are not eligible to receive BAH for a three-bedroom single-family detached house until achieving the rank of E-9 - representing only one percent of the enlisted force - yet many personnel in more junior pay grades do in fact reside in detached homes. As a minimum, the BAH standard (single-family detached house) should be extended over several years to qualifying service members beginning in grade E-8 and subsequently to grade E-7 and below as resources expand.

FRA extends appreciation to the Subcommittee for acting a few years ago to reduce out-of-pocket housing expenses for service members. Responding to the Subcommittee's leadership on this issue, the Department of Defense proposed a similar phased plan to reduce median out-of-pocket expenses to zero by FY 2005. Through the leadership and support of this Subcommittee, these commitments are now law. This aggressive action to better realign BAH rates with actual housing costs is having a real impact and providing immediate relief to many service members and families who were strapped in meeting rising housing and utility costs.

The Association applauds the Subcommittee's action, and is in hope that this plan is executed in 2005. Unfortunately, housing and utility costs will become more expensive, and the pay comparability gap, while diminished over recent years - thanks to the Subcommittee's leadership - continues to widen. Members residing off base face higher housing costs, along with significant transportation costs, and relief is especially important for junior enlisted personnel who do not qualify for other supplemental assistance.

FRA urges the Subcommittee to direct gradual adjustments in grade-based housing standards to more adequately cover members' current out-of-pocket housing expenses and to complete the elimination of average out-of-pocket housing expenses in FY 2005.

Basic Allowance for Subsistence (BAS). FRA is grateful for the establishment of a food-cost-based standard for BAS and repealing the one percent cap on BAS increases. There is more to be done to permit single career enlisted members greater individual responsibility in their personal living arrangements. In this regard, the Association believes it is inconsistent to demand significant supervisory, leadership and management responsibilities of noncommissioned and petty officers, but still dictate to them where and when they must eat their meals while at their home duty station.

FRA urges the Subcommittee to repeal the statutory provision limiting BAS eligibility to 12 percent of single members residing in government quarters. As a long-term goal, extend full BAS eligibility to all single career enlisted members, beginning with the grade of E-6 and, eventually, to the lower grades as budgetary constraints permit.

Force Size/Readiness/OPTEMPO/PERSTEMPO. Force size, readiness, OPTEMPO, and PERSTEMPO should be addressed simultaneously. Readiness cannot be achieved at the high level demanded if force size is inadequate in numbers, OPTEMPO is too heavy and PERSTEMPO is affecting the performance of individual service members. FRA believes that all are suffering due to a shortage of uniformed members. Once again, DOD apparently is so concerned with the cost of personnel that it is reluctant to increase manpower strengths when it's obvious to FRA and others there is a need for more troops. If DOD says there is no requirement for more troops than authorized, then why did three of the military services issue stop-loss orders to many of their uniformed personnel? "It reflects the fact that the military is too small," says Charles Moskos, a leading military sociologist, "which nobody wants to admit."

The Department played an integral role in having Congress give birth to the All-Volunteer Force. As such, it must stay the course realizing that people who volunteer to lay down their lives and limbs will not do so at the same level of compensation offered their predecessors of the WWII-Vietnam era. Today 50 percent or more of our military personnel are married and have families. It costs money to enfold these families under the military's social umbrella. If the United States desires an all-volunteer armed force, it will have to pay the price. Paying the price will allow the Department to increase the size of its uniformed force in order to relieve the pressure of lengthy deployments, long hours on duty, and family concerns, each having its own negative effect on readiness. One service chief stated that he would spend every dollar available to "modernize" his service (how many years now?), but not one cent more for people. Such a statement seems incredible when one knows historically that final victory is in the hands of the people.

FRA recommends that the military services be afforded the opportunity to determine the size of its forces and the number of personnel necessary to perform the mission. However, it does little good to authorize an increase in manpower when funding is not supportive of the numbers.

Impact Aid. FRA is most appreciative for the Impact Aid authorized in previous Defense measures but must urge this Subcommittee and its full Committee to support a substantial increase in the funding for schools bearing the responsibility of educating the children of military personnel and federal employees. Current funds are not adequate to ably support the education of federally sponsored children attending civilian community elementary schools. Over the years, beginning with the Nixon Administration, funding for Impact Aid has decreased dramatically. For example, in the current fiscal year the Military Impacted Schools Association (MISA) estimates Impact Aid is funded at only 60% of need according to law. Our children should not be denied the best in educational opportunities. Impact Aid provides the children of our Sailors, Marines, Coast Guardsmen, Soldiers, and Airmen, a quality education.

FRA implores Congress to accept the responsibility of fully funding the military Impact Aid program. It is more important now to ensure our service members, many serving in harm's way, they have little to concern with their children's future but more to do with the job at hand.

DOD Schools. FRA is disturbed once again with the Department of Defense (DOD) and its repeat of a quest to close some or all DOD-sponsored schools operating on military installations in CONUS. FRA is adamantly opposed to reducing the quality of education now enjoyed by military personnel and federal employees' children by forcing them to enroll in public schools politicized by local government regulations. As long as the United States continues with an all-volunteer force and as long as U. S. uniformed personnel and employees of the Armed Forces are deployed to foreign shores, CONUS schools will provide a safe haven for their children. The children whose fathers or mothers are in the military and subject to deployment or long periods of training away from the parent's installation, are better served by DOD teachers and administrators who understand their needs. Recent remarks by the Master Chief of the Navy Terry Scott provided the justification to retain and operate the Department's School System. Scott, appearing before a House panel, explained the Navy has little if any problem assigning its sailors to installations having DOD-administered schools, but experiences considerable reluctance from those who are ordered to areas where public schools are wanting.

FRA recommends that Congress direct the Department of Defense to cease and desist before further damage is done to the morale of our Nation's military personnel and families. In an all-voluntary force environment, it's certain Congress doesn't want to add to the retention challenges the military may face in the future.

Dislocation Allowance (DLA). Moving households on government orders can be costly. Throughout a military career, service members endure a number of permanent changes of station (PCS). Too often each move requires additional expenses for relocating to a new area far removed from the service members' current location.

Dislocation allowances are authorized for military-ordered moves. To aid service members in defraying these additional costs, Congress in 1955 adopted the payment of a special allowance- termed "dislocation allowance" - to recognize that duty station changes and resultant household relocations reflect personnel management decisions of the Armed Forces and are not subject to the control of individual members.

Odd as it may appear, service members preparing to retire from the Armed Forces are not eligible for dislocation allowances, yet many are subject to the same additional expenses they experienced when effecting a permanent change of station during the 20 or more years of active duty spent earning the honor to retire. In either case, moving on orders to another duty station or to retire are both reflective of a management decision. Retiring military personnel after completing 20 years of service is advantageous to the Armed Forces. It opens the ranks to much younger and healthier accessions.

FRA recommends amending 37 USC , §407, to authorize the payment of dislocation allowances to members of the Armed Forces retiring or transferring to an inactive duty status such as the Fleet Reserve or Fleet Marine Reserve who perform a "final change of station" move of 50 or more miles.

Education. FRA advocates the creation of a benchmark for the MGIB so its benefits will keep pace with the cost of an average four year college education. Even with the October 1, 2004 increases in basic rates, a MGIB student looking forward to completing the 2004-2005 academic year will have to pay out-of-pocket about one-third the cost of a four year course of education in a public college or university. If married, the shortfall in benefits will place a heavier financial burden on the student.

A significant percentage of the Navy's enlisted force has no educational benefits. It seems ironic that an individual enlisting in the military services is eligible to enroll in the MGIB while another seeking to reenlist does not have the opportunity. Allowing service-members to enroll in the MGIB upon reenlisting in the Armed Forces should be the norm.

FRA continues to support increased benefits for participation in the Montgomery GI Bill (MGIB) and to authorize certain service members the opportunity to enroll or reenroll in the MGIB.

Spousal Employment. Today's all-volunteer environment requires the services to consider the whole family. It is no longer adequate to focus only on the morale and financial well-being of the member. Now, his or her family must be considered, too. One of the major considerations is spousal employment that could be a stepping-stone to retention of the service member - a key participant in the defense of this Nation.

In recent years, the Armed Forces have become concerned with the plight of military spouses who lose employment when accompanying their service member husbands or wives to new duty locations. Studies have concluded that many military families suffer significant financial setbacks. Some losses are substantial. Worse, yet, is the lack of equal or even minimal employment opportunities at the new duty locations.

The services are continuing to test new programs to assist spouses in finding full or temporary employment to include counseling and training. Other initiatives will help spouses find "portable" employment in companies with customer-service jobs that can be done at remote locations. FRA salutes these efforts and encourages the military departments to continue the march.

The Association urges Congress to continue its support of the military's effort to affect a viable spousal employment program and to authorize sufficient funds to assure the program's success.

RESERVE COMPONENT (CONTINUED)

MGIB-SR. The Selected Reserve MGIB has failed to maintain a creditable rate of benefits with those authorized in Title 38, Chapter 30. Other than cost-of-living increases, only two improvements in benefits have been legislated since 1985. In that year MGIB rates were established at 47% of active duty benefits. This past October 1, the rate fell to 27% of the Chapter 30 benefits. While the allowance has inched up by only 7% since its inception, the cost of education has climbed significantly.

FRA stands four square in support of the Nation's Reservists. To provide an incentive for young citizens to enlist and remain in the Reserves, FRA recommends to Congress the pressing need to enhance the MGIB-SR rates for those who choose to participate in the program.

Academic Protection for Reservists. There are cases where reservists, attending higher institutions of learning, called to active duty in the defense of the Nation and its citizens, lose credits or pre-paid tuition costs because they did not complete the course of instruction. FRA believes Congress should adopt provisions of law that require colleges and universities to retain and reactivate the credits and prepaid costs for the reservists upon demobilization.

FRA urges Congress to adopt legislation that would provide academic and financial protection to members of the Reserve who are attending an institution of higher learning when called to active duty.

RETIRED COMPONENT (CONTINUED)

Authorize Surviving Spouses a Full Month's Retired Pay for Month in which Retirees Die. This is a proposal initiated by FRA based on pleas from surviving spouses caught up in the bureaucracy of mammoth rules and regulations, absolutely foreign to them. Current regulations require survivors of deceased military retirees to return any retirement payments received for the month in which the retiree dies. On the demise of a retired service member entitled to retired pay, the surviving spouse or beneficiary is to notify the Defense Department of the death. The Department's financial arm then stops payment on the retirement check or electronic deposit and subsequently recalculates the payment to cover the actual days in the month the retiree was alive. In other cases where the death is not reported in a timely manner, any payments made for the days the retiree was not alive will be recouped.

Retirement and its related activities are most agonizing if not an arduous experience for many military retirees and families transitioning to an unfamiliar civilian-lifestyle. For the average retiree, and most likely the enlisted member, will suddenly discover finances now will be more than a principal concern. On leaving active duty, the retiree's income will drop 60-to-70 percent of what he/she earned while in uniform. The enlisted retiree, unlike his or her active duty counterpart, will receive no death gratuity and, in the case of many of the older enlisted retirees, would not have had the financial resources to purchase adequate insurance to provide a financial cushion for the surviving spouse.

Death is a most traumatic experience for survivors. It is a most painful time when the surviving spouse must accept the task of arranging for the deceased members' funeral services. The additional cost involved constitutes a major output of scarce family dollars only amplified by the loss of retirement income when needed the most. A final month's retirement payment will go far in helping to sooth the strain on the survivor's financial obligations.

To aid in reducing the cost of the proposal, survivor benefit payments may be forfeited for the month in which the retiree dies and, in lieu thereof, the survivor receives the retiree's final month's check. In the event the retiree's final month's retirement check is less than the SBP annuity, the survivor would receive the one most favorable.

FRA recommends that, in consideration of service to the Nation and the trauma surrounding the death of a retired service member, the surviving spouse would be entitled to receive and retain the final retired pay check/deposit covering any month in which the member was alive for any 24-hour period.

Concurrent Receipt. The FY 2003 National Defense Authorization Act (NDAA) authorizes a special compensation that establishes a beachhead to authorizing full concurrent receipt, a term for the payment of both military non-disability retired pay and any VA compensation for service-connected disabilities without a reduction in one or the other payment. The FY 2004 NDAA expanded the beneficiary list to include those retired service members with at least a 50% compensatory service-connected disability. Although FRA is appreciative of the effort of Congress to address the issue, it fails to meet the resolution adopted by the Association's membership to seek full compensation for both length-in-service military retirement and VA compensation. Currently, the receipt of VA compensation causes a like reduction to a retired service member's military retired pay. This leads to the belief, and well-deserved, that retired service members, earning retired pay as a result of 20 years or more of service, are forced to pay for their own disablement.

Most disabilities are recognized after the service member retires. Some are discovered while the member is still performing active duty or as the result of a retirement physical. However, it is to the benefit of the Department of Defense to retire the member without compensation for any disability. Instead, the member is directed to the Department of Veterans' Affairs for compensatory relief for the damages incurred by the member while serving the Nation in uniform.

Prior to 1975, all military disability pay was tax exempt. A perception of abuse to the system, mostly in the Armed Forces senior grades, caused Congress to amend the Internal Revenue Code. The Tax Reform Act of 1976 forced the Department of Defense (DOD) to change the rules so that only a percentage of the member's disability retired pay attributable to combat-related injuries would be tax-exempt. Subsequently, many retiring service members petitioned the VA for relief for service-connected injuries.

Service members, whether in uniform or retired, are considered Federal employees subject not only to Title 10, U. S. Code, but Title 5, U. S. Code, regulating the conduct and performance of government employees, on the job or retired. When retired, service members are not entitled to VA compensation payments for their disabilities without forfeiting an equal amount of their retired pay with one exception; military retirees may go on the federal employee rolls and subsequently retire using military service time to calculate their federal retirement annuity. They, then, may receive veterans' compensation as well as Federal civil service retirement payments with no offsets, reductions, or limits. Why should current law discriminate against the military retiree?

FRA encourages Congress to take the helm and fully authorize and fund concurrent receipt of military non-disabled retirement pay and veterans' compensation program as currently offered in H.R. 303, a bill introduced by Rep. Mike Bilirakis (Fla.) or S. 392 introduced by Senator Harry Reid (Nev.). Congress should remember that U.S. service members, more so than any collective group, not only had a major hand in the creation of this Nation, but have contributed for more than 200 years to the military and economic power of the United States. Those who have served in the Armed Forces for 20 years or more years certainly deserve the opportunity to have equity with their counterparts in the Federal service who can earn both without a penalty to one or the other.

Cost of Living Adjustments (COLA). Recent threats to curtail or halt cost of living adjustments (COLAs) have been lobbed in the direction of military retired pay and related payments such as survivor benefit annuities. Once again, Congress is urged to keep its promise that military retired pay will maintain its purchasing power based on increases in the Consumer Price Index (CPI).

One must recall that the wisdom of Congress initiated the COLA program in lieu of the "re-computation" system. Re-computation was a term used to describe adjustments to military retired pay prior to the 1970s. Military retirees received retirement pay adjustments each time active duty pay was increased. This system guaranteed the service member if he/she retired at a certain percentage of active duty pay, that pay would maintain the same percentage factor to active duty pay throughout retirement. In 1963, Congress - concerned with a heightened number of retired WWII members on the retired roll - decided to switch to the CPI method.

In 1985 the Gramm-Rudman-Hollings Act gave the Administration an open door policy to "stop payment" on COLAs to military retired pay. The result was a frontal attack on Congress by military retirees under the banner of the newly formed (The) Military Coalition. Congress did not include veterans in its sequestration proposing a 3.7% COLA for veterans and their survivors, so the Coalition used the slogan, "Military retirees are veterans too." The Coalition was irate.

Conversely, COLA protection is the paramount reason military retirees make an irrevocable decision to elect significant reductions in retired pay to provide surviving spouses and children with an annuity following the retiree's death. The most compelling reason for the decision is that the guaranteed inflation protection made the Uniformed Services Survivor Benefit Plan (USSBP) a superior alternative to life insurance policies. The sequestration of COLA funds violate that guarantee and greatly diminishes the value of the USSBP.

FRA recommends that Congress - if it reduces the FY 2005 budget - not target military and federal retirees' retirement pay. Such action is discriminating and contrary to the promise made by Congress to maintain the purchasing power of military retirement pay.

Uniformed Services Former Spouses Protection Act (USFSPA). The USFSPA is a statute adopted without hearings on the House side and no up-or-down vote in the Senate. As one member of the House said at the time, the law will cause more problems than it will solve. How true the prediction.

Since its inception in 1982, more than two-thirds of states have adopted community property laws. More have turned to no-fault decisions in determining the outcome of divorces. Some of the actions were the result of State Courts embracing the USFSPA as a means to automatically strip military retirees of their hard-earned retirement pay for the payment of alimony to a former spouse who in far too many cases, failed to dedicate the same number of years to the marriage and the military. Whether serving in war or peace, the military member is credited only 2 1/2 percentage points for each year of active duty. It takes at least 20 years to receive sufficient credits to qualify for retirement. On reaching that plateau the member becomes entitled to 50 percent of his or her active duty pay. Fifty (50) percent of the member's active duty pay, by the way, is nearer to 30 percent of all pay and allowances earned while serving in uniform.

One of the major problems with USFSPA is it allows state courts to consider military retired pay as property that may be divided between the retiree and the spouse/former spouse. The court, with little or no knowledge of how the retiree earns retired pay, grants the spouse/former spouse a portion of that retired pay for the life of the retiree, regardless of the number of years of marriage. A lifetime of payments to a spouse/former spouse for a period of marriage less than 20 years during which the retiree was slowly accruing only 2 1/2 percent for each of those years is unfair, inequitable and discriminating.

The spouse/former spouse should not be entitled to more than an equal percentage of the retiree's retirement pay for each year of marriage and should not be in receipt of that amount for any longer than the number of years of marriage. Although the service member is not entitled to retired pay until the minimum credible time is completed, the former spouse can become eligible at any time based on the decision of a Civil Court.

It's a terrible law. Moreover, since state courts have little if anything to say about how the military directs its people to serve the Nation, and service members agree only to defend the Constitution, why does the Federal government dump its fiscal responsibilities to its uniformed members onto the state courts?

FRA recommends that this Subcommittee, this Congress, accept the responsibility of conducting a review and the possible adoption of amendments to the Uniformed Services Former Spouses Protection Act [10 USC, 1408] to establish a more equitable division of the service member's retirement pay with a spouse/former spouse upon dissolution of a marriage.

Medical Care Recovery Act. In the summer of 2003 while the new Sergeant Major of the Marine Corps was in the process of assuming his duty, his wife was nearly killed by a "wayward driver." She spent weeks in a Navy hospital the recipient of emergency brain surgery, intensive care, military air transportation to Washington, D.C, from California, and both occupational and physical therapy. Now the Navy is proceeding to recover the returns from the insurance companies of both parties, an estimated $100,000.

The Navy, as with the other Services, cites a 41-year old law, Medical Care Recovery Act, as the basis to collect payment for medical care administered to uniformed personnel. According to a January 4, 2004 news article by James W. Crawley in the San Diego Union Tribune, the Navy collected $11 million in reimbursements from insurance companies in the past year "that would have gone to sailors, Marines, and their dependents."

Apparently, the law is reasonable. The Navy operates its medical facilities with taxpayer funds and it is only right that these expenditures be recovered whenever possible. However, the question of fairness rises to the front when the process of recovery goes against the victim. FRA believes any recovery should come from the insurance of the party at fault. In many cases the proceeds from the victim's insurance policy will be earmarked for expenses involved in the continued care of the victim, baby-sitting, replacement vehicle, and other everyday living requirements not now accomplished on a personal basis but by payment or hire.

The ironic part of this statute is that recovery is only collectible through a third party. If a service member is injured as a result of "willful and negligent" acts and in receipt of medical care in a military treatment facility, no claim of recovery can be made against the member.

The law does allow the Secretary concerned to waive a claim of the United States. However, it is doubtful that affected serviced members are aware such a waiver may be granted if requested. Such knowledge such be disseminated to all service members through the military's information program and upon receipt of treatment and care at a military treatment facility.

FRA recommends a review of the law, 10 USC 1095, and the possibility of an amendment authorizing the no-fault victim to retain a certain percentage of the proceeds from insurance claims so the no-fault victim will not bear a fiscal burden during a time of financial need.

OTHER ISSUES

Health Care. The Fleet Reserve Association (FRA) has prepared a statement on health care available on request to Bob Washington, Director of Legislative Programs, 703-683-1400, or e-mail (legfra@fra.org).

Military Construction/Family Housing. The Association's statement on Military Construction/Family Housing is available on request to Bob Washington at the above addresses.

(Note: The two statements immediately above have been or will be submitted to the appropriate Congressional Subcommittee, as requested.)

CONCLUSION

FRA is grateful for the opportunity to present its goals for FY 2005. If there are questions or a need for further information, please call Bob Washington, FRA Director of Legislative Programs, at 703-683-1400.