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MOAA believes all servicemembers should receive both retirement and disability compensation.
April 30, 2018
MOAA members recently stormed Capitol Hill, rallying lawmakers to resolve a long-standing challenge regarding military medical retirees and their retired pay.
We were on a mission to draw attention to the roughly 200,000 Chapter 61 retirees who were unable to finish out their military careers due to injury or illness. Those servicemembers are forced to relinquish retirement pay dollar-for-dollar to receive VA disability compensation. Sometimes, that offset leaves a Chapter 61 retiree without any of his or her retirement pay.
MOAA believes all servicemembers should receive both retirement and disability compensation.
There are two bills in Congress that address gaps in Concurrent Retirement Disability Pay (CRDP): H.R. 333 and H.R. 303. One of the most common questions we faced from members of Congress and staffers concerned the difference between the two. Here are the key differences worth outlining:
H.R. 333 is the Disabled Veterans Tax Termination Act, sponsored by Rep. Sanford Bishop Jr. (D-Ga.) It recognizes both of the two remaining categories of individuals who do not fully receive their earned retirement and disability pays: 1) retirees with 20-plus years of service and disability ratings of 40 percent or below and 2) medical retirees with less than 20 years of service and disability ratings of 30 percent or higher (also known as Chapter 61 retirees).
H.R. 303 is the Retired Pay Restoration Act, sponsored by Rep. Gus Bilirakis (R-Fla.). This bill only recognizes one of those categories: retirees with 20-plus years of service and disability ratings of 40 percent or below.
Individuals with 20 or more years of service likely will favor H.R. 303, as it directly affects them. Given its limited scope, this bill also has a likelier chance of getting passed, because the associated costs are lower than if a wider group were included.
Individuals who were unable to complete their 20 years of service due to injury or illness are retirees by most other accounts, and the reason for their early retirement was considered by their service to be within the line of duty. The only option on the table for these Chapter 61 retirees is H.R. 333.
Between the two, who is losing the most? The potential for the largest losses come from Chapter 61 retirees. Below are calculations using the same family profile with different disability rates to show the scale of loss (remember, those with 20-plus years of service with 50-percent or more disability already receive CRDP):
20+ years and 40% disability rating from the VA (highest disability not receiving CRDP): Rank is not relevant. With a spouse and three kids, including one over 18 years old and in school, the amount of retired pay lost to offset the VA disability pay is $714.90 + $32.00 + $106, or $852.90.
Chapter 61 retiree with 100-percent disability rating from VA (highest disability not receiving CRDP): An E-7 with 16 years of service, with a spouse and three kids, including one over 18 years old and in school will receive $3,261.13 + $82.38 + $266.13 = $3,609.61 in disability pay from the VA - at the price of losing their service-earned retirement pay: (2.5% x 16 years) = 40% x $4,493.10 = $1,797.24, lost to partially offset their VA disability pay.
MOAA favors H.R. 333 because it encompasses both communities we support. Our objective is to garner enough support on Capitol Hill to move the bill out of the Military Personnel Subcommittee to the House Armed Services Committee for possible inclusion in the FY 2019 defense authorization bill. Once it's in the authorization bill, the legislation can be shaped through markups or in the Conference Committee into something that will suit either, both, or some portion of the two communities who eagerly await some kind of successful outcome.
We need you to help move this bill along. The timing could not be more critical as the House Armed Services Committee gears up for its 2019 defense spending bill markup.
MOAA's advocacy team is gearing up to protect your health care and retirement benefits, military pay, force levels, wounded warriors, and caregivers. After an unpredictable 2017, the coming year likely will hold even more surprises on Capitol Hill. Midterm elections are coming in November, and the turnover in Congress could be significant. With partisanship on the rise, the political transition likely will pose interesting challenges.
Our uniformed servicemembers and their families have now endured 16 years of war. Overshadowing the challenges is the constant competition for fewer dollars, as budget caps dominate discussions at every level.
These growing budget pressures prompt efforts to erode service-earned benefits through reduced pay raises, significant changes to housing allowances, and increased health care fees. While MOAA has successfully deflected some of those challenges, we must remain vigilant. Of paramount concern is the proven impact these reductions have on retention and readiness. We're resolved to ensure any reduction to career incentives - essential to the all-volunteer force - is approached with great care.
MOAA suggests the following action items to be of primary concern for our elected representatives in 2018:
1. Ensure any TRICARE reform sustains access to top-quality care and avoids disproportional TRICARE fee increases.
2. Sustain military pay comparability with the private sector.
3. Block erosion of compensation and non-pay and quality-of-life benefits.
4. Protect military retirement and COLAs.
5. Sustain wounded warrior programs and expand caregiver support.
6. End financial penalties to disabled servicemembers.
7. End financial penalties to survivors.
8. Ensure the Guard and Reserve system adequately supports requirements for an operational reserve.
9. Recruiting and retention of an all-volunteer force require alignment of spouse and family support programs.
10. Ensure timely access to VA health care and preserve veterans' earned benefits.
Please sign and mail the letters included in the March 2018 Military Officer Magazine in support of these initiatives!
The Core of Our Nation's Military is the All-Volunteer Force
By: Col. (Ret.) Dan Merry, MOAA Vice President – Government Relations
This didn’t happen on accident, nor did it originate within DOD. The all-volunteer force was initiated by President Richard Nixon shortly after he won the election in 1968. President Nixon had stated openly his priority of ending the draft and creating an all-volunteer armed force.
Several factors motivated the president. The draft wasn’t fair—it disproportionately impacted lower income individuals who were less able to get deferments. This inequity, and the general concept of conscription, was to Nixon a blatant attack on individual liberty, his love of which being the product of a Quaker upbringing. Plus, the Viet Nam war was taking its toll on the military and the nation and was made worse by a wide range of discipline issues during and after military service.
The president appointed the Gates Commission in 1969 to address these issues and deliver the plan for an all-volunteer force. The commission was thorough and methodical, taking into consideration the broad range of manpower and personnel issues to include determination of requirements, modeling projections, recruiting and retention, and the need for significant changes to the pay system. The commission completed its work in 1970 and passed into law in 1971 eliminating the draft with an eventual effective date of July 1, 1973. This same legislation also authorized a substantial pay increase and created enlistment bonuses.
The cost of an all-volunteer force, relative to a model of conscription, was a negligible $3 billion in 1973 but the evolving factors skew any year-to-year comparison once taking into account recruiting, quality of life, pay raises, an emerging global presence, and tenure patterns of those who serve until retirement. Over the years, the costs of military pay and benefits have been consistent, accounting for nearly one third of the defense budget.
The move to an all-volunteer force has been successful beyond measure. In spite of unyielding demands on our men and women from all quarters of our country and beyond, our nation’s military remains peerless.
But some people think our all-volunteer force costs too much. I believe a majority would disagree. This means there are two camps:
1) The few who believe our men and women in uniform are overpaid, and their benefits too costly to the government.
2) The many who say, “Our men and women in uniform are our most valuable weapon system” and earn their pay and benefits through service and sacrifice.
We will continue to try and educate the few who believe our all-volunteer force is overpaid and can afford to bear some of the costs of readiness and other programs. Attempts over time to reduce compensation have been mostly overt; e.g., propose a military pay raise below the Employment Cost Index, eliminate with-dependent rate housing allowance for military couples with children, or eliminate half of the housing allowance for those military who share quarters.
MOAA led the efforts with key allies to successfully deflect these recent attempts at reductions. In addition we experienced a couple of setbacks when it came to healthcare and pharmacy fee increases, largely attributed to budget caps stemming from sequestration.
Our work continues into 2018 with the 13th Quadrennial Review of Military Compensation. This QRMC’s mandate is to look at military compensation to see if or how a salary-based system could improve and modernize how we compensate our all-volunteer force. Ironically, we again find a connection back to the Vietnam era: the first QRMC in 1965 had an almost identical mandate — to look at a salary system as a replacement to a system of pays and allowances. The results generated interest but no movement, its failure chalked up to being too expensive and too difficult to manage concurrently with conscription.
MOAA is concerned the QRMC, with its comprehensive review of all aspects of regular military compensation, could mask the previously overt reductions noted above. The end product could be another sweeping change for the uniformed services with embedded reductions to housing and subsistence allowances. This would follow the already significant changes to retirement in place this year, and continuing increases to TRICARE and pharmacy fees. Additionally, budget uncertainties will likely compel more cuts to compensation and benefits. As a result of demands for immediate fiscal gains, this QRMC could run the risk of trying to do too much. In turn, this could jeopardize the all-volunteer system that has worked well for these past 45 years … and change how we go to war.
This is worthy of your attention. Please send this suggested message to your members of Congress; we owe our all-volunteer force the utmost support. To do otherwise risks noticeable reductions in quality recruits and retention of our most highly sought-after skills.