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Congress ready to SBP offset at 62

 


A quarter of a million surviving spouses of military retirees have moved two steps closer to seeing a dreaded drop in survivor benefits, which occurs at age 62, be phased out over the next decade.

As the House and Senate in mid-March set spending ceilings for fiscal 2005, surviving spouses won a key vote in the Senate, lost a bipartisan showdown before the House Budget Committee, but then won a promise of cooperation from the committee.

Rep. Jim Nussle (R-Iowa), citing strong support among lawmakers this year for enhancing SBP benefits, vowed that he would work with the House Armed Services Committee “to arrive at a financial fix‚ to the SBP problem.”

The problem is that SBP benefits typically fall at age 62, from 55 percent of the deceased member’s covered annuity down to as low as 35 percent, a drop disappoints and surprises too many survivors. The plan’s design assumes that beneficiaries, at 62, can draw Social Security benefits.

Nussle’s commitment to SBP gains was expected to deflect some of the political heat aimed budget committee Republicans after a straight party-vote March 17 that killed an amendment from Rep. Chet Edwards (D-Texas) that would have paid for phasing out the SBP offset by rolling back a fraction of recent tax cuts to Americans earning more than a $1 million a year.

“Let’s take a stand today that we are going to help military widows who sacrificed tremendously,” Edwards said, urging the committee to tell “people making a million a year we’re going to take away $7000 of their $126,000 tax cut.”

All 23 Republicans present voted to reject Edwards’s amendment, yet 13 are co-sponsors of nearly identical legislation to phase out the offset. Edwards hoped a roll call vote would highlight the hypocrisy. Republicans, however, stuck by their chairman and party. Nussle is under pressure from the White House to stop growth in federal entitlements. But his promise to work on a funding solution for the SBP offset softened outside criticism.

“We’re taking him at his word,” said Steve Strobridge, co-chairman of The Military Coalition, an umbrella organization for dozens of military associations and veteran groups. They are fighting hard this year for survivor benefits gains. Coalition representatives appeared at the hearing wearing buttons that urged an end to the SBP “widows tax.”

Though disappointed that the committee failed to endorse phase out of the offset “up front,” or to approve Edwards’ amendment, Strobridge said the coalition was “heartened” by Nussle’s commitment to find the money.

Nussle said the House budget resolution would establish a reserve account for SBP improvements, to be funded by budget savings identified by the House Armed Services Committee. Any SBP gains, explained Sean Spicer, spokesman for the committee, must be “deficit neutral. We’re going to look for the money to help get this program off the ground.”

The Senate gave military survivors a cleaner victory March 12, approving a floor amendment from by Sen. Mary Landrieu (D-La.) that earmarked $2 billion to phase out the age 62 offset over 10 years.

During debate, Landrieu said she had expected her amendment to fail but insisted on a roll-call vote to identify those opposed to improving SBP. She proposed paying for her amendment by raising taxes on U.S. companies that re-incorporate in foreign tax havens and by ending tax breaks for individuals who forfeit their U.S. citizenship.

The Senate, to avoid a recorded vote that either would show Republicans rolling back part of President Bush’s tax cuts or opposing SBP increases, opted to pass Landrieu’s amendment by “unanimous consent.” That means no recorded vote but a single senator could have blocked it. None did. The Senate then passed the full budget resolution, 51-to-45.

Key action on the House budget blueprint occurred on St. Patrick’s Day. Nussle and fellow Republicans stood firm against many Democratic amendments. Besides SBP reform, Edwards sought an extra $1.3 billion for VA healthcare in 2005, on top of a $1.2 billion increase above the Bush budget already endorsed by House Budget Committee and by the full Senate.

Edwards said the House Veterans Affairs Committee concluded a $2.5 billion increase was needed to avoid a reduction in VA health services next year. Nussle responded with charts that compared total spending on veterans in the decade before 1995, when Democrats controlled the House, and in the decade since, with Republicans in charge.

Montgomery GI Bill benefits rose 35 percent in the first decade but by 133 percent under Republicans, he said. Total VA budget authority rose by an equal percentage in both decades.

The committee defeated Edwards’ VA amendment by another party-line vote, 21-to-16.

Campaign ribbons, R&R travel — The House Armed Services Committee approved and sent to the House floor two bills to recognize service members in Iraq and Afghanistan.

The first would allow separate medals and campaign ribbons for the Iraq and Afghan theaters, in addition to the Global War on Terrorism medal already approved by the Department of Defense.

A second bill would make 29,000 members eligible for retroactive travel pay from point of entry into the United States to their home and return under the R&R (rest and relaxation) leave program from the war theaters. Regulations had barred the services from making retroactive payments. This change would allow travel reimbursements for R&R users who came home from Sept. 23 to Dec. 19 last year.

 
 

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