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The Honolulu Advertiser
Posted on: Monday, November 19, 2001

Military Update
Lifting of concurrent receipt ban remains uncertain

Military Update focuses on issues affecting pay, benefits and lifestyle of active and retired servicepeople. Its author, Tom Philpott, is a Virginia-based syndicated columnist and freelance writer. He has covered military issues for almost 25 years, including six years as editor of Navy Times. For 17 years he worked as a writer and senior editor for Army Times Publishing Co. Philpott, 49, enlisted in the U.S. Coast Guard in 1973 and served as an information officer from 1974-77.

By Tom Philpott

When lawmakers go behind closed doors to discuss lifting the ban on "concurrent receipt" of full military retirement pay and VA disability compensation, their enthusiasm for the costly idea wanes.

It happened last year, and it appears to be happening again this year. It's enough to make a half-million disabled retirees question what their lawmakers mean when they co-sponsor legislation to lift the ban. Clearly it doesn't mean they will find a way to pay for it — not so far, at least.

The century-old concurrent receipt law requires a dollar of military retired pay to be offset for every dollar in tax-free compensation that a retiree receives from the Department of Veteran Affairs for service-related illnesses or injuries. Retirees say that, in effect, they end up paying their own disability compensation in return for a tax break.

Last year, on a floor amendment from Sen. Harry Reid, D-Nev., the Senate agreed by voice vote to lift the ban on concurrent receipt. Because senators didn't have a plan for how to pay for the initiative, a House-Senate conference committee assigned to work out differences in the two bills dropped Reid's language from the final version.

Earlier this year, the House passed a provision with its 2002 defense bill that would end the ban — if the Bush administration found a way to pay for it. The cost over 10 years would be $14 billion in defense spending and $41 billion in overall entitlement obligations.

Retiree groups view the House response as a gesture only, because the Bush administration, like every other one in recent memory, strongly opposes lifting the concurrent receipt ban. They won't set the money aside.

Rep. Vic Snyder, D-Ark, a member of the House Armed Services Committee and conferee on this year's defense bill, said he supported the conditional language in the House as a potentially significant first step. He noted that congressional approval of a Thrift Savings Plan for service members, which became a reality this fall, began in a similar manner.

When the year began, Snyder thought more substantial legislation would be possible. But the budget surplus evaporated with the Bush tax-cut package, declining economy and war against terrorism.

"The issue continues to be one of dollars," Snyder said.

This year the Senate again approved the Reid amendment to the defense bill. Again it passed on a voice vote, rather than roll call. And again conferees are said to be lacking a clear way to pay for it. Unless offsets can be found from other defense budget accounts, House and Senate negotiators will have to agree to waive 2002 budget ceilings, which is very unlikely.

In an Oct. 26 "appeals" letter to conferees, the Defense Department urged rejection of the Senate and House language on concurrent receipt. It complained that the Senate provision, identical to long-standing legislation from Rep. Michael Bilirakis, R-Fla. (H.R. 303), would allow retirees to receive "multiple payments."

VA disability pay originally was developed for veterans who left service short of retirement eligibility, with service-connected disabilities that could affect future earnings. So, according to the letter, the retirement system and disability pay system were set up for different populations and different purposes.

"Nevertheless, Congress also provided that military retirees with service-connected disabilities should receive no less than a veteran with identical disabilities who is not a retired member," the letter says. "This interaction allows a retiree to choose the larger of the two entitlements, provided he/she waives military retired pay on a dollar-for-dollar basis."

Defense Secretary Donald Rumsfeld reportedly argued also that the Senate plan for concurrent receipt would strain the department's ability to provide new TRICARE benefits for the elderly.

What impact these arguments made on conferees is unclear. But Sen. Carl Levin, D-Mich., a powerful voice in the conference as chairman of the Senate Armed Services Committee, warned in mid-November that the conference committee was wrapping up final business and the House language likely would prevail, according to a Senate source.

The Military Coalition, an umbrella group of service associations, urged retirees to pressure congressional leaders to go at least further than the House on concurrent receipt.

Some advocates say a better interim step would be to lift the ban selectively, perhaps so that full military retirement could be paid to 14,000 retirees rated 100 percent disabled by the VA.

They say it's time for all "co-sponsors" of change to act.

"Eighty-four percent of House members and 74 percent of Senators have co-sponsored concurrent receipt legislation," said Mike Jordan, deputy director of government relations for the Retired Officers Association. But "it's not meaningful if you make it dependent on the administration's support."

Last May, Congress asked the Pentagon in a budget resolution to provide yet another study on concurrent receipt.

Such a resolution is not binding, however, and defense officials have what they believe is a more useful plan. They have asked SAG Corp., a small policy analysis company in Annandale, Va., to take an independent look at the issue.

SAG might decide the administration is right, or that disabled retirees have been wronged, or that there's a logical compromise between the two positions. Defense officials expect to receive that report by March 2002.

Questions, comments and suggestions are welcome. Write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111, or send e-mail to: milupdate@aol.com.