MILITARY UPDATE
Bush official finds merits of keeping concurrent receipt ban
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
Congress seems near to ending a century-old ban on "concurrent receipt" of military retired pay and VA disability compensation. But is the political momentum that carried the issue this far losing ground to rising budget deficits, a presidential veto threat and unexpressed unease among some lawmakers who publicly support the multibillion-dollar initiative?
David Chu hopes so. As undersecretary of defense for personnel and readiness, he is the Bush administration's top critic of concurrent receipt. Congress, he argues, doesn't understand the ban.
"This is a bad choice for the American public. It's not really targeted on the veterans, who are our greatest concern (and), therefore, the administration opposes it," Chu said.
A House-Senate conference committee soon will iron out differences in separate versions of the 2003 defense authorization bills. One will be on concurrent receipt. Under present law, military retirees see their retired pay reduced, dollar for dollar, when they draw tax-free disability compensation.
The House voted to phase out the offset over five years for roughly 90,000 retirees with disability ratings of 60 percent or higher from the Department of Veterans Affairs. The Senate would end the offset immediately for all 700,000 career retirees drawing VA disability pay.
About 700,000 non-disabled retirees are expected to apply for VA disability ratings if the retired pay offset ends.
The administration agrees with Congress that disabled retirees must be properly compensated, Chu said. "Where we disagree is (over) what's necessary to do that."
Proponents for ending the offset say other disabled veterans can leave service, take federal civilian or private industry jobs, and draw both VA compensation and civilian pay or retirement without suffering an offset.
It's an appealing argument, Chu conceded. But it ignores the generous military retirement package payable after 20 years and fully protected from inflation. The law has allowed retirees to replace taxable retired pay with tax-free disability pay but has not allowed, until now, any double payments.
VA compensation was designed, Chu said, for veterans unable to complete careers because of disability.
Congress somehow lost focus on the real question, Chu said, which is, "Are we taking care of veterans properly?" Instead, it moved to satisfy retirees who want to draw both benefits, regardless of financial need.
Chu said he has heard from "senior officers with distinguished combat service" who say Congress is going too far. If there are disabled retirees not properly compensated, Chu said, "it's a very small group." Yet if the Senate provision passes, "two-thirds of all military retirees" would begin drawing a second payment, in a range from a few hundred dollars a month to $2,100 or more for retirees rated 100-percent disabled.
"I don't think anyone really argues that two-thirds of our military retirees are in trouble financially," Chu said.
He also said a 1996 Defense survey that showed average household income among retirees, officers and enlisted, at $60,000.
Mitchell Daniels, director of the Office of Management and Budget, will recommend a presidential veto if either provision is enacted, Chu said.
Finally, Chu said one-third of retirees who stand to gain from concurrent receipt are officers who "typically stand in the top 10 percent of the American income distribution. This is not a disadvantaged class."
Steve Strobridge of The Retired Officers Association, and a concurrent receipt advocate for The Military Coalition, an umbrella group of service associations, said Chu is trying to apply a "needs" test to a dispute over earned benefits.
"According to that logic, we shouldn't pay senators because most of them are millionaires," Strobridge said.
"The issue is: Did people earn their disability compensation? Did they earn their retired pay? If they did, then anything they get for the disability should be in addition to retired pay. They should not be forced to give up their retired pay."
Concurrent receipt advocates usually make their case citing the circumstances of retirees too disabled to work, Chu said. But most disabled retirees do work and even earn civilian retirement benefits.
"They are going to get their Coca-Cola pension and their military retirement. The real issue (for Congress) is should they get all three?"
If Congress shelves both provisions, Chu said, "we are prepared to discuss if there is a group who has a need we have not met properly."
Strobridge said he hasn't detected a lot of wavering on this issue. Some lawmakers always are ready to drop support for high-priced programs, he said. But with concurrent receipt, "90 percent of Congress has their name on the line."
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