MILITARY UPDATE
Income insurance for reserves unlikely
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, 50, enlisted in the U.S. Coast Guard in 1973 and served as an information officer from 1974-77.
By Tom Philpott
Forty-one percent of Reserve and National Guard personnel mobilized for active duty see total income fall while away from civilian jobs, according to the Department of Defense's most recent survey of reserve personnel.
The silver lining behind that figure is the self-reported income experience of the other 59 percent. Thirty percent of mobilized reservists see no change in income and 29 percent see income actually rise because they are on active duty.
Given that almost two-thirds of mobilized reservists suffer no income loss, said Thomas F. Hall, assistant secretary of defense for reserve affairs, DoD has no plan to support a mobilization income insurance program as part of a broader effort to modernize reserve compensation.
Hall also suggested, in an interview March 19, that legislation to lower the age at which reserve retired pay begins, from 60 down to 55, is too expensive to win support from the Bush administration. The Congressional Budget Office estimates the cost at $26.6 billion over 10 years.
"I've heard the different figures and it has been from 1 to 2 billion (dollars a year). It's fair to say there's not money in the budget for that right now," Hall said, moments before testifying on reserve forces before the Senate Armed Services Committee.
As Hall testified, just hours before war began with Iraq, the General Accounting Office unveiled preliminary results from the DoD 2000 Survey of Reserve Component Personnel to a panel of the House Armed Services Committee. Last year the committee directed GAO to study the adequacy of income, benefits and employer support for mobilized reservists.
Derek B. Stewart, GAO's director of defense capabilities and management, commented on income losses using results from the August 2000 survey to which 35,000 drilling reservists responded.
Asked to estimate income change for them and their spouses during recent mobilizations and deployments, 41 percent reported losses. The average loss across all respondents was $1,700.
Income loss varied by component, from an average of $600 for Air National Guard members up to $3,800 for Marine Corps reservists. Average income drop was $5,000 for senior officers, $700 for junior enlisted troops.
Income drops among reservists during the first Persian Gulf War led DoD to propose, and Congress to enact, a mobilization income insurance program in 1996. But the plan was poorly designed and managed and relatively few reservists signed up. Most who did had deployment orders in hand for Bosnia. In return for a modest premium, they immediately began drawing up to $5,000 a month in replacement income, even if they suffered no income loss. The plan was to be self-sustaining. It ended up costing taxpayers $112 million by the time Congress shut it down in November 1997.
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