Order Code RL34169
The FY2008 National Defense Authorization Act:
Selected Military Personnel Policy Issues
Updated September 17, 2007
David F. Burrelli, Coordinator
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Richard A. Best, Jr., Charles A. Henning, and Lawrence Kapp
Specialists in National Defense
Foreign Affairs, Defense, and Trade Division
The FY2008 National Defense Authorization Act:
Selected Military Personnel Policy Issues
Summary
Military personnel issues typically generate significant interest from many
Members of Congress and their staffs. Ongoing military operations in Iraq and
Afghanistan in support of what the Bush Administration terms the Global War on
Terror, along with the emerging operational role of the Reserve Components, further
heightened interest and support for a wide range of military personnel policies and
issues.
CRS selected a number of issues considered by Congress as it considers the
FY2008 National Defense Authorization Act. In each case, a brief synopsis is
provided that includes background information, a comparison of the House-passed
provisions and the provisions reported by the Senate Armed Services Committee, if
any, and a brief discussion of the issue. Where appropriate, other CRS products are
identified to provide more detailed background information and analysis of the issue.
For each issue, a CRS analyst is identified and contact information is provided.
Note: some issues were addressed in last year’s National Defense Authorization Act
and discussed in CRS Report RL33571, The FY2007 National Defense Authorization
Act: Selected Military Personnel Policy Issues, concerning that legislation. Those
issues that were previously considered in CRS Report RL33571 are designated with
a “*” in the relevant section titles of this report.
This report focuses exclusively on the annual defense authorization process. It
does not include appropriations, veterans’ affairs, tax implications of policy choices
or any discussion of separately introduced legislation.
It is anticipated that this report will be updated.
Contents
Deployment Impact on Military Minor Dependents . . . . . . . . . . . . . . . . . . . . . . . 2
Cold War Victory Medal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Continuation of Authority To Assist Local Educational Agencies that
Benefit Dependents of Members of the Armed Forces and Department
of Defense Civilian Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Disregarding Periods of Confinement of Members in Determining Benefits
for Dependents Who are Victims of Abuse by the Member . . . . . . . . . . . . . 5
Continuation/Modification of Authority for Members of the Armed Forces
to Designate a Recipient for a Portion of the Death Gratuity . . . . . . . . . . . . 6
Recoupment of Annuity Amounts Previously Paid, but Subject to Offset
for Dependency and Indemnity Compensation . . . . . . . . . . . . . . . . . . . . . . . 7
Special Survivor Indemnity Allowance for Persons Affected by Required
Survivor Benefit Plan Annuity Offset for Dependency and Indemnity
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Annuities for Guardians and Caretakers of Dependent Children Under
Survivor Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Army/Marine Corps End Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Hardship Duty Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
*Modifying Reserve Retirement Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
POW/MIA Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
*Military Pay Raise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
*Concurrent Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Moving Reserve “GI Bill” Educational Benefits from Title 10 to Title 38 . . . . . 16
*Role of National Guard Bureau and National Guard Bureau Chief . . . . . . . . . . 17
*Tricare Fee Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
*Retiree Tricare Coverage and Employer Group Health Plans . . . . . . . . . . . . . . 22
*Tricare Pharmacy Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
*Treatment of Tricare Retail Pharmacy Network Under Federal Procurement of
Pharmaceuticals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
The FY2008 National Defense Authorization
Act: Selected Military Personnel Policy
Issues
Each year, the Senate and House Armed Services Committees report their
respective versions of the National Defense Authorization Act (NDAA). They
contain numerous provisions that affect military personnel, retirees and their family
members. Provisions in one version are often not included in another, treated
differently, or, in certain cases, they are identical. Following passage of each by the
respective legislative body, a Conference Committee is typically convened to resolve
the various differences between the House and Senate versions. If a Conference
Committee reports its final version of the Authorization Act, the bill is returned to
the House and Senate for their consideration. Upon final passage the act is sent to the
President for approval.
In the course of a typical authorization cycle, congressional staffs receive many
constituent requests for information on provisions contained in the annual NDAA.
This report highlights those personnel-related issues that seem to generate the most
intense constituent interest, and tracks their status in the FY2008 House and Senate
versions of the NDAA. The House bill, H.R. 1585, was introduced on March 20,
2007, reported by the Committee on Armed Services on May 11, 2007 (H.Rept. 110-
146), and passed by the House on May 17, 2007. The Senate bill, S. 1547, was
introduced on June 5, 2007 and reported by the Committee on Armed Services on
that day (S.Rept. 110-77), and reported by the Select Committee on Intelligence on
June 29, 2007 (S.Rept. 110-125). The entries under H.R. 1585 and S. 1547 in the
following pages are based on language in the House-passed bill and the Senate
Armed Services Committee (SASC) reported bill, unless otherwise indicated.
Each presentation in this report offers the background on a given issue, tracks
its legislative status, discusses the proposed language, identifies other relevant CRS
products, and designates a CRS issue expert. Note: some issues were addressed in
last year’s National Defense Authorization Act and discussed in CRS Report
RL33571, The FY2007 National Defense Authorization Act: Selected Military
Personnel Policy Issues, concerning that legislation. Those issues that were
previously considered in CRS Report RL33571 are designated with a “*” in the
relevant section titles of this report.
CRS-2
Deployment Impact on Military Minor Dependents
Background: The House Committee is concerned that high deployment tempos may have an effect
on the levels of child abuse in military families.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House report contains
The Senate report does not have
language that requires the
similar language.
Secretary of Defense, in
consultation with the Centers
for Disease Control and
Prevention, to conduct a study
“of the level of risk of child
abuse and neglect among
military minor dependents that
may result due to the increased
operational tempo of service
members.”
Discussion: This report is exploratory in nature and does not presume a linkage between high
deployment tempos and child abuse. The report is to be delivered to the Armed Services
Committees by December 31, 2008. This is report language only and is not contained in the bill
itself.
Reference(s): None.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-3
Cold War Victory Medal
Background: Congress authorized the Cold War Recognition Certificate ten years ago as part of
the FY1998 National Defense Authorization Act (Section 1084). Its was created to recognize the
contributions and sacrifices of our armed forces and government civilians whose service contributed
to victory in the Cold War. Members of the armed forces and federal government civilian
employees who served the United States during the Cold War period, from September 2, 1945, to
December 26, 1991, are eligible.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House bill contains a
The Senate bill does not contain
provision (sec. 556) that
this language.
requires the Secretary of
Defense to design and issue a
Cold War Victory Medal for
anyone who served honorably
for a minimum of 180 days
during the same period.
Discussion: A number of veterans’ organizations have supported efforts to create this medal in
recognition of the service members’ role in the Cold War.
Reference(s): None.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-4
Continuation of Authority To Assist Local Educational
Agencies that Benefit Dependents of Members of the Armed
Forces and Department of Defense Civilian Employees
Background: In 1950, Congress enacted P.L. 81-815 and P.L. 81-874. These laws (later made
permanent) provide money from the Department of Defense to local school agencies for construction
and educational activities in recognition of the impact of the dependents of Defense personnel who
attend these schools. Local schools are supported, to a large extent, by the state tax base. In many
cases, military personnel pay taxes to their home state which may not be the state where they are
serving. Arguably, this assistance minimizes the impact these dependents have on schools near
military facilities.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House provision authorizes
The Senate bill does not contain
$50 million to local educational
a similar provision.
agencies that have military
dependents comprising at least
20 percent of the average daily
attendance and also authorizes
$15 million to local educational
agencies that experience
“significant increases or
decreases in average daily
attendance” of military
dependent students due to
changes in force structure, base
closure and realignment, and
from changes resulting from the
relocation of personnel to other
bases.
Discussion: It appears that this language would augment impact aid laws in cases where there is a
substantial military presence and/or when military personnel policy or base structure changes bring
about ‘significant’ changes in the average daily student attendance. Arguably, some states may
receive a windfall in that service members are paying state taxes, but their dependents are being
educated in other states due to military assignments. It is possible for these same states to collect
additional funds if this provision is enacted.
Reference(s): None.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-5
Disregarding Periods of Confinement of Members in
Determining Benefits for Dependents Who are Victims of
Abuse by the Member
Background: In the past, military members, including those eligible to retire, who were convicted
of abuse or domestic violence could receive a sentence that included loss of military benefits. As
a result, family members, especially those who suffered abuse, lost access to military benefits,
including retired pay and health care, at a time when they were most in need of these benefits. On
October 23, 1993, Congress enacted P.L. 102-484, which “authorizes various benefits for the spouses
and former spouses of retirement-eligible members who lose eligibility for retired pay as a result of
misconduct involving abuse of dependents. Generally, the spouses and former spouses are provided
the same rights and benefits that they would have had if there had been no abuse and the member
had retired under normal circumstances.”1
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Sec. 641 of the House bill states
The Senate bill does not contain
“[I]n determining ... whether a
similar language.
member of the armed forces
became eligible to be retired
from the armed forces on the
basis of years of service so that
a spouse or dependent child of
the member is eligible to
receive payment under this
subsection, the Secretary
concerned shall consider as
creditable service by the
member any periods of
confinement served by the
member before convening
authority action on the record of
trial related to the misconduct
that resulted in the termination
of the eligibility of the member
to receive retired pay.”
Discussion: By example, a member of the armed services who is arrested and confined for abuse
prior to reaching eligibility for retirement, but remains confined long enough to qualify for retirement
except that such time in confinement is not creditable toward retirement. If enacted, this language
will allow those confined to have the time in confinement prior to the actions of a convening
authority terminating retirement eligibility, to count toward that retirement.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
1 U.S. Department of Defense, Financial Management Regulation, Vol. 7B, Chap. 59, June
2001: 59-1.
CRS-6
Continuation/Modification of Authority for Members of the
Armed Forces to Designate a Recipient for a Portion of the
Death Gratuity
Background: The Death Gratuity is one of a number of benefits available to the survivors of
military personnel. Its purpose is to provide an immediate cash payment to survivors until other
benefits, if any, become available. Under law, the beneficiary(ies) are designated in the order of
eligibility with the surviving spouse first, followed by the children. If so designated by a service
member, others can receive this benefit including parents or siblings. Recently, it was reported that
a service member, a single parent, died while on active duty and that her financially struggling
parents who had custody of the surviving child were unable to access this benefit. P.L. 110-28 (May
25, 2007) contained language that allows a covered service member to designate up to 50 percent
of the death gratuity (in 10% increments) to a person other than the recipient under law. This
authority ends September 30, 2007.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Sec. 642 of the House bill
Sec. 651 of the Senate bill
would make this designation
modifies the law by striking the
authority permanent by
existing list of beneficiaries and
removing the Sept. 30, 2007
replacing it with a new list by
termination date.
the order of eligible
beneficiaries (subject to certain
qualifications): 1) any
individual designated in writing,
2) the surviving spouse, 3)
children, 4) parents, 5) an
executor or administrator of the
estate, and, 6) other next of kin.
The Senate also included report
language addressing the need
for pre-deployment counseling
of survivor benefits and
directing the Secretary of
Defense to review such
counseling.
Discussion: The House language allows service members to designate more than one individual to
receive the Death Gratuity. Arguably, it is designed so that guardians or others who may be
responsible for the service member’s dependent(s) would be eligible to receive a portion of the Death
Gratuity. However, there is nothing in this language that suggests or limits said designee from
spending this money in any way he or she pleases. In other words, there is no requirement that the
designated individual needs to spend the money in the interests of the child. The Senate language
allows service members to designate a beneficiary but also creates a specific list of other such
beneficiaries.
Reference(s): CRS Report RL32769, Military Death Benefits: Status and Proposals, David F.
Burrelli and Jennifer R. Corwell.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-7
Recoupment of Annuity Amounts Previously Paid, but
Subject to Offset for Dependency and Indemnity
Compensation
Background: The military Survivor Benefit Plan (SBP) provides an annuity for the survivors of
those who die while serving in the Armed Forces and those who have retired from the Armed Forces.
For those receiving retired pay, a portion of their retired pay is withheld for those participating in the
SBP. For the surviving spouses of those who die of injuries or illness suffered in the line of duty,
the Department of Veterans Affairs provides a monetary benefit known as Dependency and
Indemnity Compensation or DIC. However, under law, if a surviving spouse or former spouse is
eligible to receive both benefits, the SBP benefit is offset on a dollar-for-dollar basis. If the DIC is
paid to an SBP-eligible surviving spouse or former spouse, a percentage (or possibly all) of the
deceased retiree’s original contributions to the SBP, as offset by DIC, will be returned to the
surviving spouse or former spouse. In other words, if the SBP is offset by DIC, that proportion of
deductions from the deceased retiree’s retired pay which financed the offset portion of the SBP will
be refunded to the surviving spouse or former spouse. SBP payments can be restored, if the
beneficiary becomes ineligible for DIC and remains eligible for SBP, provided that the refunded SBP
payments are returned. On certain occasions, the surviving spouse has been over paid because of
the offset and recoupment is required.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House provision (sec. 643)
The Senate bill contained no
requires four actions be taken
similar provision.
when notifying an individual of
recoupment: 1) A single notice
of the amount to be recouped, 2)
a written explanation of the
statutory requirements for this
recoupment, 3) a detailed
accounting of the determination
of the amount to be recouped,
and, 4) contact information for a
person who can provide
information and answer
questions concerning the
recoupment actions.
Discussion: Military widow(er)s are often confused or uninformed when one benefit offsets the
other resulting in a return of payments made and any subsequent recoupments that may result. Often,
these widow(er)s feel that money has been unfairly taken away from them. It is expected that this
provision will remove any uncertainty as to what happens during the recoupment process when an
over payment is made.
Reference(s): CRS Report RL31664, The Military Survivor Benefit Plan: A Description of Its
Provisions, David F. Burrelli.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-8
Special Survivor Indemnity Allowance for Persons Affected
by Required Survivor Benefit Plan Annuity Offset for
Dependency and Indemnity Compensation
Background: As explained on the previous page, a surviving spouse or former spouse who is
eligible to receive both a Survivor Benefit Plan (SBP) annuity and benefits under Dependency and
Indemnity Compensation (DIC), will have the SBP benefit reduced or offset on a dollar-for-dollar
basis by DIC.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House provision (sec. 644)
The Senate bill contains no
authorizes a monthly survivor
similar provisions.
indemnity allowance “equal to
$40 or the same amount of the
SBP annuity subject to the DIC
offset should it be a lesser
amount.” These payments
become effective October 1,
2008 and terminate effective
March 1, 2016.
Discussion: Under this language, SBP-eligible surviving spouses or former spouses who are also
eligible to receive DIC, will receive an additional payment of up to $40.
Reference(s): CRS Report RL31664, The Military Survivor Benefit Plan: A Description of Its
Provisions, David F. Burrelli.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-9
Annuities for Guardians and Caretakers of Dependent
Children Under Survivor Benefit Plan
Background: Under the Survivor Benefit Plan (SBP) military service members and participating
retirees can, upon their death, provide an annuity to certain survivors, including spouses, former
spouses, and/or dependent children. In certain cases, a member may wish to designate a dependent
child as the beneficiary, however the child may be too young to be financially responsible. This is
also true if the eligible dependent child is mentally incapacitated.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House bill does not have a
The Senate bill contains a
similar provision.
provision (sec. 652) that creates
a new category of beneficiary
under SBP: “Guardian or
Caretaker of Dependent
Children.” According to the
Senate report: “A person who is
not married and has one or more
dependent children upon
becoming eligible to participate
in the Plan may elect to provide
an annuity under the Plan to a
natural person (other than a
natural person with an insurable
interest in the person ... or a
former spouse) who acts as a
guardian or caretaker to such
child or children.”
Discussion: Under this language, a guardian or caretaker of dependents can be designated as a
beneficiary. This could be helpful in those instances where the dependent child(ren) is/are very
young or mentally incapacitated.
Reference(s): CRS Report RL31664, The Military Survivor Benefit Plan: A Description of Its
Provisions, David F. Burrelli.
CRS Point of Contact (POC): David F. Burrelli, x7-8033.
CRS-10
Army/Marine Corps End Strength
Background: Even though engaged in combat operations in Afghanistan since 2001 and in Iraq
since 2003, the Bush Administration and the Department of Defense (DOD) have, until recently,
resisted congressional calls to permanently increase the end strength of the Army and Marine Corps
(although they did accede to temporary increases). Even the Quadrennial Defense Review (QDR)
released on February 6, 2006, recommended an Army end strength of 482,400 and a Marine Corps
end strength of 175,000. On January 19, 2007, DOD announced that it would seek approval to
increase permanent active Army end strength by 65,000 to 547,400 and permanent active Marine
Corps end strength by 27,000 to 202,000, both by FY2012. In response to the request for increased
end strength, the respective committees reported the following:
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Section 401 authorized an
Section 401 authorized an
FY2008 end strength of 525,400
FY2008 end strength of 525,400
for the Army and 189,000 for
for the Army and 189,000 for
the Marine Corps.
the Marine Corps.
Section 402 established a new
No similar provision.
minimum strength levels of
525,400 for the Army and
189,000 for the Marine Corps.
Section 403 authorized
No similar provision.
additional increases in FY2009-
FY2010 of 22,000 for the Army
(to 547,400) and 13,000 for the
Marine Corps (to 202,000).
Discussion: Increasing the end strength will require increased annual recruiting and retention goals.
It is reasonable to project an annual recruiting goal of 85-87,000 for the active Army and 36-38,000
for the active Marine Corps. Based on recent recruiting difficulties, these goals may be difficult to
achieve.
Reference(s): CRS Report RL31334, Operations Noble Eagle, Enduring Freedom, and Iraqi
Freedom: Questions and Answers About U.S. Military Personnel, Compensation, and Force
Structure, by Lawrence Kapp and Charles Henning.
CRS Point of Contact (POC): Charles Henning at x7-8866.
CRS-11
Hardship Duty Pay
Background: Hardship Duty Pay (HDP) is compensation for the exceptional demands of certain
duty, including unusually demanding mission assignments or service in areas with extreme climates
or austere facilities. The maximum amount of HDP was recently increased by Congress from $300
to $750 per month (P.L. 109-163, Section 627).
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House provision (Section
The Senate provision (Section
624) increases the maximum
617) also increases the
amount of Hardship Duty Pay
maximum monthly amount of
from $750 to $1500 per month.
Hardship Duty Pay to $1500,
and authorizes payment of a
lump sum in advance, subject to
the servicemember executing a
written agreement for a period
of service.
Discussion: DOD has currently capped HDP to a maximum of $100 per month for both Iraq and
Afghanistan.
Reference(s): CRS Report RL31334, Operations Noble Eagle, Enduring Freedom, and Iraqi
Freedom: Questions and Answers About U.S. Military Personnel, Compensation and Force
Structure, by Lawrence Kapp and Charles Henning.
CRS Point of Contact (POC): Charles Henning at x7-8866.
CRS-12
*Modifying Reserve Retirement Authorities
Background: Active duty military personnel are eligible for full retirement benefits after 20 years
of active duty, regardless of their age. Reservists are also eligible to retire after 20 years of qualifying
service but do not receive retired pay or access to retiree health benefits until age 60. In light of the
heavy use of the Reserve Component in recent years, a number of legislative proposals have been
introduced to lower the age at which reservists receive retired pay and military retiree health care
benefits.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
No similar provision.
Section 655 of the Senate bill would
reduce the age for receipt of retired pay by
three months for each aggregate of 90
days of specified duty performed in any
fiscal year after the date of enactment.
Specified duty includes active duty or
active serve under certain provisions of
Title 10 (Sections 688, 12301(a),
12301(d), 12302, 12304, 12305, 12406)
and Title 32 (Section 502(f), if responding
to a national emergency declared by the
President or supported by federal funds).
The retired pay eligibility age could not be
reduced below age 50, and eligibility for
retiree health care benefits would remain
at age 60.
Discussion: The Senate provision is narrower in scope than some other legislative proposals in the
110th Congress, such as those that would lower the age for receipt of retired pay and retiree health
care benefits to 55 for all reservists. The Senate provision would reduce the age at which certain
reservists – those who, after the date of enactment, serve on active duty for the specified period under
the specified activation authorities – can draw retired pay. However, it would not reduce the age at
which they can receive retiree medical benefits; that would remain at age 60. A provision similar
to this was included in the Senate version of the National Defense Authorization Act for FY2007 (S.
2766), although it applied retroactively to duty performed by reservists since September 11, 2001;
however, the provision was dropped in Conference.
Reference(s): CRS Report RL30802, Reserve Component Personnel Issues, Questions and Answers,
by Lawrence Kapp.
CRS Point of Contact (POC): Lawrence Kapp at x7-7609 or Charles Henning at x7-8866.
CRS-13
POW/MIA Operations
Background: The Department of Defense (DOD) POW/MIA organization consists of the DOD
Prisoner of War/Missing Personnel Office (DPMO) and two field activities-the Joint POW/MIA
Accounting Command (JPAC) and its subordinate Central Identification Laboratory-Hawaii (CIL-
HI) and the Air Force’s Life Sciences Equipment Laboratory. Over the past several years, Congress
has been concerned about the level of DOD resources being allocated to POW/MIA operations, both
personnel and funding. The FY2007 John Warner National Defense Authorization Act (NDAA)
(P.L. 109-364) required DOD to submit a five-year overview of the funding required and requested.
The FY2008 President’s Budget would support 91 percent, or $8.0 million less than, the total
funding required.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House report recommends
No similar provision.
fully supporting POW/MIA
efforts by increasing the
amounts allocated by:
+$0.2 M for DPMO
+$7.5M for JPAC
+$0.3M for Life Sciences
Laboratory.
Discussion: If supported by appropriations, these increases would fund FY2008 POW/MIA
operations at 100% of the requirement. This is report language only and is not contained in the bill
itself.
Reference(s): CRS Report RL33452, POWs and MIAs: Status and Accounting Issues, by Charles
A. Henning.
CRS Point of Contact (POC): Charles Henning at x7-8866.
CRS-14
*Military Pay Raise
Background: Ongoing military operations in Iraq and Afghanistan, combined with end strength
increases and recruiting challenges, continue to highlight the military pay issue. 37 U.S.C. 1009
provides a permanent formula for annual military pay raises that indexes the raise to the annual
increase in the Economic Cost Index (ECI), and the FY2008 President’s Budget request for a 3.0
percent military pay raise was consistent with this formula. Congress, in FY2004, FY2005 and
FY2006 approved the raise as the ECI increase plus 0.5 percent.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
The House provision, in Section
The Senate, in Section 601,
601, supports a 3.5 percent (0.5
supports a 3.5 percent across-
percent above the President’s
the-board pay raise effective
Budget) across-the-board pay
January 1, 2008.
raise that would be effective
January 1, 2008.
In Section 606, the House also
The Senate bill does not address
supports a guaranteed pay raise
guaranteed future raises of 0.5
of 0.5 percent above the ECI for
percent above the ECI.
FY2009 through FY2012.
Discussion: A military pay raise larger than the permanent formula is not uncommon. Mid-year,
targeted pay raises (targeted at specific grades) have also been authorized over the past several years.
This year’s legislation included no mention of targeted pay raises.
Reference(s): CRS Report RL33446, Military Pay and Benefits: Key Questions and Answers, by
Charles Henning.
CRS Point of Contact (POC): Charles Henning at x7-8866.
CRS-15
*Concurrent Receipt
Background: Since the enactment of Concurrent Receipt legislation in FY2003, the Combat-
Related Special Compensation (CRSC) benefit has been available to all military retirees with 20 or
more years of active duty and who met other eligibility criteria. Excluded from eligibility have been
reservists and those who were medically retired under Chapter 61 of Title 10 prior to completing 20
years of service.
H.R. 1585
S. 1547
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House-passed Version
SASC-reported Version
The House provision in Section
The Senate, in Section 653,
645 would expand CRSC
would expand CRSC eligibility
eligibility to include military
to include all service members
retirees (to include Chapter 61)
eligible for retired pay, to
with a minimum of 15 years’
include those retired under
creditable service and a
Chapter 61 and almost all
disability rated as at least 60%
reserve retirees. It excludes
disabling.
reservists who retire under a
special provision (10 USC
12731b), which allows
reservists with a physical
disability not incurred in the
line of duty to retire with
between 15 and 19 creditable
years of reserve service.
Discussion: The legislation proposed for the FY2008 NDAA would open CRSC eligibility to some
previously excluded. It is estimated that approximately 8,000 disabled retirees would be eligible
for concurrent receipt under the House version and 13,000 would be eligible under the Senate
version.
Reference(s): CRS Report RL33449, Military Retirement, Concurrent Receipt, and Related Major
Legislative Issues, by Charles Henning.
CRS Point of Contact (POC): Charles Henning at x7-8866.
CRS-16
Moving Reserve “GI Bill” Educational Benefits from Title 10
to Title 38
Background: The original “GI Bill” educational benefit was enacted in 1944 as part of a legislative
act designed to help the millions of World War II servicemembers readjust to civilian life upon
demobilization. This was a “post-service” benefit for veterans. In subsequent versions of the “GI
Bill,” the educational benefit became not just a veterans’ readjustment program, but a military
recruiting incentive as well. In 1984, when Congress established the version of the GI Bill which
came to be known as the “Montgomery GI Bill” (MGIB), the basic benefit for active duty personnel
(MGIB-AD) remained codified in Title 38 (Veterans’ Benefits). A new benefit was also established
for members of the Selected Reserve (MGIB-SR), but this was placed in Title 10 (Armed Forces)
as its purpose to “encourage membership in units of the Selected Reserve” was directly related to
recruiting and retention, not veterans’ readjustment. Over time, the benefit for those eligible for
MGIB-AD increased more rapidly than for those eligible for MGIB-SR, as the programs were
administered and overseen by different executive branch agencies and congressional committees.
In 2004, Congress enacted a new educational benefit called the Reserve Educational Assistance Act
(REAP) for reservists who had served at least 90 days on active duty in support of a contingency
operation. This program was placed in Title 10, although the benefit level was statutorily linked to
the MGIB-AD basic benefit in Title 38.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Section 525 would recodify 10
No similar provision.
USC, chapters 1606 (MGIB-
SR) and 1607 (REAP), to
Chapter 33 of Title 38.
Discussion: Transferring the Montgomery GI Bill – Selected Reserve statutory authority from Title
10 to Title 38 has been advocated by a number of military advocacy groups as a way of ensuring the
Reserve GI Bill payment rates maintain proportional parity with the Active Duty GI Bill. Section
525 of H.R. 1585 would effect such a transfer.
Reference(s): CRS Report RL33281, Montgomery GI Bill Education Benefits: Analysis of College
Prices and Federal Student Aid Under the Higher Education Act, by Charmaine Mercer and Rebecca
Skinner.
CRS Point of Contact (POC): Lawrence Kapp at x7-7609.
CRS-17
*Role of National Guard Bureau and National Guard Bureau
Chief
Background: There have been long-standing tensions between the senior leadership of the military
services and their respective reserve components regarding policy and resource allocation decisions.
This conflict has resurfaced in the past few years with respect to several decisions which impacted
the Army and Air National Guard. Additionally, the devastation caused by Hurricane Katrina
generated great interest in revamping the way in which the federal and state governments prepare
for and respond to disasters or other catastrophic events. Modifying the role which the National
Guard might play in future events has been an area of particular area of interest, given its unique
status as both a state and federal force. The FY2007 John Warner National Defense Authorization
Act (P.L. 109-364, sec. 529) directed the Commission on the National Guard and Reserve (CNGR)
to review a number of proposed changes to the role of the National Guard Bureau (NGB) and the
National Guard Bureau Chief and to report its recommendations on these proposals to the House and
Senate Armed Services Committees. The CNGR submitted its “Second Report to Congress”on
March 1, 2007.
H.R. 1585
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SASC-reported Version
Section 1611(a) specifies that --
Section 533(d) specifies that --
in addition to the Chief's current
in addition to the Chief’s
duties as principal adviser the
current duties as principal
Secretaries and Chiefs of Staff
advisor the Secretaries and
of the Army and Air Force on
Chiefs of Staff of the Army and
National Guard matters-- the
Air Force on National Guard
Chief is also the principal
matters -- the Chief is also an
adviser to the Secretary of
advisor to the Secretary of
Defense, through the Chairman
Defense, through the Chairman
of the Joint Chiefs of Staff, on
of the Joint Chiefs of Staff, “on
such matters.
matters involving non-
federalized National Guard
forces and other matters as
determined by the Secretary of
Defense.”
Section 1611(b) would also
No similar provision.
make the Chief an adviser on
National Guard matters to the
Commander of U.S. Northern
Command and to the Secretary
of Homeland Security.
Section 1611(c) would change
Sec 533(b) would similarly
the grade of the Chief of the
change the grade of the Chief of
National Guard Bureau from
the National Guard Bureau from
Lieutenant General (O-9) to
Lieutenant General (O-9) to
General (O-10).
General (O-10).
Section 1611(d) would change
Section 533(a) would add new
the way the Chief of the NGB is
requirements for an officer to be
recommended for appointment.
recommended for appointment
CRS-18
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
It would leave intact the current
as Chief of the National Guard
procedure for recommending
Bureau, including a
candidates for this position, but
recommendation by the
add a new requirement for the
Secretary of the Army or Air
Secretary of Defense to set up a
Force; a determination by the
process for identifying the “best
Chairman of the Joint Chiefs of
qualified officer or officers
Staff that the officer has
whom the Secretary of Defense
“significant joint duty
will recommend for
experience”; a determination by
consideration by the President
the Secretary of Defense that
for appointment as Chief of the
the officer’s assignments and
National Guard Bureau.” A key
experiences provide a detailed
component of this selection
knowledge of the status and
process would be the
capabilities of National Guard
requirement to “incorporate the
forces and missions; that the
requirements of Section 601(d)”
officer possess a level of
of Title 10 (discussed below).
operational experience,
professional military education,
and expertise in national
defense and homeland defense
commensurate with the advisory
role of the position; and that the
officer possess such other
qualifications as the Secretary
of Defense prescribes.
Section 1611(e) would repeal
Section 533(c) is identical to
the prohibition on officers 64
Section 1611(e).
years of age or older from
holding the position of Chief,
NGB.
Section 1611(f) would require
No similar provision.
the Secretary of Defense to
recommend to the President the
best qualified officer or officers
to serve as the Chief,
determined under the new
process set up by Section 1611,
within 120 days of enactment.
Section 1612(a) would change
No similar provision.
the National Guard Bureau from
a “joint bureau of the
Department of the Army and the
Department of the Air Force” to
a “joint activity of the
Department of Defense.”
CRS-19
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Section 1613(a) would assign a
No similar provision.
new function to the NGB:
facilitating and coordinating the
use of National Guard personnel
and resources for certain types
of operations with other federal
agencies, the Adjutants General
of the States, U.S. Joint Forces
Command, and U.S. Northern
Command.
Section 1613(b) would transfer
Section 532(a)(1) is virtually
authority for prescribing the
identical to Section 1613(b).
NGB charter from the
Secretaries of the Army and Air
Force to the Secretary of
Defense, who would be required
to develop the charter in
consultation with the
Secretaries of the Army and Air
Force, and the Chairman of the
Joint Chiefs of Staff.
Discussion: Most of the provisions in the House and Senate bills track closely with
recommendations contained in the CNGR’s Second Report to Congress. For example, both the
House and Senate bills (Sections 1611(c) and 533(b), respectively) would increase the rank of the
Chief of the National Guard Bureau from lieutenant general to general, as advocated by CNGR
Recommendation 13; and both bills (sec. 1613(b) and Section 532(a)(1)) would transfer authority
for prescribing the NGB charter to the Secretary of Defense (CNGR Recommendation 12). Section
533(d) of the Senate bill, relating to the Chief’s role as advisor to the Secretary of Defense,
corresponds closely with the first part of CNGR Recommendation 10; Section 1611(a) of the House
bill is similar, but assigns greater advisory authority to the Chief than the CNGR Recommendation.
Section 1611(b) of the House bill, relating to the Chief’s role as advisor to the Commander of U.S.
Northern Command and to the Secretary of Homeland Security, corresponds closely with the second
part of CNGR Recommendation 10. House provisions 1612(a), concerning the NGB as a joint
activity of the Department of Defense, and House provision 1613(a), concerning a new function for
the NGB, mirror CNGB Recommendations 9 and 11, respectively.
The provisions modifying the process for recommending an officer as Chief of the National Guard
Bureau concerns a topic which is not addressed in the CNGR report. Both provisions appear to be
trying to bring the recommendation process for NGB Chief into greater harmony with the process
used for recommending officers for other three star (O-9) and four star (O-10) positions. The House
provision (1611(d)) specifically incorporates the requirements of 10 USC 601(d) into the Chief’s
selection process. Section 601(d) requires that when an officer is recommended for initial
appointment in the grade of O-9 or O-10, the Chairman of the Joint Chiefs of Staff must submit to
the Secretary of Defense an evaluation of that officer’s performance “as a member of the Joint Staff
and in other joint duty assignments.” It also specifies that when a O-9 or O-10 vacancies occur, the
Secretary of Defense must inform the President of the qualifications an officer needs to effectively
CRS-20
carry out the duties of the office. While the Senate provision (533(a)) does not refer to Section
601(d), it does add requirements related to joint duty experience and capacity to serve in the position
of NGB Chief.
Reference(s): CRS Report RL33571, The FY 2007 National Defense Authorization Act, Selected
Military Personnel Policy Issues, pp. 34-36. Commission on the National Guard and Reserves,
Second Report to Congress, March 1, 2007, available at [http://www.cngr.gov].
CRS Point of Contact (POC): Lawrence Kapp at x7-7609.
CRS-21
*Tricare Fee Increases
Background: In early 2006, DOD proposed increases in Tricare Prime enrollment fees for retired
personnel under age 65, but Section 704 of the FY2007 John Warner National Defense Authorization
Act (P.L. 109-364) prohibited increases in premiums, deductibles, copayments, and other charges
between April 1, 2006, and September 30, 2007. In submitting its proposed FY2008 budget, DOD
again proposed fee increases that would provide an estimated $1.9 billion in potential savings for
the year.
H.R. 1585
S. 1547
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House-passed Version
SASC-reported Version
Section 701 would extend to
No similar provision although
Sept. 30, 2008 the prohibition in
the accompanying report
the FY2007 Authorization Act
(S.Rept. 110-77) stated that the
on DOD increasing premiums
DOD proposal for higher fees
and co-pays for Tricare Prime,
was “premature” and requested
and inpatient care charges for
that DOD consult with
Tricare Standard.
Congress on any proposed fee
changes.
Discussion: The FY2007 Authorization Act requested two separate reports on defense health care
budget issues, one by the Government Accountability Office (GAO) and another by a DOD Task
Force on the Future of Military Health Care. Both reports favored increases in the portion of costs
borne by beneficiaries, but GAO found that although DOD is unlikely to realize estimated savings
($9 billion over a five-year period), it would achieve “significant savings.” Although there remains
considerable opposition to fee hikes among beneficiaries, the two Armed Services committees have
expressed an intention to seek an eventual “comprehensive and prudent” approach to changes to
health care budget issues.
Reference(s): None.
CRS Point of Contact (POC): Dick Best, x7-7607.
CRS-22
*Retiree Tricare Coverage and Employer Group Health Plans
Background: Section 707 of the FY2007 John Warner National Defense Authorization Act (P.L.
109-364) prohibited employers from offering incentives to military retirees not to enroll in
employee-sponsored health care plans. Tricare beneficiaries are thus treated in the same way as
Medicare beneficiaries in that they are eligible for government health care plans but they may not
receive any direct inducement to forego employer-sponsored health care plans. The goal of the
legislation was to discourage employer efforts to shift costs of health care coverage to DOD while
not decreasing the earned benefits of retired servicemembers. On the other hand, some employers
offer a variety of different health care options (sometimes known as a cafeteria plan) that permits
employees eligible for Tricare to choose plans that will complement their Tricare coverage and there
has been some confusion in regard to this issue. In addition, some employers, including state
governments, remain opposed to the provision that may increase their health care costs and there has
been discussion of repealing the FY2008 provision.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Report language urges DOD to
No similar language.
implement clarifications that
certain common employer
benefit programs do not
constitute improper incentives.
Discussion: There remains some confusion among beneficiaries in regard to this provision and
opposition among some employers. Amendments may be offered at some point to remove the
current prohibition.
Reference(s): None.
CRS Point of Contact (POC): Dick Best, x7-7607.
CRS-23
*Tricare Pharmacy Fees
Background: Currently dependents of active-duty servicemembers and retired servicemembers and
their dependents (up to age 65) must make co-payments of $3 for generic pharmaceuticals, $9 for
formulary drugs and $22 for non-formulary drugs obtained through the Tricare retail pharmacy
program. The Administration has proposed increasing co-payments for generic pharmaceuticals and
formulary drugs to $5 and $15, respectively, along with $22 continuing to be required for non-
formulary drugs. CBO has estimated that banning the proposed increases would increase DOD’s
discretionary costs by $187 million in FY2008.
H.R. 1585 House-passed
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Conference
Version
SASC-reported Version
Section 702 would freeze
No similar provision, but
current co-payment levels
S.Rept. 110-77 states on page
through the end of FY2008.
363: “The committee concluded
that this [i.e., DOD’s]
legislative proposal [for higher
co-pays] is premature and
believes that any increase in
TRICARE program cost-sharing
should be made on the basis of
the comprehensive analyses
required by Congress and after
implementation of efficiencies
in the health care program.”
Discussion: There is considerable resistance among beneficiaries and their organizations to raising
co-payment rates. GAO has concluded that increases in beneficiaries’ co-payments are unlikely to
permit DOD to achieve the extent of savings it has anticipated but “it is still likely to achieve
significant savings.” The Interim Report of the DOD Task Force on the Future of Military Health
Care concluded that “The portion of costs borne by beneficiaries should be increased to a level below
that of the current FEHBP [Federal Employees Health Benefits Plan] or that of generous private-
sector plans and should be set at or below the level in effect in 1996.” Further, the Task Force
recommended that “Increases in cost-sharing should be phased in over three to five years to avoid
precipitous changes.”
Reference(s): Government Accountability Office, Military Health Care: TRICARE Cost-Sharing
Proposals Would Help Offset Increasing Health Care Spending but Projected Savings are Likely
Overestimated, GAO-07-647, May 2007; Department of Defense, Task Force on the Future of
Military Health Care, Interim Report, May 2007.
CRS Point of Contact (POC): Dick Best, x7-7607.
CRS-24
*Treatment of Tricare Retail Pharmacy Network Under
Federal Procurement of Pharmaceuticals
Background: Pharmaceuticals obtained by DOD are procured under federal pricing rules, but there
has been a dispute regarding pharmaceuticals dispensed by the Tricare retail network: DOD has
maintained that federal pricing rules apply; the pharmaceutical industry disagrees. Although there
had been a provision relating to the issue in the Senate version of the defense authorization bill for
FY2007, no language was included in the John Warner National Defense Authorization Act (P.L.
109-364). The conference report (H.Rept. 109-702) accompanying the final bill stated that
“prescriptions dispensed by the Department of Defense Retail Pharmacy Program qualify for
discounted drug prices under [38 USC] Section 8126.” A court case concerning the issue was
returned to a lower court on a procedural issue and has not been pursued.
H.R. 1585
S. 1547
Conference
House-passed Version
SASC-reported Version
Section 703 authorizes DOD to
Section 701 provides that the
exclude pharmaceuticals from
Tricare Retail Pharmacy
the DOD retail pharmacy
Program “shall be treated as an
benefits program that are not
element of the Department of
available at the same price that
Defense for purposes of the
is reflected in the Federal
procurement of drugs.”
Supply Schedule.
Discussion: Both provisions aim at encouraging pharmacies in the Tricare retail network to obtain
pharmaceuticals at the same price that is available to Federal agencies, including DOD and the VA.
The House version provides flexibility to DOD; the Senate Committee on Armed Services provision
makes federal pricing mandatory after October 1, 2007. There is considerable resistance to the
proposal from pharmaceutical companies and retail drug stores and some observers express concern
that making federal pricing mandatory for the Tricare Retail Pharmacy Program could be seen as a
precedent for setting retail prices for pharmaceuticals obtained through Medicare.
Reference(s): None
CRS Point of Contact (POC): Dick Best, x7-7607.