VFW WI Legislative Updates

MOAA LEGISLATIVE UPDATE

Posted at 8:45 AM on Saturday, March 21, 2009 by Legislative

This update provided Courtesy of Mike "Gunner" Furgal

Retirees May Face "Economic Stimulus Tax"

The recently enacted stimulus plan reduces federal income taxes up to $400 for working individuals and $800 for couples via smaller tax withholding from their paychecks.  But the need for quick-implementation is leading the IRS to apply the smaller withholding to all taxpayers - including non-working retirees who aren't eligible for the tax cut but have retired pay.

 

Obama Heeds Vet Leaders.  After meeting with MOAA President VADM Norb Ryan (USN-Ret) and other veterans' association leaders this week, President Obama agreed to drop a budget proposal to bill veterans'health insurance companies for the cost of treating their service-caused injuries.

 

Pelosi Hears Association Priorities.  House Speaker Nancy Pelosi and the rest of the House Democratic leadership met with MOAA and other association leaders this week to discuss legislation priorities for FY2010.

 

 

COLA Making Headway.  Inflation crept up one-half percentage point in February, but still has a long way to go before retirees can expect any COLA next year.

 

 

Stop Loss Stopping.  The Secretary of Defense announced a two-year plan to end the practice of forcing troops to stay in the military for deployments after their service obligation has expired.

 

 

Obama Heeds Vet Leaders

 

Stunned at veterans' negative backlash to a draft plan to have the VA bill vets' health insurance plans for the cost of treating their service-connected injuries and illnesses, President Obama asked for a personal meeting this week with the leaders of 11 military and veterans' association leaders who wrote him a letter urging him to drop the plan.

 

MOAA president VADM Norb Ryan (USN-Ret) was one of the

signatories invited to the meeting, where the president explained that the intent was to help fund his multi-billion-dollar expansion of the VA budget by billing insurance companies that his staff saw as getting a "free ride" (collecting premiums from veterans but not paying for care).

 

Under current law, the VA bills private insurers only for care concerning conditions that were not caused by military service.

 

Ryan and the others explained the concern that expanding billing to service-caused conditions - many of which are catastrophic - could result in raising veterans' premiums, exhausting coverage needed for their family members, causing cancellation of vets' family health policies for the more severely injured, or deterring small business from hiring disabled veterans for fear of large health care bills.

 

They reiterated that the government has a moral obligation to fully fund medical care for service-caused conditions, without seeking to shift any of that cost to civilian insurers or to veterans.

 

President Obama responded that he didn't intend to do anything to raise financial risks for disabled veterans and asked the leaders back for another meeting on Wednesday.

 

Following that Wednesday afternoon meeting, the President announced he was canceling the proposal.

 

"Our voices were heard," said VADM Ryan after the announcement. "The President told us he wouldn't do this if it hurt veterans. After listening to our concerns, he kept his word.  We're grateful that he invested his personal time to get the facts and do the right thing on this important matter of principle."

 

Pelosi Hears Association Priorities

 

On Wednesday, MOAA President Norb Ryan and Government Relations Director Steve Strobridge joined other military and veterans' association leaders in meeting with Speaker of the House Nancy Pelosi (D-CA) and more than two dozen House Democrats, including the chairmen of all of the key committees.

 

At the beginning of the meeting, Speaker Pelosi drew a standing ovation by announcing that the President had dropped the budget proposal to bill vets' health insurance for service-caused injuries.

 

Armed Services Committee Chairman Ike Skelton (D-MO) applauded the president's budget for including funds to extend concurrent receipt eligibility to severely disabled retirees forced into medical retirement before attaining 20 years of service.  He said his committee will eagerly support that, but congressional rules on "mandatory spending" will require him to ask other committees to volunteer mandatory spending reductions to pay for it.  He expressed concern that this would put the committee at a disadvantage - having to use up offsets that might be needed to reverse any TRICARE fee hikes that might be in the budget.

 

This comment perked up MOAA attendees' ears, since it's the first indication we've had that the president's budget might include some TRICARE fee increases.  The initial budget outline sent to Congress a few weeks ago gave no specific indication of that.  MOAA will work to check that out and generate grass-roots alerts as appropriate.

 

Later in the meeting, the Speaker asked attendees to outline their priorities for the year.  Association leaders expressed a general consensus in support of advance funding for the VA, doing more for wounded warriors and especially their family caregivers,

concurrent receipt, SBP-DIC, and homeless vets, among others.

 

In addition, VADM Ryan stressed MOAA's strong support for sustaining end strength increases as the only way to ease deployment-related stresses on members and families, as well as the importance of sustaining a commitment to restoring full pay comparability by authorizing a 3.4% military pay raise, rather than the 2.9% raise proposed in the initial defense budget submission.

 

COLA Making Headway

 

This week, the Bureau of Labor Statistics announced the consumer price index (CPI) for February.  The CPI is the metric used to calculated annual cost of living adjustments (COLA) for military retired pay, Social Security and survivor annuities. Inflation is making its way towards positive territory, but not very fast.  The February CPI increased 0.5% over January's number.  That puts cumulative inflation at -4.1% since October.

 

This is the lowest rate of inflation in almost 40 years.  Only five times since 1970 has there been a CPI swing of more than 4% in the space of five months.  And this is the first time that large of a swing has been negative.   Check out MOAA's month-by-month COLA track comparison for the last three years.

 

If inflation is negative or flat for the entire fiscal year, there would be no COLA for retired pay or Social Security.

 

Stop Loss Stopping

 

Earlier this week, the Defense Department made public a two-phase plan to end "stop loss" - the practice of involuntarily retaining servicemembers on active duty when their unit is scheduled for deployment with six months, even if their service obligation will expire before the end of the deployment.

 

Starting this fall, Army Reserve and National Guard units being mobilized will not impose stop-loss rules on individual soldiers in those units. The same policy change will be applied to active duty Army units deploying after the first of the year.

 

Currently, more than 13,000 soldiers are affected by the stop-loss policy.

 

DoD's goal is to cut that number in half by June 2010 and to "near zero" by March 2011, while still retaining the authority to use stop loss for extraordinary circumstances.

 

For servicemembers who were stop-lossed during fiscal year 2009, DoD plans to pay a new Stop Loss Special Pay at a rate of $500 per month to help ease the effects of being involuntarily extended on active duty.

 

The $500 monthly payments, scheduled to start this month, will be paid retroactive to October 2008.

 

MOAA - Military Officers Association of America

201 N. Washington Street

Alexandria, VA 22314