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From the Navy Times:

September 05, 2003

Administration, House reach concurrent receipt agreement

By Rick Maze
Times staff writer


The Bush administration has agreed in a deal with House Republican leaders to support concurrent receipt of full retired pay and veterans disability compensation, backing a five-year phased end of the offset that reduces pay for about 700,000 people eligible for both benefits, congressional sources said.

But the cost of getting President Bush's backing for full concurrent receipt could be so high that military and veterans groups who have been pushing for concurrent receipt will refuse to accept the White House offer.

Sources involved in talks with the White House and Pentagon said that in return for allowing those who have served 20 years to receive full retired and disability pay, White House budget officials want a revision of veterans' disability payments.

The White House proposes giving future benefits or an increase in current disability only to those with injuries or illness linked directly to service.

This could cut the number of new claims by 40 percent and prevent many veterans who get disability payments from seeing increases as their health worsens.

Limiting disability compensation isn't a new idea. Until it stopped producing the reports a few years ago, the Congressional Budget Office, a bipartisan arm of Congress, usually included in its annual
report about ways to cut federal spending a proposal to restrict benefits for service-connected disabilities to those that had some direct link to being in the military. The CBO argued that someone
injured in an off-duty accident or who came down with an ailment while in the military did not have to be covered.

The General Accounting Office, the investigative arm of Congress, also endorsed the idea.

The idea, suggested by the congressional budget analysts, would be to make disability and death benefits similar to civilian workers' compensation, which only covers on-the-job injuries and illnesses.

Congress never adopted the idea, although disability benefits for tobacco-related illnesses have been eliminated as a service-connected disability, along with use of illegal drugs and some alcohol-related disabilities.

The change would save enough money in the Department
of Veterans Affairs budget to fully pay for the increase in military retired pay, and possibly more, sources said. The cost, estimated at up to $5.8 billion a year, is why the Bush White House opposes
concurrent receipt.

The White House proposal would, in effect, provide an increase in pay for disabled retirees by cutting benefits for people now on active duty whose disabilities would prevent them from serving until retirement.

I'm not sure this is fair, said a congressional aide working on concurrent receipt legislation who asked not to be identified.

Taking money from one veteran to give to another is an idea that requires some thought, said another aide, who also requested anonymity. Even if you agree that the disability system needs an overhaul, I'm not sure this is either the time or the way to do it.

If the agreement stands, House Republican leaders will include concurrent receipt and the disability benefits restriction in the 2004 defense authorization bill.

This would require approval of a conference committee made up mainly of members of the House and Senate Armed Services committees, and would need a final vote of approval by the full House and Senate.

On Sept. 2, a letter calling for Bush to support concurrent receipt was sent to the White House, signed by 401 retired flag and general officers representing all seven military services.

It was prompted by threats from senior administration officials,
including Defense Secretary Donald Rumsfeld, to recommend a veto of concurrent receipt, including vetoing the entire defense bill if concurrent receipt provisions were attached.

The pact between the White House and House Republican
leaders was struck so quickly and quietly that details weren't explained to other lawmakers.

This included members of the Senate Armed Services Committee, who have been involved since July in talks with the House Armed Services Committee over the fate of the 2004 authorization bill.

The Senate version of the bill includes a provision granting full concurrent receipt of retired and disability pay without restricting eligibility for disability benefits.

Also not told of the details were a group of House Republicans that has pressed leaders to reach a deal and threatened to join with Democrats in voting for a separate concurrent receipt bill if that didn't happen, sources said.

The agreement with the White House was reached Thursday, one day after rank-and-file Republicans warned their leaders during a party caucus that they were prepared to sign a Democrat-led petition to force a House vote on a concurrent receipt bill.

It is not clear whether this agreement will satisfy them. If they look at it closely, I'm not sure it is going to be acceptable, said one source involved in the negotiations.

Details of the agreement were still being written by House aides, and it was unclear how full concurrent receipt would be phased in.

The White House proposal would only pay for itself if restrictions on disability claims were quickly applied while delaying increases in retired pay resulting from ending the current offset in benefits until there were savings from disability claims, congressional sources said.

Since 1891, military retired pay has been reduced dollar-for-dollar by any amount received in tax-free veterans' disability ompensation.

Today, more than 1.4 million disabled veterans have their retired pay reduced under this policy, although only about 671,000 retired from the military after 20 years of service.

The rest retired with less than 20 years of military service, either under a disability retirement or under the early retirement allowed during the military drawdown.

VA expects a flood of new disability claims from military retirees if veterans could receive their full retired pay and pay for a service-connected disability.

Most proposals to phase in concurrent receipt have taken a worst-first approach, first allowing concurrent receipt for those with the highest rated disabilities. If this holds true, retirees with disabilities rated a 100 percent would be the first to have their retired pay increased.

Two benefits programs are now available that partly replace the offset in retired pay for certain groups of 20-year military retirees. Both would be scrapped under the White House deal.

Special compensation for severely disabled retirees is a monthly payment of up to $300 for those who finish 20 years of military service and receive a disability rating of 60 percent or more within four years of leaving active duty.

Combat-related special compensation is a payment up to the amount of offset retired pay for those with a disability of any rating that is directly related to combat action for which the service member received a Purple Heart. It also covers those with disabilities of 60 percent or more if the disability is related to
combat or combat-like training.