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MOAA LEGISLATIVE UPDATES  (cont).

• Authority for Guard/Reserve members to deduct drill-related travel and lodging expenses
• Relief from capital gains tax penalties for military homeowners sent overseas or elsewhere away from home on military orders so they can't meet pre-sale occupancy requirements
• Exemption of military survivors from having to pay tax on half of the modest $6,000 death gratuity paid when the sponsor dies on active duty.

September 26, 2003:

Issue 1: Concurrent Receipt Update

This was an important week for current and future disabled retirees and veterans. This week brought increased pressure on Congress to find a concurrent receipt fix.

On Tuesday, 23 Sep, a Senate Veterans Affairs Committee hearing put a stake in the heart of a behind-the-scenes effort to make no-notice cutbacks in VA disability compensation eligibility criteria for future veterans.

Committee Chairman Arlen Specter (R-PA) summed up the hearing with the comment, "The witnesses have made an overwhelming case that this is a bad idea, and I'm with you." Specter said he had written a letter to Armed Services Committee Chairman John Warner (R-VA), urging him and his committee to reject the House leadership's idea. Subsequently, House sources indicated the concept already had been dropped, though some proposal for a more measured and formal review of disability rules may still be offered.

Also this week, Rep. Walter Jones (R-NC) became the 203rd signer of Rep. Jim Marshall's (D-GA) concurrent receipt discharge petition. In doing so, Jones courageously joined Rep. Thomas Tancredo (R-CO) as the only two Republicans to defy their leadership's "death penalty" threat for any Republican representative who signs the petition. Only fifteen more signatures will force a floor vote in the House, but the other 183 Republicans who have cosponsored the main concurrent receipt bill (H.R. 303) have yet to step forward.

Meanwhile, House and Senate Armed Services Committees were working feverishly on possible concurrent receipt options. Several possible scenarios have been outlined in news media this week, but nothing's been decided. One Hill source told us, "We're costing out new options every hour or so."

Please help keep the pressure on by:

a. Urging House members to sign the concurrent receipt discharge petition (send an email via MOAA's Web site at http://capwiz.com/moaa/home/), and

b. Using MOAA's toll-free hot line to Congress (1-877-762-8762) to urge your senators and

Issue 2: Defense Appropriations Goes to President

On Thursday, the Senate approved the FY2004 Defense Appropriations Act by a vote of 95-0, following a 407-15 House vote on Wednesday. All indications are that the President will sign it.

The Appropriations bill comes in at a total cost of $368.2 billion, a figure only slightly different from earlier proposals. The bill moved quickly through both chambers, in part because President Bush insisted it be given high priority. Most of the other appropriations bills will not be completed until after the start of the fiscal year on October 1, so Hill leaders are preparing a continuing resolution to fund the government on a temporary basis until the other bills are finished.

It's important to note that the Defense Appropriations Bill is not the vehicle for military benefits changes like concurrent receipt and improvements to TRICARE. Those will have to wait for the Defense Authorization Bill. On the bright side, a finished appropriations bill puts pressure on the Defense Authorization Bill conferees, who are ordinarily supposed to finish first.

Issue 3: CBO Study Misses Mark

This week, the Congressional Budget Office (CBO) released a study of the growth in military health care spending over the past fifteen years. The study says the military health care budget has grown from $14.6 billion in 1988 to $27.2 billion today. CBO uses these numbers to claim that health spending "per active-duty service member" has tripled, from $6,600 to $19,600.

That's a bogus statistic that's been taken out of context in national news stories. First of all, it attributes retiree health care costs to active duty members, which makes no sense at all.

Second, it's skewed by changes in active duty and retiree demographics that are driven by the Department of Defense's own policy decisions.

Third, the 2003 budget numbers are inflated by recent changes in government accounting methods introduced with enactment of TRICARE For Life. While the newly required health care trust fund deposits appear in DoD's budget, this isn't a real expenditure. It's just an accounting mechanism to recognize health costs that will be incurred many decades in the future after current active duty members attain Medicare eligibility.

The CBO study acknowledges that:

• 56% of the cost growth is due to national health care cost increases in general;
• 23% is due to changes in the relative sizes of active duty and retired populations;
• 18% is due to changes in government accounting methods; and