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Budget Issues


Administration Reveals 2015 Budget Request

The Administration’s budget request for FY 2015 includes a substantial decrease in the Defense Department (DoD) personnel programs from $144 billion in the current fiscal year (FY 2014) to $135 billion in FY 2015. Secretary of Defense Chuck Hagel, who had earlier unveiled details of the DoD budget request, stated that this is the first budget to reflect the end of American involvement in Afghanistan and it accounts for significantly reduced end strengths for all branches of the military, including the National Guard and Reserve. These end strength levels will result in the smallest military since before World War II and Hagel warned that future sequestration budget cuts mandated by the 2011 Budget Control Act will create a “hollow force.”

FRA shares concerns about a “hollow force” and supports adequate end strengths for our military’s operational commitments. The budget intends to slow the growth of military compensation and benefits, with provisions that include:

• Capping military pay increases at one percent for FY 2015 and 2016;

• Creating an annual enrollment fee for new TRICARE-for-Life (TFL) beneficiaries (current enrollees would not be affected);

• Merging TRICARE Standard, Prime, and Extra into one consolidated health plan;

• Requiring all retirees to use home-delivery or MTF for maintenance drugs;

• Increasing TRICARE annual fees and pharmacy co-pays for retirees under age 65;

• Creating a small co-pay ($10) for retirees using Military Treatment Facilities (MTF);

• Requiring active duty family members to pay a co-pay for TRICARE services;

• Reducing Base Allowance for Housing (BAH) payments by six percent;

• Cutting the commissary budget from $1.4 billion to $400 million in three years. Only stateside commissaries would be impacted. (See Tom Philpott’s syndicated “Military Update” (3-6-2014) article at www.fra.org for more details); and

• Reducing Army and Marine Corps end strength (Navy end strength is not reduced).

In response to the DoD budget announcement, Chairman of the House Armed Services Committee Howard “Buck” McKeon (California) expressed disapproval by stating that “we are trying to solve our financial problems on the back of our military,” and FRA agrees. The Association adamantly opposes new TRICARE fees and increases, cuts to the commissary benefit and reductions in BAH. FRA also will fight for active-duty pay increases that at least keep pace with those offered in the civilian sector. At press time, the Association is reviewing other issues addressed in the DoD budget proposal.

FRA is encouraged that no reductions to military retirees’ benefits were included in these proposals, but that doesn’t mean those benefits are safe from future cuts. Hagel explained that he will await the final report from the Military Compensation and Retirement Modernization Commission, which is due February 2015, before proposing any changes to military retirement benefits.

The Department of Veterans Affairs (VA) FY 2015 budget proposes to increase spending by 6.5 percent over the current fiscal year, and reflects a 35.2 percent increase since FY 2009. The proposed budget provides the Veterans Benefit Administration (VBA) with funds to adjudicate 1.5 million disability and pension claims in FY 2015, which is a 17-percent increase over the current year’s funding. The proposed budget also provides $173.3 million for the Veterans Benefits Management System (VBMS) to administer a paperless claims system, and $138.7 million to scan paper documents into e-folders. The proposed $163.9 billion budget also includes $58.7 billion in advanced spending for VA health care for FY 2016. The advanced appropriation for veteran’s health care is a 4.7 percent increase over FY 2015.

Proposed spending for the U.S. Coast Guard, which is included in the Department of Homeland Security (DHS) proposed budget for FY 2015, will be reduced by $795 million from FY 2014.

FRA will review and monitor developments with the DoD, VA, and Coast Guard budgets and other related issues.



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Debt Ceiling Extension Passes House

The House and Senate passed a debt ceiling increase (S. 540) with no conditions attached. This “clean” debt measure extends the nation’s borrowing limit through March 15, 2015. President Obama and congressional Democrats have been calling for the debt limit increase, claiming that raising the debt limit does not authorize new spending, but rather allows the federal government to pay for the obligations it has already approved. House Leadership and Senate Republicans claimed that it’s irresponsible to continue huge deficit spending without implementing greater fiscal restraint. The nation’s debt stands at approximately $17.2 trillion.



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Health Care Issues



Senate Stops Vets Omnibus Bill with Repeal of COLA Cut for Future Military Retirees

The Senate voted to block the FRA-supported “Comprehensive Veterans Health and Benefits and Military Retirement Pay Restoration Act” (S. 1982), citing the $21 billion price tag (over 10 years) as the primary objection. The bill would have repealed the one-percent COLA cut for future military retirees who joined military service after January 1, 2014, and provided numerous veterans improvements. FRA believes that no young man or woman considering a career of military service should be deterred from enlisting due to this ill-advised reduction in military retirement compensation.

FRA supported, and will continue to support, other important provisions of this measure that include:

• Requiring in-state tuition rates at public colleges for all student veterans using Post-9/11 GI Bill and Montgomery GI Bill benefits;

• Extending the VA caregiver program to all seriously injured veterans who were injured in the line of duty;

• Expanding VA health care to include alternative medicine and dental care;

• Extending access to VA health care from five years to 10 years for recently separated veterans;

• Improving delivery of care for veterans who experience sexual trauma while in military service;

• Improving protections under the Servicemember Civil Relief Act (SCRA); 

• Allowing two-year funding for the entire VA budget (see below);

• Renewing veterans retraining assistance; and

• Allowing “Veteran Status” for reservists who served 20 years, but were never mobilized.

FRA will continue to push for enactment of veterans’ legislation with the provisions listed above.

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FRA Supports Two-Year Funding for VA

John Davis, FRA’s Director of Legislative Programs, attended a press conference on Capitol Hill urging the House and Senate to pass legislation that would require Congress to fully fund the Department of Veterans Affairs (VA) budget a year in advance by providing budget authority for two fiscal years at a time. The “Putting Veterans Funding First Act” (H.R. 813/S. 932) seeks to ensure all VA services will have timely, predictable funding in an era when continuing resolutions and threats of government shutdowns are all too frequent. Rep. Jeff Miller (Florida), chairman of the House Veterans Affairs Committee (HVAC), is sponsoring the House bill (H.R. 813) that has been approved by the committee and is awaiting action on the House floor. The Senate companion bill (S. 932), sponsored by Senator Mark Begich (Alaska), is awaiting action in the Senate Veterans Affairs Committee.

Rep. Michael Michaud (Maine), HVAC Ranking Member, and Senator John Boozman (Arkansas) urged veterans at the press conference to encourage their legislators to support this measure. Shipmates can do this by using the FRA Action Center at www.fra.org (Click the orange “Advocacy” tab on top of the page).

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House Panel Looks at VA Health Care

The House Veterans Affairs Committee’s (HVAC) Subcommittee on Health recently held an oversight hearing for the Veteran’s Health Administration (VHA). During the hearing, VHA officials were asked about recent media reports that the Greater Los Angeles VA Medical Center inappropriately destroyed exam requests and veterans’ medical records so as to falsely report that they were reducing the disability claims backlog. Dr. Robert Petzel, VA Undersecretary for Health, said that these reports were false and misleading, calling them “scurrilous.” He stated that the VA Medical Center only deleted old requests from veterans who had repeatedly failed to show up for the exams and that medical records in the VA Electronic Health Record System cannot be destroyed.

The Subcommittee also discussed VHA pain management treatments, physician staffing, and VA procurement process.

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VA Announces Secure Veteran Health Identification Cards

The Department of Veterans Affairs (VA) announced the phased rollout of newly designed, more secure Veteran Health Identification Cards (VHIC). Similar to a typical health insurance card, the VHIC displays the veteran’s member ID, a new unique identifier, as well as a plan ID, reflecting the veteran’s enrollment in VA health care.

The card replaces the Veteran Identification Card (VIC), which was introduced in 2004. As part of a phased rollout, which started in February, the card will only be offered to newly enrolled and other veterans who have not been issued a VIC. In early April, VA will begin a three-month effort to automatically issue the more secure VHIC to current VIC holders.

Enrolled veterans can get more information about the VHIC by visiting their VA medical facility enrollment coordinator or the website www.va.gov/healthbenefits/vhic. Veterans who are not enrolled in the VA health care system can apply for enrollment at any time by visiting www.va.gov/healthbenefits/enroll. All veterans can also get help by calling 1-877-222-VETS (8387) or visiting their local VA health care facility.



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