We have two legislative items to update you on:
1. FY 05 National Defense Authorization Act (Conference Report) Guard & Reserve Items of Interest
2. Employers of Guardsmen and Reservists Tax Credits
And one suggested action item:
1. For Employers of Guard and Reserve Tax Credit Provisions: Call or E-mail Senate Finance Committee, and House Ways & Means Congressional member, or Professional Staff Member (PSMs).
Legislative Details:
1. FY 05 NDAA (HR 4200) Conference Report was past, the FY 05 NDAA is on the way to White House for signature; Items of Interest that are included in the bill; http://thomas.loc.gov
· Guard/Reserve Utilization. 37,000 reservists will be permitted to serve voluntarily on active duty for up to three years, or a cumulative of three years over a four year period, before counting against active duty end strengths.
· Naval Reserve cuts. NR was cut by 2,500 and the ANG was cut by 230.
· End Strengths for Selected Reserve: Naval Reserve, 83,400.
· Maximum Number Of Reserve Personnel Authorized To Be On Active Duty For Operational Support; Naval Reserve, 6,200
· Mandatory Retention of Active Duty to Qualify for Retired Pay. Clarifies that reservists with more than 18 years of service who are serving on active duty are not required to be retained on active duty for the purpose of qualifying for retirement.
· SelRes Reenlistment: 14 years changed to 16 years; maximum bonus amount changed to $15,000 and authority given to pay it in a lump sum. SelRes Enlistment: amount raised to $10,000 and allows the member to be paid the bonus while on active duty. Prior Service bonus increased to $3000 max for Ready Reserve and $15,000 for SelRes. MOS Conversion Incentive bonus - $2,000.
· Bonus for certain initial service of commissioned officers in the Selected Reserve. Allows bonus of $6,000 to address critical skills shortages.
· Special rule for computing the high-36 month average for disabled members of Reserve components. Changes calculation from high-36 to last 36 month for retired pay and survivor benefits.
· Reserve Component Requirement for Medical and Dental Readiness Accountability. Directs SecDef to ensure processes for health exams and assessments are in place.
· TRICARE for Guard and Reserve. Conference language creates a new program to provide TRICARE Standard to Guard and Reserve members who have served in active duty since September 11, 2001. For each 90 days of active duty, the reservist can buy, at a 28% cost-share, TRICARE Standard for a year. The conferees also “expect” DoD to do the demonstration project and ask for specifics about implementation.
· Permanent earlier eligibility date for TRICARE benefits for members of Reserve components. 90 days before active duty begins – Sec Def to prepare report NLT 3/1/05 on steps to ensure timely notification.
· Authority for Payment of Additional Amounts Billed by Health Care Providers to Activated Reserve Members. Protects dependents of activated RC members from paying more than the TRICARE maximum allowable cost – “balance billing.”
· Permanent extension of transitional health care benefits and addition of requirement for preseparation physical examination.
· Modification of stated purpose of the Reserve components. Eliminates statutory reference to planned mobilizations.
· Comptroller General assessment of integration of active and reserve components of the Navy.
· Payment of Federal Employee Health Benefit Premiums for Mobilized Federal Employees. Would pay FEHBP premiums for mobilized reservists who are also federal civilian employees
· Family Separation Allowance (FSA) raised from $100 to $250
· Commission of the National Guard and Reserves. Establishes a commission to examine future roles, capabilities, organization and structure, readiness and compensation and benefits, annual report due from SECDEF after Commission concludes.
o Congress will appoint 10 members, and the Secretary of Defense will appoint 3 members to the commission. The commission will study:
· The roles and mission of the National Guard and Reserve components
· Compensation and other benefits including health care
· Reserve component capabilities and how they can best be utilized
· DOD plans implementing the Reserve pay system
· The current organization and structure and how Reserve components are funded for training and operational readiness
· Options for improved compensation and benefits and effects of those on readiness, recruitment, and retention
· Reserve component career paths and methods to improve them
· The adequacy of funding over several fiscal years
o The commission will submit its final report to Congress and the Secretary of Defense no later than one year after its first meeting.
o The Secretary of Defense will annually review (beginning in 2006) the Reserve components for their roles and missions, and compensation and benefits, including health care benefits.
2. Employers of Guardsmen and Reservists - Tax Credits (Senator Landrieu Amendment to S 1637)
Ø The Issue
· The provisions which were passed by the Senate were stripped out during Conference by Congressman Thomas (CA). Senator Landrieu (LA) stalled passage of the bill, and got the provisions promised for consideration in a pending bill HR 1779.
· Over 410,000 members of the National Guard and Reserve have been activated since September 11, 2001. This number continues to grow, as DOD announced this week it will alert another 16,000 Guardsmen and Reservists for possible deployment. Today, 40% of our troops in Iraq are Guardsmen or Reservists. Unfortunately, the GAO estimates 41% of activated Guardsmen and Reservists will face a reduction in salary during activation versus civilian salaries, known as the “Pay Gap.” Thousands of employers have patriotically made up the Pay Gap or even offered full salaries to their activated Guard and Reserve employees. However, most employers simply cannot afford to pay a mobilized employee. Loss in pay leaves great strains on mobilized reservists, and their families. Retention suffers when families suffer. Additionally, small businesses suffer losses in productivity when their employees are activated, and this amendment provides tax credits to help small business and manufacturers hire temporary workers.
Ø The Solution
· Call or send an e-mail to Committee Chairs and Ranking members, or to the Professional Staffs on the Committees. These Tax Credits are for Employers of Guardsman and Reservist. Act today – to let the Congressional members and Professional Staff members on these committees know that they need to keep these provisions in HR 1779 as promised, when Congress returns after the elections, if you act now, it will remain an issue.
· The original provisions passed by the Senate:
· A 50% tax credit to employers continuing to pay activated Guard and Reserve employees, with a cap of $30,000 ($15,000 credit) per employee;
· The credit would cover salaries paid on days when the employee is activated for up to 2 years to cover the entirety of the deployment;
· The credit rewards those employers already going above and beyond what the law mandates; encourages more employers to do so; and alleviates strains on Guard and Reserve families; and
· A $6,000 credit to help small business owners hire temporary workers to fill-in for activated employees and a $10,000 credit for small manufacturers to hire temporary workers.
Legislative Action
1. We strongly urge you to write or contact the Senate Finance Committee and the House Ways and Means Committee and the Professional Staff members on these committees, on keeping the Landrieu Amendment provisions in HR 1779.
v NOTE: Contact your representative, as a citizen; please remember to not use government time or equipment!
For Senate Finance Committee:
Majority Phone: (202) 224-4515 FAX-202-228-0554 Minority Phone: (202) 224-5315
Majority Staff Director – Kolan Davis, or Minority Staff Director Russ Sullivan
http://finance.senate.gov
Send E-mails to: Senator Grassley, or Senator Baucus – www.senate.gov
For House Waysand Means Committee:
Phone: (202) 225-3625 Fax: (202) 225-2610
Chief of Staff: Allison Giles, or Minority Staff Director – Janice Mays
http://waysandmeans.house.gov/
Send E-mails to members: Congressman William Thomas (CA) - www.house.gov/writerep
Congressman Charles Rangel (NY) - www.house.gov/writerep
Example for fax letter:
To a Senator:
To a Representative
The Honorable (full name) The Honorable (full name)
United States Senate House of Representatives
Washington, DC 20510 (OR) Washington, DC 20515
Dear Senator (last name) Dear Mr/Mrs/Ms (Name)
I request that you maintain the Landrieu Amendment provision in HR 1779 that provides tax credit provisions for Employers of Guard and Reserve members.
Very respectfully,
(Your Name), (Your address)
Feel free to forward this e-mail. For those of you who read and you are not already a member, please consider joining the Naval Reserve Association. Check us out at: www.navy-reserve.org or call on our toll free number 866-672-4968.