Archived Issue: March/April 2007

President Submits $2.9 Trillion Budget, Defense Spending Increased but Retirees Tagged to Pay $1.8 Billion More in TRICARE Fees

The president's fiscal year 2008 budget proposes new spending estimated at $2.9 trillion and forecasts a balanced budget by 2012. Discretionary spending in 2008 would make up a little under half the proposed total spending, a total request of approximately $1.1 trillion. Of that amount, the total defense request would be $626.2 billion — including a total of $481.4 billion requested for the regular defense budget and $145.2 billion in emergency funding for the wars in Iraq and Afghanistan.

In making his proposal, the President said, "Our priority is to protect the American people, and our priority is to make sure our troops have what it takes to do their jobs."

The proposal also proposes $1.8 billion in new, yet to be detailed, increases in TRICARE premiums, deductibles and fees. Also the budget includes a 3 percent pay increase for military members, a 4.5 percent increase in housing, and $38.7 billion for health care. The proposal estimates spending in the wars in Iraq and Afghanistan at substantially less than the $170 billion being spent this year.

The total amount of defense funding is the largest in real dollars since the Vietnam War, an increase of 11 percent over current levels. However, in terms of the American economy, defense spending represents approximately 4.3 percent of the nation's gross domestic product (GDP), which is less than spent during the Korea War (13-14.2 percent) and the Vietnam War (7.5-9.5 percent).

Defense spending is almost entirely made up of discretionary dollars rather than mandatory spending, as is the situation for all military and veterans health care programs regardless of the extent of a servicemembers service connected injuries.

Of the $1.1 trillion total request for discretionary spending in fiscal 2008, $626.2 billion would be for the Pentagon and war operations — including a total of $481.4 billion requested for the regular defense budget and $145.2 billion in emergency funding for the wars in Iraq and Afghanistan.

Mandatory spending is spending that is based on formulas written into the law. It's generally fixed (you'd have to change the original law to change the spending amount), so it cannot be adjusted in the appropriations process. Discretionary spending levels are what get set every year by Congress in the budget process. Although laws may set minimum and maximum spending levels, Congress can tighten or expand discretionary spending.

Mandatory spending includes Social Security, Medicare, and federal and military retirement payments. Discretionary spending includes defense, veterans health care, environment programs, international aid and homeland security.

To further distinguish mandatory spending versus discretionary funding — a family's home budget would classify rent and mortgage payments as mandatory spending and movies and restaurants as discretionary spending.

President Bush's FY 2008 Department of Defense Budget Submission

Spending:
• Fiscal Year 2008 Base Budget $481.4 billion;

• Fiscal Year 2008 emergency war funding request $141.7 billion; and,

• FY 2007 supplemental request to cover current war costs $93.4 billion.

Percentage change from 2007:
+11.3 percent

Highlights:
• For the first time the budget contains an administration estimate of war costs, put at $141.7 billion for 2008, which includes $37.6 billion to repair or replace equipment destroyed or damaged in combat and to reset the force to a ready war-fighting condition.

• Budget estimates 3 percent increase pay for military members.

• Would add $4 billion to the effort to counter and reduce the threat in Iraq and Afghanistan from roadside bombs, IEDs, which account for nearly 70 percent of battlefield casualties.

• Would give the Army, which bears the greatest share of the war fighting, the largest percentage increase — 20.4 percent — to $130.1 billion. The Navy budget would rise 9 percent to $119.3 billion; the Air Force would increase 8 percent to $136.6 billion; and the Marine Corps would rise 4.3 percent to $20.5 billion.

• Adds $12 billion to increase the size of the Army and Marines. Active duty Army would grow by 7,000 annually until reaching an increase of 65,000 by 2012 for a total of 547 thousand. The Marine Corps end strength would grow by 5,000 annually until reaching 27,000 by 2011 for a total of 202 thousand.

• Overall weapons-buying budget would increase 20.4 percent over the current spending level to $101.7 billion.

• Would alter TRICARE charges to show "savings" of about $1.8 billion, an amount equal to the Pentagon plan from last year that proposed steep increases in TRICARE premiums, fees, deductibles and prescription drug increases for military retirees and their familes.

President Bush's FY 2008 Department of Veterans Affairs Budget Submission

Spending:
$84.4 billion

Percentage change from 2007:
+13.3

Highlights:
• More than half the budget, $44.9 billion, would fund disability compensation for over 2.2 million veterans disabled in military service, pensions and survivor benefits.

• Would increase money for veterans health care to $34.2 billion, a 6 percent increase over the 2007 funding level of $32.3 billion in the Joint Funding Resolution expected to pass the Senate.

• Proposes higher healthcare enrollment fees for certain veterans without service-connected injuries and with incomes above $50,000 — fee would range from $250 to $750 per year for VA medical services.

• Would nearly double pharmaceutical copays for a 30-day prescription to $15 from the current $8 fee.

• Provides approximately $3 billion to mental health care to veterans returning from Iraq and Afghanistan.

• Reduces veterans medical and prosthetic research activity on conditions prevalent in the veteran population such as, limb loss, mental health, spinal cord injury, brain trauma injury and aging related diseases to $411 million from the $412 million level contained in the anticipated level contained in the 2007 continuing resolution for veterans funding.

The TRICARE Increase

The President's budget proposal includes a request to increase TRICARE fees and copayments for military retirees under the age of 65 and for their dependents. It also contains reference to increasing prescription drug copays for the entire military retiree family, including TRICARE For Life.

Unlike last year, the details of the administration's plan to increase fees and premiums were not made available this year. They remain undisclosed. However, the budget plan does request "savings" of $1.8 billion in the defense health program. What this means is higher and hurtful new costs strapped onto the backs of retirees and their families who will pay more for their earned benefit.

NAUS recognizes there is an upward spiral in healthcare costs. And we understand that programs in the Department of Defense are no different than what we see in the general economy regarding health care. Nevertheless the solution is not to charge retiree families double and triple what each previously paid, especially when these benefits were earned through a long service to the armed defense of our country.

The answer is not to necessarily go first into the pockets of those who defended America and our cherished freedom. There are a number of better ways to solve the problem of increased costs rather than shifting costs for care and driving or prohibiting retirees from using their earned benefits, a contemptible policy from any viewpoint. For instance, we could negotiate with drug manufacturers to secure a better discount for TRICARE.

In addition, our policy makers must give TRICARE the priority it deserves. To secure funding for TRICARE, congressional and administrative officials must recognize that the system has expanded greatly over recent years, but funding clearly has not kept pace. It is absolutely unacceptable for Congress and the Pentagon to expand access to the healthcare program and then turn to squeeze retirees for paying higher costs.

Also, the TRICARE earned benefit should be given the spending priority it deserves. Certainly it should be ahead of a number of lesser, non-defense program areas.

What kind of commitment do we make when we rob one DoD program, TRICARE, to pay for another DoD program, ammunition and Kevlar protection. Putting the absolutely urgent ahead of the important puts our nation's priorities in too narrow a box, especially when we spend millions of dollars on any number of less important programs, including free medical care for illegal aliens flooding our republic.

The administration's proposal sends the wrong message to those who served, those who are serving, and to those thinking about joining up to serve their country. NAUS is firmly convinced that our military community should not be saddled with steeply higher costs in the time of their retirement.

NAUS will work with members of Congress willing to keep faith with those men and women eligible for TRICARE who served our country for 20 years or more.

We live in freedom today because honorable people did not fail us in their military commitment, and we, as a great nation, should not fail them in their time of need. We ask you to let your representative and senators hear your feelings on this issue.

Keep the Promise

Following up on The Keep Our Promise to America's Military Retirees Act, H.R. 602, introduced in the 109th Congress by Rep. Chris Van Hollen (D-MD), NAUS is working to see similar legislation introduced in the new Congress. H.R. 602, which expired with the close of the last Congress, attracted more than 260 cosponsors and would make good on promised and earned health care.

Passage of the bipartisan Keep Our Promise Act would provide for a member of the armed forces who began service before June 7, 1956, and retired after completing a minimum of 20 years, or by reason of a service-connected disability being authorized premium free enrollment under the military health care program without payment of Medicare premiums.

The NAUS supported measure responds to the Federal Court ruling that only Congress, not military recruiters, can authorize the kind of care provided to military retirees, and that only Congress can — and should — make the promises made to the military come into reality. According to the Court, the lifetime, free healthcare promises made by the recruiters and past defense secretaries cannot be considered binding.

While TRICARE works well for many military retirees, the Keep Our Promise bill will get health care to military retirees who are not getting the service they deserve from TRICARE. It will get it to them right away because it does not require another burdensome bureaucracy to be created. The legislation would expand health care coverage for the most elderly retirees who need health care the most by waiving the Medicare Part B premiums required to enroll in TRICARE For Life (TFL). Also the measure or an independent bill could provide health care to ANY military retiree who is not well served by TRICARE, by allowing them to elect the Federal Employees Health Benefits Program (FEHBP) coverage.

The Keep Our Promise to America's Military Retirees Act would also bring down pharmacy costs for military retirees who are physically unable to use TRICARE Network Pharmacies. These provisions will help reduce the cost of health care for military retirees and restore the promise made for their sacrifices in uniformed service.

House Members Re-Introduce Bill to Block Steep Increase in TRICARE Costs

Reps. Chet Edwards (D-TX) and Walter Jones (R-NC) have re-introduced the NAUS-supported Military Retirees Healthcare Protection Act, H.R. 579. If enacted the Edwards-Jones bill would prevent the Defense Department from increasing health care premiums for enlisted and officer retirees and their families under TRICARE, the militaryÕs health insurance system, and require the Administration to request future increases through Congress.

With the Pentagon hawking for steep increases in beneficiaries payments for earned healthcare benefits, NAUS is extremely pleased to see these champions take the actions they have. At this writing, H.R. 579 has already gathered 67 cosponsors.

In introducing the legislation, Rep. Edwards, chairman of the appropriations subcommittee on military construction, said, "I believe that keeping our promise of quality, affordable health care for military retirees is the right thing to do and the smart thing to do. It is right because our nation has a moral obligation to keep our promises to those who have kept their promise to defend our nation. It is the smart thing to do because we cannot attract the best and brightest to fight our war on terrorism in the years ahead if they see us breaking faith with those who served in years past. To win the war on terrorism, we must keep faith with our warriors."

NAUS legislative director Rick Jones said, "The bill would move the question on TRICARE fees to an arena where we have a fighting chance of making our case, and thatÕs better than leaving it to the unelected bureaucrats and economists, or the appointed social engineers and their chosen 'yes' men lodged in the corridors of the Pentagon and alleyways around the nation's Capitol."

The bi-partisan bill would do two main things. First, it would remove the Secretary of Defense's current authority to make virtually unlimited increases in four specific areas: enrollment fees for retired members and survivors in TRICARE Prime; pharmacy co-payments; enrollment fees for the new TRICARE Reserve Select program for our Guard and Reserve families; and co-payments for inpatient care. Second, it will require congressional approval for any future increases in military retiree health care costs.

Last year, the Administration's budget proposal included for the first time a provision to double premiums for senior enlisted and triple for officers, but the final 2007 Defense Authorization bill put off the increases for one year.

This year, the actual details of the Pentagon's plan for TRICARE increases are not detailed in the budget document. DoD simply states that the plan would "align the TRICARE program's annual premiums and deductibles for non-Medicare eligible retirees to typical employer sponsored health insurance plans," which is unclear by anyone's standards.

Without doubt, the clear intention of the Pentagon plan is to require retirees under age 65 to pay a larger share of their health care benefits, adversely affecting a major career incentive and driving hundreds of thousands of retirees out of the system.

NAUS and The Military Coalition (TMC) immediately announced their support for the legislation. As our readers know, TMC is a consortium of 35 military and veterans groups and represents the interests of more than six million members around the world, including active duty, National Guard, Reserve, and retired members and veterans of the seven uniformed services, plus their families and survivors.

NAUS asks you to contact your Representative and ask for support and cosponsorship of H.R. 579. We invite you to use our NAUS-CapWiz system to send your elected representative a message on this very important bill to curb Pentagon excesses.

House Speaker Invites NAUS to Roundtable

In early February, NAUS received an invitation from House Speaker Nancy Pelosi (D-CA) to a roundtable discussion with other military and veterans organizations on issues affecting active duty service members, veterans, military retirees, their families and survivors. The Speaker, House Leader Steny Hoyer and other key leaders engaged in discussion on the administrationÕs repeated attempts to impose a "TRICARE Tax" on retirees under age 65, veterans' health care and claims backlog, military readiness and enactment of Full Concurrent Receipt of both VA Disability Pay and Military Retired Pay.

Taking part in the discussion, NAUS brought forward a number of related important issues including "seamless transition" from military medical care to VA medical care, VA and DoD electronic medical records, and expansion of the Montgomery GI Bill to fully include Guard and Reserve members. NAUS also gave its full endorsement to H.R. 579, a bill introduced by Chet Edwards (D-TX), to remove DoD authority under current law to increase TRICARE fees and co-pays and restore it to our elected officials in Congress.

Among the congressional members in attendance included nearly every member of the key committees and chairmen as well: Ike Skelton, Armed Services Chairman; David Obey, Appropriations Chairman; Bob Filner, Veterans' Affairs Chairman; and John Spratt, Budget Chairman. Also: Chet Edwards, Chairman of Appropriations Subcommittee on Military Personnel; Vic Snyder, Chairman of the Armed Services Personnel Subcommittee; Michael Michaud, Chairman of the Veterans Health Subcommittee; John Hall, Chairman of the Veterans Disabilities Subcommittee; Stephanie Herseth, Chairman of the Veterans Economic Opportunity Subcommittee; and Harry Mitchell, Chairman of the Veterans Oversight Subcommittee.

As readers know, the last Congress failed to pass nine of the eleven appropriations bills for current year funding of federal government programs.

When the new Congress turned to resolve this challenge, as promised, it made NAUS-supported veterans issues a top priority.

NAUS is grateful that one of the first major actions taken by Speaker Pelosi and her leadership team, Majority Leader Steny Hoyer and Appropriations Chairman David Obey, was action to increase funding for the VA by $3.6 billion in the fiscal year 2007 Continuing Resolution. And we appreciate, as well, action taken in the Senate, under the leadership of Leader Harry Reid and Appropriations Chairman Daniel Inouye, to complete the funding bill.

While the 2007 Continuing Resolution bill did not fully fund a number of military accounts, Congress will have the opportunity to address these matters in a supplemental bill scheduled for consideration later this spring. As we go to print, NAUS is pressing Congress to enhance funding for these issues that include military construction and quality of life initiatives to ensure that critical projects designed to assist our men and women in uniform are fully funded.

First Summit of Veterans Service Organizations

In a mid-February meeting, Chairman Bob Filner (D-CA) led Democratic and Republican Members of the House Committee on VeteransÕ Affairs in the first summit of veterans service organizations to discuss legislative priorities for the 110th Congress.

"This summit is intended to bring about productive problem solving tactics on the issues facing our nationÕs veterans," said Filner. "Today's roundtable discussion allowed organizations to participate in identifying proposed priorities for this session's legislative agenda."

Veterans service organizations that participated in the Stakeholders Roundtable Discussion:

National Association for Uniformed Services, The American Legion, Vietnam Veterans of America, Disabled American Veterans, Paralyzed Veterans of America, Veterans of Foreign Wars, Blinded Veterans Association, Jewish War Veterans, Military Order of the Purple Heart, National Coalition for Homeless Veterans, Iraq and Afghanistan Veterans of America, National Association for Black Veterans, and Gold Star Wives.

According to the Chairman, the series of roundtable hearings will continue throughout the 110th Congress. The issues to be addressed include reducing the backlog of veterans' disability claims at the Department of Veterans Affairs, post traumatic stress disorder, updating the GI education bill, and health care services.