[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
HEROES EARNINGS ASSISTANCE
AND RELIEF TAX ACT OF 2007
=======================================================================
JOINT HEARING
before the
SUBCOMMITTEE ON SELECT REVENUE MEASURES
and
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
OCTOBER 17, 2007
__________
Serial No. 110-63
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, California JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan WALLY HERGER, California
JIM MCDERMOTT, Washington DAVE CAMP, Michigan
JOHN LEWIS, Georgia JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee JERRY WELLER, Illinois
XAVIER BECERRA, California KENNY C. HULSHOF, Missouri
LLOYD DOGGETT, Texas RON LEWIS, Kentucky
EARL POMEROY, North Dakota KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon DEVIN NUNES, California
RON KIND, Wisconsin PAT TIBERI, Ohio
BILL PASCRELL JR., New Jersey JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
Janice Mays, Chief Counsel and Staff Director
Brett Loper, Minority Staff Director
______
Subcommittee on Select Revenue Measures
RICHARD E. NEAL, Massachusetts, Chairman
LLOYD DOGGETT, Texas PHIL ENGLISH, Pennsylvania
MIKE THOMPSON, California THOMAS M. REYNOLDS, New York
JOHN B. LARSON, Connecticut ERIC CANTOR, Virginia
ALLYSON Y. SCHWARTZ, Pennsylvania JOHN LINDER, Georgia
JIM MCDERMOTT, Washington PAUL RYAN, Wisconsin
RAHM EMANUEL, Illinois
EARL BLUMENAUER, Oregon
______
Subcommittee on Income Security and Family Support
JIM MCDERMOTT, Washington, Chairman
FORTNEY PETE STARK, California JERRY WELLER, Illinois
ARTUR DAVIS, Alabama WALLY HERGER, California
JOHN LEWIS, Georgia DAVE CAMP, Michigan
MICHAEL R. MCNULTY, New York JON PORTER, Nevada
SHELLEY BERKLEY, Nevada PHIL ENGLISH, Pennsylvania
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
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converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisory of October 10, 2007, announcing the hearing............. 2
WITNESSES
The Honorable Susan A. Davis, a Representative in Congress from
the State of California........................................ 10
The Honorable Nick Lampson, a Representative in Congress from the
State of Texas................................................. 13
The Honorable Walter B. Jones, a Representative in Congress from
the State of North Carolina.................................... 16
David A. Rust, Acting Deputy Commissioner, Disability and Income
Security Programs, Social Security Administration.............. 23
John F. Downing, President and Chief Executive Officer, United
Veterans of America, Inc., Leeds, Massachusetts................ 36
Victoria C. Johnson, widow of Major Alan R. Johnson, U.S. Army
Reserve, Yakima, Washington.................................... 40
John McAuliffe, Connecticut State Director, National Volunteer
Fire Council, Wethersfield, Connecticut........................ 44
Jessica Perdew, Deputy Director of Government Relations, National
Military Family Association, Alexandria, Virginia.............. 50
Michelle D. LaRock, Deputy Director of Program Development,
Division of Veterans' Affairs, State of New York, Albany, New
York........................................................... 54
SUBMISSIONS FOR THE RECORD
California Department of Veterans Affairs, letter................ 61
Corporation for National and Community, statement................ 62
Jerry Patterson, Texas Land Commissioner and Chairman, Texas
Veterans Land Board, statement................................. 62
Lori A. Brown, Military Spouse, statement........................ 64
Max Stier, Partnership for Public Service, statement............. 65
National Multi Housing Council and National Apartment
Association, letter............................................ 66
The Honorable Joe Courtney, a Representative in Congress from the
State of Connecticut, statement................................ 68
The Honorable Tom Davis, a Representative in Congress from the
State of Virginia, statement................................... 69
HEROES EARNINGS ASSISTANCE
AND RELIEF TAX ACT OF 2007
----------
WEDNESDAY, OCTOBER 17, 2007
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Select Revenue Measures,
Subcommittee on Income Security and Family Support,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:02 a.m., in
room 1100, Longworth House Office Building, Hon. Richard E.
Neal (Chairman of the Subcommittee on Select Revenue Measures)
presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON SELECT REVENUE MEASURES
CONTACT: (202) 225-5522
FOR IMMEDIATE RELEASE
October 10, 2007
SRM-7
Neal and McDermott Announce a Joint Hearing on
the ``Heroes Earnings Assistance and
Relief Tax Act of 2007''
Congressman Richard Neal (D-MA), Chairman of the Subcommittee on
Select Revenue Measures, and Congressman Jim McDermott (D-WA), Chairman
of the Subcommittee on Income Security and Family Support, today
announced a joint hearing on legislation soon to be introduced H.R. __
, called the ``Heroes Earnings Assistance and Relief Tax Act of 2007.''
The hearing will take place on Wednesday, October 17, 2007, at 10:00
a.m. in room 1100, Longworth House Office Building.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
The Committee has jurisdiction over certain tax and other
provisions that are intended to benefit our military, volunteer
firefighters, and other service volunteers. Some of the tax provisions
are set to expire at the end of the year and must be addressed. Other
provisions need to be simplified.
The ``Heroes Earnings Assistance and Relief Tax Act'' would make
the following changes: (1) make permanent the provision that permits
active duty individuals to make penalty-free withdrawals from
retirement plans; (2) make permanent and modify qualified mortgage
bonds used to finance residences for veterans; (3) make permanent the
ability to include combat pay as earned income for purposes of the
Earned Income Tax Credit (EITC); (4) extend the limitation period for
filing tax refund claims resulting from Department of Veterans Affairs
(DVA) disability determinations; (5) make permanent the authority of
the Social Security Administration to disclose tax return information
to the Department of Veterans Affairs for purpose of determining
eligibility for certain veteran programs; (6) permit recipients of
military death benefit gratuities to roll over the amounts received,
tax free, to a Roth IRA or an Education Savings Account; (7) permit an
employer to make certain contributions to a qualified plan on behalf of
an employee who was killed in combat; (8) for purposes of meeting the
requirements of the Uniformed Services Employment and Reemployment
Rights Act (USERRA), treat the day prior to the date of death as the
date the employee returned to work for purpose of triggering payment of
survivor benefits (or other beneficiary payments) under a qualified
plan; (9) treat differential wage payments made by an employer to an
employee who becomes active duty members of the uniformed services as
wages for retirement plan purposes; (10) clarify the tax treatment for
certain rebates of deductible State and local taxes for volunteer
firefighters; (11) exclude certain reimbursed expenses that are
incurred in the line of duty for volunteer firefighters; (12) clarify
the application of the ``5-year requirement with respect to the sale of
a principal residence for Peace Corps volunteers''; (13) provide
equitable treatment of most military cash allowances, beyond basic pay,
for purpose of determining eligibility and benefit amounts for military
families; (14) disregard certain annuity payments paid specifically to
blind veterans for purpose of determining Supplemental Security Income
(SSI) eligibility and benefits under the SSI program; and (15)
disregard any benefits or allowances paid to Americorps volunteers for
purpose of determining eligibility and benefits under the SSI program.
In announcing the hearing, Chairman Neal stated, ``We cannot forget
the everyday needs of our military families and other American heroes
serving their country honorably in Iraq and around the globe. I believe
we have an obligation to examine the Internal Revenue Code to make
certain it is working in an effective way for these brave individuals.
This proposed legislation is another example of our commitment to the
men and women who wear the uniform of the United States armed forces
each day with dedication and distinction.''
Chairman McDermott stated, ``We don't want to leave those who
defend our country defenseless against being hit by unfair taxes or
reductions in needed benefits, and we are going to serve our military
heroes in this legislation by correcting inequities that are simply
inconceivable.''
FOCUS OF THE HEARING:
The hearing will focus on legislative proposals designed to help
members of our armed forces and their families, as well as others
volunteering in service to America.
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noted above.
Chairman NEAL. Let me call this hearing to order.
This country is fortunate that so many soldiers and sailors
have been willing to sacrifice for our defense. That sacrifice
often comes in different forms. For the Reservist or member of
the National Guard who is called up to duty for extended
periods, it can mean stepping off the career ladder or
shuttering their own business. For the husband or wife of an
active duty soldier, sacrifice can mean managing the household
as a single parent. As the mother, father, or child of someone
serving our country, sacrifice can mean losing a loved one.
We have all witnessed the depth of this sacrifice as we
tour local military hospitals, visit veterans assistance
centers, or attend funerals. Just last week, another young son
from Massachusetts was lost. Army Private Kenneth Iwasinski was
killed by an IED in Baghdad. He was scheduled to return home
earlier this year, but his tour was extended. Kenneth was the
78th fallen hero from my home State, and I extend my deepest
sympathies to his parents, Tracy Taylor of Chickami,
Massachusetts, and Dominic Iwasinski of Belchertown,
Massachusetts.
You do not have to look far in any city or town in America
to find extraordinary service and sacrifice for our country. It
has been said that in war there are no unwounded soldiers. This
could probably apply to many military families as well.
It is truly a shared sacrifice, even when only one member
of the family has volunteered their service. The family can
suffer financially as well as emotionally during extended
tours. It is the responsibility of this Committee to ensure
that the Tax Code and other income security provisions do not
create problems, but rather solve them so that families and
soldiers can heal emotionally, physically, and financially and
move on with their lives.
Today the Select Revenue Measures Subcommittee, along with
the Income Security and Family Support Subcommittee, will hear
from a variety of witnesses on draft legislation to extend,
modify, and create a number of incentives to assist these
families that have sacrificed so much for us.
This legislation would make permanent the current provision
waiving the 10 percent withdrawal penalty for those called up
to active duty who need to tap into retirement accounts. We
have Representative Lampson to thank for this one, and he will
be testifying before us today. The drafts would also allow
families to roll over amounts received as death gratuity
payments in Roth IRAs or Education Savings Accounts, an idea
from Representative Walter Jones, who will be before us as
well.
The draft makes a number of changes relating to
Supplemental Security Income, or SSI, eligibility, military
service, which is based upon suggestions from Representative
Susan Davis, who joins us today, and Representative Tom
Reynolds, a senior Member of this Committee.
Already a number of Members, including Representative Nancy
Boyda, Representative Zach Space, Representatives Gabrielle
Giffords and Bruce Braley, have filed legislation to make
permanent the special rule treating combat pay as earned income
for purposes of the Earned Income Tax Credit, or EITC.
The draft bill we are discussing today includes that
important provision, and we thank those Members for championing
this issue. The draft bill will provide a number of changes to
allow employers the flexibility to extend benefits to workers
called up for duty, and will expand certain provisions that
provide mortgage assistance to veterans through qualified bond
programs.
The draft bill also includes incentives for those who
volunteer their service Stateside, such as firefighters and
emergency responders, as has been suggested in legislation by
Mr. Larson.
As you can see, we have reviewed a number of good
suggestions from Members of the House and this Committee, and
we are still doing so. It is our hope that a final bill will be
a bipartisan product that the full Committee can mark up in the
next few weeks.
To assist us today in understanding all of these
provisions, we welcome today our first panel, Representative
Davis, Representative Lampson, and Representative Jones.
Our second panel will include Mr. David Rust, the Acting
Deputy Commissioner for Disability and Income Security Programs
at the Social Security Administration. Mr. Rust will discuss
the SSI provisions under consideration.
And on our third panel, we will welcome Jack Downing,
President and Chief Executive Officer of the United Veterans of
America, based in Leeds, Massachusetts. Mr. Downing heads an
early intervention program to assist recently returned veterans
in transitioning back to the workforce.
We will also hear from Ms. Victoria Johnson of Yakima,
Washington, who lost her husband earlier this year and almost
lost his retirement savings as well. We will hear from Mr. John
McAuliffe, the Connecticut State Director of the National
Volunteer Fire Council from Wethersfield, Connecticut.
And we will hear from Ms. Jessica Perdew representing the
National Military Family Association in Alexandria, Virginia.
From Albany, New York, we are pleased to be joined by Ms.
Michelle LaRock, the Deputy Director of Program Development at
the Division of Veterans' Affairs, who will discuss the State
annuity program for line veterans.
And now I would like to recognize and turn to Chairman
McDermott for his opening statement. Mr. McDermott.
Mr. MCDERMOTT. Thank you very much, Mr. Chairman.
The brave women and men serving in our armed forces deserve
nothing less than our respect and full support for the
tremendous sacrifices that they and their families make as they
honorably defend their country. Whether they are completing
their tours of duty or returning home with a service-related
injury, they need to know that their government is on their
side.
The last thing they need and deserve is to be hit with
unfair taxes and reductions in Federal benefits during their
time of need. It is inconceivable to me that some military
servicemembers and their families are not getting the benefits
they are entitled to because of disparate treatment in the Tax
Code or a Federal disability program. They earn every benefit
that is available to them, many times over. We can and should
enact legislation quickly to ensure that military families are
treated fairly.
The purpose of this hearing, as you have heard, is to
consider proposals that would provide greater equity in the Tax
Code and in the Supplemental Security Income program for the
men and women serving in the armed forces and their families,
and also ensure assistance to other Americans who selflessly
volunteer to serve communities across this Nation and the
world.
Chairman Rangel is preparing legislation he will introduce
soon that will eliminate many of the inequities that currently
exist in the tax law and the Supplemental Security Income
program that create hardships for military personnel and
volunteers. The proposal, which will be titled the Heroes
Earnings Assistance and Relief Tax Act, or the HEART Act, would
bring fair tax treatment to those individuals and their
families in a number of ways.
For example, the proposal would permanently extend the
option for military families to include combat pay as earned
income for the purposes of calculating the Earned Income Tax
Credit. This option is currently scheduled to sunset at the end
of the current year. The Earned Income Tax Credit provides
financial assistance for vulnerable military families who
experience financial hardships as a result of a servicemember's
deployment.
The financial support would provide a servicemember with
the comfort of knowing that his or her family is receiving some
additional income to assist them while they are away defending
their country. This is the least we can do for families who are
sacrificing so much.
The Chairman's proposal would also make several
improvements to the Supplemental Security Income program,
commonly called SSI, to better assist servicemembers and their
families. The SSI program provides critical benefits to
millions of elderly and disabled Americans who have low incomes
and limited resources, including military servicemembers with
disabled spouses or children.
Some military families who rely on SSI for critical
financial support may lose a portion of their benefits because
of the unfair treatment of certain types of military cash
allowances in determining a disabled spouse or child's
eligibility for assistance under the program.
Unlike civilian wages, some military payments are subject
to less favorable treatment under the SSI program. Most
allowances and bonuses paid to servicemembers beyond their
basic pay are counted as unearned income under the SSI program.
This treatment effectively reduces, and in some cases
eliminates, SSI benefits for thousands of military families.
To address this inequity, earlier this year I joined with
Representative Susan Davis from San Diego in introducing
legislation to eliminate the unfair treatment of military
allowances when calculating SSI program eligibility and benefit
amounts. The bill would result in higher benefit amounts and
would increase access to the program for some servicemembers
and their families.
I am pleased that Chairman Rangel is planning to include
provisions from that bill into the military package that he is
preparing. This change will go a long way in helping
servicemembers who need the financial support, and the
additional health coverage that generally comes with it, to
care for a disabled member of their family. I am also pleased
that our colleague, Ms. Davis, is here with us today to lend
her support for these important provisions.
The Chairman's plan would also include bipartisan
legislation that was introduced by Representative Tom Reynolds
that would remove penalties for blind veterans who receive
State annuity payments. The Act would exempt State annuities
that are paid specifically to blind veterans from the tests
that are used to determine eligibility and benefits under SSI.
Some AmeriCorps volunteers currently have benefits under
this program excluded from SSI eligibility rules, while others
do not. The Chairman's proposal would end this disparity by
exempting payments made to all AmeriCorps volunteers when
determining eligibility and benefits. This recommendation comes
from the Social Security Administration and from the
Corporation for National and Community Service.
And last, the bill includes legislation that Mr. Van Hollen
and I introduced to clarify the application of the 5-year
requirement to the sale of a principal residence by a Peace
Corps volunteer. The pending legislation is an important piece
of work that will improve the lives of members of the armed
forces and their families. It will also benefit those who
volunteer to serve in the United States.
And I am pleased to join my colleague, Congressman Neal
from Massachusetts, in convening this hearing to discuss these
important bipartisan proposals on behalf of the Committee. And
I look forward to working with my colleagues on both sides to
ensure that military personnel and other volunteers are treated
equitably in our Tax Code and our Federal benefits. Thank you.
Chairman NEAL. Thank you, Mr. Chairman.
Now I would like to recognize our friend Mr. English, the
Ranking Member of the Select Revenue Measures Subcommittee, for
his opening statement. Mr. English.
Mr. ENGLISH. I thank you, Mr. Chairman, for calling this
hearing today. I think it is fair to say that we cannot express
enough the tremendous debt of gratitude that we owe to the
brave men and women who defend our freedoms on a daily basis.
I have been privileged to have had the opportunity to
support both our active duty military and the veterans who no
longer wear the uniform. I am very grateful in this job to have
been able to support legislation expanding quality of life
improvements and pay increases for soldiers, as well as
expansions of the VA medical care for veterans.
And while many of these provisions are clearly not in the
jurisdiction of this Committee, it is clear that the Tax Code
does have an important role to play in addressing the needs of
active duty and retired servicemembers. Today's hearing I think
is a timely attempt to explore some of the ways the tax system
is helping, and in some cases where it is not, and perhaps some
opportunities for us to improve tax policy in this area.
I am looking forward to the testimony, and also to working
with you, Mr. Chairman and others, to identify substantial
solutions to real-life problems facing our military.
One of the problems I hope we will have a chance to examine
is the shortage of on-base housing. This shortage forces the
military to offer a housing allowance to soldiers who must find
adequate housing off base. It is not clear to me that there is
meaningful difference between these housing allowances and
Section 8 vouchers for low-income families, which are also
offered by the Federal Government.
Yet strangely, under current law, the Tax Code perversely
discriminates against military personnel attempting to find
off-base housing. Specifically, under current law, Section 8
vouchers do not count as income for purposes of determining
whether an individual meets the income limits for living in a
rent-subsidized low-income housing tax credit facility.
Yet, the law says that the recipients of the military
housing allowance must include the value of the allowance in
determining income for the low-income housing tax credit. This
counterintuitive rule is unfair and discriminates against those
who choose to serve their country. There is no reason to treat
recipients of Section 8 vouchers more favorably than members of
our military, Mr. Chairman.
I am grateful for those, including Mr. Moran of Kansas, who
have gotten involved in this issue. And I hope that we will be
able to work together in the coming days and weeks to address
this serious problem. I can think of no better place to do so
than in the context of this bill.
Again, I thank you, and I thank the Committee, for moving
forward in this area. And I yield back the balance of my time.
Chairman NEAL. Thank you, Mr. English.
And now let me recognize Mr. Weller, the Ranking Member of
the Income Security and Family Support Subcommittee, for his
opening statement. Mr. Weller.
Mr. WELLER. Thank you, Mr. Chairman. I appreciate the
opportunity to participate in this very important hearing. I
also want to welcome my colleagues who are not Members of this
Committee who are joining us today, all three friends, and
welcome them for testifying before our two Subcommittees this
morning.
This is an important hearing, Mr. Chairman, in which we
will review the tax and benefit assistance provided today to
support active and retired military families, amongst others.
We should always be looking for ways to ensure that families
who make these sacrifices receive appropriate and timely
support. That will provide more help to current veterans, as
well as active duty families.
But it will also encourage more young people to make these
sort of sacrifices for our country in the future. We must
always honor those who sacrifice and defend our freedoms. Those
are our military men and women, as well as our veterans.
So I thank you for calling this hearing. I look forward to
our continued bipartisan work on these issues in the weeks
ahead.
At this time I would like to yield to my colleague and
friend, Representative Tom Reynolds, who has authored numerous
bills designed to improve the assistance provided to blind
veterans in New York and other States. This assistance flows to
the SSI program that operates under the jurisdiction of the
Income Security and Family Support Subcommittee. The proposal
before us includes a modified version of Mr. Reynolds'
proposal. Mr. Reynolds.
Mr. REYNOLDS. I thank my friend for yielding me this time.
And I thank both Chairman Neal and Chairman McDermott, as well
as Ranking Members English and Weller, for holding this
important hearing.
Mr. Chairman, we come together this morning not as
Democrats or Republicans, but as Americans. We are united in
our respect for those who wear the uniform of the United States
armed forces, and we are united in our desire to ensure that
Federal programs within the Committee's jurisdiction, from Tax
Code to the SSI program, work effectively for members of the
military, veterans, and their families.
I would like to highlight two specific provisions in the
Committee's draft bill that have been of particular interest to
me during my time with Congress. The first provision, section
202, is modeled on legislation, the Blind Veterans Fairness
Act, that I first introduced in the year 2000.
My legislation would correct a problem in the Federal SSI
rules that affect blind veterans in four States, New York, New
Jersey, Pennsylvania, and Massachusetts, that provide blind
veterans modest annuities in recognition for substantial
sacrifices they have made in serving our country. We will hear
more about one of those State annuity programs during our third
panel when I introduce Michelle LaRock of New York's Division
of Veterans' Affairs.
Regrettably, under current Federal law, these State
annuities actually reduce SSI payments for which blind veterans
could otherwise be eligible. I do not need to remind my
colleagues who serve on the Income Security Subcommittee that
SSI beneficiaries are among the poorest of the poor in our
country. The absolute last group of people the Federal
Government should be barring from the program are veterans who
gave their sight so the rest of us might be free.
As in years past, the bill I have introduced in the 110th
Congress, H.R. 649, has enjoyed bipartisan support among my
Committee colleagues, including Chairman Neal, Mr. McNulty, and
Mr. Porter. I would also like to thank Chairman Rangel for his
cosponsorship of prior versions of this bill, and I look
forward to working closely with him to see that this proposed
legislation finally is enacted into law. I would ask unanimous
consent that a letter from the Blinded Veterans Association
endorsing H.R. 649 be entered into the record.
Let me turn now to a separate provision in section 104 of
the draft bill, which would permanently allow penalty-free
withdrawals from IRA 401(k)s and other retirement funds for
Reservists and National Guardsmen called to active duty. As we
know, when Guardsmen or Reservists are called up, they often
face significant reductions in pay compared to their civilian
salaries, putting an economic strain on their families.
To lessen this economic hardship, many of them choose to
draw down on their retirement funds. Unfortunately, under prior
law they face a 10 percent early withdrawal tax when they do
so, and they face restrictions on making repayments to their
retirement funds upon returning from active duty. Last year's
Pension Protection Act provided relief from the 10 percent
penalty tax and permitted unlimited repayments within 2 years
after leaving active duty, but only for Guardsmen or Reservists
called to active duty before December 1, 2007.
To ensure this important relief remains available on a
permanent basis going forward, I introduced H.R. 867, the
Guardsmen and Reservist Tax Fairness Act, on February 7th of
this year. This legislation has also attracted a bipartisan
group of cosponsors, as well as endorsement from several
leading VSOs. And I ask unanimous consent to make those
endorsement letters part of the record as well.
In closing, Mr. Chairman, I understand that we will be
receiving testimony this morning from one of our colleagues,
Mr. Lampson, about a bill he introduced on September 19th, just
a few weeks ago, which is essentially identical to H.R. 867. I
am delighted to see that my idea is gaining additional traction
both by Democrats and Republicans, and I welcome support from
any Member who is willing to help get this done. For me, this
issue isn't about who can claim the most credit for eliminating
the early withdrawal tax. It is about doing what is right for
Guardsmen and Reservists.
Mr. Chairman, I hope today's hearing will be a springboard
for bipartisan action on these two important provisions that
will find a way to make these changes without taxing ourselves
to death somewhere else to pay for them. I thank the gentleman
from Illinois for his courtesy in yielding me the time, and I
yield back.
Mr. WELLER. Claiming my time, and I yield back. Thank you,
Mr. Chairman.
Chairman NEAL. Thank you.
I thank the gentleman from New York, and without objection,
the letters he referred to will be part of the record.
Mr. REYNOLDS. I thank the Chairman.
Chairman NEAL. Without objection, any other Member wishing
to submit an opening statement for the record may do so. And
without objection, all written statements by witnesses will be
made part of the record in full.
Ms. Davis, Mr. Lampson, Mr. Jones, welcome to the
Committee. Ms. Davis, would you please begin.
STATEMENT OF THE HONORABLE SUSAN A. DAVIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. DAVIS. Chairman Neal, Chairman McDermott, Ranking
Member English, and Ranking Member Weller, thank you very much
for convening today's joint hearing on the Tax Code's
discriminatory treatment of servicemembers. I certainly
appreciate having this opportunity to discuss how incorporating
the language from the McDermott-Davis bill, H.R. 337, into the
Heroes Earnings Assistance and Relief Act, the HEART Act, will
help remedy one area of inequality.
I would also like to thank the Members of the Committee for
their effort to include provisions supporting Qualified
Veterans Mortgage Bonds, or QVMB bonds, to promote
homeownership for former servicemembers. Those loans have
helped thousands of veterans in California and other eligible
States purchase homes.
Correcting the flaw in current law that prevents veterans
who signed up for military service after 1977 would be an
enormous step forward. Those returning from Iraq and
Afghanistan would have greater opportunities to purchase homes,
especially in California's high-cost real estate market. Again,
I want to thank you for finally addressing the inequities in
the QVMB program and for setting reasonable bond limits for the
States that participate in this valuable program.
Today's hearing illustrates an important point, and that is
that we have a responsibility to care for those who have chosen
to serve their country. Just as these brave men and women are
working to protect our Nation, we must likewise protect them
and their loved ones through the laws and the policies that we
enact.
I want to turn to SSI eligibility and H.R. 337. The current
Supplemental Security Income, SSI, regulations are causing some
military families a great deal of frustration, and in some
cases preventing them from obtaining benefits. As you know, SSI
is a means tested income assistance program that also
facilitates access to valuable services such as Medicaid.
Without SSI, some special needs families would not be able to
cover their medical expenses.
However, members of the armed forces face a unique risk of
losing SSI eligibility. Under the program's rules, wages
receive preferential treatment, the 50 percent disregard, as
earned income, resulting in a lower countable income and,
therefore, a higher SSI benefit. This process of income
determination is generally straightforward, as Chairman
McDermott pointed out, for the civilian population.
But the intricate military pay and allowance system
complicates the income determination process. Military members
must contend with different treatment for items considered
earned income or unearned income. Under current rules, only
basic pay and continental United States cost of living
allowance, the CONUS COLA, are considered earned income.
Unfortunately, there are more than 30 types of military pay
that are treated as unearned income and result in a higher
countable income. It is a bit counterintuitive as we look at
this. But that is really what is happening to these military
families.
The language from the Military Families Financial Security
Act, H.R. 337, changes how the SSA calculates income for SSI
eligibility by treating most military compensation as earned
income. This very simple change will help families remain
eligible for SSI benefits and, overall, simplify the
Administration of this program.
In addition, the language in H.R. 337 would codify current
treatment of Basic Allowance for Housing, the BAH, to the rules
for in-kind support and maintenance. Treating BAH this way
would be more favorable for income determination purposes.
I wanted to just mention a few comments that I have had
from military families because I have heard from many of them
who are struggling with the current SSI rules. And I think a
few of their comments are telling.
Lori Brown from northern San Diego has three children. Her
husband, a 13-year Marine, is active duty. Her two boys receive
SSI benefits. Dakota, 13, has Asperger's syndrome, and Hunter,
age 7, cerebral palsy and epilepsy. And she wrote the
following:
``We have had many ups and downs with SSI over the years.
The way the military leave and earnings statement looks,
everything is broken down and itemized for accounting purposes.
But civilian pay stubs are looked at as earned income. This
practice puts us at a great disadvantage. All the military
families are looking for is equal rules for all, civilian and
military, no better, no worse.''
In closing, there is no doubt that the men and women who
serve in our armed forces are everyday heroes. However, their
service is even more inspiring when we realize many of these
men and women are also trying to raise children and take care
of their families.
As Chair of the House Armed Services Subcommittee on
Military Personnel and a former military spouse, the subject of
military families has always been dear and near to my heart.
The provisions from H.R. 337 and those dealing with veterans
mortgage bonds are fair, overdue, and demonstrate our Nation's
appreciation for our military families and veterans. These
changes will give servicemembers a bit more peace of mind from
knowing that payment for their duties will not be jeopardizing
their families' eligibility for SSI benefits and related
services.
Thank you.
[The prepared statement of Ms. Davis follows:]
Prepared Statement of The Honorable Susan A. Davis,
a Representative in Congress from the State of California
Chairman McDermott, Chairman Neal and Distinguished Members of the
Subcommittees,
Thank you for convening today's joint hearing on the Tax Code's
discriminatory treatment of servicemembers.
I appreciate having this opportunity to discuss how incorporating
the language from the McDermott-Davis bill, H.R. 337, into the Heroes
Earnings Assistance and Relief Tax (HEART) Act will help remedy one
area of inequality.
Today's hearing also illustrates an important point, that is, we
have a responsibility to care for those who have chosen to serve their
country--just as these brave men and women are working to protect our
Nation, we must likewise protect them and their loved ones through the
laws and policies we enact.
SSI Eligibility and H.R. 337
Current Supplemental Security Income (SSI) regulations are causing
some military families a great deal of frustration and--in some cases--
preventing them from obtaining benefits.
As you know, SSI is a means-tested income assistance program that
also facilitates access to valuable services such as Medicaid.
Without SSI, some special-needs families would not be able to cover
their medical expenses. However, members of the armed forces face a
unique risk of losing SSI eligibility.
Under the program's rules, wages receive preferential treatment
(50% disregard) as ``earned income'' resulting in a lower countable
income and, therefore, a higher SSI benefit. This process of income
determination is a generally straightforward one for the civilian
population.
The intricate military pay and allowance system complicates the
income determination process. Military members must contend with
different treatment for items considered ``earned income'' or
``unearned income.'' Under current rules, only basic pay and
Continental United States Cost of Living Allowance (CONUS COLA) are
considered earned income. Unfortunately, there are more than 30 types
of military pay that are treated as ``unearned income'' and result in a
higher countable income.
The language from the Military Families Financial Security Act,
H.R. 337, changes how the SSA calculates income for SSI eligibility by
treating most military compensation as earned income. This simple
change will keep families eligible for SSI benefits and simplify the
administration of this program.
In addition, the language in H.R. 337 would codify current
treatment of Basic Allowance for Housing (BAH) to the rules for in-kind
support and maintenance. Treating BAH this way would be more favorable
for income determination purposes.
Comments from Military Families
Chairman McDermott and Chairman Neal, I have heard from numerous
families who are struggling with the current SSI rules and want to
share a few of their comments with you.
Lori Brown from northern San Diego has three children and her
husband, a 13-year Marine, is active duty. Her two boys receive SSI
benefits. Dakota, 13, has Asperger's Syndrome and Hunter, 7, cerebral
palsy and epilepsy.
She wrote the following:
``We have had many ups and downs with SSI over the years. The
way the military LES (Leave and Earnings Statement) looks
everything is broken down and itemized for accounting purposes,
but civilian's pay stubs are looked at as all ``earned''
income. This practice puts us at a great disadvantage. All the
military families are looking for is equal rules for all
civilian and military, no better no worse.''
Anne Hoag from Watertown, NY has a 4\1/2\-year-old son, Liam, who
did not qualify for SSI benefits because of the family's income. She
shared the following about the current income determination process.
``This system is totally unfair and unjust for my son. If we
made the same amount of money and were civilians, he would
qualify for SSI.
Being a military family is hard. Being a family with a
disabled member is hard. Being both is even harder, and these
families, these kids are suffering due to temporary
circumstances. SSI money would make a huge difference in the
life of my child.''
In Closing
There is no doubt that the men and women who serve in our armed
forces are everyday heroes. However, their service is even more
inspiring when one realizes that many of these men and women are also
trying to raise children and take care of their families.
As Chair of the House Armed Services Subcommittee on Military
Personnel and a former military spouse, the subject of military
families has long been dear and near to my heart.
Lee Iacocca once said, ``The only rock I know that stays steady,
the only institution I know that works, is the family.'' He could have
been talking about military families.
The provisions from H.R. 337 are fair, overdue and demonstrate our
Nation's appreciation for our military families. These changes will
give servicemembers peace of mind from knowing that their duties will
not jeopardize their families' eligibility for SSI benefits and related
services.
Chairman NEAL. The gentleman from Texas, Mr. Lampson, is
recognized for testimony.
STATEMENT OF THE HONORABLE NICK LAMPSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. LAMPSON. Thank you, Chairman Neal, Chairman McDermott,
Ranking Members English and Weller, distinguished Members of
the Committee. It is an honor to be able to come and offer
testimony this morning, and I certainly appreciate you calling
this important hearing.
Two weeks ago I announced a tax package that I developed to
benefit all of our country's middle class, the America's Middle
Class Tax Relief Plan. And included in that plan was H.R. 3594,
America's Heroes Tax Relief Act, a bill that permits soldiers
called to active military duty to deduct from the individual
retirement accounts, their 401(k) plans or 403(b) tax-sheltered
annuities, without having to pay the 10 percent early deduction
tax the IRS levies on withdrawals taken before 59\1/2\.
The Heroes Earnings Assistance and Relief Tax Act, HEART,
that we are discussing today includes my legislation and many
other provisions that help our soldiers and their families. And
I am proud to support this bill that takes into consideration
the financial burdens placed on our men and women in uniform
serving bravely throughout the world, and works to provide for
their financial security by cutting taxes and ensuring the
receipt of important benefits that our military families depend
on.
Southeast Texas has the largest population of veterans in
the Nation. Their service is something that we do not take for
granted. National Guardsmen and Reservists throughout the world
serve the United States honorably and bravely, often while
enduring personal financial hardship. This legislation is just
a small way to show our gratitude for their service and their
sacrifice while easing the financial strain that can be put on
them and their families.
For military Reservists and National Guard members who are
deployed and sent away from their usual job, the strain can be
compounded. Since the war in Iraq began, statistics have shown
that more than a third of these soldiers experience a cut in
pay when they are called to active duty.
Perhaps the hardest hit of this group are small business
owners and self-employed workers, who account for about 6
percent of the Reservists. Many of these individuals lose
customers. They fall behind on their bills or are in some
instances forced into bankruptcy. This is simply unacceptable,
and the Heroes Earnings Assistance and Relief Tax Act will
help.
Veterans in my district are grateful for this legislation.
Those who served in previous conflicts sympathize with the
difficulties that our troops face when they return home, and
are always thankful when we can make their time serving in
active duty easier for them and for their families.
Temporary relief from this tax was enacted through H.R. 4
in the 109th Congress, which became public law in August 2006.
But it didn't go far enough. Through the Heroes Earnings
Assistance and Relief Tax Act, penalty-free withdrawals will
become permanent, which will enable our heroes to count on a
relief of financial burden on their families.
This provision will enable military families in Texas and
elsewhere to permanently make withdrawals from their retirement
accounts to ensure their financial security while loved ones
are serving our Nation. More Reserve soldiers than ever before
hold white-collar jobs. And for many of these individuals, time
away from home can harm relationships with customers and
clients that took years to cultivate.
Often, soldiers are called up to active duty and need extra
funds to ensure their family is supported when they are sent
overseas to protect our Nation. Our soldiers risk their lives
defending our freedom and ensuring our Nation's security. They
should not be penalized by the IRS while doing it.
Again, I want to thank you for initiating this hearing on
this important legislation that will help the families of our
brave National Guardsmen and Reservists in combat continue to
live their everyday lives with as little added stress as
possible while their loved ones are overseas. I thank you, Mr.
Chairman, and yield back.
[The prepared statement of Mr. Lampson follows:]
Prepared Statement of The Honorable Nick Lampson,
a Representative in Congress from the State of Texas
I am pleased to offer this testimony, and I thank the Chairmen and
Members of the Committee for calling this important hearing.
Two weeks ago I announced a tax cut package I developed to benefit
all of our country's middle-class, America's Middle-Class Tax Relief
Plan. Included in my plan was, H.R. 3594, America's Heroes Tax Relief
Act, a bill that permits soldiers called to active military duty to
deduct from their individual retirement accounts, their 401(k) plans
and 403(b) tax-sheltered annuities, without having to pay the 10
percent early-deduction tax the IRS levies on withdrawals taken before
age 59 and a half.
The ``Heroes Earnings Assistance and Relief Tax Act'' that we are
discussing today includes my legislation and many other provisions that
help our soldiers and their families. I am proud to support this bill
that takes into consideration the financial burdens placed on our men
and women in uniform serving bravely throughout the world, and works to
provide for their financial security by cutting taxes and ensuring the
receipt of important benefits that our military families depend upon.
Southeast Texas has the largest population of veterans in the
Nation. Their service is something we do not take for granted. National
Guardsmen and Reservists throughout the world serve the United States
honorably and bravely, often while enduring personal financial
hardship. This legislation is just a small way to show our gratitude
for their service and sacrifice while easing the financial strain that
can be put on them and their families.
For military Reservists and National Guard members who are deployed
and sent away from their usual job the strain can be compounded. Since
the war in Iraq began, statistics have shown that more than a third of
these soldiers experience a cut in pay when they're called to active
duty.
Perhaps the hardest hit of this group are small business owners and
self-employed workers, who account for about 6 percent of reservists.
Many of these individuals lose customers, fall behind on their bills or
are forced to declare bankruptcy. This is simply unacceptable and the
``Heroes Earnings Assistance and Relief Tax Act'' will help.
Veterans in my district are grateful for this legislation. Those
who served in previous conflicts sympathize with the difficulties our
troops face when they return home and are always thankful when we can
make their time serving in active duty easier for them and their
families.
Temporary relief from this tax was enacted through H.R. 4 in the
109th Congress, which became public law in August 2006, but it didn't
go far enough. Through the ``Heroes Earnings Assistance and Relief Tax
Act,'' penalty-free withdrawals will become permanent which will enable
our heroes to count on a relief of financial burden on their families.
This provision will enable military families in Texas and elsewhere
to permanently make withdrawals from their retirement accounts to
ensure their financial security while loved ones are serving our
Nation.
More reserve soldiers than ever before hold white-collar jobs. For
many of these individuals, time away from home can harm relationships
with customers and clients that took years to cultivate.
Often, soldiers called up to active duty need extra funds to ensure
their family is supported when they are sent overseas to protect our
Nation. Our soldiers risk their lives defending our freedom and
ensuring our Nation's security. They should not be penalized by the IRS
while doing it.
Again, I would like to thank you for initiating this hearing on
this important legislation that will help the families of our brave
National Guardsmen and Reservists in combat continue to live their
everyday lives with as little added stress as possible while their
loved ones are overseas.
Chairman NEAL. Thank you, Mr. Lampson.
Now I would like to recognize our friend Mr. Jones from
North Carolina.
STATEMENT OF THE HONORABLE WALTER B. JONES, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. JONES. Chairman Neal and Chairman McDermott, and my
friends Ranking Members English and Weller, and the Members of
this Committee, thank you for this opportunity.
Mr. Chairman, our men and women in uniform serve this
Nation with great honor and distinction and may give their
lives for this country. It is for this reason that I introduced
this legislation over 2 years ago. H.R. 418 permits military
families who receive the death gratuity to invest the full
amount into certain tax-favored accounts.
As you may know, a death gratuity is a $100,000 payment
paid to survivors of servicemembers whose death resulted from
combat-related circumstances. Current tax laws limit the
amounts that recipients of the death gratuity can place in tax-
preferred accounts such as a Roth IRA or a Coverdell Education
Savings Account. This legislation would change that to allow
recipients to contribute up to the full amount of the gratuity
payment to any one of these two accounts.
As the families of our fallen heroes try to put their lives
back together, they need help. They should not have to worry
about saving the death gratuity to pay for retirement, college,
or other expenses, and then have the government come in and tax
the interest on that savings. This bill will help ensure that
does not happen.
The need for this legislation was brought to my attention
by Captain Michael Ceres, a constituent stationed at Marine
Corps Air Station New River. Captain Ceres, who had just
returned from serving in Iraq, contacted my office and
suggested that Congress institute this change to ease the
burden on grieving military families.
The Joint Committee on Taxation has scored this legislation
at no cost, meaning that the actual cost of this proposal is
less than $500,000 over 9 years. We owe it to our fallen
military heroes to expand the options of families who receive
the death gratuity, families who have paid the ultimate cost
with the loss of their loved one.
H.R. 418 has also received the endorsement of the Military
Coalition, a group of prominent national military and veterans
organizations that represent more than 5.5 million members,
plus families.
I thank you, Mr. Chairman, for this hearing. I am grateful
that this Committee is putting together this comprehensive
package to help our families and our military. And so with
that, Mr. Chairman, thank you again for this opportunity, and I
yield back the balance of my time.
[The prepared statement of Mr. Jones follows:]
Prepared Statement of The Honorable Walter B. Jones,
a Representative in Congress from the State of North Carolina
Mr. Chairman, Ranking Member, our men and women in uniform serve
this Nation with great honor and distinction. Many give their lives for
this country. It is for this reason that I introduced this legislation
over 2 years ago. H.R. 418 permits military families who receive the
death gratuity to invest the full amount into certain tax-favored
accounts.
As you may know, a death gratuity is a $100,000 payment paid to
survivors of servicemembers whose death resulted from combat-related
circumstances. Current tax law limits the amount that recipients of the
death gratuity can place in tax-preferred accounts such as a Roth IRA
or Coverdell Education Savings Account. This legislation would change
that to allow recipients to contribute up to the full amount of the
gratuity payment to any one of those accounts.
As the families of our fallen heroes try to put their lives back
together, they need all the help they can get. They should not have to
worry about saving the death gratuity to pay for retirement, college,
or other expenses--and then have the government come in and tax the
interest on that savings. This bill would help ensure that does not
happen.
The need for this legislation was brought to my attention by
Captain Michael Ceres, a constituent stationed at Marine Corps Air
Station New River. Captain Ceres, who had just returned from serving in
Iraq, contacted my office and suggested that Congress institute this
change to ease the burden on grieving military families.
The Joint Committee on Taxation has scored this legislation at no
cost, meaning that the actual cost of the proposal is less than
$500,000 over 9 years.
We owe it to our fallen military heroes to expand the options of
families who receive the death gratuity, families who have paid the
ultimate cost with the loss of their loved one.
H.R. 418 has also received the endorsement of The Military
Coalition, a group of prominent national military and veterans
organizations that represents more than 5.5 million members plus their
families.
Today, I call upon my colleagues to support H.R. 418 to expand the
options of military families whose loved ones have given their lives in
the name of freedom and in defense of our Nation.
Chairman NEAL. Thank you very much, Mr. Jones.
I know that this question is going to sound very simple,
but I think it is worthy of explanation and certainly would be
helpful to the discussion as a whole. For any of the three
panelists, you are cosponsoring or suggesting a manner in which
it would be easier for people to access penalty-free retirement
account withdrawals.
Can you explain succinctly why people need, in the
military, to tap into these retirement accounts earlier than
anticipated? Any one of the three like to take a----
Mr. LAMPSON. I would like to at least make one comment on
it. There are many areas where we are desperately in need of
people with good background to be able to do it, and oftentimes
those particular jobs to which they may go are not highly paid
jobs.
Teachers, for example, is an area where if a person is able
to, when they leave the military, go into a teaching field and
offset some of their costs for living with access to already-
set-aside money without having to pay the penalty on it, it
would be a significant boon to our communities. And I am sure
that that can be doubled many times over.
Chairman NEAL. Thank you. Sounds so simple, but it is so
critical.
Mr. LAMPSON. Indeed.
Chairman NEAL. Mr. English.
Mr. ENGLISH. Mr. Chairman, I would just like to thank these
panelists for their contribution and for their very strong
commitment to the veterans. And I have no further questions.
Chairman NEAL. Thank you.
Mr. McDermott.
Mr. MCDERMOTT. I would like to hear from each of you the
case that came to your office that made you drop in this
legislation, because I think sometimes people don't understand
where we get the ideas that we bring to Congress.
Susan, can you tell us what happened to you?
Ms. DAVIS. I have had an opportunity, actually, to meet
with a number of families who have come and spoken to me. Lori
Brown, who I mentioned in this particular story, I met with Ms.
Brown and her son Hunter to talk about this issue.
And I think what is so difficult about it, the
predictability for these families is just not there because
their income is changing from one deployment to the next. And
that is what is really difficult because sometimes if they are
in combat, it may be exempted. But if they are not in combat,
it is not.
I think the system itself just confuses families. And I had
this wonderful family in front of me sharing how they just
don't know how they are going to cover these medical expenses
from one year to the next because of the way their income is
counted.
As I said earlier and I think you mentioned, Mr. Chairman,
it is counterintuitive. You would think that they would be
getting more. But, in fact, because it is not counted as earned
income, it then ends up being at a higher level, which sends
the message that they are making a lot more money than they are
actually making. And that is where the rub is.
Mr. MCDERMOTT. Nick.
Mr. LAMPSON. Mr. Chairman, I think there are probably two--
--
Mr. MCDERMOTT. Congressman Lampson.
Mr. LAMPSON. Call me anything. Just don't call me late for
supper.
I think for the first time that I had such an impact made
to me about the need to address issues like this was when a
veteran's family came to us because they were in the process of
losing their home, which they actually lost. I was astounded.
I think more recently, a gentleman who is working for me in
my office now, when he returned from Iraq, expressed concerns
himself about needing financial assistance to be able to make
ends meet, to make the transition, to get back into the life
here. So John Bursler is a gentleman who served valiantly in
combat, and came back and is now working in my office.
And I think that the number of cases, Chairman McDermott,
probably can go on as long as your arm, unfortunately. And
there are some that are pretty dramatic. We have a significant
number of people right now who I met with who have just
returned. The 149th Attack Group came back just within the last
couple of weeks. Some of those people are already coming and
talking to us about some of the needs that legislation like the
HEART Act will be able to assist. And we appreciate that.
Mr. MCDERMOTT. Mr. Jones.
Mr. JONES. Mr. Chairman, thank you. Captain Michael Ceres
called me 2 years ago and we talked by telephone. And he said,
Congressman, he said, I have been to Iraq one time. I am sure
that I will be going back soon. He said, I want to make it as
easy for my wife. He said, we have two children. The oldest is
six. And he said, we have talked about my death and what I
would like to happen for her and my children.
And I really get kind of a chill telling you this
conversation because over the telephone, he was such a
compassionate man. And he just wanted to make sure that his
wife would have decisions that would be forthcoming; in some
ways, maybe he could take off some of the pressure.
And that is how he brought this idea to me about the
$100,000 death gratuity. Give her, or any family, an option to
put the full amount in and not have to worry about 5,000 here,
5,000 there. And I just felt like it made a great deal of
sense. And if a family member is going to be sent to war and
maybe not come back, then they could at least say to that
spouse, you now have a choice that you can take the full
amount, if you choose to do so, and put it into a 401 type
plan.
Mr. MCDERMOTT. Thank you. Thank you all.
Chairman NEAL. Thank you, Mr. Chairman.
The Chair would now like to recognize Mr. Weller.
Mr. WELLER. Thank you, Mr. Chairman. And I want to thank my
colleagues for being before us today. Clearly, all have
proposals which have, I believe, strong bipartisan support.
I particularly want to commend my friend Mr. Jones for your
initiative here in giving survivors the opportunity to save the
full death benefit. As one who has worked on the issue of
catch-up contributions, IRAs and 401(k)s to help working moms
and empty nesters make up missed contributions, I believe your
proposal clearly has bipartisan support and I would welcome the
opportunity to work with you.
Mr. JONES. Thank you.
Mr. WELLER. As I note, as your testimony points out, this
bill has already been scored. And the scoring says that the
actual cost proposal is less than $500,000 over 9 years. So it
comes at a little cost, but it can really make a difference for
families.
So I want to commend you for your initiative, and I would
very much like to work with you as a cosponsor of your bill, if
I could join with you.
Mr. JONES. Thank you.
Mr. WELLER. Thank you, Mr. Chairman. I yield back.
Chairman NEAL. Thank you. Are there any other questions
from our panelists, or would it be okay----
Mr. DOGGETT. Mr. Chairman?
Chairman NEAL. The Chair would recognize Mr. Doggett.
Mr. DOGGETT. I'd like to thank each of you for the role
you've played. And I believe that our objective, as Congressman
Jones said, is to develop a comprehensive package, to take all
the ideas that have come forward and try to bring them together
to do as much as we possibly can.
I know you recall the effort that we made a few years ago
just to get the limit on the death benefit up to $100,000
because when this war began, it was much lower than that. And I
think each of you have constructive proposals.
I would like to ask Congresswoman Davis about another idea.
The SSI benefits you mentioned are extremely important, but we
have also been considering as a part of this comprehensive
package the challenges that many of our returning military
personnel face when they come back to try to find housing.
And you have some legislation that you have introduced--I
know Congressman Lampson has joined with it because
particularly Texas and California have been affected--that
currently the law does not allow more veterans who served our
country since the Vietnam War to participate in programs like
we have in Texas.
In Texas, it is done through our Veterans Land Board, and
it has been really important to open financing for our vets to
allow them to be a home buyer. And yet under the way the law is
written now, someone who served in the Persian Gulf War, in
Bosnia, in Somalia, and now in the conflicts in Afghanistan and
Iraq, would not be eligible for a program that a Vietnam vet or
someone earlier than that would be eligible.
Could you elaborate a little on your efforts, Congresswoman
Davis or Congressman Lampson? I know you care about this issue
also.
Ms. DAVIS. Yes. Well, thank you, Mr. Doggett. Yes. What is
so difficult is that if you are coming back from Iraq or
Afghanistan today, you are not eligible for that program that
other vets have been eligible for in California and across the
country.
By including the Qualified Veterans Mortgage Bonds in this
provision today in this bill, it really does make a difference.
Anyone serving after 1977 is therefore eligible. And these are
the opportunities that provide them with the best loans
possible.
And when we talk to those returning men and women, it
doesn't make any sense to them that they somehow would not be
part of this. It is a quirk basically and some limits that were
cast in prior legislation, and that is the correction that is
being done today. And it really will make a difference by
substantial amounts to these folks.
Mr. DOGGETT. And Congressman Lampson, since your territory
is not far from the area I represent in Texas, I am sure that
like my area, it has an affordable housing problem, and that
many of the folks who might settle there in the outskirts of
Houston or in any of the area that you cover, that being able
to get the financing, and now with some of the challenges
especially within the mortgage industry, is really important to
these returning vets.
Mr. LAMPSON. Anyone who has ever looked into the face of
anybody who lost a home, and then more importantly, a veteran--
when I was standing and talking with three different families
on the return of a group of Iraq veterans, all three of them
were having difficulties. Only one of them at the time lost a
home.
Many of our--what is it, one-third of our homeless people
are veterans. Those are atrocious statistics for us to
consider. And like I started out, if you look at the face of
someone like that, how can we not stand up to do anything we
can to be of help?
This legislation we hope will. We want to make a
difference. There are many, many, many people who are seeking
the opportunity to be homeowners. If we can help them, then I
think we are doing the job that we were sent here to
Washington, D.C. to do.
Mr. DOGGETT. And I know, going back to your service even
before coming to Congress, you are familiar with the work of
the Texas Veterans Land Board----
Mr. LAMPSON. Certainly.
Mr. DOGGETT [continuing]. And how valuable it is to our
vets there in Texas. And if we can open up opportunities there
to more returning vets, we can provide more opportunity to come
back and be full participants and homeowners in Texas.
Mr. LAMPSON. Certainly.
Mr. DOGGETT. Thank you, and I yield back.
Chairman NEAL. Mr. Thompson is recognized.
Mr. THOMPSON. Thank you, Mr. Chairman. I want to thank all
of you for being here today and for your testimony, and for the
great work that you are doing in this regard.
Specifically, though, I would like to thank Ms. Davis for
her work in her bill that she introduced regarding the
Qualified Veterans Mortgage Bond program. I am proud to be a
cosponsor of that bill, and had it not been for that program, I
don't think I could have purchased my first house.
So I know it was important for me, and I know it is
important for a lot of other veterans. And we need to help
those folks realize that American dream in all ways that we
possibly can. So thank you.
I yield back.
Chairman NEAL. The Chair would recognize Mr. Blumenauer.
Mr. BLUMENAUER. Thank you, Mr. Chairman. And I too
appreciate the hard work that is evidenced by our colleagues
here, and I identify with the comments that both my previous
colleagues have mentioned here from the dais.
Mr. Chairman, I guess I would just add my voice in terms of
making sure that the Qualified Veterans Mortgage Bond program--
we are in a State that has had a program here that has served,
in Oregon, a third of a million veterans since World War II,
being able to make some adjustments.
We are in danger of running out of money in my State, and I
look forward to working with my colleagues who are witnesses
and with you, Mr. Chairman, to make sure that the adjustment--
it looks like we have some indication from the Committee staff
and leadership that we might be able to make an adjustment for
Oregon that would be necessary to keep that program going so
that we don't shortchange our veterans who are returning from
the field of battle of late.
And I appreciate the work that all of you are doing, and
look forward to making sure that that benefit extends back to
my community as well.
Chairman NEAL. Thank the gentleman.
The gentlelady from Nevada, Ms. Berkley, is recognized.
Ms. BERKLEY. Thank you, Mr. Chairman. I also want to thank
and congratulate my colleagues for coming here and presenting
their testimony regarding these pieces of legislation that are
going to impact the lives of our veterans.
I represent a community that has the fastest-growing
veterans population in the United States. I have over 200,000
veterans in my congressional district. And as a Member of the
Ways and Means Committee and the Veterans' Affairs Committee, I
keep in close contact with my veterans.
Nellis Air Force Base is directly outside of my district.
And right now we have 1,600 veterans who have returned home
from this latest military action in Iraq and Afghanistan in our
global war on terrorism. These pieces of legislation that are
being proposed today are very important, and I fully support
them.
When I hear our colleagues and Members of the
Administration talking about supporting our troops, I can't
think of a better way of supporting our troops than showing our
veterans that we recognize their sacrifices and we care enough
about them to make them as whole as possible when they return,
and in the chance that they don't return, to show our
appreciation for the ultimate sacrifice by helping the families
overcome this tragedy.
So I thank you again for being here, and I appreciate your
testimony.
Chairman NEAL. Thank the gentlelady.
Mr. Johnson, the gentleman from Texas, is recognized.
Mr. JOHNSON. Thank you, Mr. Chairman. I appreciate it.
You know, in Texas, and you would know that, the Qualified
Veterans Mortgage Bond program in Texas has been very popular
with older veterans. IT is a program that was grandfathered
into law in 1986 along with other private activity bond
programs in four additional States.
The program in Texas is limited to only veterans who served
on active duty before 1977, and who apply for this housing
finance assistance within 30 years after the last date of their
military service. Frankly, there are not many veterans who fall
into that category, but we have thousands of young Texans who
are coming home from military service today who should be
served by this program. Young veterans from Texas should be
eligible for veteran mortgage bond financing for their homes,
just as the young veterans in the States of Oregon, Alaska, and
Wisconsin are now.
Mr. Chairman, I would like to get information from the
Joint Committee on Taxation about how many additional veterans
will be eligible for this housing assistance if this provision
is added to the bill. And I also would ask unanimous consent to
have a statement submitted for the record from the Texas
Veterans Land Board Chairman, Jerry Patterson.
Chairman NEAL. Without objection, the gentleman's request
will be entered into the record.
Mr. JOHNSON. Thank you. Thank you for allowing me to come
in.
Chairman NEAL. Thank you, Mr. Johnson.
The gentlelady from Pennsylvania, Ms. Schwartz, is
recognized.
Ms. SCHWARTZ. Thank you, Mr. Chairman. And I too want to
congratulate my colleagues for their really important work in
supporting our troops, our armed services, and particularly
recognizing some of the issues that they have when they return
home. So thank you for your good work, and I know you
appreciate your interest being in this draft bill, and hope to
keep it that way.
I wanted to take my moment to not ask a question, but to
mention something else that is in the draft legislation that is
a proposal that I have introduced and support. And it comes
from--I appreciate the suggestion we are to talk about where it
comes from.
And I have a constituent who came to me about an issue. He
is actually a full-time civilian Federal employee at a defense
logistics agency in my district. I want to call it--we always
refer to it as the defense supply depot, you know.
But he volunteered to go to Iraq to work, as he does here,
on the same kind of issues of logistics and actually buying
supplies. And so I didn't get a chance to see him in my
district, but I did see him when I was in Baghdad. We met when
I was in the Green Zone. He was in uniform, and his name is Tim
McMinn.
And his issue was the fact that while he is serving in a
combat zone and in harm's way and doing work for the Department
of Defense as a Federal civilian employee, he does not get the
same tax advantages as someone who serves in the military, and
had asked me about whether in fact we could fix that.
He is overseas again in a combat zone in harm's way doing
work asked by the Department of Defense, and his family is at
home. And he would like the same tax advantages. So Mr. Wolf,
who has introduced this legislation referred to as the Federal
Employee Combat Zone Tax Parity Act--and actually, Mr. Jones,
you are a cosponsor, as is Mr. English and Van Hollen on the
Committee.
And it has been included in the underlying bill, draft
bill. And I'm pleased about that. And, also, I know I share
with you an interest in seeing that our civilian soldiers, if
you want to call them that, are treated in the same way from a
tax point of view so that they actually can receive the same
tax benefits while they are deployed overseas.
So I am sure some of you would want to be supportive of
that. But I mention it and want to say that I look forward to
working with the Chairman on this particular piece of
legislation and this content in the bill, and look forward to
working on the larger bill as well, and hope we can move
forward so that our newest veterans can receive some of the
kind of fairness that they need from a tax structure.
So thank you, Mr. Chairman.
Chairman NEAL. We thank the gentlelady.
I want to also thank our panelists for their testimony
today. And I would now like to move to the second panel, and
ask Mr. Rust to take his position.
The Chair would now like to recognize Mr. Rust. Would you
proceed with your testimony, sir.
STATEMENT OF DAVID A. RUST, ACTING DEPUTY COMMISSIONER,
DISABILITY AND INCOME SECURITY PROGRAMS, SOCIAL SECURITY
ADMINISTRATION
Mr. RUST. Chairman Neal, Chairman McDermott, and Ranking
Members Weller and English, I am pleased to be with you today.
On behalf of Commissioner Astrue, thank you for inviting me to
discuss the proposed changes in the SSI program.
I am David Rust. I am the Executive Secretary of the
Agency, and since early August, I have also been serving as the
Acting Deputy Commissioner for Disability and Income Security
Programs. My responsibilities include oversight and
coordination of policy and operational issues for both the SSI
program and the OASDI program. In this role, I have great
interest in making these programs as effective as possible, and
I am pleased that SSA views on the pending SSI-related
proposals in the HEART bill have been requested today.
Over the years, Congress has pursued incremental changes in
the SSI law, finding ways in which equity can be improved and
policy streamlined within the basic structure of the program.
It is in that context that we can best evaluate the three SSI-
related provisions in the legislation, and I am pleased to say
that we support two of these provisions, and that they have
been previously proposed to the Congress by SSA.
The first proposal would treat most military compensation
as wages for SSI purposes and codify SSA's policy of treating
certain housing allowances as non-cash or in-kind income. The
proposal would also put in the statute the current SSI policy
that excludes any additional pay received from service in a
combat zone. We believe that this legislation is critically
important.
The provision would remove the most significant inequity in
the consideration of household income. And it is especially
needed by disabled children of our Nation's service men and
women. It is this group that is most severely affected by the
current policy.
Under current SSI law, generally only basic pay is counted
as earned income. All other allocations--housing, uniform,
special duty pay, and so forth--are counted as unearned income.
Because of the SSI provisions supporting beneficiary efforts to
work, earnings from work are treated differently than other
income in determining eligibility and benefit levels.
When a child is disabled, we determine eligibility based on
family income using the same distinction between earned and
unearned income. The different treatment of different pay types
has had the effect of disadvantaging many military personnel.
The proposal contained in the HEART bill would result in
treating most cash military compensation and civilian wages
alike for SSI purposes, thus eliminating the present unfair
treatment of military compensation other than basic pay.
We also support a statutory requirement regarding the
consideration of certain privatized military housing. This
approach to the housing allowance is appropriate because in
these situations, the full amount of the servicemember's
allowance is deducted directly from his or her pay and then
paid directly to the landlord of the privatized housing. By
codifying this policy into statute, Congress affirms the
importance of eliminating inequities in the SSI program.
Mr. Chairman, I would note that I think that Representative
Davis' earlier testimony clearly described the situation that
many of these provisions were designed to address.
Turning to the second proposal, we also support legislation
that would exclude AmeriCorps program payments for the purposes
of determining SSI eligibility and benefit amounts. In 1993,
the creation of the Corporation for National Community Service
brought together two formerly independent Federal agencies, the
Commission for National Service and the Action Agency.
This merger of previously separate agencies led to
differences in how income for SSI purposes is considered. For
volunteers in the AmeriCorps Vista program, Federal law
excludes stipends paid to the volunteers from income for SSI
purposes. However, current law does not exclude similar
payments to other AmeriCorps volunteers.
Thus, we have individuals performing similar volunteer work
and participating in similar programs who are being treated
differently. SSA supports the proposed legislation. Treating
income similarly across the AmeriCorps volunteer programs would
provide equity for our beneficiaries and also provide for
administrative simplification.
Like all Americans, we recognize the great debt owed to
members of the armed services who have made sacrifices for all
of us. The third proposal, to exclude State annuity benefits to
blind veterans from income considered for SSI benefits, serves
as a means to recognize that sacrifice. An exclusion of State
annuity payments for veterans who by definition are blind and
also of limited resources seems reasonable and appropriate.
In conclusion, the AmeriCorps and Military Service Income
proposals correct inequities that exist in the current SSI law,
and the State Blind Pension exclusion could provide
humanitarian assistance to those who have served our country.
I thank the Subcommittees for holding this hearing and for
considering these SSI provisions. SSA looks forward to
continuing to work with Congress in our ongoing efforts to
promote sound public policy and improve program administration.
Thank you, and I will be glad to answer any questions you
may have.
[The prepared statement of Mr. Rust follows:]
Prepared Statement of David A. Rust, Acting Deputy Commissioner,
Disability and Income Security Programs, Social Security Administration
On behalf of Commissioner Astrue, thank you for inviting me to
discuss proposed changes in the Supplemental Security Income (SSI)
program. I am David Rust, and I serve as Executive Secretary of the
Agency and, since early August, as the Acting Deputy Commissioner for
Disability and Income Security Programs. My responsibilities include
oversight and coordination of policy and operational issues for both
the SSI and the Old Age, Survivors, and Disability Insurance (OASDI)
programs. In this role I have an obligation to make these programs as
effective as possible, and a great interest in proposals that would
help achieve that end. So I am pleased to offer the Social Security
Administration's (SSA's) views on several SSI-related proposals
contained in the Chairman's draft bill.
Background
Before turning to the specific proposals contained in this bill, I
would like to take a minute to provide some helpful background
information. SSA has been administering the SSI program for more than
30 years--dealing with a program in which eligibility and the amount of
needs-based benefits is dependent upon the fluctuating circumstances of
millions of beneficiaries. Complex income rules, designed to more
favorably consider earned wages than unearned payments, mean that SSA
must evaluate the source of every dollar. Resource limits, likewise,
mean that a beneficiary who is eligible for payments one month may not
be the next.
If it sounds complicated, that's because it is. Means-tested
programs such as SSI have to balance the stewardship requirements of
protecting taxpayers, while insuring fair treatment for beneficiaries,
with the administrative need to design programs that are manageable. It
is quite a challenge for SSA and the Congress, both of which have
studied SSI simplification and equity issues for years.
Over the years, Congress has pursued incremental changes to SSI
law, finding ways in which equity can be improved and policy can be
streamlined within the basic structure of the program. It is in this
context that we can best evaluate the SSI-related provisions of this
legislation, and I am pleased to say that we support two of the
proposals without reservation, as they have in fact been previously
transmitted to Congress by SSA in Administration bills.
Treatment of Most Military Compensation as Wages
Turning to the first proposal, this provision would treat most
military compensation as wages for SSI, and codify SSA's policy of
treating certain housing allowances as ``in-kind'' income. We believe
this legislation is very important.
The provision would remove a significant inequity in the
consideration of household income, and is especially needed in light of
those who are most often affected by the current policy--the disabled
children of our Nation's service men and women.
Under current SSI law, generally only basic pay is counted as
earned income. All other allowances--housing, uniform, special duty
pay, and so on--are counted as unearned income. Because of SSI's
provisions supporting beneficiary efforts to work, earned income is
treated differently than unearned income in determining benefit
eligibility and payment level.
Generally, all unearned income above $20 is used in these
calculations. But in determining eligibility and calculating benefits,
we do not count the first $65 of earned income and one-half of income
above the $65 amount. When a child is disabled, we determine
eligibility based on family income, using the same distinction between
earned and unearned income. Current law requires us to treat all
payments except for basic pay as unearned income. (Combat pay is
disregarded altogether.)
This distinction between consideration of military basic pay and
other pay types has had the effect of disadvantaging military personnel
compared to civilians in similar situations.
Let's look at the differences in the way income would be treated in
two similarly situated families:
The family of an active duty servicemember could be receiving basic
pay of $1,459 per month, and a military housing allowance of $1,087--a
total of $2,546. The housing allowance portion is counted as unearned
income. Because of the less-favorable treatment of unearned income for
SSI purposes, in calculating SSI eligibility for a disabled child, we
would ``count'' $519.
But a civilian with the same total income of $2,546 would receive
all income through wages (earned income) and would pay rent via a
portion of the wages. Thus we would count $141 of the civilian's wages
in determining SSI eligibility for the disabled child. Assuming there
is no other income to either family, the disabled child in the civilian
family would receive $502 in SSI benefits, while the disabled child in
the military family would only receive $124.
The proposal contained in the HEART bill would result in treating
most cash military compensation and civilian wages alike (for SSI
purposes), thus eliminating this present unfair treatment of military
compensation other than basic pay.
We also support placing into statute the current SSA policy
regarding how we consider certain privatized military housing. In the
SSI program, certain privatized military housing is generally
considered ``in-kind support and maintenance,'' and is treated
differently than either earned or unearned income. Since March of 2003,
we have capped the amount of SSI benefit reduction attributable to the
housing allowance to one-third of the SSI Federal benefit rate. This
approach to the housing allowances is appropriate because in these
situations the full amount of the servicemember's allowance is deducted
directly from his or her pay, and paid to the landlord of the
privatized housing by military payroll. By codifying this policy into
the statute, Congress affirms the importance of eliminating inequities
in the SSI program.
Exclusion of AmeriCorps Payments for SSI and DI Purposes
Turning to the second proposal, we also support legislation that
would exclude the AmeriCorps State and National and AmeriCorps National
Civilian Community Corps program payments for purposes of determining
SSI eligibility and benefit amounts.
Stipends for AmeriCorps VISTA volunteers are currently excluded
from income for SSI purposes under the 1973 authorization for this
program, the Domestic Volunteer Service Act. However, authorizing
legislation for the newer AmeriCorps programs, does not exclude
stipends for SSI purposes. These payments are counted as earnings in
the SSI program, and room and board provided under the new programs is
counted as in-kind support and maintenance. The earnings received based
on these newer AmeriCorps programs are also taxable, and earn Social
Security (OASDI) quarters of coverage. All three AmeriCorps programs
have similar missions, and volunteers in these programs that receive a
living allowance can receive a separate educational award upon
completion of public service.
Thus, we currently have individuals performing similar volunteer
work and participating in similar programs who are being treated
differently. SSA supports the proposed legislation. Expanding the
earning exclusions to participants in the other two programs would
provide equity for our beneficiaries, administrative simplification,
and presumably enable AmeriCorps to enroll more participants with
disabilities.
Exclusion of Certain Annuity Payments to Blind Veterans
Like all Americans, we recognize the great debt owed to the men and
women, who have sacrificed for us as members of the armed services, and
the third proposal to exclude State annuity payments to blind veterans
from income consideration for SSI benefits, could serve as a means to
recognize that sacrifice. An exclusion of State annuity payments for
veterans who, by definition, are blind and also of limited means, may
be reasonable and appropriate.
Conclusion
In conclusion, the AmeriCorp and Military Service Income proposals
correct inequities that exist in current SSI and law, and the Blind
Pension exclusion could provide humanitarian assistance to those who
have served our country so well.
We would be happy to work with the Subcommittees on these
proposals, and SSA looks forward to continuing to work with Congress in
our ongoing efforts to promote sound public policy and improve program
administration. Thank you and I will be glad to answer any questions
you may have.
Chairman NEAL. Thank you, Mr. Rust.
The Chair would now like to recognize Mr. McDermott for
inquiry.
Mr. MCDERMOTT. Thank you, Mr. Rust, for coming up. I
appreciate Social Security coming. Treasury was invited, but
said they didn't have sufficient time to prepare themselves. So
I am glad you got your act together and got up here.
Mr. RUST. You may have to wait until you hear my answers to
your questions to see if we got our act together, Mr.
McDermott.
Mr. MCDERMOTT. I will take my chances. I just want to
clarify something for our understanding how this developed.
Uniform allowances, are they unearned income or earned income?
Mr. RUST. Unearned income.
Mr. MCDERMOTT. Basic allowance for subsistence, unearned or
earned?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Reenlistment bonuses?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Foreign duty pay?
Mr. RUST. Unearned.
Chairman NEAL. Demolition duty pay?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Aviation continuation pay?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Dive pay?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Submarines?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Hardship duty for a location?
Mr. RUST. Unearned.
Mr. MCDERMOTT. Hazardous duty?
Mr. RUST. Unearned, under current law.
Mr. MCDERMOTT. Why was it set up so that all these were
made unearned income?
Mr. RUST. As a general rule--and, you know, we are an
agency where there is always an exception to the general rule--
but in the general rule, earned income is income against which
the FICA tax is applied. And if the FICA tax, the Social
Security tax, is not applied, then it for the most part falls
into the category of unearned income and is treated that way.
What the proposals before the Committee today will do is
change the way those particular categories are counted. It will
move almost all of those from unearned to earned income for
purposes of calculation for the SSI program.
Mr. MCDERMOTT. For the purposes of SSI, for the
calculation?
Mr. RUST. For the purposes of SSI.
Mr. MCDERMOTT. Now tell us what the difference is. Why is
this better for somebody, to make it earned income for the
purposes of SSI?
Mr. RUST. Earned income is treated in a different way
because, one, you have the FICA tax application, but more
importantly, there is a preference for work, an incentive for
work, in the SSI program. So earned income has always had
essentially a higher status than unearned income.
Let me give you an example that I think will probably
clarify this a little bit. The family of an active duty
servicemember could be receiving basic pay of $1,459 per month,
and a military housing allowance of $1,087--a total of $2,546.
The housing allowance portion is counted as unearned income.
Because of the less-favorable treatment of unearned income for
SSI purposes, in calculating SSI eligibility for a disabled
child, we would ``count'' $499. In determining the benefit for
the child, we deduct the countable income ($499) from the
Federal Benefit Rate ($623 in 2007). Thus, the disabled child
in the military family would receive $124 in SSI benefits.
But an identical civilian family with the same total income
of $2,546 would receive all income through wages (earned
income) and would pay rent via a portion of the wages. Thus, we
would count only $121 of the civilian's wages in determining
SSI eligibility for the disabled child. Assuming there is no
other income to either family, the disabled child in the
civilian family would receive $502 in SSI benefits, nearly four
times more than the child in the military family.
Mr. MCDERMOTT. It is okay to ask one of your staff people
to come over and whisper in your ear.
Chairman NEAL. You would be surprised. We do it all the
time.
[Laughter.]
Mr. RUST. Roughly, we count about one-half of an
individual's earned income.
Mr. MCDERMOTT. You can have her come up and sit at the
table with you, or one of your staff people.
Mr. RUST. Mr. Chairman, if that would be okay?
Mr. MCDERMOTT. Yes. Of course. We are actually trying to
learn how it works. Okay? We are not trying to fry anybody.
Mr. RUST. Thank you. This is the Assistant Deputy
Commissioner, Marianna LaCanfora.
Ms. LACANFORA. Good morning. To make a complex issue----
Mr. RUST. Complex.
Ms. LACANFORA. Excuse me. Good morning. To make a complex
issue as simple as possible, I think maybe the easiest way to
explain it is that with earned income, wages, we only count
that earned income--we generally take one-half of it, and we
count it against the benefit amount; whereas with unearned
income, we actually count almost the total unearned income,
dollar for dollar, against the benefit amount.
So basically, we penalize a beneficiary based on the
receipt of unearned income more heavily than we do earned
income. And the genesis of that I believe has to do with the
fact that we were trying to provide an incentive for people to
return to work, so wages--in other words, earned income--are
treated more favorably under the SSI program.
This legislation will bring the treatment of income into
parity for military families.
Mr. MCDERMOTT. Okay. Thank you very much. I see my time is
exhausted, so I will leave the technical questions to other
Members if they wish. Thank you, Mr. Chairman.
Chairman NEAL. Thank you, Mr. McDermott.
The Chair would now like to recognize Mr. Weller for
inquiry.
Mr. WELLER. Thank you, Mr. Chairman. Commissioner, welcome
before our Subcommittees this morning.
Mr. Reynolds has a proposal which eliminates the offset of
SSI benefits to reflect State blind veterans annuity. And I
understand there are four States that currently operate such a
program, New York, New Jersey, Pennsylvania, and Massachusetts.
Are you aware of any other States that are considering
adding an additional program similar to this proposal?
Mr. RUST. We are not aware of any such States at this time.
Mr. WELLER. Do you believe that enactment of Mr. Reynolds'
legislation in the law would encourage other States to start
providing this type of assistance for blind veterans?
Mr. RUST. The way the language is written in the draft we
have, it would cover any State that would choose to enact such
a program. So I think the answer probably is yes, it would, or
it could.
Mr. WELLER. So it would make it more attractive for a State
such as mine to provide such assistance. You would believe that
based on your experience?
Mr. RUST. Well, I think the State would probably act
because of its own dynamic, its own desire to serve the
veterans within that State. But I think the more favorable
treatment under SSI would certainly be a favorable
consideration.
Mr. WELLER. Is there any reason this special treatment
should be solely limited to blind veterans? For example, do
States operate State annuities for other disabled veterans?
Mr. RUST. The disability rules under Social Security
already have a preferential treatment for blind, both veterans
and non-veterans. So it is quite dramatic in terms of the more
preferential treatment for blind in both the SSDI program and
the SSI program for disability. So I think there is sort of a
history of showing preferential treatment to the blind.
Mr. WELLER. And explain then for other annuities for other
types of disabilities where there are annuities provided at the
State level, how are they treated differently compared to for
blind veterans?
Mr. RUST. The general rule is that if the annuity or if the
benefit at the State level is either State or locally funded,
we exclude that income, that payment, from consideration for
SSI benefits. So it is excluded. If there is some Federal money
in it, like in TANF, then it is counted as unearned income for
the calculations.
So as long as the State were to set up a program that was
100 percent State or locally paid and needs-based, it would be
excluded from SSI consideration.
Mr. WELLER. And has your agency taken a position on Mr.
Reynolds' proposal?
Mr. RUST. We are looking at it. We haven't had time to cost
it all out and do the interagency review. That is why my
testimony I think is basically quite favorable to the
provision. But we have not yet been able to get the
Administration position on it.
Mr. WELLER. And how quickly can you provide an
Administration position for Mr. Reynolds?
Mr. RUST. A lot of that is outside the control of the
Social Security Administration because OMB would really be the
one that would coordinate that. So I don't know that I could
give you an estimate. We will request it immediately.
Mr. WELLER. And has the Social Security Administration made
a recommendation to OMB on what position the Administration
should take?
Mr. RUST. They cleared my testimony for today with the
statement that it was fair and appropriate and reasonable to
look at this provision.
Mr. WELLER. So you have recommended then that they support
this proposal?
Mr. RUST. It is our position that this is a reasonable
thing to do, an appropriate thing to do. We would be supportive
of it.
Mr. WELLER. Thank you, Commissioner, and thank you for
being here this morning.
Thank you, Mr. Chairman.
Chairman NEAL. Thank you, Mr. Weller.
The Chair would now recognize Mr. Herger for inquiry.
Mr. HERGER. Thank you, Mr. Chairman.
Mr. Rust, I think it is really outstanding that we have a
program that is working to get the disabled employed and being
productive, and such valuable service through the AmeriCorps.
And I would like to explore that further if I could.
Could you tell me how many hours of work does the average
AmeriCorps participant perform per year?
Mr. RUST. Mr. Herger, I guess you would have to direct that
question really to the AmeriCorps agency. I don't know that.
Mr. HERGER. Is there anyone on your staff that might have
an idea?
Mr. RUST. No. I mean, that is a different program, a
different agency.
Mr. HERGER. Could you tell me maybe about SSI recipients
who--what is the typical number of hours that they work or
perform--I don't know if you know that--per year?
Mr. RUST. You mean in terms of the ones who would be
working in one of these--either the military or in the
AmeriCorps program getting SSI----
Mr. HERGER. Yes.
Mr. RUST [continuing]. And being impacted by this
provision? The number is probably very small. For one of the
provisions, we think there are probably about 3,000 people
currently receiving SSI, and about maybe 200 more a year who
could become eligible. And for the other provisions, we are
assuming fewer than 500. So we are probably talking in total of
somewhere in the neighborhood of 3,000 to 3,500 people who
could be affected by all three of these SSI provisions in this
bill.
Mr. HERGER. Any idea what the stipend is or other
assistance that they receive for the service that they do,
those that are involved?
Mr. RUST. No, sir.
Mr. HERGER. Okay. I thank you, Mr. Chairman. I yield back
my time.
Chairman NEAL. Thank you, Mr. Herger.
The Chair will now recognize Mr. Reynolds to inquire.
Mr. REYNOLDS. I thank the Chairman.
I appreciate the Social Security Administration's comments
of support of the legislation that is included on the annuity
payments. My understanding in my home State of New York, the
State began annuities under World War I, and it was about 500
per month, and raised it to a thousand.
And we find that unfortunately, just due to the current
law, all that money goes back as the annuitant has to return
that money because it caps. So I think we are moving in the
right direction both on inflation, plus it is just plain the
right thing to do. We have seen a lot of testimony on it. And I
appreciate your comments, and will look forward to what you
think the cost is.
Also, when I originally have looked at the legislation over
different periods of time since 2000, there were times where I
restricted it to the four States because that is what the
previous Chairman would have wanted, if I could have even
advanced this legislation. And now I am pleased to see that
Chairman Rangel and others are exploring the aspect that any
State that may want to participate can.
But I think we don't want to lose sight in the testimony of
inquiry from my colleague, Mr. Weller, that the States still
have to put up the cash here. And so States will have to
reflect: Do we want to follow the four States that are already
doing this with some sort of an investment into an annuity
program? And I think that is part of the checks and balance, is
the State's own participation in the program. And I appreciate
you, Mr. Rust.
And I know this is not your domain, but I was also
disappointed on the recent decision of the Social Security
Administration to use the Buffalo office as a pilot for closing
the office early. I will be sending a letter to the Acting
Commissioner, and I hope you will convey that, and will follow
up on that shortly.
We have an older population in upstate western New York,
and seeing face-to-face solutions versus toll-free numbers I
think would go a lot farther along. And I will make an appeal
that while the pilot is underway, we can't seem to make better
accommodations to take care of people we are serving. Thank
you.
Mr. RUST. Mr. Reynolds, if I could, that is another Deputy
Commissioner's area. And I believe that Chairman Rangel is
scheduling a meeting for Members of the Committee and Ms.
McMahon, the Deputy Commissioner for Operations, to discuss
these issues. I think it is scheduled within the next week or
so. I don't remember the exact date, but I think that we are
very interested in talking to the Members about the issue.
And let me just--if I can just digress for a second, Mr.
Chairman, I think it is helpful if you would understand that we
are an agency under some stress right now. In January,
February, and March of next year, we will slip under 60,000
employees for the first time since 1973.
And we have the baby boomers about to retire, and other
workloads. So we are feeling a lot of stress across our
programs right now in terms of how we can maintain the kind of
service the public expects from us with somewhat more
constrained resources.
So, I would just add that as a sort of an aside. But it is
something that is very much on our minds as we try to run these
programs.
Mr. REYNOLDS. Sir, if I could reclaim my time for just a
second, I would just--in the opening of my thought on this, I
said I realize that is not your domain. But because you have
taken such time to want to defend the Administration's
position, let me just be perfectly clear.
I intend to watch the pilot program. It is an
administrative decision, and I will register my displeasure
with the Acting Commissioner. But nevertheless, we are taking
less face time of the Social Security Administration dealing
with both seniors and others who are dependent upon getting
answers. And that is a concern to me in western New York. And I
will be watching very closely as to the outcome of your pilot
program.
Mr. RUST. If you would want to meet directly with Ms.
McMahon, I am sure she would be more than glad to meet with you
on that.
Chairman NEAL. Mr. English is recognized to inquire.
Mr. ENGLISH. Thank you, Mr. Chairman.
Mr. Rust, I think your point is very well taken, that your
agency is under a great deal of pressure, And I suppose on that
point, I would like to particularly follow up with regard to
this legislation.
The draft legislation suggests that the three SSI changes
for participants will be, and I quote, ``effective with respect
to benefits payable for months beginning after 60 days after
the date of enactment of this Act.'' So in general, that would
be no more than 3 months.
Given the fact that your agency is under stress, is that
enough time for SSA to make sure that the correct payments are
being made?
Mr. RUST. We think so.
Mr. ENGLISH. I note that the legislation does not provide
for any additional administrative funds. And SSA has recently
expressed concern about having sufficient administrative
funding to handle current workloads. Do you see any issues on
that point raised by this legislation?
Mr. RUST. If the numbers are about what I quoted a little
bit ago, probably somewhere between 3- and 4,000 people, we can
handle that within our current budget situation, remembering
that we are across the board under stress.
Mr. ENGLISH. Very good. On a different point, I think that
our disability system has to do everything it can to encourage
disabled Americans to work when they are able to. From your
perspective, is there any evidence that SSI recipients have
refrained from participating in AmeriCorps as a result of the
disincentives that this legislation addresses, essentially
current law?
Mr. RUST. I don't think we would have any way of knowing
that.
Mr. ENGLISH. In your view, if the proposal before us is
adopted, do you have any estimate of how many more SSI
recipients might participate at AmeriCorps? You wouldn't have a
way of evaluating that?
Mr. RUST. We wouldn't have any way of even guessing on
that.
Mr. ENGLISH. Thank you, Mr. Rust. And thank you for your
testimony.
Mr. RUST. Thank you.
Chairman NEAL. Are there any other questions? The
gentlelady from Nevada is recognized to inquire.
Ms. BERKLEY. Thank you, Mr. Chairman. And thank you, Mr.
Rust, for coming and giving us your testimony.
I am not sure that this is pertinent to what we are
discussing, but I wanted to follow up on what Mr. Reynolds
said. In addition to having the fastest growing veterans
population in my congressional district, I have the fastest
growing senior population.
Because of the large number of complaints, and I recognize
that this doesn't come under your domain, but in response to an
amazing number of telephone calls from my constituents and
telephone calls from the employees of my Social Security
offices in Las Vegas, I paid a spot visit to the newest
facility.
And I can tell you that the line was around the block when
I--the employees are stretched beyond what they can possibly,
possibly do to deliver necessary services to my constituents.
And my constituents, many of them, especially the older women,
there wasn't enough seating. And this is a brand new facility.
And they were in tears because they had spent hours in line and
couldn't spend another minute on their feet.
And this is a situation that absolutely has to be
corrected. It is horrible. And again, I just wanted to put this
on the record for the future. And I am sure you are aware of
these problems.
Mr. RUST. We are under pressure to look for ways to make
the program more administrable, if you want to use that term,
to look for ways to simplify the program.
That is one of the reasons, in the testimony today, one of
the things we appreciate about the provisions in this bill are
that they will help to make this program a little easier to
administer because we have a very complicated program. It is a
very complex program.
And as I mentioned, just 5 years ago we had 66,000
employees. So we are down 6,000, roughly, in the last 5 years.
So it is a huge workload with a constrained workforce. So we do
the best we can, but we are aware of those problems.
And again, I would suggest that you may want to bring this
to Linda McMahon's attention, our Deputy Commissioner for
Operations, who is working with these problems day to day.
Ms. BERKLEY. I will, and I thank you.
Mr. RUST. Thank you.
Chairman NEAL. Thank the gentlelady.
Mr. Rust, we want to thank you for your testimony. And now
we would like to have the third panel assemble and take
position.
Mr. RUST. Mr. Chairman, I started to try to give two
examples, which I didn't do very artfully, of how income,
unearned and earned, worked differently. When I correct the
record, may I correct that example?
Chairman NEAL. Without objection, you certainly can.
Mr. RUST. Thank you, sir.
Chairman NEAL. What I would like to do now is to recognize
the Members of the Committee to introduce our guest panelists.
And I would like to begin by recognizing Mr. Larson for an
introduction.
Mr. LARSON. Thank you, Mr. Chairman. And thank you again
for holding this hearing on this very important legislation.
Mr. Chairman, may I for the record seek unanimous consent
to introduce the testimony of Chief Steven B. Westerman, the
President of the International Association of Fire Chiefs, an
organization that has worked very hard on this, who is not here
today to testify?
Chairman NEAL. Without objection.
Mr. LARSON. And now, Mr. Chairman, I know that the
legislation before us in this hearing is vitally important and
compelling listening to the testimony of men and women who wear
the uniform, and especially our veterans that are in the field.
But it wasn't lost on Members of Congress, and certainly
not on John McAuliffe, the gentleman I am going to introduce,
that it wasn't the Army, the Navy, or the Marines, the FBI, or
the CIA that responded at that World Trade Center, at the
Pentagon, or in the fields of Pennsylvania. Indeed and in fact,
it was our men and women who are the front lines of our effort
here, our firefighters, police officers, and emergency medical
teams.
And it is my great pleasure to introduce to you today a
gentleman who has been a volunteer firefighter and in that
service since 1958. John McAuliffe served as fire chief of the
Wethersfield Fire Department in my district from 1991 to 1996.
I worked very closely with him as Senate President in the State
of Connecticut on a number of issues as it relates to
firefighters and volunteers in general.
He is currently the Connecticut State Director of the
National Volunteer Fire Council, as well as the Chairman of the
Legislative Committee of the Connecticut State Firemen's
Association, and understands these issues thoroughly.
Like most events, as Mr. McDermott indicated earlier, we
learn of things that are of importance through our
constituents. And having traveled around to several volunteer
fire departments and listened to a number of them, and
especially from the Chairman's district in Massachusetts and
mine, it is a great honor for me to introduce a man who is
knowledgeable on all these fronts, John McAuliffe.
Chairman NEAL. We thank you.
And now the Chair would like to recognize Mr. Reynolds for
an introduction.
Mr. REYNOLDS. I thank the Chairman.
It is my pleasure to introduce Deputy Director of the New
York State Division of Veterans' Affairs, Michelle LaRock, who
has served under both Governor Pataki and now Governor Spitzer.
Ms. LaRock had dedicated more than a decade to public service
in various capacities in my home State. In her current
position, she draws on a wealth of experience and expertise
gained through her own experience in the military as a veteran.
She is a native of upstate New York, and has served 4 years
in the Marines, including a tour of duty in the Middle East
during the Persian Gulf War, as a lance corporal specializing
in logistics and earning a Southwest Asia Service Medal.
Appointed as Deputy Director in December 2005, Ms. LaRock
works closely with Director George Basher and various field
Deputy Directors in evaluating existing programs and
recommending new practices and strategies to enhance the
agency's services provided to New York's veterans community.
She has considerable familiarity with New York's State annuity
for blind veterans, and she has seen firsthand the challenges
that current Federal SSI law poses both for blind veterans and
for her agency in the administration of this annuity program.
On behalf of the Ways and Means Committee, welcome, and we
look forward to your testimony.
Chairman NEAL. Thank you, Mr. Reynolds.
And now I would like to recognize the gentleman from North
Dakota, Mr. Pomeroy, for an introduction.
Mr. POMEROY. Thank you, Mr. Chairman, and I appreciate
being able to sit in with the Committee in the hearing today.
We have a law on the books which guarantees the right of
returning Guard and Reserve soldiers to seamlessly resume their
private pension plan participation when they return to civilian
employment. But there is a gap in this law, a very important
gap that needs to be addressed. The law does not anticipate the
circumstance where our soldier cannot return to work and resume
pension plan participation because of losing their life while
under deployment in service to our country.
Essentially, under many pension plans, under this
circumstance there is no survivor's benefit. There is just a
return of moneys paid into the plan by the plan participant,
our deceased soldier. This needs to be fixed, and I am very
pleased to tell you that Congressman Doc Hastings and I have
introduced a bill to address this. The bill is known as the
Heroes Act.
Testifying on it today will be Victoria ``Torrie'' Johnson.
Victoria is the surviving spouse of Major Alan Johnson. He was
born and raised on a farm in North Dakota and lost his life in
Iraq, an IED attack, on January 26th of this year.
Torrie, like her late husband, is an extraordinary person.
She is very dedicated to service. Even while she deals with her
personal grief, she serves as the family support volunteer
coordinator for the Washington State Army National Guard doing
her dead level best to help other families.
Congressman Doc Hastings and I have been very grateful to
Torrie for calling her situation to our attention. And we have
so admired the work she has done in the State of Washington to
try and get that fixed at the State level. But this really
requires a Federal fix.
She spent her own frequent flyer miles to come here to tell
you her story today. And we just can't feel more gratitude for
the courage and the determination of Torrie Johnson to get this
situation fixed.
Chairman NEAL. We thank the gentleman.
And now let me introduce Mr. John Downing. Mr. Downing is
unyielding in his advocacy on behalf of veterans everywhere. He
is the President and Chief Executive Officer of United Veterans
of America. And he has spoken for the incarcerated veteran, the
mentally ill veteran, the homeless veteran, and the addicted
veteran, as well as anybody in America.
And with that, I would like to recognize Mr. Downing.
STATEMENT OF JOHN F. DOWNING, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, UNITED VETERANS OF AMERICA, INC., LEEDS, MASSACHUSETTS
Mr. DOWNING. Thank you, Chairman Neal, Congressman
McDermott, Members of the Committee. On behalf of the hundreds
of homeless veterans I serve every year, I am honored to be
here today testifying on the Heroes Earnings Assistance and
Relief Tax Act of 2008.
I have the privilege of serving as President and CEO of
United Veterans of America in Leeds, Massachusetts, with
facilities serving homeless veterans also in Pittsfield,
Massachusetts. We serve upward of 200 homeless veterans every
day. Our program is based on a continuum of care, ranging from
the treatment of trauma and mental health to substance abuse
counseling, shelter, food, job training, and permanent housing.
Our partners include the U.S. Department of Veterans Affairs,
U.S. Department of Labor, HUD, and many State and local
agencies.
Shelter, treatment, and hope are the cornerstones of our
work. The UVA hosts 120 men and women in transitional living on
site at the VA Medical Center on a campus in Leeds,
Massachusetts, a small section of Northampton, Massachusetts.
Sixty more vets live in transitional housing in the Berkshire
Veterans Residence in Pittsfield, Massachusetts, which opened
in 2004. And there are 10 new studio apartments, funded through
the U.S. Department of Housing and Urban Development, which
provide permanent housing for homeless veterans with a
disability at the Pittsfield site.
We serve veterans primarily from the northeast United
States. A few are referred to us from across the country. The
average age of our population is 54, but the mean age is
trending younger as we see more veterans of Operation Enduring
Freedom and Operation Iraqi Freedom.
Approximately 85 percent of our veterans suffer mental
health and substance abuse issues. Some 10 percent are elderly,
and by elderly we mean age 70 or older. Five percent of our
veterans are women. More than 25 percent of our veterans have
been diagnosed with post-traumatic stress disorder, and 28
percent are on parole and probation, the majority of them from
their addictions. Forty-two percent of the veterans in our care
on any given day are members of our minority community.
I could go on, but it would be easier for you to take a
look at our website, www.unitedveterans.org, to learn more
about the work we do and the extent of the work we do. I am
supported by an intensely dedicated staff and a committed board
of directors, and I enjoy a wonderful collaborative
relationship with the Leeds VA Medical Center and the VA
headquarters here in Washington.
Currently, we are in the predevelopment stage of a 39-unit
limited equity cooperative apartment development, to be built
on our site in Pittsfield for formerly homeless veterans. This
development will be owned cooperatively and managed by the
formerly homeless veterans. The apartments will meet the
highest standards of green building, incorporating energy
efficiency, renewable energy, and alternative fuels. The
housing will be sustainable in perpetuity for low-income
veterans.
Additionally, with reasonable support from the Federal
Government, we can dedicate a portion of each veteran's rent to
an individual deposit account, thus enabling formerly homeless
veterans to realize the American dream of home ownership and
building wealth through equity. This changes the end of the
story for homeless veterans of U.S. military service.
I would add that at this point, the Federal role in
developing this housing has been minimal. In fact, we
understand that the IRS rules prohibit the use of the Low-
Income Housing Tax Credits in building cooperatives. I would
suggest that this Committee take a look at that rule.
I believe that, however unintended, restrictive IRS rules
governing the Low-Income Housing Tax Credit probably have
prevented the creation of alternative models of supportive
housing for people with disabilities.
In general, to the best of my knowledge, the Federal
Government has no program that supports exclusively the
creation of permanent, affordable housing for veterans. I
realize that this is a policy decision for consideration of the
entire Congress and Administration, but I think it is something
that needs to be brought to the forefront of our consciousness,
that veterans are not a preferred class of people in the United
States of America as we would legislate that for housing.
Back home in the Commonwealth of Massachusetts, and under
both Governor Romney and Governor Patrick, they are stepping up
to the plate with State money and a willingness to support with
Federal resources such a project such as with project-based
Section 8s and VASH subsidies and HOME funds. At this point,
however, Federal participation has been limited to relatively
small direct appropriation from HUD, procured through the good
offices of Congressman John Olver and Congressman Richard Neal.
The UVA needs to complete this project with a reasonable,
minimal debt load, and the Federal Government must become a
partner with us in this.
By the way, VASH, Veterans Affairs Supportive Housing, is a
subject of the Federal Section 8 program that hasn't been
funded in years. Both the House and the Senate this year are
considering funding VASH. We emphatically endorse funding VASH,
and we would suggest that VASH subsidies be flexible--that is,
that the VASH subsidies could be both tenant-based and project-
based subsidies.
I would add parenthetically that although not the purview
of this Committee, I would ask Congress to amend the Fair
Housing Act to include veterans of U.S. military services as a
protected class. I mention this because if we are successful in
creating permanent housing for veterans, we run the real risk
of violating the fair housing laws by giving veterans
priority--again, a Catch-22 situation which I am sure is
unintentional, but which I am sure can be fixed.
I mentioned changing the end of the story for homeless
veterans, and I would like to go back to that just for a
minute. Typically, the veterans in our care, both men and
women, cycle from the streets to the shelter, back to the
neighborhood, and ultimately back to the shelter.
Along the way, these men and women lose everything. It is
hard to imagine, but typically every contact with family and
community has been lost. Jobs, houses, friends, self-respect,
personal dignity, personal hygiene--it is all gone. The dignity
is gone for the men and women when they walk into my facility.
Only by creating permanent, affordable housing for veterans
can we change this pattern. By creating permanent, affordable
housing opportunities, whether it is rental, cooperative, or
homeownership, and by bringing comprehensive support services
to the veterans in this housing, we can change the end of the
story once and for all. In the long run, permanent supportive
housing is less expensive than shelter. And finally, our
veterans deserve better than what we are doing today.
The beauty of the project that we are building in
Pittsfield is that it is replicable. With a little help from
the banks, States, and Federal Government, this type of housing
can be adapted for any part of the country. We are working now
with the VA Medical Center in Leeds to create another limited
equity cooperative on the grounds of the medical center.
Across the country, VA Medical Center campuses typically
enjoy lots of unused green space. A project like ours could be
built on the grounds of any VA Medical Center. Working with the
VA, nonprofit developers could lease the land at a nominal rate
while taking the entire responsibility for building and
operating the permanent housing on that land. No additional
expense would accrue to the VA, and the VA Medical Center would
have a new outpatient population at its doorstep.
But the best reason for doing this is that it really serves
veterans. And that is what we are talking about today, serving
veterans. Now, I am not the expert in the Tax Code. But I do
know that any portion of this Tax Code that could be changed to
benefit veterans should be changed. Our veterans have paid the
price. They don't need to be nickeled and dimed by the Tax
Code. If anything, we ought to be creating tax credits for
military service.
Soon, we hope, we will be welcoming home the veterans of
Operation Enduring Freedom and Operation Iraqi Freedom. After
all the celebrations, will we once again turn to other business
and forget our veterans? Twenty years from now, will someone be
sitting in this Chair testifying to the needs of homeless
veterans?
I hope not. And I believe by the commitment that this
Committee is making to begin to look at all the little
bureaucratic chinks that make it difficult for people to
succeed, that working together we will change the end of the
story for all our veterans. Thank you.
[The prepared statement of Mr. Downing follows:]
Prepared Statement of John F. Downing, President and Chief Executive
Officer, United Veterans of America, Inc., Leeds, Massachusetts
Congressman Neal and Congressman McDermott, Members of the
Committee: On behalf of the hundreds of homeless veterans served every
year by United Veterans of America, I am honored by your invitation to
be here today testifying on the ``Heroes Earnings Assistance and Relief
Act of 2007.''
I have the privilege of serving as President and CEO of United
Veterans of America, Inc. Based in Leeds, Massachusetts, with
facilities serving homeless veterans in Pittsfield and Leeds, UVA
serves upwards of 200 veterans every day. Our program is based on a
continuum of care, ranging from the treatment of trauma and mental
health issues to substance abuse counseling, shelter, food and other
necessities, job training, and permanent housing. Our partners include
the U.S. Department of Veterans Affairs, the U.S. Department of Labor,
HUD, and many State and local agencies. Shelter, treatment, and hope
are our cornerstones.
UVA hosts 120 men and women in transitional living on site at the
VA Medical Center campus in the Leeds section of Northampton,
Massachusetts. Sixty more vets live in transitional housing at our
Berkshire Veterans Residence in Pittsfield, Massachusetts, which opened
in September 2004. Ten new studio apartments, funded through the U.S.
Department of Housing and Urban Development, provide permanent housing
for homeless veterans with a disability at the Pittsfield site.
UVA serves veterans primarily from the northeast United States. A
few are referred to us from across the country. The average age of our
population is 54, but the mean age is trending younger as we see more
veterans of Operation Enduring Freedom and Operation Iraqi Freedom.
Approximately 85 percent of our vets suffer mental health and/or
substance abuse issues. Some 10 percent are elderly, at age 70 or
older. Five percent of our vets are women. More than 25 percent of our
vets have been diagnosed with post-traumatic stress disorder (PTSD); 28
percent are on parole or probation; 42 percent of UVA's vets are
minority.
I could go on, but I would invite you to take a look at our website
at www. unitedveterans.org to learn more about UVA. I am supported by a
dedicated staff and a committed board of directors, and I enjoy a
wonderful, collaborative relationship with our VA Medical Center and
with VA Headquarters here in Washington.
Currently we are in the pre-development stage of a 39 unit limited
equity cooperative, to be built on our site in Pittsfield,
Massachusetts. The development will be owned cooperatively and managed
by formerly homeless veterans. These apartments will meet the highest
standards of ``green'' building, incorporating energy efficiency,
renewable energy, and alternative fuels. This housing will be
sustainable in perpetuity for low-income veterans. Additionally, with
reasonable support from the Federal Government, we can dedicate a
portion of each veteran's rent to an Individual Development Account
(IDA), thus enabling formerly homeless veterans to realize the American
dream of home ownership and building wealth through equity. This
changes the end of the story for homeless veterans of U.S. military
service.
I would add that, at this point, the Federal role in developing
this housing has been minimal. In fact, we understand that IRS rules
prohibit the use of the Low Income Housing Tax Credit in building
cooperatives. I would suggest that this Committee take a close look at
that rule. I believe that, however unintended, restrictive IRS rules
governing the Low Income Housing Tax Credit probably have prevented the
creation of alternative models of supportive housing for people with
disabilities. In general, to the best of my knowledge, the Federal
Government has no program that supports exclusively the creation of
permanent, affordable housing for veterans. I realize that this is a
policy decision for the consideration of the entire Congress and the
Administration.
Back home, the Commonwealth of Massachusetts, under both Governor
Romney and Governor Patrick, is stepping up to the plate with State
money and a willingness to support the project with Federal resources,
such as project-based Section 8 subsidies, VASH subsidies, and HOME
funds. At this point, however, Federal participation has been limited
to a relatively small direct appropriation from HUD, procured through
the good offices of Congressmen John Olver and Richard Neal. For UVA to
complete this project with a reasonable, minimal debt load, the Federal
Government must be more of a partner with us.
By the way, VASH--Veterans Affairs Supportive Housing--is a subset
of the Federal Section 8 program that hasn't been funded in years. Both
the House and the Senate this year are considering funding VASH. We
emphatically endorse funding VASH. And we would suggest that VASH
subsidies be flexible, that is VASH subsidies could be both tenant-
based and project-based subsidies.
I would add, parenthetically, that, although not the purview of
this Committee, I would ask Congress to amend the Fair Housing Act to
include veterans of U.S. military service as a protected class. I
mention this because, if we are successful in creating permanent
housing for veterans, we run the real risk of violating Fair Housing
laws by giving veterans priority--again, a Catch-22 situation which I'm
sure is unintentional, and which I'm sure can be fixed.
I mentioned changing the end of the story for homeless veterans,
and I'd like to go back to that. Typically, the veterans in our care,
both men and women, cycle from the streets to shelter, back to the old
neighborhood and, ultimately, back to shelter. Along the way, these men
and women lose everything. It's hard to imagine but, typically, every
contact with family and community has been lost. Jobs, houses, family
ties, self-respect, sobriety, mental health, personal hygiene--all
gone. Dignity--gone. At UVA our vets come to see each other as their
community. Only by creating permanent, affordable housing for veterans
can we change that pattern. By creating permanent, affordable housing
opportunities, whether it's rental, cooperative, or home ownership, and
by bringing comprehensive support services to the veterans in this
housing, we can change the end of that story once and for all. In the
long run, permanent supportive housing is less expensive than shelter.
And, finally, our veterans deserve better than what we're doing today.
The beauty of the project we're building in Pittsfield is that it
is replicable. With a little help from the banks and State and Federal
Government, this type of housing can be adapted for any part of the
country. We are working now with the VA Medical Center in Leeds,
Massachusetts to create another limited equity cooperative on the
grounds of the Medical Center. Across the country, VA Medical Center
campuses typically enjoy lots of unused green space. A project like
ours could be built on the grounds of any VA Medical Center. Working
with the VA, nonprofit developers could lease the land at a nominal
rate, while taking the entire responsibility for building and operating
the permanent housing on that land. No additional expense would accrue
to the VA, and the VA Medical Center would have a new outpatient
population on its doorstep. But the best reason for doing this is that
it serves veterans. And that's what we're talking about today--serving
veterans. Now, I am not an expert in the Tax Code. But I do know that
any portion of the Tax Code that could be changed to benefit veterans
should be changed. Our veterans have paid the price. They don't need to
be nickeled and dimed by the Tax Code. If anything, we ought to be
creating tax credits for military service.
Soon, we hope, we will be welcoming home the veterans of Operation
Enduring Freedom and Operation Iraqi Freedom. After all the
celebrations, will we, once again, turn to other business and forget
our veterans? Twenty years from now, will someone else be sitting in
this chair testifying to the needs of homeless veterans?
Chairman NEAL. Thank you, Mr. Downing.
Ms. Johnson, we are honored by your presence. Would you
proceed?
STATEMENT OF VICTORIA C. JOHNSON, WIDOW OF MAJOR ALAN R.
JOHNSON, U.S. ARMY RESERVE, YAKIMA, WASHINGTON
Ms. JOHNSON. Good morning, Chairman Neal and Chairman
McDermott, and Ranking Members English and Weller. Thank you so
much for allowing this opportunity to share the concerns of our
military personnel and families.
Again, my name is Victoria Johnson. My husband was Major
Alan R. Johnson, who was killed January 26, 2007, in Iraq. I
want to tell you a little bit about my husband. He has 26 years
military service, okay, combined with National Guard and
Reserve. It started in North Dakota, with the 141st Engineer
Battalion. Moving to Washington State, he was with the 81st
Brigade, 303rd Armor.
Just recently, before his service in Iraq, he was attached
to the 402nd Civil Affairs Battalion from New York. The men
that he went over to Iraq with, many of them were firsthand
part of 9/11.
As a civilian, my husband was a sergeant for Yakima County
Department of Corrections, so he was a public servant both
ways. Many of the men and women that he was over there with--
when you are talking Reservists and National Guard, whether it
be Army Reserve, National Guard, many of them are public
servants here. They may start out active duty military, and
then they have it in their heart. So they are over here in our
country becoming--I mean, they go to firemen. They go to law
enforcement. They go to any type of a public servant field.
So it is almost a dual purpose that they have. The
experience that they have here in this country in their jobs,
and not just law enforcement, not just the fire department, but
financial advisors, everything--with the Civil Affairs, they
were over there helping the Iraqi government build their
government. They were working with the Iraqi people. They took
what they had with their civilian jobs here to help over there.
So it was very important, those skills that they had here
as civilians. And I just want that recognized, that part of the
strength of our military is the strength that we give our
individuals in this country as civilians. It is very important.
I was married to him for 19 out of those 26 years. And I
believe that the strong leader that he was depended a lot on
the strength his family had. We were a team. We worked together
and we supported each other. The stronger those families are
here at home, the stronger they can be, whether they are here
or over there. So a lot of the focus needs to be on those
families so that they can do the jobs that they need to do and
not worry about those families.
He had 15 years working for the county, and there was a
State pension. Now, he was climbing that ladder with Yakima
County as a sergeant. He planned on coming back, being promoted
to chief, becoming administrator. In no way did he not plan on
coming back. In no way did he not plan on moving up that
ladder.
I received a letter from the State, because it was a State
pension plan at the county, saying that he would only be given
the money that he put in as his contributions. There would be
no matching contributions. My husband has always fought for
what is right, and I wanted to continue doing so.
And he worked hard for that pension and our future. And
part of my connection with him is I want to continue to have
the future that we planned together to have. And receiving that
letter saying that I would only get what he put in was just a
slap in the face on top of the pain.
I cannot explain to you the pain involved when you have
military people come to your door at night in uniform. You
know, you already know--from the movies and everything else--
you already know what they are going to tell you. The pain is
unbelievable, and I don't wish anybody to have to go through
it.
But then to deal with the problems afterward, what I did is
with help from the Representatives in Washington State, we went
to Olympia to find out that--I don't know quote unquote or how
it works or anything, but it sounds like he was the first State
employee actually killed in action since Vietnam. And really,
it is all things that just haven't been changed since then. It
is technicalities, wording, paperwork. They had never dealt
with the situation before.
He was 44 years old when he died. He did not quit his job.
He was being treated as though he was terminated and quit. He
didn't do that. He was over serving our country, and was
killed.
Because the pension plan considered him voluntarily
terminated, quit, I mean, it just, like I said, would only pay
me that. But if he had been an active employee at that time and
still considered and everything, the survivor benefits paid to
the family would have been more.
The bill would assure that the pension survivor benefits
would be paid as if he had returned to work with Yakima County.
So that is what I did in Olympia, is to try to have it taken
care of.
This picture here, right here, these are the men that were
with my husband when he died. Those are Reservists, each one of
those. And you have a paramedic from New York in the New York
Fire Department. You have a carpenter. You have financial
advisors. All these people are the type of people that we are
talking about.
And many of these are, again, public servants. If they had
been killed over there, they would be dealing with exactly the
same thing that I am dealing with. Their family would be faced
with exactly the same thing.
I urge you to make sure that they and their families can
continue to rely on the survivor benefits that they have earned
through their civilian employers' pension plans. I ask that
their families get the benefits that their spouses worked for
before they were called to serve our country on active military
service.
Again, I worked with the Washington State Legislature to
change its pension plan to recognize the sacrifices that
members of the Guard and Reservists may be called to make for
our country, and I urge the U.S. Congress to do the same. Our
Guard and Reservists should know that the families they leave
behind will be honored to have the future that they have worked
so hard to provide. And again, their strength over there is
going to be the strength they have here. They need to know that
the country they are sacrificing everything for will take care
of their families.
We have a change in the type of military serving our
Nation. Over 81,000 Reservists and National Guard members have
been called to duty and have responded to that call. The world
of being married to a Reservist or a member of the National
Guard has changed in ways that they--there is no way 20 years
ago that we would have known this.
Today my life has changed. Oh, yes. It has been thrown
upside down and backward. But my husband always said there was
light in the tunnel. He always--he never gave up. It was always
win/win. In fact, I want you to know that this binder was the
one that he had in Iraq with him. So it went over there, and it
stays with me.
And in the back of this book, there are a couple of quotes.
For instance, one of the quotes he had in his book over there
is, ``The love of a wife is one of God's most precious gifts to
man, and your love for her is worth whatever it costs.'' His
love for his country was also worth that. He believed in his
country, and was willing to make that ultimate sacrifice. He
also has the quote that: ``The greatest thing a father can do
for his children is to love their mother.'' I think the
greatest thing that this country can do is to love the families
of these soldiers.
Please, I ask you to make the changes in pension laws to
support those families who find that their loved ones cannot
come back to those former jobs. Please make sure that the
families of veterans who have given their lives for their
country receive the full benefits that their spouses have
earned. And yes, there will be lots of parties for those that
come back. But there are some that will not come back. Thank
you.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Victoria C. Johnson,
Widow of Major Alan R. Johnson, U.S. Army Reserve, Yakima, Washington
Good morning, Chairman Neal and Chairman McDermott and Ranking
Members English and Weller. I am Victoria Johnson and I live in Yakima,
Washington. Thank you for holding this hearing today on the situations
faced by the brave men and women who are serving in the military and
their families.
My husband, Major Alan R. Johnson, was killed on January 26th of
this year. He had 26 years of military experience, most of it in
National Guard and Reserve. My husband, like many young men and women,
joined the Army National Guard after he graduated from high school in
1981 and served as an enlisted member of the 141st Engineer Combat
Battalion out of Jamestown, North Dakota. During his years in the
National Guard he attended OCS and after moving to Washington was
assigned to many leadership roles in the service. He transferred to the
U.S. Army Reserve in 2003 and was deployed to Iraq in April 2006.
As a member of the Guard and the Reserves, my husband had a
civilian job. During his 26 years of serving in the Guard, he also
spent 15 years working for Yakima County. When he was deployed, Alan
was working as a sergeant in the Corrections Department of Yakima
County; he was a shift supervisor for one of the largest jails in
Washington State. He gave the county 100 percent effort in what he did
and planned to come back from serving in Iraq and move up the ladder.
He would be looking at a chief position or possibly administrator of
the county jail had he returned as he had planned.
When he was killed in Iraq, the pension covering the employees of
the Yakima County Department of Corrections treated him as if he was
somebody who volunteered to quit his job at the age of 44. My husband
did not quit his job. He left to serve his country. As I mentioned,
Alan planned to come back after he served his duty but he did not get
that chance. Because the pension plan considered him a voluntarily
terminated employee, the plan would have only paid me, as his widow, a
survivor benefit equal to a refund of his contributions to the county
pension; the money paid by Yakima County into the State pension plan
would be kept by the retirement system.
Had Alan been an active employee of Yakima County, the survivor
benefits paid to our family would have been more, as a full death
benefit. The pension in Washington State had adopted language based on
the requirements of the Uniformed Services Employment and Reemployment
Rights Act (USERRA) but there is a gap in the protection under that
law. USERRA requires that servicemembers return to their civilian
employers to claim their benefits under the law. My husband could not
meet that requirement. I am grateful that H.R. 2540, the Honoring
Existing Retirement Obligations for Every Servicemember Act, which
Congressmen Pomeroy and Hastings introduced, addresses the gap that I
fell into when Alan was killed. The bill would assure that his pension
survivor benefits would be paid as if he had returned to work with
Yakima County.
The picture that you see in front of you are the men that were with
Alan when he died. Those are your Reservists. All of those men in the
Reserve have civilian jobs back home in the U.S. Their civilian
experience enables each of them to bring a unique asset to our Nation's
military. Those serving in the National Guard and the Reserve take the
knowledge gained in their civilian occupations and bring that expertise
with them as they serve in Iraq and across the world. They use their
civilian skills to do good--supporting their missions in Iraq. It's a
great asset.
While Alan was here at home, he and all Reservists were building a
foundation for their families' future through the retirement benefits
provided in their civilian jobs. When called to serve on active duty,
they go to support our country in Iraq, or wherever else in the world
they are needed.
I urge you to make sure that Reservists and National Guard members
can continue to rely on the survivor benefits that they have earned
through their civilian employers pension plans. I ask that their
families get the benefits that our spouses worked for here before they
were called to serve our country on active military service. I worked
with the Washington State Legislature to change its pension system to
recognize the sacrifices that members of the Guard and Reservists may
be called to make for our country and I urge the U.S. Congress to do
the same. Our Guard and Reservists should know that the families they
leave behind will be allowed to have the future that they have worked
so hard to provide.
We have a change in the type of military serving our Nation. Over
81,000 Reservists and National Guard members have been called to duty
and have responded to that call.
The world of being married to a Reservist or member of the National
Guard has changed in ways that I could not know 20 years ago when Alan
and I were married. Today, my life has changed and so have the lives of
many other military families. I ask you to make changes in the pension
laws to support those families who find their love ones cannot come
back to their employer. Please make sure they get the full benefits
that their spouses have earned.
Thank you.
Chairman NEAL. Thank you very much for your testimony, Ms.
Johnson.
The House floor has now scheduled three votes, and the
Committee Members are required to go over for those votes. So
the Chair will declare a recess for approximately 20 minutes.
[Recess.]
Chairman NEAL. Let me reconvene our panel. And I would like
to recognize Mr. McAuliffe for his testimony.
STATEMENT OF JOHN MCAULIFFE, CONNECTICUT STATE DIRECTOR,
NATIONAL VOLUNTEER FIRE COUNCIL, WETHERSFIELD, CONNECTICUT
Mr. MCAULIFFE. I would like to thank the Chairman, Ranking
Members, and other Members of the Subcommittees for the
opportunity to be here today to express the views of the
National Volunteer Fire Council on H.R. 943, the Volunteer
Responder Incentive Protection Act. H.R. 943 would prohibit the
Federal Government from taxing benefits provided by State and
local units of government to volunteer firefighters and EMS
personnel.
Volunteer firefighters and EMS personnel are essential to
our Nation's safety and security. All- and mostly-all volunteer
fire departments protect approximately 38 percent of the
country's population and more than 70 percent of the country's
land area.
A 2004 study by St. Joseph's University, in partnership
with VFIS, which is the Volunteer Firemen's Insurance Service,
revealed that volunteer first responders save the American
taxpayers $37.2 billion per year. Without volunteer first
responders, many communities simply would not be able to afford
to provide firefighting and emergency medical services to all.
According to the National Fire Protection Association, also
known as NFPA, the number of volunteer firefighters in this
country has decreased dramatically since the mid-1980s. In
addition, NFPA statistics show that volunteer firefighters as a
population are significantly older today than they were 20
years ago.
There are two tables and a more detailed explanation of the
population issues facing the volunteer fire service that are
included in the written testimony. However, I may want to point
out that from the original printout, what happens when
computers can't talk to printers properly, things change
around, so it may be a little confusing. So if there is a
question, our office can certainly clarify that for you.
To cope with the dwindling and aging population of
volunteer emergency responders, some States and many local
units of government have discovered that providing benefits to
volunteer emergency responders helps boost retention and
recruitment. Volunteer benefits come in various forms.
Communities provide length of service award programs, sometimes
known as fire pension programs or LOSAPs, for volunteer first
responders; various tax and fee reductions; small cash payments
for emergency calls responded to; reimbursement for expenses
incurred; and a variety of others ranging from free gym
memberships to award ceremonies. The types and levels of
benefit vary widely by State and community.
Some States provide benefits, or at least authorize local
units of government to provide benefits. Connecticut, New York,
and Alaska have authorized, through enabling legislation, to
have local units of government to provide property tax credits
to their volunteer first responders. Delaware, Maryland, and
South Carolina offer their volunteers State income tax credits.
The Federal Government does not provide volunteer first
responders with any taxable benefits, but the Federal
Government does tax the benefits provided by State and local
units of government. Federal taxation of volunteer first
responder benefits has several effects. The most obvious effect
is to reduce the value of the benefit to the volunteer.
H.R. 943 excludes from gross income any property tax rebate
or other benefit provided by State or local units of government
to a member of a qualified emergency response organization.
Excluding property tax rebates from gross income will be most
beneficial in States like mine, where local units of government
are allowed to offer up to $1,000 in property tax rebates.
The other benefits that are not enumerated in H.R. 943
would cover a wide range of benefits that are provided to
volunteer emergency responders in every State. There are so
many different types of incentives provided to volunteer
emergency responders across the country that it would be nearly
impossible to list them all. The broad language used in H.R.
943 is extremely important so that States and communities will
have the flexibility to provide whatever type benefit they find
to be most effective as a retention and recruitment tool.
Federal taxation also imposes a significant administrative
burden on the units of government in small rural communities,
which rely heavily on volunteer emergency services, that have
limited staff to process the paperwork. Many of these
communities have no staff at all and rely on marginally
compensated elected officials to perform all the administrative
functions.
In addition to being an administrative burden, Federal
taxation of benefits provided to volunteer first responders can
also be confusing. Many communities issue volunteers 1099 tax
forms when they should be issuing W-2 forms, and vice versa.
Small communities with severely limited resources often find
the administrative and legal barriers associated with providing
benefits to volunteer emergency responders prohibitive. By
eliminating the Federal taxation on these benefits, H.R. 943
would make it much easier for smaller communities to provide
them.
The Joint Committee on Taxation estimates that passage of
H.R. 943 would cost the Federal Government $1.58 billion over
10 years. Each year, the services provided by volunteers--and I
say each year--results in a savings to the taxpayers of $37.2
billion. The tax savings derived from volunteer first
responders compared to the average year cost incurred by
passage of H.R. 943 results in a cost-to-savings ratio of
approximately 42 cents per $100.
NVFC supports passage of H.R. 943, either as a stand-alone
bill or as a part of a package of multiple tax proposals in one
bill.
I would like to thank the Subcommittee for the opportunity
to speak here today, and would be happy to take any questions
at this time. Thank you.
[The prepared statement of Mr. McAuliffe follows:]
Prepared Statement of John McAuliffe, Connecticut State Director,
National Volunteer Fire Council, Wethersfield, Connecticut
I'd like to thank the Chairmen, Ranking Members and other Members
of the Subcommittees for the opportunity to be here today to express
the views of the National Volunteer Fire Council (NVFC) on H.R. 943,
the Volunteer Responder Incentive Protection Act, which would prohibit
the Federal Government from taxing benefits provided by State and local
units of government to volunteer firefighters and EMS personnel.
My name is John McAuliffe and it is an honor and a pleasure to
appear before you today. I have been in the volunteer fire service
since 1958, and served as Chief of the Wethersfield Fire Department
from 1991-1996. I am currently the National Volunteer Fire Council's
Connecticut State Director as well as the Chairman of the Connecticut
State Firemen's Association's (CSFA) Legislative Committee. CSFA is a
member of the NVFC, which represents the interests of the Nation's
volunteer fire and emergency medical personnel who staff approximately
30,000 fire and EMS agencies nationwide.
Volunteer firefighters and EMS personnel are essential to our
Nation's safety and security. All- and mostly-volunteer fire
departments protect approximately 38 percent of the country's
population and more than 70 percent of the country's land area. A 2004
study by St. Joseph's University in partnership with VFIS revealed that
volunteer first responders save American taxpayers $37.2 billion per
year. Without volunteer first responders, many communities simply would
not be able to afford to provide firefighting and emergency medical
services at all.
According to the National Fire Protection Association (NFPA) the
number of volunteer firefighters in this country has decreased
dramatically since the mid-1980s. In addition, NFPA statistics show
that volunteer firefighters as a population are significantly older
today than they were 20 years ago. In order to improve retention and
recruitment, many States and communities provide benefits to their
volunteer emergency responders. Federal taxation of these benefits
reduces the incentive for the volunteers and creates administrative
problems for local units of government. By eliminating Federal taxation
of these benefits, H.R. 943 would be a tremendous boost for volunteer
first responder recruitment and retention efforts in communities around
the country.
The number of volunteer firefighters in the country is decreasing.
According to a National Fire Protection Association (NFPA) study,
between 1983 and 1988, the number of volunteer firefighters in the
country has decreased from close to 900,000 to approximately 800,000.
Since 1988, the number of volunteers has fluctuated up and down but
remained close to 800,000. Over that same period of time, the number of
volunteer firefighters per person in this country has declined steadily
by 26.7 percent.
Table 1
Number of Firefighters in the U.S., 1983-2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Rate per 1,000 Career Rate per 1,000 Volunteer Rate per 1,000
Year Number People Number People Number People
--------------------------------------------------------------------------------------------------------------------------------------------------------
1983 1,111,200 4.75 226,600 0.97 884,600 3.78
--------------------------------------------------------------------------------------------------------------------------------------------------------
1984 1,129,100 4.78 231,600 0.98 897,750 3.80
--------------------------------------------------------------------------------------------------------------------------------------------------------
1985 1,077,950 4.52 238,500 1.00 839,450 3.52
--------------------------------------------------------------------------------------------------------------------------------------------------------
1986 1,045,950 4.35 237,750 0.99 808,200 3.36
--------------------------------------------------------------------------------------------------------------------------------------------------------
1987 1,060,000 4.36 243,200 1.00 816,800 3.36
--------------------------------------------------------------------------------------------------------------------------------------------------------
1988 1,040,750 4.25 252,500 1.03 788,250 3.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
1989 1,020,700 4.12 250,600 1.01 770,100 3.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
1990 1,025,650 4.11 253,000 1.01 772,650 3.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
1991 1,033,600 4.09 261,800 1.04 771,800 3.05
--------------------------------------------------------------------------------------------------------------------------------------------------------
1992 1,058,300 4.14 253,000 0.99 805,300 3.15
--------------------------------------------------------------------------------------------------------------------------------------------------------
1993 1,055,050 4.09 259,650 1.01 795,400 3.08
--------------------------------------------------------------------------------------------------------------------------------------------------------
1994 1,073,600 4.12 265,700 1.02 807,900 3.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
1995 1,098,850 4.18 260,850 0.99 838,000 3.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996 1,081,800 4.07 266,300 1.00 815,500 3.07
--------------------------------------------------------------------------------------------------------------------------------------------------------
1997 1,079,050 4.03 275,700 1.03 803,350 3.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
1998 1,082,500 4.00 278,300 1.03 804,200 2.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
1999 1,065,150 3.90 279,900 1.03 785,250 2.87
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000 1,064,150 3.86 286,800 1.04 777,350 2.82
--------------------------------------------------------------------------------------------------------------------------------------------------------
2001 1,078,300 3.85 293,600 1.05 784,700 2.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
2002 1,108,250 3.89 291,650 1.02 816,600 2.87
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003 1,096,900 3.77 296,850 1.02 800,050 2.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
2004 1,100,750 3.76 305,150 1.04 795,600 2.72
--------------------------------------------------------------------------------------------------------------------------------------------------------
2005 1,136,650 3.82 313,300 1.05 823,350 2.77
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: NFPA Survey of Fire Departments for U.S. Fire Experience (1983-2005).
Exacerbating the problems created by the decreasing number of
volunteer firefighters, NFPA statistics show that volunteer
firefighters as a group are aging. Table 2 on the next page shows three
NFPA studies that measured the percentage of volunteer firefighters
under 30, under 40, under 50 and over 50 in 1987, 1998 and 2005 (2005
is the last year that NFPA collected age profile information for
volunteer firefighters and 1987 was the first). The long term trend is
that the percentage of volunteer firefighters under 30 and under 40 is
decreasing while the percentage of volunteer firefighters over 40 and
over 50 is increasing. This data suggests that departments are having
difficulty recruiting new members.
Table 2
Age Profile of Firefighters By Size of Community, 2005
----------------------------------------------------------------------------------------------------------------
Mostly Volunteer Firefighters
-----------------------------------------------------------------------------
Size of Community Percent Percent Percent Percent
Firefighters Firefighters Firefighters Firefighters Total
under Age 30 Age 30-39 Age 40-49 Age 50 and up
----------------------------------------------------------------------------------------------------------------
10,000 to 24,999 28.4% 31.2% 25.1% 16.3% 100.0%
----------------------------------------------------------------------------------------------------------------
5,000 to 9,999 31.0 29.4 22.5 17.1 100.0
----------------------------------------------------------------------------------------------------------------
2,500 to 4,999 29.5 28.4 23.1 19.0 100.0
----------------------------------------------------------------------------------------------------------------
Under 2,500 25.9 25.8 24.8 23.5 100.0
----------------------------------------------------------------------------------------------------------------
Source: NFPA Survey of Fire Departments for U.S. Fire Experience, 2005.
Age Profile of Firefighters By Size of Community, 1998
----------------------------------------------------------------------------------------------------------------
Mostly Volunteer Firefighters
-----------------------------------------------------------------------------
Size of Community Percent Percent Percent Percent
Firefighters Firefighters Firefighters Firefighters Total
under Age 30 Age 30-39 Age 40-49 Age 50 and up
----------------------------------------------------------------------------------------------------------------
10,000 to 24,999 31.3% 32.1% 23.8% 12.7% 100.0%
----------------------------------------------------------------------------------------------------------------
5,000 to 9,999 33.2 30.3 22.5 14.1 100.0
----------------------------------------------------------------------------------------------------------------
2,500 to 4,999 33.5 29.4 23.4 13.7 100.0
----------------------------------------------------------------------------------------------------------------
Under 2,500 25.3 29.8 26.7 18.2 100.0
----------------------------------------------------------------------------------------------------------------
Source: NFPA Survey of Fire Departments for U.S. Fire Experience, 1998.
Age Profile of Firefighters By Size of Community, 1987
----------------------------------------------------------------------------------------------------------------
Mostly Volunteer Firefighters
-----------------------------------------------------------------------------
Size of Community Percent Percent Percent Percent
Firefighters Firefighters Firefighters Firefighters Total
under Age 30 Age 30-39 Age 40-49 Age 50 and up
----------------------------------------------------------------------------------------------------------------
10,000 to 24,999 33.0% 33.8% 20.6% 12.6% 100.0%
----------------------------------------------------------------------------------------------------------------
5,000 to 9,999 35.8 32.4 19.1 12.7 100.0
----------------------------------------------------------------------------------------------------------------
2,500 to 4,999 34.6 32.5 19.3 13.6 100.0
----------------------------------------------------------------------------------------------------------------
Under 2,500 29.7 33.5 20.9 15.9 100.0
----------------------------------------------------------------------------------------------------------------
Source: NFPA Survey of Fire Departments for U.S. Fire Experience, 1987.
To cope with the dwindling and aging population of volunteer
emergency responders, some States and many local units of government
have discovered that providing benefits to volunteer first responders
helps boost retention and recruitment. Volunteer benefits come in
various forms. Communities provide length of service award programs
(LOSAPs, pension-like programs for volunteer first responders), various
tax and fee reductions, small cash payments for emergency calls
responded to, reimbursement for expenses incurred, and a variety of
others ranging from free gym memberships to award ceremonies. The types
and levels of benefit vary widely by community.
Some States provide benefits, or at least authorize local units of
government to provide benefits. Connecticut, New York and Alaska have
authorized local units of government to provide property tax credits to
their volunteer first responders. Delaware, Maryland and South Carolina
offer their volunteers State income tax credits.
A Department of Labor ruling last year capped the value of benefits
a first responder can receive each year and still be considered a
volunteer. The ruling stated that a first responder loses their
volunteer status if they receive more than 20 percent of what a career
first responder, working the same number of hours in the same community
would make in their place. This ruling hasn't affected most
communities, where benefit levels don't come close to approaching the
20 percent threshold. However, the ruling has set an upper limit on
volunteer benefits and some departments have been forced to take steps
to ensure that their members are in compliance.
The Federal Government does not provide volunteer first responders
with any taxable benefits, but the Federal Government does tax the
benefits provided by State and local units of government. Federal
taxation of volunteer first responder benefits has several effects. The
most obvious effect is to reduce the value of the benefit, by reducing
the take-home income of the individual receiving the benefit, hence
reducing the incentive that the benefit was intended to provide.
H.R. 943 excludes from gross income any ``property tax rebate or
other benefit'' provided by State or local units of government to a
member of a qualified emergency response organization. Excluding
property tax rebates from gross income will be particularly beneficial
in States like mine, where local units of government are allowed to
offer up to $1,000 in property tax rebates. This type of benefit is
particularly useful in communities where rising property taxes have
made living in the community unaffordable to the volunteers that serve
it. New York and Alaska allow local governments to offer similar
benefits to their volunteers.
The ``other benefits'' that are not enumerated in H.R. 943 would
cover a wide range of benefits that are provided to volunteer emergency
responders in every State. There are so many different types of
incentives provided to volunteer emergency responders across the
country that it would be nearly impossible to list them all. The broad
language used in H.R. 943 is extremely important so that communities
will have the flexibility to provide whatever type of benefit they find
to be most effective as retention and recruitment tools.
Federal taxation also imposes a significant administrative burden
on units of government in small, rural communities (which rely heavily
on volunteer emergency services) that have limited staff to process
paperwork. Many of these communities have no staff at all and rely on
marginally compensated elected officials to perform all administrative
functions. In communities such as these, issuing tax documents and
maintaining tax records for every member of the volunteer fire
department can be an overwhelming task.
In addition to being an administrative burden, Federal taxation of
benefits provided to volunteer first responders can also be confusing.
Many communities issue volunteers 1099 tax forms when they should be
issuing W-2 forms and vice versa. LOSAP's place in the Federal tax
structure is ambiguous at best, leading to a lack of portability and in
some cases underfunding of programs. Small communities with severely
limited resources often find the administrative and legal barriers
associated with providing benefits to volunteer emergency responders
prohibitive. By eliminating Federal taxation of these benefits, H.R.
943 would also make it much easier for small communities to provide
them.
The Joint Committee on Taxation estimates that passage of H.R. 943
would cost the Federal Government $1.58 billion over 10 years. This
estimate does not take into account the value of volunteer first
responders in keeping local tax rates down. Communities provide
benefits to their volunteer first responders as a retention and
recruitment tool. Ultimately, by providing these benefits and
maintaining a viable volunteer emergency responder force, communities
are able to maintain lower local tax rates. Each year, the services
provided by volunteer emergency responders save State and local
taxpayers more than $37.2 billion. The tax savings derived from
volunteer first responders compared to the average year cost incurred
by passage of H.R. 943 results in a cost to savings ratio of
approximately 42 cents per $100.
Table 3
H.R. 943 Cost Estimate
[Millions of Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal Years
---------------------------------------------------------------------------------------------------------------------------------------------------------
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007-12 2007-17
--------------------------------------------------------------------------------------------------------------------------------------------------------
-31 -126 -135 -146 -162 -172 -184 -196 -208 -221 -599 -1580
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation Letter to Congressman John Larson dated July 16, 2007.
The NVFC supports passage of H.R. 943, either as a stand-alone bill
or as part of a package of multiple tax proposals in one bill. I would
like to thank the Subcommittees for the opportunity to speak here today
and would be happy to take any questions at this time.
Chairman NEAL. Thank you, Mr. McAuliffe.
Ms. Perdew.
STATEMENT OF JESSICA PERDEW, DEPUTY DIRECTOR OF GOVERNMENT
RELATIONS, NATIONAL MILITARY FAMILY ASSOCIATION, ALEXANDRIA,
VIRGINIA
Ms. PERDEW. Chairman Neal, Chairman McDermott, and
distinguished Members of the Subcommittee, thank you for the
opportunity to share the tax issues and concerns facing
military families today. NMFA appreciates the concern for and
commitment to families evident in the Heroes Earnings
Assistance and Relief Tax Act of 2007.
As you know, military compensation is very complex. Many
servicemembers receive special and incentive pays at different
times throughout their careers. These temporary increases in
compensation may actually result in a loss of programs or
benefits for the families who receive them.
In other circumstances, a permanent change of station move
may result in the loss of benefits or programs upon arrival at
the new duty station. Perhaps the most glaring example of this
problem is with regard to Supplemental Security Income or SSI.
Military families that receive SSI to help care for a
special needs or disabled child often find that a change in
housing status or a deployment can disqualify the family for
SSI. While the loss of these payments is certainly an issue,
SSI is also the gateway to other programs that assist the
family in caring for that disabled family member.
I recently spoke with a Navy spouse who had completed a
government order move. They had five children. One of the
children was diagnosed with autism. At their former duty
station, the family received SSI for the autistic child. In
addition, because the family qualified for SSI, they also had
access to additional support programs in the local community.
They were unable to secure government quarters at the new
duty station, and as a result were collecting Basic Allowance
for Housing on the local economy. This increase in income
resulted in their ineligibility for SSI, and as a result,
ineligibility for Medicaid and other support programs. In
addition, because they were now receiving BAH, the other
children in the family were no longer qualified for reduced-
price lunches.
Military families should not be penalized for being
deployed to a combat zone or making an ordered permanent change
of station move. A standardized formula for the treatment of
military compensation is necessary to ensure that all families
are eligible for the same benefits regardless of their current
geographic location. NMFA believes that BAH should be excluded
from income when calculating eligibility for safety net
programs such as SSI and reduced or free school lunches.
Congress has heard and responded to the issue of military
families who lost eligibility for the Earned Income Tax Credit
as a result of nontaxable pay in a combat zone. The concern is
that while there is no immediate end in sight to the current
deployments, the end of the provision that allows
servicemembers to count nontaxable pay as earned income for
EITC purposes is clearly in sight.
It is imperative that this provision be protected for
servicemembers repeatedly sent in harm's way. In addition,
hardship duty pay, imminent danger pay, and other deployment-
related pays should be considered earned income for purposes of
safety net programs. A family coping with the stresses of
deployment should also not be faced with the loss of benefits.
A few years ago, the Military Times newspaper ran a story
about a Marine staff sergeant, Staff Sergeant Brown, who had
actually requested to forfeit special pays and allowances that
would be paid for his upcoming deployment to Kuwait. His
request was denied. By law, he was told, he had to be paid
approximately $400 a month in special pays for this deployment.
Unfortunately, the additional money meant that the Browns
would lose eligibility for SSI for their disabled child. The
SSI eligibility was the gateway for a daycare program provided
by Medi-Cal. These services would have cost the Browns nearly
$50,000 a year. In addition, Medi-Cal was covering supplies
that TRICARE did not cover. In total, the Browns estimated that
they would need about $8,000 in extra income every month to
make up for the $400 Staff Sergeant Brown would be receiving as
a result of the deployment.
The disabled child of a servicemember does not stop being
disabled just because the servicemember deploys. As a result,
the services these families need should not stop when the
servicemember deploys. The treatment of special pays and
allowances as unearned income is financially devastating to
special needs families.
I would also like to take the opportunity to share with you
some additional provisions that NMFA believes would be
beneficial to military families.
Currently, military members are not eligible to participate
in flexible spending accounts, nor are they permitted to use
pretax dollars to pay health insurance premiums for TRICARE
supplements or the DOD-sponsored TRICARE dental plan. NMFA
advocates extending these benefits to military members.
Finally, NMFA believes it is time for a coordinated
national approach to unemployment benefits for military spouses
who make a permanent station move with their military sponsor.
While some States have extended unemployment benefits to
military spouses, others have categorically denied us from the
benefit. A Federal solution to this problem would ensure
equitable treatment of all military spouses.
Military families are very proud of their service. On a
daily basis, they are shouldering the burdens of family
stresses, compounded by a high operation tempo and limited
funding. NMFA believes the opportunity to bring these issues to
the Subcommittee on behalf of military families is an important
one. Thank you for your continued concern and support for
servicemembers and their families.
[The prepared statement of Ms. Perdew follows:]
Prepared Statement of Jessica Perdew, Deputy Director of Government
Relations, National Military Family Association, Alexandria, Virginia
The National Military Family Association (NMFA) is the only
national organization whose sole focus is the military family. The
Association's goal is to influence the development and implementation
of policies that will improve the lives of those family members. Its
mission is to serve the families of the seven uniformed services
through education, information, and advocacy.
Founded in 1969 as the National Military Wives Association, NMFA is
a nonprofit 501(c)(3) primarily volunteer organization. NMFA represents
the interests of family members and survivors of active duty, reserve
component, and retired personnel of the seven uniformed services: Army,
Navy, Air Force, Marine Corps, Coast Guard, Public Health Service and
the National Oceanic and Atmospheric Administration.
NMFA Representatives in military communities worldwide provide a
direct link between military families and NMFA staff in the Nation's
Capital. Representatives are the ``eyes and ears'' of NMFA, bringing
shared local concerns to national attention.
NMFA does not have or receive Federal grants or contracts.
NMFA's website is: http://www.nmfa.org.
Jessica Perdew joined the National Military Family Association
Government Relations staff in 2005 as Legislative Administrative
Assistant. In January 2007 she was selected to serve as Deputy Director
in the Government Relations Department. In this position, she follows
issues such as pay and compensation, housing, taxes, family member
employment, financial literacy, commissary, and exchange as well as
other issues relevant to the quality of life of the families of the
seven uniformed services. She is a regular contributor to several
publications including Military Money and Military Spouse magazines.
Mrs. Perdew serves on the Military Construction/MWR/Exchanges
Committee, the Taxes/Social Security Committee and the Committee on
Military Personnel, Compensation and Commissaries of The Military
Coalition. In addition she represents military families on the Military
Saves National Partners Committee.
A former Marine and a Marine spouse of 14 years, Mrs. Perdew has
served in various volunteer leadership positions in civilian and
military community organizations including Key Volunteers, Navy and
Marine Corps Relief Society, Volunteer Income Tax Assistance (VITA),
and Marine Spouse Clubs. She is a graduate of the University of
Michigan in Ann Arbor with a Bachelor of Science in Physics and is
currently pursuing a second Bachelors degree in Accounting through the
University of Maryland.
In addition to her work at NMFA, Mrs. Perdew is a past President of
the Marine Officers' Spouses' Club of Washington D.C. and is currently
serving as the Coordinator of the Joint Armed Forces Officers Wives
Luncheon Committee. She is also a volunteer in the youth office at St.
Mark Church in Vienna, Virginia. Mrs. Perdew and her husband,
Lieutenant Colonel Jason Perdew, reside in Vienna, Virginia with their
four children.
__________
Representative Neal, Representative McDermott, and distinguished
Members of the Subcommittees, the National Military Family Association
(NMFA) would like to thank you for the opportunity to present testimony
today on some of the issues confronting military families with regard
to taxation. The package of provisions being discussed in the ``Heroes
Earnings Assistance and Relief Tax Act of 2007'' contains some very
exciting benefits for military members and their families. I would like
to discuss a few specific provisions today.
Special Tax Provisions for Active Duty Service
Over the past 6 years of the Global War on Terror many laudable tax
provisions targeting military members have been enacted. Unfortunately,
many of these provisions were enacted with sunset dates and are due to
expire at a time when servicemembers want and need them to continue.
One such provision is the ability to treat nontaxable income earned in
a combat zone as income for the purpose of Earned Income Tax Credit
(EITC) qualification.
A few years ago many of our junior enlisted and officer members
were suffering a net loss in tax benefits while deployed to a combat
zone despite the allowed tax exclusions on their income. This seeming
paradox resulted from an overall decrease in earned income resulting in
the decrease in or disqualification for the Earned Income Tax Credit.
Congress recognized the importance of this credit to our military
families and took action to ensure they did not lose eligibility due to
military orders deploying them to a combat zone. Making this provision
permanent will ensure that our lowest income servicemembers and their
families are eligible for and can maximize the benefit of these
important credits while serving in a combat zone.
Other families are finding that the receipt of combat or hazardous
duty compensation reduces or makes them ineligible for Supplemental
Security Income (SSI) payments. Currently military families who rely
upon SSI to meet living expenses associated with a disability are
finding that a deployment can significantly impact their financial
stability in a multitude of ways. The receipt of Hardship Duty Location
Pay (HDL-P), Imminent Danger Pay (IDP), or other deployment-related
pays can disqualify otherwise qualified families for SSI. Not only does
the affected family lose the SSI payment, they also become ineligible
for other programs for which SSI is the gateway to qualification such
as Medicaid. Classifying these pays as earned income for purpose of SSI
qualification would ensure that military families in these
circumstances aren't arbitrarily penalized for the deployment of the
servicemember.
NMFA has heard from many families about the difficulty of balancing
financial obligations when the servicemember is deployed. Families
commit to financial obligations based upon their regular income, which
may include SSI. When the servicemember is deployed, the family is
still obligated to pay the mortgage, utilities, car payment, and
college tuition even if their income decreases. Disabled family members
do not suddenly lose their disability when a servicemember deploys. The
child who requires special daycare still requires special daycare. The
blind child does not suddenly regain his or her sight. These families
are not only coping with a disabled child, they are also now dealing
with the additional impacts of a deployment and suddenly becoming a
single parent family until the servicemember returns. It is imperative
that disability payments continue for families coping with deployment.
Legislation is needed to ensure continuity of these benefits to all
families.
The call to active duty service and deployment can have
catastrophic impact on the monthly budget of a family, especially Guard
and Reserve families. Many families have used their ``emergency fund''
to cope with the additional financial demands of previous deployments.
As a result many families are finding subsequent deployments more
financially taxing. The provision that permits active duty members to
make penalty free withdrawals from retirement plans may be the only
resource remaining for some families. While withdrawing from a
retirement account will obviously impact future retirement plans, such
withdrawals may be the only means of maintaining a family's financial
solvency.
NMFA believes there is also room for additional legislative
provisions for servicemembers and families coping with deployment. NMFA
suggests Congress pass legislation to:
Exclude all employment taxes, rather than just FICA for
servicemembers in a qualifying combat zone.
Increase the standard deduction for servicemembers who
received tax free pay as a result of service in a combat zone during
the tax year.
Extend tax exemptions offered to servicemembers in combat
zones to military spouses of those servicemembers.
Provide employers with tax incentives to continue benefit
programs for families of Guard and Reserve servicemembers called to
active duty.
All servicemembers, regardless of deployment status, would benefit
from the ability to pay health insurance premiums for TRICARE
supplements or the DoD sponsored TRICARE dental plan with pre-tax
dollars. Also, servicemembers are currently unable to participate in
flexible spending accounts that would permit them to pay health care
and child care expenses with pre-tax dollars. Both of these benefits
are routinely offered to civilian employees and Federal civilian
employees. Military spouses are called upon to regularly relocate as
servicemembers are transferred from duty station to duty station. Yet,
in many States military spouses are not eligible for unemployment
compensation despite having worked at the previous duty station.
Standardizing the rules for unemployment compensation for military
spouses would ensure that they are not arbitrarily penalized for moving
with their military sponsor. NMFA believes it is time to extend those
benefits to active duty personnel and their families.
NMFA appreciates the efforts of Congress to provide beneficial tax
treatment due to the special circumstances surrounding military service
in a time of conflict. We believe that it is now time to make these
provisions permanent to ensure there is no loss of benefit as
servicemembers continue to wage the Global War on Terror.
Military Allowances and Safety Net Programs
In congressional testimony since 2003, NMFA has raised a
longstanding frustration for military families: The confusion involved
in how and when military allowances are counted to determine
eligibility for military and civilian programs. NMFA again reinforces
the need for Members of Congress, as well as State officials, to assist
in bringing a sense of order to how military allowances are counted for
Federal and State programs. We ask you to help ensure equitable access
to these safety net services and protect families against disruptions
in benefit eligibility caused by the receipt of deployment pays. No
family should have to face the prospect of losing valuable benefits for
a disabled child because a servicemember has received deployment orders
or because they have relocated to a new duty station.
Families living off the installation are often there only because
of the non-availability of on-base housing, yet endure higher expenses
than families living on an installation. Ideally, therefore, NMFA
believes tax free allowances such as BAH should not be counted under
any safety net program, which is how they are now treated in
determining eligibility for the Earned Income Tax Credit (EITC). NMFA
understands this could increase the number of military families
eligible for some of these programs, but believes this increase is
justified given the need for equitable treatment of all servicemembers,
as well as the loss of spouse income due to military relocations and
high operations tempo.
Inconsistent treatment of military allowances in determining
eligibility for safety net programs creates confusion and can exact a
financial penalty on military families. A start in correcting this
inequity would be to adopt a common standard in how BAH should be
counted in eligibility formulas and to ensure that the receipt of
deployment-related allowances do not cause military family members to
become ineligible for support services for which they would otherwise
be eligible.
Tax Treatment for Wounded and Surviving Families
NMFA recognizes and appreciates the legislation that has been
passed in support of survivors since the beginning of the Global War on
Terror. One issue that has been previously overlooked in legislation is
the ability to invest death gratuities in tax favored accounts. For
survivors, the ability to contribute up to the entire amount of the
death gratuity to a tax favored account allows them the opportunity to
invest this payment until it is needed to cover higher education costs
without being penalized by a significant tax expense when withdrawn.
This measure is one more way that we can ensure that the families of
those patriots who have made the ultimate sacrifice can achieve their
dreams and goals without the threat of taxes eroding the value of their
educational funding investments.
Finally, those veterans who have patiently waited years for a
Department of Veterans Affairs (VA) Disability Determination should be
afforded the opportunity to amend a tax return and obtain a refund of
taxes that were overpaid during the time that the VA was adjudicating
the case. The delay in determinations is through no fault of the
individual veteran and they should not be asked to forego refunds
simply because the statute of limitations on amending a return has
passed.
NMFA appreciates your focus on and commitment to military members
and their families. Financial readiness has a direct impact on military
readiness; the tax provisions discussed here have the potential to
improve financial readiness of military members.
Chairman NEAL. Thank you, Ms. Perdew.
Ms. LaRock.
STATEMENT OF MICHELLE D. LAROCK, DEPUTY DIRECTOR OF PROGRAM
DEVELOPMENT, DIVISION OF VETERANS' AFFAIRS, STATE OF NEW YORK,
ALBANY, NEW YORK
Ms. LAROCK. Thank you. Chairman Neal, Chairman McDermott,
Ranking Members English and Weller, and Members of the Ways and
Means Subcommittees, my name is Michelle LaRock and I am Deputy
Director for Program Development of the New York State Division
of Veterans' Affairs. I am pleased to be here today to discuss
Section 202 of the draft proposal before you, which would
ensure that recipients of State annuities for blinded veterans
are not penalized by the loss of their Supplemental Security
Income benefits.
Section 202 of this proposal is modeled on legislation,
H.R. 649, introduced by New York Congressman Tom Reynolds, who
has advocated this important change since the year 2000, and I
appreciate his facilitating my appearance at this morning's
hearing.
New York is one of four States that currently provide a
modest annuity to blinded veterans. The other States that offer
similar annuities are Massachusetts, Pennsylvania, and New
Jersey, States that are also well represented by Members of
this Committee. Let me begin briefly by describing New York's
annuity program and then discuss why current Federal SSI rules
present serious challenges both to annuitants and to the
Division of Veterans' Affairs in our administration of the
annuity program.
Under New York's program, the State makes an annuity
payment to blinded veterans or their un-remarried surviving
spouses. The annuity has been in existence since shortly after
World War I, and it is currently at a rate of $1,103.88 per
year. There are approximately 3,100 veterans and 1,400 spouses
currently receiving these benefits.
Unfortunately, under current Federal law, SSI benefits for
which blinded veterans may otherwise be eligible are reduced
simply by virtue of their receiving these modest State
annuities. This quirk in Federal law poses significant
challenges both to annuitants and to administrators of these
State programs.
With respect to the annuitants themselves, it seems unfair
that these modest State annuities would reduce Federal SSI
payments to blind veterans who are struggling economically,
especially given that our annuity program predates SSI and was
never intended to replace Federal benefits.
Instead of making the lives of eligible veterans a little
easier, these annuities have often become significant hardships
for them when offsetting their Federal benefits. This is an
obvious inequity, and it is a welcome development to see that
Congressman Reynolds' proposal to correct this problem has been
included in the draft bill under consideration by the
Committee.
These Federal rules governing SSI payments have also
presented difficulties for the Division of Veterans' Affairs in
the administration of our blind annuity program. For an unknown
number of years, our annuities have not been paid as single
annual payments, but rather as 12 monthly payments. The
rationale behind this payment schedule is the necessity to
minimize the impact a lump sum payment would have on
annuitants' Federal benefits, such as SSI, that are calculated
on a monthly basis.
Unfortunately, this has resulted in the annuity being
treated as a payroll process, except that no deductions are
made and it is run monthly. This generates about 54,000 checks
over the course of 1 year, which is the payroll equivalent of a
2,000-person agency, all managed part-time by a Secretary II in
the Division of Veterans' Affairs and a payroll clerk in the
Office of General Services.
If State annuities to blind veterans were disregarded in
calculating Federal SSI benefits, the Division of Veterans'
Affairs could explore ways to simplify and improve our
administration of the annuity program and make it more
effective for our State's blinded veterans.
In sum, the interplay between current Federal law and our
State program has made something as simple as paying $1,103.88
per year to blind New York veterans or his or her surviving
spouse unbelievably complicated and difficult, not only for the
recipients but also for the State.
For the above-mentioned reasons, the New York State
Division of Veterans' Affairs enthusiastically supports the
legislative change made in Section 202 of this proposal, and we
thank Congressman Reynolds and other Members of this Committee
for their efforts to address this important issue.
I appreciate the opportunity to present the views of the
Division of Veterans' Affairs, and am prepared to answer any
questions Members of the Subcommittees may have. Thank you.
[The prepared statement of Ms. LaRock follows:]
Prepared Statement of Michelle D. LaRock,
Deputy Director of Program Development, Division of Veterans' Affairs,
State of New York, Albany, New York
Chairman Neal, Chairman McDermott, Ranking Members English and
Weller, and Members of the Ways and Means Committee, my name is
Michelle LaRock, and I am Deputy Director of the New York State
Division of Veterans' Affairs. I am pleased to be here today to discuss
Section 202 of the draft proposal before you, which would ensure that
recipients of State annuities for blinded veterans are not penalized by
the loss of their Federal Supplemental Security Income (SSI) benefits.
Section 202 of this proposal is modeled on legislation, H.R. 649,
introduced by New York Congressman Tom Reynolds, who has advocated this
important change since the year 2000, and I appreciate his facilitating
my appearance at this morning's hearing.
New York is one of four States that currently provide a modest
annuity to blinded veterans. The other States that offer similar
annuities are Massachusetts, Pennsylvania, and New Jersey, States that
are also well represented by Members of this Committee. Let me begin by
briefly describing New York's annuity program and its eligibility
requirements and then discuss why current Federal SSI rules present
serious challenges both to annuitants and to the Division of Veterans'
Affairs in our administration of the annuity program.
Description of New York State's Blinded Veterans Annuity Program
Under New York's program, the State makes an annuity payment to
blinded veterans or to their un-remarried surviving spouses. The
annuity has been in existence since shortly after World War I,
initially at an annualized rate of $500 and only for blinded veterans
themselves. In 1999, the amount was increased to $1,000 per year, and
in 2000 un-remarried surviving spouses were added as eligible
annuitants. In 2004, a provision to index the amount of the annuity by
the annual Federal inflation rate was added. The current annuity is
$1,103.88 per year.
Prior to 1999, there were approximately 1,100 veterans receiving
the annuity. Following the increase in the amount of the annuity and
the addition of many more surviving spouses, that number has risen to
include approximately 3,100 veterans and 1,400 spouses. Most of these
recipients are elderly--only 18 of the 4,500 recipients are under the
age of 50.
Eligibility Requirements
In New York, eligible veterans are those who served on active duty
in the armed forces of the United States during specified wartime
periods and who were discharged or released under conditions other than
dishonorable. Annuitants must meet the New York State standards of
legal blindness and must continue to be residents of, and continuously
domiciled in, New York State. In general, the veteran must have had 90
days of active duty service for nontraining purposes. Less than 90 days
is acceptable, however, if the veteran was discharged for a service-
connected disability.
Current Federal Law Reduces Annuitants' SSI Benefits
Unfortunately, under current Federal law, SSI benefits for which
blinded veterans may otherwise be eligible are reduced simply by virtue
of their receiving these modest State annuities. This quirk in Federal
law poses significant challenges both to annuitants and to
administrators of these State programs.
With respect to the annuitants themselves, it seems unfair that
these modest State annuities would reduce Federal SSI payments to blind
veterans who are struggling economically, especially given that our
annuity program predates SSI and was never intended to replace Federal
benefits. Instead of making the lives of eligible veterans a little
easier, these annuities have often become significant hardships for
them when offsetting their Federal benefits. This is an obvious
inequity, and it is a welcome development to see that Congressman
Reynolds' proposal to correct this problem has been included in the
draft bill under consideration by the Committee.
These Federal rules governing SSI payments have also presented
difficulties for the Division of Veterans' Affairs in the
administration of our blind annuity program. For an unknown number of
years, our annuities have not been paid as single annual payments, but
rather as 12 monthly payments. The rationale behind this payment
schedule is the necessity to minimize the impact a lump sum payment
would have on annuitants' Federal benefits, such as SSI, that are
calculated on a monthly basis. Unfortunately, this has resulted in the
annuity being treated as a payroll process, except that no deductions
are made and it is run monthly. This generates about 54,000 checks over
the course of 1 year, which is the payroll equivalent of a 2,000-person
agency--all managed part-time by a Secretary II in the Division of
Veterans' Affairs and a payroll clerk in the Office of General
Services. If State annuities to blind veterans were disregarded in
calculating Federal SSI benefits, the Division of Veterans' Affairs
could explore ways to simplify and improve our administration of the
annuity program to make it more effective for our State's blinded
veterans.
In sum, the interplay between current Federal law and our State
program has made something as simple as paying $1,103.88 per year to a
blind New York veteran or his or her surviving spouse unbelievably
complicated and difficult, not only for the recipients but also for the
State.
Conclusion
For the above-mentioned reasons, the New York State Division of
Veterans' Affairs enthusiastically supports the legislative change made
in Section 202 of this proposal, and we thank Congressman Reynolds and
other Members of this Committee for their efforts to address this
important issue. I appreciate the opportunity to present the views of
the Division of Veterans' Affairs and am prepared to answer any
questions Members of the Subcommittees may have. Thank you.
Chairman NEAL. Thank you, Ms. LaRock.
Mr. Downing, I appreciate your comments on the need for
affordable housing for veterans, and perhaps the successful
low-income housing tax credit program could be utilized for
this need as well. You stated that your program creates savings
accounts for veterans so that someday they can own their own
home.
Under the current draft bill we are considering, one of the
provisions would make permanent a temporary provision that
waives the first-time homebuyer requirement for veterans under
a Qualified Mortgage Bond program, providing an opportunity for
veterans to access lower-cost financing.
Does Massachusetts do any outreach work to veterans under
the Qualified Mortgage Bond program?
Mr. DOWNING. Not that I'm aware of, sir.
Chairman NEAL. Do you want to expound on that?
Mr. DOWNING. The issue has been that in the Massachusetts
Department of Veterans Services, they have never had anything
whose full-time position was just housing around the issue of
housing for veterans. They are currently funding and developing
a job position to do that, and I think as a result of that, the
programs that might have benefited veterans have never come
into existence.
Chairman NEAL. And Ms. LaRock, do you expect an uptick in
recipients of veterans services in your special annuity program
with the increase in the number of veterans over the last few
years?
Ms. LAROCK. Once the State started allowing spouses, that
increased. And once the State indexed the annuity to keep with
the Federal cost of living, that also increased the amount of
annuitants in the program.
I am not sure if they knew that the blind annuity would not
be countable income, that that would make them come out in
droves. I think they still come out to get their annuity. But
it just makes it difficult for them to have their Federal
benefits offset if they do receive SSI.
Chairman NEAL. Thank you. I would like now to recognize Mr.
McDermott.
Mr. MCDERMOTT. Thank you, Mr. Chairman.
Listening to you talk about all the health care problems
reminds me, we are going to have a hearing in my Subcommittee
on the gaps in SSI and how they are created because it is
pretty clear to me that we really need a universal health care
system so that people don't drop between TRICARE and Medicaid
and all the places where, when there are shifts in people's
lives, what happens to their health care.
I am afraid to ask, Ms. Johnson: What happened to your
health care coverage when your husband was killed?
Ms. JOHNSON. Well, fortunately I was working at the time,
so I had health care also for our family. And, of course, while
he was on active duty, we had the military TRICARE. Because he
was killed, the military will take care of the family with
TRICARE.
Mr. MCDERMOTT. So TRICARE goes from now until your daughter
is how old?
Ms. JOHNSON. There is a period that the family does not
have to pay anything, and then the family does have to pay a
portion. I have not come to that point yet to know how much
that is.
Mr. MCDERMOTT. Tell me about what happened in the State
legislature when you went down there to try and get a fix from
the State legislature around the pension system.
Ms. JOHNSON. I have to let you know that everyone that I
talked to was very supportive on a personal level. They could
not do enough for me because they understood the situation.
Mr. MCDERMOTT. Did they change the law?
Ms. JOHNSON. It was the wording and how things were done.
They would tell me their hands are tied on what happened with
that. Again, he was being treated as though he quit, as though
he wasn't employed any longer, where I believe that if he had
been killed here in the States at the time while he was
employed, there would have been just a reduction in those
benefits; where in this case they were removing all of the
matching, where if he had been killed here, there still would
have been the matching funds. It just would have been a penalty
for early retirement.
Mr. MCDERMOTT. Does anyone here on the panel know how many
States treat a service person as terminating their employment
when they go on active duty? Is that a universal thing across
the country? Does anybody know that?
Ms. JOHNSON. I don't think it has happened enough, so I
don't think people--they haven't looked at it.
Ms. PERDEW. Mr. Chairman, it is not just State governments.
Also, private employers who have pension plans, when you are a
Guardsman or a Reservist and you activate, if you are killed in
the line of duty during that activation, you are considered a
terminated employee because you never came back to the employer
as an employee after your tour of duty.
Mr. MCDERMOTT. So that you do not then participate in the
company--in the private plans, either?
Ms. PERDEW. Correct. They would have the same experience,
whereas they would be given back what they had paid into the
program, but not treated as a pensionholder.
Mr. MCDERMOTT. And I hope that, Ms. Johnson, you will send
it to us. But if anybody else has access to what the difference
is for a--your husband was what, 40----
Ms. JOHNSON. Forty-four-years-old.
Mr. MCDERMOTT. And he had been in the law enforcement
system----
Ms. JOHNSON. Fifteen years. Fifteen years.
Mr. MCDERMOTT [continuing]. For 15 years. So he had some
kind of actuarial--you could have received an actuarial reduced
pension.
Ms. JOHNSON. Right. And even at State level, it is not
where it really needs to be. For instance, I was not given the
option to keep the money in there so to reduce that penalty. Do
you understand what I am saying? That if I could have kept it
in their until, you know, his age that he would have been at
retirement normally, if you did that, there would be a
reduction of that penalty. I was not given that choice.
Mr. MCDERMOTT. So you were just given----
Ms. JOHNSON. So I had to take a full penalty, as though he
retired at age 44.
Mr. MCDERMOTT. And then were you taxed on that money as
well?
Ms. JOHNSON. I, of course, knowing it was a pension, I have
rolled it over into a pension account. I guess that would be an
IRA. Of course, I will be.
Mr. MCDERMOTT. Ultimately.
Ms. JOHNSON. But, I mean, that is what--I don't believe
that the families necessarily--I mean, some of them may need it
right away. But it was meant to be a pension, and I had no
problem keeping it that way. And I would have loved to have
been able to keep it in there to reduce those penalties, but I
was not given that opportunity.
Mr. MCDERMOTT. Thank you very much. Thank you for coming
and testifying here today. You did a good job.
Ms. JOHNSON. Thank you.
Chairman NEAL. Mr. Reynolds.
Mr. REYNOLDS. I thank the Chairman. And I thank this panel.
I think it has been both helpful on the legislation that our
two Chairs and Ranking Members have hosted this hearing on, but
also, as Chairman McDermott and I were walking to the Capitol,
it opens up other things where your testimony helps us think
about where we can maybe do other areas of assistance as
unintended consequences have occurred as we are at war and we
have had our Reserve and Guardsmen on active duty service.
And I also saw some of that as I was on an Air Force base
this weekend in my district, and talking to Reservists about
some peculiar problems they are now experiencing that we just
need to work through. So I again appreciate the testimony here,
and appreciate the opportunity with this hearing both for
legislation before us, but where it is leading us to look at
some other things.
Chairman NEAL. Thank you, Mr. Reynolds.
Mr. Larson is recognized.
Mr. LARSON. Thank you, Mr. Chairman. And let me echo the
sentiments of the Members on the Subcommittee, first and
foremost to you and Mr. McDermott and the Ranking Members for
holding this hearing, and Mr. Rangel for putting this
legislation forward. Certainly the testimony here today has
been compelling, if not poignant and emotional.
And as was said by Mr. Reynolds, I think more often than
not, when we get to listen to our constituents, we get to learn
an awful lot more about how we can more effectively apply the
laws. That was the case in Connecticut, which passed a law in
1999 that provided relief to volunteers and local
municipalities that allowed them to provide a rebate to
volunteers. And if we learned anything after the events of
September 11th, it was how important and how valuable those
volunteers are, those frontline defenders, as I said.
I have a question for Mr. McAuliffe because I do think it
is important. Is the state of volunteerism, and specifically in
the case of firefighters, and so important, I believe, in your
statement you said something like it saves the taxpayer $37
billion--what has caused this stress? Is there some--what do
you attribute to the lack of volunteerism, et cetera, not only
in Connecticut, but perhaps across the Nation in your
association?
Mr. MCAULIFFE. I think there is a broad series of events
that have caused the diminishment of volunteers. However, I can
focus on a couple of points. And one is that the demands of a
volunteer have substantially changed since I went into the
department years ago.
We did on-the-job training. Now there are more safety
features, more specialized training that our people have to go
through to maintain that professional level of balance to do
their job. So the time commitment becomes much longer than what
it was years ago.
The other thing I see is a diminishment in the volunteers
out there as the demographics of communities. And if I might
point out that Wethersfield, the town I come from, was once a
suburban community. As time went along, it became an urban
community. And those firefighters or volunteer firefighters
that we had during the daytime who were the farmers, those
farms are gone. So we have to find people who we can solicit or
encourage to join the volunteer fire service to pick up that
slack.
However, I will say that in looking at the $1,000 tax
deduction that the State has allowed, I see that there is a
slowing down of the number of people exiting from the fire
service, and I think that is definitely a good sign. Hopefully,
it will turn around even further and come back to where, when I
went in the department, you had to be put in queue to get into
the department. Now, if you can capture a warm body and get
them to join, you certainly do that.
Mr. LARSON. Thank you, Mr. McAuliffe.
Chairman NEAL. Are there any other questions of our
panelists?
[No response.]
Chairman NEAL. Well, I want to thank you personally as well
as professionally. I think that you are reflective of hometown
America and the real problems that our veterans and others have
every single day. And I think not only is the testimony you
have offered instructive, but I think it is testimony that you
can see Republicans and Democrats both are embracing.
And I am hopeful that the full Committee will move on with
some of the suggestions that you have offered, and that we will
get a product that will pass the House of Representatives. And
I am pretty confident that in some form, that will happen.
So let me thank you for your testimony. The record will
remain open for a short period of time to accommodate any
written followup that you might like to offer.
Mr. MCDERMOTT. Mr. Chairman?
Chairman NEAL. Mr. McDermott.
Mr. MCDERMOTT. Mr. Chairman, I would like to have unanimous
consent to put into the record a letter from the AmeriCorps
program in Washington State that has part of the documentation
of why we need to deal with AmeriCorps.
Chairman NEAL. Without objection, that testimony will be
accepted.
If there is no further comment, the Chair will declare that
this hearing is adjourned.
[Whereupon, at 12:58 p.m., the Subcommittees were
adjourned.]
[Submissions for the Record follow:]
STATE OF CALIFORNIA
DEPARTMENT OF VETERANS AFFAIRS
FARM AND HOME PURCHASES DIVISION
Sacramento, California 94295-0001
October 29, 2007
The Honorable Charles B. Rangel
Chairman
House Ways and Means Committee
1002 Longworth HOB
Washington, DC 20515
Dear Chairman Rangel:
Thank you for helping California's veterans fulfill their dreams of
homeownership by including the mortgage bond provisions of H.R. 551 in
the Heroes Earnings Assistance and Relief Tax Act of 2007. The
California Department of Veterans Affairs strongly supports your bill,
which will allow California's recent war veterans to participate in our
CalVet Home Loan program.
The CalVet Home Loan program has helped more than 420,000 veterans
experience the American dream of homeownership. Since 1922, California
has offered low-interest home loans to veterans in appreciation of
their service to the Nation primarily through the sale of voter
approved, tax-exempt Qualified Veterans Mortgage Bonds and to a smaller
extent through Qualified Mortgage Bonds. The States of Alaska, Oregon,
Texas and Wisconsin operate similar Qualified Veterans Mortgage Bond
programs, and any State can use Qualified Mortgage Bond funds for
housing programs.
Over 2.2 million veterans and 200,000 servicemen and women reside
in California. Enactment of the proposed bill will help meet the demand
for low-cost loans in California's high-cost market, and ensure that
those Americans who served in the Persian Gulf War, Somalia, Grenada,
Panama, Kosovo, Bosnia, Afghanistan and Iraq can enjoy the same level
of benefits that have been granted to their fathers and grandfathers
who served in World War II, Korea and Vietnam.
Your leadership and support of the Heroes Earnings Assistance and
Relief Tax Act of 2007 is very much appreciated by the California
Department of Veterans Affairs, the many veteran and industry
organizations that support H.R. 551, and the veterans of California.
Tom Johnson, FACHE
Secretary, California Department of Veterans Affairs
Corporation for National and Community
October 18, 2007
The Honorable Jim McDermott
Chairman
Ways and Means Subcommittee on Income Security and Family Support
United States House of Representatives
Washington, DC 20515
Dear Chairman McDermott:
I am writing to thank you for your leadership in addressing the
disparate treatment of AmeriCorps participant benefits for purposes of
disability benefits provided by the Social Security Administration.
The AmeriCorps program has three components: (1) AmeriCorps VISTA;
(2) AmeriCorps National Civilian Community Corps; and (3) AmeriCorps
State/National. All AmeriCorps participants receive a modest living
allowance during service and a post-service education award upon
completion. Under current law, payments to AmeriCorps VISTA
participants may not affect their eligibility for any government
program, including Supplemental Security Income (SSI) and Social
Security Disability Insurance (SSDI). At the same time, payments to
AmeriCorps NCCC and State/National participants may negatively affect
their eligibility for, or benefit levels under, SSI or SSDI.
The National and Community Service Act of 1990 calls upon the
Corporation to promote the inclusion of individuals with disabilities
in national and community service programs, with specific funding for
outreach and placement. Individuals with disabilities volunteer for the
same reasons that anyone else does: To give back to their communities;
to improve their surroundings; to improve the quality of their lives;
and to be active and engaged citizens. Some national service
participants who have disabilities volunteer with organizations that
serve other individuals with disabilities, while others focus their
efforts on helping to meet a wide range of critical community needs.
Through the Corporation's National Service Inclusion Project, we
work with nonprofit and community-based organizations to develop
inclusive service environments that are accessible and welcoming and
that make meaningful service experiences possible.
Regarding the disparate treatment of AmeriCorps benefits, we have
consistently heard from many of our State Commissions and grantees, as
well as the larger disability community, about the difficulties they
encounter recruiting individuals with disabilities to our programs
because of the possible threat to their SSI or SSDI benefits. Some
participants have been caught up in this problem after they have
already enrolled.
Thank you very much for your attention to this important issue, and
for your many years of support of national service. Please do not
hesitate to call me if I may provide you with additional information or
contact Kathleen Ott, Director, Government Relations.
The Office of Management and Budget advises that from the
standpoint of the Administration's program, there is no objection to
the transmittal of this letter.
Sincerely yours,
David Eisner
Chief Executive Officer
Statement of Jerry Patterson,
Texas Land Commissioner and Chairman, Texas Veterans Land Board
Chairman Neal and Chairman McDermott:
I want to thank you both for allowing me to submit this written
testimony about the Qualified Veteran Mortgage Bond provision contained
in the ``HEROES Earnings Assistance and Relief Act of 2007.'' I also
want to thank Congressman Sam Johnson for requesting that this
testimony be included in the record.
Texas has always rewarded those who have fought on her behalf. Over
the years, Texas gave land because that was all she had. The heirs of
David Crockett, who was once a member of this body, received 1,280
acres of land for his honorable service at the Alamo. In 1946, the
Texas Legislature created the Texas Veterans Land Board (VLB) to make
loans to returning veterans so they could buy a piece of Texas to farm
or ranch. Since then, the VLB has served more than 200,000 veterans.
From the first land loan in 1947, the VLB has grown to provide low
interest loans for land housing and home improvement. All of the
programs are conducted at no cost to the taxpayer. The VLB is one of
two State agencies that completely pay for themselves with the proceeds
from the programs. In addition to the loan programs, the VLB also
operates seven long-term, skilled nursing facilities for veterans and
their spouses, as well as two State veterans cemeteries and is
currently working on the location of an eighth nursing home and third
cemetery.
The inclusion of the Qualified Veteran Mortgage Bond section into
the HEROES bill will allow California and Texas to have the same
benefit to serve their veterans as Alaska, Oregon and Wisconsin now do.
QVMB loans symbolize an important commitment to veterans. Over the past
several years, we have received a number of resolutions of support from
veterans groups and those in the housing industry endorsing passage of
this and similar measures.
All veterans, regardless of when they served, deserve to be treated
equally. Passage of this provision will ensure that all benefits
provided by the Texas Veterans Land Board are administered without bias
to all eligible veterans. These veterans, who have earned this
entitlement through their honorable service, will enhance local tax
bases, stimulate economic growth and strengthen our communities as
responsible homeowners and taxpayers.
Veterans are a good credit risk. The default rate--of borrowers who
cannot afford to keep their homes--averages less than one-half of 1
percent. That is outstanding compared to the rest of the market, which
sees default rates in the 7 percent range and higher. Veterans pay
their bills.
It is also noteworthy that the Texas Veterans Land Board offers
additional benefits and discounts on its already low base rate. Veteran
borrowers with a disability rating of 50 percent or more from the U.S.
Department of Veterans Affairs (VA) will receive an additional 0.35
percent rate reduction. We also offer our own version of the
Servicemember Civil Relief Act of 2003, once known as the Soldiers and
Sailors Relief Act. If borrowers in the Reserve forces of any branch of
service or the National Guard are called to active duty, we suspend the
interest due for the duration of their deployment. The only amount they
or their spouses have to pay is the principal portion of the payment.
Once they return home, we give them an additional 90 days before we
resume the original payment. This gives them an opportunity to get
settled back into life as it once was. We forgive the interest that we
suspended during their deployment. We do this because it is the right
thing to do.
It is critical to understand that this is not a refinance program,
it is a home purchase program. With a recent focus on National Guard
troops and Reservists, the program has recently grown to new heights.
In 2001, the program made $230 million in loans; in 2002, $320 million;
in 2003, $532 million; in 2004, $1.012 billion; and in 2005, $859
million. During this period, the rest of the market for loans was
diminishing.
In the 109th Congress, H.R. 4297 was passed granting the States of
Alaska, Oregon and Wisconsin the ability to do away with the arbitrary
1977 exclusion date that was in section 143 of the Internal Revenue
Code. Under the Internal Revenue Code, veterans who entered active
military service after December 31, 1976, are not eligible for QVMB-
funded home loans. These deserving American men and women should be
provided the same benefit as those veterans in Alaska, Oregon and
Wisconsin. Through the passage of H.R. 4297 in the last session, those
States now have the ability to fund all of their veteran borrowers with
QVMB funds, thereby reducing the interest rate to all veterans, not
just one class.
It is also important to understand that veteran borrowers are
better served using Qualified Veteran Mortgage Bonds for housing loans.
The issue is whether or not Qualified Mortgage Bonds (QMBs) are a
suitable replacement for using Qualified Veterans Mortgage Bonds
(QVMBs) to fund housing loans to Texas veterans. The answer is: QMBs
are not a suitable replacement because of the State's allocated Private
Activity Bond program (PAB) cap and QMB lending requirements.
The total amount of Texas' private activity cap allocated to
single-family mortgage revenue bond issuers (i.e., QMB issuers) is only
about $559 million, and is primarily concentrated on lending to low-
income borrowers. The Texas Veterans Land Board originated over $600
million in housing loans to Texas veterans in FY07. The total VLB
housing loan demand surpasses the entire amount of Private Activity
Bond program cap available for the whole State.
More specific considerations that are problematic with using QMBs
instead of QVMBs:
The Internal Revenue Code, Section 143(d)(1), requires
that mortgagors borrowing from the proceeds of tax-exempt QMBs should
not have a present ownership interest in a principal residence at any
time during the 3-year period immediately before the date of obtaining
the loan. This is referred to as the ``first-time homebuyer''
requirement. The Veterans Housing Assistance program, administered by
the VLB, is not a first-time homebuyer program. Eligible veterans may
receive a QVMB-funded home loan with no such first-time homebuyer
restriction. Using QMB proceeds to fund VLB loans would establish
restrictions that are not consistent with the tradition of the program
or the intent of the Texas Legislature and the VLB.
The purchase price of a residence must not exceed 90
percent of the average purchase price of all single-family residential
sales during the last 12 months in the same statistical area as the
financed property. In 2005, the Texas Legislature authorized the VLB to
set housing loan limits near the maximum loan amount guaranteed by the
USDVA (currently $325,000). By using QMB proceeds, it is likely that
purchase price restrictions would be established that are different
(and lower) than those already authorized for the VLB by law.
All of the mortgage loans financed with proceeds of QMBs
must be made to persons whose family income is 115 percent or less of
the applicable median family income. Family income and area median
incomes are determined in accordance with Section 8 regulations under
the Housing Act of 1937. Currently, the VLB has no income restrictions
for eligible veterans. Using QMBs for home loans would establish income
limits that conflict with the tradition of the program and the intent
of the Texas Legislature and the VLB.
Restrictions on loans made from the proceeds of QMBs, coupled with
the very limited amount of Texas PAB cap on single-family mortgage
revenue bond issuers facing loan demand from low-income borrowers,
require veterans to borrow QMB money instead of QVMB money. This will
result in a much smaller number of veterans being able to take
advantage of the lower mortgage rates associated with loans made from
the proceeds of tax-exempt bonds.
California and Texas share a commitment to serve our veterans,
especially during this time of war. As the 110th Congress continues its
work, we are asking for your support to end this inequity for our two
States. Our men and women who have served in such places as Panama, the
Persian Gulf, Somalia, the Balkans, Kuwait, Afghanistan and Iraq
deserve our thanks and gratitude for a job well done. By supporting
QVMB legislation, you will be honoring their service with this small
act of financial support.
With the decision on BRAC 2005 realignment, Texas is now
experiencing major growth in three key areas. El Paso County is home to
Fort Bliss. With the influx of new units to Fort Bliss, the county's
population will grow by 18,000-20,000 in the next 48 months. Bell and
Coryell Counties are home to the Nation's largest military base, Fort
Hood. Some 20,000 soldiers and their families are moving to the area.
Bexar County, home to the finest burn care center in the world--Brook
Army Medical Center, or BAMC--is also in the growth mode. The city of
San Antonio and surrounding communities are planning for the relocation
of about 25,000 soldiers and their families to the area.
I want to thank the Members of the Committee again for allowing me
to submit testimony on this important program. On behalf of all Texas
veterans, we appreciate your favorable consideration of this important
measure.
Statement of Lori A. Brown, Military Spouse
Thank you for your continued support of the members of the military
and their families. I would like to share with you some of my
experiences with the SSI program that my son, Hunter, has received SSI
for 7 years and Dakota for 3 years.
My husband is active duty and has been in the Marine Corps for 13
years. We have three children. My two boys are on SSI. Dakota, age 13,
is diagnosed with Asperger's Syndrome and Hunter, age 7, has cerebral
palsy and epilepsy.
We have had many ups and downs with SSI over the years. The worst
time was when my husband, Steve, went to Iraq for the start of the Iraq
War and we were told by the local Social Security Office that Hunter
would be losing his SSI and MediCal. We depended on the SSI payment to
pay for things that his insurance just did not cover. We would have had
to come up with about $6,000-$10,000 a month to make up for losing the
MediCal and SSI. We were very blessed when Congresswoman Davis took up
our cause and shed light on what was going on and helped to get it
changed.
There are still issues with the way that military dependent's SSI
is figured. There are unfair ``earned and unearned'' labels put on our
pays. The way the military LES looks, everything is broken down and
itemized for accounting purposes but civilian's pay stubs are looked at
as all ``earned'' income. This practice puts us at a great
disadvantage. All the military families are looking for is equal rules
for all civilian and military--no better, no worse.
Many families with special needs family members need to live close
to a specific hospital or therapy center for their loved ones' well-
being and health. But, under the current law, if they do not live on
base, the BAH will count as ``unearned'' income and, therefore, they
lose SSI. This is an issue that needs to get resolved.
For us personally, we have run into this situation and lost SSI for
a few months while my husband was in Japan. I needed help in the home
so I rented a house in town where I would be able to have my sister and
family live with us to help me out. When we could no longer afford
Hunter's bills we had to move back on base where I could not have help
living in my home for more than 30 days.
Also, BAS is treated as ``unearned'' income as if it is money for
the family. This money is not for the family, it is for the food for
the servicemember. It should be counted as ``earned'' income.
Military Clothing Allowance is another one that is counted as
``unearned'' income. It is pay to buy uniforms that wear out during the
year, not for the family. This money is woefully inadequate for this
purpose. We pay out hundreds of dollars more each year for Steve's
military needs above and beyond what is given as an allowance.
Special Pays, such as flight line pay, reenlistment bonuses,
hazardous duty (non war), or jump pay are all counted as ``unearned''
income as well. These are pays that are given to Marines (or other
branches) in certain jobs that rate an additional pay based on their
job. This should be counted as ``earned'' income based on the fact it
is just an extension of their base pay.
Any monies that are paid out for moving such as money for a DITY
(Do It Yourself) move is counted as ``unearned'' income. This money is
used for the servicemember to move themselves and their family to the
new duty station or into housing.
I would also like to see that the money that the military member
puts into their Thrift Savings Plan not be used as a way to disqualify
a special needs military family member from SSI. Just because families
have a disabled family member shouldn't mean that they can't save for
their retirement just like all the other active duty military members.
Basically, I would like to see the word ``UNEARNED'' removed from
the figuring process to qualify the disabled military dependent for SSI
benefits. It is a slap in the face to all that serve this country and
their families. The term is insulting and says that the Social Security
Administration and those bodies of government that make the rules do
not see that our servicemembers work for their money and this is just
not true. The military and their families give all that is asked of
them by this country and then they give a little more. We want equal
rights and considerations in the computations for qualifying for
government programs such as SSI.
Thank you for your time and consideration in this matter.
Lori A. Brown
Proud wife of GySgt Steven M. Brown (newly promoted!)
Statement of Max Stier, Partnership for Public Service
Chairmen Neal and McDermott, Representatives English and Weller,
Members of the Subcommittees, thank you very much for the opportunity
to submit this testimony in support of H.R. 2363, the bipartisan
Generating Opportunity by Forgiving Educational Debt for Service Act
(GOFEDS) introduced by Rep. Tim Bishop (D-NY). The language in H.R.
2363 complements many of the objectives of the Heroes Earnings
Assistance and Relief Tax Act of 2007 and I believe it would be a
positive addition to the legislation.
I am Max Stier, President and CEO of the Partnership for Public
Service, a nonpartisan, nonprofit organization dedicated to
revitalizing the Federal Government. We appreciate your consideration
of Representative Bishop's bill and would like to share our thoughts on
its impact on both military and civilian employees and the agencies in
which they serve. We also urge the Subcommittees to consider adopting
language from the bill when drafting the Heroes Earnings Assistance and
Relief Tax Act of 2007.
The Partnership has two principal areas of focus. First, we work to
inspire a new generation to Federal service. Second, we work with
government leaders to help transform the business of government so that
the best and brightest will enter, stay and succeed in meeting the
challenges of our Nation. Given those objectives, identifying ways to
attract new talent to Federal service is high on our list of
priorities. We believe that H.R. 2363 has the potential to make a great
impact on the government's ability to recruit the highly-skilled
individuals needed in all branches of our military and our Federal
civil service while yielding a significant return on investment.
Our country is facing unprecedented new challenges in a host of
areas, from protecting our Nation against terrorism, to responding to
catastrophic natural disasters like that of Hurricane Katrina. It is
crucial that our armed services and Federal civilian agencies have some
of our Nation's best and brightest minds to meet these challenges. Yet
at a time when our need for technically- and intellectually-skilled
employees is greatest, research indicates young people view the
nonprofit sector, rather than government, as the best place to build a
meaningful public service career. Compounding this problem, Partnership
research finds conclusively that student debt is a growing barrier to
attracting talented young people to government service. Rising
education costs are essentially pricing the best and the brightest out
of public service jobs.
According to data from the National Center for Education
Statistics, more than half of full-time undergraduate students rely on
student loans to finance their education. During the 2003-2004 academic
year students took out an average of $6,200 in loans. Over a 4-year
period a student can accumulate over $20,000 in debt. Individuals who
pursue graduate school have even greater debt. Those completing
master's degrees average $32,900 in debt. Individuals earning
doctorates or other advanced degrees can have an average debt as high
as $125,000.
H.R. 2363 is a straightforward bill. Under the proposal, any
student loan repayment made by the Federal Government on behalf of an
employee will not be taxed as part of that employee's income. The tax
relief benefits uniformed servicemembers and Federal civil servants. We
believe H.R. 2363 is a low-cost initiative that will do much to improve
both the military and Federal Government's ability to recruit and
retain the right people with the right skills. In addition, educational
or nonprofit institutions are already able to offer tax-free loan
repayment benefits to graduates who pursue government or nonprofit
employment. H.R. 2363 puts the Federal Government's loan repayment
program on equal footing with the programs offered by these
institutions.
Mr. Chairmen, Members of the Subcommittees, we thank you for this
opportunity to submit our views in strong support of H.R. 2363. We
encourage the Subcommittees to consider incorporating the GOFEDS
language as a provision in the Heroes Earnings Assistance and Relief
Tax Act of 2007 or consider other vehicles to help move this bill
forward.
National Multi Housing Council
and
National Apartment Association
October 31, 2007
Jim McDermott
Subcommittee on Income Security and Family Support
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Richard E. Neal
Subcommittee on Select Revenue Measures
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman McDermott and Chairman Neal:
The National Multi Housing Council (NMHC) and the National
Apartment Association (NAA) are pleased to present this statement to
the Subcommittee on Income Security and Family Support and the
Subcommittee on Select Revenue Measures in connection with the joint
hearing held October 17, 2007, to examine the Heroes Earnings
Assistance and Relief Tax Act of 2007 (HEART Act). NMHC and NAA
represent the Nation's leading firms participating in the apartment
industry. Our combined memberships include apartment owners,
developers, managers, builders and lenders. NMHC and NAA jointly
operate a Federal legislative program and provide a unified voice for
the private apartment industry.
NMHC/NAA would like to thank you for your leadership in developing
the HEART Act and for holding the joint hearing on the legislation. As
the Ways and Means Committee continues to develop this legislation, we
encourage you to consider including a provision to address the
treatment of the Basic Allowance for Housing (BAH) that is modeled on
H.R. 1481, The Military Access to Housing Act of 2007.
The Military Access to Housing Act of 2007 allows BAH provided to
servicemembers to be excluded from calculations of income for purposes
of determining the servicemember's eligibility for various Federal
rental housing programs, including the Low Income Housing Tax Credit
program (LIHTC).
As Members of the Committee are aware, military installations do
not always possess an adequate supply of military-owned housing to
provide for the needs of all servicemembers. When the military is
unable to provide military-owned housing to a servicemember and his or
her family, the Department of Defense pays a BAH to the servicemember
to allow him or her to acquire suitable housing in the private market.
The members of NMHC/NAA are committed to working with local
communities and the Department of Defense in order to meet this demand
for private housing. However, in some instances, it may be difficult
for servicemembers, particularly those with large families, to find
affordable housing in the private market. This can especially be a
problem in instances where various base and troop realignments have
resulted in an influx of personnel to some military installations and
an adequate supply of affordable housing in the nearby communities has
not yet developed.
In July 2006, the General Accountability Office (GAO) released a
report examining the issue of the exclusion of servicemembers' housing
allowances from income determinations for various housing programs.
That report concluded that excluding BAH from eligible income would
have a significant impact on the ability of many servicemembers to
qualify for Federal housing programs. The servicemembers most affected
by such a change, the GAO found, would be the soldiers in the lowest
pay grades (particularly E-1 through E-4 enlisted personnel) and those
soldiers with the largest families.
The GAO report also indicated that excluding BAH from income
determinations for the LIHTC and tax-exempt multifamily housing bond
programs could have the effect of stimulating the production of such
housing. GAO cited some officials representing communities near growing
installations as indicating that excluding BAH from eligibility
determinations may make it more likely that programs such as the LIHTC
could be used as a tool to build more affordable housing for incoming
soldiers and their families.
This change in the treatment of BAH is consistent with its status
as a tax-free benefit and with a change being considered for inclusion
in the HEART Act that would change the treatment of military allowances
(including BAH) when calculating SSI program eligibility and benefit
amounts.
On behalf of the members of NMHC/NAA, we respectfully request your
support for this important issue. We appreciate your work in this area
and look forward to working with you to improve the housing for our
Nation's military personnel.
Sincerely,
Doug Bibby
President
National Multi Housing Council
Douglas S. Culkin, CAE
President
National Apartment Association
Statement of The Honorable Joe Courtney,
a Representative in Congress from the State of Connecticut
Chairman Neal and Chairman McDermott, thank you for the opportunity
to provide my thoughts today on the Heroes Earnings Assistance and
Relief Tax Act of 2007. I applaud your Subcommittees for drafting
legislation to ease the burden on the men and women serving in our
Nation's armed forces, and their families supporting them here at home.
In addition, I am grateful that you are considering including
critical tax assistance for volunteer firefighters, who serve
selflessly each and every day to protect our families and our
communities.
Volunteer firefighters play one of the most critical roles in
ensuring the safety of communities across eastern Connecticut, which I
am proud to represent in Congress. In many areas across the region,
they are the only responders for fire, medical and other emergencies.
They serve not for financial gain, but out of a sense of duty and
responsibility to their friends and neighbors. However, like most
Americans, volunteer firefighters are finding it increasingly difficult
to find not only the time to serve, but to make ends meet as the
medical, education and energy costs facing our middle class working
families continue to increase.
To address this problem, the Connecticut General Assembly passed a
law in 1999 which allowed local governments to abate the property taxes
of any resident who volunteers his or her services as a firefighter.
However, as cities and towns tried to develop incentives to take
advantage of this law, the Internal Revenue Service (IRS) ruled in 2002
that the amount of property tax abated for volunteers was considered
income subject to Federal taxation.
Taxing the tax breaks meant to retain and recruit volunteer
firefighters clearly undermines the purpose of providing incentives for
individuals to volunteer their time to keep their communities safe.
Unfortunately, in light of this misguided ruling, many towns were
forced to repeal their abatement incentives, or prevented from even
considering such programs.
I know first hand the chilling effect this ruling had on
communities in Connecticut looking to implement a volunteer firefighter
tax incentive program. Prior to being elected to Congress, I served as
Town Attorney for the Town of Vernon, Connecticut, which has an all
volunteer fire department. In 2004, the town council began considering
a tax abatement program for their volunteer firefighters, but was
forced to drop the plan in light of the IRS ruling. As a result,
volunteer firefighters in Vernon, and countless other communities
across eastern Connecticut, are denied critical assistance as they
serve.
Sometimes the best thing the Federal Government can do to support
our State and local governments is to simply get out of their way as
they find creative and effective solutions to critical challenges
facing our Nation. This is clearly one of those cases, and I strongly
believe that we need to change Federal law to exempt local tax
incentives provided for service as volunteer firefighters from income
taxes. I am proud to support the Volunteer Responder Incentive
Protection Act (H.R. 943), introduced by my friend and colleague
Representative John Larson, which would amend the Tax Code to not only
protect local tax incentives for volunteer firefighters from income
taxes, but also other benefits that a local or State government may
provide for their services.
For a region like eastern Connecticut, which relies primarily on
the time and dedication of volunteers to staff its fire departments,
finding ways to ease the burden on volunteer firefighters is absolutely
critical. Given all that they do to safeguard our families and
communities, the very least we can do is make it just a little easier
for them to pay their bills as they continue to serve. I am proud to
serve in the Connecticut Congressional Delegation with Representative
John Larson, who has championed this issue on behalf of volunteers in
our State, and across the Nation, since 2002. I applaud him for his
dedication to this cause, and urge you to include the provisions of
H.R. 943 in the draft legislation before you.
There is never enough we can do for those who give their time,
energy and devotion to protecting the lives of others. However, the
``Heroes Earnings Assistance and Relief Tax Act of 2007'' would help
ease the financial burdens of those who serve our communities, States
and our Nation, and I look forward to supporting it once introduced.
Thank you for the opportunity to discuss this important issue with
you today.
Statement of the Honorable Tom Davis,
a Representative in Congress from the State of Virginia
Mr. Chairmen and Members of the Subcommittees, thank you for
holding this joint hearing on legislative proposals designed to help
those who have dedicated their lives to serving our country.
The Oversight and Government Reform Committee spends considerable
time and effort identifying ways to recruit and retain a strong Federal
workforce, especially in light of the pending wave of retirements
expected to hit the Federal Government in the coming years. The
legislative proposals I will discuss today would help the Federal
Government attract the best and the brightest employees this Nation has
to offer.
The first bill is H.R. 1110, commonly referred to as ``premium
conversion.'' I have sponsored this legislation for many Congresses
now, and it has always enjoyed broad bipartisan support, collecting 340
cosponsors in the 109th Congress (H.R. 994). The Oversight and
Government Reform Committee marked up H.R. 1110 in September, and it is
now pending before this Committee.
H.R. 1110 has widespread support for good reason. It would end a
longstanding discrepancy by allowing Federal civilian and military
retirees to pay their monthly health care premiums using pre-tax
dollars. Also, it would allow active duty military members to apply a
pre-tax rebate to the supplemental insurance premiums most purchase to
cover gaps in TRICARE. This legislation would build upon a provision
included in the Pension Protection Act of 2006 which allows Federal
public safety officers a limited premium conversion tax advantage.
Health care costs in the Federal Employees Health Benefits Program
have gone up by over 9 percent a year since 1999. H.R. 1110 would
alleviate these increases by saving retirees nearly $800 annually. To
those on a fixed income, that amount of money can make a huge
difference.
The Federal Government has a long history of treating our active
employees and retirees the same--providing them equal access to health
care, for example. Our retirees should have the same ability to pay
their premiums with pre-tax dollars as current Federal employees, and
our military personnel should be able to do the same under their
TRICARE programs.
I look forward to working with the Subcommittee Chairs this
Congress to try to get this important legislation enacted into law.
The second piece of legislation is H.R. 2363, introduced by Rep.
Tim Bishop (D-NY) and myself, called the Generating Opportunity by
Forgiving Educational Debt for Service Act of 2007, better known as
GOFEDS.
GOFEDS seeks to attract and retain employees who have recently
completed undergraduate or graduate-level education by allowing them to
exclude their student loan repayments from gross income.
The challenges we face--from homeland security to pandemic health
crises to energy supplies--will require a committed and talented human
capital pool. But more and more, young Americans are opting for
employment in the private and nonprofit sectors, leaving the Federal
Government hard-pressed to attract the right people to the right jobs.
In a recent report on the need to build expertise in the Federal
workforce to protect the Nation from bioterrorism, the Partnership for
Public Service pointed out that bio-defense agencies are finding it
increasingly difficult to hire employees with the required scientific
and medical expertise. The overall demand for bio-defense talent will
continue to rise for the foreseeable future--by as much as 25 percent
through 2010--while the supply of such talent will decline unless we
act.
The GOFEDS Act would improve the effectiveness of the existing loan
repayment program as a recruitment tool and in turn improve Federal
programs. While current law allows Federal agencies to repay student
loans on behalf of employees, up to $10,000 a year with a $60,000 cap,
the incentive is taxed. Nonprofits and educational institutions offer
loan repayments which, in contrast, are not counted as taxable income
for the recipient. H.R. 2363 simply puts the Federal Government on par
with nonprofits by excluding loan repayment from the employees' taxable
income.
I look forward to working with the Ways and Means Committee and
other interested Members of Congress on these important initiatives so
that we can better meet the Federal Government's workforce challenges,
which are so critical to the success of the Federal Government's core
missions, today and in the future. Thank you.