Mr. President, I rise today to announce the introduction of the Military Retiree Survivor Benefit Equity Act of 2005. This bill is a major step forward in making our military's Survivor Benefit…
Mr. President, I rise today to announce the introduction of the Military Retiree Survivor Benefit Equity Act of 2005. This bill is a major step forward in making our military's Survivor Benefit Program fairer, more equitable, and more in keeping with our Nation's promise to our service members and their families. The bill combines two important fixes to the SBP. The first corrects a serious inequity in SBP that currently requires over a hundred thousand older military survivors to pay extra into the system for the same benefits as more recent enrollees. I have been fighting to fix this problem since the last Congress and am confident that this year we will succeed in providing basic fairness to these survivors.
This bill also eliminates the dollar-for-dollar deduction of the dependency indemnity compensation, DIC, which the VA pays to survivors, from SBP annuities. This policy is effectively a tax on military survivors at a time when so many of our brave men and women in uniform are dying in Iraq and their families are struggling to get by. Senator Nelson has long fought to eliminate this unfairness, and I am proud to stand with him today in introducing this comprehensive legislation.
The legislation that I introduced in the last Congress and which is included in this bill eliminates a major inequity in the SBP arising from a 1999 congressional act limiting the time required to pay into the plan. That act deemed retirees who are at least 70 years old and have already been paying into SBP for at least 30 years to be fully ``paid up'' for the purpose of receiving benefits. This was an important piece of legislation, but, unfortunately, Congress only made it effective in 2008. The result was that earlier enrollees--those who enrolled between 1972 and 1978--were forced to pay into SBP longer than enrollees from 1978 or later, up to 6 extra years of premiums. In other words, they had to pay in longer for the same benefits.
This inequity was further magnified by the fact that those earlier retirees paid much higher SBP premiums--10 percent of retired pay--for two full decades, until 1992, when the premium was reduced to 6.5 percent of retired pay.
This bill, by making the ``paid up'' provision effective this year, will finally grant these survivors--the widows and widowers of the Greatest Generation--the same benefits of those who enrolled in SBP in subsequent years. It will provide basic fairness to 135,000 survivors and allow us to honor their sacrifice and that of their loved ones.
This bill also eliminates the dollar-for-dollar reduction of SBP benefits by the amount received in dependency and indemnity compensation. Under current law, the surviving spouse of an active duty or retired military member who dies from a service-connected cause is entitled to $993 a month--for a survivor without children--from the Department of Veterans Affairs. However, the surviving spouse's SBP annuity is reduced by the amount of DIC.
SBP and DIC payments are paid for different reasons. SBP, in most cases, is elected and purchased by the retiree to provide a portion of retired pay to the survivor. DIC payments represent special compensation to a survivor whose sponsor's death was caused directly by his or her uniformed service. To offset DIC--which we provide to the families of those who have lost their life in the service of their country--from annuities earned and paid for, is blatantly unfair.
This bill has the broadest possible support among organizations representing our troops and their families, including Air Force Association, Air Force Sergeants Association, Air Force Women Officers Associated, American Logistics Association, AMVETS, Army Aviation Association of America, Associations of Military Surgeons of the United States, Association of the U.S. Army, Commissioned Officers Association of the U.S. Public Health Service, CWO and WO Association U.S. Coast Guard, Enlisted Association of the National Guard of the U.S., Fleet Reserve Association, Gold Star Wives of America, Jewish War Veterans of the USA, Marine Corps League, Marine Corps Reserve Association, Military Officers Association of America, Military Order of the Purple Heart, National Association for Uniformed Services, National Guard Association of the U.S., National Military Family Association, National Order of Battlefield Commissions, Naval Enlisted Reserve Association, Naval Reserve Association, Navy League of the U.S., Noncommissioned Officers Association of the United States of America, Reserve Officers Association, Society of Medical Consultants to the Armed Forces, Military Chaplains Association of the USA, Retired Enlisted Association, United Armed Forces Association, USCG Chief Petty Officers Association, U.S. Army Warrant Officers Association, VFW, and Veterans' Widows International Network. The Military Coalition has described this bill as a top legislative goal, and it is my expectation that it will have strong support in the Senate.
It is vital that we keep faith with the men and women who serve in our military as well as their families. The widows and widowers of our service members, those who are serving now and those who served us in earlier times, are owed our deepest gratitude. But in the face of their sacrifice, there is more that we should do. We cannot ever fully compensate them for their loss. But we can ensure that the benefits that they have earned are fair and just.
Mr. President, I join with Senators Kennedy and Smith and twenty-seven of our colleagues today in introducing a very important piece of legislation, the Ensuring College Access for All Americans Act.
This bill would prevent any student from seeing a reduction in the Pell grants under recent changes by the Bush administration to the formula used to calculate student aid eligibility. On December 23, 2004--just 2 days before the Christmas holiday, I might note--the Department of Education published updates to the allowance for state and other taxes that is used by students and their families to calculate their expected family contribution, or EFC, to college tuition. The EFC is the amount that students and their families are expected to contribute towards college in a given year.
Changes in a student's ``expected family contribution'' have a direct impact on that student's eligibility for a variety of types of financial aid. Simply put, as a student's expected family contribution goes up, their eligibility for financial aid goes down.
The Administration's changes to the tax tables have the effect of cutting $300 million from the successful Pell grant program, upon which more than five million students nationwide rely. It is projected that, as a result of these cuts, 1.3 million students will see a reduction in their Pell grants and another 89,000 will become ineligible for Pell grant assistance.
Not only will these changes drastically affect Pell grant eligibility and aid, but because the EFC formula is used to calculate eligibility for other forms of Federal aid, including federal student loans, as well as private institutional and state aid, these changes will cut practically all forms of student aid. Unfortunately, the Department's changes to the state and local tax allowance will increase the EFC for nearly all American families and students. While no New Jersey students are projected to lose assistance under this year's proposed cuts, they were projected to lose assistance under similar cuts proposed in 2003. I am very concerned that New Jersey students could be hurt going forward if the administration continues to update the tax tables based on outdated tax information.
Certainly, I do not disagree that the tax tables used to determine EFC, which have not been updated since 1988, may need to be revised to reflect current state and local tax burden. However, the administration's proposal does not reflect current tax levels. The updates reduce the credit that families receive for paying state and local taxes at a time in which they are actually paying more taxes. For example, the administration's new tax tables are based on Fiscal Year 2002 state tax information. According to the National Association of State Budget Officers, though, since FY 2002, states have enacted $14.1 billion in tax and fee increases. Again, because the administration's proposal is based on outdated tax information, it does not take into account these substantial increases in State tax burden.
In fact, the General Accounting Office issued a report last week that found that the Department of Education's procedures for revising the tax tables and the formula the Department used are seriously flawed. The GAO report, entitled Student Financial Aid: Need Determination Could be Enhanced through Improvements in Education's Estimate of Applicants' State Tax Payments, states, ``Education could not provide us with written procedures guiding staff on the routine steps necessary to update the tax allowance, nor did it maintain detailed records of its efforts to obtain data.'' The report goes on to say of the data the Department used to revise the tables,
As a result of certain limitations of the SOI [statistics
of income] dataset for the purpose of calculating the
allowance and problems with how Education uses this dataset,
the current state and other tax allowance may not fully
reflect the amount of taxes paid by students and families.
The dataset itself is not ideally suited for calculating the
allowance because it is limited to financial data from those
who itemize their taxes, does not include state and local
taxes, and is several years older than the income information
reported by students and families on the FAFSA.
The report further notes that because the SOI compiles data only for those who itemize their tax deductions, who may pay different tax rates than non-itemizers, the data is further flawed. The GAO goes on to suggest improvements to the Department's calculations and the data they use.
These changes also come at a time when tuition is rising dramatically at double digit rates, and students and working families are straining to provide the financial wherewithal to access America's promise of education. According to the College Board, tuition, room, and board at a four-year public university costs an average of $11,354, $824 more than last year and $1775 more than 2 years ago. In other words, tuition at public institutions has been increasing by almost ten percent a year. In fact, according to the National Association of State Universities and Land-Grant Colleges, tuition and fees at public institutions in New Jersey has increased by more than 40 percent since the 1999-2000 school year. In some states they've increased by more than 60 percent in the last five years.
To really understand these numbers, though, it's necessary to look at the people who are struggling to afford to go to college. To that end, I would like to read a couple of personal stories about the importance of the Pell grant program to a college-bound student and a student struggling to afford college now.
One student writes,
I am lucky enough to be attending a top-rate University and
receiving a quality education, but I rely on many federal
loans and aid, including a Pell Grant, in order to remain
where I am. When President Bush decided not to fully fund
Pell Grants, he left me and many others in a precarious
position. My Pell grant is still pending and I really am
counting on it to cover some of my basic expenses; it will be
a hardship until it comes--or worse if it doesn't come in
full. The President says he's an advocate for young people
with his dubious social security plans, but he leaves us
behind with his non-commitment to higher education.
A mother who fears she will no longer be able to afford to send her son to school writes,
I've saved money from the day my son was born so that he
may attend the college of his dreams. He is a gifted musician
and was awarded scholarships to attend Berklee in Boston.
With the help of the Pell Grant and other student loans, he
is now a freshman there and I'm proud to say is doing very
well. However, I am worried that with Bush having lowered the
income standard for Pell, Timmy may lose his grant and there
won't be enough money saved for him to stay in school. I
would like to give him the opportunity to pursue his dreams
and let his talent take him where it may. I see Bush cutting
programs from the have nots to give to the haves. How many
dreams is he going to destroy and how many more programs is
he going to cut?''
It's wrong, to cut $300 million--a small price to pay to ensure that low-income families can afford to send their children to college--from this program. And it's even worse to cut aid to 1.4 million families based on faulty calculations.
A college education today is essential to survival in our competitive marketplace. Not only does our economy thrive on an educated workforce, but also those who are educated and as a result are gainfully employed contribute enormously to our tax base. I am willing to venture that the costs of the Pell grant program are more than paid back by those who were able to go to attend college because of a Pell grant and today are productive, tax-paying citizens.
The Senate must prevent these cuts from becoming a reality. Thirty Senators stand behind the legislation I introduce today a bipartisan group of thirty Senators, I might add.
I hope that we can put politics aside and pass this legislation immediately to prevent any student from losing Pell grant assistance. Finally, I strongly urge the administration to take a close look at the GAO report and to reform the flawed system they have used to revise the tax tables.
Mr. President, I ask unanimous consent that the bill be printed in the Record.