Combat Pay Tax Flexibility Act of 2007

Madam Speaker, I move to suspend the rules and pass the bill (H.R. 3997) to amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes, as amended.

Madam Speaker, Martin Luther King said, ``Everybody can be great because anybody can serve. You only need a heart full of grace and a soul generated by love.''

Those that volunteer to serve our country deserve our thanks and our support. Members of our Armed Forces make tremendous sacrifices as they honorably perform their duties and deserve so much in return for their service.

The Heroes Earnings Assistance and Relief Act is an important piece of legislation that would eliminate many inequities that presently exist in Federal statutes affecting those performing service to our country.

The bill makes several improvements in the Tax Code for servicemembers and their families. It includes a provision to remove obstacles for Americans who wish to serve our Nation overseas through the Peace Corps by providing relief from capital gains taxes on the sale of a home.

Additionally, the bill makes several important changes to the Supplemental Security Income program, known as SSI. The SSI program provides critical benefits for servicemembers who are caring for a severely disabled spouse or child. This bill would change SSI's treatment of certain forms of military compensation when determining SSI eligibility and benefit amounts for military families. As a result, more military families will be able to benefit from this important safety net. This bill would remove penalties that presently exist for blind,

disabled, and elderly veterans under the SSI program.

And, finally, the bill would end the disparate treatment of compensation that is paid to some AmeriCorps volunteers but not to others under the SSI program. This modest change would enable disabled Americans to serve their country and their community despite their disability. For some Americans, AmeriCorps can provide a pathway for the disabled to gain the skills to reenter the workforce.

At this time, I would like to enter into the Record the following documents.

Stories of Americans With Disabilities in National Service

People with disabilities volunteer for the same reasons

that anyone else does--to give back to their communities, to

improve their surroundings, and to be active and engaged in

life. Some national service participants who have

disabilities volunteer with organizations that serve other

people with disabilities, while others focus their efforts on

helping to meet a wide range of critical community needs. The

individuals profiled here represent a small sampling of the

many people with disabilities involved in the Corporation for

National and Community Service's Senior Corps, AmeriCorps,

and Learn and Serve America programs.

americorps*state and national

Steve Hoad, AmeriCorps Alumnus 2001, AmeriCorps*VISTA

Alumnus 2003 Augusta, Maine; disability: blind.

Steve Hoad served with the Maine Conservation Corps in

Augusta as a coordinator of volunteers on a statewide basis.

The program, called SERVE--Maine (State Environmental

Resource Volunteer Effort for Maine), identifies volunteers

for outdoor or natural resource projects sponsored by

government agencies or nonprofit groups. As a person who is

blind, Steve thinks it's important for lots of organizations,

including the Corporation for National and Community Service,

to address inclusion. Steve feels his contributions are

important for the additional reason that, in his opinion, ``.

. . people with disabilities have been left on the sidelines

and pushed into isolation by a couple of different ideas that

people seem to have. One is that because maybe someone looks

different or acts differently or speaks differently, that

they're not as smart; and the other is that because someone

is disabled, they can't contribute anything, they need to be

helped. Those two ideas become very exclusionary.''

americorps*vista

Dawn Facka, AmeriCorps*VISTA Alumna 2001, Anchorage,

Alaska; current location: Charleston, South Carolina;

disability: hearing impaired.

Dawn Facka, a service-learning coordinator with

AmeriCorps*VISTA, advocates for people with disabilities and

serves as a role model for young men and women with

disabilities that come to serve in AmeriCorps Programs. In

addition, she teaches others about the importance of

inclusion and facilitates disability awareness and diversity

training to AmeriCorps*NCCC members. She strives to create a

work environment that is welcoming and understanding to those

individuals with disabilities by advocating for community

involvement and supporting organizations that support and

help individuals with disabilities. She says that ``If

AmeriCorps, had not opened the doors of opportunity to me, I

most likely would still be ashamed and embarrassed of who I

am and [how] society has labeled me. I would still be

apologizing to people who did not tolerate or accept my

hearing loss. I can't begin to show my gratitude . . . to

AmeriCorps for showing me another world.''

americorps*nccc

Joe Tierney, AmeriCorps*NCCC Alumnus 2001 and 2002,

Charleston, South Carolina; current location: Boston,

Massachusetts; disability: traumatic brain injury.

Joe Tierney dedicated two years of his life to service with

Americorps*NCCC. During these years he tutored children,

built houses, designed and built wheelchair ramps, surveyed

and mapped a historical graveyard, blazed trails, worked at a

camp for children and adults with disabilities, and much

more. Of his time there he writes, ``Throughout my service I

met some amazing individuals, traveled to some fascinating

locations, and learned a variety of skills, but most

importantly my service gave me the opportunity to recover,

the ability to experience life with a smile. I made the

decision to join AmeriCorps because I felt an obligation to

give back, I understood that I was very fortunate to have

recovered and that I would have never done it without the

help of many thoughtful, committed, competent individuals.''

learn and serve america

Jared (not his real name), Learn and Serve America Alumnus

2002, Hampshire, Massachusetts; current location: Hampshire,

Massachusetts; disability: significant disabilities.

Jared (not his real name), a high school student with

significant disabilities, participated fully in a water

quality testing initiative though a school-based service-

learning project in Western Massachusetts. During the

project, Jared spoke of all that he learned about water

quality and the effects on the environment. His family and

teachers were impressed with the project because it provided

Jared with a meaningful experience to give back to his

community as well as taught him vital life skills. His mother

speaks of the project as being one of the few opportunities

Jared has had to mingle with other students outside of

special education.

rsvp

Dean Homerick, RSVP Volunteer, current location: Lexington,

Ohio; disability: debilitating arthritis.

Dean Homerick began service as an RSVP volunteer as soon as

he became eligible--the day he turned 55. He is involved in

environmental issues and emergency operations. He volunteers

regularly at the Columbus Zoo, participating in education

programs to teach children about animals, as well as

volunteering at a local nature center and at the Ohio Bird

Sanctuary, where he edits a monthly newsletter. He also

volunteers for the American Red Cross and is the volunteer

coordinator for the Richland County Emergency Operations

Center, charged with alerting volunteers in the event of an

emergency.

corporation for national and community service

The Corporation for National and Community Service provides

opportunities for Americans of all ages and backgrounds to

serve their communities and country through three programs:

Senior Corps, AmeriCorps, and Learn and Serve America. This

year, more than 1.6 million individuals will participate in

the Corporation's programs, helping thousands of nonprofit

organizations, faith- based groups, schools, and government

agencies build their capacity to meet critical local needs in

education, the environment, public safety, disaster relief,

and other areas. Together with the USA Freedom Corps, the

Corporation is working to build a culture of citizenship,

service, and responsibility in America.

Madam Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Neal).

Madam Speaker, I ask unanimous consent to allow Mr. Neal to handle the rest of the time.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, we cannot express enough the tremendous debt of gratitude we owe the brave men and women who defend our freedoms every day. It is with great honor that I join my colleagues on the House floor today and

help lead the debate on H.R. 3997, the Heroes Earnings Assistance and Relief Tax Act. This legislation is more than a simple cleanup of some of the disincentives, distortions and oversights that have disadvantaged our active duty military and veterans in the Tax Code.

This legislation is significant because it sends a clear message that even as many of our best and brightest are currently in harm's way in theaters where they are facing hostile fire, this Congress is prepared to work on a bipartisan basis to consider every option and every opportunity to improve the lives of their families and their predecessors.

The $2.3 billion tax package which was reported out of the House Ways and Means Committee last week will bolster tax and Social Security benefits for military servicemembers, veterans and volunteers. This important measure will allow our active military men and women to benefit from the earned income tax credit by allowing them to pair their nontaxable combat pay with their earned income.

H.R. 3997 will ease the financial burden of losing a loved one by allowing survivors to put military death benefits into Roth IRAs without limitations. Furthermore, this legislation will ensure military Reservists will have the opportunity to make penalty-free withdrawals from their retirement plans, including 401(k) and IRA accounts. If deployed, these men and women will be able to provide the financial footing their families may depend on during their absence.

I am also pleased that the majority, in bringing this bill to the floor today, included in it an amendment I offered and withdrew in committee. I appreciate the bipartisan support displayed on this critical issue. Specifically, my provision will expand Social Security income benefits to our aged, disabled and blind veterans.

Under current law, the Social Security Administration counts annuities paid by State governments to veterans who are blind, disabled or aged as earned income. As a result, veterans in certain States like Pennsylvania, which provides paralyzed vets with an $1,800-per-year annuity, may be denied Federal benefits or receive a lower amount than veterans in States that do not provide such annuities. H.R. 3997 will correct this inequity in the law and ensure that annuities awarded by States to vets with certain disabilities are disregarded when determining SSI benefits.

Madam Speaker, the dedication and bravery made by American soldiers have allowed us to exercise our everyday freedoms. Many have made the ultimate sacrifice, and it is our duty in Congress to make sure that veterans rights and interests are protected and served. As many of us prepare for this upcoming Veterans Day, this legislation reaches our Chamber at the proper time and includes the right incentives to help our men and women in uniform. Overall, this legislation is a bundle of commonsense changes to help those who have contributed to the defense of our country and the protection of our freedoms. I am proud to be a supporter of this initiative, and I retain the balance of my time.

Madam Speaker, at this point, I would like to yield 2 minutes to a leader on our committee, the distinguished gentleman from Illinois (Mr. Weller).

Madam Speaker, it is now my privilege to yield 2 minutes to another member of our committee and a strong advocate of the cause of veterans, the gentleman from Texas (Mr. Brady).

Madam Speaker, may I inquire how much time is remaining on both sides.

Madam Speaker, at this point, it would be my honor to yield 4 minutes to a leader in our committee who made a seminal contribution to the SSI component of this legislation, the gentleman from New York (Mr. Reynolds).

(Mr. REYNOLDS asked and was given permission to revise and extend his remarks.)

Madam Speaker, it is now my privilege to yield 3 minutes to the gentleman from North Carolina (Mr. Jones), a strong advocate of the cause of veterans.

Madam Speaker, it is now my privilege to yield 4 minutes to the distinguished gentleman from Kansas (Mr. Moran), a true advocate of the veterans, as well as all of the military facilities in his district.

Madam Speaker, I reserve the balance of my time.

Mr. Speaker, may I inquire of the other gentleman, does he have just one more speaker?

Mr. Speaker, I yield myself the balance of my time.

In conclusion, I believe the case has been made compellingly that this legislation consists of many components, but they have been developed within the Ways and Means Committee as a benefit for our veterans and our active duty military.

I don't believe there is a great controversy here. What I do believe is there is a lesson. When Republicans and Democrats work together on a bipartisan basis, when they put aside political posturing, when they put aside ideological poses, when they insist on procedural fairness, then I think we can find common ground to move forward on things that are genuinely important.

I want to particularly credit the chairman of our committee, Mr. Rangel, and the gentleman from Massachusetts, the chairman of our Select Revenue Subcommittee, for having moved this legislation forward and having set a very high standard. And I would like to take credit for the fact that there has been substantial Republican participation in the development of this bill.

This bill, I think, is important to move forward now, but not only for what it consists of, but for what it symbolizes, and that is what this Chamber can achieve when both parties work together.

Mr. Speaker, I yield back the balance of my time.

General Leave

I thank the gentleman from Pennsylvania.

I want to thank both Chairman Rangel and Ranking Member McCrery, as well as Chairman Neal and Chairman McDermott and Ranking Members English and Weller, for their outstanding leadership in crafting this legislation.

Madam Speaker, we come together today not as Democrats and Republicans but as Americans. We are united in our respect for those who wear the uniform of the United States armed services. We are united in our desire to ensure that Federal programs within the Ways and Means Committee's jurisdiction, from the Tax Code to the SSI program, work effectively for members of the military, veterans, first responders and their families. I strongly urge the passage of this legislation.

I would like to highlight two specific provisions in the bill that have been of particular interest to me during my time in 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 affects blind veterans in four States, New York, New Jersey, Pennsylvania and Massachusetts, that provide these veterans modest annuities in recognition of the substantial sacrifice they have made in service to our country.

Regrettably, under current Federal law, these State annuities actually reduce any SSI payments for which blind veterans would otherwise be eligible. As we heard from Michelle LaRock of New York's Division of Veterans' Affairs at our Ways and Means Committee hearing 3 weeks ago, this quirk in the Federal SSI rules creates a hardship not only for the affected veterans themselves, but for the States that administer these annuity programs as well.

As in years past, the bill I have introduced in the 110th Congress, H.R. 649, has enjoyed bipartisan support. It has been strongly endorsed by the Blinded Veterans Association. I would also like to publicly thank Chairman Rangel, not just the Chair of our committee but the dean of my State's congressional delegation, for his cosponsorship of prior versions of this bill, and I look forward to working closely with him to see the proposal finally enacted into law.

Let me turn briefly to a separate provision, section 107 of the bill, which will permanently allow penalty-free withdrawals from IRAs, 401(k)'s and other retirement funds for Reservists and National Guardsmen called to active duty. As we all know, when Guardsmen and 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 chose to draw down on their retirement funds. Unfortunately, under prior law, they faced a 10 percent early withdrawal tax when they did so, and they faced restrictions on making repayments to their retirement funds upon returning from active duty.

Last year's Pension Protection Act provided relief from this 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 31, 2007.

To ensure that 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 7 of this year. This legislation has also attracted a bipartisan group of cosponsors, as well as endorsements from several leading veteran service organizations. I look forward to seeing these commonsense changes enacted into law over the coming weeks.

I urge a ``yes'' vote.

Blinded Veterans Association,

Washington, DC, February 9, 2007.

Hon. Thomas Reynolds,

House of Representatives,

Washington, DC.

Dear Representative Reynolds: On behalf of the Blinded

Veterans Association (BVA), the only congressionally

chartered Veterans Service Organization exclusively dedicated

to serving the needs of our Nation's blinded veterans and

their families we commend you for the introduction of H.R.

649 ``Blind Veterans Fairness Act.'' BVA is grateful to you

for sponsoring this bill for those blind veterans who have

their state annuities counted against the income levels by

Social Security. Cornell University Disability Statistics

research has found that the poverty rates for the disabled

working age population in 2004, ages 21-64, has risen to 3.33

times the rate of poverty for the non-disabled population.

They also found that the poverty rate for those with a

sensory disability in this age group was 24.6% in 2005 as

compared to 9.3% for the non-disability population.

These annuities from the states are clearly meant as a

``gift'' to help prevent these veterans from falling into

these terrible statistics and in appreciation for their

service to our nation. BVA appreciates that you not only

understand this issue, but are willing to take action to

correct the problems blinded veterans have had with these

annuities from some states being provided to them. These

should not be considered additional income by Social

Security, but instead a special disability benefit for their

service to our grateful nation. This penalty should be

removed and the annuities excluded from all income for

purposes of SSI for purposes of pension benefits.

BVA strongly supports H.R. 649, and we appreciate all your

strong efforts in regards to this issue for blinded veterans.

Sincerely,

Thomas Zampieri,

Director, Government Relations.

Madam Speaker, I am delighted that this bipartisan legislation to assist our veterans is before the House today. It also is certainly of great assistance to our active duty military and Reservists and indeed their families. The bill we are considering today is the product of a joint hearing held last month by the Select Revenue Measures Subcommittee led by myself and the Ranking Member English and the Income Security Subcommittee led by Chairman McDermott and Ranking Member Weller. We heard from a number of veterans advocates, military families groups, the Social Security Administration, Members of Congress and others who discussed their proposals to either enhance tax provisions or reduce burdens on those who serve or volunteer for America.

The bill we are considering today, which passed out of the full committee last week, is a product of those deliberations and will go far to assist those serving this country, again, emphasizing support for their families. This country is fortunate that so many soldiers and sailors have been willing to sacrifice for our defense. We must remember, once again, that this is a shared sacrifice. The families of someone serving this country can suffer financially, as well as emotionally, during extended tours. Congress has a responsibility to ensure that the Tax Code and other income security provisions do not create problems but, rather, solve them for military families. That is exactly what this bill will allow us to do.

Madam Speaker, I yield 1 minute to the gentleman from Texas, a member of the Ways and Means Committee, Mr. Doggett.

Madam Speaker, I would like to yield 1\1/ 2\ minutes to the gentleman from North Dakota and member of the Ways and Means Committee, Mr. Pomeroy.

Madam Speaker, at this time I yield 2 minutes to the gentleman from Connecticut (Mr. Larson), a member of the Ways and Means Committee.

(Mr. LARSON of Connecticut asked and was given permission to revise and extend his remarks.)

Madam Speaker, I yield 1 minute to the gentleman from Oregon (Mr. Blumenauer), a member of the Ways and Means Committee.

Madam Speaker, I yield 1 minute to the gentleman from New Jersey (Mr. Pascrell), also a member of the Ways and Means Committee.

(Mr. PASCRELL asked and was given permission to revise and extend his remarks.)

Madam Speaker, I yield 1 minute to the gentlewoman from Nevada (Ms. Berkley), a distinguished member of the Ways and Means Committee.

Madam Speaker, I yield Mr. Altmire from Pennsylvania, a good friend of the veteran, 1 minute.

Madam Speaker, I recognize a great friend of the veteran, the gentlewoman from Kansas (Mrs. Boyda) for 1 minute.

I yield 1 minute to the gentlewoman from Arizona (Ms. Giffords), a friend of the veteran.

Mr. Speaker, I would like to recognize the gentlewoman from California (Mrs. Davis), a good friend of the American veteran as well, for 1 minute.

Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. Farr), a friend of the American veteran as well.

Mr. Speaker, I reserve the balance of my time.

I believe we have concluded the speakers who have asked for time on our side.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 3997, as amended.

Mr. Speaker, I yield myself the balance of my time.

First of all, I thank the gentleman from Pennsylvania (Mr. English) for the usual courtesy that he extends to all Members of this body, and particularly those of us who are on the Ways and Means Committee. I also wish to acknowledge Chairman Rangel and Mr. McCrery who worked to accommodate suggestions from several Members of the House. We thank those Members, both Republicans and Democrats, for generating many of the good ideas contained in this bipartisan bill.

Let me describe some of the provisions in this bill. The bill makes permanent the current provision waiving the 10 percent withdrawal penalty for those called up to active duty who need to tap into retirement accounts.

The bill allows families to roll over amounts received as death gratuity benefits into Roth IRAs or education savings accounts.

The bill makes a number of changes related to supplemental security income or SSI eligibility and military service.

And the bill makes permanent the special rule treating combat pay as earned income for the purposes of the earned income tax credit, or

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

This is a photograph of Major Alan Johnson, his wife, Tori, and his daughter, Megan. This beautiful family suffered the tragedy of losing Major Johnson in Iraq. Last winter, we buried Major Johnson at Arlington Cemetery. His widow contacted me 2 weeks later to tell me that what had happened in the State of Washington is the pension plan there had simply given the money back that Alan Johnson had paid in as if he had terminated his employment at the time he was called to duty, called to deployment in his status as a Reserve officer.

It brought to light a gap in the law that protects our deployed Reservists and Guardsmen. When they come back, this law seamlessly reintegrates them into the pension plan of their employer, but there was no provision if we tragically lose our soldiers under deployment. Included in this bill is the HEROES Act, introduced by Doc Hastings and myself, that allows for survivor benefits to be paid in this situation. It is a very important addition. It is terribly important that survivors of our soldiers who paid the ultimate price have survivors benefits under the pension. This law will afford that.

Madam Speaker, I include for the Record a letter to this effect from Mrs. Tori Johnson.

November 5, 2007.

Hon. Charles Rangel,

Chairman, Committee on Ways and Means, Longworth House Office

Building, Washington, DC.

Dear Chairman Rangel: I am writing to thank you for

introducing the Heroes Earnings Assistance and Relief Tax

(HEART) Act, H.R. 3997. Your bill makes many important

changes to the tax law that will be of great help to the men

and women who serve in the Reserve and the National Guard and

their families.

My husband, Major Alan R. Johnson, who was killed in Iraq

earlier this year, was a public servant both in the Reserve

and in his full time job. In his civilian life, he worked for

fifteen years with the Yakima County Department of

Corrections. We were a team. He was a strong leader and he

depended on the strength of his family. We needed to be

strong so he did not need to worry about us when he was

serving his county in the Reserves.

Dealing with the problems and technicalities our family had

to face after we learned that Alan was killed has not been

easy. My husband was 44 and we were planning on his

retirement for our future. Because his employer considered

Alan as an employee who had voluntarily terminated when he

left for his deployment, the survivor benefit under his

pension that we would be paid was less than the amount we

would have received if he was still an active employee. When

I asked why, I found out that in order to have his pension

protected under existing law he had to return to work.

The HEART Act corrects the gap in the Uniform Services

Employment and Reemployment Right Act's pension protections

for survivors of National Guard and Reserve soldiers who are

killed in action and can not return to work. Our Guard and

Reservists should know that the families that they leave

behind will be able to rely on the survivor benefits that

they have earned in their civilian employment.

Over 81,000 Reservist and National Guard members have

responded to our Nation's call to duty. They believe in our

country and are willing to make that ultimate sacrifice. When

they cannot return to their former jobs your bill will make

sure that their families will get the full survivor benefits

that they earned from their jobs at home.

Again, I thank you for your leadership and that of

Congressman Pomeroy and Congressman Hastings in making sure

that the country that Reservists, like my husband, have

sacrificed everything for will take care of their families. I

hope that your bill, H.R. 3997, will become law soon.

Sincerely,

Victoria C. Johnson.