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70–521—PDF 2010

S. HRG. 111–1088 

TAX AND FISCAL POLICY: EFFECTS ON THE 

MILITARY AND VETERANS COMMUNITY 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 22, 2010 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 2 

WITNESSES 

Dobyns, Specialist Dan, Director, State Family Programs for Montana National Guard Family Programs, Helena, MT ..................................................... 4 

Noyce Merino, Staff Sergeant Michael, Montana National Guard, former 

‘‘Noncommissioned Officer (NCO) of the Year’’ for 2008, and winner of 

the U.S. Army’s 2008 ‘‘Best Warrior’’ competition, Melrose, MT ..................... 7 

Darrah, Dr. Mark, president and chief executive officer, Athena GTX, Inc., 

Des Moines, IA ..................................................................................................... 9 

Hanson, Captain Marshall, USNR (Retired), director of legislative and military policy, Reserve Officers Association of the United States; also representing The Military Coalition (TMC), Washington, DC ............................... 11 

Embree, Timothy, legislative associate, Iraq and Afghanistan Veterans of 

America (IAVA), Washington, DC ...................................................................... 13 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 25 

Darrah, Dr. Mark: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 27 

Responses to questions from committee members ......................................... 31 

Dobyns, Specialist Dan: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 35 

Embree, Timothy: 

Testimony .......................................................................................................... 13 

Prepared statement .......................................................................................... 40 

Responses to questions from committee members ......................................... 46 

Grassley, Hon. Chuck: 

Opening statement ........................................................................................... 2 

Prepared statement .......................................................................................... 49 

Hanson, Captain Marshall: 

Testimony .......................................................................................................... 11 

Prepared statement .......................................................................................... 50 

Responses to questions from committee members ......................................... 58 

Noyce Merino, Staff Sergeant Michael: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 65 

Responses to questions from committee members ......................................... 71 

COMMUNICATION

Reserve Officers Association (ROA) and Reserve Enlisted Association (REA) ... 73 

(III) 

(1) 

TAX AND FISCAL POLICY: EFFECTS ON THE 

MILITARY AND VETERANS COMMUNITY 

WEDNESDAY, SEPTEMBER 22, 2010 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 10:11 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Grassley and Ensign. 

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; Lily Batchelder, Chief Tax Counsel; Holly 

Porter, Tax Counsel; and Michael Grant, Detailee. Republican 

Staff: Tony Coughlan, Tax Counsel. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee will come to order. 

In a fireside chat during World War II, President Franklin Roosevelt honored America’s troops by saying, ‘‘We honor our troops 

fighting our enemies in distant parts of the world.’’ Today, America’s armed forces are once again fighting our enemies in distant 

parts of the world, and once again we should honor these brave 

men and women. But there is much that we can do to support their 

efforts. That is our task today, and every day. During today’s hearings, we will work to identify new ways that we can help. 

Our troops bear a heavy burden. They deploy for months, sometimes even years, at a time. They often leave much behind: 

spouses, children, jobs. Members of the National Guard and Reserves leave their careers, and too many come home to face financial or marital problems. In spite of these challenges, our armed 

forces still answer the call. They bear this burden because they 

love their country. 

My home State of Montana sends a higher share of its population 

to serve in Iraq and Afghanistan than almost any other State. This 

week, hundreds of Montana National Guardsmen said goodbye to 

their families and began a year-long tour in Iraq. For many, this 

was their second or third deployment. 

In April, I had the honor to meet with members of our armed 

services in Afghanistan. I saw our brave troops in action. These 

men and women work under the most difficult conditions. They 

serve every day: weekends, holidays, anniversaries, and birthdays, 

24 hours a day, 7 days a week. 

2 

Our troops are some of the hardest-working Americans there are. 

They patrol the mountains, they fix trucks, they fire artillery. They 

are warriors and they are diplomats. They organize meetings, 

known as shuras, with local leaders and village elders. I was struck 

by their professionalism, their courage, and their tenacity. We have 

some of the very best men and women in the whole world serving 

the United States of America over in Afghanistan and Iraq, and I 

am very proud of them. 

We Montanans, and all Americans, are so proud of these men 

and women, but we must do more than just express our support. 

We must act to take care of our soldiers, marines, sailors, and airmen when they get home. So today, this committee will take a hard 

look at how we can improve tax and fiscal policy to make life better 

for our military and their families. 

We did much in 2008 with the Heroes Earnings Assistance and 

Relief Tax Act. That law eliminated many obstacles in the tax law 

that created problems for veterans and service members. Among 

other changes, we made permanent the law that combat duty income counts for EITC purposes. We guarantee that family members of fallen soldiers can take advantage of tax-favored accounts, 

and we provided disabled veterans with an extra year to claim tax 

refunds. 

I know that there is more we can do. Today, we will hear how 

the tax code does not always make allowances for the unique circumstances that the troops and their families face during times of 

war. Surviving children of our troops are sometimes subjected to 

higher tax rates on benefits paid to them. National Guard and Reserve troops regularly pay out of their own pockets to drive hours 

to military training and do not receive reimbursement or a tax deduction for these expenses. 

Small businesses who hire Guardsmen or Reservists see their 

employees deployed again and again, but are not compensated for 

their loyal support for their employees. We need to address concerns like these, and more. 

George Washington once said, ‘‘The willingness with which our 

young people are likely to serve in any war, no matter how justified, shall be directly proportional to how they perceive the veterans of earlier wars were treated and appreciated by their nation.’’ 

We have a sacred responsibility here. Our armed forces have answered the call, and they have shouldered their responsibility. Let 

us do so as well. Let us honor the members of America’s armed 

services who have borne this heavy burden. Let us do our part to 

help those who fight our enemies in distant parts of the world. And 

let us do what we can to show them that we are very appreciative 

of them and that they are appreciated by a grateful Nation. 

Senator Grassley? 

OPENING STATEMENT OF HON. CHUCK GRASSLEY, 

A U.S. SENATOR FROM IOWA 

Senator GRASSLEY. Thank you, Mr. Chairman. Thank you, panelists, for coming today and taking time out of your busy schedules 

to help us review tax laws. 

When our Nation is at war, as it is now, we are often reminded 

of the tremendous sacrifices made on the battlefield by those who 

3 

wear our country’s uniform. I think of Salvatore Giunta, the Iowan 

who is about to receive the Medal of Honor for risking his life to 

aid his wounded comrades while fighting the Taliban in Afghanistan. 

The stories I read in the paper of the patriots from my home 

State, who have given their lives for their country, bring home the 

tremendous price of freedom. We can never thank enough those 

who are serving or who have served in the armed services; however, we often overlook the many day-to-day sacrifices on the part 

of those who serve, as well as their important support group: their 

families. 

I also want to acknowledge the small business owners, like Dr. 

Darrah from my home State of Iowa, who seek to hire Reservists, 

even knowing that they could be called to active duty, leaving the 

business in the lurch. I thank Dr. Darrah for being here today as 

well. 

To the extent that it is possible to alleviate the extra stresses 

and strains on service members and veterans, as well as their families and support network, we have an obligation to explore policy 

options to do so. We have done that in the past, and I was pleased 

in that process to support the Military Family Tax Relief Act and 

the Heroes Earnings Assistance and Relief Tax Act. Those bills 

were passed in 2003 and 2008, respectively, and are now law. 

Among other provisions included in these laws were a temporary 

tax credit for small employers of Reservists called to active duty, 

a permanent extension of an election to include combat pay as 

earned income for purposes of the Earned Income Tax Credit, an 

allowance for Reservists called up for active duty to withdraw unused funds from a health flexible spending account, and an exclusion from income of payments made to offset adverse effects in 

housing values that result from military base closures. 

The subject of this hearing is building upon those previous acts, 

and it is a very important hearing. We will consider at this time 

to what extent the tax laws of this country need to be changed to 

alleviate the special hardships placed upon the military and veterans communities. 

To the extent requirements of the Federal Government contained 

in the Uniformed Services Employment and Reemployment Rights 

Act and elsewhere place burdens on employers of those deployed to 

the military, we should determine the most appropriate way to alleviate those burdens. 

This committee should also consider the best way the unique 

burdens of the members of the military and veterans communities 

should be addressed by the tax laws. The committee may also wish 

to determine the best way those burdens are addressed, by the tax 

laws or by some other way. Thank you. 

The CHAIRMAN. Thank you, Senator Grassley. 

I would now like to introduce our panel. I am very proud to have 

two representatives from the Montana National Guard. The first 

witness is Specialist Dan Dobyns, who is the State Family Programs Director for the Montana National Guard Family Programs. 

Welcome, Specialist Dobyns. 

We also have Staff Sergeant Noyce Merino, former ‘‘Noncommissioned Officer of the Year’’ for 2008, and he was also the winner 

4 

of the U.S. Army’s 2008 ‘‘Best Warrior’’ title. Staff Sergeant Noyce 

Merino, thank you very much for being here. 

And Dr. Darrah, who is president and chief executive officer for 

Athena ISG/GTXtreme, Inc. That is quite a mouthful. 

In addition, we have Captain Marshall Hanson of the U.S. Navy, 

Director of Legislative and Military Policy for the Reserve Officers 

Association of the United States. Captain Hanson is also a representative of The Military Coalition, a consortium of nationally 

prominent military and veterans organizations, and will present 

testimony on their behalf. 

Finally, we have Timothy Embree, who is a legislative associate 

with the Iraq and Afghanistan Veterans of America. Thank you all 

very, very much for coming. I just urge you—I know I need not tell 

you this—let ’er rip. Tell it like it is. Tell us what you think. Let 

us make the most out of this hearing here. Thank you very, very 

much. 

All of your statements will be automatically included in the 

record. You can just rest assured of that. Second, I would just urge 

you to speak for about 5, 6 minutes and summarize your statements, and we will take it from there. 

We will start with you, Specialist Dobyns. 

STATEMENT OF SPECIALIST DAN DOBYNS, DIRECTOR, STATE 

FAMILY PROGRAMS FOR MONTANA NATIONAL GUARD FAMILY PROGRAMS, HELENA, MT 

Specialist DOBYNS. Thank you, Mr. Chairman. Thank you for this 

opportunity today. My name is Specialist Dan Dobyns. I am the 

State Family Program Director for the Montana National Guard. I 

am a full-time Federal technician with the Montana National 

Guard in Ft. Harrison, Helena, MT. I was born and raised in Montana. I am proud of that. I am very familiar with the unique challenges. 

The CHAIRMAN. Where were you born? 

Specialist DOBYNS. I was born in Shelby, MT. 

The CHAIRMAN. Good for you. 

Specialist DOBYNS. Yes. Up in the high line up there. We reside 

in Helena right now. We like Helena. Today, I want to put human 

faces to some of our service members in Montana. There are a few 

important statistics, obviously, that are pretty important. In Montana, life is a little bit different than other States. We are the 

fourth largest, and from east to west we have over 600 miles. A lot 

of our roads are covered in ice many months, and a lot of our residents live in very rural, isolated areas. The average income is substantially lower, $20,000 to $30,000, 

depending on which family it is. With gas prices hovering at about 

$3 a gallon and employment opportunities being the lowest that we 

have seen in a long time, Montana is different. These are just a few 

facts. I do not want to get jumbled up in facts. I want you to hear 

some stories of some people who have been impacted by these facts. 

Late on a Saturday night, I received a really distressed call from 

an 18-year-old female who is taking care of four young children; I 

get these calls a lot. Her mom, who is a member of the Army National Guard, was gone for annual training. Annual training is a 

mandatory 2-week training for Guard members. Well, the power for 

5 

their house had been turned off, since the bill was not paid. Since 

the power was turned off, all the refrigerated food in the house had 

spoiled, and the kids had nothing to eat. They were down to one 

loaf of bread. Five military children down to one loaf of bread. 

The mother was an extremely hard worker—I did a lot of research on this case—balancing, sometimes, three jobs at one time. 

She had been traveling on her drill weekend—Guard members are 

required to drill 1 weekend a month—and it was 4 hours one way 

to her drill location. That’s an 8-hour round trip. 

In Montana, we do not talk about miles, we talk about hours. We 

do not talk 100 miles, we say it takes about 3 hours, because we 

are not sure what the driving conditions are going to be like. While 

her rank was an actual E–4, her pay was not even enough to hardly cover her expenses for the weekend to travel to drill. 

Like I said, Montana is a big State. With gas prices, for an 

E–4, there is not enough money to come back and to contribute to 

paying for the power bill. Her husband is also in the National 

Guard. He had been at basic training for over 4 weeks, and he was 

an E–1. His pay did not even come close to covering the cost of a 

family living in Montana. 

Well, as the Director of Family Programs in Montana, I have 

great resources at my disposal to help families just like this. We 

have six Family Assistance Centers State-wide that I call on to 

help in situations like this. We have geographically dispersed them 

strategically throughout Montana. 

I called the Family Assistance Center in their area and the Family Program staff, and I started to work up possible solutions specifically for this family. We went to a local grocery store right away 

and provided the family with groceries, since that was the most important need that we could see right away. 

Next, we helped them with the resources to assist them in paying their power bill. Family Assistance Centers have knowledge 

and access to resources to help families financially. The family had 

their power turned back on, and they had received financial help. 

The end of the story was, people realized, just even in our community, how, right next door, you can have a family like this. 

The primary mission of a Family Assistance Center is to provide 

guidance to family members. FACs also provide resources on health 

insurance, even access to great family counselors. All information 

is validated, it is official, and all families in the military are welcome at the Family Assistance Center. We will help any family, no 

matter if they are National Guard, if they are Reserve, or if they 

are active duty. 

Another family that I want you to hear about today is a couple 

who showed up in my office in Ft. Harrison. They were very frustrated. Tears were flowing off of their faces as they told me how 

they had been working four jobs between the two of them because 

they had been laid off of their original jobs that they had obtained 

with college degrees. They were coming up short on their bills. 

His wife had joined the National Guard for an opportunity to further her education to earn more income, but the exact opposite 

started to happen. Before she left for 9 weeks of basic training, 

which is required, they saved as much money as they could. However, since she had to travel every drill weekend so many hours, 

6 

they actually lost money on their drill weekends. Her pay at basic 

training was actually lower than her civilian employment. So their 

income took a drastic cut because she became a member of the National Guard. 

They were faced with 2 months of rent that could not be paid, 

and his two jobs definitely could not cover their bills while she was 

at basic training. To add to that, she discovered that, after 9 weeks 

of basic training, she was going to be deployed. Not only was her 

absence a huge emotional stress to their three children, but once 

again, her income while being deployed was not enough to cover 

the bills. 

Well, right away I had them get in contact with the Family Assistance Center in their area. We got them financial help not only 

for the time that she was gone at basic training, but for the time 

that she was going to be deployed. We put them in touch with 

great organizations that we work with. We helped them with some 

financial programs available to military families, and they were 

really grateful. 

Many other Montana service members like the ones I just mentioned are undergoing financial challenges as we continue to deploy, we continue to train. Families are being impacted in serious 

ways because of the military life and because of deployments. 

There are a couple of other families. My time is running short 

here, but I want to share a couple of more. These stories are not 

so good. 

The CHAIRMAN. Briefly, please. 

Specialist DOBYNS. Briefly. You got it. You got it, sir. 

One active-duty member came to me, and he had some legal 

issues with his daughter. He was out of town. He came back into 

Montana, found out he was being deployed, and gave his daughter 

into the care of his parents, which would be her grandparents. 

They did not have enough funds to really take care of her, and they 

came to our Family Assistance Center. We could only help a little 

bit with this family, but we need to be able to do more. 

Another family I know who has been under huge economic stress, 

the parents of this service member became incredibly ill. This service member, whom I know personally, actually took emergency 

medical leave to help take care of her parents. She was not only 

financially supporting her parents who had lost their jobs due to 

economic stress, but she was taking care of them. She called her 

Family Assistance Center, and we helped only in the small bit that 

we could do. 

My point here today is that I want to put human faces to just 

a couple of Montana service members in our military. I deal with 

this every week, all day long. The statistics in Montana are a little 

bit different, but I want you all to take a closer look behind the 

statistics and look at the people behind them. 

I know there are great ideas out there that can help families like 

this, and I really wish you would consider the stories that I have 

shared. I do believe that you, as leaders of our country, have the 

ideas. You know the laws, you know how you can help. I want to 

thank you for the opportunity to be here and the brief time that 

I had to share. 

The CHAIRMAN. And thanks so much for taking the time. 

7 

Specialist DOBYNS. Absolutely. 

The CHAIRMAN. It is a long distance not only across Montana, 

but from Montana to Washington, DC. So, thank you very much. 

Specialist DOBYNS. Yes, sir. 

[The prepared statement of Specialist Dobyns appears in the appendix.] 

The CHAIRMAN. Sergeant Noyce Merino, you are next. 

STATEMENT OF STAFF SERGEANT MICHAEL NOYCE MERINO, 

MONTANA NATIONAL GUARD, FORMER ‘‘NONCOMMISSIONED 

OFFICE (NCO) OF THE YEAR’’ FOR 2008, AND WINNER OF THE 

U.S. ARMY’S 2008 ‘‘BEST WARRIOR’’ COMPETITION, MELROSE, 

MT 

Staff Sergeant NOYCE MERINO. Chairman Baucus, Ranking 

Member Grassley, thank you for your time. It is an honor to testify 

before you today as a member of the military community. I am testifying today based on my experience, and I hope to represent my 

population with accuracy and in good faith. 

I entered into the military when I was 19 years old in the summer of 2001. I entered because I wanted to serve my country, and 

I also wanted to see if I could do it; it was a challenge to me. In 

the middle of my basic training, our country was attacked on September 11, so I knew right away that I would be training for, and 

going to, war. 

I enlisted as an infantryman, and I also learned how to jump out 

of perfectly good airplanes, as they say. I was assigned to the 82nd 

Airborne Division. Five months after I was assigned there, I deployed to Afghanistan, where I served for 6 months. On redeploying 

6 months after that, I deployed to Iraq, this time for 8 months. 

When I returned from Iraq, I reenlisted and was deployed again in 

2005, this time for 12 months. 

During the time that I was deployed, I saw a lot of the hardships 

that our soldiers face, of course, overseas and in the combat area, 

but I also saw the hardships that we face when we return. A lot 

of these soldiers escape injury and near death and come home to 

financial problems and divorce. A soldier that I know was there, 

was severely injured, and made it home alive, but came home and 

ended up getting divorced and had lots of financial problems. 

My wife and I were actually separated our entire second year of 

marriage during the deployment. When we came home, we faced a 

stop-loss and possible involuntary extension of my service by 2 

years, so we decided that the active Army was no longer good for 

us, and I left active duty in August of 2007. 

Once I got out of the active duty, I still looked for a way that 

I could continue to serve my country while being there for my family, and I found the National Guard. It has been a wonderful home 

for me. It has helped me transition from active-duty military into 

civilian life. I have been a proud member of the National Guard 

since I left active duty, and I hope to retire from the National 

Guard. 

I really want to thank you, Senators, for all the support that I 

have seen come from Congress from the start of the war to the 

present. I have seen the equipment that we use overseas improve 

greatly since 2001, and it has increased our survivability many, 

8 

many times. I would not even consider going over there with some 

of the equipment we had back in 2001, and I really appreciate your 

help. 

I also want to thank this committee specifically for your work to 

lower the cost of Tri-Care. Currently, Tri-Care Reserve Select is affordable to the lowest-ranking enlisted Guardsman with a family, 

and that has not always been the case. Thank you so much for your 

work on this, and I hope that your efforts are successful in keeping 

Tri-Care affordable to all service members, especially our Reservists. 

When I first joined the Guard, the only place that I could find 

that had the job, which is called a Military Occupational Specialty 

or MOS, and the rank position for me, was 150 miles from my 

home. I live in Melrose, and my drill location was in Missoula. 

Even though my round trip was 300 miles and there was no reimbursement to myself, it was more important to me to be able to 

serve in the Guard than it was to have to pay those costs, so I 

chose to do it. My example is not the exception. The distance I had 

to travel is not far above average. As you heard Specialist Dobyns 

testify, some of our soldiers travel as many as 4 hours from one 

side of the State to the other to serve in the only way that they 

possibly can. 

You might ask why we do not drill in the armory that is close 

to us. For instance, I have an armory that is half an hour south, 

and also one that is half an hour north. Those jobs are not compatible with what I have been trained in, and if I were to retrain and 

reclassify I might lose rank, or I might have to do a job that I have 

no interest in doing. So personally, once I came off of active duty, 

if those two drill locations were my only options, I would not have 

done it. I would have become a civilian and ended my military career. Fortunately, that did not happen. 

The CHAIRMAN. What were you doing in Missoula? 

Staff Sergeant NOYCE MERINO. I was infantry up there. The unit 

that deployed just now, sir, was my old unit. I actually helped 

them train and deploy. 

The problem of drill travel hits Montanans especially hard. We 

have a very geographically large State and a few number of armories and a few number of Guard members for the square miles that 

we cover. A lot of these Guardsmen—for some reason there is a 

higher percentage of Guardsmen who come from rural areas, family 

ranches like mine, small hometowns, cities that are not large 

enough to support armories. So no matter what, even if they take 

the job at the armory nearest them, it still requires them to travel 

a great distance. 

The Guardsmen that are the most affected by Guard drill travel 

are lower enlisted soldiers. They are the ones who are 17 to 25 

years old. Usually they have a high school-level education, and 

they usually have meager financial means, so they are the ones 

who are most affected by this travel. 

The absolutely hardest hit group is the young Guardsman who 

has a family who is paying for Tri-Care Reserve Select. The average drill pay for this soldier is just over $200. As you know, the 

premium for Tri-Care Reserve Select for the same soldier is about 

$197. If this soldier drives any more than a few miles to drill, he 

9 

ends up paying money so that he can go and serve his country in 

addition to the medical benefit that he receives, the medical coverage that he receives. 

Sometimes these soldiers get discouraged from actually paying 

money to have to serve their country, so they just stop showing up 

for drill. They end their military career, and we lose a Guardsman 

and someone who could have been a great leader and a great asset 

to our Guard. 

There are a couple of ways that we can try to reimburse these 

soldiers for their costs of having to drill. The best way to do it 

would be to allow these soldiers to fill out a travel voucher and 

have their costs refunded for travel and lodging. This would ensure 

that the soldier has the resources and that they are readily available so that he can pay for his drill costs between one drill and the 

next. I understand that there are limits on things like this. I just 

hope that eventually this is something we can do to take care of 

our Guardsmen. 

In the meantime, there are some things that we can do, coming 

from the tax side. Currently, as I understand it—and it is very difficult for me to understand it; I made some mistakes in my research—if a soldier travels over 100 miles to drill, their costs can 

become part of their adjusted gross income, and they are not taxed 

on that money that they spent. 

However, we have soldiers who still travel up to 100 miles, and 

they do this 12 times a year. They travel once a month, and also 

for AT. Even though it is not over 100 miles, that is still a significant cost, and it is still something that that soldier has to pay for 

out of pocket. When you are talking about a lower enlisted Guardsman, they do not make a lot of money. This is a pretty significant 

cost to them. 

Hopefully, this committee is able to find some way, perhaps by 

removing that 100-mile minimum, to allow these soldiers to at 

least get a tax deduction from their adjusted gross income to begin 

to compensate them for the costs of traveling to drill. 

I thank you so much for your time. This concludes my testimony, 

pending your questions. 

The CHAIRMAN. Thank you, Sergeant, very much. 

[The prepared statement of Staff Sergeant Noyce Merino appears 

in the appendix.] 

The CHAIRMAN. Dr. Darrah? 

STATEMENT OF DR. MARK DARRAH, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, ATHENA GTX, INC., DES MOINES, IA 

Dr. DARRAH. Good morning, Mr. Chairman and committee. I appreciate the opportunity to address this committee. 

Athena GTX, which is easier to say, Mr. Chairman—— 

The CHAIRMAN. Thank you. 

Dr. DARRAH [continuing]. Is a small business developing state-ofthe-art wireless miniature electronic medical sensors for use on injured humans from the point of injury all the way back through 

treatment. Development of these monitors began with close contacts in the various military branches—medics, trauma surgeons, 

doctors, nurses—primarily for triaging civilian mass casualties or 

numerous casualties on the battlefield. Hence, Athena has a long 

10 

history of working with various branches of the military, including 

a strong relationship with the U.S. Special Forces. 

Several employees are retired service members or have served in 

Reserve and National Guard units, as have many of our consultants and our subcontractors. Many have been recalled and/or 

served, as outlined in my written submittal to this committee. 

Let me preface my comments with the statement that it is my 

belief as a business owner, and indeed our corporate policy which 

I adhere to, that no pressure has been, and never will be, put on 

any employee serving in the National Guard or as a Reservist to 

resign for any reason. 

Additionally, Athena is not unaware of the risk of hiring such 

employees, but severely has under-estimated the impacts of those 

recalls. Deployment of employees impacts, first, compensation and 

tax incentives; second, their health care and their families’; third, 

their emotional stability; and finally, reassimilation upon return. 

These impacts affect both the soldier and the company. The soldier and his or her family and the corporation or business are affected at three times: before the deployment, during the deployment, and—not to be under-estimated, by our experience—long 

after their return from duty. 

Additionally, these impacts for the corporation or business become more severe as the overall size of the company decreases— 

Athena has only 25 employees—and the long-term impact is more 

serious as the importance of the individual’s role in that business 

increases. Finally, these impacts become greater for younger, single 

employees and young married employees than they may be for 

older, more established, or married employees. 

Our business has benefitted tremendously from employment of 

past and present active-duty Reservists and Guard-affiliated employees. However, it remains cost-prohibitive for Athena to continue to provide compensation benefits—including wages, health 

care, or paid time off, such as sick and vacation time—to those who 

are called up. 

Possibilities to improve this policy will impact both the deployed 

employee and the business. I have summarized some of these, to 

include the following. (A) Travel expense deductions for any related 

period that the employee is called away from corporate duties, regardless of the distance traveled. When a deployed employee tries 

his or her best to serve this country and to maintain their family, 

they should be rewarded and honored for that decision, not punished emotionally or financially. (B) Tax credits for businesses hiring temporary workers to fill in for deployed personnel, especially 

when such a temporary employee also has direct military ties, perhaps a spouse or relative of the deployed soldier. (C) Tax credits 

to continue health care benefits to deployed personnel and their 

family as an option for Tri-Care. Athena pays the individual employees’ health care, but, when they are deployed, we cease to continue to do so. (D) Consideration of continued part-time employment when benefitting the employer, the employee, and/or the employee’s family. Pay cuts, as we have heard in previous testimony, 

are especially hard, even devastating, for single engineers once 

they are deployed. (E) Tax incentives for employers hiring returning soldiers, especially when wounded. We feel the incentives to 

11 

hire these veterans and their families must be a priority. (F) Consideration for continued tax breaks for returning soldiers in need 

of extended medical and psychological treatment during the process 

of reassimilation into the workforce. And finally, one of the most 

damaging issues for employees subject to recall, and the employer, 

is simply not knowing for sure whether they will be deployed. 

Our experience as a small business is that few soldiers and employees will actually wear this emotion on their sleeve, but it certainly does exist. The reality of a pending deployment or call-up 

and the uncertainty of it often results in an employee’s loss of 

focus. 

Performance and attitude can drop significantly. The employer 

cannot plan appropriately or fast enough to properly deal with this 

uncertainty. It can be a substantial financial burden, as well as seriously damaging to strategic schedules and growth for a small 

business, especially when we are too small to absorb even the impact of the deployment. At one time at Athena, 50 percent of my 

engineering staff was deployed, and that is critical. Improving the 

occurrence of this one uncertainty will greatly improve our ability 

to progress. Simply stated, let us make a decision and stick to it. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Doctor. 

[The prepared statement of Dr. Darrah appears in the appendix.] 

The CHAIRMAN. Captain Hanson? 

STATEMENT OF CAPTAIN MARSHALL HANSON, USNR (RETIRED), DIRECTOR OF LEGISLATIVE AND MILITARY POLICY, 

RESERVE OFFICERS ASSOCIATION OF THE UNITED STATES; 

ALSO REPRESENTING THE MILITARY COALITION (TMC), 

WASHINGTON, DC 

Captain HANSON. Thank you. Chairman Baucus, Ranking Member Grassley, The Military Coalition appreciates the opportunity to 

give testimony today. The Coalition is a consortium of military and 

veterans associations representing over 5.5 million members. These 

groups work together as advocates for active and Reserve serving 

members, retirees, their families, and their survivors. TMC would 

like to express its thanks to this committee for its groundbreaking 

tax initiatives that have aligned with our goals in the past. 

I am Marshall Hanson, a retired Naval Reserve Captain, and I 

am a co-chair of TMC’s Tax Committee. Prior to coming to Washington, DC in 1999, I spent over 20 years in industry, mainly in 

small businesses. This is pertinent, because I have experienced 

firsthand some of the issues that we are here today to discuss. 

While my home was in Seattle, WA, my Reserve career had me 

travel east to the Idaho border and south to the California border. 

In addition, I was let go from at least two companies because I was 

a Reservist. Many employers do not understand the financial demands placed on Guard and Reserve members and think the Reserve component members have a second generous stream of income. 

National Guard and Reserve members subsidize a lot of their 

own training. They do not receive the same uniform allowances as 

authorized to active duty members. They pay for some of their own 

12 

training equipment and often are required to travel beyond normal 

commuting distances to get to monthly drills. 

While this committee took steps to correct this in 2003, the final 

legislation that was included in the fiscal year 2004 National Defense Authorization Act allowed above-the-line deductions for expenses only to those who traveled at least 100 miles one way. 

TMC feels like this needs to be changed to 50 miles, which is the 

distance many Federal agencies use to define the limit of a normal 

commute. We are pleased that Senators Kerry and Lincoln are introducing a bill to do just this. TMC is also concerned about protecting the civilian jobs of National Guard and Reserve members. 

The operational contingencies in an operational reserve policy have 

placed an enormous burden on America’s employers. 

While acknowledging their patriotism, TMC has noted employer 

fatigue setting in after 9 years of mobilization. Deployed units are 

returning to a high level of unemployment, and we have heard 

from Reserve component members who are hesitant to tell prospective employers that they are in the Guard and Reserve, for fear 

they will not be hired. Tax credit incentives are a possible solution. 

TMC’s written testimony provides some examples of what could be 

done. 

While the Uniformed Services Employment and Reemployment 

Rights Act (USERRA) may provide employment protections, it uses 

negative sanctions against employers who violate it. TMC has 

heard from employers who ask for positive incentives as a balance 

to USERRA. 

Tax credits for employers hiring returning veterans were included in the American Recovery and Reinvestment Act, but these 

need to extend beyond 2010. Unemployment is 2 percent higher 

among Iraq and Afghanistan veterans when compared to all veterans as a group. 

As veterans, serving men and women need a smooth transition 

as well from military duty to civilian life, or when they and their 

families are transferred between bases. The serviceman or woman’s 

family is an integral part to that transition, and their financial stability is key to retention. Employment of military spouses, as well 

as reemployment of the serving member, is considered a critical 

element in recruiting and retraining a high-quality, all-volunteer 

force. 

A TMC goal of no lesser importance is to alleviate a punitive burden adversely affecting some surviving military families. Following 

the loss of a serving member who has been killed, surviving 

spouses with dependent children are often faced with a harsh reality of sustaining an acceptable income. Congress has helped with 

two programs: the Dependency and Indemnity Compensation Program, and the Survivors Benefit Plan, or SBP, which unfortunately 

creates a financial offset, reducing, rather than combining, incomes. 

As a work-around, Congress, in the fiscal year 2004 National Defense Authorization Act, authorized surviving spouses to transfer 

SBP entitlements to dependents. However, the unintended result 

was a child’s unearned income triggering the punitive Alternative 

Minimum Tax, or AMT. The Coalition is exceptionally grateful to 

Senator Burr for introducing S. 3334, the Children of Fallen WarVerDate Nov 24 2008 16:57 Oct 26, 2011 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 R:\DOCS\70521.000 TIMD
13 

riors AMT Relief Act, that will define a child’s SBP annuity as 

earned income. 

Unfortunately, the bill has another unintended consequence affecting Social Security Survivor Insurance income limitations. TMC 

requests that S. 3334 be amended to simply exempt the SBP annuity from AMT rules; suggested language is included in our written 

testimony. 

The Military Coalition is very appreciative of the committee’s 

sensitivity to the war-time sacrifices being made by active and Reserve serving members, their families, returning veterans, and surviving family members. TMC is looking forward to working with 

this committee on advancing solutions, and I am ready to address 

any questions you may have. 

The CHAIRMAN. Thank you, Captain. 

[The prepared statement of Captain Hanson appears in the appendix.] 

The CHAIRMAN. Finally, Mr. Embree? 

STATEMENT OF TIMOTHY EMBREE, LEGISLATIVE ASSOCIATE, 

IRAQ AND AFGHANISTAN VETERANS OF AMERICA (IAVA), 

WASHINGTON, DC 

Mr. EMBREE. Yes, sir. Chairman Baucus, Ranking Member 

Grassley, members of the committee, on behalf of Iraq and Afghanistan Veterans of America’s nearly 200,000 members and supporters, I want to thank you for allowing us to testify before your 

committee today. 

My name is Tim Embree, and I served two combat tours in Iraq 

with the U.S. Marine Corps Reserves. 

America’s newest veterans face serious employment challenges. 

The difficult process of returning to civilian life is now even tougher in the most hostile economic environment in decades. As a result, unemployment rates for Iraq and Afghanistan veterans are 

staggering. To make matters worse, Iraq and Afghanistan veterans 

are finding civilian employers do not understand the value of their 

skills and experience, and many of these young veterans cannot afford the necessary job training. 

National Guardsmen and Reservists who leave behind their civilian lives to serve alongside active-duty troops lack proper assistance to rebuild their own businesses when they return home. IAVA 

recommends passage of S. 3398, Senator Baucus’s Veterans Employment Transition Act. This bill expands the Work Opportunity 

Tax Credit, which incentivizes businesses to hire Iraq and Afghanistan veterans. 

We believe that S. 3398 must be passed before the October recess 

in order to ensure that the veterans of Iraq and Afghanistan are 

not left languishing in soup lines while waiting for Congress to get 

back to work after the elections. Finding a job for returning veterans is a challenge, but finding quality employment is extremely 

difficult. 

Sixty-one percent of employers do not believe they have a complete understanding of the qualifications ex-service members offer. 

To make matters worse, employers are growing increasingly wary 

of hiring or re-employing National Guardsmen or Reservists because of unprecedented mobilization rates. This Congress authorVerDate Nov 24 2008 16:57 Oct 26, 2011 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 R:\DOCS\70521.000 TIMD
14 

ized a 2-year tax credit for employers who hire unemployed Iraq 

and Afghanistan veterans. 

Unfortunately, although the tax credit was well-intentioned, it 

was poorly advertised and limited in its effect. IAVA, and many 

other veteran service organizations, lauded this tax credit when it 

passed. This tax credit was designed to encourage hiring veterans, 

but few employers know about it and even fewer took advantage 

of it. S. 3398 solves these issues by expanding and simplifying this 

tax credit, and IAVA asks this Senate to pass it before the October 

recess. 

Thousands of young veterans want to build on the skills they 

learned in the military, but they cannot afford the training. Today’s 

newest veterans deserve the right to use the hard-earned new GI 

bill benefits for the job training they desperately need. IAVA recommends swift passage of S. 3447, commonly known as New GI 

Bill 2.0, before the October recess. New GI Bill 2.0 extends post9/11 GI bill benefits to veterans who enroll in vocational schools, 

thereby providing returning combat veterans immediate access to 

job training. 

I want to tell you about Dan from Missouri. Dan is an IAVA 

member and a Marine Reservist who recently returned from his 

second tour in Iraq. Dan was attending college, pursuing a degree 

in business. He soon realized his calling was to become a paramedic firefighter and quickly enrolled in the local fire academy. 

Dan was floored when he learned the new GI bill would cover college but would not cover the fire academy. 

Dan told me he was shocked that someone who went from serving his country, two combat tours with a 400-day extension, cannot 

use his well-earned GI bill for the academy to help serve his local 

community. The New GI Bill 2.0 gives veterans like Dan the ability 

to pursue valuable job training. The Senate must pass this crucial 

legislation before the October recess to help people like Dan become 

leaders in his community. 

IAVA asks every member of this committee to help Dan and the 

thousands of veterans in your States like Dan by calling for this 

vital bill to be brought to the Senate floor for an immediate vote. 

Dan was in my platoon. He was one of my Marines. I continue to 

have Dan’s back. Do you? 

The veteran unemployment rate remains consistently higher 

than that of the general population and threatens to undermine 

our country’s next greatest generation. History has shown us the 

importance of investing in our country’s veterans, and honestly, we 

need the jobs. The causes of veteran unemployment are complex, 

but the remedies do not have to be. They are right in front of us 

and ready to go. 

IAVA calls on this committee to finish the work that it has begun 

and bring S. 3398 to the floor for a vote now. By passing S. 3398 

and supporting the New GI Bill 2.0, the members of this committee 

will be taking an important step towards solving the critical problem of veteran unemployment. Now is the time. The members of 

this committee must act before the October recess and show our 

country’s newest veterans that the 111th Congress has our back. 

I appreciate your time today, and I look forward to answering any 

questions you may have. 

15 

[The prepared statement of Mr. Embree appears in the appendix.] 

The CHAIRMAN. Thank you all very much. 

Let me start with you, Dr. Darrah, as an employer. You mentioned tax credits for temporary employees in the interim, I guess, 

when servicemen and women are deployed, waiting for them to 

come back, I guess. 

Could you just, again, give me a flavor from an employer’s perspective of what incentives are really needed to solve this basic 

problem of deployment, continued deployment, going over and back, 

and over and back, and the uncertainty that it causes? You also 

mentioned—one of you mentioned, anyway—that uncertainty creates lots of psychological problems too and makes it very difficult 

to plan, both for the servicemen and also for the employers. So, 

talk to me a little more about that and kind of help me get a better 

idea of what we might do to remedy that. 

Dr. DARRAH. All right. A very long question, but I will try to take 

that apart. 

The CHAIRMAN. It was a long question. You are right, there are 

several parts to it. 

Dr. DARRAH. And I am not a lawyer, so—— 

The CHAIRMAN. That is all right. Just, what comes to mind. 

Dr. DARRAH. Yes. A very good comment. I believe some tax incentives could be put in place for an employer who seeks to interview 

and hire those who are related to deployed servicemen. I think we 

heard at least a couple, three examples of service families that had 

trouble when one or more of the family members, significant income sources, were deployed. 

I think that, in our particular case, I have no problem with sending family members to training. If some of the cost of doing that 

could be offset, either in a break to the corporation, a grant, or an 

incentive, that is not cost-prohibitive to do so. It is a good way for 

me to serve my country, although I am not in Iraq or Afghanistan. 

The second thing is, my thought on the spouses and the family 

members is, we should put extra incentives in place to cover the 

cost of interviewing or bringing these people in to see if we can find 

a role for them. As a small business, I do not employ thousands of 

manufacturing personnel, but I do find opportunity for people to 

come in and serve in a capacity that can be anywhere from a high 

school degree up to a Ph.D. or trauma doctor with many years of 

experience. 

So I believe that we can create those jobs, even if they are temporary jobs, to help offset those deployed. They do not have to be 

deployed from my organization. We are in three States right now, 

although we are a small business. There are plenty of deployed 

people from all States, and those families could find employment, 

at least temporarily, while their loved ones are deployed. 

The CHAIRMAN. Now, why is the unemployment rate so much 

higher among returning veterans compared with the national average? 

Dr. DARRAH. I do not see the same thing. I actually seek veterans 

coming back, especially those who have served. We had a discussion about medics and nurses, because that is the business I am 

in. I also find the work ethic and the contribution that they bring 

16 

from a user perspective very valuable to Athena. I do not share the 

opinion that veterans do not have value. I see it just the opposite. 

There is a huge difference between one trained in the military 

world and one who lived in the world and never went to the military. In fact, some of our foreign countries have mandatory military 

service, and I am actually a proponent of that. Having raised three 

boys myself, none of them served in the military. We will not go 

into details on that. [Laughter.] 

But we have had many discussions. I absolutely love that environment and that training and that work ethic. 

The CHAIRMAN. All right. 

Captain Hanson? 

Captain HANSON. Sir, to answer your last question, I think there 

are a couple of elements. For the Guard and Reserve, what we are 

learning is that employers do not mind hiring individuals with 

military background, but are hesitant to hire Guard and Reserve 

members for fear that they will be deployed again. As the doctor 

pointed out, this puts a big burden on companies, especially the 

smaller ones, when key employees are removed from the organization. 

But in a broader sense, veterans have been impacted because of 

the publicity that has gone out there, saying that one-third of the 

people who have come back are disabled, and the fact that many— 

even higher numbers, perhaps—suffer from post-traumatic stress. 

This creates a lot of fear in the environment because they think of 

the Hollywood version of a crazed veteran coming into their organization, so there is a hesitancy to even hire returning veterans with 

this bad publicity that is out there. In reality, if you talk to any 

of the associations—IAVA is a good representative here at the 

table—they will testify about the stability of these people, about 

the fact that they are not really suffering the health problems that 

are publicized. It is something to be watched, but it is not a risk 

for employers. 

The CHAIRMAN. Well, then, I think what you are saying is right, 

namely that employers, to a large degree, in many parts of our 

country, they are a little reluctant for all those reasons. So how do 

we address that? How do we get this information, as you are suggesting—but how else do we address that so the employers are 

much more likely to hire? Mr. Embree? 

Mr. EMBREE. Yes, sir. Thank you for the question. There are a 

couple of things. I mean, like we all understand, this is a complicated issue, so there are some answers that may be complicated, 

but there are some simple answers. First is like 3398, your bill, sir, 

for the tax credit. 

The CHAIRMAN. Right. 

Mr. EMBREE. That really does help a lot of these small businesses, folks who maybe are employing 3–10 employees. These 

folks may be Reservists or National Guard members—— 

The CHAIRMAN. Right. 

Mr. EMBREE [continuing]. Or just returning from active duty. 

This immediately helps those small businesses. Then you have to 

discuss the issue of education. Right now, if you think of someone 

who did 4 years active duty, they are 4 years behind their counterparts in the civilian world. So while folks were in college, getting 

17 

their college degree, maybe doing an internship, someone else may 

have been humping a pack and learning how to fire a rifle. 

So taking those skills they learned in, say, the Marine Corps, 

and trying to go to the civilian world is very tough to do. Translating those skills is the next step. So, if you have someone who 

is a squad leader, a platoon sergeant, they may walk into an interview and the civilian may ask them, do you have any management 

experience? 

Well, the fact of the matter is, that platoon sergeant ran a small 

company the whole time they were in the Marine Corps. They managed 40 to 90 individuals. They managed their payroll, they scheduled their training, they made sure these folks knew when to eat 

chow, made sure they had food, they made sure they had housing. 

So the fact is, these folks are coming out of the military with amazing skills, business skills, but they do not know how to translate 

them . 

Like, the average corpsman may have done phenomenal work on 

the battlefield, dealing with sucking chest wounds, to stab wounds, 

to blast wounds, patching people up and getting them to the health 

care in the rear. When they come to the civilian world, all that skill 

does not translate. 

So now, granted they have the same amount of experience as an 

ER trauma nurse, but they do not have all the certifications, they 

do not have all the schooling, so they are only qualified to drive an 

ambulance even though they have the same experience and know 

the same information. 

So I think you have a couple of things we have to deal with. We 

have to deal with the tax incentives to help the businesses now, to 

help them get the veterans into the door, help incentivize it. We 

need to deal with transition of skills to make sure folks understand 

what the veterans do bring to the table. We also need to deal with 

the education side, because it cannot just be a 4-year college. We 

have to make sure folks go to vocational schools, become a mechanic, open up that small car repair shop in Helena. Sorry, Helena. I am from Missouri; I am not from Montana, sir. 

The CHAIRMAN. Good catch. [Laughter.] 

Mr. EMBREE. Thank you, sir. Or Chillicothe, MO is another example, if they want to go and open up their own HVAC repair 

shop. These are the small businesses that are helping our small 

towns around the country. So the first step, I think, is the immediate, and that is these tax credits. I think we have to handle it 

with transition as well as education, sir. 

The CHAIRMAN. So the GI bill was not available to that fellow. 

Could you explain why? What was it in the GI bill that precluded 

him from getting training, or getting assistance? 

Mr. EMBREE. Well, sir, what happened was, he used his post9/11 GI bill. For community college or a public university that is 

a degree-granting institution, he qualifies to use that to pay for his 

college credit. Unfortunately, he switched to a vocational school, 

and vocational schools are not included under chapter 33, which is 

the post-9/11 GI bill. So, instead of him being able to use his robust 

post-9/11, he is now in a situation where he had to take out student loans to help pay for the training to become a firefighter. 

18 

The CHAIRMAN. Why should vocational schools not be included? 

Any reason why they should not? 

Mr. EMBREE. No, sir. 

The CHAIRMAN. I know cost is part of it, but why not? 

Mr. EMBREE. Well, we have been working with the whole VSO 

community, as well as the education community, to find pay-fors 

for the New GI Bill 2.0, and we feel very confident with a lot of 

things we have identified. In fact, I always like to tell folks about 

this, because this is very similar to the World War II GI bill. When 

they first passed that first GI bill, they actually left out vocational 

schools and distance learning. 

The CHAIRMAN. Right. 

Mr. EMBREE. And so, within 1 year, they realized that there are 

a lot of folks who need vocational training. They do not want to go 

to a 4-year college, they want to go to a 1-, 2-year training school, 

and they want to go start their own business, or go into working 

with a professional skill. So they actually ended up having to upgrade the original GI bill. In fact, the great GI bill everyone refers 

to is that second GI bill, the upgraded version. 

The CHAIRMAN. That is interesting. 

Mr. EMBREE. So New GI Bill 2.0, sir, is going to be our great upgrade. We just need to finish the work we started. 

The CHAIRMAN. Well, I appreciate that. 

Captain? Yes? 

Captain HANSON. Addressing the incentives for employers, sir, 

The Military Coalition agrees with the Doctor on a lot of things 

that he brought up in his testimony, as you will find in our written 

testimony. A lot of people do not recognize the fact, though, that 

in an all-volunteer force, many of the veterans who are coming off 

of active duty continue in the individual Ready Reserve if they 

have not completed their 8-year obligation. 

So, in addition to the people who are actively assigned to the National Guard and Reserve, you could potentially even have veterans 

called back up if their training was needed. So I think, when you 

come to tax incentives for employers, you need to look in-depth 

rather than just saying it is a simple solution, because, as the Doctor pointed out, there are different aspects that affect businesses. 

In addition to perhaps compensating an employer who is continuing benefits to a deployed Guard or Reservist, you need to also 

look into the aspect of helping provide a tax credit for replacement 

employees who come in. Perhaps, as was pointed out, this is a good 

opportunity, that we could combine programs. Here they could get 

a tax credit for hiring someone, and perhaps even get an additional 

credit if that individual happens to be a spouse of a military member, which would solve two problems with one solution. 

Then, in addition, many of these employers would love to continue the health care plan because it is an easier transition for the 

family, but, if they receive some type of stipend from DoD instead 

of having DoD pay for Tri-Care, this is another incentive that could 

be used. So I think, when we look at these potential incentives that 

we want for employers, it is a situation we have to look at in-depth, 

because there are many subtle ways that we can help these employers and make it a very positive type of support. 

19 

The CHAIRMAN. All right. Do you have all of these different ramifications in your prepared testimony? 

Captain HANSON. Yes, sir. 

The CHAIRMAN. Good, because we can go through that testimony 

and get that. 

Yes, Doctor? 

Dr. DARRAH. I would just like to add one thing to that health 

care/Tri-Care comment. One of the major things that my deployed 

service members came back with was the Tri-Care issue and having to switch insurances. Sometimes we over-estimate or underestimate the impact of that on the children of these deployed servicemen. They are changing doctors, they are changing their environment. 

The CHAIRMAN. I am sorry, I am ignorant on that. What causes 

the switch? 

Dr. DARRAH. When the employer no longer carries the health 

care, they have to move to Tri-Care, so they move from one insurance provider to Tri-Care, and then when they come back they 

move back into the corporate enforcement and the corporate health 

care. 

The CHAIRMAN. And what happens often with kids who are 

dropped? 

Dr. DARRAH. They are changing their doctor, their pediatrician, 

their dentist, et cetera, and they are going under a Tri-Care plan 

while deployed, the family. Then when they come back, they switch 

back. 

The CHAIRMAN. Are the benefits about the same, or are they different? 

Dr. DARRAH. It is not the benefit, it is the provider. The children 

want sameness. 

The CHAIRMAN. I see. Thank you. 

Yes? 

Captain HANSON. Mr. Chairman? 

The CHAIRMAN. Yes? 

Captain HANSON. Since I am fairly close to the Tri-Care issue, 

the real problem that is faced for the National Guard and Reserve, 

and to even a lesser extent people coming off active duty, is the fact 

that the system does not allow for a smooth transition. You can 

have Guard and Reserve members who are in Tri-Care Reserve Select paying for their own health care insurance. They get mobilized, 

they have to unenroll in one and re-enroll in the pre-deployment 

coverage. Then they mobilize and go onto a different program. 

They come off of mobilization and go into what they call the 

TAMP program, or Transitional Assistance Management Program, 

by unenrolling from Tri-Care and re-enrolling in TAMP. Then, if 

they go back into the Tri-Care Reserve selection, they have to 

unenroll from TAMP and re-enroll in Tri-Care Reserve Select. Because of this, you are going through a lot of hassles, a lot of bureaucratic hurdles, which is very discouraging for those who want 

to have a continuum of health care. 

The CHAIRMAN. Right. 

Captain HANSON. But for people, like the Doctor explains, going 

from civilian to military, it is much headache. 

20 

The CHAIRMAN. Well, what is the solution? I mean, it sounds like 

it is callous. 

Captain HANSON. Well, the irony is, all of this information is in 

the DEER system already. 

The CHAIRMAN. The DEERS? I am sorry. 

Captain HANSON. The DEERS system? I apologize for not giving 

a full explanation. It stands for Defense Eligibility Enrollment Reporting System. But basically that is the database for the military 

that lists all individuals, active and retired, and their family members, including spouses and dependents. Theoretically, you should 

be able to make a phone call, have someone do a little check in the 

box and transition automatically, but instead you are forced to 

physically fill out application forms and resubmit this paperwork, 

which slows the process and provides a lot of headaches for the 

beneficiary. 

The CHAIRMAN. That sounds like an unnecessary set of complications. Let us see if we can look into that. 

Captain HANSON. Yes, sir. We would be more than willing to 

work with you. 

The CHAIRMAN. Thank you. 

This Burr bill. What is the Senator Burr bill that somebody mentioned? Maybe you did? 

Captain HANSON. Yes, sir. 

The CHAIRMAN. What is that? 

Captain HANSON. This bill is—let me get to the right piece of 

paper here, sir. This is the Children of Fallen Warriors AMT Relief. 

The CHAIRMAN. Oh. It is the AMT relief. Yes. Right. 

Captain HANSON. And this is to try to correct a situation where 

the income that is transferred to dependent children is impacting 

when it comes to income tax. 

The CHAIRMAN. Right. We are trying to correct that. But you said 

there is an unintended consequence, if I recall correctly. 

Captain HANSON. Yes, sir. The first unintended consequence is in 

that it is considered earned income. It comes up to the AMT limitations. 

The CHAIRMAN. Right. 

Captain HANSON. I am sorry, that was unearned income is the 

first step. But by changing it to earned income, then you run into 

problems with the Social Security Survivor Insurance income limitations, which bumps up against that limitation. So the solution 

that TMC suggests is simply to exempt the SBP annuity from the 

AMT rules, and we would not have that problem. 

The CHAIRMAN. I think that is what we are thinking of doing. I 

was unclear. I did not know that Senator Burr also is trying to address that issue. 

It seems like this 100-mile limit is a no-brainer. 

Captain HANSON. Yes, sir. [Laughter.] 

The CHAIRMAN. Why even limit it to 50? 

Staff Sergeant NOYCE MERINO. That is an excellent question. I 

do not think there should be any limit at all, sir. 

The CHAIRMAN. I mean, two Senators, and I know they are good 

Senators, suggested 50. I am just wondering why 50 should be a 

limit at all. It seems like, if you are traveling, the costs—I think 

21 

the simpler way is to get a voucher for your expenses. Next, you 

should get the above-the-line deduction for your expenses. 

Staff Sergeant NOYCE MERINO. Absolutely, sir. 

The CHAIRMAN. Yes. 

Captain HANSON. The challenge for the voucher of expenses is 

the fact that it comes out of DoD funding at that point. 

The CHAIRMAN. Right. Right. 

Captain HANSON. We are facing a lot of concerns on that side because, as Secretary Gates himself has emphasized, they are looking 

at ways of saving money. Unfortunately, they are hesitant to give 

more benefits to National Guard and Reserve members at a time 

that they are looking at cutting back in other areas. 

The CHAIRMAN. Yes. 

Captain HANSON. Now, prior to the 1986 changes to the law, any 

costs for military training used to be above-the-line deductions for 

National Guard and Reserve members, and then the 2-percent rule 

came in, which placed all that under business expenses, and it was 

only until 2004 that made that adjustment to allow the 100-mile 

rule to come in. 

The CHAIRMAN. Right. 

Captain HANSON. As TMC, we ask for the 50-mile rule, but we 

would love to see it drop below that. We are just trying to be realistic in our request. 

The CHAIRMAN. I appreciate that. 

Specialist Dobyns, can you give me a little more flavor of what 

resources you have? I guess I have another question. How much do 

service men and women know about either tax provisions or other 

provisions that are available to them? It kind of sounds like there 

is lots of, not misinformation, but lack of information, maybe to 

service men and women, and also to employers as to current credits 

or deductions that are available, let alone other provisions that are 

needed. 

Specialist DOBYNS. Well, in my opinion, sir, the lack of knowledge is a problem that needs to be fixed. In my experience, I have 

seen literally every day, people go, really? I get a lot of, really? I 

did not know that. I do not know why. I cannot diagnose that at 

this point. But I can tell you that we are doing everything we can 

to get resources in people’s mailboxes, and we are doing everything 

we can at our events to make ourselves available for their questions. 

Our Yellow Ribbon program, which we have been very successful 

in, in pre-deployments and post-deployments, covers a lot of information that we have been talking about here. That has been one 

of the most successful things that we have ever done, just for deployed members, but there are still a lot of people out there in 

Montana who do not know. 

As I travel and as I go, I do everything I can to get in touch with 

people. Like I said, I get a lot of, ‘‘Really? I did not know that.’’ 

Or they call me and say, ‘‘Well, I heard I could get a discount on 

my car registration.’’ ‘‘Yes, you can.’’ ‘‘I have been in the Guard for 

10 years, and I did not know that.’’ I get a lot of those. 

The CHAIRMAN. What is the biggest ‘‘really?’’ 

Specialist DOBYNS. The biggest ‘‘really?’’ 

The CHAIRMAN. Yes. 

22 

Specialist DOBYNS. It is usually with health care. It is usually 

trying to figure out how to jump those hurdles. Also, another big 

‘‘really’’ is, we have to juggle a lot of different situations. It is like, 

every service member is different. This person is National Guard, 

this person is Reserve, this person is Navy, this person is Marines. 

In Montana, we do not have an active-duty base, per se. 

The CHAIRMAN. Right. 

Specialist DOBYNS. We have an Air Force base, Malmstrom, but 

we do not have, like, a really big base. On the active-duty bases, 

they come away from that, and they are just out there in these 

rural towns, and they just have nobody. So we have developed 

these Family Assistance Centers. We only have six of them. If I 

could have more of them, I would take them. They are the centers 

people call to get their information. 

I make sure that the staffs there are sharp and they are accurate. The more people are getting exposed to those Family Assistance Centers, the better care they are getting. I mean, they are on 

the phones 8 to 5. I work with them every day. I am really proud 

of them because they do a really good job. 

The CHAIRMAN. So how many do you have working with you? 

Specialist DOBYNS. We have six Family Assistance Centers. 

The CHAIRMAN. Right. 

Specialist DOBYNS. And so those people specifically manage the 

phones, and then on top of that, our Family Program staff. I would 

say probably maybe up to a dozen, a little less than that. I mean, 

I could employ so many more. 

The CHAIRMAN. But instead of just trying harder, is there just 

some other kind of way to get—— 

Staff Sergeant NOYCE MERINO. Sir, I would really like to answer 

that. 

The CHAIRMAN. Yes. Sure. 

Staff Sergeant NOYCE MERINO. I actually was involved in teaching financial literacy when I returned from Iraq, and I can tell you 

that the financial literacy rate of soldiers in general is extremely 

low. Something that does not exist in the military, that I have 

never seen and needs to exist, is a financial literacy counselor, at 

least one in every State, one in every major post. 

We need to be able to have classes that teach these soldiers not 

only about the tax issues, but about how to maintain their credit 

when they are deployed, how to watch out for identity theft. All 

these financial issues fall under one umbrella. If we could assign 

one person, even per State, to be fully versed on all these issues 

and to go out and teach these classes, we could cover the entire 

State. We could fix this problem. It would be an enormous help. 

I know soldiers who do not know how to get their credit report; 

I know soldiers who do not know about the Servicemen Civil Relief 

Act. They do not know anything about taxes. I did not know anything about taxes until I started doing research for this testimony. 

There is a void of information. This is part of where the financial 

hardship comes from. 

The average soldier in Montana does not know that you can get 

a deduction for travel to drill, so that is something that we could 

do. Just by assigning a single person who was fully trained, we 

would resolve a lot of these issues. 

23 

If it is all right, I would like to go back and talk about these 

travel vouchers for drill travel. 

The CHAIRMAN. Sure. 

Staff Sergeant NOYCE MERINO. Yes, I understand it is a huge financial burden, but if you look in my written testimony I talk 

about, there is the standard mileage rate that the IRS sets, and 

then there is a GSA rate, and they are usually very similar. Right 

now it is 55 cents for the IRS, and the GSA rate this year is 50 

cents. 

When you are talking about drill travel, if we refunded half of 

that rate to lower enlisted soldiers with a cap, that would almost 

solve the problem 100 percent right there. For me, I traveled 300 

miles to drill. If I could get 25 cents a mile, that would be $75. 

That would not pay my vehicle bill, but it would pay for the fuel, 

it would pay for an oil change and all the maintenance that it took 

me to get back and forth to drill. So this is something that we really need to try to push to the right people and to get the attention 

of the right people, because it is causing hardship for our lower enlisted soldiers, and they are the ones who are least able to compensate for that hardship. 

The CHAIRMAN. That is a very good point. I appreciate it. Thanks 

for jumping in, too. I appreciate that, taking the initiative. 

Well, I, unfortunately, have another engagement I have to get to 

here. Is there anything any of you want to say that has not been 

said yet that should have been said? Something in the back of your 

mind that, boy, I have to get this out? 

Staff Sergeant NOYCE MERINO. I would like to say, sir, I appreciate wholeheartedly the fact that this committee is paying attention to these issues and is willing to open the door for people like 

us to come up here and testify. It means the world to me. Its shows 

me as a soldier that you guys pay attention and that you are listening to issues, and I thank you so much for your efforts now and 

for your efforts in the future. 

The CHAIRMAN. I appreciate that very much. Really, the thanks 

go to all of you. You are the ones who are really going the extra 

mile and have been working so hard. 

Yes, Mr. Embree? 

Mr. EMBREE. And sir, if I could, just one last time, just plug the 

importance of getting these things done before the October recess. 

The CHAIRMAN. Yes. 

Mr. EMBREE. Right now we have enough time to bring these 

issues to the floor, and IAVA, as well as the other veterans service 

organizations, have been working closely. We will get there. If the 

Senate makes that first step and gets them to the floor, we will 

help you get the votes. We will get these through the House, and 

we will get these to the President’s desk before October to get these 

signed. 

The CHAIRMAN. We will do our very, very best to try to accomplish that objective. 

Yes, Captain? 

Captain HANSON. And sir, I think I will do a final plug for The 

Military Coalition and the fact that, with over 32 different associations, the representatives who attend the meetings bring in a collection of different subject matter experts. So we have a knowledge 

24 

base that can be shared with your committee to address a lot of 

issues. For example—I cannot go into details—this year there is a 

reimbursement for Inactive Duty Training travel that is expiring, 

but unfortunately DoD placed it only under those who are affected 

by BRAC and that policy. But we help write a lot of these laws that 

come into place, so we can help bring this expertise and corporate 

knowledge to assist your staff. 

The CHAIRMAN. I deeply appreciate that, because that is important to know. Frankly, we are not the Armed Services Committee 

here, so we are going to need a little extra help, and we are going 

to be calling on you to get the information that we need. Thanks 

an awful lot. We deeply appreciate your time in coming here, making the extra effort, getting prepared for the hearing, learning a little bit more about the subject. Thanks so very much. I have 

learned a lot, I can tell you right now. I hope to learn more in the 

next couple of weeks so we can get something done here. 

Thank you all very, very much. 

The hearing is adjourned. 

[Whereupon, at 11:23 a.m., the hearing was concluded.] 

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