U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

1

38–661 2008

[H.A.S.C. No. 110–22]

HEARING

ON

NATIONAL DEFENSE AUTHORIZATION ACT

FOR FISCAL YEAR 2008

AND

OVERSIGHT OF PREVIOUSLY AUTHORIZED

PROGRAMS

BEFORE THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MILITARY PERSONNEL SUBCOMMITTEE HEARING

ON

BUDGET REQUEST ON THE IMPACT OF

CHANGES TO THE RESERVE MONTGOMERY G.I. BILL

HEARING HELD

FEBRUARY 28, 2007

(II)

MILITARY PERSONNEL SUBCOMMITTEE

VIC SNYDER, Arkansas, Chairman

MARTY MEEHAN, Massachusetts

LORETTA SANCHEZ, California

SUSAN A. DAVIS, California

NANCY BOYDA, Kansas

PATRICK J. MURPHY, Pennsylvania

CAROL SHEA-PORTER, New Hampshire

JOHN M. MCHUGH, New York

JOHN KLINE, Minnesota

THELMA DRAKE, Virginia

WALTER B. JONES, North Carolina

JOE WILSON, South Carolina

KEVEN COUGHLIN, Professional Staff Member

JEANETTE JAMES, Professional Staff Member

MARGEE MECKSTROTH, Staff Assistant

(III)

C O N T E N T S

CHRONOLOGICAL LIST OF HEARINGS

2007

Page

HEARING:

Wednesday, February 28, 2007, Fiscal Year 2008 National Defense Authorization Act—Budget Request on the Impact of Changes to the Reserve Montgomery G.I. Bill .................................................................................................... 1

APPENDIX:

Wednesday, February 28, 2007 .............................................................................. 27

WEDNESDAY, FEBURARY 28, 2007

FISCAL YEAR 2008 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST ON THE IMPACT OF CHANGES TO THE RESERVE

MONTGOMERY G.I. BILL

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

McHugh, Hon. John M., a Representative from New York, Ranking Member,

Military Personnel Subcommittee ...................................................................... 2

Snyder, Hon. Vic, a Representative from Arkansas, Chairman, Military Personnel Subcommittee ........................................................................................... 1

WITNESSES

Dominguez, Hon. Michael, Principal Deputy Under Secretary of Defense for

Personnel and Readiness ..................................................................................... 3

Wilson, Keith, Director of Education Service, Veterans Benefits Administration, Department of Veterans Affairs ................................................................. 5

APPENDIX

PREPARED STATEMENTS:

Dominguez, Hon. Michael ................................................................................ 33

McHugh, Hon. John M. .................................................................................... 31

Wilson, Keith .................................................................................................... 43

DOCUMENTS SUBMITTED FOR THE RECORD:

Assessment of a G.I. Bill for the Total Force, Department of Defense/

Department of Veterans Affairs Working Group, Executive Summary ... 79

Statement of American Council on Education submitted by David Ward,

President ........................................................................................................ 74

Statement of Joseph C. Sharpe, Jr., Deputy Director, Economic Commission, The American Legion ........................................................................... 66

Statement of Partnership for Veterans’ Education on the Total Force

Montgomery G.I. Bill (H.R. 1102) ................................................................ 51

Statement of Reserve Officers Association (ROA) ......................................... 72

Statement of the National Association for Uniformed Services (NAUS)

on H.R. 1102, The Total Force G.I. Bill submitted by Rick Jones,

NAUS Legislative Director ........................................................................... 59

Statement of the Naval Reserve Association ................................................. 62

Page

IV

DOCUMENTS SUBMITTED FOR THE RECORD—CONTINUED

Views and Cost Estimate H.R. 1211 ............................................................... 75

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:

Mr. McHugh ...................................................................................................... 95

Mr. Murphy ....................................................................................................... 95

(1)

FISCAL YEAR 2008 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST ON THE IMPACT OF

CHANGES TO THE RESERVE MONTGOMERY G.I. BILL

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, MILITARY PERSONNEL SUBCOMMITTEE, Washington, DC, Wednesday, February 28, 2007.

The subcommittee met, pursuant to call, at 2:30 p.m., in room

2118, Rayburn House Office Building, Hon. Vic Snyder (chairman

of the subcommittee) presiding.

OPENING STATEMENT OF HON. VIC SNYDER, A REPRESENTATIVE FROM ARKANSAS, CHAIRMAN, MILITARY PERSONNEL

SUBCOMMITTEE

Dr. SNYDER. The committee will come to order.

Gentlemen, we appreciate your being here today. Our 2 o’clock

hearing is starting at 2:30 because of votes and a busy afternoon,

and we appreciate you waiting.

I am pleased that you all are here today. I am pleased that we

are having this hearing on the impact of changes to the Montgomery G.I. Bill (MGIB) for members of the Selected Reserves (SR).

I am going to be very brief in my opening statement, but the sentiment for a lot of us is that the changing use of the reserve component is different than when the Montgomery G.I. Bill was set up

in decades past and that we need to revisit this.

Mr. McHugh very graciously held a joint hearing with one of the

subcommittees from the Veterans’ Affairs Committee last year

when he was chairman of this subcommittee on these issues, and

we had some of these discussions that I am sure will continue

today in more detail.

Some of us filed a bipartisan bill with both Senate and House

sponsors a couple of weeks ago, H.R. 1102, the Total Force Educational Assistance Enhancement and Integration Act of 2007.

And part of our discussion today is specific things we might need

to do to improve that bill, but also to discuss the broader issue of

the G.I. bill and its role in the military today.

And I want to emphasize a point that I made before. We are not

looking for equality between reserve component benefits and active

component. Everyone recognizes they can’t be equal. But we need

to look for equity.

And in the view of a lot of us, we have failed to achieve that and

that our laws are failing our reserve component now.

I also want to call attention to the fact that we have a number

of veterans service organizations who have asked to submit written

statements for the record.

2

If there is no objection, I ask unanimous consent that those

statements, which have been submitted by the following, be allowed in the record: the Partnership for Veterans Education, the

National Association for Uniformed Services, the Naval Reserve

Association, the American Legion, the Reserve Officers Association

and the Reserve Enlisted Association, and the American Council on

Education.

I would ask that those statements be allowed in the record.

[The statements referred to can be found in the Appendix beginning on page 51.]

Dr. SNYDER. And Mr. McHugh is recognized for such time as he

needs.

STATEMENT OF HON. JOHN M. MCHUGH, A REPRESENTATIVE

FROM NEW YORK, RANKING MEMBER, MILITARY PERSONNEL SUBCOMMITTEE

Mr. MCHUGH. Thank you very much, Mr. Chairman. I would ask

unanimous consent my full statement can be entered in its entirety

in the record.

Dr. SNYDER. Without objection.

Mr. MCHUGH. Thank you.

And just a couple opening comments.

Mr. Chairman, I think you set the stage very well. I certainly

want to add my words of welcome to our two distinguished witnesses. We apologize for the late start, but it is the unwritten rule

of Congress: schedule a meeting and a vote will happen. No way

around that.

This is an important issue, and one in which I think there is a

broad-based agreement in principle, that clearly the structure that

gave birth to the government G.I. bill, with respect to active versus

reserve components, is no longer prevalent.

There needs to be changes made that at least make for a somewhat more level playing field. There are critical issues of recruiting

and retention. We need to do this for the troops. This is something

that, obviously, as you look at the percentages, they feel is very,

very important, a great benefit of being in the military.

But it serves us as well in helping us to encourage young men

and women to come to the all-volunteer force, and we want to make

sure that that is continued as well.

There have been a number of bills introduced already. The chairman has introduced not just bipartisan but a bicameral, House and

Senate, initiative.

Actually, Dr. Bartlett, Roscoe Bartlett, of the full committee has

introduced his version. And I am sure there will be others as we

go along, so we have a lot of focus here.

And I commend you, Mr. Chairman, for continuing to move this

initiative hopefully to a point in the not-too-distant future when we

can make relevant and efficacious changes to this very, very worthy program.

With that, I would yield back.

[The prepared statement of Mr. McHugh can be found in the Appendix on page 31.]

Dr. SNYDER. Thank you, Mr. McHugh.

3

I also want to acknowledge this huge room. It seems like you are

a long way away, but we will conduct this hearing with the same

coziness that we usually do in our other meeting room.

We are just having the one panel today. We are pleased to have

both of you here: the Honorable Michael Dominguez, the Principal

Deputy Under Secretary of Defense for Personnel and Readiness,

and Mr. Keith Wilson, Education Service Director, Veterans Benefits Administration, Department of Veterans Affairs (VA).

And, gentlemen, welcome. And we will go in whatever order you

all have decided you wanted to go, as far as your opening statements.

STATEMENT OF HON. MICHAEL L. DOMINGUEZ, PRINCIPAL

DEPUTY UNDER SECRETARY OF DEFENSE FOR PERSONNEL

AND READINESS

Mr. DOMINGUEZ. Chairman Snyder and Congressman McHugh,

first, thank you for everything you do for the men and women of

the armed forces. You have certainly made great contributions to

sustaining the all-volunteer force during this time of unprecedented

conflict duration.

And thanks for the opportunity to discuss the educational assistance program for the Guard and Reservists.

I want to begin by acknowledging the generosity of spirit and the

deep concern for the welfare of the service men and women that

motivated the changes to the educational program as recently proposed by you, Chairman Snyder. I feel honored for the privilege of

working with both you and Congressman McHugh on these issues.

I find myself, however, in this particular circumstance opposing

consolidation of these programs into the V.A., and to recasting this

as career transition programs at the expense of their powerful utility as retention tools.

The Montgomery G.I. Bill for the selected reserve and the recently enacted Reserve Educational Assistance Program (REAP),

helps us attract and retain Guard and Reserve members. These

educational programs are among our most valuable retention incentives.

They work as retention incentives because, unlike their active

duty counterparts, most reservists do not begin a new career when

they are released from active duty.

Eighty percent of reservists were employed full time when activated. Twenty-six percent were enrolled in school. In both cases,

they did this while participating in the selected reserve.

Certainly, reintegration and readjustment are important to our

citizen soldiers, particularly for those who do not return to the

same employer and those who are not in the workforce when mobilized.

But Guard and Reserve members can use these education benefits to train for new careers or to advance in their current careers.

And we do not believe that the continued service requirement is

onerous, since the first couple of years following mobilization are

also the years when the demands to perform reserve service are at

their lowest under the services’ force generation models.

It is also important to note that Secretary Gates’s recent reserve

access policy announcement provides an important measure of preVerDate 22-MAR-2001 11:00 Nov 12, 2008 Jkt 038661 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\110-22\059020.000 HAS2 PsN: HAS2
4

dictability about the frequency and duration of our military’s service demands on members of the Guard and Reserve.

At the hearing last fall on the same subject, the committee heard

testimony urging Congress to combine the two reserve educational

assistance programs into a single program under the Department

of Veterans Affairs. There is already a single face to our educational institutions, and that is the V.A.

Certainly, we should also consolidate the determination of which

educational programs qualify, and that should be consolidated

under a single legislative authority. But I am deeply concerned

about changes to the reserve programs that would affect retention

outcomes we hope to achieve with these programs.

Half of those who serve in the selected reserve today have completed their initial military service obligation.

Even among those who are still within their initial eight-year

military service obligation, many have no obligation to serve in the

selected reserve. They can complete their service obligation in the

individual ready reserve (IRR).

This is why we are so intent on incentive being tied to service

in the selected reserve. We need incentives that encourage and reward our Guardsmen and Reservists to stay with us, not to leave.

And finally, our survey data tell us that Guardsmen and Reservists value and use this education benefit. And further, in our July

2005 survey, only four percent of Guard and Reserve members

identified these education programs as needing improvement.

These programs are not broken. They don’t require radical restructuring.

Mr. Chairman, we have given a great deal of thought to educational programs and changes that would improve these programs, while continuing to assist the Department of Defense (DOD)

in meeting its force management objectives.

In the short time since last year’s hearing, which you made reference to, we were able to include two proposals in the Department’s 2008 legislative program. The first would allow selected reserve members to retain their REAP eligibility indefinitely while in

the individual ready reserve, rather than losing eligibility after 90

days.

The second would allow selected reserve members who are separated due to draw-downs, to retain Montgomery G.I. Bill Selected

Reserve eligibility until the delimiting date, just as we did during

the force draw-downs in the 1990’s.

We have also been working closely with the Veterans Administration to identify changes to the educational assistance programs

that improve those programs while not undermining retention.

That work is still ongoing.

Mr. Chairman, we also want to work with you and this committee to see if we can find a way to balance retention with providing

our combat-proven Guardsmen and Reservists a benefit that meets

their needs for reintegration and readjustment.

I would again like to thank the committee for all its done for our

men and women who serve this great country, and I look forward

to your questions, sir.

[The prepared statement of Mr. Dominguez can be found in the

Appendix on page 33.]

5

Dr. SNYDER. Mr. Wilson.

STATEMENT OF HON. KEITH WILSON, DIRECTOR OF EDUCATION SERVICE, VETERANS BENEFITS ADMINISTRATION,

DEPARTMENT OF VETERANS AFFAIRS

Mr. WILSON. Thank you. Good afternoon, Mr. Chairman. Good

afternoon, Ranking Member McHugh and other members of the

subcommittee.

I appreciate the opportunity to appear before you today to discuss the impact of changes to the two existing Title 10 reserveguard education benefit programs administered by V.A.; namely,

the Montgomery G.I. Bill Selected Reserve and the Reserve Educational Assistance Program, known as REAP.

In particular, my testimony will address the major changes to

those programs as proposed in H.R. 1102.

The MGIB–SR is the first G.I. bill to provide educational assistance to members of the selected reserve, including National Guard

members. The Department of Defense funds this program and is

responsible for determining eligibility for the program. V.A.’s Veterans Benefits Administration is responsible for administering the

program.

MGIB–SR participants must agree to a six-year selected reserve

obligation after June 30, 1985, must have completed the requirements of a secondary school diploma or its equivalent before applying for benefits, and generally must remain a member in good

standing in the selected reserve.

The maximum entitlement under this program is 36 months, and

participants must generally use these benefits within 14 years of

their date of eligibility.

The REAP program provides educational assistance to members

of the Guard Reserve who serve on active duty in support of contingency operations under Federal authority on or after September 11,

2001.

The Department of Defense again determines eligibility for this

program. To establish eligibility, members must serve a minimum

of 90 days on active duty. The maximum full-time entitlement allowed under this program is 36 months, and the benefit rate is a

portion of the MGIB active duty program 3-year enlistment rate.

H.R. 1102 seeks to consolidate these two certain education programs and to provide an enhanced educational benefit to Guard

and Reserve members. As these changes are considered, the basis

for the programs should be a major guiding factor.

The three R’s of recruitment, retention and readjustment must

continue to be the foundation upon which any total force education

benefit is to be constructed.

We believe the proposed changes should be transparent to eligible persons, and facilitate program Administration. Based on our

experience in administering the education programs, we have noted

that the cause of some of the greatest confusion and processing

delays stems from the extensive eligibility criteria and myriad program elections that are currently required.

Shifting the governing statutes for the Chapter 1606 and 1607

programs from Title 10 to Title 38 may be appealing on the surVerDate 22-MAR-2001 11:00 Nov 12, 2008 Jkt 038661 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\110-22\059020.000 HAS2 PsN: HAS2
6

face. However, while these may facilitate V.A. oversight, it has

other broader implications.

Clearly, it invests V.A. with new funding authority and responsibility beyond the Department’s traditional role. In some cases,

moreover, this may intrude upon matters more appropriately within the jurisdiction of the Department of Defense.

One example of this is making V.A. partly responsible for determining kicker amounts. Not only is such a decision not within our

area of expertise, but the required departmental consensus could

also create unnecessary and inappropriate tensions between domestic spending initiatives for veterans and force management objectives for service members. Decisions on the latter, in our view,

should rest solely with the Department of Defense.

Otherwise, we have not fully assessed the impact on our Department of transferring the mentioned Title 10 programs to Title 38.

Although we have not fully assessed the full cost of the bill, the

proposed program changes would likely result in significant costs

that are not included in the President’s budget.

For this and the previously mentioned reasons, V.A. cannot support this legislation.

Mr. Chairman, this concludes my statement. I would be pleased

to answer any questions you or any other members of the subcommittee may have.

[The prepared statement of Mr. Wilson can be found in the Appendix on page 43.]

Dr. SNYDER. Thank you, Mr. Wilson.

We are going to put ourselves on the five-minute clock.

So that means, Mr. Murphy, you have ten minutes to get your

thoughts together.

Mr. Dominguez, I want to start with you, because you used the

phrase that ‘‘the system is not broken.’’

Mr. DOMINGUEZ. Sir.

Dr. SNYDER. But on page six of your opening statement, in my

view, you make a very strong argument that the system is broken.

And these are your words: ‘‘To restore the historic relationship between the two programs, the Department of Defense estimates it

would cost just over $13 billion over the next 5 years.’’

I mean, that sounds to me like we say a program is $13 billion

short to restore the equity that was there for the first 15 years or

18 years of the program.

I mean, did the President include $13 billion in this budget?

Mr. DOMINGUEZ. Sir, the retention in the Guard and Reserve is

at historic highs.

Dr. SNYDER. Woah, woah, woah, woah. You are answering a

question I didn’t ask.

Mr. DOMINGUEZ. No. This is a force management and a retention

incentive program, so that the amount of money that this committee authorizes to be put in and paid out is driven by the retention

needs and our force management needs. It is achieving that purpose.

And the members of the Guard and Reserve don’t rate this as a

program needing improvement. If you had $13 billion, according to

the surveys we did in July 2005, we should put it in health care.

7

Dr. SNYDER. Well, we are having the same discussion we had

back some time in the fall in which I think I asked you if we just

took the benefit down to, you know, eight dollars a month, as long

as retention rates didn’t change, you would be satisfied with it.

And that is not what the attitude of the American people or this

Congress is today. And so what happened before was, because of

the statutory issues, we raised, under Chris Smith’s leadership on

the House Veterans’ Committee when he was chairman, we raised

the ACLE component.

We couldn’t get DOD to go along, and so we went from, what is

it, 47 cents on the dollar to 29 cents on the dollar for the reserve

component. I think that is a broken—I think it is broken, Mr. Secretary.

And I want to take up what Mr. Wilson said. He has his three.

He has three. I have a couple others there, too. He talks about it

being a recruitment program, a retention tool and a readjustment

tool.

Well, you completely ignore, in my view, the readjustment component of it and had no discussion about what the potential recruitment benefit could be.

And you have got this other issue of could this be a tool, the way

we are talking about doing it, to encourage people to volunteer for

mobilization. And so you are hanging your hat on retention.

As long as, you know, $8 a month or $20 a month, or whatever

it is—as long as the retention rates stay the same, through a lot

of hard work on the part of senior non-commissioned officers

(NCOs) and everybody to get people to sign up. I don’t think that

is the way that the American people see this program.

Mr. DOMINGUEZ. This is a valuable recruitment program, particularly for the younger men and women, the 17- to 25-year-olds,

because they do value this program greatly. They know how much

we pay when they sign up and join the selected reserve. So it is

a transparent transaction.

Dr. SNYDER. Well, I know I have had people come to my office

and not realize that they had no benefit once they are no longer

in the reserve, so we have got some education issues there.

And also, at the time, as you know, a lot of people signed up.

They didn’t know they were going to be mobilized for the length of

time they are being mobilized and that their only choice is to somehow use their benefits in Iraq or Afghanistan, and that that is obviously not going to work.

And so I don’t think you all are acknowledging that there are

some breaks in the system, and the Congress is interested in doing

some fixes.

I want to make another point. In your written statement and

today, too, you talk about people going back to their jobs. And this

gets to this readjustment phenomenon.

I heard former Secretary of Treasury Lawrence Summers talking

yesterday. And I don’t know what the numbers are, but, you know,

I am almost 60 years old, and when I got out of high school, the

expectation I might have a job for the rest of my life, the same job,

was not unreasonable.

8

In this changing economy, I don’t know what the turnover is

now. Mr. McHugh, I think it is like 7 jobs through a career a 20-

year-old can estimate having.

We need to be recognizing that just because somebody came into

the reserve component, was mobilized for 18 months or 2 years,

that came from a job, that that same job is there for them when

they get out.

And I think this readjustment component is not getting the attention it ought to from DOD’s stance on these——

Mr. DOMINGUEZ. Sure. The Uniformed Services Employment and

Reemployment Rights Act of 1984 (USERRA) is a great law, number one, and that——

Dr. SNYDER. I am sorry, sir, I didn’t hear.

Mr. DOMINGUEZ. USERRA is a great law in terms of the—when

mobilized members are returned, the USERRA law passed by the

Congress ensures that their job will be there for them in most circumstances.

Dr. SNYDER. Well, not if the factory is closed because they no

longer make the product.

Mr. DOMINGUEZ. Yes, sir. In most circumstances. But here is how

we think about this. The REAP, which, again, that is another fabulous program enacted by this Congress very recently, specifically to

address the burdens we were placing on members of the Guard and

Reserve as they shift into an operational reserve and are engaged

into the fight.

They can use those programs and become full-time students. And

they can do that while they have a part-time job with us and get

an income through their selected reserve participation. This can be

viewed as a win-win, particularly, again, because Secretary Gates

has established some very clear parameters around the expectation

of use.

And all the services are developing these force generation models

so that they can be clear with members of the Guard and Reserve

about this is when you go, here is when we need you, this is what

you can expect in terms of our demands on you for military service.

With those things happening, I think it is reasonable to expect

service in the selected reserve while using the educational benefits.

Now, I also want to point out that, you know, anyone who serves

2 continuous years—and there have been some 10,000 or so people—both as volunteers and involuntary mobilization—it doesn’t

matter how they activated—they earn the same entitlement that

the active did, which is because they served 2 continuous years on

active service.

And so they have MGIB eligibility and the same portability, the

same, you know, everything with that.

Dr. SNYDER. Mr. McHugh.

Mr. MCHUGH. Thank you, Mr. Chairman.

As I said in my opening statement, I fully recognize the importance of this as a tool for—I hear a lot from our distinguished witnesses about retention, but I would argue recruitment as well. I am

pretty certain you agree with that.

Mr. DOMINGUEZ. Yes, sir. Absolutely.

Mr. MCHUGH. That is why I just wonder if a survey of those who

have already been recruited under the old system to determine the

9

efficacy of the old system is a good way to determine what you are

not getting rather than what you have gotten.

I don’t know if that makes sense to you, but what I am suggesting is I look at the figures. In the active duty component, 97 percent of active duty members currently enroll in the MGIB. On the

reserve side, I don’t have that same figure for enrollment, but utilization is about 38 percent.

That would suggest to me there is a whole lot of folks out there

that aren’t participating. I can’t tell you why. I don’t know. And I

just can’t help but wonder how many folks might be helped into recruiting on the reserve side were there some sort of more robust

benefit.

I listened very carefully to the chairman’s opening comments. He

said he is not trying to make them equal but, rather, to try to

equalize some of the historical gaps that have grown up over time.

You did mention that, Mr. Secretary, as to bring it up to equity,

but I want to be sure, because your statement is a little unclear.

Does the Department support bringing the percentages back in line

as they were when this program was created in 1985 between the

reserve and the active?

Mr. DOMINGUEZ. Applying the same logic the Congress did in denying our ability to bring the TRICARE co-pays to the same level

last year that they were established in 1995, which, you know—we

do not.

In other words, the force management needs are driven by recruiting and retention, and the money that we are spending on the

educational benefit plus the other things we do appears to meet the

force management needs of the Department.

So the question of restoring a balance that happened to exist

when the program was initiated is a different question that doesn’t

enter into the force management equation.

Mr. MCHUGH. I would respectfully suggest you can get yourself

in trouble talking about the logic of Congress on any level.

Mr. DOMINGUEZ. Yes, sir.

Mr. MCHUGH. But you did list it. I am not sure what your analysis of the logic of Congress in that denial last year was, but I was

the chairman of this subcommittee at the time, and I can tell you

what my thought process was, and that I totally objected to the Department beginning to find the necessary savings and restructuring

of that program that was totally on the backs of the beneficiary.

There wasn’t a programmatic efficiency in that whole package.

That was my problem.

Mr. DOMINGUEZ. Yes, sir.

Mr. MCHUGH. I don’t know if that is the logic you associated

with your analysis on restoring equity.

But going back to my original question, I appreciate at least

knowing that position.

And, Mr. Chairman, I would tell you, I guess I understand the

position of the secretary. This is a force management tool. I don’t

want to put words and thoughts in your head, Mr. Chairman, but

I think for many of us on this side, yes, it is a force management

tool, but there is also a challenge of what is the right thing to do

by the men and women in the uniform.

10

And I am not suggesting you don’t care about that. But that, I

think, is probably the bigger focus that we are going on right now.

But let me go over to Mr. Wilson.

Mr. Wilson, I heard your comments and your concerns. In fact,

I believe you used the word ‘‘opposing’’ moving this program into

Title 38. You talked about the money issues. Is that your big concern?

Mr. WILSON. That is our big concern right now based on—we

don’t have a complete picture of what it is going to cost. Based on

just a quick understanding of what it looks like it would do, the

cost would be substantial.

Mr. MCHUGH. Right. Okay. And that is fair. Let me ask you a

quick question here. I am on the yellow light. You mentioned the

kickers. Kickers are something right now DOD pays for.

If we were able to structure a program that technically moved it

over to 38 but retained responsibility for kickers and other more

traditional DOD costs, would that lessen your opposition?

Mr. WILSON. It would.

Mr. MCHUGH. So much that you would absolutely embrace the

bill?

Mr. WILSON. No. I cannot say that, no.

Mr. MCHUGH. I tried for you, Mr. Chairman.

Mr. WILSON. It was a good try, though. [Laughter.]

It was a good try, but no.

Mr. MCHUGH. Strike the last part, and he said he would lessen

the opposition. Maybe we can—thank you, Mr. Chairman. I yield

back.

Dr. SNYDER. And thank you, Mr. McHugh.

And that is an issue that—this is a complicated bill. We understand that. And we appreciate you all’s comments. But that is a

change that I think we are going to make with regard to the kickers, because I think it satisfies the needs that both of you expressed with regard to that, and it is actually not that difficult to

do.

It is probably more complicated to do it the way we have it in

the original bill than the way that Mr. McHugh just suggested.

So, Mr. Murphy.

Mr. MURPHY. Thank you, Mr. Chairman. I appreciate it.

Secretary, I used to teach at your alma mater, West Point, and

I know that you are an airborne soldier. I am from Fort Bragg,

spent some time there, so I appreciate your service.

And, Mr. Wilson, my father was in the Navy, and I appreciate

your service of eight years in the Navy.

With the wars in Iraq and Afghanistan, we have certainly asked

a great deal from our Guard and Reserves, and they have performed magnificently. I think we can all agree that we owe them

a debt of gratitude.

My colleague, Congressman Matheson of Utah, has introduced a

bill that deals with a critically important issue that I want to get

both of your opinions on.

Many Guardsmen and Reservists across the Nation have served

a total of 24 months on active duty in Iraq and Afghanistan. But

typically, they serve 24 months over multiple deployments. The

current criteria for the Montgomery G.I. Bill eligibility only allows

11

individuals who serve at least two years of continuous active duty

service to qualify for the full active duty benefit.

Congressman Matheson’s bill would allow Reservists and

Guardsmen who serve a total of 24 months over a 5-year period on

active duty to qualify for the full active duty educational benefit.

I personally think this is an excellent piece of legislation. I am

proud to co-sponsor it. Would DOD or the V.A. object to such legislation?

Mr. DOMINGUEZ. Sir, if I might, that is an intriguing idea. One

of the challenges that we have—and Chairman Snyder actually

mentioned this as well—we do need people to volunteer for service,

and we need to move away from our reliance on mobilization, involuntary mobilization, as a tool to bring our citizen soldiers into the

fight over a long war.

And some innovation, some potential use of these benefits to try

and incentivize that kind of behavior, you know, I think those are

intriguing concepts. And that is an intriguing concept that you

have described. We haven’t had time to look at it, but it is certainly

worth a dialogue.

I guess I don’t know the details, but equity in this case would

also suggest that reserve members who meet that criteria would

also have the pay reduction so that there would be an equivalent

participation with the active who will also volunteer for a pay reduction in order to get the two-year eligibility.

But those are intriguing ideas, as is the kicker that the chairman

discussed and Congressman McHugh. These are things, you know,

that give us space to work in.

Mr. MURPHY. So you don’t object to it per se.

Mr. DOMINGUEZ. I think it is an intriguing concept we should

discuss and evaluate and work on.

Mr. MURPHY. Okay.

Mr. Wilson.

Mr. WILSON. The equity of the proposal—I definitely don’t want

to minimize the importance of that. Having said that, we would

have the same concerns as my testimony talked about concerning

other issues, concerning the cost of those type of things.

The equity is absolutely important, but without knowing the details—certainly, the devil is in the details of something like that.

Without knowing the details of how that would impact both the

active duty and the reserve as well as the costing of that type of

proposal, we would be opposed to it until we knew more about it.

Having said that, we would certainly be more than happy to

work with the subcommittee to work out the details of that.

Mr. MURPHY. If I got you a copy of that bill and some of the announcements on it, do you think you could give me a written response from each of your departments within a few weeks, say

March 30th?

Mr. DOMINGUEZ. I think we will try as diligently as we can, but

I can’t, you know, promise to turn it—we do work the questions for

the record really pretty hard, because we understand the mark-up

schedule of this committee.

Mr. MURPHY. You know, again, I was in the military, and eight

weeks in this job, and we are a Nation at war. We need to act with

a sense of urgency. So I would appreciate it if you can get back to

12

me a written response whether or not it is an option—your costbenefit analysis of it.

Mr. DOMINGUEZ. Sure.

Mr. WILSON. Understood.

Mr. MURPHY. Thank you.

Dr. SNYDER. Ms. Shea-Porter.

Ms. SHEA-PORTER. Thank you.

And thank you for being here.

I was a military spouse, and I can remember hearing the expression that nothing is too good for the military. And when I look at

this, I sometimes have the feeling that we are missing our men and

women in uniform, and what they have given to us.

And specifically, I would like to talk about this because of the

National Guard. They have been called upon, just like our other

soldiers, to serve in the same dangerous conditions. They have sacrificed and, in some ways, more so, because those who are active

duty are employed by the military. The military completely understands them.

If you have the National Guard, and they leave their jobs, they

have trouble coming back to it. We know this is true, and that

there has been a lot of difficulty in the communities reabsorbing

people. In spite of the law, there is still a big misunderstanding

about what their role is when they come back.

Also, I see a lot of recruiting information from the National

Guard, and they always highlight the education that is available.

And indeed, a lot of people have taken advantage of the National

Guard because it is that boost up.

So now we are looking at these soldiers who have gone and done

their duty beautifully, often under more difficult circumstances in

their community in their return, and then we change the—we

make it so they don’t get exactly the same benefit, the same

amount of time that others have.

And there is just something fundamentally unfair about this.

I am also very concerned that it is in the DOD instead of the

V.A. As a former social worker, I look at all these programs, and

I have to tell you, I am pretty good, but it is hard to find, you

know, exactly the connections.

And I am very certain that the National Guardsmen who are

looking at this are having some trouble also figuring out where to

go and how to collect what is due them.

So I guess my only question here is if we have these soldiers, and

they are serving—and you talked about the recruitment and the retaining, and I understand that.

But how can we look at these troops, who have given so much,

and tell them that their experience was different and therefore

their benefits are going to be different?

Mr. DOMINGUEZ. Ma’am, if I could take a shot at answering that,

REAP is a very, very good program. It was designed and enacted

by this Congress to deal specifically with that issue.

The MGIB for the active requires two years of continuous service

before you get, you know, item number one in terms of the benefit.

And that applies as well to the, you know, Guardsmen and Reservists. As I said, if they serve two years continuous on active service,

then they are entitled to that program as well.

13

Now, if they served a proportion of that, let’s say one year, all

right? That is half of the basic active duty service commitment.

Under REAP, they are entitled to 60 percent of the 3-year rates

that the active is entitled to.

So in terms of proportionality, REAP has tried to address the

issue you have raised by structuring a tiered program—90 days of

service, 1 year of service, 2 years of service—in a way that applies

a proportionality relative to the 2-year minimum service obligation

that the actives have under the MGIB.

And so you actually are better off in REAP in terms of the

months that you have served toward that two-year obligation. You

get a richer benefit proportionally.

Ms. SHEA-PORTER. But in order to utilize those benefits, you need

to be still involved. And with these multiple deployments, they are

not able to take advantage of them.

You cannot be studying and also be fighting for our country. So

I am concerned that they lose those benefits.

Mr. DOMINGUEZ. Well, ma’am, one of the things that I would myself suggest that we look at is the delimiting date, you know, the

14 years in, it expires. And that is something that I think we clearly need to think about chucking over the side.

But the multiple deployments, 12 percent so far—now, that number is going to change, but only 12 percent of the members of the

reserve component have deployed more than once. And only 47 percent of them have been mobilized at all at this current——

Ms. SHEA-PORTER. I just want to say, talking about percentages

does not negate the impact on the individual soldier. And I think

each individual going in there is not particularly concerned about

whether this will apply to 12 percent or 80 percent. They are interested in how this applies to them.

Mr. DOMINGUEZ. Yes, ma’am, and again, I want to say that the

Secretary in his first major policy pronouncement of his tenure

chose to speak on the utilization of the Guard and Reserve and set

clear, unambiguous policy parameters around that, to set clearly

the expectation of service, and to clearly put the military services

on a path to planned, predictable use of Guardsmen and Reservists

so that they can take advantage of these benefits, because you are

correct, as the chairman was.

You know, you can’t do this while you are fighting in combat,

and you don’t have, you know, Internet access and the luxury of

time and all that kind of thing.

Ms. SHEA-PORTER. Thank you.

And my final comment about it is that I have been talking to National Guard and I know that they are having difficulty with their

recruitment. And I think that we need to look at everything and

figure out why. And I am pretty sure that——

Mr. DOMINGUEZ. Yes, ma’am.

Ms. SHEA-PORTER [continuing]. This may not be the number-one

issue, but it certainly has to factor in.

Mr. DOMINGUEZ. Yes, ma’am. This is an important recruiting

tool, absolutely, and particularly for young people. They value it a

great deal. And there is no doubt in my mind that an increase in

this benefit would benefit recruiting. It is unclear how much.

14

I do want to say that Lieutenant General Blum and adjutants

general have just done a superb job in turning around the recruiting in the National Guard. They are hitting their numbers, and

they are doing it with quality young men and women that we are

all proud of.

And so I want to compliment him for that achievement.

Ms. SHEA-PORTER. Thank you.

Thank you, Mr. Chairman.

Dr. SNYDER. Thank you.

We will start our second round here, if we could.

You know, you have talked about retention. We have talked

about recruitment. Clearly, to me, it seems what our bill is heading

for and what the Congress, which I think as a whole, is heading

for is something that would help your recruitment. I think my bill

would help recruitment, and we can debate about the retention

issue.

I think clearly, in Mr. Wilson’s words, our approach would help

readjustment for people coming out of the reserve component. I

have mentioned it before, but I have two employees who are Iraq

war veterans, both reserve component. One stayed in the Reserves.

One is not.

The one who is not inquired the other day about why don’t I get

an educational benefit. He would like to go to graduate school.

Well, because the way the law is written. So this issue of readjustment that Mr. Wilson talked about I think is very real.

And then the issue that I think you acknowledged, Mr. Secretary, this idea of volunteering for mobilization, it may well be

that our bill would help.

But the fifth criteria is the one that I wanted to get your response to, maybe from both of you, but particularly, Mr.

Dominguez. This involves your side. And it is one that we mentioned before, and Ms. Shea-Porter mentioned.

It is this issue of fairness. You know, when you are talking about

people who are in the reserve component, who may be taking advantage of their program, and they are in school, and they get their

mobilization, and they leave the school.

My guess is that, you know, Secretary Rumsfeld and Secretary

Gates, I don’t expect them to sit down and see what the end of

terms and the beginning of the next terms are to do their mobilization order. Of course they don’t do that.

And so they get pulled out of school, a lot of them. That has occurred. Their education is disrupted. They have that time in mobilization. They lose their benefit during that time, practically, because they are overseas.

And I need a response specifically—I understand your discussions of retention, and you think it is a force management tool. Mr.

McHugh brought this issue up, too. How is this fair?

How is it fair now that people are being mobilized for 18 months

and 22 months, and being kept longer, and they come back, and

their enlistment is winding down, and they decide not to re-enlist,

they get no educational benefit? How is that fair?

Mr. DOMINGUEZ. Sir, I think we partially addressed this concern

in the legislative proposal that I referenced in my opening comments with REAP and the change that we suggested where a memVerDate 22-MAR-2001 11:00 Nov 12, 2008 Jkt 038661 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 C:\DOCS\110-22\059020.000 HAS2 PsN: HAS2
15

ber could move into the individual ready reserve, so that is out of

the selected reserve. You are not a drilling reservist.

You know, we want to encourage you to remain a drilling reservist in the selected reserve, but you can move into the IRR and continue—let me back up. That allows you to retain eligibility, but the

legislative proposal that we turned in wouldn’t allow you to begin

using it until you were a drilling reserve, again trying to keep the

retention benefit of it.

Dr. SNYDER. We will be glad to take a look at your proposal.

Mr. DOMINGUEZ. Yes, sir.

Dr. SNYDER. But I don’t think it gets at the basic issue of fairness as I described it.

Mr. DOMINGUEZ. Right.

Dr. SNYDER. And I think that is why there is just unanimous

agreement, I think, among the veterans service organizations that

our approach is the right one. It is just not fair. And you all are

just, I think, struggling to make a case that it is fair, and I don’t

think you can do it. I would not want to try to make that defense.

I want to get to this issue, Mr. Wilson, that neither one of you

talked about in your opening statements, either written or oral.

What is the current status of the relationship, which I think may

be informal or some kind of formal relationship, between DOD and

V.A. that came about in the 1992, 1993 framework in which the

V.A. is paying some benefit based on some kind of agreement. I understand there is disagreement between the V.A. and the DOD

about whether there is statutory authorization to do what you are

doing.

What is the status of that? Would you describe it for the committee? How many people are currently taking advantage of it? Is

there a disagreement? I would like to hear from both of you on

that.

Mr. WILSON. I would be happy to address that. The short answer

is there is no current disagreement, and I will go into a little bit

more background on that.

The current method in which we pay this benefit is based on

public law that was enacted immediately following the first Gulf

War. I believe 1993 was when the statute went into place.

There wasn’t an agreement as one would think of in terms of administering this. We followed the standard procedures and implemented regulations upon which DOD agreed to administer payment of this benefit.

And what this statute allowed was that for a Guard Reservist

who was called up for contingency operations and was eligible for

1606 benefits, their delimiting date would be extended for the

amount of time that they were activated plus four months.

And the way this was implemented under the regulations was—

and our understanding of the intent of the legislation was, that

this delimiting date would be extended irregardless of the drilling

status of the individual.

So you would have situations at that time—very, very few, but

you would have situations where individuals would have a length

of time normally equal to about 16 months—if they are activated

for a year, the 12 months plus the 4 months—immediately followVerDate 22-MAR-2001 11:00 Nov 12, 2008 Jkt 038661 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\110-22\059020.000 HAS2 PsN: HAS2
16

ing separation from the Guard Reserve in which they could use

1606 benefits.

It did not create portability as the term is being used around

town now. What it did do was allow an immediate short-term window in which individuals could use their 1606 benefits following

their severing their relationship with the Guard Reserve.

We have paid about 3,500 claims under this, obviously, the majority of them in the last several years after 9/11. We have been

paying the benefit for 15 years or so.

The discussions that were occurring between DOD and V.A. attorneys were among a group of people who did not have institutional knowledge of what existed and why it existed going back to

1992. So those discussions went on for a length of time.

But there is agreement now between DOD and V.A. that the

method in which we have been administering this program since

the early 1990’s is the correct method. And there is no disagreement on that.

Dr. SNYDER. Do you have any comment, Mr. Dominguez?

Mr. DOMINGUEZ. No, sir.

Dr. SNYDER. Mr. McHugh.

Mr. MCHUGH. Thank you, Mr. Chairman.

I wasn’t here in 1985, so whatever good happened I can’t claim

and whatever bad happened I can’t be held too responsible for. But

maybe you can help me understand.

Explain the congressional logic, if you will, Mr. Secretary—what

is the rationale behind the $1,200 payment to participate in MGIB?

Mr. DOMINGUEZ. The reduction in salary, or the reduction in pay

to participate. I also may have been here in 1985, but I wasn’t engaged in this area of policy, so I actually don’t have the institutional knowledge on the rationale.

Mr. MCHUGH. Okay. You haven’t heard recently? Nobody said

boy, that $1,200 is good because——

Mr. DOMINGUEZ. No, sir. I don’t recall. I would take that for the

record. I would get you that.

[The information referred to can be found in the Appendix beginning on page 95.]

Mr. MCHUGH. Okay. I wish you would.

Mr. DOMINGUEZ. Yes, sir.

Mr. MCHUGH. So I suspect you can’t officially respond to a question that I might ask you—what would DOD’s response be to a proposal to end the $1,200—I call it a payment. You call it a reduction

in pay.

Mr. DOMINGUEZ. Right.

Mr. MCHUGH. Potato, potato.

Mr. DOMINGUEZ. Yes. I think we would have to study that, Congressman. You know, clearly, there is a fiscal consequence to the

Department, as you are completely aware of, because of the work

you do here in the authorization——

Mr. MCHUGH. Well, I understand the money. I mean, you know,

if you could self-fund the whole program, that would be wonderful,

I guess, from a budgetary perspective, for the Department.

But I would like to think—and maybe I am being a little bit too

Pollyannaish here, but I would like to think there was some kind

17

of programmatic reason for it other than a budgetary one. I may

be totally off base here.

Mr. DOMINGUEZ. Sir, I think, you know——

Mr. MCHUGH. If so, if I may, just so you can—and if so, that was

in 1985? If it was a budgetary issue, should we update that, too?

Maybe it ought to be $2,400.

Mr. DOMINGUEZ. No, sir. We are not——

Mr. MCHUGH. I am not proposing that. I am proposing——

Mr. DOMINGUEZ. No, nor am I.

Mr. MCHUGH [continuing]. We consider going the other way. But

I mean, you know, we talked about——

Mr. DOMINGUEZ. Right. You know, I think, as I was reflecting on

this—you know, this came out and replaced the Voluntary Education Program (VEP). And the VEP was a program where you had

to put cash in and the government would match it.

But basically, it was a statement that says look, we are doing

this for people who value education, and who want to put some

skin in the game. And so I believe that is where that came from.

It is very similar to the VEP benefit, where you had to put the

skin in the game in order for the government to put any in. So I

think that is where that came from.

You know, there is every force management reason not to increase that $1,200 pay reduction.

Mr. MCHUGH. Well, is there a force management reason to decrease it?

Mr. DOMINGUEZ. Again, you know, in terms of surveys of the

force, you know, ‘‘what are you concerned about, what bothers you,

what can we do better for you?’’ This is not a high one on the list

when we go out and connect with people. There may be a reason,

sir, and there may be a benefit.

Mr. MCHUGH. Okay. Speaking of skin in the game, right now an

active force member participating in MGIB can self-fund their kickers. It doesn’t have to be a departmental enriched kicker, paid-for

kicker. They can put their own money in. But reservists cannot.

Would the Department have objections to allowing reservists to

self-fund their own kickers, to put skin in the game, using more

skin in the game?

Mr. DOMINGUEZ. Offhand, I can’t think of a compelling reason

why we wouldn’t want to encourage our men and women——

Mr. MCHUGH. Do you want to take——

Mr. DOMINGUEZ [continuing]. You know, to invest——

Mr. MCHUGH [continuing]. A look at that, too, though?

Mr. DOMINGUEZ [continuing]. In their educations.

Mr. MCHUGH. I don’t want to——

Mr. DOMINGUEZ. Yes, sir. I think we should. That is also an intriguing concept.

Mr. MCHUGH. Okay. Thank you.

I heard Mr. Wilson say that the V.A. had not yet costed out these

proposals. Has the Department had an opportunity to do that? You

may have said that.

Mr. DOMINGUEZ. Not the legislation that has been introduced, no,

sir.

18

Mr. MCHUGH. Are you intending to do that? I know the chairman has asked for a Congressional Budget Office (CBO) analysis,

but—or would you rely on CBO?

Mr. DOMINGUEZ. Well, sir, I think we will provide the committee

whatever help that you require on this, and if you would like our

assistance, we would be happy to offer it.

Mr. MCHUGH. I think the chairman would like your support. If

that helps you support the bill, then by all means. If not, then, you

know, go find something else to do, probably. But all right. Thank

you.

I appreciate it, Mr. Chairman.

Dr. SNYDER. Mr. Murphy.

Mr. MURPHY. Thank you, Mr. Chairman.

Kind of going along what Congressman McHugh was—back in

1994, Fort Knox, Kentucky, asked if I wanted to sign up for the

G.I. bill. I had five days to sign up or not at that point.

Many of my fellow soldiers were hesitant to spend the $1,200 out

of their meager salary, and my colleague on this subcommittee, Ms.

Davis, has introduced a bill to help alleviate some of the cost to the

soldiers who are not, in my opinion, paid nearly enough to serve

in our military.

I am also proud to co-sponsor that bill, because I saw with my

own eyes how much of a deterrent this $1,200 to get skin in the

game was to people to get the benefits of the G.I. bill.

In my opinion, we should be encouraging soldiers to enroll in this

great program and not the other way around.

So my question is why are we forcing the recruits to pay the

money up front and out of pocket to participate in this program.

Has the DOD thought of any alternatives that would not discourage soldiers from enrolling in this program?

And you know, I am assuming that you are intrigued by Ms.

Davis’s bill, and I would ask for a written response as well within

30 days, if you could both look at it. Do you have any objections

to giving a response to Ms. Davis’s bill and doing a cost-benefit

analysis of that?

Mr. DOMINGUEZ. Well, I don’t know how much detailed cost-benefit analysis—but we can look at it and give you a response in 30

days, absolutely, Congressman.

Mr. MURPHY. Okay. Thank you.

Mr. DOMINGUEZ. I do want to point out, though—I guess it was

Congressman McHugh who mentioned on the active duty side now,

the take rate of people participating in the G.I. bill is really quite

extraordinary and rewarding. It could be better, but it does not appear to be the deterrent it was, and that may be the result of the

Congress’ support of the salary increases over the last decade.

Mr. MURPHY. Well, I have got another thing that I am hopeful

you will be intrigued about as well. My brother is a captain in the

Air Force Reserve, my brother J.J. And he had entered the service

after he already had his college degree and his master’s degree.

And he had to take out thousands of dollars in student loans to

pay for both these degrees. It is my understanding under the current policy my brother would be able to use G.I. benefit to also obtain an additional degree, but the military will not assist him in

19

paying down his educational debts that he incurred prior to his

service.

It seems to me that we ought to be encouraging the best and the

brightest and the most highly trained and educated people to join

our military, so how about doing it retroactively—you know, applying the G.I. benefit bills to student loans already incurred, to encourage the best and brightest to serve our country? Has that been

looked at?

Mr. WILSON. We administer one very small program, National

Call to Service Program, which does have provisions to pay back

a limited amount of debt in exchange for a normal enlistment time

into the military.

I can give you details. I can provide details in writing on that

program. It is one of our smaller programs, but there is something

in place that does address that issue, to a degree.

Mr. MURPHY. Is that just for the enlisted or is it for officers as

well?

Mr. WILSON. I would have to look at the specifics. I can’t answer

that. But I will find out.

Mr. MURPHY. I know you said small, Mr. Wilson. How small? Do

you know that?

Mr. WILSON. I will verify this, but I want to say it is up to $5,000

in student loans that we can repay.

Mr. DOMINGUEZ. Sir, I will have to check in the DOD, but I believe we have an educational loan repayment program for—again,

it is for members of the selected reserve who commit to continued

service in the selected reserve. And I believe we will pay loans

back.

I don’t know the details and how much, you know, and who is

eligible and things, but we certainly can look at that for you.

Mr. MURPHY. As well as the idea about, generally speaking,

retroactively paying this?

Mr. DOMINGUEZ. Again, I think in the details—I will look at

those, but if you show up, and you have an educational loan, and

you want to sign up in the selected reserve, I believe we can pay

the loan so long as you agree to, you know, drilling status with

that unit. I will check the details for you, sir.

Mr. MURPHY. Thank you.

Thanks, Mr. Chairman. I appreciate it.

Dr. SNYDER. Mr. Murphy, I want to assure you that everything

you say is intriguing.

Was Mr. Dominguez one of your students at West Point? I guess

not.

Mr. MURPHY. No.

Dr. SNYDER. I thought I would ask.

Let’s see. Mr. Wilson wants to wait a minute before we recognize

him, so we will go another round here.

Mr. Dominguez, you agree with Mr. Wilson’s description, which

is consistent with what I have heard, too, about the current working relationship between the DOD and the V.A.

Now, I didn’t hear you express concerns about retention, though,

because we have that benefit that extends after getting out of the

service.

Mr. DOMINGUEZ. Yes, sir.

20

Dr. SNYDER. Do I detect an inconsistency in your argument

there? You are not advocating we get rid of that working relationship there so that it would help retention, are you?

Mr. DOMINGUEZ. That provision has been in place, as Mr. Wilson

has said, since the gulf war. And even with that provision, retention in the selected reserve is at all-time highs, even while that reserve force is engaged in combat.

Dr. SNYDER. My point is it is hard to do this kind of analysis and

say retention rates are good because of specific provisions like this.

I agreed about the 14-year clock. It doesn’t make sense to me.

I guess people are thinking in terms of tenure, portability, and

14-year clocks and so on at the time that these programs are written, which is—there is kind of this sense of, ‘‘Gee, we have got to

get people in there and get their education so they can help themselves.’’

It is kind of like you have got to get moving. And now we recognize that it is not uncommon at all for people in their late 40’s and

50’s to have to go back or choose—not have to, but want to go back

for additional upgrades in education.

So I think we could make an argument none of those kinds of

things make much sense, recognizing there is a dollar cost to those.

In terms of the problem that we have here—because, Mr.

Dominguez, as I indicated earlier, you really described the problems well, I think, some of the problems that we have with our current system.

You specifically mentioned the increasing costs of higher education and how the benefit has not kept up with that. You talk

about the $13 billion shortfall just to get the reserve component

benefit up to the same relationship as it was.

And one of the problems that we had was not just the resistance

of DOD several years ago when we did that. It is our committee

structure because of these different sections of the code.

And if we can fix the kicker problem, and not have DOD paying

for bills that—you know, they don’t have much input over the Veterans’ Affairs Committee. Would you have a problem with us doing

this statutory change to get it under the same committee so that

we don’t leave our reserve component high and dry any time we

deal with these benefits? Do you get my drift?

Mr. DOMINGUEZ. Yes, sir.

Dr. SNYDER. I am isolating out that one issue, because I recognize that these others have costs to them and all, but this one

issue—it just seems inherently unfair what we did several years

ago, but we did it because that was all we could get done——

Mr. DOMINGUEZ. Yes, sir.

Dr. SNYDER [continuing]. Because of DOD resistance.

Mr. DOMINGUEZ. I think one question we have to ask ourselves

is whether when the Congress enacted the—and I don’t know the

answer to this—when it enacted these provisions back in 1985,

whether they established that the MGIB–SR would be 47 percent

of the active, or that was deduced afterwards by virtue of the rate

that the Congress enacted.

Dr. SNYDER. No, we are the Congress now, Mr. Dominguez.

Mr. DOMINGUEZ. Sir?

Dr. SNYDER. We are the Congress now.

21

Mr. DOMINGUEZ. Yes, indeed, you are, sir. So again, my point is

I am not driven by the fact that there was a relationship between

the two of them. I think about it more much in terms of how much

is enough to inspire people to join us and for them to say, ‘‘Yeah,

that is a good deal. I will take it.’’

Now, to your question, we really do need to stay in charge, and

this committee and the DOD have dialogue about the kickers—that

this is where that dialogue needs to happen.

Dr. SNYDER. And I think that is something we can work on.

Mr. DOMINGUEZ. Yes, sir. Right now, the reserve benefits are not

transition benefits. By making them transition benefits and entitlements, we are going to create some mandatory spending. So that

is a thing we have to think about and work through.

Dr. SNYDER. We need to see the CBO score on that specific component of it.

Mr. DOMINGUEZ. Yes, sir. And the next thing that we need to

think about is will it cost us more to have the same reserve force,

you know, that we have now under that proposal. And there may

be important reasons that make that okay.

Dr. SNYDER. Recruitment, readjustment, fairness.

Mr. DOMINGUEZ. Yes, sir.

Dr. SNYDER. Mr. McHugh.

Mr. MCHUGH. Thank you, Mr. Chairman.

Mr. Secretary, in your testimony, you mention about the initiative under way with respect to a total force G.I. bill.

Mr. DOMINGUEZ. Yes, sir.

Mr. MCHUGH. And you spoke about the working group came and,

as I read your testimony, had a set of proposals that, again, as I

interpret your testimony, sounded as though, in your view, they

cost a little bit too much, and the committee was redirected to come

back with a cost neutral alternative, which I assume they are

working on.

So number one, could you talk to the components of the original

proposal that you felt were too costly? And number two, when

would you expect the second iteration of the joint task force work

to be completed?

Mr. DOMINGUEZ. I will introduce it, but I think actually Keith is

much more knowledgeable about this.

Mr. MCHUGH. Okay, whomever feels——

Mr. DOMINGUEZ. But this working group was working on this

exact issue that the chairman has challenged us with, which is how

do you create a transition benefit to deal with this equity issue, but

without taking away one of the important tools we have for retention in the selected reserve.

And so they were working that, came up with some ideas on

that, but the—when it was presented to the Joint Executive Council, the cost consequences of that were not neutral, and so they

were sent back to the drawing board.

I think I have captured that right, Keith, and if you want to——

Mr. MCHUGH. Before Mr. Wilson adds his comments, do you

know what—they weren’t neutral, but do you know what the costs

were?

Mr. DOMINGUEZ. I think, again, Keith is the expert here on that.

Mr. MCHUGH. Okay.

22

Mr. WILSON. I don’t have the exact costs. I can give you a little

bit starting from the very beginning.

The original proposal for a total force came from the Veterans

Advisory Committee on Education, who is a standing chartered

committee that provides assistance to the Secretary on how we can

best meet the needs of veterans and service members educationwise.

The total force proposal as it was submitted to us involved structural changes, bringing everything required for the programs into

Title 38. It called for three tiers of benefit based on the amount of

active service an individual would have, irregardless of Reserve,

Guard, or active duty.

But it also addressed issues that weren’t necessarily germane to

a total force structure. For example, the recommendation was to

bring the equivalent, under the new program—of the 1606 program

to a higher percentage than currently exists for what would be the

current Chapter 30 program.

So there was built into the proposal—there was automatic cost

increases separate from the structure itself. So when the working

group took the proposal as a whole, it took the entire proposal at

face value and moved forward.

The working group liked some of the ideas that were in the proposal, and I will use the word intriguing. They were intrigued

about some of the ideas in the proposal. But there was concern

about that costing mechanism specifically.

In addition, the total force proposal as it was presented was silent on some very key issues. For example, it did not address how

the current $1,200 pay reduction would be handled under a program that integrates all three of the current programs, which, as

you are aware, active duty individuals do have the pay reduction.

The current Guard Reserve do not.

So there were some sticky issues, and they are continuing to

work on how all of those ideas would end up costing out.

Mr. MCHUGH. As I understand, they have been looking at this

since, what, 1995? Is that right?

Mr. WILSON. No. They have been working since 2005.

Mr. MCHUGH. 2005.

Mr. WILSON. Roughly 1.5 years, I believe.

Mr. MCHUGH. Yes, I lost a decade there. I wish I could. 2005.

But do you have or do they have a time frame on them as to

when they are expected generally to come back with the next proposal?

Mr. WILSON. At this point, we are still working on a time frame

to get the requested information back to the JEC, the Joint Executive Council.

The costing issues, as well as getting a better understanding of

what their alternative proposals would do to the core issue of recruitment and retention, is the issue that the group is grappling

with right now.

I can find out the exact current status or whether we have a time

frame. My understanding is we do not.

Mr. MCHUGH. Well, the reason, Mr. Chairman—obviously, it

would be of some interest if it could dovetail into what you and others are trying to do.

23

I see the red light is on, so, again, gentlemen, thank you for

being here. And thank you for your service to our men and women

in uniform, active, Guard, retired, Reserve—deeply appreciate that.

Thank you, Mr. Chairman.

Dr. SNYDER. Mr. Joe Wilson.

Mr. WILSON OF SOUTH CAROLINA. Thank you, Mr. Chairman. In

lieu, really, of questions, I just want to thank the chairman, also

the ranking member, for this hearing and, in particular, the call for

greater parity in compensation and benefit programs between reservists and active duty personnel.

I am very pleased that the unit that I was a member of, the 218

Mechanized Infantry Brigade, is currently in training at Camp

Shelby and Fort Riley for deployment to Afghanistan. And I have

identified with our Guard members who have served overseas in

the past five years, and how proud I am of their service.

But particularly with my now former unit going, I know that the

difference between Guard members, Reservists and active duty has

become so blurred that, indeed, I feel like the benefits should be

equally similar in terms of service.

And thank you very much for your service. And again, I appreciate the efforts being expressed here today.

Dr. SNYDER. Thank you, Mr. Wilson.

I think we are about winding down here, Mr. Secretary. One specific question, Mr. Dominguez. Help me get my facts straight. We

have talked about the person who activated for 24 consecutive

months and then getting the benefit they do. Am I correct, they do have to pay the $1,200?

Mr. DOMINGUEZ. Yes.

Dr. SNYDER. They do.

Mr. DOMINGUEZ. Yes.

Dr. SNYDER. And if you do your calculation, is your calculation the $860 a month benefit in which you call it a richer benefit—does

that take into consideration the $1,200 that they then have to pay

at that time?

Mr. DOMINGUEZ. Yes. Yes. When you compare the REAP benefit,

is that where you——

Dr. SNYDER. Right. I just want to make sure——

Mr. DOMINGUEZ. Yes, you have to take that in consideration.

Dr. SNYDER. And it get back to Ms. Shea-Porter’s question, of

course, which is the difference being that they have to stay in——

Mr. DOMINGUEZ. In the selected reserve.

Dr. SNYDER [continuing]. The service subject to mobilization and

drill and everything else.

Mr. DOMINGUEZ. Right.

Dr. SNYDER. You know, we have talked about the fairness, and

I don’t know if you and I disagree on that or not, but it just seems

to me incredibly unfair.

And I think what drives this sense of unfairness that a lot of us

have now is I don’t think most people re-enlist for the educational

benefit or gee, they have got—you know, they really love their

friends down there once a month they go down and drill with.

I think they are re-enlisting in a time of war because they are

military men and women, and they love their country, and they

just think it is important.

24

And we have had testimony at that table from the highest ranking civilian and uniformed people in our country who talk about

the incredibly high retention rates, surprisingly high retention

rates, that occur while people are on duty overseas.

So I think we can overplay our statements about the impact of

an educational program on retention. I think it gets back to this—

in my view, this sense of fairness.

I also think we talk about their readjustment, in Mr. Wilson’s

words, the readjustment component. And that has to do with individuals.

But as I am sure you know, I mean, a lot of people feel that the

G.I. bill in the post-World War II era is what built the American

middle class and made us what we are today.

And in fact, Senator Webb has filed a bill that I suspect is exorbitantly expensive, but it takes a back to what the bill was, which

is if you get into a college, you all—we all as taxpayers will pay

the tuition of that college.

If it is Pulaski Technical College in Little Rock, we will pay that

tuition. If it is Yale or Harvard, we will pay that tuition, plus a

stipend, which gets back to not just the readjustment for that individual, but the tremendous impact that men and women coming

out of uniform into American society—the tremendous impact, positive impact—armed with the educational tools they think they

need, at the place they think they need to go to—the impact that

they can have on our society at large and have for decades, coming

out of World War II.

One final question. Mr. Wilson, do you have a sense yet, knowing

our process and our year moves along fairly rapidly—do you have

a sense of the general outline of what the V.A.-DOD working

group’s findings are going to be that you might share with us

today?

Mr. WILSON. I can provide a very limited thumbnail sketch. The

costing I cannot address at all, obviously.

Dr. SNYDER. I understand. Okay.

Mr. WILSON. There is general agreement that there are components of the separate programs that can be combined into an integrated program that would provide a better degree of what we are

all calling here equity. And it can be done in a manner that would

make the program easier to use for the participants.

And I believe, as somebody responsible for Administration of the

program, equity and complexity of the program are almost two

sides of the same coin.

It can be a confusing world for our program participants, and the

advantages of eliminating some of the equity issues by making the

programs easier to understand and easier for the people to use is

something that the working group, I believe, believes we can capitalize on.

The working group likes the idea as well of a three-tier-type approach in terms of, again, equity, recognizing and providing a benefit commensurate to the amount of service that an individual has

provided. I don’t believe there is any disagreement on that issue as

well.

There continues to be issues concerning the impact on recruitment and retention and the costing figures. A particular issue is

25

addressing things like the current $1,200 pay reduction and how

that would be handled under an integrated program.

So the fundamental approach of the proposal, in terms of a tiered

structure that offers benefits commensurate to amount of service

the working group, is in agreement.

Again, as I mentioned earlier, the devil is in the details. And

those are the things that they are working through.

Dr. SNYDER. Mr. McHugh, anything further?

Mr. Wilson, anything further?

We appreciate you all being here.

And I encourage you, if you have thoughts or are working with

people that have thoughts about this specific bill or other aspects

of these bills, to let us know, because I think there is a lot of interest in both the House and the Senate in addressing this issue as

expeditiously as we can, because we think we have got some challenges out there that are terribly unfair to a lot of men and women

in the United States today.

The hearing is adjourned.

[Whereupon, at 3:45 p.m., the subcommittee was adjourned.]

A P P E N D I X

FEBRUARY 28, 2007

PREPARED STATEMENTS SUBMITTED FOR THE RECORD

FEBRUARY 28, 2007

(31)

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

DOCUMENTS SUBMITTED FOR THE RECORD

FEBRUARY 28, 2007

(51)

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

QUESTIONS AND ANSWERS SUBMITTED FOR THE

RECORD

FEBRUARY 28, 2007

(95)

QUESTIONS SUBMITTED BY MR. MCHUGH

Mr. MCHUGH. Explain the congressional logic, if you will, Mr. Secretary—what is the rationale behind the $1,200 payment to participate in MGIB?

Mr. DOMINGUEZ. The Department is able to respond with a partial history of the introduction of the $1,200 pay reduction required to remain enrolled in the Montgomery GI Bill (MGIB). The pay reduction was not included in House Resolution

1400, Chairman Montgomery’s original bill. It was introduced in the version agreed

to by the Senate and included in Public Law (P.L.) 98–525, the National Defense

Authorization Act for Fiscal Year 1985, when the MGIB was established as a threeyear test. It remained as a requirement when the MGIB was made permanent in

P.L. 100–48. The pay reduction is codified in Section 3011(b) Title 38, United States

Code, which states, ‘‘The basic pay of any individual.... shall be reduced by $100 for each of the first 12 months that such individual is entitled to such pay.’’

It further states, ‘‘Any amount by which the basic pay of an individual is reduced

shall revert to the treasury and shall not, for any purposes of any Federal law, be

considered to have been received by or be within the control of such individual.’’ As

a result of this, the $1,200 reduction is pre-tax and pre-Federal Insurance Contributions Act tax.

However, with more than 95 percent of new enlisted Service members choosing

to enroll in the MGIB, the current pay reduction does not appear to be a major disincentive for participation in the program. While eliminating the $1,200 reduction

in pay would be tantamount to a ‘‘pay raise’’ for our most junior Service members,

at a time when they could best use it, it also represents a very sound investment

for them. The $1,200 investment can return over $37,000 in educational benefits to

those members. The cost of eliminating this pay reduction would be significant, estimated at about $204 million annually, and would have a significant impact on the

budget of the Department of Veterans Affairs. Therefore, Department of Defense

would defer to that agency on the viability of eliminating the pay reduction.

Mr. MCHUGH. Right now an active force member participating in MGIB can selffund their kickers. It doesn’t have to be a departmental enriched kicker, paid-for

kicker. They can put their own money in. But reservists cannot.

Would the department have objections to allowing reservists to self-fund their own

kickers, to put skin in the game, using more skin in the game?

Mr. DOMINGUEZ. House Resolution 100 would subtract the $1,200 pay reduction

from a veteran’s Montgomery GI Bill benefit in the first year of use in calculating

eligibility for federal student aid. The Department supports this concept; however,

as this provision affects Department of Education funding, the Department defers

to that agency’s views.

Mr. MCHUGH. Do you have or do they have a time frame on them as to when

they are expected generally to come back with the next proposal?

Mr. WILSON. The Veterans Advisory Committee on Education (VACOE) submitted

a ‘‘Total Force GI Bill Concept’’ proposal as one of their recommendations to Secretary Nicholson. Subsequently, the VA/DoD Joint Executive Council (JEC) requested that a joint DOD/VA working group be formed to analyze the VACOE proposal. The working group found many attractive elements in the VACOE proposal

and prepared an alternative proposal. The working group briefed the JEC in May

2007, regarding their final report, and also released the final report to the VACOE.

The Chairman of the VACOE furnished copies of the working group’s alternative

proposal to House and Senate Veterans Affairs Committee staff members in May

2007.

QUESTIONS SUBMITTED BY MR. MURPHY

Mr. MURPHY. My colleague, Congressman Matheson of Utah, has introduced a bill

that deals with a critically important issue that I want to get both of your opinions

on.Many Guardsmen and Reservists across the Nation have served a total of 24

months on active duty in Iraq and Afghanistan. But typically, they serve 24 months

over multiple deployments. The current criteria for the Montgomery G.I. Bill eligiVerDate 22-MAR-2001 11:00 Nov 12, 2008 Jkt 038661 PO 00000 Frm 00099 Fmt 6601 Sfmt 6621 C:\DOCS\110-22\059020.000 HAS2 PsN: HAS2
96

bility only allows individuals who serve at least 2 years of continuous active duty

service to qualify for the full active duty benefit.

Congressman Matheson’s bill would allow Reservists and Guardsmen who serve

a total of 24 months over a 5-year period on active duty to qualify for the full active

duty educational benefit.

I personally think this is an excellent piece of legislation. I am proud to co-sponsor

it. Would DOD or the V.A. object to such legislation?

Mr. DOMINGUEZ. House Resolution (H.R.) 1211 would allow members of the Selected Reserve who accumulate more than two years of mobilized service within any

five-year period to enroll in the active duty Montgomery GI Bill (MGIB). Currently,

members of the Ready Reserve who serve continuously on active duty for two years

are eligible to enroll in the active duty MGIB, have their pay reduced by $1,200,

and become eligible for the same education benefits that accrue to a Service member

who enlists on active duty for a period less than three years. This provision supports

the transition/readjustment purposes of the MGIB for both categories of service. We

would not support extending this transition/readjustment benefit to members of the

Selected Reserve who serve multiple, but shorter, periods of mobilized service. Rather than amending the MGIB eligibility requirement as proposed in H.R. 1211, the

Department is considering an amendment to the Reserve Educational Assistance

Program (REAP) in chapter 1607 of Title 10, United States Code, that would allow

for cumulative rather than continuous service to achieve eligibility for that program.

This would essentially yield the same result, except that modifying REAP would not

only provide a richer benefit, but would also serve as an incentive for continued

service.

Mr. MURPHY. Why are we forcing the recruits to pay the money up front and out

of pocket to participate in this program. Has the DOD thought of any alternatives

that would not discourage soldiers from enrolling in this program?

And you know, I am assuming that you are intrigued by Ms. Davis’s bill, and I

would ask for a written response as well within 30 days, if you could both look at

it. Do you have any objections to giving a response to Ms. Davis’s bill and doing

a cost-benefit analysis of that?

Mr. DOMINGUEZ The concept of permitting Reserve component members who are

participating in the Montgomery GI Bill (MGIB)—Selected Reserve program to buy

additional benefits, similar to the option currently available to MGIB Chapter 30

participants is certainly an intriguing concept, but one that we would need to examine in the context of its utility in assisting the Department in meeting its force management objectives. If it were to be patterned after the Chapter 30 program, a participating member would be able to purchase a total benefit increase at about a one

to nine ratio—for every dollar the member would pay, he or she would purchase

nine dollars of benefits up to a set maximum, which is $5,400 for the Chapter 30

program. The potential costs to the government of such an option would have to be

weighed carefully against the resulting effect on recruiting and retention. We have

not modeled the potential effect such a change might have on force management.

However, if providing an enhanced benefit would be a cost effective way of overcoming recruiting or retention shortfalls, or help staff under-subscribed career fields,

then the Department would be interested in pursuing such an initiative.

Mr. MURPHY. My colleague, Congressman Matheson of Utah, has introduced a bill

that deals with a critically important issue that I want to get both of your opinions

on.

Many Guardsmen and Reservists across the Nation have served a total of 24

months on active duty in Iraq and Afghanistan. But typically, they serve 24 months

over multiple deployments. The current criteria for the Montgomery G.I. Bill eligibility only allows individuals who serve at least 2 years of continuous active duty

service to qualify for the full active duty benefit.

Congressman Matheson’s bill would allow Reservists and Guardsmen who serve

a total of 24 months over a 5-year period on active duty to qualify for the full active

duty educational benefit.

I personally think this is an excellent piece of legislation. I am proud to co-sponsor

it. Would DOD or the V.A. object to such legislation?

Mr. WILSON. Views and cost analysis is currently in the VA concurrence process.

Mr. MURPHY. Why are we forcing the recruits to pay the money up front and out

of pocket to participate in this program. Has the DOD thought of any alternatives

that would not discourage soldiers from enrolling in this program?

And you know, I am assuming that you are intrigued by Ms. Davis’s bill, and I

would ask for a written response as well within 30 days, if you could both look at

it. Do you have any objections to giving a response to Ms. Davis’s bill and doing

a cost-benefit analysis of that?

97

Mr. WILSON. We defer to the Department of Education on questions regarding the

determination of financial assistance (Title 20 U.S.C.) for veterans and service members.

Mr. MURPHY. It seems to me that we ought to be encouraging the best and the

brightest and the most highly trained and educated people to join our military, so

how about doing it retroactively—you know, applying the G.I. benefit bills to student loans already incurred, to encourage the best and brightest to serve our country? Has that been looked at?

Mr. WILSON. The National Call to Service Program (NCS) is a recruitment incentive program offered by DoD. The participant may elect from one of four incentives,

payable after completing an initial active service period of 15 months plus completion of required training. The incentives include a student loan repayment program

that covers a student loan and interest up to a pre-set amount. This program is administered by DoD.

VA administers two other incentive programs offered through the NCS: an education allowance payable of up to 12 months equal to the chapter 30, 3-year rate;

and an education allowance payable by VA of up to 36 months of one-half of the

chapter 30, 2-year rate.

The election of a particular incentive program is irrevocable.

Æ