Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - May 07, 2009)

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By Mrs. SHAHEEN (for herself, Mr. GREGG, and Mr. KOHL):

S. 1008. A bill to amend title 10, United States Code, to limit requirements of separation pay, special separation benefits, and voluntary separation incentive from members of the Armed Forces subsequently receiving retired or retainer pay; to the Committee on Armed Services.

Mrs. SHAHEEN. Mr. President, I rise today to introduce the Military Retirement Pay Fairness Act of 2009. I want to thank my colleague, Senator GREGG, for cosponsoring this important legislation.

The Military Retirement Pay Fairness Act addresses a critical issue that impacts our nation's veterans. Certain service members who receive special separation pay must have that benefit recouped if they later re-enlist and become eligible for a pension. Under current law, the Department of Defense, DOD, is bound by a statutory formula for recouping that benefit and cannot change the amount it recoups each month, even if it results in severe financial hardship for our nation's veterans. In fact, many veterans are currently in dire financial straits because of this unnecessarily harsh formula. This legislation will fix the formula and provide these veterans with much needed financial relief.

I would like to talk about one particular veteran who brought this issue to my attention. Sgt. Wayne Merritt of Dover, New Hampshire served in the Air Force for nearly 14 years until the end of the Cold War, when the Defense Department began to draw down its forces. At DOD's encouragement, Mr. Merritt took a one-time Special Separation Benefit, and then started working in the private sector.

But in 1996, Sgt. Merritt decided to serve his country once again, joining the New Hampshire Air National Guard. When Sgt. Merritt retired in 2006, he became eligible for a pension that provided him and his family with enough to help pay the bills, especially his monthly mortgage payments.

However, just a couple of months ago, Sgt. Merritt had his life turned upside down when he got a letter in the mail from the Defense Department. The letter said that, within a few weeks, DOD would begin recouping his separation benefit by withholding more than half of his pension each month until the full amount is paid back.

Sgt. Merritt was shocked. He planned his family budget around a pension payment he had been receiving each month for nearly 2 years, only to get a letter saying that, in a few weeks, it would be reduced by more than half. Sgt. Merritt suddenly found himself in a position where he couldn't make ends meet and make his mortgage payments. In fact, he was so concerned that he contacted a real estate agent to talk about selling his home.

Sgt. Merritt contacted DOD, asking if there was anything that could be done to work out a manageable monthly payment plan. Sgt. Merritt did not ask for the amount to be forgiven, but simply asked DOD to be flexible and work out a payment plan that he could afford. DOD told him that there was nothing it could do to help, citing a statute that tied its hands.

On behalf of Sgt. Merritt, I contacted DOD and spoke to Undersecretary Robert Hale. He told me that DOD doesn't have a choice--it must recoup over half of his income because the formula in the statute dictates the rate. The result is that Sgt. Merritt, and over 1,000 veterans in similar situations across the country, face financial hardship as a result of an unfair rule. As each month goes by, DOD has to garnish over half of Sgt. Merritt's pension payments.

I do not believe that Congress intends to treat our Nation's veterans this way. That is why I am introducing legislation today that would provide a simple and straightforward solution. Instead of an unnecessarily harsh formula, our bill will provide DOD with the flexibility it needs to develop manageable monthly payment plans that do not impose undue financial hardship on service members. In addition, DOD would be required to consult with the service member to create a monthly payment plan, taking into account a veteran's financial situation when determining how much should be recouped each month. To make sure these payment plans are manageable, DOD would only be able to recoup, at the most, 25 percent of the veteran's monthly pension check until the benefit is repaid.

This legislation would also address other problems with pension recoupment.

It would provide service members with adequate notice of the recoupment so that they have time to prepare for the loss of income. Sgt. Merritt received his letter just weeks before DOD garnished over half of his pension pay. This legislation ensures that service members have at least 90 days notice before recoupment begins.

Finally, the legislation would also give the Secretary of Defense the flexibility to ensure that no veteran will be left destitute from this recoupment. We need to recognize that financial circumstances change over time. If recouping the benefit would cause a severe financial hardship, the Secretary of Defense should be able to waive that amount.

This legislation is critical. Each month, over 1,000 veterans face circumstances similar to Sgt. Merritt's. Undersecretary Robert Hale told me that while he sympathizes with these veterans, he has no legal recourse to change the amount it recoups every month. This legislation provides DOD with the flexibility it needs to ensure that we do not punish veterans who have made the courageous decision to serve their country again.

I'm glad that this effort has the support of DOD, as well as veterans organizations like the Veterans of Foreign Wars, VFW, and the Military Officers Association of America, MOAA.

I want to thank Senator GREGG for his support of this important, common sense legislation. I also want to thank my fellow New Hampshire delegation member, CAROL SHEA-PORTER, for introducing companion legislation in the House. I urge my colleagues to join me in addressing these important issues.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD, as follows:

S. 1008

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