Ending the Widow's Tax

Ending the Widow's Tax

Rep. Boozman's Column for the Week of May 31, 2004

This week, as we mark Memorial Day, I wanted to highlight a recent move by the House of Representatives to right a wrong that has resulted in financial hardships for families of military retirees.

Commonly referred to as the widow's tax, this injustice dramatically reduces the benefits for hundreds of thousands of spouses of military retirees when they reach the age of 62. This is a result of the Social Security offset in the Survivors Benefit Plan (SBP), which cuts payments for beneficiaries from 55% to 35% of their retired spouse's pay.

The Social Security offset was never fully explained to many military retirees before they signed an irrevocable contract. As a result, retirees, spouses and widows have been angered to learn over the years that SBP benefits drop by as much as 20% when their Social Security benefits become available.

I voted for the first-ever legislative remedy to this problem earlier this month when I cast my vote in favor of the Department of Defense Authorization Act for FY05. The Defense Authorization bill contained a provision that will completely phase-out the reduction in benefits in less than five years.

Because of the inherent injustice of the current program, SBP reform became one of the top priorities for the 108th Congress. Two separate bills and a minority-led discharge petition were introduced to address this problem. However, it was the behind-the-scenes work of the House Veterans Affairs Committee, on which I serve; the House Armed Services Committee; and the House Republican Leadership that forged this historic solution.

The Defense Authorization bill not only eliminates the widow's tax, but it restores payments to beneficiaries in less time than previous proposals. It would take anywhere from five to ten years to fully phase-out the widow's tax in other SBP reform proposals before the House of the Representatives. If this provision remains in the Defense Authorization bill when it gets to President Bush, we will see a full elimination of the widow's tax within the next 4 ½ years.

The Survivor Benefits Plan wasn't living up to the promise we made to our veterans and it needed to be fixed in a hurry. Everyone understood that we owe our veterans and their families more than what the current program is providing. For this reason, my colleagues and I on the Veterans Affairs Committee worked hard to get this unprecedented, historic fix into the Defense Authorization bill.

The Defense Authorization bill will make SBP live up to our original intentions, which was to provide for the spouses of our veterans that sacrificed so much in their lifetime. It also serves as a signal to the brave men and women that are serving America today. We are a nation that stands by our word. Your sacrifices are not going unnoticed and we have every intention of giving you the benefits that you were promised.