Active duty and reserve component members are closer to landing  a  3.4 percent basic pay raise next January, which would be the 11th consecutive annual increase set higher than private sector wage growth.

But in approving a $550.4 billion fiscal 2010 defense authorization bill and $130 billion for wartime operations Wednesday, the House Armed Services Committee couldn’t find money to support President Obama’s plan to extend “concurrent receipt” to 103,000 more disabled retirees.

Rep. Ike Skelton, D-Mo., committee chairman, said some funds still might be found before the defense bill reaches the House floor.

The target of Obama’s plan are “Chapter 61” retirees — those forced by their disabilities to retire, usually before they can complete 20 years of service and earn regular military retirement. Today they receive either military disability retirement or VA disability compensation. Obama’s plan would allow many of them also to receive an annuity based on years served.

The cost would be $5.1 billion over 10 years but the greater difficulty for the committee was finding the right type of funding, explained Skelton. The president’s plan, in effect, would enhance an entitlement, which means mandatory spending. That is, by law, it would have to funded every year.

Under the House “pay-as-you-go” budget rule, no mandatory spending initiative can be approved unless a matching amount of “offsets,” or mandatory spending reductions, will be made elsewhere in the budget.

As the full committee began to review the personnel portion of the defense bill, Rep. Susan Davis, D-Calif. — the personnel subcommittee chair — announced with regret that Obama’s provision was not included because no “mandatory offsets” had been found yet.

Skelton and Rep. John Spratt, D-S.C., who chairs the budget committee, explained that they have been searching for offsets for several weeks and that the task continued. In the meantime, Skelton explained, any amendment introduced during mark-up that requires mandatory spending would be ruled out of order unless offsets to pay for it were identified.

Undeterred, Rep. Joe Wilson R-S.C., the ranking member on the personnel subcommittee, introduced a four-part amendment full of unfunded mandatory spending initiatives, most of them to help beneficiaries who continue to feel victimized by what remains of the ban on concurrent receipt.

One part of Wilson’s amendment would restore Obama’s Chapter 61 initiative to the bill. A second called for an end to the “Widows’ Tax” for surviving military spouses, also called the SBP/DIC offset. Surviving spouses of servicemembers who die on active duty or from service-related conditions can receive tax-free Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs, but they must agree to accept a dollar-for-dollar reduction in their military Survivor Benefit Plan payments.

Several members of Gold Star Wives of America sat through the mark-up all day, hoping to see the SBP/DIC issue debated. Sandra Drew, widow of an Air Force colonel who died in Bosnia in 1995, was the only one left when, in the mark-up’s 13th hour, Wilson proposed an end the SBP/DIC offset.

Part three of his amendment would phase out the ban on concurrent receipt for 450,000 military retirees who still see monthly retired pay reduced by the amount they receive in VA compensation. These retirees have disabilities unrelated to combat and disability ratings below 50 percent.

Wilson’s fourth provision would extend military health coverage to Reserve and National Guard members who retire before age 60 as a result of last year’s law that lowers reserve retirement age by three months for every 90 days a reserve member is deployed after Jan. 28, 2008.

Skelton advised Wilson that his amendment would cost $36 billion over 10 years, and failed to identify mandatory spending offsets to pay for it. So Skelton ruled the amendment out of order.

If Skelton and Spratt do find some offset dollars before the defense bill clears the House floor, the money likely would be used to advance the president’s Chapter 61 initiative rather on other parts of the Wilson package.

Drew said she was disappointed, but would sit through a defense bill mark-up again if it influenced lawmakers to address the SBP/DIC offset.

Correction: Last week’s column reported that Troy University was a “for-profit” institution. Troy is a multi-campus, public university with 30,000 students in nearly 20 states but with a single administration in Troy, Ala.

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