Military Update: House wants tanker funds for ‘widow tax’
Using money unspent from a controversial Air Force tanker program, the House Armed Services Committee has voted for a speedier phase out of a sharp drop in survivor benefits for military widows and widowers at age 62.
What lawmakers call the “widow’s tax” feature of the military Survivor Benefit Plan has existed since SBP began in 1972. But the reduction wasn’t briefed well to all participants. Retirees, spouses and widows have been angered over the years to learn that SBP benefits fall from 55 percent of covered retired pay down to as low as 35 percent at age 62, when Social Security benefits typically become available.
The committee’s Total Force Subcommittee voted May 5 to phase out that drop in benefits over five years, but said it couldn’t start until 2009 because any hike in mandatory spending under the Defense Department’s five-year budget must be paid for with an equivalent spending reduction.
As the full committee considered final amendments to the 2005 defense authorization bill May 12, Rep. Jeff Miller, R-Fla., announced that funds had been found to begin phasing out the widow’s tax next year. The cost of more than $2 billion over five years would be covered by money previously earmarked for the Air Force to lease tanker aircraft.
With no dissent heard, the committee approved Miller’s amendment to raise SBP benefits, starting with 270,000 beneficiaries age 62 and older. As of Oct. 1, 2005, their SBP would climb to 40 percent of covered retired pay. It would increase again to 45 percent on April 1, 2006, and to 50 percent a year later. It would be fully restored, to 55 percent, on April 1, 2008.
The amendment would make corresponding adjustments to the SBP supplemental annuity program, which allowed retirees to avoid the age 62 drop in survivor benefits through payment of higher premiums.
The House committee also voted to delay next year’s round of military base closings until 2007, citing uncertainty over future infrastructure needs in light of the expanding war on terrorism and Bush administration plans to realign and transform active and reserve forces.
“We cannot afford to close a base in a 2005 BRAC [Base Realignment and Closure] round only to discover in 2010 that assets at that base are both irreplaceable and now are lost forever,” said Rep. Joel Hefley, R-Colo., chairman of the committee’s readiness panel.
Congress in 2001 authorized a new round of base closings. Defense officials estimate the military has 24 percent excess base “capacity.” Next May, the defense secretary is to provide to a new nine-member BRAC commission with a list of facilities to close or realign. Commissioners will review, amend and send a revised list through the president to Congress.
That process would be pushed back two years under the House committee provision.
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