Recommendation:The Coalition recommends that the SBP law be changed to provide a 44 percent subsidy of supplemental SBP options of 40 and 45 percent. The estimated DoD accrual costs of the proposal are $40 million. 9. CONTIN JE BX AND COMMISSARY OPERATIONS AT CLOSED BASES. The Assistant Secretary of Defense (Production and Logistics) issued a memorandum which stated the Department of Defense (DoD) cannot justify and will not consider retaining resale operations primarily for retirees, reservists and certain other non-active duty people. Mair.taining stores in areas where there is a cost effective customer population of retirees, eligible widows and orphans, 100 percent disabled veterans, reservists, and involuntary separatees, could very well prove to be an efficient use of DoD resources. Exchange stores could be self-sustaining and may generate profits that could be used to supplement MWR facilities located elsewhere, thereby sustaining, rather than eroding, the exchange and commissary customer-base over time. Since the stores already exist, DoD can avoid start-up costs. Civilian hires could replace the ancillary loss of military labor caused by force structure reductions. Using Carswell Air Force Base as an example we see the following potential: Presently, Carswell has 114,000 eligible patrons who generate approximately $35 million in revenue of which $2 million goes to MWR activities. Upon closure of Carswell there will be an estimated 107,000 potential patrons who will support a $25 to $30 million gross and provide more than $1 million to MWR activities. Recommendation: The Coalition recommends that Congress direct DoD to examine the feasibility of keeping BX, Commissaries and medical facilities operational at bases slated for closure. When DoD determines that it is not feasible to continue operating BX, commissary or medical facilities at c. particular base, it should be directed to submit a report to the Committees on Armed Services indicating the reasons for the decision(s). Senator GLENN. Colonel, we welcome you this morning and we look forward to your statement. STATEMENT OF COL. PAUL W. ARCARI, USAF (RETIRED), THE RETIRED OFFICERS ASSOCIATION, COCHAIRMAN, MILITARY COALITION Colonel ARCARI. Thank you, Mr. Chairman. We appreciate your permitting us to testify before you on these very important issues. On behalf of the Coalition, I respectfully request that the names of the Coalition's association appear in the record here as read. [The information follows:] Air Force Association Air Force Sergeants Association Association of Military Surgeons of the United States Association of the United States Army Chief Warrant Officer and Warrant Officer Association, United States Coast Guard Commissioned Officers Association of the United States, Public Health Service, Inc. Enlisted Association of the National Guard of the United States Fleet Reserve Association Jewish War Veterans of the United States of America Marine Corps League Marine Corps Reserve Officers Association Military Chaplains Association of the United States of America National Association for Uniformed Services National Guard Association of the United States National Military Family Association Naval Enlisted Reserve Association Naval Reserve Association Navy League of the United States Non Commissioned Officers Association Reserve Officers Association Society of Medical Consultants to the Armed Forces The Retired Enlisted Association The Retired Officers Association United States Army Warrant Officers Association USCG Chief Petty Officers Association Colonel ARCARI. The Coalition operates under a rule of five. If five or more member associations object to a proposed initiative, the initiative is dropped from the coalition's legislative agenda. In terms of the testimony presented today, the coalition unanimously supports the issues and recommendations with one exception, which Sergeant Major McKinney will discuss later on. As we draw down our armed forces, Congress and the administration anticipate a sizable peace dividend. We are concerned that the drawdown will be too deep and too fast. At the same time, we believe any peace dividend which may result should go first to those who earned it. The military personnel, retirees, veterans and their families, who endured the long separations, stood the watches, fought the wars, and finally, won the peace. It is from this perspective that we present our recommendations to you. We divided our statement into five parts, Mr. Chairman, and I am going to address the part with respect to the Survivor Benefit Plan. The coalition has several recommendations for improving the SBP, and I want to discuss some of them now. As a point of departure, chances for any meaningful Survivor Benefit Plan changes died last year, when assistant secretary of defense for force management and personnel (OSD) failed to submit the SBP report required by Congress in time for action as part of the fiscal year 1992 defense authorization bill. The final report revised dramatically by OSD ignored the unanimous recommendations of the SBP study group, comprised of representatives of OSD, seven uniformed services, and The Military Coalition, and used analytical legerdemain to recommend no subsidy to the supplemental SBP program. All the empirical data compiled by the study group including Government subsidies, the Air Force study of income replacement, and the Coalition's independent analysis of cost per dollar of benefit provide compelling reasons for partially subsidizing a supplemental SBP. Therefore, the Coalition recommends the SBP law be changed to provide a 44 percent subsidy for supplemental annuities of 40 and 45 percent. The timing is also right to make several other SBP changes to promote equity, promote flexibility, and increase participation. To facilitate these goals, the Coalition recommends a withdrawal clause be added to allow a participant to drop out of the plan between the second and third year of retirement, or during the year following the sponsor's 65th birthday, both subject to spousal con currence. As a matter of equity, members with former spouses should be afforded the same flexibility to withdraw from the SBP under the same circumstances as members with spouses. The Coalition also recommends that members be permitted to terminate insurable interest elections at any time of their choosing. In a related area, the retired service member's family protection plan, the RSFPP is an expensive forefather of the SBP program. Therefore, the Coalition recommends that RSFPP participants be permitted to terminate their participation in the plan and, those who desire, be allowed to convert to SBP without being subject to the 2-year survival period. Finally, Mr. Chairman, we recommend that active and reserve forgotten widows be provided an annuity of $165 per month, subject to any social security or second-tier offset. This would provide them with the same coverage Federal civilian forgotten widows received in 1958. That concludes my part of the testimony, Mr. Chairman. [The prepared statement of the Military Coalition follows:] STATEMENT OF THE MILITARY COALITION Presented by Colonel Paul W. Arcari, USAF (Retired) Mr. Chairman and Distinguished Members of the Committee: The Military Coalition would like to express its appreciation to the chairman and distinguished members of the Manpower and Personnel Subcommittee of the Committee on Armed Services for holding these important hearings. The testimony provided here represents the collective views of the following military and veterans organizations known as The Military Coalition: Air Force Association Air Force Sergeants Association Association of Military Surgeons of the United States •Association of the United States Army ⚫Chief Warrant Officer and Warrant Officer Association, United States Coast Guard •Commissioned Officers Association of the United States Public Health Service, Inc. •Enlisted Association of the National Guard of the United States •Fleet Reserve Association •Jewish War Veterans of the United States of America •Marine Corps League •Marine Corps Reserve Officers Association •Military Chaplains Association of the United States of America •National Association for Uniformed Services •National Guard Association of the United States •National Military Family Association •Naval Enlisted Reserve Association •Naval Reserve Association •Navy League of the United States •Noncommissioned Officers Association •Reserve Officers Association •Society of Medical Consultants to the Armed Forces •The Retired Enlisted Association •The Retired Officers Association ⚫United States Army Warrant Officers Association ⚫USCG Chief Petty Officers Association The Military Coalition represents approximately 3.5 million members of the seven uniformed services, officer and enlisted, active, reserve and retired, plus their families and survivors. The Military Coalition operates under a "rule of five". If five or more member associations object to a proposed initiative, the initiative will not be placed on the Coalition's legislative agenda. In terms of the testimony presented here, The Coalition unanimously supports the issues with one exception that is noted later in the statement. Equitable Use of the "Peace Dividend" As we drawdown our Armed Forces, Congress and the Administration anticipate a sizeable peace dividend. We are concerned that the drawdown will be too deep and too fast. At the same time we believe that any peace dividend that may result should go first to those who earned it - the military personnel, retirees, veterans and their families who stood the watches, endured the long separations, fought the wars and finally won the peace. We are also concerned that as tough decisions are made, funding for new initiatives will be limited to those currently serving and about to be separated. There is no question but that these individuals deserve special consideration for their distinctive contributions to the Defense Mission. However, the Coalition believes it would be a travesty to ignore the similarly distinctive contributions of the retirees and veterans, active and reserve, who fought the hot wars, including World War II, Korea and Vietnam and concurrently fought the Cold War that led to the ultimate demise of communism as a threat to National Security. These selfless heroes and |