Commissary savings at risk to help ill Lejeune vets
by Tom Philpott
In these tight budget times, the Senate Veterans Affairs Committee has learned it must cut current spending to fund new initiatives for veterans.
For example, Sen. Patty Murray (D-Wash.), committee chairman, would pay for her Hiring Heroes Act of 2011 (S 951) by extending by three years, to 2014, a higher fee on veterans who reuse their VA home loan authority. So the committee agreed that current fee of 3.3 percent for "subsequent"home loan usage, set to fall to 2.15 percent Oct. 1, should only fall now to 3.0 percent. The full Congress would have to agree to that.
Likewise, to pay for the Senate version of a bill to repair a glitch in last December’s Post-9/11 GI Bill Reform Act so it doesn’t lower benefits for at least 4000 students enrolled in private colleges across seven states, Sen. Ch arles Schumer (D-N.Y.) got committee agreement to extend current higher fees on VA home loans with five or 10 percent down payments, by three years and one year respectively. The fees in question are 1.5 percent for loans with five percent down payments and 1.25 percent for 10 percent.
But another tradeoff agreed to Wednesday will anger base shoppers.
To free up billions of dollars for the cost of providing VA health care to veterans and family members exposed to contaminated water over three decades at Camp Lejeune, N.C., Sen. Richard Burr (R-N.C.) won approval, without debate, to consolidate all base exchanges and commissar y operations worldwide into a single for-profit retailing system.
The Congressional Budget Office floated a similar deficit-reduction idea last January, projecting savings to the Department of Defense of $200 million the first year after consolidation and $9.1 billion over the first 10 years. A large part of the savings is derived from reducing the value of commissary shopping where groceries now are sold at cost plus a small surcharge.
A spokeswoman for Burr said his store consolidation plan would be different but she could not provide full details.
"No, this is not the same plan,"said Chandler Smith. " Senator Burr intends for DoD to merge duplicative management functions without impacting service delivery for personnel and families. The potential cost savings in the first year would be $267 million."
The CBO plan would have softened the effect of selling food at exchange prices by phasing in a tax-free grocery allowance for service members. Exchanges, or base department stores, earn profit on items sold and the profits then are used fund base morale, welfare and recreational activities such as gyms and libraries.
CBO estimated that base shoppers would pay seven percent more for groceries under a consolidated system. Burr’s bill would need only half of CBO’s projected savings to cover care of ill Camp Lejeune veterans.
During a mark-up hearing on six bills previously considered by the veterans’committee, the Caring for Camp Lejeune Veterans Act (S 277) sailed through with unanimous support and no discussion over Burr’s late-hour plan to pay for it. The bill would extend health services to Marine Corps and Navy veterans and family members assigned to Lejeune sometime from 1957 to 1987, a period when water there was contaminated by "volatile organic compounds including known carcinogens and probable carcinogens,"explained the committee’s short summary of the bill.
"Unaware of the danger, service members and their families drank, bathed in, and cooked with that water,"Burr told the committee weeks ago.
The Navy Department dragged its feet in addressing the contamination and acknowledging possible health effects, which proponents contend includes higher incidences of rare cancers. Government-funded studies are only now being conducted "to gauge how much of the dangerous chemicals"Lejeune residents "were exposed to and how it impacted their health,"Burr said. "But those who were put at risk should not have to wait for these studies before VA will provide them with care."
But one Senate source, upset by Burr’s funding plan, said it likely would mean an end to the annual $1.3 billion subsidy of commissary operations and, therefore, "do away with commissaries as we know it."
The bill would direct VA to provide the care to Lejeune veterans and families but collect those costs from DoD. Burr estimates the size of the potential population at 600,000 but VA officials said it’s one million, and total costs over the next a decade could reach $4.1 billion.
VA opposes Burr’s bill , citing inadequate scientific evidence so far to assess levels of exposure or to confirm what health conditions it caused.
A few weeks ago funding seemed to be its biggest hurdle. The Obama administration and congressional leaders continue to seek ways to slash federal spending and lower the nation’s $14 trillion debt. No new entitlement programs can be launched unless lawmakers find offsets in current direct spending programs. Burr and staff struggled to do so for the Lejeune veterans and finally settled on ordering DoD to consolidate base stores.
The bill is being filed for consideration of the full Senate. But the Senate Armed Services Committee is expected to request "sequential referral"of the bill so that its members can weigh the merits of consolidating the store system. The armed services committee has oversight responsibility for all matters under the Department of Defense. If sequential referral doesn’t occur because it needs the unanimous consent of the Senate, opponents will try to derail Burr’s funding scheme through floor amendment.
Commissary and exchange consolidation "is not something we would support,"said Steve Strobridge, director of government relations for Military Officers Association of America. "And certainly not without going through the armed services committee. I hope it gets the kind of scrutiny it deserves."
One critic said Burr’s funding plan wasn’t "thought through by anybody who knows the business models of the commissaries and the PXs [post exchanges]. They operate differently. They charge different prices for different reasons…If they’re going to use the PX business model, they would have to charge a markup on whatever groceries are sold."
While Burr and colleagues envision a careful consolidation of store operations, opponents fear a deep, permanent cut to the shopping benefit.