Statement of the Fleet Reserve Association
on the

United States Coast Guard’s FY 2006 Budget

submitted to the
Committee on Commerce, Science and Transportation
Subcommittee on Fisheries and the Coast Guard
United States Senate


Joseph L. Barnes
National Executive Secretary
Fleet Reserve Association

March 17, 2005


Certificate of non-receipt of federal funds

Pursuant to the requirements of the House Rule XI, the Fleet Reserve Association has not received any federal grant or contract during the current fiscal year or either of the two previous fiscal years.


Madame Chairman and distinguished members of the Subcommittee, the Fleet Reserve Association (FRA) appreciates the opportunity to present its recommendations on the United States Coast Guard’s FY 2006 Budget. Celebrating its 80th Anniversary, the Association is a Congressionally Chartered non-profit organization representing the interests of U.S. Coast Guard, Navy, and Marine Corps personnel with regard to compensation, health care, benefits, and quality of life programs.

Prior to addressing these issues, FRA wishes to thank Congress for the generous pay, health care and benefit enhancements enacted in recent years. Of special importance are the targeted pay increases for senior enlisted personnel, health care access improvements, higher housing allowances and additional benefits for Reserve personnel. The Association is also grateful for the passage of legislation authorizing the Commandant of the Coast Guard the authority to express his or her personal opinion, if asked, while testifying before Congress.

Coast Guard parity with DoD personnel programs remains a high priority for FRA with regard to the Coast Guard.


Congress has for the past few years improved compensation that, in turn, enhanced the recruitment and retention of quality personnel in an all-volunteer environment. Adequate and targeted pay increases for middle grade and senior petty and noncommissioned officers have contributed to improved morale and readiness. With a uniformed community that is more than 50 percent married, satisfactory compensation helps relieve much of the tension brought on by demanding operational and personal tempos.


For the FY 2006, the Administration has recommended a 3.1 percent across the board basic pay increase for members of the Armed Forces. This is commensurate with the 1999 formula to provide increases of 0.5 percentage point greater than that of the previous year for the private sector. With the addition of targeted raises authorized by Congress in FY 2001, the formula has reduced the pay gap with the private sector from 13.5 percent to 5.2 percent following the January 1, 2005, pay hike.


FRA, however, is disappointed that no targeted pay increases are recommended for FY 2006, particularly for mid-grade and more senior enlisted personnel. FRA, the 9th Quadrennial Review of Military Compensation (9thQRMC), and even the Department of Defense have advocated the necessity for additional targeted pays. In spite of the targeted pay increases authorized in recent years, the pay of our noncommissioned and petty officers remains compressed, a situation that has existed since the advent of the all-volunteer force.


FRA has recommended the House and Senate Armed Services Personnel Subcommittees adopt a targeted pay table for FY 2006, at least proportionate to that of January 1, 2004, and urges this Subcommittee to support the initiative as it would greatly benefit Coast Guard personnel and their families.

Health Care

Due in large part to the unique range of geographic locations in which they are assigned, Coast Guard personnel and their families often struggle to find medical providers who accept the TRICARE Standard benefit. While implementation of TRICARE Prime Remote alleviated many of these problems, the standard benefit fee for service option’s low reimbursement rates can still make finding health care providers a daunting task. Unfortunately, Coast Guard personnel who choose to receive care at Military Treatment Facilities (MTFs) may have to travel long distances to receive care. FRA is concerned that low reimbursement rates will continue to make health care access a challenge for Coast Guard personnel stationed in remote locations.


Dental costs and associated reimbursement rates are also challenging for Coast Guard personnel. For example, the orthodontic benefit is capped at $1,500 thereby causing substantially increased personal expenses to Coast Guard personnel, especially in high cost areas.

Reserve Health Care — FRA is grateful to Congress for including in the FY 2005 National Defense Authorization Act language allowing Reservists to continue receiving TRICARE coverage for up to 180 days following separation from active duty. While the new provision will aid many Reservists who experience a lapse in coverage following demobilization, more needs to be done. Some Reservists have coverage through private employers, others through the Federal government, and still others have no coverage. Reserve families with employer-based health insurance must, in some cases, pick up the full cost of premiums during an extended activation. Although TRICARE "kicks in" at 30 days activation, many Reserve families prefer continuity of care through doctors and their own health insurance. Disenrollment from private sector coverage as a consequence of extended activation adversely affects family morale and military readiness and is a disincentive for Reservists to reenlist. FRA recommends that Congress authorize legislation granting permanent authority for cost-share access to TRICARE for all members of the Selected Reserve and their families in order to ensure medical readiness and provide continuity of health insurance coverage.

Like their active duty colleagues, many Reserve families live in locations where it is difficult or impossible to find providers who will accept new TRICARE Standard patients. In 2001, DoD recognized this problem and announced a policy change under which DoD would pay the premiums for the Federal Employee Health Benefit Program (FEHBP) for DoD Reservist-employees activated for extended periods. Since the current program only benefits about ten percent of the Selected Reserve Force, FRA urges expanding this program to include the authority for federal payment of civilian health care premiums (up to the TRICARE limit) for dependents of mobilized Coast Guard Reserve personnel.

Housing Standards and Allowances

FRA supports revised housing standards that are more realistic and appropriate for each pay grade. Many enlisted personnel are unaware of the standards for their respective pay grade and assume they are entitled to a higher standard than authorized. Enlisted members, for example, are not eligible to receive BAH for a three-bedroom single-family detached house until achieving the rank of E-9 — representing only one percent of the enlisted force — yet many personnel in more junior pay grades do in fact reside in detached homes. As a minimum, the BAH standard (single-family detached house) should be extended over several years to qualifying service members beginning in grade E-8 and subsequently to grade E-7 and below as resources allow.

FRA is pleased that the Administration’s FY 2006 budget request includes full funding for Coast Guard military pay and benefits. The Coast Guard also continues to receive strong support for benefit parity with DoD and is on par with DoD benefits including requirements to collect Hazardous Duty Incentive Pay (HDIP).

The Association appreciates Congressional support for increased BAH rates for Coast Guard personnel and enactment of a plan to eliminate average out of pocket housing costs over several years. The President’s FY2006 budget includes funding to support these improvements. BAH rates allow Coast Guard members and their families to maximize housing choices in communities where adequate housing exists, helping alleviate the need for government housing. That said, with a large number of Coast Guard personnel stationed in high cost areas, the issue of ensuring that average out of pocket costs housing expenses are eliminated needs to be tracked closely.

FRA also appreciates enactment of Coast Guard Housing Authorities legislation, to improve government housing. As a result of this legislation, the Coast Guard is proactively exploring the Public Privatization Venture (PPV) program with the hopes of replicating the successes DoD has experienced. It transferred 318 units in Red Hill, Hawaii to the U.S. Army, which subsequently transferred more than 7,000 units to Actus Land Leasing in October 2004. The Coast Guard has also entered into a similar venture with the Navy in New Orleans, and privatization feasibility studies are currently underway in Alaska and Cape May, New Jersey.

Permanent Change of Station (PCS) Reform Initiatives

FRA commends Congress for authorizing the Families First Program, which upon full implementation will usher in much needed reforms to the Permanent Change of Station (PCS) process including the full reimbursement of the cost of lost or damaged household goods. The Association strongly supports full funding for the program in FY 2006.

Dislocation Allowance — Relocating on government orders is costly and throughout a military career, service members undergo a number of permanent changes of station. Each move usually requires additional expenses for relocating to a new area far removed from the service members’ current location.

Dislocation allowances are authorized for military-ordered moves. To aid service members in defraying these additional costs, Congress in 1955 adopted the payment of a special allowance- termed "dislocation allowance" — to recognize that duty station changes and resultant household relocations reflect personnel management decisions of the armed forces and are not subject to the control of individual members.

Odd as it may appear, service members preparing to retire from the Armed Services are not eligible for dislocation allowances, yet many are subject to the same additional expenses they experienced when effecting a permanent change of station during the 20 or more years of active duty spent earning the honor to retire. In either case, moving on orders to another duty station or to retire are both reflective of a management decision. Retiring military personnel after completing 20 years of service is advantageous to the Armed Services. It opens the ranks to much younger and healthier accessions.

FRA recommends amending 37 USC , §407, to authorize the payment of dislocation allowances to members of the armed forces retiring or transferring to an inactive duty status who perform a "final change of station" move of 50 or more miles, and urges the Subcommittee to support such an amendment.

Weight Allowances — FRA also recommends modifying PCS household goods weight allowance tables for personnel in pay grades E-7, E-8 and E-9 to coincide with allowances for officers in grades 0-4, 0-5, and 0-6, respectively. These allowances were recently increased for grades E-1 through E-4, but weight allowance increases are also needed for service members in other grades, to more accurately reflect the normal accumulation of household goods over the course of a career.

Shipment of Privately Owned Vehicles — Expanding the number of privately owned vehicles a military family can ship during a PCS from one to two for personnel assigned to Alaska and Hawaii is another FRA supported initiative which falls into the category of family readiness as well as PCS reform. This is an issue of particular concern to Coast Guard personnel stationed in these locations as it is becoming increasingly difficult to commute to the workplace of the now common, two working adults, and would greatly benefit from the Subcommittee’s support.

Family Readiness

It is often said that the military recruits the service member, but retains a family. As our nation asks its all-volunteer force, at least 50 percent of whom are married, to deploy into harms way, family readiness has never been more important.

FRA wholeheartedly supports initiatives to enhance survivor benefits to include increasing the death gratuity to $100,000 and the amount of Service members Group Life Insurance (SGLI) coverage from $250,000 to $400,000 at no additional cost to the service member. The Association also maintains that eligibility for death benefit enhancements should include dependents of any service member who dies in the line of duty regardless of whether or not the death was combat related.

Another effective method of maintaining a high level of family readiness is through the effective and consistent communication of existing programs and resources available to active and Reserve personnel and their families. The increased use of Reserve units to serve along side active duty components has caused considerable challenges for certain individual Reservists. Not only has their mobilization placed a strain on employment and income, but on the family as well.

Benefits information, spouse employment assistance, options for child care and guidance on utilizing the TRICARE benefit are just a few issues that are constantly being updated, creating a need for easily accessible and current information. DoD services have worked to enhance the lines of communication via its Military One Source web sites, and the Coast Guard provides family members with a multitude of resources on its Personnel Service Center’s web site ( Online resources combined with a strengthened Ombudsman program will help Coast Guard family members stay up to date on their benefits.

Availability and Affordability of Child Care — The availability and accessibility of affordable childcare is a very important quality of life issue for Coast Guard personnel and their families. There are approximately 700 children in Coast Guard childcare facilities and the program operates under the same standards for care as that of DoD.

High cost childcare can often be attributed to the fact that most of the unit locations preclude access to DoD and Coast Guard child development centers. As in the past, FRA stresses the importance of adequately funding this important program.

The Coast Guard continues to explore ways to defer childcare costs to members in remote, high cost areas. This includes exploring possible partnerships with GSA and private industry. FRA strongly supports these initiatives and encourages timely research and implementation for the benefit of personnel and their families.

Education Benefits

Increased funding for personnel benefits in the President’s FY2006 budget will enable the Coast Guard to adequately support its education programs, specifically the Tuition Assistance Program. This enables the service to maintain parity with DoD. Tuition Assistance is a high priority for the active and Reserve forces and is a key element associated with successful recruiting initiatives. Enhancements to this program and Montgomery GI Bill (MGIB) have significantly impacted recruiting and retention efforts.

FRA advocates the creation of a benchmark for the MGIB so its benefits will keep pace with the cost of an average four year college education. Even with the October 1, 2004 increases in basic rates, the MGIB only covers about 60 percent of current tuition expenses.


Coast Guard personnel are among the 61,000 senior enlisted personnel who entered service during the Veterans Education Assistance Program (VEAP) era (1977-1985), and have not had the opportunity to sign up for the MGIB. FRA urges authorization of an open enrollment period giving enlisted leaders the opportunity to sign up for increased educational benefits provided by the GI Bill.


The Montgomery GI Bill is often characterized as a form of compensation or as a "recruiting tool." However, FRA would argue that it would be more appropriate to consider the benefit an investment in our nation’s future. Military personnel can use the MGIB on active duty to aid in their professional development, giving them the tools to become better leaders, mentors and representatives of their respective service. Many veterans who leave the military and use the GI bill to further their education have become more productive members of our society. From the offensive backfield of the Denver Broncos to the halls of Congress to several Fortune 500 Companies to small businesses in Main Street, America, there are college graduates who used the MGIB stipend to help pay for their education. These veterans pay taxes, returning more in revenue to the Treasury than what they might have contributed without a degree. (Persons with Bachelor Degrees earn 70 percent more on average than those with a high school diploma.)


Our nation has a responsibility to ensure the MGIB investment remains a relevant supplement to completing one’s education. We must give our veterans the tools to excel in an academic environment.


MGIB-SR — The Selected Reserve MGIB has failed to maintain a creditable rate of benefits with those authorized in Title 38, Chapter 30. Other than cost-of-living increases, only two improvements in benefits have been approved since 1985. In that year MGIB rates were established at 47% of active duty benefits. This past October 1, the rate fell to 27% of the Chapter 30 benefits. While the allowance has inched up by only 7% since its inception, the average cost of tuition at a 4-year university increased by 10.5 percent in the 2004-2005 school year alone.


FRA stands four square in support of the Nation’s Reservists. To provide an incentive for young citizens to enlist and remain in the Reserves, FRA recommends that Congress enhance the MGIB-SR rates to the intended level for those who choose to participate in the program.


Academic Protection for Reservists — There are cases where Reservists, attending higher institutions of learning, called to active duty in the defense of the Nation and its citizens, lose credits or pre-paid tuition costs because they did not complete the course of instruction. FRA believes Congress should adopt legislation requiring colleges and universities to retain and reactivate the credits and prepaid costs for the Reservists upon demobilization.

Other Reserve Initiatives

Eliminate BAH II — To ensure Reservists’ compensation reflects the duties our Nation has asked them to perform, FRA recommends a policy change authorizing Reservists activated 30 days or more to become eligible for locality based Basic Allowance for Housing (BAH). Current policy requires Reservists serving less than 140 days to receive "BAH-II," which is generally a flat-rate amount based on pay grade and marital status rather than the market-influenced, geographically driven allowance that active duty personnel receive.

Training and End Strengths

FRA fully supports the Coast Guard’s professional development enhancements including the placement of a senior enlisted cadre within the U.S. Coast Guard Academy Corps of Cadets for the purpose of providing an enlisted perspective, mentorship and experienced physical guidance. Other initiatives include the successful launch of an Enlisted Professional Military Education Program, increased participation in the Coast Guard’s Leadership and Management School for mid grade enlisted personnel, and the development of a comprehensive Unit Leadership Development Program (ULDP) for unit-level training.

The Coast Guard’s focus on developing opportunities for, and encouraging participation in, professional development is a clear indicator of the service’s commitment to retaining quality personnel. Not only does it better prepare enlisted and commissioned leaders for negotiating an oftentimes rigorous operations tempo, but it helps the Coast Guard continue to define itself as an "employer of choice" for prospective recruits.

Recruiting and Retention

FRA is pleased that the President’s FY2006 budget fully supports all Coast Guard recruiting initiatives and incentives. The Coast Guard exceeded its active duty recruiting mission and the current retention rate within its enlisted workforce is at impressive 89.6 percent. Increased visibility and a robust recruiting system coupled with enlistment bonuses is enabling the Coast Guard to maintain a steady flow of new recruits.

The Coast Guard has also opened new recruiting offices to target diversity rich communities. Increased opportunities for advancement, improved sea pay and selected reenlistment bonuses contributed to the aforementioned retention rates.

Recent officer continuation legislation as well as steadily increased promotion selection opportunities for mid-grade officers has also helped contribute to a better officer retention rate. The Coast Guard continues the always-difficult recruiting challenge to meet the diversity and skill sets required to best fill the future workforce.

USSBP Reform

With an average age of 68 on its membership roll, reform of the Uniformed Services Survivor Benefit Plan (USSBP) remains a legislative priority for the Association. The FRA commends Congress for passing legislation to eliminate the social security offset, ending an unfair policy that adversely affected nearly 1.7 military retirees and survivors alike, and views changing the effective date for paid-up coverage from 2008 to 2005 as the next step in reforming the plan.


There are three compelling reasons to amend the Plan. One, the cost of participating in USSBP has increased from 60% for the military retiree to more than 80% allowing the Department of Defense to renege on its original charge to provide 40% of the cost. Two, the USSBP was fashioned from the survivor program for retired federal employees, yet the military retiree on the average will pay more for participating in his or her Plan. Three, the military retiree on the average will pay into the USSBP over a longer period than the federal retiree. Although Congress has adopted a time for USSBP participants to halt payments of premiums (when payments of premiums equal 30 years and the military retiree is 70 years of age) the date is more than three years away. Military retirees enrolling on the initial enrollment date (1972) will this September be paying premiums for 33 years, by 2008, thirty-six years. FRA recommends and urges Congress to restore the value of participating in the program by adopting legislation to change the date 2008 to 2005.

Exchange/MWR Programs

The Coast Guard relies heavily on vital non-pay compensation programs to provide for the health and well-being of its personnel and their dependents, and to ensure good morale as well as mission readiness.

The Coast Guard’s Morale, Welfare, and Recreation (MWR) program and the Coast Guard Exchange System (CGES) provide important services to members and their families. Proceeds from CGES sales generate funds for MWR programs including retail stores, fitness centers, gymnasiums, libraries, and child development centers. All indirectly support the Coast Guard’s mission while helping ease the challenges and rigors of often demanding duty assignments.

FRA is closely tracking the development of DoD’s Unified Exchange Task Force’s proposal for shared services among military exchanges, and asks that Congress provide appropriate funding support for CGES and MWR programs to ensure the well-being and morale of all Coast Guard personnel and their families.


Madame Chairman, FRA appreciates the opportunity to submit its views for the record on pay, health care and other programs important to Coast Guard personnel. The Association salutes you and members of your distinguished Subcommittee for effective oversight of our Nation’s all-important fifth Armed Service, and for your untiring commitment to the men and women serving so proudly in our United States Coast Guard.