Statement of the Fleet Reserve Association

on the

United States Coast Guardís

FY 2005 Budget

Submitted to the

Committee on Transportation and Infrastructure

Subcommittee on Coast Guard and Maritime Transportation

U.S. House of Representatives


Joseph L. Barnes

National Executive Secretary

Fleet Reserve Association

March 12, 2004


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.


Mr. Chairman and distinguished members of the Subcommittee, the Fleet Reserve Association (FRA) appreciates the opportunity to present its recommendations on the United States Coast Guardís FY 2005 Budget. 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.

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


FRA would like to thank the Administration and Congress for their continued support for the pay and benefits for all Coast Guard personnel. Of particular note, are the recent increases in base pay, targeted pay raises for certain pay grades, and continuing buy down of the average cost of out of pocket housing expenses (BAH) that will decrease from 3.5% to 0% in keeping with the multi-year plan to reduce the out of pocket expense to zero.

. The Presidentís FY2005 budget provides a military pay raise of 3.5% across-the-board. This is commensurate with the 1999 formula to provide increases of 0.5 percentage points greater than that of the previous year for the private sector. The formula, with the addition of targeted raises, has reduced the pay gap with the private sector from 13.5% to 5.2% following the pay increase programmed for January 1, 2005.

FRA, however, is disappointed that the Office of Management and Budget (OMB) is opposed to targeted pay increases for certain enlisted and officer pay grades. This is despite the Defense Department's projected recommendation to affect targeted pays along the line of those authorized for FY 2004. Targeting pay hikes for FY 2005 and FY 2006 will aid the Department's quest to increase basic pay for career personnel to equal the level of private sector workers having similar education and experience levels. Comparability with private sector wage growth remains a fundamental underpinning of the all-volunteer force. To ignore it would result in severe consequences to the national defense.

FRA, in concert with The Military Coalition, 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 Administrationís FY 2005 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 for most benefits applicable to all services. On exception is the authorization of hazardous duty incentive pay (HDIP).

Hazardous Duty Incentive Pay (HDIP)

Only Coast Guard crews supporting flight deck operations. receive hazardous duty incentive pay. However, DoD authorizes HDIP for all Visit, Board, Search and Seizure (VBSS) Teams and depending upon the type of duty, HDIP ranges from $150 to $225 per month. In addition, DoD personnel participating in maritime interception operations qualify for HDIP for duty that includes support of - Operation Southern Watch, Operation Enduring Freedom, Operation Iraqi Freedom and the global war on terrorism; counter-drug operations; and homeland defense.

The Coast Guard has been conducting at sea boardings since its inception and just like their DoD counterparts, countless boarding officers and boarding team members put themselves into harms way during each and every boarding but do not receive any special compensation. And since Sept 11th, 2001, these boardings have been conducted during periods of significantly higher readiness levels and threat conditions. The intent of every boarding is protecting the Homeland from weapons of mass destruction, terrorist threats, illegal aliens desperate to enter our country, or other means of inflicting catastrophic damage to the United States.

Accordingly, FRA requests that the dedicated Coast Guard men and women serving as boarding Officers and Boarding Team Members, be authorized to receive hazardous duty incentive pay (HDIP).

Dislocation Allowance (DLA)

Moving households on government orders is costly and throughout a military career service members endure a number of permanent changes of station (PCS). Each move usually requires additional expenses for relocating to a new area far removed from the service membersí 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 , ß407, 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.

Health Care

FRA appreciates the TRICARE Management Activityís (TMAís) continued work to improve accessibility to providers for active duty, reserve and retired personnel and their dependents. However, access to providers can be especially challenging for Coast Guard personnel, particularly in areas where there are limited providers or members are limited by distance from a Military Treatment Facility (MTF).

Unfortunately Coast Guard personnel and their families continue to encounter providers that prefer not to accept TRICARE patients mainly due to the low reimbursement rates. In locations where TRICARE Prime is present, there is a noteworthy trend of providers leaving the network. This mostly impacts active duty service members and their dependents; however, retirees and their dependents are encountering similar situations.

TRICARE Prime Remote (TPR) access has improved as a result of combining TRICARE Regions. However, there are pockets of beneficiaries that still reside in geographic locations where there is no access to a uniformed healthcare benefit, primarily in high cost areas. The Coast Guard and TMA continue to work to resolve these challenges.

Areas that are most severely impacted include Alaska where there are limited medical and dental providers willing to participate and accept government reimbursement rates. FRA understands that there is no dental care available in Cordova and Petersburg. In addition, Port Angles, WA and Marin County, CA are problematic as network providers panels are full and non-network providers are not willing to see Coast Guard beneficiaries.

Reserve Support

As of February 12, 2004, the Coast Guard had approximately 1,430 Title 10 mobilized Reservists supporting the contingency operations associated with the War on Terrorism. In addition, there are more than 700 Reservists on other voluntary active duty contracts.

With regard to reserve training, the FY 2005 budget supports a Selected Reserve force of 8,100; assuming approximately 500 Reservists are still mobilized. The Coast Guard is currently reviewing its new and existing requirements as well as determining the optimum size and make-up of the Reserve force.

FRA understands that there a shortage of funding to support IDT travel and requests that increased funding be authorized for FY 2005.

Reserve Health Care and Other Issues

Health Care.

FRA is grateful to Congress for ensuring that the Temporary Reserve Health Care Program was included in the FY 2004 National Defense Authorization Act. This program will provide coverage, through December 2004, for Reserve (and National Guard) members who are unemployed or do not have employer-sponsored health care coverage. TRICARE officials plan to build on existing TRICARE mechanisms to expedite implementation; however, no one is certain how long this will take. Immediate implementation is required, and a permanent program must be established.

Health insurance coverage varies widely for members of the Reserve: some 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. Being disenrolled from private sector coverage as a consequence of extended activation adversely affects family morale and military readiness and discourages some Reservists from reenlisting. Many Reserve families live in locations where it is difficult or impossible to find providers who will accept new TRICARE 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. However, this new benefit only affects about ten percent of the Selected Reserve. FRA urges the authority for federal payment of civilian health care premiums (up to the TRICARE limit) for dependents of mobilized service members.

Dental Care.

Dental readiness is another important aspect of readiness for Reserve personnel. Currently, DoD offers a dental program to Selected Reserve members and their families. This program provides diagnostic and preventive care for a monthly premium, and other services including restorative, endodontic, periodontic and oral surgery services on a cost-share basis, with an annual maximum payment of $1,200 per enrollee per year. However, only five percent of eligible members are enrolled.

During the recent mobilization, soldiers with repairable dental problems were having teeth extracted at mobilization stations in the interest of time and money instead of having the proper dental care administered earlier. Congress responded by passing legislation that allows DoD to provide medical and dental screening for Selected Reserve members who are assigned to a unit that has been alerted for mobilization in support of an operational mission, contingency operation, national emergency, or war. Unfortunately, waiting for an alert to begin screening is too late. During the initial mobilization for Operation Iraqi Freedom, the average time from alert to mobilization was less than 14 days, not sufficient time to improve dental readiness. In some cases, units were mobilized before receiving their alert orders. This lack of notice for mobilization continues, with many Reservists receiving only days of notice before mobilizing.

The TRICARE Dental Plan benefits should be expanded for Reserve service members. This would allow Reserve personnel to maintain dental readiness and alleviate the need for dental care during training or mobilization. As a matter of morale, equity, and personnel readiness, even more needs to be done to assist Reservists who are being called up more frequently in support of national security missions.

The FRA urges: making the Temporary Reserve Health Care Program permanent and expanding coverage to all members of the Reserve Component and their families on a cost-sharing basis; allowing federal payment of civilian health care premiums for the families of deployed Reservists who choose to keep their civilian healthcare; and the expansion of the TRICARE Dental Plan for Reserve service members in order to ensure medical readiness and provide continuity of coverage to members of the Selected Reserve.

Operational Tempo.

The increase in the use of Reserve units to serve along side active duty components in Iraq, as an example, has caused considerable challenges for individual reservists. Not only has their mobilization placed a strain on employment and income, but on the family as well. Employer support, once strong, decreases as more essential employees are whisked-off to spend longer periods in uniform leaving the employer frustrated with having to find a replacement and, at the same time, hold the position open for the Reservist's return.

FRA has always supported the Total Force Policy but is concerned that the sustained use of Reserve forces will eventually harm the recruiting and retention of young men and women willing to serve. The United States must maintain a strong Reserve force at all times in the event of a greater need than at the present.

FRA recommends that a review of the Reserve's role in the Total Force Policy be affected at the earliest and that it provided to appropriate oversight committees. The study should examine what enhancements are necessary to recruit and retain the number of Reservists required for the defense of the United States. Recommendations may include such issues as tax relief, health care, retirement upgrades, improvements in the MGIB-SR, and family support programs.


FRA strongly supports legislation (H.R. 3374) that would authorize the Commandant of the Coast Guard the authority to express his or her personal opinion, if asked, while testifying before Congress. The military heads of the Army, Navy, Air Force, and Marine Corps currently have authority to provide to Congress, after first notifying the Secretary of Defense, recommendations relating to their Service as they consider appropriate. However, the Commandant of the Coast Guard, despite serving as the chief of the fifth Armed Service, does not have the same authority. The legislation would authorize the Commandant of the Coast Guard to make such recommendations to the Congress relating to the Coast Guard as he or she deems relevant after informing the Secretary of Homeland Security.

FRA believes the advice received from the other service chiefs has been invaluable in ensuring that Congress provides the proper resources and legislative support to the services. And at a time when the Coast Guard is engaged a wide range of military operations abroad, and homeland defense missions at home, it is even more important that Congress receive the same level of advice from its Commandant.

Training and End Strengths

Coast Guard training systems continue to run at full capacity training active duty and Reserve members. The Coast Guard is challenged by infrastructure (predominantly classrooms and berthing) and staff limitations given the increasing end strengths) Resourceful solutions developed and implemented by dedicated Coast Guard personnel are providing maximum effectiveness and efficiencies. The Coast Guard is also working closely with other Department of Homeland Security (DHS) Agencies to identify opportunities for consolidation and shared resources.

FRA notes with concern that increased OPTEMPO. Running at full capacity significantly limits the effectiveness of the Coast Guardís surge requirements, and negatively impacts facility maintenance and staff professional development. FRA appreciates the support of the Administration and DHS with regard to Coast Guardís training needs and understands that DHS is working with the Coast Guard and the other internal agencies to identify the operational requirements and specific training necessary to support completion of all mission requirements.

Housing Challenges

FRA appreciates Congressional support for increased BAH rates for Coast Guard personnel and enactment of a plan to eliminate out of pocket housing costs. The Presidentís FY2005 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, alleviating the need for government housing. In communities where there is a lack of adequate housing, the Coast Guard will continue to use traditional Acquisition Construction and Improvement funds, along with tools contained in Coast Guard Housing Authorities legislation, to improve government housing.

FRA also appreciates the recent reinstatement of Coast Guard housing authorities permits privatization initiatives. Public Privatization Venture (PPV) program holds promise for the Coast Guard based on DoD success. To that end, the Coast Guard will conduct a PPV feasibility study in Kodiak, AK and perhaps other locations to determine priority target areas for these projects.

As noted above, FRA continues to press for restructuring housing standards for enlisted personnel.

Recruiting and Retention

FRA is pleased that the Presidentís FY2005 budget fully supports all Coast Guard recruiting initiatives and incentives. Active duty retention for FY2003 was the second best on record 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 high retention rates seen in 2003.

Recent officer continuation legislation as well as steadily increased promotion selection opportunities for mid-grade officers has 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.

Funding and Availability of Childcare

High cost childcare remains a concern for Coast Guard personnel. This is principally attributed to the fact that most of the unit locations preclude access to DoD and Coast Guard child development centers. In the past FRA has noted the disparity of resources allocated by DoD, as compared to the Coast Guard for childcare services and again stresses the importance of adequately funding this important program.

The availability and accessibility of childcare is a very important quality of life issue for Coast Guard personnel and their families. There are approximately 800 children in Coast Guard childcare facilities and the program operates under the same standards for care as that of DoD.

The Coast Guard continues to explore ways to defer childcare costs to members in remote areas where the cost of childcare is extremely high. 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 assigned to remote duty stations.

Education Benefits

The Presidentís FY2005 budget supports the Coast Guard education programs, specifically the Tuition Assistance Program and allows 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 MGIB have significantly impacted recruiting and retention efforts.

FRA continues to press for achieving a benchmark for MGIB benefits equal to the average cost of a four-year public college education.

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 Guardís Morale, Well-Being, 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 the MWR programs.

These activities and programs include retail stores, fitness centers, gymnasiums, libraries, and child development centers. All indirectly support the Coast Guardís mission while helping ease the challenges and rigors of often demanding duty assignments.

FRA 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.


Mister Chairman, the 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 Nationís all-important fifth Armed Service, and for your untiring commitment to the men and women serving so proudly in our United States Coast Guard.



posted: March 12, 2004