Fleet Reserve Association

Statement of the Fleet Reserve Association
to the
House Coast Guard
and Maritime Transportation Subcommittee
on the
United States Coast Guard's
Fiscal Year 2004 Budget

Submitted by
Joseph L. Barnes
National Executive Secretary
Fleet Reserve Association
March 21, 2003

Certification of Non-receipt of Federal Funds

Pursuant to the requirements of 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.


Thank you Mister Chairman and distinguished members of the Subcommittee for the opportunity to submit the Fleet Reserve Association= s views on the FY 2004 Coast Guard budget.

The Fleet Reserve Association (FRA) is a Congressionally Chartered, non-profit organization, representing the interests of U.S. Navy, Marine Corps, and Coast Guard personnel with regard to pay, health care and other benefits.

With 135,000 members, the FRA is the oldest and largest Association representing enlisted members of the Sea Services whether on active duty, in the Reserves, or retired. In addition to its extensive legislative program, the Association sponsors annual scholarship and patriotic essay competitions, and recognition programs honoring the Coast Guard Enlisted Persons and Recruiters of the Year, the Navy Sailors and Recruiters of the Year and the Marine Corps Recruiters and Drill Instructors of the Year.

Quality of life programs are critically important to sustaining military readiness and fighting the War on Terrorism. As it has for many years, the United States Coast Guard serves with distinction as the fifth branch of our Nation= s Armed Forces and as an integral component ensuring our Nation= s security.

Thanks to the heroic efforts of many Coast Guard personnel in the aftermath of the 9/11/01, the American people have an increased awareness of, and appreciation for the Coast Guard= s multi-faceted and demanding mission. FRA believes this is long over due.

Before addressing specific issues, the Association wishes to thank Congress for its tremendous support for pay and benefit improvements enacted during the 107th Congress. Across the board and targeted pay increases, higher housing allowances, reform of the PCS process and increased funding for health care are significant improvements and perceived as important recognition of the service and sacrifice of the men and women serving in the Coast Guard, and those whoíve served in the past.

The Association notes the significant progress toward ensuring Coast Guard parity with all pay and benefits provided to DoD services personnel in recent years and restates it commitment to this goal.


The Fleet Reserve Association appreciates and thanks the Administration and Congress for continued support for the pay and entitlements of Coast Guard personnel. These include increases in base pay, target pay raises for senior enlisted personnel and some officer grades and annual housing allowance increases. (BAH).

The FY2004 Budget supports an average military pay raise of 4.1% with pay levels ranging from 2% for E-1s to 6.25% for E-9s. The majority of members will receive an increase of 3.7% and out of pocket housing costs will be reduced from 7.5% to 3.5% in keeping with a multi-year plan to reduce the average out of pocket expense to zero by 2006.

The Budget also fully funds all pay and entitlements for Coast Guard personnel and reflects continuing strong support for benefit parity with the Department of Defense.

The Association is extremely disappointed that the Administration is proposing to cap the pay of NOAA and USPHS officers at 2% for FY 2004. FRA strongly objects to this disparate treatment of these members of the uniformed services and urges you to intercede in their behalf with colleagues on the appropriate oversight committees to halt this plan and ensure pay comparability for these personnel.


The Coast Guard is in a period of large personnel and mission growth. The service continues to balance mission requirements against workforce strength and asset availability to ensure a safe operational tempo is maintained and missions are completed.

FRA strongly supports recently authorized increased end strengths and appreciates the adequate funding for same in the FY 2004 Budget. This is especially important given its broad and demanding mission requirements related to its key position in the new Department of Homeland Security. The budget authorizes 1,788 military and 188 civilian positions and includes funding for six Maritime Safety and Security Teams, 53 Sea Marshalls, two Port Security Units, and new Coast Guard Stations in Boston and Washington, D.C. Adequate funding is also included for the Search and Rescue (SAR) Program and to allow the stations to meet readiness requirements with watch standers maintaining a maximum 68-hour workweek.

Recruiting, training and deploying a workforce with the skills and experience required to carry out the Coast Guardís many missions is a formidable challenge. The overall experience level of the workforce decreased since 9/11/01 and during this large growth period it will require a few years to come back to the levels before that date.

Enlisted workforce retention is the best it has been since 1994 having increased by 2.1% since FY2000. This significantly helped increase the overall strength and experience of the workforce. Increased opportunities for advancement, improved sea pay and selected reenlistment bonuses contributed to these high rates.

The Coast Guard also met its active duty recruiting goal in FY2002 and is on target to meet it again in FY2003. Consequently, the service actually had to slow recruiting for enlisted members this year due to the higher than expected retention levels.

Reserve recruiting fell slightly short of the FY2002 goal but is on target to meet it for FY2003. The FY 2004 budget includes funding to fully train, support and sustain the Coast Guardís Selected Reserve Force as an integral part of Team Coast Guard with growth to 10,000 personnel (up from 9,000 in FY 2003). FRA strongly supports this increase because adequate training is essential to ensuring military readiness. Reservists maintain qualifications and important skill sets to support contingency operations as well as augment the active component.

The Coast Guard training system is operating effectively at maximum level in order to process the growing number of trainees. Additional contract instructors have been hired at the training centers and temporary classrooms accommodate day and night classes to increase capacity and efficiency.

The Administrationís FY2004 Budget fully supports all recruiting initiatives and incentives. This robust recruiting system coupled with Coast Guard enlistment bonuses has ensured a steady flow of recruits entering the service. The Coast Guard also opened new recruiting offices to target diversity rich communities.


FRA continues to work with Congress and DoD to ensure full funding of the Defense Health Budget to meet readiness needs and deliver services, through both the direct care and purchased care systems, for all uniformed services beneficiaries, regardless of age, status and location. The Association strongly supports TRICARE improvements recently enacted for active duty, Reserve and retired personnel and their families.

Oversight of the Defense Health Budget is essential to avoid a return to the chronic under funding of recent years that led to execution shortfalls, shortchanging of the direct care system, and reliance on annual emergency supplemental funding requests. Even though supplemental appropriations were not needed last year, FRA is concerned that the current funding level only maintains the status quo. Addressing TRICARE provider shortfalls will require additional funding.

Active duty members are automatically enrolled in TRICARE Prime. Reservists activated for 30 days or more are entitled to the same healthcare benefit as active duty personnel and their family members are entitled to TRICARE Extra and Standard on the first day of the military sponsorís active duty if orders are for more than 30 days. Coast Guard retirees may access care through Coast Guard Healthcare System on a space available basis if they are not enrolled in TRICARE Prime or TRICARE Senior (in which case they are automatically enrolled in TRICARE Extra or Standard).

Access to care is the number one concern expressed by our membership and this is especially challenging for Coast Guard personnel assigned to duty in areas not served by military treatment facilities (MTFs). Some beneficiaries report that there are providers not willing to accept new TRICARE Standard patients. Areas most affected by this are:

    • Alaska where there is a continuous struggle to get providers to participate and accept assignment. FRA notes that the TRICARE AK office provides great help in addressing the issue and in solving some of the balance billing issues. Valdez, Cordova and other remote locations are affected the most.
    • In Humboldt Bay/County, California (AIRSTA/Group Humboldt Bay) Ė there is an extremely limited pool of participating providers with a growing population of active duty service members and dependents.
    • At Novato, California, and other Bay Area locations (Pacific Strike Team/TRACEN Petaluma/ISC Alameda) Prime providers are leaving the network contributing to beneficiaries having a hard time locating replacements. No hospitals accept TRICARE Prime patients in Marin County and there is only one laboratory and few radiology facilities available in the area.
    • The Santa Barbara, California, situation is similar to Novato and Marin County.

In areas away from MTFs, access can be especially challenging. Providers do not like to take TRICARE patients mainly due to the low reimbursement rates. In the locations where TRICARE Prime is present, a trend is developing whereby providers are leaving the network. This not only affects active duty service members and their dependents but retirees and their dependents.

The message sent by The TRICARE Management Activity "selling" the three TRICARE options (Prime, Extra or Standard) only applies to those fortunate to live near an MTF that has an established network. These members have choices. If assigned to a high cost or remote/semi-remote area where Prime is not available, the only option is Standard. In addition, it is unfair for Coast Guard personnel to have to absorb the higher costs associated with health and dental care, including orthodontics in assignment areas. In reality there is no uniform benefit at this time since the three TRICARE options are not available to all beneficiaries nationwide.

FRA also believes further distinction must be made between TRICARE Standard and Prime in evaluation of the TRICARE program. Our members report increased problems and dissatisfaction with the Standard benefit.

The Presidentís FY2004 budget seeks to repeal a protection for beneficiaries that Congress recently enacted into law. A persistent problem with TRICARE Standard has been that beneficiaries who need certain kinds of care must check with a local military facility before getting the care in the private sector. TRICARE Standard will pay the claim for civilian care in such instances only if the local military facility issues a non-availability statement (NAS) indicating the care canít be provided at the military facility.

FRA is also concerned about a flaw in the provider reimbursement formula which contributes to this situation. The Centers for Medicare and Medicaid (CMS) cut the Medicare fees by 5.4% in the past two years. This reduction coupled with providersí increasing overhead expenses and rapidly rising medical liability costs, seriously jeopardize providersí willingness to participate in TRICARE and Medicare. Provider groups say that TRICARE is the lowest paying program they deal with, and often results in the most administrative problems.


FRA is concerned about Coast Guard housing challenges that include adequate appropriations for new construction and/or maintenance. While the objective is to ensure that all members have access to quality housing, whether for single personnel or personnel with families, the Commandantís people-oriented direction acknowledges the importance of quality of life, and the important role of housing in obtaining and retaining a productive workforce.

During recent testimony presented to this distinguished Subcommittee, Master Chief Petty Officer of the Coast Guard Frank Welch, stated that Coast Guard personnel and their families "continue to face a lack of affordable and adequate housing in many of our assignment areas."

The following locations are deemed Critical Housing Areas (CHAs) for Coast Guard personnel.

    • Cape Hatteras, North Carolina (NC176)
    • Montauk, New York (NY218)
    • Cape May, New Jersey (NJ198)
    • Abbeville, Louisiana (ZZ553)
    • Port OíConnor, Texas (ZZ583)
    • Rockland, Maine (ME141)
    • Carrabelle, Florida (ZZ630)
    • Marathon/Islamorada, Florida (FL069)
    • Plus any area currently designated as a CHA by the U.S. Navy.

In the absence of adequate government owned housing, the Coast Guard offers accompanied members several choices including seeking rental partnership agreements with landlords (where possible) and/or establishing Coast Guard Leased Housing.

This situation is exacerbated by assignment areas that are typically in or near remote, high-cost resort areas along our coasts. Areas where no government owned housing is available include Puerto Rico, Alaska, Washington State, the Outer Banks off the Eastern Shore, and Santa Barbara, California. Unaccompanied personnel housing problems affecting habitability exist at, but are not limited to, barracks in Alameda, California, Cape Cod, Massachusetts, Activities New York, and New Orleans, Louisiana.

While housing allowances have increased, the availability of quality, affordable housing within a reasonable distance to work remains a challenge Ė especially for junior enlisted personnel. In certain areas, hyper increases in utility costs may also financially impact accompanied members residing on the economy and paying their own utilities. This has occurred for personnel in California.

Housing privatization initiatives are helping ease this challenge for the DoD Services and the Coast Guardís authority to participate in these ventures was recently renewed, with passage of the Port and Maritime Security Act (U.S. Coast Guard Authorization) last year.


Having available and accessible childcare is a very important quality of life issue for Coast Guard personnel and their families and the Administrationís FY2004 Budget supports an expansion of this service.

While comparing Coast Guard childcare parity with the Department of Defense is difficult Ė the childcare needs of Coast Guard personnel and their families are no different than for DoD services personnel. Approximately 640 children are in Coast Guard childcare facilities and FRA believes that this program should be adequately funded to ensure parity.


FRA strongly supports increased funding for education benefits. For FY 2003, tuition assistance is paid at 100% up to $250 per semester hour with an annual cap of $4,500 for Coast Guard personnel. This puts the service on a par with the Department of Defense.

With regard to the MGIB program, participants may receive a full-time student rate of $985/month or more, depending on whether they contribute to an increased benefit program. Recent enhancements are positive steps to improving this program, however FRA believes MGIB benefits should be benchmarked to the average cost of a four-year public college education.

In addition, FRA believes active duty career service members who entered service during the Veterans Education Assistance Program (VEAP) era (1977 Ė 1985) and declined to take VEAP should have an opportunity to enroll in the MGIB. There are about 115,000 armed forces personnel in this situation. Many actually were discouraged from signing up for VEAP as it was acknowledged to be a woefully inferior program compared to the Vietnam-era GI Bill and the subsequent MGIB that began on 1 July 1985. As the backbone of todayís force, these senior leaders are critical to the success of ongoing and pending operations. As they complete their careers, they should be afforded at least one opportunity to say "yes" or "no" to veteransí education benefits under the MGIB.

The Coast Guard adjusts discretionary funding to best address its particular needs.

The Presidentís FY2004 budget supports the Coast Guard to be fully competitive with DoD education benefits.


The Association again appreciates the opportunity to present its recommendations on the Coast Guardís FY 2004 Budget and is grateful to this Distinguished Subcommittee for its great work in support of the men and women serving in our Nationís fifth Armed Force.

The broad range of services and support provided by the Coast Guard are not fully understood and recognized by the American public. FRA is working to broaden awareness of the incredible work done by Coast Guard men and women in support of the serviceís many missions and our national security. Hopefully the serviceís well deserved prominence within the new Department of Homeland Security will help increase recognition of the Coast Guardís tremendous service to our great Nation.