Comments from BGen Bob Clements, USAF (Ret)

Apparently, the Office of Management and Budget (OMB) is still managing to charge the TRICARE for Life (TFL) trust fund deposit against DOD's budget topline, regardless of the letter of the law.

At fault and in defiance of the NDAA 2005, that went into effect on 1 Jan 2005, is the Administration's plan being implemented, because, they don't want to add money to the DOD budget to pay for Tricare For Life trust fund deposits.

When we talk to what the Armed Services Committee wanted, we need to make it clear one more time that these committees are led by Republicans. This isn't a party issue. Period. And if it is, it's certainly not the Democrats who are causing the problem. All of the leaders on the Administration and Congressional side alike are Republicans.

The Democrats couldn't do squat by themselves if they wanted to. It takes both parties acting in a bi partisan way to accomplish the legitimate needs of the people.

The money we're talking about isn't that going to pay care for current retirees. All agree that money really does come from Treasury. The money at issue is the trust fund deposit which is just putting money aside (theoretically) to pay TFL costs 20 to 45 years in the future for today's active duty/Guard/Reserve members and their families.

It is the Administration, rather than Congress, that's requiring DOD to eat the TFL trust fund deposit out of the DOD budget. Yet the Under Secretary of Defense for Personnel and Readiness, David S C Chu would like to place the blame on today's current retirees as taking money away from the war fighters.

I do not agree that it's Congress that's forcing the trade but rather Chu speaking for the White House thru the Secretary of Defense.

A letter written on Oct 4 by two Senate Budget Committee leaders to the two Senate Armed Services Committee leaders expressed their disagreement with the provision and asked the Armed Services Committee leaders to drop it from the final FY2005 Defense Authorization Act. But the Armed Services Committee leaders didn't agree to that request. The final Act did, in fact, retain that provision. It was passed by the full House and Senate, and it was signed into the law of the land by President Bush on Oct 28, 2004.

As I understand it, members of the Military Coalition worked closely with the Armed Services Committees on that language, and the clear intent of the law was to remove that line item from counting against the DOD budget topline. Otherwise, why would the Armed Services Committees put the language in there?

At issue here are both the spirit and the letter of the law, and there is legitimate reason for debate on both counts. But we have to make sure we don't ignore the forest for the trees. And that means, going back to examine why the House Armed Services Committee sought to put that provision in the Defense Authorization Act to begin with.

When Congress approved TRICARE For Life in 2000, there was every expectation that the White House would budget additional authority for its cost in future years. In other words, an increase in the DOD topline. As a matter of fact, the then Chairman of the JCS, General Henry Shelton, agreed in principle on statements and questioning by Congressman Steve Buyer, that funding for military retiree healthcare was “The Right Thing To Do” as long as the Congress influenced the President in his budget to raise the topline of the DOD budget to fund that care. If it wasn't done in that matter, the recapitalization and modernization of the armed forces was in peril - and still is.

But OMB chose not to provide the full topline increase… Instead, seeking to make the Defense Department eat part of the cost “out of hide.” As a practical matter, that meant Congress (a Congress controlled by the same party as the President) would have to say the Administration was wrong if it wanted to increase the Defense budget to cover the required trust fund deposit. That's embarrassing to congressional leaders on one hand, because they're under great pressure to support the President's budget request.

But there's another reason they're reluctant to do that, and that's because trust fund deposits aren't real outlays. They're just accounting entries in the government's books. There's a limit to how much of a fuss they want to raise over such technicalities.

The only time this really causes a problem is when the Administration wants to argue that these trust fund deposits are coming at the expense of other items in the DOD budget. In fact, it was the Administration's choice to make that happen. It chose not to ask for the added money to cover the trust fund deposit… which Congress certainly would have provided, since Congress had just approved the law that required it.

Only after seeing this for a couple of years did the Armed Services Committee seek, in the least offensive way it could, to direct the Administration not to carve out this line item from other DOD budget needs. That was the clear intent of the provision; it had no other purpose. The Senate Budget Committee leaders' letter expressed a philosophical difference with that approach. But the Armed Services Committee conferees obviously felt strongly enough about the issue that they left the provision in the final law despite the Budget Committee objection.

In point of fact, neither the Senate Budget Committee nor anyone else in Congress has any authority to direct the Administration to make these kinds of classifications, outside the language of the law. The Executive Branch doesn't work for the Legislative Branch, and it certainly doesn't work for the Budget Committee. The Budget Committee letter states two things on this point. First, that the Congressional Budget Act gives the Budget Committee authority to determine estimate “for purposes of the congressional budget process.” Secondly, It further states that OMB “intends count the accrual payment against the defense appropriations bill.”

There is nothing in these two statements that contravenes the reality that OMB and/or DOD officials choose to budget this way, regardless of the letter of the law, which was clearly passed with the intention of changing the methodology.

In effect, the Administration and the Budget Committee tacitly agreed to continue the current classification, despite the new letter of the law.

For the reasons addressed above, congressional leaders aren't going to try to embarrass the Administration over such things. But the Administration certainly had full authority to budget otherwise if it had chosen to do so, and would have had the new letter of the law to back it up.

The Administration's autonomy on such issues is clear in many other areas — not the least of which is the Administration's refusal to budget for end strength and other increases in its normal budget submission. Instead, contrary to the clear and repeated wishes of the Armed Services Committees, it chooses to do this through the supplemental appropriations process.

But quibbling over whether the entry should be in the DOD or Treasury budgets is missing the point. Had it wished to keep TFL trust fund deposits from impinging on the DOD budget, the Administration could have just submitted a bigger budget request. It simply chose not to.

Aside from the budgeting and bookkeeping authority, there's a more fundamental issue about what the funding we're talking about really goes to pay for.

Contrary to the impression given by many in government and the media, the issue here isn't pitting funding for current retirees vs. funding for current active duty programs. Payments for delivery of current benefits to current retirees do, in fact, come from the Treasury, and that's acknowledged by both the Administration and the Budget Committee.

The only money we're talking about here is the amount required to make trust fund deposits to pay future health benefits for today's active duty force — and for their family once they attain age 65 decades in the future.

The Administration believes (and senior officials have stated these words explicitly) that military people cost too much. The Administration wants to allocate only a specific amount to spend on defense, and they choose not to increase that figure, even if Congress authorizes (and is willing to fund) increased benefits to help offset the extraordinary sacrifices inherent in a military career. So rather than adjust the topline as Congress had expected, OMB has sought to try to force tradeoffs within the current budget.

That's not unique to this Administration.

The Clinton Administration opposed enactment of TRICARE For Life, too.

But there's simply no denying the fact that, if OMB had submitted a budget with the trust fund deposit in the Treasury account instead of the military personnel account, Congress would have funded it without taking it out of the DOD budget. If, on the other hand, OMB had felt some moral “truth in accounting” obligation to keep that entry in the military personnel account, it could have chosen to increase DOD's topline to account for it, and Congress would have funded it. Either way, it was clearly an Administration choice.

Members of the Military Coalition have had this very discussion with key committee staff members. The response to their views? “You make some good points.”