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average recruiter must interview more than 100 potential candidates to find one

acceptable recruit and the Coast Guard has had to expand the recruiting force

substantially to meet its recruiting needs.

The major point the Association wishes to make to this subcommittee is that the

decision to maintain a credible Coast Guard automatically carries with it a responsibility

to take care of the men and women who comprise that force regardless. This

subcommittee has done that in the past. Yet much more must be done to avert a

manpower crisis.

NCOA wishes to offer a number of pay, personnel, medical care and quality-of-life

improvement recommendations intended to address a number of areas which can

significantly improve the overall well-being of Coast Guard members, retirees, their

families and survivors. As a matter of parity, the same recommendations will be made to

those committees and subcommittees maintaining responsibility for the other services.

ANNUAL MILITARY PAY RAISE

NCOA appreciates the support of this subcommittee to pass legislation in 1997 that

awarded Coast Guard members a 2.8 percent cost-of-living pay raise effective January 1,

1998. However, it must be noted the increase was one-half percent below inflation as

measured by the Employment Cost Index (ECI) which was set at 3.3 percent. NCOA

and most enlisted members of the armed forces are well aware that military pay raises

have been capped below private sector pay growth or full inflation in 12 or the last 16

years. The result is that military pay, even with the January 1998 increase, lags a

cumulative 13.5 percent behind that enjoyed by the average American worker performing

similar work. With the knowledge of these facts and after sustaining weeks and months

of family separation and the hardships associated with the missions of the Coast Guard,

complicated by increasingly longer workdays due to force reductions and operation

tempo, enlisted men and women feel they are being “short-changed" by those in control

of their destinies.

In 1997, the House of Representatives recognized the seriousness of this pay situation by

including language in their version of the FY 1998 Defense Authorization Bill that

directed future military pay raises to be at the full ECI level. Unfortunately, this

provision was dropped in conference and the status quo prevailed. Although NCOA

supports full ECI pay raises and total elimination of the differential with civilian sector

pay, the Association does not expect the Congress to approve a 13.5 percent pay raise in

1999 to correct the situation. NCOA does recommend that Congress adopt a long

term military pay raise plan that would resolve the problem over time. Future

military pay raises paid annually at full ECI levels plus an additional percentage

amount would put military members (including the Coast Guard) on equal financial

ground with their civilian counterparts in future years, while at the same time,

gradually eliminating the current estimated pay differential. NCOA recommends a

long term plan that would increase pay by the ECI plus 2 percent in 1999, ECI plus

3 percent in 2000, ECI plus 4 percent in 2001 and ECI plus 5 percent in 2002.

COMPENSATION PARITY WITH DOD

The Coast Guard's FY 1999 Budget Request reflects funding increases which correspond

to the improvements enacted into law in 1998. Housing Allowance and Basic Allowance

for Subsistence (BAS) reform, Hazardous Duty Incentive Pay, Family Separation

Allowance (FSA) are all items Congress approved last year and is now being asked to

authorizing funding for FY 1999. NCOA believes it to be extremely important that this subcommittee react favorably to the Coast Guard's request. Failure to do so could leave

Coast Guard members and their families without the same benefits enjoyed by members

of the other military services.

THE UNIFORMED SERVICES THRIFT SAVINGS PLAN (USTSP)

This year NCOA expects a recommendation to come before Congress that would

establish a saving plan for members of the uniformed services. This proposal would give

those eligible to participate an opportunity to contribute up to 5 percent of their basic pay into a program referred to as the Uniformed Services Thrift Savings Plan with the

deduction made from their pay by the servicing Defense Finance and Accounting

Services (DFAS). Under normal conditions, such a proposal would appear to have

considerable merit; however, NCOA is very concerned that such a proposal sends the

wrong message or paints an inaccurate picture of the current financial capabilities of

enlisted members of the Coast Guard and other services. NCOA believes it to be highly

unusual that at a time when annual pay raises are being capped below inflation; When a pay gap of 13.5 percent is estimated to exist between military and civilian sector pay;

When commissaries are redeeming food stamps in the millions of dollars, the Defense

Department would offer a proposal that strongly suggests that military people,

particularly enlisted people, can afford to save money.

Since the original proposal made only those who entered military service on or after

August 1, 1986, eligible to participate, NCOA believes the main intent was to provide a

program to supplement the retirement system for military members who began service on

August 1, 1986. The financial impact of that system is itemized on Enclosures 1 and 2.

There can be no doubt the 1986 retirement system will impose a wide range of financial

penalties on those serving under it. In the interests of military services' ability to recruit

and retain military people until retirement, NCOA recommends the retirement system

be improved from its current version and a comprehensive review of existing

civilian savings and tax deferred programs be undertaken prior to implementing a new savings plan for members of the uniformed services rather than initiate a new

program.

COAST GUARD HOUSING AND FACILITIES

Last year in testimony to this subcommittee, NCOA supported a Defense Department

proposal to change the manner in which Basic Allowance for Quarters (BAQ) and

Variable Housing Allowance (VHA) were paid. The one allowance system went into

effect on January 1, 1998, and hopefully will provide Coast Guard families with a

sufficient amount of money to cover the cost of adequate housing wherever assigned.

Despite improvements in the housing allowance, there continues to be a need for this

committee to authorize the funding necessary to construct or make necessary

improvements to government owned family housing and single member living facilities.

In addition, NCOA believes that work area construction and improvements are as much

quality-of-life improvements as are those related to housing. NCOA strongly

recommends this subcommittee consider the need to authortze funding that not only

provides Coast Guard people with suitable living quarters but also considers health,

welfare and safety in the workplace as an important part of its quality-of-life

funding responsibilities.

TUITION ASSISTANCE PARITY

Last year Congress instructed DoD to standardize the Tuition Assistance Program for all

services. The Coast Guard has responded to guidance and has attempted to change its

program to mirror the other services. However, a shortage of funding resulted in the

Coast Guard's fielding of an annual tuition assistance benefit that was far short of what is

authorized by the other service. The DoD services provide a maximum annual tuition

assistance benefit of $3,500, while the Coast Guard could only fund an annual benefit of

$1,000 for all eligible active-duty and civilian employees. This differential is difficult for

Coast Guard members to understand especially when education opportunity while in

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