| LEGISLATIVE
UPDATE
By JEREMY M. MILLER
Tax Fairness for Military
Legislation to provide tax relief and tax fairness
to the men and women of the U.S. military forces has been approved by
the House of Representatives. The Armed Services Tax Fairness Act of 2003
would enable armed services members and their families to benefit from
reform provisions such as the exclusion of capital gains taxes on home
sales and tax-free death gratuity payments to survivors of military personnel.
The tax fairness bill has been a top priority of
the Navy League as well as The Military Coalition, an organization of
33 associations with more than 5.5 million members.
However, passage by the entire House had been problematic
for many weeks. The bill is nearly identical to tax fairness legislation
unanimously approved last year by the House but not taken up by the Senate
before Congress adjourned in December. House leaders then placed the bill
on the calendar for consideration in early March but pulled it back after
realizing they did not have the votes needed for approval. The legislation
was filled with unrelated special interest tax breaks that had been added
on during the bill's "mark up" in committee. For example, one
measure called for the elimination of surcharges for foreigners placing
bets at horse tracks.
The underlying bill was considered non-controversial
and the Ways and Means Committee in mid-March sent a stripped-down proposal
to the House, which was approved.
In the Senate, a similar military tax fairness bill
is being sponsored by Sen. Charles Grassley (R-Iowa), chairman of the
Senate Finance Committee, and seems destined for speedy approval. Differences
in the House and Senate versions of the bill will be resolved in a conference
committee.
Encroachment
Gen. Michael W. Hagee, the Marine Corps commandant,
pushed a hot political button as he testified on 26 February before the
House Armed Services Committee. Encroachment, a huge problem for all of
the military services, has become "a serious threat to the operational
readiness of the Corps," Hagee said. Many Marine Corps installations,
built years ago in remote areas, now are surrounded by housing developments
or land with environmental restrictions. This has led to volatile political
battles over land use within and around military bases in many areas of
the country. Urban growth and enforcement of environmental restrictions
often are accompanied by pressure for access to Marine Corps training
areas, or "demands to curtail Marine Corps operations to make them
more compatible with surrounding land uses," he said. What is needed,
Hagee said, is more "clarity and limited flexibility in certain environmental
laws, so that we may more effectively balance our training requirements
with our long-term environmental stewardship responsibilities."
FY 2004 Budget and the GDP
Hagee was testifying on the National Defense Authorization
Act for fiscal year 2004 with Acting Navy Secretary Hansford T. Johnson
and Chief of Naval Operations Adm. Vern Clark. The Navy and Marine Corps
fiscal year 2004 budget request totals $114.7 billion, an increase of
$3.5 billion over last year but only a 3.1 percent increase overall. The
Navy seeks seven ships in fiscal year 2004, two more than last year. However,
Secretary of Defense Donald H. Rumsfeld has said ten new ships per year
are required to sustain the existing 300-ship battle force fleet. Several
members of Congress, meanwhile, want to fund 12 to 14 ships per year to
build a Navy of 375 ships.
Taking a broader view, Rep. Duncan Hunter (R-Calif.), chairman of the
House Armed Services Committee, said the current defense budget is at
least $62 billion less than it should be. In a 5 March article in the
Wall Street Journal, Hunter said President Ronald Reagan spent nearly
6 percent of gross domestic product (GDP) on defense. In the 1960s, President
John Kennedy spent 9 percent. The current defense budget calls for an
expenditure of just 3.4% of GDP. In the current wartime environment with
other threats looming, Hunter said, it would be unwise "to underfund
the transformation of our armed forces at the start of a dangerous century."
An increase from 3.4 percent to 4 percent of GDP would mean an additional
$62 billion annually for defense, Hunter said. Rep. Sam Johnson (R-Texas)
is drafting legislation to allocate a minimum 4 percent to defense.
Homeland Security Subcommittee
The Senate Appropriations Committee has decided
to model itself after the House Appropriations Committee. Sen. Ted Stevens
(R-Alaska), chairman of the Senate panel, announced in early March that
he would create a new subcommittee on Homeland Security and merge the
Transportation and Treasury/General Government Subcommittees. Sen. Thad
Cochran (R-Miss.) will serve as the new subcommittee chairman for Homeland
Security. Sen. Robert Byrd (D-W.Va.) is the ranking minority member.
Jeremy M. Miller is Director of Legislative Affairs of the Navy League.
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