S. 1402 - All-Volunteer Force Educational Assistance
Programs Improvements Act
(Specter (R) PA)

The Administration supports House passage of S. 1402 (text of H.R. 4268 as reported by the House Veterans' Affairs Committee), which would make improvements to the Montgomery GI Bill (MGIB) veterans' education assistance program. S. 1402 would increase the basic monthly benefit for eligible veterans and active-duty personnel in the MGIB-Active Duty program from $536 today to $600 in FY 2001 (12 percent) and then to $720 in FY 2003. The bill also would increase benefits for survivors and dependents by 24 percent in FY 2001 and automatically increase these benefits each year for the cost-of-living.

The Administration has offered an alternative to S. 1402 that provides for a larger increase in the basic monthly benefit in the first year. This proposal would increase the monthly benefit for eligible veterans and active-duty personnel in the MGIB-Active Duty program from $536 today to $670 in FY 2001 (25 percent) -- the largest single increase in veterans' education benefits in the program's 16-year history. The Administration's proposal would also: (1) provide this same 25 percent benefit increase for survivors and dependents and provide automatic cost-of-living adjustments; and (2) make the benefit more flexible by allowing veterans to use their benefits for licensing and certification and during longer breaks between school terms. While we support House passage of S. 1402, we will work with the Congress to seek consideration of our alternative proposal.

Improvements like these are essential to ensuring that veterans and their survivors and dependents can afford higher education or professional training. Recent surveys indicate that education assistance is an important reason why young men and women join the service, and these benefits contribute to service members' completing their first tour of active duty. However, the current MGIB program does not reflect the Nation's growing reliance on non-traditional methods of learning and increased focus on high-tech training. The Administration looks forward to working with the Congress to enact these improvements.

Pay-As-You-Go Scoring

S. 1402 would affect direct spending and receipts; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. OMB's preliminary scoring of this bill as ordered reported by the House Veterans' Affairs Committee is that it would result in net costs of $116 million in FY 2001, $134 million in FY 2002, and a total of $78 million in FYs 2001-2005. Final scoring of this bill will be issued seven days after enactment, as required by OBRA. The bill does not contain provisions to fully offset the net budget costs in FYs 2001 and 2002. As a result, if the bill were enacted without any further action to provide offsets, it could contribute to a sequester of mandatory spending. The Administration supports House passage of this bill and will work with Congress to ensure that such an unintended sequester does not occur.