[No. 15]

FULL COMMITTEE CONSIDERATION OF H.R. 5132, TO AMEND TITLE 10, UNITED STATES CODE, WITH RESPECT TO ACTIVE DUTY AGREEMENTS FOR RESERVE OFFICERS, AND FOR OTHER PURPOSES

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, D.C., Monday, March 9, 1959.

The committee met at 10:40 a.m., Hon. Carl Vinson (chairman of the committee) presiding.

The CHAIRMAN. Mr. Rivers, I will recognize you to call up H.R.

5132.

Mr. RIVERS. Yes, sir.

The CHAIRMAN. We must have a quorum, because we have to have a vote on this. Go ahead, Mr. Rivers.

Mr. RIVERS. Mr. Chairman, Subcommittee No. 3 has held extensive hearings on H.R. 3369 and have written a clean bill, now known as 5132.

It is a Department of Defense proposal which has two main objectives:

1. To raise the critically low rate of retention of Reserve officers beyond their obligated tours of active duty; and

2. To provide for more equitable treatment of those Reserve officers who supplement the Regular Corps but who may not be continued on active service long enough to be entitled to retirement.

I don't know any proposal which caused the Members of the Congress any more questions than this.

The Department has pointed out that the officer strength within the Department of Defense is composed of approximately 40 percent Regular and 60 percent Reserve. Therefore, to insure an even flow of experienced officer personnel, throughout the lower grades of the officer structure; that is, from the 3-year to 14-year point in service, some method must be developed whereby junior officers of proven competence might be induced to remain on active duty for periods short of a full career but during the time that their services are critically required by the Armed Forces.

During hearings on this aspect of the problem witnesses for the Department of Defense emphasized the magnitude of the problem by citing the fact that junior officers turnover-input plus losses-approximates 90,000 annually. This figure, when contrasted to the total number of officers on active duty, which is presently less than 325,000, indicates the tremendous and constant effort necessary to insure the availability of trained and experienced officer personnel in the lower grades.

It is astronomical what this costs the Department of Defense in the turnover of these 90,000 officers annually.

Approximately 40,000 young officers complete their obligated service each year. The Department of Defense has estimated it requires a minimum of 15,000 of these officers to remain on active duty beyond their obligated service to meet the needs of the Armed Forces. However, during the last year only 10,000 of this group of 40,000 indicated a desire to remain on active duty. The services accepted almost all of this group of 10,000, thus precluding any possibility of selectivity. It is, therefore, evident that a continuation of this downward spiral in the numbers, experience, and quality level of junior Reserve officers can only result in an unacceptable reduction in the overall combat effectiveness of our Armed Forces.

The second problem is one not unrelated to the first. That is, to provide more equitable treatment of those Reserve officers who supplement the Regular Corps but who may not, for one reason or another, be continued on active duty long enough to be entitled to retirement. Thus, because of the questionable "career" status of senior Reserve officers, the average junior Reserve officer, regardless of his desire to continue on active duty, has been forced by prudent judgment not to permit himself to remain on active duty beyond his obligated term of service.

The Congress has recognized some of the inequities besetting the Reserve officer on extended active duty and accordingly enacted Public Law 676 of the 84th Congress, which provides a lump-sum readjustment payment for members of the Reserve components who are involuntarily released from active duty. However, the readjustment payment provided by this law, amounting to one-half of 1 month's basic pay for each year of active duty, is admittedly inadequate and compares most unfavorably with the 2 months' basic pay paid to a Regular officer who is not permitted to continue on to retirement.

Now, after outlining the principal problem areas present in connection with the retention of Reserve officers on active duty, let us consider the Defense bill.

The bill, as submitted by the Department of Defense and I might say here that it embodies the proposal of the Cordiner Report. Mr. Cordiner saw this terrible situation and he went into it at length. I have it here and I brought it for the committee, if anybody cares to read it. It embodies that report. And you will remember Mr. Kilday wrote a very wonderful bill on the Cordiner Report. However, because this problem is separate and distinct, from that of Regular "career" personnel, it was decided to handle it separately.

It has as its central theme a general improvement in the status of Reserve officers on active duty by providing them with increased financial security in the event they elect to remain on extended active duty beyond their period of obligated service.

To accomplish this purpose the bill would--

1. Require that in the future all Reserve officers on active duty after the first 2 years of commissioned service be provided a contract specifying a period of mutually agreeable extended active duty.

2. If the contract were completed by the Reserve officer and he had been released to inactive duty, provide him with a bonus of 2 months'

basic pay for each year served under that contract whether he was released involuntarily or not.

а

3. Provide that if a Reserve officer were released prior to the expiration of his contract period he would receive 1 month's pay and allowance for each year of the uncompleted contract in addition to the 2 months' basic pay for each year he had actually served under the contract. You can call that liquidated damages.

4. Provide that for those Reserve officers presently on active duty with active service in excess of 10 years that upon involuntary release of such officers severance pay would be payable amounting to onehalf month's basic pay for each of the first 10 years of active duty and 2 months' basic pay for each year of active duty in excess of 10 years. That is, they are the officers that we have problems with

now.

And, finally, the bill would also require that upon completion of 14 years of active duty by a Reserve officer, the service concerned would take one of the following courses of action:

(a) Augument the officer into the Regular service;

(b) Provide the officer with a contract which will enable him to complete the additional service necessary to permit him to retire voluntarily with 20 years of service; or

(c) Release him to inactive duty with appropriate severance pay computed as previously indicated.

At the time of submission of the proposal, the Department of Defense indicated the following estimated costs of the proposal:

Fiscal year 1959.

Fiscal year 1960.

Fiscal year 1961

$137,000 Fiscal year 1962. 3,016, 000 Fiscal year 19634,822, 000

$8, 199, 000

11, 513, 000

Although the bill as originally recommended by the Department of Defense appeared to be basically sound, it did possess several weaknesses which your committee resolved.

1. The bill failed to address itself to the possibility of a Reserve officer remaining on active duty beyond the 20-year period. Although the Department of Defense witnesses indicated that the bill was not to be construed as a prohibition against retaining a Reserve officer on active duty beyond the 20-year period, they agreed that language should be inserted to clearly indicate this possibility. The bill was changed accordingly.

2. The bill provides a grace period of 1 year for implementation. Of course, they have to have a year to set up the books.

The committee recognized the administrative difficulties involved in initiating a contract to allow Reserve officers to remain on active duty and, therefore, did not consider this unreasonable. However, since no provision-this is important-however, since no provision was made for those officers presently on active duty who will, on the date of enactment of the bill, have completed 14 years of active duty, the point in service at which the service department must resolve a reservist's future, the committee felt that these individuals should be protected from the possibility of a general r.i.f. action. Accordingly, the committee prepared an amendment to the bill which would provide all such individuals with a constructive contract of such duration to permit them to go on to retirement. It should be noted, however,

that this action does not force the armed services to retain these officers on active duty, but does provide the Reserve officer with the protection afforded by the written contract.

We are indebted to Mr. Morris for that, because he did a fine job in helping us resolve it.

3. The bill as written addressed itself to commissioned officers. The committee felt that this bill should also apply to warrant officers and, accordingly, made necessary changes to accomplish this purpose.

4. The Department bill provided that an officer who, once having completed a contract of any duration, would be entitled thereafter to voluntarily leave the service and benefit by being able to collect readjustment pay from the inception of his active service. This would be true after the effective date of the act for all officers who complete a contract agreement and included those officers who might have completed 14 years or more of service. The committee believes this particular feature might be an inducement for the trained, seasoned officer, whose services were critically necessary to the Armed Forces to request voluntary release from active duty to permit him to take advantage of the large readjustment payment available to him.

We think after he gets to 14 years under the new contract he ought to know what he wants; and if they need him, they should require that he stay on.

The committee also felt that there might be instances where an officer because of good and sufficient reason, such as extreme personal hardship or family difficulties, should not be penalized under this rule. Therefore, the committee further amended this section of the bill to provide that under such regulations as may be prescribed by the Secretary of Defense exceptions may be made for the officer with over 14 years of service leaving the service voluntarily to permit him entitlement to readjustment pay.

5. The committee also found that the language of the Defense Department bill was difficult to understand and accordingly large portions of the bill had been rewritten.

6. The committee felt that the bill should properly be given a title and accordingly the bill has been named the "Reserve Officer's Incentive Act of 1959."

7. Under the terms of the defense bill, individuals who may be awarded retired pay subsequent to their receipt of readjustment pay would be required to repay such readjustment pay as deduction from their monthly retired pay.

The committee felt that title III retirees-Reservists who become eligible for modest non-regular-retirement benefits at age 60-should be exempted from this requirement since any effort to recoup readjustment pay in such instances would be administratively difficult and also inequitable. Not the least of these inequities would be the fact that a reservist who, after leaving active duty, continues his participation in the Reserve program, would at age 60 be required to pay back his readjustment pay while his Reserve contemporary who chooses not to particiapte in the Reserve program would not have a similar obligation to pay back his readjustment pay.

However, the committee felt that the recoupment feature should be retained in respect to all other personnel who may become eligible

for regular retirement from the Armed Forces. The bill was amended accordingly.

That completes our bill, Mr. Chairman. Now, if there are any questions, I will endeavor to answer them and, if I can't, I have Mr. Slatinshek over there who can answer them.

The CHAIRMAN. Now members of the committee, I want to say this: Last year this legislation was considered late by Mr. Brooks' subcommittee. I don't recall-did they make a report?

Mr. SLATINSHEK. Yes, sir

The CHAIRMAN. To the Congress?

Mr. SLATINSHEK. Yes, sir.

The CHAIRMAN. Now, we all understand under the law a Reserve officer has a mandatory obligation of 2 years. At the end of 2 years, why, he can be ordered to active duty for an indefinite period of time. And great hardship has oftentimes occurred, because the man sometimes goes out of the service with a Reserve commission and a Reserve obligation, and goes in business, and then a crisis arises and he is called back into the service at great financial hardship to them.

Now, the underlying philosophy and principle of this is to have a contract, to say that "You will have a contract." And the contract means a meeting of the minds of the contracting parties.

For instance, it probably will be based on a 6-year term, and at the end of 6 years, under the language of this bill

Mr. RIVERS. It doesn't exceed six.

The CHAIRMAN. It couldn't exceed six. Under the language of this bill if the contract is completed he will draw 2 months' pay for each one of the 6 years that he served.

Now, at first blush you might say, "Why do you pay a man when he has fulfilled his contract and you fulfilled your part of the contract?" But the way I look at that, that is equivalent to a reenlistment bonus, which is recognized in the law, and we are paying him at the end of his time instead of at the beginning of his time.

Now, that is the justification for that phase.

Now, I studied this bill carefully, and I followed the hearings. It is a departmental bill, the Reserve associations are for it. There are going to be a lot of technical explanations required on the floor of the House, but it is basically sound."

No man should be called up to meet a military obligation at a hardship. He should be accorded every opportunity to meet his obligation without a hardship.

And from what has happened in the past, and what may happen in the future these Reserve officers are called to active duty, and they have to sacrifice. Then, let the Department adopt a policy that they will contract with them. And by making these contracts, it will enable a great degree of selectivity.

Now, here is one question that worries me. There is a provision that relates to being integrated into the Regular service.

Now, isn't there a limitation as to the total number of officers we can have in the Regular service?

Mr. SLATINSHEK. That is correct, Mr. Chairman.

Mr. RIVERS. Yes.

The CHAIRMAN. All right.