also at this time, I would like to ask unanimous consent that a portion of my statement on the Senate floor on July 11, during the debate on the survivor benefits amendment, be printed in the record and included in my remarks.

Senator NUNN. Without objection that will be done.

[The statement follows:]

Mr. THURMOND. I wish to say that I am speaking tonight for the military widows. It is not for the people on active duty but it is their widows, after those who have worn the uniform and served their country have passed on.

There are many discriminations which I shall discuss within a few minutes, and I hope the Members of the Senate will give their attention to this discussion because it is a very important matter.

On September 21, 1972, Congress after many years of heated deliberations finally established what is known as a survivor benefit plan (SBP) for military widows by passing Public Law 92-425.

Unfortunately, Public Law 92-425 contained many inequities and omissions because of the lack of understanding and the complexity of the issues involved. In subsequent years, a few of the most obvious and gross inequities which had discouraged participation were corrected by the Congress.

However, some unfair provisions and omissions still plagued the survivor benefit plan. In an effort to correct more of these ill-advised judgments, the House passed H.R. 3702 to correct additional inequities in September 1977. Unfortunately, the Senate has not acted on this vital legislation.

Consequently, I am introducing a survivor benefit plan amendment to the military authorization bill, S. 2571. This amendment contains the same provisions passed by the House in H.R. 3702 in this session of Congress. It passed the House last September by a unanimous vote of 391 to 0.

And I am now submitting the same amendment as passed by the House of Representatives 391 to nothing last September.

The main elements of the House bill and my amendment are:

First. Authorize cost-of-living adjustments of annuities under the retired serviceman's family protection plan (RSFPP). That was the plan prior to the present survivor benefit plan, and that will affect the widows who are very old. There are not too many of them. If we delay this matter it will be too late for many of them.

Second. Provide for reinstatement of survivor benefit plan (SBP) benefits to the widows of a retired member who had elected VA benefits upon the death of the retired member and who had subsequently remarried after age 60. The reinstatement of benefits would be effective upon the termination of the subsequent marriage:

Third. Reduce the offset payment for social security benefits for beneficiaries of SBP from 100 percent to 50 percent;

Fourth. Eliminate the reduction in SBP benefits of a widow who is entitled to. but not actually receiving, social security payments based on her husband's military service; thus permitting widow to collect social security payment derived from her own employment;

Fifth. Eliminate the offset of SBP benefits for social security payments for a widow with one child;

Sixth. Eliminate the offset of SBP benefits for social security benefits for the widows of a Reserve retiree whose only active service after 1956 consisted of active duty for training for periods of less than 30 days;

Next, it would change the calculation of the cost of SBP coverage to be consistent with the Civil Service System.

Mr. President, the Congressional Budget Office calculated the cost of H.R. 3702 last year. At that time, it was estimated that the first year cost would be approximately $21 million. In projecting this cost through 1982, it is estimated that the cost for 1982 would be approximately $49 million. For the purpose of the record, I am providing herein the projected estimated cost of each element of the amendment, as calculated by the Congressional Budget Office.

Mr. President, I ask unanimous consent that a table entitled "Detail of Estimate for SBP Amendment to S. 2571" be placed in the RECORD at this point in my remarks.

There being no objection, the table was ordered to be printed in the RECORD as follows:

Mr. THURMOND. Mr. President, during the 94th Congress, the Defense Department supported those provisions of H.R. 14773 now contained in H.R. 3702 which would have extended the cost-of-living increases for RSFPP widows. In addition, former Defense Secretary Rumsfeld in his annual report to the Congress for fiscal year 1978 endorsed the reduction in the offset from 100 to 50 percent, as also embodied in H.R. 3702.

Mr. President, I would like to elaborate on most of the major elements of my amendment, which represent the more severe inequities. These provisions pertain to the Retired Serviceman's Family Protection Plan (RSFPP), the social security offset, including a widow who has earned her own social security, and adjustments to make the annuity consistent with the Civil Service Survivor Annuity Plan.

First, it would authorize cost-of-living adjustments for widows covered by the Retired Serviceman's Family Protection Plan, commonly referred to as RSFPP, which was the predecessor of the present SBP. That is a group, as I said, which were the older widows and they number approximately 9,500.

The same cost-of-living adjustments would be provided for widows getting benefits under the RSFPP, as are provided for those getting benefits under the present survivor benefit plan. Under the present survivor benefit plan they get the cost-of-living adjustment, but under the old plan they are not getting benefits. This was an unfortunate omission when the survivor benefit plan was enacted in 1972. You can imagine the plight of RSFPP widows whose annuities have remained the same, but have been ravaged by inflation since the deaths of their husbands 5, 10, or even 20 years ago. Just since 1972, the Consumer Price Index has increased more than 40 percent.

Second, it would reduce the social security offset from 100 percent to 50 percent. Right now a widow who receives benefits under the survivor benefit plan has social security deducted 100 percent. We feel it is very unfair, and there is a question whether any should be deducted, but certainly not over 50 percent should be deducted.

It would eliminate the offset entirely for a widow who is receiving no social security benefits from the late husband's military service. There are several situations in which this may occur, but the most common is the widow who has worked for many years and earned her own social security benefits. Even though she receives no social security benefits from her late husband's account, her SRP annuity is reduced dollar for dollar for those nonexistent benefits. Also removed is the offset for widows under age 62 with one child, since widows with two or more children already are not subject to the offset. The present 100-percent social security offset is unfair to all widows covered by the plan, but it is particularly burdensome to widows of enlisted personnel. In some cases, it completely wipes out any benefit otherwise payable. This is grossly unfair since the retired member contributed very substantially during his lifetime in order to provide this benefit for his widow. In addition, he contributed substantially to the social security program.

I might say, Mr. President, that the members of the armed services have to pay social security. They have no choice, as other people do. Yet it is of no value to have the survivor benefits plan when you take away the social security, as is being done now.

Third, it reinstates the survivor benefit plan payments to widows whose Dependency and Indemnity Compensation (DIC) is terminated on remarriage

after age 60. This would eliminate an inequitable situation in which the widow of a retiree can have her benefits reinstated if her husband died of a non-serviceconnected cause, but the widow of a member who died of a non-service-connected reason cannot have those benefits reinstated. That is completely ridiculous to have a widow whose husband's death was service-connected being denied the right to reinstate these benefits, and yet one who is non-service-connected can have the benefits reinstated.

Fourth, it corrects an inequity caused by a difference in the method of applying cost-of-living adjustments to the survivor benefit plan. As a result of this difference in the method of calculation, the plan is now costing a military retiree approximately $13 per month more than the exact same plan is costing his civil service counterpart.

Mr. President, what is fair about that? Why should a military retiree have to pay $13 more per month than a corresponding equal beneficiary of a civil service retirement system? The administration itself acknowledges this is wrong; the Defense Department acknowledges this is wrong, and it should be corrected.

It should be noted that the element pertaining to recalculation to reduce the cost of the annuity to the retiree to make it consistent with the civil service SBP is actually a reduction of Government revenue. It is not a direct increase in cost to the taxpayer.

Mr. President, these measures are very worthy. The benefits of H.R. 3702 which are not too costly would be of great value to the morale of our active military, many of whom are becoming disenchanted with military careers, as well as for our retired military community.

There are those around Washington, especially on Capitol Hill and in the administration, who advise that any action on the survivor benefit plan should be delayed until the Congress receives the administration's recommendations on changes to the military compensation system which for about the fourth time in the last few years has been under study. We all know that there have been numerous studies of the military compensation system.

Mr. President, in my judgment, it is not necessary for the Congress to delay action on SBP until the administration's proposals resulting from the President's Panel on Military Compensation are received by the Congress. It has been reported to me that officials of the President's Panel agree with this view.

I repeat, it has been reported to me that officials of the President's Panel agree with this view. Any action by the Congress to change the complex military compensation system is not likely to occur, if at all, until the 96th Congress.

It is reported that the Defense Department does not plan to submit a legislative package to the Congress based on the Panel's compensation recommendations until 1979. Even if the system might be changed at some future date, the legislative effect, if any, on SBP would not be a major problem, since SBP— survivors benefit plan-annuities are essentially established by compensation percentage formulas.

Mr. President, I urge my colleagues to consider this amendment carefully. It is nothing but a matter of justice. It is nothing but a matter of right. It is a matter of correcting inequities that the Defense Department itself acknowledges are wrong. In fact, the main thing the Defense Department objects to, or the Budget Committee objects to, or the administration, is the matter of the offset, and I want to say, with regard to that offset-and I might as well take that up now, because there is a lot of hullabaloo about this cost, and I want to go into that and might as well do that now.

In response to inquiries about the cost of my survivor benefit amendment to the military authorization bill, I would like to correct some misleading information. There appears to be concern particularly about the long-range cost of reducing the social security offset from 100 percent to 50 percent at age 62.

According to cost projections prepared in a June 8, 1977, report by the Department of Defense, the Government will maintain a surplus in terms of pay-out of benefits for the next two decades. Beginning about year 1997, and peaking early in the next century, disbursements to widows will exceed retired pay reductions by modest amounts. For example, in the year 2000, the cost to the Government will be $73.4 million, decreasing to $41.7 million in the next decade, with a $2-billion surplus again by the year 2025. It is interesting to note that the Defense Department projects that, cumulative through the year 2035, it can reduce its projected outlays for the retired pay by $47 billion because of the survivor benefit plan. For the year 2035 alone, Government revenues will be increased by 4.6 billion.

Now, Mr. President, I would like for the distinguished chairman of the committee, the Senator from Mississippi, to listen to this, because it is a very important matter, and I am anxious for him to hear it; I feel that after I finish, he may wish to consider accepting this amendment-a reduction in the social security offset from 100 percent to 50 percent will have an impact on Government expenditures, particularly around the year 2000. The consequences are not necessarily that dire. For example, the Defense Department projection shows a net increase in cost to the Government of $2 billion for the years 1978 through 2000 inclusive. Further examination, however, shows that the Government will still be running a cumulative net surplus for those years of $257 million, or a quarter of a billion dollars. So, despite a year 2000 increased cost of $338 million with the 50, rather than 100 percent offset, the Government will still have a cumulative surplus of $257 million.

Mr. President, that means this: It simply means that the amount that is being paid into this survivors' benefit plan will be sufficient to take care of this situation. I realize that the recalculation will cost money. On the other hand, is it fair to put the military people in a different category, in a different position from the civil servants, and cause them to pay $13 a month more for the same benefits? That is what they are doing now.

The recalculation, I believe, for 1979 amounts to $8 million, and it will average, up until the year 2000, about $130 million a year.

Mr. President, as I have stated, this is nothing but a fair amendment. It is perfectly equitable and perfectly just. And some of the military people have paid into this plan all these years. Take an enlisted man in the Army or Navy or Air Force. He can pay into this plan for 20 years, and then, when he dies his widow will lose 92 percent of what she should have gotten. That is just simply not fair, and that is what I am trying to get corrected for these military widows. I am not trying to affect the general retirement plan; I am not trying to raise the pay of the military, but simply saying it is not right for people to pay into this plan thinking their widows are going to be protected and then, when they die their widows never receive 92 percent of their husband's contribution.

Mr. President, I want to say that for 3 years, I have been trying to get hearings. I have copies of letters written to try to get hearings. For years, these widows have suffered. It is simply not right for members of the military to pay in and expect their widows to be protected, and then, when they die, their widows are not protected.

I gave an illustration here and this is from the Defense Department. All of my figures are from the Defense Department. For an enlisted man who is in 20 years and dies, his widow loses 92 percent. It is just that simple. It is a matter of correcting this inequity. Why do we not do it?

Mr. President, again, I want to repeat that according to the Defense Department's own figures, those who are paying into the plan will pay in enough so that, by the year 2000, there will be a surplus of $257 million. That does not cover the recalculation and several other minor items there. That is the only cost there would be. But that will not exceed, according to the Department of Defense, an average of $130 million a year.

Is it right? Is it just? Should we do it? The House thought so or they would not have passed the bill in 1976, 379 to 6; or they would not have passed it last September, 391 to 0.

Mr. President, this is a matter of justice, it is a matter of equity, it is a matter of right. And I hope the Senate will see fit to adopt this amendment.

Senator THURMOND. I observed you giving figures here, and I have not had a chance to go into the accuracy of those figures. I presume they were provided by the Defense Department; were they?

Senator NUNN. The Congressional Budget Office provided those. Senator THURMOND. There is one thing I would like to mention and that is the cost, which has been mentioned as being high, but of course that is not that much per year. That is the total cost.

Senator NUNN. It is $13 billion.

Senator THURMOND. A lot of these people will be dead by then. I just want to say that whatever the annual costs, it will be a very small percent of the total cost of retirement, maybe 1 or 2 percent. But the main thing is, it is fair; it is just; it is equitable and should be done.

Another thing is that if these amendments go into effect, this is going to generate more income, too, to bring into the retirement plan. I just wanted to make those points, and thank you very much, Mr. Chairman.

Senator NUNN. Thank you, Senator Thurmond.

I certainly think you have led the way in trying over a period of years to eliminate many of these inequities which are obvious and which need to be corrected, and we appreciate your cooperation.

Senator Muskie, we are delighted to have you here this morning. I have made a brief opening statement describing and summarizing the bills, and also pointed out that in my frank opinion, our subcommittee and full committee have to consider two things.

One, the inequities in the present system and, second, we have to consider the cost of the changes. In the second item, I think it would be very unrealistic and unfair to the people who want the inequities changed to pretend that we can come out of here with a bill that is going to add this much in cost in this period of time and get it passed this year.

Now, next year, when we are considering possible savings in the military retirement program over a period of years, we might be able to take another look. But this year, in my opinion, and I have already stated this if we load this bill up with the full cost, it will never pass the U.S. Senate, and what we will see is a package that goes down the drain because it was overloaded.

So, I have said that and I just wanted to thank you for being here. Senator Muskie is the chairman of the Senate Budget Committee and has done an outstanding job in that capacity. We have asked him to comment here because when and if we get these bills to the floor of the Senate, the question whether they pass or not will largely depend, in my opinion, on the overall budget analysis.

That is why we have requested Senator Muskie to testify today. We are delighted to have you, and we appreciate your being here.

STATEMENT OF HON. EDMUND S. MUSKIE, A U.S. SENATOR FROM THE STATE OF MAINE, AND CHAIRMAN OF THE SENATE BUDGET COMMITTEE

Senator MUSKIE. Thank you very much, Mr. Chairman and members of the subcommittee. I think I can probably do nothing better than say "Amen" to what you have apparently already said. I concur completely in the need to focus on the inequities of the retirement system, but we must do so in the context of the overall budget considerations. I appreciate also the opportunity to be with you the second time this morning, Mr. Chairman.

I would like to emphasize at the outset that I am not an expert on the military retirement system and all the intricate benefit plans that are associated with it. I am not here to question the need for a program of survivor benefits for military personnel; obviously, an equitable plan is essential and justifiable.

Nor am I here to advocate any specific program of survivor benefits. Your subcommittee has earned a well-deserved reputation for careful evaluation of and expertise on legislation in this area. I know that you