Congressman Adam Smith (D-Tacoma) is disappointed that the Republican majority failed to pass fully-funded concurrent receipt and eliminate the Disabled Veteran’s tax.  A Democratic motion to recommit, proposed during consideration of the fiscal year 2004 Department of Defense authorization bill, would have eliminated the law which reduces a veteran’s retirement benefit on a dollar-for-dollar basis by the amount the veteran receives in disability compensation.  The measure would have fully funded both benefits to veterans. It failed by a vote of 217-188.

“In effect, this is a Disabled Veterans Tax, which taxes our veteran’s income at 100%,” said Smith. “On the eve of Veteran’s Day, it is disappointing that a majority of the House can’t see fit to stand up for our veterans. In my District alone, veterans are losing $33.5 million a year in benefits.  It is unfair to impose this tax on the men and women who have served our country so proudly and who have sacrificed for the freedoms that we enjoy every day.”

Acknowledging that this was a partial victory for veterans, Smith voted for final passage of the authorization bill which included partial relief to approximately one-third of eligible individuals (20-year retirees with a Purple Heart or combat-related disability, including Guard and Reserve). The agreement phases in over 11 years full concurrent receipt for the retirees with at least 50% disability, leaving two-thirds subject to the disabled veterans’ tax.

Smith has cosponsored the Retired Pay Restoration Act of 2003, passage of which would end the Disabled Veterans Tax for any veteran with over 20 years of military service.  Smith also signed the discharge petition associated with this bill that would force the bill to the floor for a vote and is actively engaging other Members of the House of Representatives to sign the petition and support the Retired Pay Restoration Act.

The current offset dates back to 1891, and it affects approximately 560,000 disabled military retirees.  Military retirees are the only federal employees affected by the offset.  For 18 years, legislation has been introduced in the House of Representatives to correct this long-standing inequity.  The Retired Pay Restoration Act has received strong bipartisan support in Congress.

“I believe that all our veterans should be justly compensated for their service,” said Smith.  “I remain committed to seeing fully-funded concurrent receipt enacted and will do all I can to further its progress.”