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National Defense Authorization Act

Floor Speech

Location: Washington, DC


Mr. REED. Mr. President, I rise today in support of the National Defense Authorization Act for Fiscal Year 2013. I wish to commend the work of my colleagues on the committee, particularly Chairman Levin, who is here, and Ranking Member McCain, for their incredible diligence, dedication, and commitment to the men and women of our Armed Forces.

For 50 consecutive years, the Senate has passed a Defense authorization bill, and I hope very much that we will soon be able to send the President a bill for his signature consistent with that record of faithful service to those who serve us so faithfully. We owe it to our servicemembers and to the Nation to quickly but very deliberately pass this legislation and send it forward to the President. We made tough decisions putting this bill together--especially in these difficult economic times--but I am confident this bill provides a budget that allows the DOD to combat current threats, plan for future threats, and to provide for the welfare of our extraordinary men and women in uniform.

I wish to note a few issues in this legislation.

First, we have endeavored to make improvements to the Military Lending Act, which Congress passed in 2006 in order to protect Active-Duty servicemembers and their families from some types of high-cost loans and unfair credit practices. The Military Lending Act imposed a 36-percent annual percentage rate cap on certain types of consumer credit extended to servicemembers. Our intention was to protect Active-Duty servicemembers and their families from high-cost loans and unfair credit practices. Unfortunately, lenders have been finding ways to circumvent these regulations. For example, some payday lenders have made superficial changes to the structure of their loans, styling them as ``open-end'' credit or setting the terms slightly longer than the regulations to get around the rules under the Department of Defense of what constitutes ``consumer credit.''

I am pleased that provisions I added to the underlying bill address some of these problems with targeted changes to improve how this law is implemented. In particular, it removes definitional loopholes to ensure that payday and car title loans, whether structured as closed-ended or open-ended credit, are subject to the 36-percent cap and other protections of the MLA. Let me underscore the 36-percent cap. We are talking about a very generous rate of return on these loans to lenders, particularly in the context of very low rates across the economy. It also requires the DOD to review its MLA rules periodically and to consult with financial regulators biannually to determine if new credit products are harming servicemembers and should be covered by the Military Lending Act protections.

The bill has been strengthened by the recent passage of an amendment offered by Senator Mark Udall to remove a provision in the Senate Armed Services Committee-reported bill that would have limited the ability of the Department of Defense to purchase alternative fuels, such as advanced biofuels. I voted against this provision in the committee and joined my colleagues in urging a vote for this amendment. Reducing our dependence on oil requires a smart, balanced, and responsible energy policy, one that involves all government agencies, including the Department of Defense. I am pleased that the Department of Defense will retain the flexibility to pursue alternative fuel technologies that not only help them achieve their mission but also help our country reduce our dependence on oil.

In addition, Senator Hagan has offered an amendment to remove a provision that would prohibit the DOD from being able to enter into contracts for the planning, construction, or retrofitting of plants and refineries to produce advanced biofuels. I opposed this provision in the committee and encourage my colleagues to support Senator Hagan's amendment.

I am also working on a few amendments I would like to mention. One would provide further consumer credit protections for servicemembers, another would limit the increases of out-of-pocket prescription drug costs, and a third would create a pilot program to allow nonprofits to apply for grants to rehabilitate and modify homes for disabled veterans.

My amendment No. 3014 would further improve the Military Lending Act provisions in the underlying bill by strengthening its enforcement. During the past 5 years, we have learned that enforcement rules provided in the MLA are not up to the task. Currently, if a lender violates the Military Lending Act, it is a criminal misdemeanor, with violators to be fined as provided for in title XVIII or up to 1 year imprisonment or both. Criminal liability attaches only for knowingly violating the statute.

My amendment will clarify that all Federal agencies that enforce Federal credit laws can enforce the Military Lending Act. In addition, it will ensure that State attorneys general and State credit regulators who license and supervise many of the lenders who lend to our servicemembers and their families can enforce the Federal law protections provided by the Military Lending Act. I believe our service men and women need a full panoply of protection not just from the Department of Defense but from every Federal agency involved in these issues, including State and local agencies. I honestly believe that State and local officials, particularly where there are major installations, vigorously want to protect the rights and the benefits of our men and women in uniform, and they should have that opportunity.

Comprehensive and fair enforcement of the Military Lending Act is critical to Active-Duty servicemembers and their families. My amendment is supported by the Fleet Reserve Association, the Military Officers Association of America, the National Association of Consumer Advocates, the Military Justice Project, the National Military Family Association, Americans for Financial Reform, the Center for Responsible Lending, the Consumer Federation of America, the National Consumer Law Center on behalf of its low-income clients, and the U.S. PIRG. All of these agencies recognize the need to protect our men and women in uniform.

I have joined with Senators Rubio, McCaskill, and Whitehouse to introduce amendment No. 3017 to curb the out-of-pocket prescription drug costs proposed for TRICARE beneficiaries. The Department of Defense has proposed an increase in prescription drug copayments for TRICARE beneficiaries.

In some cases, copayments could almost double or even triple. For example, under the proposal, out-of-pocket costs for a brandname drug picked up at a local pharmacy would more than double, increasing from $12 to $26. Ensuring the fiscal soundness of TRICARE is critical, but we should limit the burden on beneficiaries in our efforts to shore up the program.

This amendment would curb the out-of-pocket prescription drug costs proposed for TRICARE beneficiaries. For instance, instead of paying $26 for a brandname drug, a TRICARE beneficiary would pay $17 at a retail pharmacy, a $5 increase from last year as opposed to a $14 increase. DOD would be prohibited from instituting dramatic increases in prescription drug copayments in future years. Copayments could only increase at the rate of the annual cost-of-living adjustment, or COLA.

To protect beneficiaries from out-of-pocket increases, the amendment proposes to achieve the necessary savings by requiring the Secretary to enroll beneficiaries age 65 and older with maintenance medication--that is, medications for chronic conditions--in a 5-year mail order pharmacy pilot program. Beneficiaries would be eligible to opt out of the mail order program after 1 year if they felt it did not adequately meet their needs.

To ensure TRICARE beneficiaries have access to their prescription medications, they would be able to secure an initial 30-day fill at a local retail pharmacy. And the amendment ensures that they will not be denied a maintenance medication at a retail pharmacy if they ever find themselves running low and in need of a quick refill.

The amendment would expressly prohibit the Secretary from including medications for acute care needs in the mail order pilot program, as well as medications dispensed to residents of long-term care facilities. The Secretary would also have the discretion to exempt other medications and other populations.

This amendment is supported by the Military Coalition, a group of 30 organizations representing more than 5.5 million members of the uniform services--active, Reserve, retired, survivors, veterans--and their families.

My third amendment, No. 3165, which is identical to the Housing Assistance for Veterans Act that I recently introduced, would create a new pilot program at the Department of Housing and Urban Development that would provide home rehabilitation and modification for veterans who are low income or disabled and who own their homes or are living in the owner-occupied home of a family member.

This amendment fills a crucial gap because it would serve all veterans with disabilities, regardless of the severity of the disability and whether the disability is service connected or not.

With this amendment, eligible veterans would have the opportunity to renovate and modify their existing homes by installing wheelchair ramps, widening doors, re-equipping rooms, and making necessary additions and adjustments to existing structures--all so these homes are more suitable and safer for our veterans.

I hope we can work together to consider these amendments, and other amendments that have been proposed by my colleagues.

As for the underlying bill, I wish to point out a few more of its highlights.

The bill authorizes a 1.7-percent across-the-board pay raise and reauthorizes over 30 types of bonuses and special payments for our men and women in uniform.

It authorizes the Secretary of Defense to carry out a research program with community partners to enhance DOD efforts in research, treatment, education, and outreach on mental health, substance use disorders, and traumatic brain injury in Guard and Reserve members, their families, and their caregivers--a provision which I worked on with Senator Ayotte to have included in this bill. We have an incredible problem with respect to returning veterans, active-duty personnel, and their families in addressing their mental health challenges, and unless we fully engage all the resources across this country, we will not be able to successfully meet the needs of these young men and women. We hope this amendment will help in that regard.

The legislation also extends authorities to continue several ``train and equip'' programs to assist foreign militaries in counterterrorism and counternarcotics missions. This is one of the emerging and critical roles that in the future we must embrace and support.

Additionally, the legislation authorizes $5.7 billion for the Afghanistan Security Forces Fund to build the capacity of the Afghan Army and police so those forces can continue to take the security lead throughout Afghanistan. Once again, this is a central foundation to our plans to withdraw the vast majority of our forces by 2014.

This year once again I had the honor of serving as the chairman of the Seapower Subcommittee, alongside Senator Wicker, my colleague from Mississippi, the ranking member. Working together, our subcommittee focused on the needs of the Navy, the Marine Corps, and strategic mobility forces. We put particular emphasis on supporting marine and naval forces engaged in combat operations, improving efficiencies, and applying the savings to higher priority programs.

Specifically, the bill includes the required funding for two Virginia-class submarines, provides multiyear procurement authority to the Navy to purchase the next block of submarines, authorizes the Navy to use incremental funding to buy an additional Virginia-class submarine in fiscal year 2014, and provides an additional $777.7 million in advance procurement for that second boat in 2014.

The bill also approves the funding for other major programs, including the DDG-1000, the Aircraft Carrier Replacement Program, the DDG-51 Aegis destroyer program, the Littoral Combat Ship, the Joint High Speed Vessel, and the P-8 maritime patrol aircraft.

I am particularly pleased about the funding for the Virginia-class submarines and the DDG-1000, which so many Rhode Islanders help to build.

We also included language that would permit the Navy to use multiyear procurement authority to buy the V-22 Osprey aircraft and the Arleigh Burke-class destroyers so we can procure these platforms as efficiently as possible.

I want to offer my particular thanks to Senator Wicker, the other members of the Seapower Subcommittee, and our staffs who have done an extraordinary job through their diligence, their dedication, and their profound commitment to the men and women, particularly, of the Navy and the Marine Corps.

We have a good bill before the Senate. I urge adoption of the amendments I have discussed, and I would urge very quickly and very timely the passage of the legislation so we can once again send the Defense authorization bill to the President for his signature.

With that, I yield the floor.


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