The House of Representatives, taking what one lawmaker called “a baby step” of support for U.S. troops fighting in Iraq and Afghanistan, voted Wednesday to allow financially strapped National Guard and Reserve troops to tap their retirement funds without penalty.
Supporters said the change helps long-deployed troops and their families pay the bills while serving their country. Reserve and National Guard troops sometimes take a pay cut when they are activated and leave their civilian jobs and salaries.
“It’s the least we can do,” said Rep. Clay Shaw, R-Fla.
The House approved the bill unanimously, 415-0.
Many Democrats who voted for the bill said Congress should do much more to support troops who leave their families and jobs for months of service.
“Let’s recognize it is a baby step when we should be taking a much larger one — I would say, a giant one,” said Rep. Sander Levin, D-Mich. “We should be doing more than this.”
Employers are not required to make up lost pay for employees activated to duty, nor do they have to continue providing benefits like health insurance.
Democrats said the bill should also encourage employers to do more by giving them a tax credit for making up the difference between military and civilian pay, as well as extend Defense Department health coverage to the families of reservists.
The bill passed by the House would waive the 10 percent early withdrawal penalty for those in an economic squeeze who withdraw money from their tax-advantaged retirement accounts and pensions before retirement.
The waiver would apply to National Guard and Reserve troops deployed for six months or longer and activated between Sept. 11, 2001, and Sept. 12, 2005.
Those military personnel would be given two years to replenish the accounts.
Rep. George Miller, D-Calif., said National Guard and Reserve troops shouldn’t be forced to undermine their own retirement security in order to pay their bills while serving their country.
“We invaded Iraq, and now they have to invade their savings,” Miller said. “It’s an outrageous thing that we would do this to these individuals. So many of them are not going to be able pay this money back.”
The Pentagon said last week it would extend by three months the tours of about 20,000 soldiers in Iraq, about one-quarter of them members of the National Guard or Reserve.
The bill is HR 1779.