Bush Seeks GI Death Benefit Hike

Calls For Extra $235K For Families Of Soldiers Killed In Combat

(CBS/AP)  President Bush is proposing a dramatic increase to $250,000 in government payments to families of U.S. troops killed in combat in Iraq and Afghanistan, as well as in future combat zones.

The proposal, the subject of an Armed Services panel hearing, includes retroactive payments to the spouses or surviving relatives of the more than 1,500 who have died in Iraq and Afghanistan since October 2001. It will be in the 2006 budget proposal Mr. Bush submits to Congress next week, a Pentagon official said.

Under the proposal, the tax-free "death gratuity," now $12,420, would increase to $100,000. The government would also pay for $150,000 in life insurance for troops, which would benefit his or her next of kin. Veterans groups and many in Congress have been pushing for such increases.

Although the gratuity and life insurance might be interpreted as a welcome gesture and even a comfort for some needy families, accepting money for a loved one's death can be extremely uncomfortable, CBS News Correspondent Lee Cowan reports.

Cowan spoke with Raul Lugo, whose Marine son Jacob died in combat.

"It's kinda hard to accept money as a result of your son being dead, ya know?" Lugo said.

Democrats in Congress liked the plan, but argued it should extend to all military personnel who died on active duty.

Sen. Carl Levin of Michigan, ranking Democrat on the Senate Armed Services Committee, said that while he agreed with Mr. Bush's proposal as far as it goes, the extra money should also "apply to all service members on active duty" and not just those who died in Pentagon-designated combat zones.

Gen. William L. Nyland, an assistant commandant of the Marine Corps, told Cowan that the distinction of "combat zones" in President Bush's plan risks creating an unwelcome hierarchy of service.

"If a young man or lady steps forward and raises his right hand to serve this great nation, I think we have to be very careful about making any distinctions about the type of services that they rendered," Nyland said.

Sen. Jeff Sessions, R-Ala., who is sponsoring a bill with the same provisions, said in an interview Monday that the first-year cost of the increased benefits would be $459 million, including more than $280 million in retroactive payments of the higher gratuity and the extra life insurance payouts.

"The American people want to be generous to the families of service people who give their lives for their country. It's not a nickel-and-dime issue," he said.

"We think the nation ought to make a larger one-time payment, quite apart from insurance, should you be killed in a combat area of operations," David Chu, the undersecretary of defense for personnel and readiness, said in an interview in his Pentagon office.

"We can never in any program give someone back their loved one," he added. "There is nothing we can do about the hurt, to make it go away. But we can make your circumstances reasonable, in terms of finances."

In addition to the higher gratuity, the Pentagon would substantially increase life insurance benefits, Chu said. The current $250,000 coverage offered to all service members at a subsidized rate under the Servicemen's Group Life Insurance program would be raised to $400,000, and for troops in a combat zone the government would pay the premiums on the extra $150,000 coverage.

Even in the case of a service member who did not participate in the basic life insurance program, the surviving spouse would receive a $150,000 settlement if the death happened in a designated combat zone, since the Pentagon is proposing to pay the premiums on that amount of coverage for everyone in a war zone. The spouse or other surviving family member also would get the $100,000 gratuity.

Chu said the extra $150,000 in life insurance and the higher death gratuity would be retroactive to Oct. 7, 2001, the date the United States launched its invasion of Afghanistan in response to the Sept. 11 terrorist attacks.

Some bills in Congress would make the higher gratuity retroactive but not the extra life insurance.

Under the administration's proposal, the 53 military members who were killed in the Sept. 11 attack on the Pentagon would not get the higher gratuity, a spokeswoman said.

As of Monday, 1,415 Americans had died in the Iraq war, according to the Pentagon's count, and 156 had died in Afghanistan and other locations deemed part of the war on terrorism.

The death gratuity is a one-time payment intended to be given to the family immediately after a service member's death; it is in addition to an array of other survivor benefits such as housing aid.

The $100,000 would apply only in cases where the service member died in a war zone as designated by the secretary of defense. Thus, a soldier killed in a training accident in the United States would get the current $12,420, Chu said. Some in Congress have proposed paying an increased gratuity for all deaths.

In 2003 the military gratuity was doubled, from $6,000, where it had stood since 1991, to $12,000, with subsequent increases to account for inflation, bringing it to $12,420 on Jan. 1, 2005. The 2003 legislation also made the payment fully tax-free. Before that, half was taxable.

In the aftermath of the Sept. 11 attacks, the current death payments for troops killed in battle has looked less generous compared to government settlements paid to Sept. 11 families. The government paid an average $2.1 million to the families of those killed in those attacks.