Thank you Mr. Vasquez. I am so glad to be here as well. I am particularly excited about seeing such a wealth of talent and knowledge in one room. What a valuable experience this will be for all of us. Such an opportunity to come together doesn't happen as often as we would like it to, so we need to take advantage of this rare opportunity to see how we can, collectively, improve quality of life for our families. I consider myself fortunate to be among the best of the best--you are the ones that can make a difference in where we need to go in the 21st Century in the area of military family readiness. And, I appreciate the Department's leadership at various levels being present to participate in this conference.
What I would like all of us to take away from this experience is a renewed commitment in what we do, in what we stand for, and how we can more effectively integrate the three themes of this conference: Community Well-Being, Economic Well-being, and Family Well-Being. Each of these components is so interrelated that we cannot separate them. We cannot develop policy or programs without considering the full implication of what we do and how it affects these other components.
If I may, I would like to elaborate on Mr. Vasquez's comments concerning community well-being and tie in the second component, economic well-being, as part of the three-fold equation of family readiness. The Department has some significant initiatives that I'd like to tell you about.
The United States military and private industry, especially the technology industry, face shortages in the number of available and qualified workers to meet current and future needs. In addition, family issues and decisions increasingly influence retention decisions for members of a high-quality workforce. The Department of Defense and individual Military Services are working with other government agencies and private industry to find a solution that benefits the military community and the Nation.
We know that workforce development within the Department encompasses support not only for service members but also for the entire family. The initiatives we are undertaking must be able to provide for basic education and job training for military members and their spouses, along with providing basic support services, including child care and family education, that enable our dual-income families to succeed in the workforce.
The Department as a whole, along with individual Military Service members, contributes significantly to national economic development, as well as sharing a common interest in promoting national economic security. Individual members and their families contribute to the communities in which they reside in financial, social capital, and human capital terms. Let us not forget that military experiences gained during active and reserve service return men and women, and their families, to their communities as better citizens and better employees.
If we are to consider the overarching theme of this conference, "The Military's Strongest Unit, the Family," then we must consider that military spouses represent a valuable resource for the Nation's labor market. The mobility of military families can create obstacles for career and professional Development for this group.
To assist in overcoming those obstacles, we have developed pilot programs to provide high-tech training to spouses. Through these programs we want to encourage entrepreneurship to help our military spouses create portable businesses that can be taken across country when they move. These efforts have been achieved through internal and external partnerships with organizations ranging from military information technology offices, local educational institutions, and the Small Business Administration.
The Department is also looking at new approaches, with your help, to assist military families to overcome some of the significant obstacles faced by a mobile work force. As in society at large, housing and transportation are the two largest expenses our military members and their families have. If you then add the high cost of credit and lack of spouse employment, we start to see financial problems that put the economic well-being of many of our military families at risk, especially our junior military members. What we want to do is seek ways to increase the disposable income of those members who are at risk. Given the interest and commitment by both military and community leaders on this issue, there is no reason that all military members can't increase their disposable income and separate or retire from the military with some type of savings investment. Some of the initiatives we are pursuing to increase discretionary income and promote savings include:
- Reducing the cost of auto loans and insurance.
Insurance, loan and credit card companies are reaching out and targeting our young Service members and family members with incomes less than $25,000. This is a significant shift from 20 years ago when an individual had to have a certain income level and valid credit history to establish credit. Today, there is a loan, credit or insurance plan for almost anyone.
The Department recognizes the need to assist our Service members and families to become more educated and self-sufficient on the financial challenges. So we are developing an outreach program that will partner with credit unions, insurance companies, corporate entities, and financial institutions to identify opportunities to lower consumer rates for our military members, particularly insurance rates in states where premiums are high. At the same time we are reviewing partnerships and assessing our resources so that we can better deliver more timely and accurate information to our people so they in turn can make better financial decisions.
- Another initiative underway is to increase spouse employment through partnerships.
The Military Departments are exploring partnerships with the Small Business Administration to give spouses the information and training they need to develop their own businesses. These efforts follow the lead of the highly successful Small Business Administration and Department of Defense pilot partnerships conducted in Norfolk, VA, Camp Pendleton and San Diego, CA.
The Department's commitment to enhancing employment opportunities for spouses is reflected in the agenda for the Spouse Employment Summit that is running concurrently with the conference. Program staff, spouses and members of the private industry are gathering to develop an achievable action agenda that can be implemented in the immediate future.
- And I believe the initiative that has all of our attention is our program for providing affordable, high quality child care.
As you know, the DoD child development program has been cited as a model for the nation by the President. Child care is an important part of our quality of life initiative.
As such, DoD has added over $190 million dollars to child care programs over the past six years for improvements to child care facilities and subsidies.
Dr. Rostker has been one of the leading visionaries in reinventing child care in the military. He has been a loyal supporter of child care for many years. You will hear more about some of the exciting initiatives Dr. Rostker worked while he was with the Department of the Navy, and he will discuss more about these initiatives in a few minutes.
- We are also reducing the average out of pocket cost for housing.
Our current system for determining housing allowances is in a period of transition. Previously, the law dictated that our members living off-base bear some of the burden of the cost of housing. Last year, the out-of-pocket costs we expected members to bear was nearly 20% of the average housing cost. The Secretary of Defense announced a plan, and it has received the support of Congress, to eliminate out-of-pocket expenses for the average member by 2005. Funding has been added for next years housing allowances such that the out-of-pocket expense will be lowered to 15%. We then expect about a 3-4% reduction per year until it is eliminated. What this means is that not only will our members living off base be seeing additional money in their pockets due to this initiative, but they will also recognize the Department remains committed to eliminating any form of under-compensation for our most valuable resource -- our people.
- We are increasing the stock of quality government housing through privatization initiatives.
The Department has the authority to enter into agreements with private companies to build housing for our members, either on military installations or in the local community. In turn, these companies will not only receive a full housing allowance from the residents, resulting in greater incentive on the part of industry to enter into these agreements, but more importantly they will assume responsibility for the management and upkeep of the housing. We believe that this is a ground breaking initiative, so to speak, in providing more housing for our force, and provides a win-win situation for both the Department and the housing industry.
- We are placing more emphasis on personal financial training, especially for junior enlisted.
We have developed a specialized CD ROM to teach our personnel sound money management. It is targeted to newly enlisted personnel with the purpose of teaching them basic money management, managing finances during moves and long-range planning for retirement. It has been distributed to all installations worldwide, Reserve component units, our ships at sea, libraries and to numerous individuals at their request. We believe there is more to be done. In fact, I am chairing a Task Force whose purpose is to determine the adequacy and effectiveness of our financial management. We know there are some excellent financial training programs and we want to be sure that these are made available and accessible to all, especially our junior enlisted.
- We are also implementing the Thrift Savings Plan to encourage personal savings.
The Department is excited that Congress appears poised to provide us the authority to allow military participation in this highly successful savings vehicle. It is important to promote personal savings, and to the extent we can increase discretionary income, we ought to also be working to encourage savings. The Thrift Savings Plan will allow our men and women to contribute up to 5% of their basic pay, and any bonus received, up to $10,500 per year into a tax sheltered savings plan. Since this is an employer-sponsored savings plan, it is our duty to educate our members about how the plan will work, and how they can provide a measure of financial security for the future. Although contributions won't start until next year, we are excited about how this fits into the theme of economic well-being and will be providing a lot more information about it after Congress formally enacts the provision.
- And finally we are coalition-building with Military Service leaders, regional commanders and civilian community leaders, U.S. Chamber of Commerce, Better Business Bureau, banks and credit unions, Military Relief Societies, Military Exchanges/Commissaries, Department of Treasury, and the Federal Trade Commission.
In October, Secretary Cohen will be hosting the First Annual Military Community Summit called "Building Quality of Life Partnerships…The Art of the Possible." The U.S. Chamber of Commerce and the Department of Defense hold common interests in developing partnerships among Corporate America, communities across America and military communities. We will be bringing together a selected group of Department of Defense leaders and military quality of life advocates and corporate executives from across the country.
The summit will focus on the mutual benefits to military and civilian communities that emanate from partnerships and good citizenship activities. It will highlight the importance of public-private partnerships in building strong vibrant communities. It will also provide an opportunity to recognize both military and civilian quality of life champions. It will raise public awareness of corporate responsibility and government as they work together to strengthen American families and communities.
These are just a few of the economic well-being issues that we are working at the DoD level. There are many other creative initiatives that you are working in the field and we want to hear them. In fact, today's schedule has a wide variety of topics and presentations that focus on economic well-being.
The range of these topics highlights the fact that we are working economic issues on more than a few fronts. Each session will provide you with fresh ideas and new initiatives. Working together, we can make a positive and powerful impact on the economic well-being of our families.
I thank you for your participation and for your dedication.
Ladies and Gentlemen, at this time I am pleased to present to you, The Honorable Dr. Bernard Rostker, Under Secretary of Defense for Personnel and Readiness. As you know, Dr. Rostker is the Department's senior advisor on recruitment, career development, pay and benefits, and our advocate for quality of life programs that impact over 1.4 million active duty military personnel, 1.3 million Guard and Reserve personnel and 725,000 DoD civilians.
Dr. Rostker, welcome to Phoenix and thank you for your support.