We may be seeing the first crack in the bipartisan budget deal that passed the House and Senate this week.
Senate Budget Committee Chairwoman Patty Murray (D-WA) appears to be backing away from a controversial provision that would reduce military pension benefits for some retirees amid a tidal wave of opposition from Senate GOP defense hawks and military organizations.
The measure would save an estimated $6.2 billion over the next 10 years by reducing annual cost-of-living adjustments in retiree pay by 1 percent, but only for those who retire after 20 years of active service, are not disabled and are still in their 40s. Some of those people are likely to start new careers or find ways to become double dippers in the coffers of the federal government.
The COLA reduction would last until military retirees reach age 62, at which time they would collect the full cost-of-living increases.
Murray, the first woman to serve as chair of the Veterans Affairs Committee, has a strong interest in how the government treats its veterans. But she and House Budget Committee Chairman Paul Ryan (R-WI) struggled to find ways to end the sequester and boost spending without increasing the deficit or raising taxes – and the military pension COLAs loomed as a big target.
During a floor speech before the final vote in the Senate on Wednesday, Murray signaled a willingness to find substitute savings in the coming months.
“As is true with any very difficult compromise, there are certainly policy changes in this bill that I would never have made on my own,” she said. “Thankfully, though, we wrote this bill in a way that will allow two years before this change is implemented so that Democrats and Republicans can keep working to either improve this provision or find smarter savings elsewhere.”
A military retirement commission created by Congress is due to report its findings and recommendations by May 2014. That allows the House and Senate adequate time to legislate a solution before any COLA change is implemented, she said.
The proposed savings agreed to by Murray and Ryan are far from draconian and would help offset or pay for the $65 billion of additional spending on defense and domestic programs over the next two years, as called for in the budget deal.
But Sens. Lindsey Graham (R-SC) and Kelly Ayotte (R-NH), members of the Armed Services Committee, led an aggressive effort on the Senate floor to strip out the military pension savings, while military retirees’ groups bombarded Capitol Hill with messages decrying the cuts.
“How did this happen?” Graham demanded to know. “How could we have picked a pay-for that to me is just unacceptable?”
Graham said that while a 1 percent reduction in the COLA adjustment for some military retirees doesn’t sound like a lot, the compounding effect of the reduction could have dire consequences for many former members of the military. “If you’re a master sergeant who retires after 20 years of service in 2015 at say 42, by the time you get to age 62 the effect of this bill will cost you $71,000,” Graham said.
“If you are someone serving our country, what kind of message does that send?” said Ayotte, who urged Murray and other leaders to remove the provision before the final vote this week.
Murray refused to do that, but she assured critics that “we can and we will look at other, hopefully better ways to change this policy going forward.”
Ryan’s backing of the provision reflects his long-standing call for major reforms to federal pensions, including government and military pension programs and Social Security. But an aide to the Wisconsin Republican sidestepped questions on the contested military provision on Wednesday, noting that the two budget committee leaders both agreed to the terms of the deal, according to Politico.
The Military Officers Association of America and other groups wasted little time revving up opposition to the budget savings measure. By early this week, the MOAA had generated more than 92,000 messages to Capitol Hill, according to The Washington Post.
The Veterans of Foreign Wars last Friday called on its "nearly 2 million VFW and Auxiliary members and veterans advocates everywhere to voice their opposition to the COLA proposal by connecting with their senators," according to a VFW news release.
"Although Iraq is over and the war in Afghanistan is winding down, we can't allow Congress to dismantle the programs they created over the past 12 years," said VFW National Commander William A. Thien.
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