Military Retiree Pay Cut Partially Reversed by Congress

Congress today voted to scale back cuts in pay for U.S. military retirees, two months after including the reductions in a budget deal.

The Senate cleared 95-3 a House-passed measure that would partially reverse changes to cost-of-living adjustments for working-age military retirees. The legislation now goes to President Barack Obama for his signature.

Most current service members would see their retirement cost-of-living adjustments restored to the previous level. Only those who joined starting in 2014 would get smaller adjustments.

The December budget agreement, Public Law 113-67, reduced adjustments for military retirees under age 62 after Defense Secretary Chuck Hagel proposed steps to slow the growth of military compensation costs.

Groups such as Veterans of Foreign Wars and the Military Officers Association of America, together with lawmakers from both parties, started a public lobbying campaign to undo the retirement adjustments.

Veterans “paid the bill,” Senator Mark Begich, an Alaska Democrat, said in an interview. “We need to pay up now. We’ve got to have their backs and we made a promise, and we need to hold the promise.”

Today’s veterans measure, S. 25, also would set up a fund to cover some future Medicare payments to physicians.

The expense of those payments, plus the extra payouts to working-age veterans, would be covered by extending for one year -- to fiscal 2024 -- some budget cuts to mandatory programs, including Medicare.

Earlier Legislation

The Senate had been considering a stand-alone military-pension bill, S. 1963, that would have fully repealed the provision in the budget agreement that was crafted by Senator Patty Murray, a Washington Democrat, and Representative Paul Ryan, a Wisconsin Republican.

The pension measure championed by Democratic Senator Mark Pryor of Arkansas didn’t include any offsets to pay for the reversal. Republicans had planned to offer amendments that would have paid for the repeal, none of them palatable to Democrats.

After the House voted 326-90 yesterday, Senate Democratic leaders decided to bring up that measure instead of seeking approval for Pryor’s bill.

Senator Dick Durbin of Illinois, the chamber’s second-ranking Democrat, told reporters in Washington today that Democrats would have to back the House bill because they offered a similar offset for legislation to extend emergency unemployment benefits.

Begich, who was one of the backers of Pryor’s measure, said he had some concerns about the offsets in the House measure. That didn’t prevent him for voting in favor of the House measure because the pay for is “so far down the road, 10 years down the road we have plenty of time to deal with that.”

To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net

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