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Defense

Pentagon Won’t Push Changes in Veterans Retirement in Budget Request

But Defense officials said no final decisions have been made about changes to how military personnel get paid.

Sen. Carl Levin said Tuesday that the committee would quickly take up legislation to reverse the COLA cuts.(Alex Wong/Getty Images)

photo of Jordain Carney
January 28, 2014

The Defense Department won't propose any retirement changes during its 2015 fiscal year budget request, Defense officials said Tuesday.

"We won't propose anything on retirement benefits in 2015, we are waiting for and working with the commission," said Christine Fox, the acting deputy Defense secretary at a Senate Armed Services Committee hearing, when asked about potential changes in the upcoming budget request.

The Military Compensation and Retirement Modernization Commission will turn in a report by February 2015 that will recommend changes to the military's compensation and retirement structure. The report was supposed to be turned in by May, but the National Defense Authorization Act passed last year extended the commission's deadline.

 

Admiral James "Sandy" Winnefeld, vice chairman of the Joint Chiefs of Staff, agreed with Fox, adding that any changes to retirement should include a "holistic" approach, that he said the commission is taking.

A provision in the budget agreement that cut military pensions for working-age retirees gained quick backlash by members of Congress in both parties. It included a 1 percent cut to cost-of-living adjustments over 10 years, saving the Defense Department approximately $6 billion.

Members of Congress restored the COLA funding for medically-retired military veterans under the omnibus bill, but that is less than a tenth of the total funding.

Fox said that no Defense Department officials were consulted on the decision to include the COLA cuts as part of the budget agreement. And that if the rest of the funding isn't restored, the Defense Department would push for current service members and retirees to be grandfathered in so they would be exempt from the cuts. Any changes made by the commission next year would also include grandfathering.

Both Republican and Democratic senators on the committee predicted that the full funding would be restored quickly. Chairman Carl Levin said he expects the committee "will have the ability to act promptly" on a bill.

A proposal by Senators Mark Pryor and Kay Hagan has been referred to the Armed Services Committee. It does not include an offset. The Democratic duo's bill is one of more than a dozen proposals that have been introduced to restore the funding. Many recommend paying for the funding with politically polarizing issues that will make the legislation practically impossible to pass.

Sen. Roger Wicker warned against delaying restoring the funds, adding that without quick action "it holds the potential that it will be like sequestration, and go into effect despite everyone's protestations to the contrary."

And Defense officials hesitated to dictate when Congress should restore the funding, with Winnefeld saying "the timing is completely up to the Congress," as long as the 1-percent cut "is not taken off the table permanently for the commission."

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