Senators Look to Block Budget Deal’s Cut to Military Retirement

Despite being sidelined during the budget fight, restoring $6 billion in cuts could give the Senate a rare bipartisan moment.

WASHINGTON, DC - SEPTEMBER 03: U.S. Sen. Carl Levin (D-MI) speaks to members of the media outside the West Wing of the White House after a meeting with President Barack Obama September 3, 2013 in Washington, DC. President Obama told reporters at the beginning of the meeting that he was confident he could get enough votes for his plan for military actions against the Bashar al-Assad regime in Syria.
National Journal
Jordain Carney
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Jordain Carney
Dec. 25, 2013, midnight

Sen­at­ors blocked a pro­pos­al to re­store $6 bil­lion in cuts to mil­it­ary re­tir­ees as part of the budget deal, but the is­sue will be back when the Sen­ate re­con­venes at the start of 2014.

The re­cently passed deal de­creases the an­nu­al cost-of-liv­ing ad­just­ment for work­ing-age mil­it­ary re­tir­ees by 1 per­cent over 10 years. But the cut doesn’t be­gin tak­ing ef­fect un­til Decem­ber 2015, and a hand­ful of sen­at­ors and out­side groups are hop­ing that’s enough time to stop it.

Sen­ate Armed Ser­vices Com­mit­tee Chair­man Carl Lev­in, D-Mich., moved early to un­der­cut the pro­vi­sion. He said be­fore the budget agree­ment was passed that pan­el mem­bers would re­view any changes next year. A spe­cif­ic timeline for such a re­view has yet to be an­nounced, and Lev­in only offered that the re­view would hap­pen be­fore the cuts start.

Oth­er sen­at­ors, though, aren’t wait­ing on the Armed Ser­vices Com­mit­tee’s re­view. Jeanne Shaheen, D-N.H., is pro­pos­ing the $6 bil­lion in cuts be swapped with clos­ing a tax loop­hole for off­shore cor­por­a­tions. Clos­ing tax loop­holes is a pop­u­lar po­s­i­tion among some Demo­crats, and Shaheen es­tim­ates it will bring in $6.6 bil­lion. But changes to the tax code, while sup­por­ted in the­ory by mem­bers of both parties, have failed to gain ser­i­ous trac­tion in the Sen­ate.

But Shaheen is will­ing to be flex­ible and said she is “open to oth­er solu­tions,” but noted the con­tinu­ation of the ex­emp­tion is “un­fair.”

Sens. Mark Pry­or, D-Ark., and Kay Hagan, D-N.C., are tak­ing a dif­fer­ent ap­proach. The duo wants to re­peal Sec­tion 304 of the budget agree­ment, which con­tains the $6 bil­lion in cuts. “Singling them out is not just un­fair but also wrong”¦. They de­serve us to work to fix this pro­vi­sion,” Pry­or said in a state­ment.

Though Re­pub­lic­ans have yet to in­tro­duce le­gis­la­tion, a hand­ful — in­clud­ing Sens. James In­hofe of Ok­lahoma, John Mc­Cain of Ari­zona, and Kelly Ayotte of New Hamp­shire — have com­mit­ted to work­ing to re­store the fund­ing once the Sen­ate re­turns next year.

And Ry­an Taylor, the com­mu­nic­a­tions dir­ect­or for Sen. Ro­ger Wick­er, noted that the Mis­sis­sippi Re­pub­lic­an will “con­tin­ue to keep the fight on” to re­store the ap­prox­im­ately $6 bil­lion in fund­ing, adding that he is will­ing to work with col­leagues on both sides of the aisle to find a solu­tion.

Wick­er was at the fore­front of a group of Re­pub­lic­an sen­at­ors that tried to at­tach an amend­ment to the budget agree­ment but was ul­ti­mately un­suc­cess­ful. Ac­cept­ing the change would have ef­fect­ively killed any chance of get­ting a budget passed this year with the House out of town un­til Janu­ary.

It’s not the first time poli­cy­makers have voiced alarm over po­ten­tially scal­ing back on a de­fense-re­lated is­sue. Ayotte mo­ment­ar­ily held up De­borah Lee James’s nom­in­a­tion to be the next Air Force sec­ret­ary over con­cerns about the po­ten­tial re­tire­ment of the Air Force’s A-10 air­craft fleet. And House and Sen­ate Armed Ser­vices Com­mit­tee mem­bers earli­er this year re­jec­ted the De­fense De­part­ment’s re­quest to re­duce the the num­ber of bases.

Al­though out­side groups proved un­suc­cess­ful at get­ting the pro­vi­sion re­moved from the budget agree­ment, they plan to con­tin­ue to reach out to mem­bers of Con­gress.

“We will be work­ing with the lead­er­ship of the SASC and HASC and oth­ers,” said Mike Bar­ron, who is with the Mil­it­ary Of­ficers As­so­ci­ation of Amer­ica. “A great num­ber of sen­at­ors and House mem­bers ex­pressed a strong com­mit­ment … to get­ting it re­moved from law when they re­turn. We ex­pect them to hon­or that com­mit­ment.”

And Deidre Parke Holle­man, the ex­ec­ut­ive dir­ect­or for the Re­tired En­lis­ted As­so­ci­ation’s Wash­ing­ton of­fice, said mem­bers would con­tin­ue to meet with mem­bers of Con­gress as well as work with oth­er mil­it­ary groups to raise aware­ness about the cuts, which she called “un­fair and un­wise.”

But the push to re­store the cuts pits the sen­at­ors and out­side groups against the De­fense De­part­ment. Sec­ret­ary Chuck Hagel and Joint Chiefs of Staff Chair­man Mar­tin De­mp­sey have backed both the budget agree­ment and scal­ing back per­son­nel costs, and they will work with Lev­in next year to re­view the cuts and oth­er pay and pen­sion is­sues.

At a press con­fer­ence earli­er this month, Hagel warned that the Pentagon “can no longer put off mil­it­ary com­pens­a­tion re­form.”

The Mil­it­ary Com­pens­a­tion and Re­tire­ment Mod­ern­iz­a­tion Com­mis­sion, which has a re­port due in May, is ex­pec­ted to re­com­mend ways the Pentagon can mod­ern­ize its fisc­al sys­tems. Both Hagel and De­mp­sey de­clined to say where the de­part­ment will re­com­mend ap­pro­pri­at­ors cut from their budget next year, or if that could in­clude com­pens­a­tion.

By the Mil­it­ary Co­ali­tion’s es­tim­a­tion, the cur­rent cuts will re­duce re­tired pay by nearly 20 per­cent at age 62 for mem­bers who re­tire after 20 years.

But the mil­it­ary lead­ers also sug­ges­ted that more changes could be com­ing. Yearly com­pens­a­tion for act­ive-duty ser­vice per mem­ber grew 57 per­cent — ad­jus­ted for in­fla­tion — between 2001 and 2012, ac­cord­ing to a study re­leased earli­er this year by the Cen­ter for Stra­tegic and Budget­ary As­sess­ments.

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