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Troops, retirees get a pay boost in 2013

Nov. 20, 2012 - 11:46AM   |   Last Updated: Nov. 20, 2012 - 11:46AM  |  
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Active-duty troops, reserve-component members and military retirees will get a 1.7 percent pay boost at the end of the year in a rare confluence of separate pay formulas.

The increases in basic and retired pay are virtually assured unless Congress returns to work in a post-election session and unexpectedly decides to resolve the nation's budget crisis by reducing or eliminating pay raises that are calculated under permanent law.

That seems highly unlikely, as the House of Representatives has passed a fiscal 2013 defense budget that endorses the 1.7 percent military raise and a federal budget that assumes a 1.7 percent cost-of-living adjustment.

The COLA would apply not only to military retirees but also to Social Security beneficiaries and federal civilian retirees.

The Senate has not yet acted on the 2013 budget, but the Senate Armed Services Committee has endorsed the 1.7 percent military pay raise, the amount requested by the Obama administration that matches last year's average increase in private-sector wages.

For the 1.4 million active-duty and 857,000 Selected Reserve members, the 1.7 percent increase in basic and drill pay would take effect Jan. 1 and first appear in midmonth checks.

The military raises for 2011 and 2012 also were less than 2 percent, but troops are still doing better than federal civilian workers, who are under an extended pay freeze ordered by President Obama and Congress.

But military raises that match the Employment Cost Index, a Labor Department measure of private-sector wage growth, could be coming to an end after 2014.

The Jan. 1, 2014, raise would continue to match the ECI under the Defense Department's five-year spending plan. But raises in 2015, 2016 and 2017 would be capped at less than the average private-sector increase.

Under that plan, which would take effect only with approval from Congress, the Jan. 1, 2015, raise would be 0.5 percent; the 2016 raise, 1 percent; and the 2017 raise, 1.5 percent.

COLA for retirees

Like the military raise, the 1.7 percent COLA that applies to 2 million military retirees and the more than 300,000 recipients of military survivors benefits is automatic unless a law is enacted to modify the adjustment, which is based on the Consumer Price Index, a Labor Department survey of the price of goods and services.

Because the military raise is calculated based on private-sector wages and the retirement COLA is calculated based on consumer prices, the two amounts are almost never the same.

While COLAs are automatic for Social Security and both military and federal civilian retired pay, they are not automatic for the 3.9 million people receiving veterans' disability compensation and dependency and indemnity compensation for surviving spouses and children paid by the Veterans Affairs Department.

Veterans' COLAs require an act of Congress to be paid, and Congress has not yet finished work on that legislation this year.

The House of Representatives has approved a veterans' COLA bill, but the measure has been tied up in the Senate, which has been slow to pass veteran-related legislation this year and has seen partisan bickering specifically on the veterans' COLA bill.

Democrats, who control the Senate, wanted to pass the bill by voice vote Sept. 20, just as senators were rushing to leave town for a pre-election break, but an objection was raised by an unidentified Republican senator.

With Congress not due to reconvene until Nov. 13 the Tuesday after the election Republicans proposed allowing the bill to pass during twice-weekly "pro forma" sessions held during the recess.

Democrats balked at this idea, which means they can continue to claim through Election Day that Republicans are trying to deny a cost-of-living adjustment for veterans. But they also will have a must-pass bill lined up for a vote when Congress returns to work.

VA officials have promised veterans will receive the 1.7 percent COLA in January checks as long as the law providing the increase is enacted by the first week of December.

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