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The chairman of the Senate Armed Services Committee has promised to review the bipartisan budget agreement’s provision that would reduce annual cost of living increases for military retirees of working age.
In a statement released Friday, Sen. Carl Levin, D-Mich., said a review by the SASC, along with the ongoing survey of military retirement and benefits by the Military Retirement and Compensation Modernization Commission, may “further bear on this issue.
“A number of concerns have been raised about the provision in the Murray-Ryan budget agreement,” Levin said. “The Senate Armed Services Committee is going to review this change after we convene next year, before it takes effect in December 2015.”
The provision would restrict the annual pay adjustment of military pensions for working-age military retirees to 1 percentage point less than the rise in consumer prices.
For example, if the proposal were currently in effect, the 1.7 percent COLA that will appear in January retirees’ paychecks would be 0.7 percent for military retirees under age 62, but would remain at 1.7 percent for retirees 62 and older.
Under the provision, the 1 percent COLA reduction would take effect starting December 2015.
Retirees on disability would not be affected.
Military and veterans organizations have voiced strong opposition to the proposal, which, according to the Military Officers Association of America, amounts to a reduction in retired pay of nearly 20 percent for troops who retire at 20 years.
According to MOAA calculations, a service member who retires as an E-7 would see an average loss of more than $3,700 a year in retired pay by the time he or she reached age 63, while an O-5 stands to lose more than $6,200 a year.
“A 20 percent reduction in retired pay and survivor benefit values is a very substantial cut in military career benefits, and does not represent good faith to our men and women in uniform,” MOAA president and retired Vice Adm. Norb Ryan said.
William Thien, the Veterans of Foreign Wars national commander, said the provision puts the all-volunteer military in jeopardy.
“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,” Thien said.
The House voted overwhelmingly Thursday to approve the budget deal, 332-94. The Senate is expected to vote on it next week.
The Bipartisan Budget Act is expected to save $6 billion. The agreement allows $1.012 trillion in discretionary spending for fiscal 2014.
Under the agreement, the 2014 defense budget could be $520.5 billion, with non-defense programs getting $591.8 billion.
A number of senators, including Sen. James Inhofe, R-Okla., and Sen. Kelly Ayotte, R-N.H., already have voiced opposition to the COLA proposal.
Thien said VFW is prepared to take the fight to the rest of the Senate.
“We know the federal government needs to curb its spending, balance its budget, and put an end to the sequester, but penalizing military retirees is not the solution,” he said.
Staff writer Rick Maze contributed to this report.