Grandfather current troops, retirees on COLA cuts, DoD urges
By Patricia Kime
The Pentagon opposes the pending reductions in annual retirement pay increases and believes changes in the military retirement system should come not from Congress but from a commission convened to study benefits modernization, senior officials told lawmakers Tuesday.
Addressing the Senate Armed Services Committee, acting Deputy Secretary of Defense Christine Fox and Vice Chairman of the Joint Chiefs Adm. James Winnefeld said current retirees and those about to leave service should be exempt from the caps on annual COLA increases to military retirees’ pay, set to take effect in December 2015.
The two urged lawmakers to consider “grandfathering” those who would be immediately affected if Congress decides to leave the increases in place.
“Because of the complex nature of military retirement benefits, we recommend that the Congress not make any additional changes in this area until the commission provides its report,” Fox said.
The Senate Armed Services Committee convened the hearing to examine the effects that the provision, which would reduce annual COLAs by 1 percentage point for “working age” retirees under age 62, would have on the budget, current and retired personnel, recruitment and retention.
Although Congress has approved the caps, no lawmakers at the Tuesday hearing voiced support for the plan.
“I believe that the COLA reduction is wrong because it targets a single group — military retirees — to help address the budget problems of the federal government as a whole,” Senate Armed Services Committee Chairman said Sen. Carl Levin, D-Mich., chairman of the armed services committee.
A number of legislative actions have been proposed to offset the estimated $6 billion in savings expected from the COLA caps, but few of the proposals have bipartisan appeal, an indication that overturning the caps may be difficult.
But senators appeared united on the issue and agreed with Fox that change was necessary.
“We need to repeal the unfair cuts to military retired pay,” said Sen. James Inhofe, R-Okla. “We need to let the commission finish its work so that we can craft a thoughtful and comprehensive plan that protects the earned benefits of our military retirees and ensures the long-term sustainability of the system.”
Although they support repeal of the COLA caps, Fox and Winnefeld said acknowledged that the Pentagon must deal with rising personnel costs, which have been driven in no small part by increases in pay and benefits that began in the late 1990s to close a perceived “gap” between average military and private-sector compensation.
The trend in pay and benefits increases in recent years also has been fueled by well-intentioned lawmakers seeking to “support the troops” during wartime.
But Pentagon officials now argue that the pendulum has swung too far, to the point that the total military compensation package for many, if not most, troops far outpaces the wages of most civilians of comparable age and education levels.
Fox and Winnifeld said service members expressed satisfaction with their quality of life, including compensation and benefits, but are concerned that they lack the equipment, training and other resources needed to accomplish the military mission.
“Our men and women recognize that if they are well paid, but the department does not have money to maintain their equipment or supply them with the latest technology or send them to get the training they need, then we have not done them as service, but rather a disservice,” Fox said.