Disabled Military Retirees Not Exempt from Pension Cuts in Budget Deal
A provision cutting the pensions of military retirees in the bipartisan budget deal that the Senate will vote on this week does not exempt disabled veterans, the Washington Free Beacon has learned.
Disabled retirees were previously thought to be exempt from the changes to military retiree pay, which could cost servicemembers up to $124,000 over a 20-year period.
The Free Beacon previously reported that military retirees under the age of 62 would receive 1 percentage point less in their annual cost-of-living adjustment (COLA) in the plan crafted by House Budget Committee Chairman Paul Ryan (R., Wis.) and Senate Budget Committee Chairman Patty Murray (D., Wash.).
The section of the U.S. code that has been altered also applies to disabled servicemembers, many of whom have been wounded in combat.
Sen. Jeff Sessions (R., Ala.), ranking member of the Senate Budget Committee, called the change “unthinkable.”
“It has been asserted that the controversial change to military retirees’ pensions affects those who are ‘working-age’ and ‘still in their working years,’ with the clear suggestion being that these individuals are able to work,” Sessions said in a statement. “That’s why I was deeply troubled when my staff and I discovered that even individuals who have been wounded and suffered a service-related disability could see their pensions reduced under this plan.”
“It is unthinkable that this provision would be included in a deal that spares current civilian workers from the same treatment,” he said. “An equivalent amount of savings and more can be easily found, and I hope the Senate will move to address the unbalanced treatment of our servicemembers before considering the legislation any further.”
An original copy of a summary of the budget agreement, obtained by the Free Beacon, explicitly stated that disabled veterans would be exempt.
“This provision modifies the annual cost-of-living adjustment for working-age military retirees by making the adjustments equal to inflation minus 1 percent,” reads the summary, which was sent on Dec. 10. “This change would be gradually phased in, with no change for the current year, a 0.25 percent decrease in December 2014, and a 0.5 percent decrease in December 2015.
“This would not affect servicemembers who retired because of disability or injury.”
The summary now posted on the House Budget Committee website removed the sentence relating to disabled retirees.
The Ryan-Murray deal affects Chapter 71, Section 1401 of the United States Code, which deals with the pay of military retirees.
As the code is currently written, servicemembers can be eligible for early Chapter 61 retirement if it is determined that, due to a physical disability, that individual is no longer able to perform the duties of their office, grade, or rank. The individual must hold a disability rating of 30 percent or more according to Department of Defense standards, and the disability must be the proximate result of performing their duties during a time of war or national emergency.
Section 403 of the budget agreement amends section 1401a(b) of Title 10, U.S. Code, adding the “CPI minus one” percent provision, lowering the COLAs of disabled retirees.
Wounded servicemembers are entitled to Veterans Administration Disability Benefits, which remain unchanged by the budget deal. However, the change to Chapter 61 retirement could account for about 55 percent of a wounded service member’s disability pay, according to a Senate aide.
For example, a 28-year-old staff sergeant (an E-5 rank) who is forced to retire after 10 years would see approximately $50,000 in lost compensation over the next 40 years.
Rep. Ryan told the Weekly Standard that the changes are appropriate because servicemen and women who retire in their 40s after serving for two decades are still young enough to maintain a job.
“We give them a slightly smaller adjustment for inflation because they’re still in their working years and in most cases earning another paycheck,” Ryan said.
Sens. Roger Wicker (R., Miss.), Lindsey Graham (R., S.C.), James Inhofe (R., Okla.), and Kelly Ayotte (R., N.H.) have said they are opposed to the deal because it cuts the benefits of military retirees, while not imposing equal cuts to federal civilian workers.
Will Allison, spokesman for the House Budget Committee, said the COLA provision does not offer any exemptions.
“The federal government has no greater obligation than to keep the American people safe,” Allison told the Free Beacon. “And it must take care of the men and women in uniform who put their lives on the line. To meet our obligations to our service men and women, we must make sure their long-term benefits are on a sound, financial footing.”
“Specifically to your question,” Allison said, “the COLA provision does not include additional exemptions, but to clarify: The Bipartisan Budget Act does not affect any benefits provided to veterans in compensation for disabilities suffered as a result of their service.”
“There are no changes made to disability-compensation benefits and no changes that would impact their VA-provided medical care,” he said.
The Senate is expected to pass the deal by a simple majority this week, after it cleareda crucial procedural vote on Tuesday.
Over the weekend, Ryan said it is possible to make changes to the military retiree provision, since it will not take effect immediately.
“We delayed this provision so that it doesn’t take effect until the year 2016, which gives Congress and the military community time to address the broader compensation issue, including this provision, if people believe there’s a better way to solve this problem,” he told the Weekly Standard.
Senate Armed Services Committee Chairman Carl Levin (D., Mich.) also has said he will review the cut to military pensions.
“We’re going to look at the whole benefits issue for veterans,” Levin told Stars and Stripes on Friday. “I can’t obviously make a commitment, but I am committed to reviewing this and looking at the impacts.”