Budget Update (12/12/2013): The Ryan-Murray Budget was passed by the House.
The latest budget deal crafted by Rep. Paul Ryan and Sen. Patty Murray is being celebrated as a bipartisan agreement that would help avoid another round of government closures and fiscal cliff threats. But what is not being widely reported – except by Tom Philpott - is that the budget deal will have a long-term impact on the value of the military retirement.
The budget deal calls for cutting the annual retirement cost of living adjustment for working age retirees (under age 62) by one full percentage point – setting the rate at one percent below the actual Consumer Price Index – the measure of inflation used to determine Social Security and VA program adjustments each year.
Tom Philpott reports that the cumulative effect would be to cut the lifetime value of military retirement by roughly $83,000 for a typical enlisted member who retires at age 40 after 20 years’ service. The typical officer retiring at age 42 after 20 would lose about $124,000.
The battle to save full retirement COLA is on.
As the co-chair of the Military Coalition, Col. Mike Hayden (Director of Government Relations for Military Officers Association of America) is leading a call to stop this action. Hayden points out that this deal essentially reneges on the Congressional and the White House promises to protect current retirees from any major changes to the retirement benefit.
(See MOAA’s official response below)
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MOAA Warns Budget Deal Penalizes Current and Future Military Members with over 20 Years of Service
Military Officers Association of America (MOAA) said the one percent annual reduction to uniformed service retired pay Cost of Living Adjustment (COLA) could have disastrous unintended consequences. For those who retire at the 20 year point in their career, it will result in reducing retired pay by nearly 20 percent between the age at retirement and 62.
“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 Vice Adm Norb Ryan said.
About one percent of the nation’s population is currently serving, but they bear 100 percent of the responsibility for our national security requirements. Retirement benefits have been earned through 20 or more years of arduous military service and sacrifice.”
Furthermore, Congress mandated the Military Retirement and Modernization Commission (MCRMC) in the FY 2013 National Defense Authorization Act and wisely removed the “BRAC-like”, fast-tracking rule so appropriate committees would appropriately study recommendations that could significantly impact retention and readiness. The MCRMC recommendations are supposed to honor commitments made to military personnel by their leadership and have not yet been provided.
“This proposal actually eliminates the appropriate assessment process and does not take long-term readiness and retention outcomes into account,” Ryan said. “A deadline will have been met, but at a terrible price for our existing force and retirees.
“Currently serving members look at how they, their families, retirees, and survivors have been treated when making career choices. If Congress arbitrarily cuts the retirement benefit for those who have served their country for over 20 years, there could be an unintended impact on uniformed service career retention, and ultimately, national security,” Ryan stated.
Military Officers Association of America (MOAA) is the nation’s largest officers association with more than 380,000 members from every branch of service, including active duty, retired, National Guard, Reserve, and former officers and their families and survivors. For more information, visit www.moaa.org or www.voicesfortroops.org/.