The Legion Explains the Importance of the COLA Battle

The following guest blog offers insight into why fighting over the reduced cost-of-living-adjustment for military retirees was important for all veterans and servicemembers.

Why Getting the COLA Provision Repealed Was So Important

By Lou Celli,

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legislative director of The American Legion Veterans service organizations have been around for over 100 years . You could almost say that we were the first organized unions, looking out for the bargaining rights of veterans who have dedicated at least some portion of their lives toward protecting the interests and values of our country. Our veterans have recognized since the time of the American Revolution that military members and veterans who have served our nation do so as contracted employees of our federal government. In that contract, our government makes promises to servicemembers in return for their commitment to defend America. This is why getting Congress to repeal cost-of-living adjustment (COLA) cuts to military pensioners was so important. Uncle Sam had promised those benefits to every man and woman serving in the military. Suddenly, Capitol Hill decided it was “okay” to reduce COLA benefits by one percent per year for a decade. Unacceptable. The American Legion loudly protested against the COLA cuts and immediately went to work in the halls of Congress to dismantle this legislative train wreck and return those benefits to the ones who earned them. When President Obama signed the COLA repeal on Feb. 15, he acknowledged the promise made to every retired veteran and removed the threat of financial hardship for hundreds of thousands of military retirees (for example, a retired sergeant first class stood to lose about $72,000 in pension payments) Individuals join the U.S. military with the understanding that they are entering into a profession of arms, under contract and with all that the Uniformed Code of Military Justice commands. That contract — that sacred vow between the servicemember and the nation he or she defends — is a commitment to a life of service unlike any other. That same contract is also an agreement between the servicemember and the government that the supporting United States Federal Code of Regulations (U.S.C.) in place at the time of enlistment or commissioning, provides the legal foundation upon which the contract is written, agreed upon and signed. Our members expect The American Legion’s national leadership to represent their best interests when dealing with legislative issues. While we have always done so with an eye toward fiscal responsibility, we also make sure that lawmakers recognize their responsibility to honor their commitment: To support and defend the veterans of this nation and their families — too many of whom have paid a price far greater than any Congress will ever be able to repay. Click here to see a chronology of the “COLA wars.”  



About the Author

Terry Howell
Before becoming the Managing Editor for, Terry served 20 years in the U.S. Coast Guard as an Aviation Electrician’s Mate and aircrewman. In his final role in the Coast Guard, Terry served as a Career Development Advisor, where he provided career, finance, education, and benefits counseling to servicemembers and their families. Since retiring from the Coast Guard, Terry has authored the book, The Military Advantage, managed the content for TurboTap, the DoD's online transition program and VAforVets, the VA's transition assistance website. Terry earned both his Bachelor's and MBA at Corban University using Military Tuition Assistance and his GI Bill benefits to help cover the cost.
  • Proud Retiree

    I think it’s great that us retirees won the COLA Battle. We also need to address the other battles whereby Congress took away our benefits. The biggest complaint I have is where a Vet has to have at least a 50 per cent disability before they get a separate check. I received 20 percent for a hearing disability and they take the 20 percent and make it non-taxable. I feel if the VA has approved a disability for a veteran they should get that money. It should not make any difference they you are retired. Just another way Congress is saving money at our expense.

  • AAA

    Not to pick nits, but no where that I am aware of are Cost of Living Adjustments (COLA) part of the promised retirement package for service in the military. I am glad they have been restored to the previous level, but purely as a hypothetical – why not increased an additional 2% or 3% or .5%. Nowhere but in our messed up political system (or perhaps Lewis Carroll’s “Thru the Looking Glass”) could a reduction in the rate of increase be labeled as a “cut” with a straight face….. frankly I think ALL Government COLA (SS, Federal Retirement, etc.) should be set to the same value and that value then set to exactly match the inflation rate.
    If something can’t go on forever, it won’t. Those of us of retirement age now may not see the train wreck, but our sons and daughters likely will.

    • MGy Butch

      Title 10 USC par 1401a. It is promised there.

    • Jeff

      When I originally enlisted the recruiter laid out the retirement plan very carefully. At that time, upon completion of 20 years of service, I would rate 50% of the average of my high three years of base pay. He was careful to point out that no other pay was included in that calculation, only base pay. That payment would be cost adjusted annually so that they buying power remained the same. Additionally I was told that I would be provided lifetime healthcare on a space available basis at no charge. I would also be able to use military air transportation on a space available basis at no charge. For each additional year of service completed, the rate would move 2.5% up to a maximum of 75% at 30 years of service. Also, I was told that my wife would continue to receive 55% of my retirement if I died first. He didn’t mention any program called SBP that I would pay for, but he being a relativity young, single Sergeant, may not have fully understood that portion of the program. It doesn’t really matter as he was trained to provide that information to all respective recruits.

      These were not promises, but laws that were on the books at that time. Laws can and do change, however there is a statement in the contract I signed that clearly stated that only those items in the contract and guaranteed by law were enforceable and any other promises made were void. That same provision was made in every follow on contract up until I was appointed a Warrant Officer, then commissioned a Chief Warrant Officer.

      Since that time, the free healthcare now comes at a cost, minimal, but still a cost. The Space A travel is almost nonexistent for domestic travel, and very limited and difficult for international. It is still possible if all the stars align and you get lucky.

      I don’t have an issue with changing the laws, but Congress should never change laws NOW that affect what I no longer have the ability to influence. I would not have reenlisted and remained in service if that retirement pension was not going to be there. I would have worked and made use of another retirement plan in the civilian or possibly Gov’t service, but I would not have stayed on active duty. I made plans for retirement based on a cost adjusted pension. I am working right now, but I lost a lot of potential 401K participation because I planned on having that cost adjusted pension. To change the rules now, is too late for me to have an effect on my retirement plan. There simply are not enough years left for me to have a significant influence.

      Any change to the rules should only affect those who are commissioned or enlist at the time of the change, that way those affected will know what they can expect for their service.

    • loonee2n

      AAA, COLA is part of the promised retirement package. High 3 receives COLA based on the CPI and REDUX receives COLA at 1% less than High 3. If the CPI is 3% then we would only received 2% and REDUX would only be 1% under the COLA reduction. That would make a huge difference over the course of the retirement.

    • ret35SGM

      Actually, that is not true…at least if you count current law (as the article points out) as a promise. Until the law was changed, it guaranteed COLA each year tied to the Consumer Price Index to maintain purchasing power. The calculators on DoD websites to allow military to project their future retirement earnings have these increases factored in. So, yes, it was promised to them. Why not to higher levels? Because that would actually increase purchasing power if you go above the increase in consumer prices…that isn’t what was promised…maintaining purchasing power throughout retirement was.

  • timothy

    A veterans have to serve for 20 or more and loose limbs or die before they get compensation for their family.The politicians only have to serve one terms and they are compensated for life.How fair is that

  • Don Campas

    If they would of took this away what would of been next? Huge victory for vets


    AAA go back to Sleep

  • flman

    As a disabled vet with 21 years in the AF I agree with all the complaints. Those of us with less than 50% disability pay for our own VA disability payment as that amount of money is deducted from our military retirement pay. I enlisted in 1954 and was told my family and I would get free health care the rest of our lives. I was a recruiting supervisor the last three years of my career and sold that benefit to all enlistees. Years ago I heard in the late 1950’s the politicians quietly changed the laws and removed that benefit, not sure if that’s true or not. but it was still part of our recruiting training in the ’70’s Most of our COLA is eaten up by the Medicare costs as they continually increase. Regarding Survivor Benefits for my wife, I could have bought a very large insurance benefit for what was deducted from my monthly retirement. I’m 79, have health issues but could live 5 to 10 years, how long after I go will my wife collect fthe SBP payment. I’ll bet not as much as I put in. AND, if she goes first I get nothing back!
    We can see by the recent reversal that change is possible. The Government has many places to keep from spending their money, subsides to large companies like oil & farm, payments to foreign countries, especially those that don’t like us in the first place or are corrupt, high annual cost of living % to congressman, reduced retirement to nearly nothing depending how ling a congressman stays in office, and a multitude of other areas. Think about this, as a career military person, our constant movement prevented us from getting a home in an area and staying there to set up a family life, I had nice cars in the service but had no way to store keep any of them for later life. WE had some pretty nasty assignments even though some were temporary and we had NO choice as to what part of the world we would go to.
    I’m not bitter, I’m proud of my military service and wish the public could realize some of the things they had were not available to us.
    If we all got together in some sort of a national group, and fought for some of these things mentioned above I’ll bet we could make changes. Maybe some of us are too old to get full benefit but the younger vets sure get them. Any ideas

  • Mark, E8 Ret

    THEY wrote the contract. We met it. They then change it with the stroke of a pen. It’s wrong. The old adage “give them an inch, they’ll take a yard” comes to mind. This time it was 1% for “working age retirees”. If we didn’t fight this (and win), what would next time be? See, they overspend and pihss away money like there is no tomorrow (like Obamaphones – people on welfare have a better cellphone than I can afford!), then they scratch and claw to steal it from wherever they can – as long as it is not in their district. Mention a base closure, and not one politician will say “take mine”.

    Oh, a previous time for me, but little publishing on it – they took Tricare Prime from my area. Understand I live by Cleveland OH, which is the 45th largest city in the US… “but since we are not within 40 miles of a military MTF”.,… With all the base closures who is? And so what if someone is by some tiny clinic. An aide station is a “MTF”. Foul, but we lost that (oh, wait, they took back those within 100 miles of one). Exactly what does not using a MTF have to do with Prime? How are the two related???

    They are not held accountable for their spending, nor are they in how they get the money.

    we held them accountable. we stood the line. We did not faulter when we saw the whites of their eyes. Well done retiree’s. We still have it!

  • Rich

    I have a colleague who is identical to AAA…always on the fence; pal I earned my retirement and for some young congressman who has never served to just outright change our COLA is wrong. I to was promised free health care for the rest of my life if I made it a career which I did. Lost my youth being in the service and also lost time with my family, and yes when PCS orders came in for you to go thousands of miles away you went. So AAA if you feel differently why don’t you just forfeit your retirement?

  • Richard Condon

    We put our lives on the line each and every minute for 20 or more years and are separated from our families and they talk about taking away our benefits, they spend 2-4 years in Washington and they make more money than we could imagine in the 20 years that we served. How dare they say we make to much. Let them have Obama care, oh but no they don’t have to take it they do get to keep their doctors! Thank a Veteran for their freedom!!!!!!

  • Jim in SOMD

    This was just one more benefit that they can and often do take awy. Back in th early 1970’s, retirees were to get free health care. Now they charge for Tricare and every year it is a question of how much will they raise it. The retiree is just a drain on the DOD budget and they get no new benefit when they provide the retirement benefits that were in place when the service member first joined. This battle was won but the war is never over. It rears its ugly head every year when DOD needs to cut funding because Congress does not do its job and set a budget for the country.