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Senate clears way for final vote on broad budget deal

Dec. 17, 2013 - 12:58PM   |  
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The Senate voted Tuesday to clear a path for a final vote on the bipartisan budget deal, legislation that includes a provision that would limit the annual cost-of-living adjustment in military retired pay until age 62.

By a vote of 67-33, the Senate invoked cloture, cutting off further floor debate on the 2013 Bipartisan Budget Act and setting up an expected final vote by Thursday.

All Senate Democrats were joined by a dozen Republicans in voting to move forward. The Republicans included Sens. Lamar Alexander, Tenn; Roy Blunt, Mo;, Saxby Chambliss and Johnny Isakson of Georgia,; Susan Collins, Maine; John McCain and Jeff Flake or Arizona; Orrin Hatch, Utah; John Hoeven, N.D., Ron Johnson, Wis., Lisa Murkowski, Alaska; and Rob Portman, Ohio.

A provision of the act that is already causing shock waves would limit COLAs for military retirees under age 62 to 1 percentage point less than the annual rise in consumer prices. At age 62, there would be a one-time “catch up” adjustment in annual retired pay to reset the amount to what it would have been at that age without the COLA caps, and then full COLAs would be provided each year from that point on.

The plan, which is expected to save $6.2 billion over 10 years according to the Congressional Budget Office, would start in December 2015.

On Tuesday, Sen. Kelly Ayotte, R-N.H., said 10 percent of that $6.2 billion would come from the proposed COLA cuts for medically retired personnel, those injured on active duty so seriously they rate full retirement and benefits after they leave the service.

According to the Military Officers Association of America, the plan would amount to a reduction in retired pay of nearly 20 percent for troops who retire at 20 years.

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, MOAA has calculated. The total difference typically adds up to tens of thousands of dollars over the years between retirement and age 62.

The budget legislation, forged by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., allows slightly more than $1 trillion in discretionary federal spending for fiscal 2014, which started Oct. 1 — about halfway between the House and Senate starting positions on the budget.

The 2014 defense budget could be $520.5 billion under the agreement, with non-defense programs getting $591.8 billion.

Savings, which include the retirement proposals, total $85 billion, with $63 billion allocated to reducing sequestration. About $45 billion of sequestration relief would be applied in 2014, evenly split between defense and non-defense programs, Murray said, leaving just $18 billion for sequestration relief in 2015.

Murray said cutting retirement benefits was a difficult decision but the final proposal is scaled back from an even more severe plan the House brought to the table during negotiations.

Sen. Joe Manchin, D-West Va., noted after the vote Tuesday that the restriction on military retirement pay does not affect the plan itself, only the cost-of-living adjustment.

Previous proposals have “wanted to eliminate the COLA altogether. This is basically a 1 percent cut for healthy people who are working other jobs. Really, there’s no bigger supporter of the military than people in West Virginia, but I think this is reasonable,” Manchin said.

The bill overwhelmingly passed the House last week. President Obama has said he will sign it when it reaches his desk.On Tuesday, Sen. Lindsey Graham urged the President not to sign the bill

“You above everybody else a responsibility to serve our retired [military personnel] and those about to retire. Mr. President, do not let this happen,” Graham said.

Both Senate Armed Services Committee Chairman Sen. Carl Levin, D-Mich., and committee member Sen. John McCain, R-Ariz., have said they plan to look closely at the proposed COLA reduction in committee and expressed thoughts that the plan will not come to fruition, at least not as currently designed.

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