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Senate committee to vote on repealing retiree COLA caps

Feb. 5, 2014 - 08:52PM   |  
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The Senate Armed Services Committee will consider a bill next week to repeal the caps on annual cost-of-living increases in military retired pay.

The bill, sponsored by Sens. Mark Pryor, D-Ark., and Kay Hagan, D-N.C., would repeal the portion of the Bipartisan Budget Act that will reduce annual COLA increases for retirees by 1 percentage point, starting in late 2015.

The move is expected to save the government $6 billion; the Pryor-Hagan bill, S 1963, does not propose any ideas for offsetting the loss of those savings if the law is repealed.

Committee Chairman Sen. Carl Levin, D-Mich., told The Hill newspaper he wants to move the bill through the committee, bring it before the Senate and allow amendments on offsetting the cost.

“I think the better way to approach this is to get a bill to the floor which will repeal the provision, and then debate the offsets when it gets to the floor,” Levin said.

The committee had initially scheduled consideration of the bill for Thursday but postponed it until Monday.

Meanwhile, at least one other bill to repeal the COLA caps is moving through the legislative pipe. Sen. Bernie Sanders, I-Vt., included such a provision in an extensive, nearly $30 billion veterans bill. He proposes to pay for repeal of the COLA caps using wartime contingency funds — a proposal largely unpalatable to Republicans.

The Senate is expected to take up Sanders’ bill this week.

Sen. Kelly Ayotte, R-N.H., a member of the Armed Services Committee, has her own plan for offsetting the cost of repeal. Her bill would close a tax loophole that allows undocumented workers to receive tax credits for their children.

Ayotte’s proposal would require a person filing taxes, or the child who is claimed, to have a Social Security number in order to receive the $1,500 credit.

Currently, there is no requirement for a taxpayer to have a Social Security number to qualify for the credit. Undocumented immigrants often file income taxes using tax identification numbers instead of Social Security numbers.

Ayotte originally had proposed eliminating the tax credits for all undocumented workers. Her new version would allow credits if the child being claimed has a Social Security number.

According to Ayotte, the proposal would save $20 billion over 10 years.

Sen. James Inhofe, R-Okla., the Armed Services Committee’s senior Republican, supports Ayotte’s bill.

Other legislators have introduced bills that would offset the costs by tightening regulations on U.S. companies that shelter funds in foreign tax havens; cutting Saturday postal service; blocking foreign aid to Egypt or Pakistan; and consolidating the Veterans Affairs and Defense departments’ prescription drug purchasing programs.

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