Military Retirementby Senator Lindsey Graham
Posted on 2013-12-20
GRAHAM. The Presiding Officer is from Virginia, and I know he
understands military men and women very well. It is a very patriotic
State when it comes to their military footprint. I am confident that he
and I--and others--will be able to fix the problem that occurred in the
[[Page S9087]] Let me say about the agreement itself that I do appreciate the fact that we were able to find a bipartisan way forward to relieve sequestration from the military and nonmilitary for a couple of years. That is just a drop in the bucket as far as what we have to do to repair the military. GDP spending on the military is moving toward an alltime low over a 10-year period with sequestration. The historical average has been well over 4 percent, and we are going to hit below 3 percent if we continue sequestration. That is an issue for another day.
The budget agreement called for relieving sequestration in the pay- fors. Quite frankly, they were not big. They did not change the course of the country. They are not what the Senator from Virginia and I hoped for. We would have liked to have done entitlement reform. I would like to do Tax Code simplification. I am willing to eliminate deductions in the Tax Code and take some of the money to pay down the debt, even though some folks on my side say we have to put it all in tax reductions. And I think the Senator from Virginia would be willing to engage in commonsense entitlement reform to keep us from becoming Greece.
This was the best deal we could get. It didn't do the big deal, but it did provide some budget relief for a 2-year period, and it was about $60-something billion; I can't remember the number.
The bottom line is that one of the ways you paid for relieving pressure on the defense budget and nondefense spending was there was a provision that will affect military retirees, which nobody will own, that got into the budget agreement.
I am on the Budget Committee. I was not consulted about the agreement; I read about it in the paper. There is a fine line between having a bunch of people involved who kind of keep things from never developing to produce a product and having a handful of people doing something in a small room, not vetted.
So the bottom line is that $6.3 billion of the pay-fors came from adjusting military retirement cost-of-living allowances for those who have served our military for 20 years and are therefore eligible for retirement. What they did was they took the COLA and reduced it by 1 percent for every military retiree until they reach the age of 62.
The President, to his credit, has called for an adjusting CPI, the way COLAs are calculated, for everybody--for civilians, military, Social Security--to make it more consistent with sustainable inflationary increases. This didn't adjust the COLA, it left the formula as it is; it just reduced the military retiree's COLA by 1 percent until the military retiree reaches age 62, and that is the only group in the country that had that happen. So $6.3 billion is taken away from men and women who have served for 20 years, and no one else had the pleasure of that experience.
Civilian employees, new hires, had to contribute additional funds to the Federal retirement system to help pay for the deal, but it only affected new retirees; the people who are in the system were grandfathered. The only group that Congress found fit to single out for the retroactive application was the retiree community.
All I can say is that military pay--retirement, pension pay, health care benefits are going to be subject to being reviewed and they will be subject to reform, because a larger portion of our budget in DOD is personnel costs. The Congress, in its wisdom, set up a commission to look at this issue. They are supposed to report back in 2014--now maybe it is as late as 2015--about how to reform military pay and benefits as part of an overall restructuring of the Pentagon.
One thing Congress put into the commission's charter was that they had to grandfather people who are currently in the system. In the budget agreement we singled out military retirees for a 1-percent reduction of their COLA and nobody was grandfathered--$6.3 billion coming out of the pockets of those who have served. For an E-7 who is going to retire at 40 and has his or her COLA reduced to age 62, it is between $71,984 or $80,000, depending on who you talk to, in loss and benefits. And the E-7 receives in retirement pay after 20 years of faithful service about $25,000 a year--not exactly becoming independently wealthy.
We have one of the leading voices on this issue, Senator Ayotte from New Hampshire, who took up this challenge and came up with some solutions early on and has been a great voice about how unfair this is. So I will yield to the Senator from New Hampshire.