NTU urges all Senators to vote “NO” on S. 1963 in its current form, which does not contain any new offsetting spending reductions. This bill, which has not even been given a hearing in the Senate, would entirely eliminate a provision in the six-week-old Bipartisan Budget Act that reduced annual cost-of-living adjustment (COLA) increases by 1 percentage point for military retirees under age 62.
While we understand the concern that lawmakers have over this change to the COLA formula, we would remind Senators that the initial, unintended impact of Section 403 on disabled retirees was already addressed in the Consolidated Appropriations Act of 2014. What remains is a serious challenge to the military’s long-term finances, one that affects areas that are vital to the well being of our people in uniform, such as readiness. In November, General Raymond Odierno, Army chief of staff, testified before the Senate Armed Services Committee that “The cost of [an Army] soldier has doubled since 2001; it’s going to almost double again by 2025. We can’t go on like this, so we have to come up with [new] compensation packages.” By 2034, the Pentagon will face an unfunded pension liability of $2.7 trillion.
These increased costs should be far from a surprise to legislators. The Congressional Military Reform Caucus anticipated this problem in the 1980s, leading to the 1986 Military Retirement Reform Act. The Act’s savings measures were repealed before they could affect the pensions of anyone joining post-1986, but the fiscal troubles of the system have not gone away.
The one percent COLA agreement passed in December was one small step – amounting to $6 billion over 10 years – toward getting these costs under control. Unless Congress can summon the willpower to sustain even modest reforms, there’s little reason to believe that legislators will be able to tackle the much larger spending crises looming on the horizon. If lawmakers are to build a sustainable, stable retirement system that our service people deserve, while addressing what retired Joint Chiefs Chairman Mike Mullen identified as the greatest threat to America’s security (the national debt), there are better approaches than S. 1963.
Roll call votes on S. 1963 as currently drafted will be included in NTU’s annual Rating of Congress and a “NO” vote will be considered the pro-taxpayer position.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700