Lawmakers and Defense Department officials expressed unanimous support Tuesday for repealing scheduled cuts to the pensions of working-age military retirees. The Pentagon, however, did not rule out support for future military compensation reform.
Senators from both parties on the Armed Services Committee pledged to walk back the 1 percent reduction to cost-of-living adjustments to retirement benefits for military retirees younger than 62 years old, included in the recent budget agreement, calling the cut a broken promise to those who signed up to serve. Both military and civilian Pentagon leaders said the cuts would damage the military’s ability to recruit and retain a first-class force.
While lawmakers wanted an immediate fix, Defense officials expressed a willingness to wait until the department completes its compensation review. The Military Compensation and Retirement Modernization Commission -- statutorily required by the 2013 National Defense Authorization Act -- will issue its report in February 2015, while the pension cuts would not kick in until December of that year.
Lawmakers left little doubt the committee ultimately will strike a deal, though they conceded the details of a final compromise still must be sorted out.
“When we find a way to repeal this provision, we may need to find an offset,” said Sen. Carl Levin, D-Mich., the committee’s chairman, pointing to the biggest sticking point of any possible fix. Levin added it was unfair to single out one group, such as military retirees, when striving for federal deficit reduction.
Dozens of lawmakers from both houses have signed on to various pieces of legislation that would repeal the cuts, with proposals to offset the $6 billion in savings ranging from tax reforms to altering the U.S. Postal Service’s delivery schedule.
While Pentagon officials used the hearing to urge Congress to repeal the pension cuts as currently enacted, they were open to continuing a COLA reduction so long as current retirees and service members are grandfathered into the current rates. Civilian federal employees were asked to contribute more to their pensions as part of the budget deal, but the provision only applies to new hires.
“If this department is going to maintain a proper force that is properly trained, ready and modern,” said Christine Fox, acting deputy Defense secretary, “we clearly cannot maintain the military compensation we had in the last decade.”
Vice Chairman of the Joint Chiefs of Staff Adm. James Winnefeld agreed the growth of military compensation -- which now consumes one-third of the Defense budget -- must be curbed, but noted the increased spending was a result of a severely undercompensated force in the 1980s and 1990s.
Winnefeld said any reforms should not come before the commission’s report, which is statutorily prohibited from suggesting any cuts to current retirees or service members.
“We should only make this adjustment once,” he told the committee.
Some lawmakers were more hesitant to embrace the need for compensation reform at all, citing the waste prevalent at the Pentagon. “It doesn’t seem prudent to me to say we need to cut soldiers pay and benefits when you can’t run the place a little better,” said Sen. Joe Manchin, D-W.Va.
The military brass, however, rejected the notion the fix was that easy. “Even with our most ambitious efficiency efforts, we will still need to address the growth of compensation,” Winnefeld said.
For her part, Fox said it would be “crazy” to say there wasn’t waste to trim, and that in the era of sequestration “everything is on the table.”
Other lawmakers chided the joint budget committee, led by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray., D-Wash., for wading into territories where they were not qualified to legislate. The budget committee members are “not known for their expertise on military personnel issues,” said Sen. John McCain, R-Ariz.
Several military and retiree advocacy groups also testified at the hearing, calling for an immediate repeal of the cuts so members of the armed forces can focus on their missions.
“The message they are hearing is they are contributing to their own unreadiness by their mere presence,” said Gordon Sullivan, president of the Association of the U.S. Army. “We must change this narrative.” He added the goal should be to ensure soldiers “sitting around a stove in Afghanistan in the middle of the night will not be talking about this issue.”
Sen. Jim Inhofe, R-Okla., assured the groups their concerns would be heard. “You guys have won,” Inhofe said. “We all agree.”