Gains in Military Pay and Benefits Stalled in 2013


As it came to a close, 2013 seemed to leave a kind of high water mark on the wall of more than a decade of steady, impressive gains to military and veterans' pay and benefits. Will those gains now begin to recede?

The military this month is getting its smallest annual pay raise in 50 years, 1 percent versus 1.8 percent needed to match private sector wages.  No big deal, pay officials contend.  Military pay still exceeds earnings for 90 percent of civilians of like age and education level, thanks to the string of raises that, starting in 2001, exceeded private sector wage growth.  Also, recruiting is strong and average housing allowances rose 5 percent Jan. 1.  

Military careerists and younger retirees got a harder hit in December when the first "bipartisan" budget in years included a cap on annual cost-of-living adjustments for retirees below age 62, starting in January 2016.

Projected savings --$6.3 billion over just the first decade – helped Congress to ease automatic defense spending cuts set for 2014 and 2015.  But advocates for military folks worry the COLA cap signals that lawmakers, who continue to oppose tax increases or cuts in more popular entitlement programs, no longer view military compensation promises as sacrosanct.  

"The COLA [cap] is huge," said retired Army Col. Robert F. Norton of Military Officers Association of America. "Because contrary to public assertions from the president, the chairman of the joint chiefs, [Defense Secretary Chuck] Hagel and leaders on Capitol Hill, this retirement cut is a hit on currently serving career members."

That includes, he said, a Marine gunnery sergeant or Army platoon sergeant "on a third or fourth tour in Afghanistan" who expect to retire soon.

Initially praised for shaping a modest budget deal on deadline, Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), the budget committee chairmen, saw their package swiftly enacted, before most lawmakers realized that the military COLA cap would spark a firestorm of protests.

Worried lawmakers immediately held press conferences, sponsored rollback bills or issued press releases promising to replace the COLA cap with an alternative budget saving idea.  Even Ryan and Murray agreed the cap at least should be modified before it takes effect in 2016 to spare 100,000 veterans who have been medically retired by their branch of service.

Ryan, however, defends the COLA cap in general, saying the idea came from the Department of Defense and only modestly trims a generous retirement plan that provides, on average, 40 years worth of inflation-protected annuities in return for 20 years of service.

Veterans affairs committees also came up short in 2013.  Most years, around Veterans' Day, Congress has passed a new package of initiatives to strengthen veteran benefits and services.  In 2013, the only noteworthy law enacted was no bigger, literally, than a rounding error.

For nearly 20 years, Congress has saved taxpayers a little money on inflation adjustments to VA disability compensation and survivors' indemnity and dependency compensation (DIC) by requiring that, after the yearly COLA is applied, new VA pay rates get rounded down to the nearest dollar.

The rounding didn't happen in 2013, thanks to Sen. Bernie Sanders (I-Vt.), chairman of the Senate Veterans Affairs Committee.  When a veterans' COLA of 1.5 percent took effect Dec. 1, compensation charts showed cents as well dollars, a gesture that added an average 49 cents to monthly payments.

Sanders had hoped to achieve much more.  On Dec. 18, he tried to get the full Senate to approve by unanimous consent a mammoth package of new benefits and services for veterans and surviving spouses.  The Veterans Health and Benefits Improvement Act of 2013 (S 944) cleared his committee in July.  This day, however, Sen. Tom Coburn (R-Okla.) put a hold on the bill.

Coburn explained his reasons two days later in letter to Sen. Mitch McConnell (R-Ky.), Senate minority leader.  One more expansion of veterans' health and education services can't be justified, Coburn said, given that the Department of Veterans Affairs can't administer all benefits previously enacted or keep all past promises made to veterans and their families.   

He also argued S 944 isn't fully paid for with budget offsets elsewhere, as proponents claim.  And some offsets identified won't save money for years while near-term VA spending, already up 58 percent since 2009, would climb by at least another $77 million and "likely much more," he said.

"At a time of runaway deficits and a crippling national debt, it is inappropriate to add even one dime to our national debt," Coburn added.

One key initiative of S 944 would force states to grant in-state tuition at state-run colleges and universities to recently separated veterans using GI Bill education benefits, a move Coburn sees as violating state rights.  Other provisions would boost Dependency and Indemnity Compensation to surviving spouses if they have children; extend official "veteran" status to Reserve and National Guard retirees, and expand the Marine Gunnery Sergeant John David Fry Scholarship to include surviving spouses.

The Fry program already provides Post-9/11 GI Bill benefits to cover four years at state colleges for every child of service members who die "in the line of duty," interpreted broadly to mean almost any active duty death.  S 944 would extend GI Bill benefits to surviving spouses too, starting in 2016, a change pushed by Military Officers Association of America.  Surviving spouses now are eligible only for the VA Dependents' Education Assistance Program, which covers much less than the GI Bill.

Joseph Violante, legislative director of Disabled American Veterans, said lack of any major veterans' legislation in 2013 should be blamed on a dysfunctional Congress, which passed "very little legislation" at all.

"I certainly wouldn't use this year as a gauge for how effective [Sanders] is as chairman," he said.  "He's been a strong advocate…and we will probably see some legislation this coming session."

The House, as well as Coburn, must agree to any new gains.  Coburn seems set against, even pointing to "needless" recent deaths of three veterans at the VA hospital in Augusta, Ga., for lack of timely, promised care.

"It is shameful for Congress to claim credit for providing new benefits while old promises are forgotten" and "heroes" die as a result, Coburn wrote.

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