COLA Cap Repeal: Finally something we all can agree on.Update: On February 15, President Obama signed the law passed by Congress which excludes current retirees and servicemembers from the 1 percent Retirement COLA reduction. The bill was flown out to California to be signed by the President.
The repeal of the so-called COLA cap on military pay passed both the U.S. Senate and the House of Representatives this week. Both had pledged to find a way to eliminate the Bipartisan Budget Act mandated cap on the annual cost-of-living-adjustment on working-age military retiree pay.
The House tied their version of the COLA cap repeal to a federal land use bill (S. 25), with the hope that tieing it to the existing Senate bill would get it passed more quickly. The House version does not completely repeal the cap, it essentially grandfathers the law to protect current retirees and anyone who joined prior to January 2014. The House version found in S. 25 offsets the $6 billion cost by extending Medicare mandatory spending cuts through 2024 instead of 2023.
Earlier this week, the Senate held a procedural vote to advance a similar COLA cap repeal. The bill, S.1963, was introduced by Sen. Mark Pryor, (D-AR), unlike the House version, it did not seek budgetary offsets to recoup the projected costs associated with repealing the cap. The lack of a pay-for or offsets to cover the $6 billion in budget savings, may delay the final vote.
The bill's co-sponsor Senator Mark Begich (D-AK) said, “Honestly, I’m sick of [hearing about the offsets]. The bill has no ‘pay-for’ because the men and women this bill addresses have already paid with their service.”
As an alternative, Senator Kelly Ayotte (R-NH) proposed a bill that would offset the cost of repealing the COLA Cap by closing a tax loophole which allows undocumented workers to receive tax credits for their children. According to Ayotte, the proposal would save up to $20 billion over the next 10 years.
In the end, the House's plan worked as the Senate overwhelmingly chose to pass the House version in S. 25, including the extended Medicare cuts to fund the cost offsets.
According to the VFW, the remaining issue is that the repeal does not protect career servicemembers who join in 2014 and beyond. (See VFW Response Below)
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VFW STATEMENT ON MILITARY RETIREE COLA VOTE
WASHINGTON (February 12, 2014) — “The Veterans of Foreign Wars of the United States thanks all our supporters in the House of Representatives and Senate for taking quick action to repeal the one-percent COLA penalty on working-age military retirees. The Senate today followed yesterday’s House passage of a bill to eliminate the penalty for current retirees and everyone serving in uniform prior to the end of 2013, should they choose to remain until retirement eligible. The legislation does not, however, remove the penalty on future retirees who enter the military after Jan. 1, 2014.
“The world will remain a very dangerous and unpredictable place even after America ends its involvement in Afghanistan, and future military retirees will be required to serve just as long and perhaps sacrifice even more than their predecessors. It is in that regard that the VFW will continue to fight for a full repeal of the COLA penalty, and we hope that this vote will continue that conversation.”
WILLIAM A. THIEN Commander-in-Chief Veterans of Foreign Wars of the U.S.