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Editorial: COLA rollbacks break promises

Dec. 20, 2013 - 06:00AM   |  
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Lawmakers are predictably — and appropriately — backtracking on a small but explosive provision in the recent budget deal that would roll back annual increases to military pension payments for working-age retirees.

Under the logic in play, most retirees under 62 hold jobs in second careers and hardly will feel the effect of capping their yearly military retirement pay increases at 1 point below the annual cost-of-living adjustment.

Yet troops, retirees and supporters immediately lashed out after news broke about the COLA reduction, projected to save the cash-strapped government $6 billion over 10 years.

Shaving off that percentage point will mean a loss of tens of thousands of dollars over the lifetime of many military retirees’ pension payouts. But most complaints centered not on the personal financial hit, but on what was roundly excoriated as a “broken promise” on a bedrock benefit of serving a military career.

Many troops and retirees felt ambushed by the COLA cap, seemingly hidden in the mind-numbing details of the budget proposal to evade detection to quietly go into effect in late 2015.

This seemed a betrayal by lawmakers who for a decade made a show of their patriotism in this era of nonstop campaigning.

Some lawmakers even professed shock — shock! — at the mere existence of the COLA caps and some attempted, without success, to reverse or mitigate its effects before Congress left town for holiday vacation.

Outrage continued building as word spread that the provision did not even exempt wounded warriors who are medically retired from the military with less than 20 years of service.

Sen. Patty Murray, D-Wash., who co-authored the Bipartisan Budget Act with Rep. Paul Ryan, R-Wis., called that omission “a technical error” and vowed to fix it next year.

But the rollback itself remains, a move that will impact several million regular retirees — and all career-minded troops still in uniform —who stand to lose tens of thousands of dollars over the next couple of decades.

Some lawmakers will push to eliminate the COLA reduction before it goes into effect by finding fairer measures to offset the income savings envisioned under the COLA rollbacks.

One proposal would tighten rules on U.S. firms that shelter funds in foreign tax havens.

That’s a fat target. The Wall Street Journal says 60 large U.S. corporations parked $166 billion in earnings off shore in 2012.

Those off-shore beneficiaries include generous campaign contributors. Going after their earnings will require some rare political courage.

After years of ignoring report after report about the ineffective way it develops and buys weapons systems, Congress must look to rein in the waste.

In 2012, the Pentagon ran a collective $411 billion over initial budget estimates on its 85 major acquisition systems — enough to virtually wipe out sequestration for eight of its planned 10 years.

Troops and retirees are keenly aware of the nation’s economic difficulties and willing to make sacrifices. But to be targeted like this feels unfair and arbitrary.

Changes need to be part of a more thoughtful and comprehensive approach, perhaps retooling military retirement plans and benefits for future generations and grandfathering current troops, at least to some degree.

The Military Compensation and Retirement Modernization Commission is considering these issues and more. That panel should be left to do its work and set the stage for informed debate.

Until then, there are fairer ways to get budget savings than to break faith with hundreds of thousands of current retirees and troops who soon will be retirees.

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