Senate Bill Sounds Retreat on Military Pension Reform

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The Senate is moving forward on a troubling bill that would add roughly $6.8 billion to the deficit over the next decade by repealing a modest reform in cost-of-living adjustments (COLA) for working-age military retirees.

The legislation, which passed a procedural hurdle on a 94-0 vote Monday, would reverse a key part of the budget agreement that the House and Senate passed with large majorities only weeks ago.

This does not bode well for future reforms involving military benefits, an area that many experts agree is ripe for reasonable cost reductions. The Senate legislation could also set a costly precedent for ignoring the “pay-as-you-go” standard (PAYGO) that calls for lawmakers to offset spending increases and tax cuts.

“Falling annual deficits, welcome as they are, have unfortunately distracted some in Washington from projections that trillion-dollar deficits will return in a few short years and that the debt will continue to grow faster than the economy,” says Concord Coalition Executive Director Robert L. Bixby. “This is no time to abandon pay-as-you-go budgeting, especially with the COLA for younger military retirees.”

Even a strict pay-as-you-go policy would not be enough to stabilize the federal debt, but Bixby calls PAYGO “the first line of defense against further fiscal erosion.”

External links:
Former Generals Discuss Need for Military Retirement Benefit Reform
Approaches to Reducing Federal Spending on Military Health Care (CBO)

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