Vets Upset COLA Reduction Remains for New Troops

Veterans welcomed the repeal of the reduction of the cost-of-living-adjustment for retirees starting in 2016, but veterans' advocate groups are disappointed the reduction will still apply to new troops.

The bill now awaiting President Obama's signature grandfathers current retirees and troops as of Dec. 31, 2013, from COLA cuts that were created as a deficit reduction measure. However, troops entering service after that date will see smaller COLAs when they begin retiring in 2034.

Representatives for several veterans organizations say that's not fair and want to see the entire law scrapped.

"Future military retirees will be required to serve just as long and perhaps sacrifice even more than their predecessors," Veterans of Foreign Wars national spokesman Joe Davis said. "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."

Shortly after the vote on Capitol Hill on Wednesday, various groups released statements praising the repeal of the current law but did not endorse Congress' decision to saddle future retirees with smaller COLAs.

"While we are pleased to see the restoration of retirement benefits for those who already have served, we are concerned that Congress has left future retirement cuts in place, and we will keep fighting until benefits for all who serve are restored," Paul Rieckhoff, chief executive officer of Iraq and Afghanistan Veterans of America, said in a statement.

Michael Saunders, deputy legislative director for The Retired Enlisted Association, said that lawmakers' decision to put the COLA cap on future retirees will present a threat to recruiting and retention.

"While we thank [them] for repealing the unjust cut contained in the Bipartisan Budget Act ... this legislation cuts compensation that we believe is needed to maintain the all-volunteer force," he said in an email.

The bill repealed by lawmakers this week would have set annual cost of living adjustments for military retirees under age 62 at 1 percentage point below the federal cost of living increase. It was to take effect in fiscal 2016. The intent of the measure was to reduce the deficit by $6 billion over 10 years.

"All of our friends [in both houses] voted for it. It was almost unanimous," Louis Celli, legislative director of The American Legion, said on Thursday. "You can't scream bloody murder because the people we trust voted for it."

What makes little sense, says Celli, is that the money the government will save in the short term under the new law will be minuscule -- a small percentage of funds that the Defense Department annually saves and invests for future retirees.

With pensions trimmed back by 1 percent below the federal COLA starting in 20 years, the DoD will have to appropriate just a tiny bit less each year for the future. But nothing like the $6 billion the government was supposed to be saving over 10 years with the original legislation, he said.

"Is this [new bill] the worst thing in the world today? No. Because it accomplished the major goal that we needed to get accomplished right away," he said on Thursday. "Are we happy that they stuck in this last-minute provision to now penalize young enlistees who are looking at the military as a possible career? We're not happy about that. But I think lawmakers fully recognize that this will never go into effect."

And since the first retirees to feel the COLA pinch won't retire until 2034, he said, Congress has given itself plenty of time to fix its mistake.

-- Bryant Jordan can be reached at Bryant.Jordan@monster.com