Have We Reached the Apex in Military and Veterans Benefits?

Many organizations are fighting to revoke the legislation which imposed a cap on the cost of living allowance for retirees under 62. Congress expects the cap to save around $6.3 billion over the first decade. This is intended to mitigate some cuts from other sections of the defense budget. The budget fights had imposed a sort of dilemma: 1) degrade national security by using further automatic and unwieldy sequesters, or 2) begin sacrificing some benefits. Representative Paul Ryan defends the reduction in retirement COLA by arguing it was an idea from the Department of Defense. This is even further evidence that the nature of the relationship between service members and Big Army, Department of Defense, and high level planners in other branches is changing. Ryan also argues that military and veterans benefits in the past have been generous enough that some reductions are not unreasonable.

Veterans Benefits Lower in 2013 than Planned

VA benefits, likewise, were less generous in 2013 than what was envisioned originally. Representative Bernie Sanders, chairman of the Senate Veterans Affairs Committee, argued for a large package of new benefits and services for veterans and veterans’ spouses. The Veterans Health and Benefits Improvement Act of 2013, (S. 944), made it through committee in July, but Sen. Tom Coburn, R-Oklahoma, held the bill stating – among other reasons – that S. 944 was not paid for with budget offsets elsewhere. The offsets proposed by S. 944 backers would not save money in the near term while VA costs would continue to increase. Since 2009 VA budgets have climbed steeply. In addition to the budget constraints, the VA continues to labor under the backlog of claims. So, the problems continue, but the money is getting tighter.

COLA for VA Benefits

The COLA for VA benefits, however, was not rounded to the nearest dollar. So, for the first time, the benefit rate tables includes pennies as well as dollars. This was a noteworthy change for practitioners, like myself, who read the tables on a routine basis. The additional pennies added an average 49 cents to monthly payments. This is good news, but it is modest.

The next few years will tell us whether 2013 was an aberration or the first of trend of freezing – or even reducing – veterans benefits. This could happen as 1) the economy tries to achieve “normal” growth rates and 2) national security concerns (which are sizable – expanding chaos in failed African states, the pivot to address China’s more muscular presence in the world, an unpredictable and reckless North Korean dictator, sectarian violence increasing in Iraq, Syrian civil war transforming into a more regional conflict involving Iran and other oil rich states, etc . . . ) absorb defense money that strains the relationship between the Department of Defense and veterans and retirees.

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