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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Defending the Military Pension Cut



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Congressional Republicans have been thinking up various clever ways to replace a cut in military pensions for under-62 military retirees with various other cuts in federal expenditures. This is a mistake. As the Committee for a Responsible Federal Budget explains, the cut is modest:

Among the elements of the budget deal that passed Congress last month was a small $6 billion change to the way military pensions are calculated for military retirees younger than 62. In the face of lawmakers who would roll back this change, both the Washington Post and Wall Street Journal editorial boards defended the provision in the last two days. 

The change would reduce by 1 percent the cost-of-living increases for retirees that are younger than a normal retirement age. Depending on the exact rank and year of retirement, an average retiree’s lifetime payments would be reduced by less than 3 percent, and payments to retirees over 62 would be unchanged. This policy is far more modest than the recommendation of the Bowles-Simpson Fiscal Commission, which recommended completely eliminating COLAs for retirees under age 62.

Over time, however, it will generate larger savings, and give future military retirees time to revise their plans. The provision also addresses, in a small way, the fact that rising compensation costs are crowding out other defense needs, like the need to invest in new technologies. And it demonstrates that Republicans are willing to push back on military compensation, despite the fact that this cuts against type. The fact that GOP lawmakers seem keen to cut spending programs that benefit predominantly Democratic constituencies while protecting those that benefit predominantly Republican constituencies greatly undermines their claim to be consistent spending hawks, and it emboldens their opponents.



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