Benefit Bulletin: 2014 COLA Repeal

Benefit Bulletin: 2014 COLA Repeal

Military Retiree COLA Cut Attempt Shot Down — Prelude To Next Battle?

In the face of bipartisan outrage, Congress swiftly repealed a recently - enacted cost-of-living adjustment (COLA) cut before it could go into effect. The COLA cut that was just passed by Congress and signed into law by President Obama in January affected military retirees younger than age 62, and would have cost the average military retiree an estimated $69,000 in lifetime retirement benefits. TSCL joined with its affiliate, TREA The Enlisted Association, in strongly fighting the COLA cuts, believing that Congress reneged on promises to our military retirees who were unfairly singled out.

A flurry of bills from opponents of the cut led to the repeal. TSCL sent a letter to Senator Jeff Sessions (AL), who serves on the Senate Budget Committee, after he proposed legislation to restore COLAs by closing a loophole that allows illegal immigrants to claim billions annually in child tax credits.

The letter said, "Allowing illegal immigrants to claim annual child tax credits is fiscally and ethically irresponsible. Closing the tax loophole would save billions of dollars, eliminating the need to trim hard-earned military pensions. We salute you for your leadership on this issue, and we look forward to informing our members and supporters about your efforts."

TSCL remains highly concerned, however, that the COLA cut attempt, which took place for the most part during closed-door budget negotiations at the end of last year, is just a prelude to bigger benefit battles ahead. The repealed cut was more than five times the size of the trim that Congress and President Obama publically debated last year. The legislation passed in January mandated that the cut would be a full percentage point below the Consumer Price Index (CPI). In other words, if the CPI increase were 2%, then military retirees would have received only 1%.

COLA cuts form a key proposal of most major deficit reduction plans, and the proposal to cut Social Security COLAs by one whole percentage point below the Consumer Price Index (CPI) has been pushed forward several times in past budget wars.

Your grassroots efforts to get friends and family involved in fighting COLA cuts helped to protect COLAs of younger military retirees, but the threat of more cuts remains on the table. TSCL has set up a number so you can call your Member of Congress toll free: 844-455-0045.

Sources: "Hill Report Puts Dollar Figures On Military Retiree COLA Limit," Eric Yoder, The Washington Post, February 10, 2014.