Congress raids Military PensionsWritten By Kenneth Brooks on 01-03-2014 | in Government, Ethics, Critical Thinking, Economics,
Congress raiding of military veterans' pensions brings shame to America. A 2014 federal budget provision subtracts one percentage point of the annual cost-of-living adjustment (COLA) for pensions of military retirees younger than 62 years old. Reportedly, the COLA penalty will save the government about six billion dollars in spending over ten years. Therefore, Congress flouts our nation's moral and contractual duty to military retirees for a small $600 million a year cut in spending.
Inflation reduces the buying power of the dollar and forces consumers to spend more to buy the same amount of goods and services. The annual COLA adds more dollars to military pensions by a rate estimated to equal buying power lost to inflation. Therefore, the annual COLA only restores the pension's original buying power without adding net monetary gain. Without the COLA, military and other retirees suffer a reduced standard of living from inflation.
The Military Officers Association of America estimated the one-percent COLA penalty cost more than $83,000 in lost income over 20 years for the typical enlisted member retiring at 40, and a loss of $124,000 for a typical retired officer. Congress levies federal income tax on military pensions from the first day of retirement no matter the retiree's age. It has a similar contractual and moral duty to protect all military retirees' pensions equally from inflation.
U.S. Code Title 29 / Chapter 14 / Section 623 says, "It shall be unlawful for an employer-(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age."
The Federal Government is the employer of U.S. Armed service members and retirement pay is part of their compensation. Therefore, Code Section 623 prohibits the Department of Defense from reducing the value of younger retirees' pension based only on age. I understand Congress passed the original age-discrimination law to protect older workers from discrimination. Nevertheless, Section 623 clearly makes it unlawful for an employer to discriminate against any individual regarding compensation based on age.
"Despite more than a decade of warfare following the Sept. 11, 2001 terror attacks, only about 0.5% of the American population has been on active military duty at any given time," according to the Pew Research Center survey. Only 15 percent of enlisted personnel will ultimately be eligible for retirement, according to the Congressional Research Service. Now Congress imposes a special pension tax on the pensions of military retirees younger than 62.
Supposedly, equal opportunity in America rewards hardworking, education-seeking people with security and upward mobility. Career members of America's armed forces displayed all those qualities while also protecting the nation. Therefore, thoughtful people must question why Congress selected military retirees for discrimination. The answer is easy. They are an identifiable minority group without wealth or power that Congress can target for blame without fear of public protest.
Some people argue that military pensions are overly generous and Congress needs to change them. They say that retirees' pensions drain money from current defense personnel and equipment needs. This is a poorly reasoned conclusion that blames retirees for Department of Defense officials' mismanagement of funds.
Armed forces members worked long hours without overtime pay during their military careers especially during deployments. They earned retirement pay each year of service. Department of Defense civilian managers had the duty to set aside money from budgets of those years to meet accruing pension obligations. Instead, they spent it as interest free loans. Now that past debt reflects in the 2014 federal budget that Congress deceitfully asserts is new spending for military pensions. However, Congress is conspicuously silent about the bonus government receives by paying zero pension credit to the 85 percent of people that served in military without qualifying for 20-year pensions.