To avoid another government shutdown in January, the House and Senate reached a bipartisan budget agreement covering both fiscal years 2014 and 2015. When it was announced, both the Senate and House Budget Committees stated that the agreement contained no provisions detrimental to disabled veterans. However, it is now evident that enactment of this agreement did cut future cost-of-living adjustments (COLAs) for military retirement pay received by veterans who retired due to medical reasons, including those who suffered combat wounds. This reduction of the military retirement COLA shrinks payments to disabled veterans by hundreds of millions of dollars over the next decade.
DAV is extremely disappointed to learn that this unconscionable policy is contained in the budget agreement that passed the Senate December 18, and we urge Congress to immediately repeal this unacceptable provision. Cutting benefits for medically retired veterans in order to reduce the deficit is a major betrayal of those who have sacrificed so much for their country.
We do note that the budget agreement does not make any reductions in benefits paid to veterans by the Department of Veterans Affairs, including disability compensation payments. The full COLA for veterans benefits approved by Congress last month will not be reduced by this agreement.
However, working-age military retirees, if retired based on longevity or medically retired, would see their retirement pay increase at a slower pace than they would have received otherwise, one percent less, until they reach the age of 62, at which time these payments would revert to normal cost-of-living increases pegged to the full rate of inflation, assuming no other change in law. The reduction in COLA will not become fully effective until the end of 2015.
DAV urges Congress to take swift action to repeal any cuts to military retirement pay for veterans who are medically retired.