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Pension cut angers vets

Two-year budget makes 1 percent cut in military pensions.

Military coalition groups have cried foul over a 1 percent reduction in military pensions that will hit working age retirees in 2015 under a two-year congressional budget deal.

The pension cut is a “breach in faith” and a “break in trust” with service members, retirees and the American public who depend on an all-volunteer force to protect the nation, said Michael Barron, deputy director of the Military Officers Association of America in Alexandria, Va.

“We have major concerns with it,” said Barron, a retired Army colonel. “It’s very unfair and harmful to the force.”

Veterans advocacy groups The American Legion, Disabled American Veterans, Veterans of Foreign Wars, and the Iraq and Afghanistan Veterans of America have demanded that Congress reverse the cut.

The American Legion reported about 900,000 of the nation’s nearly two million retired military service members would receive less in pension payouts. The cut would impact retirees up to the age of 62 with a 1 percent reduction in their cost of living allowance increase, including medically retired wounded warriors disabled or injured in wartime. When they reach age 62 they will receive a full cost of living adjustment annually.

A veteran defense analyst said rising and generous military pay and benefits and retirement costs over the years have absorbed more of the defense budget, and the reduction is a needed first step to rein in spiraling expenses. Service members may retire after 20 years of service in uniform. Active duty members can collect up to half their base pay when they retire, although reservists must wait until age 60 with certain exemptions.

“If you look at it in the whole, (military retirees) are much better off than they were a decade ago,” said Lawrence J. Korb, a defense analyst with the Center for American Progress in Washington, D.C., who cited low cost health plans through Tricare as one perk that’s risen in expense but not borne by military retirees. “We’ve got to do something about military compensation.”

The retired Navy Reserve captain said he would exempt those medically retired from the pension cut. He estimated such a change would impact fewer than 100,000 veterans.

The Pentagon paid $52.6 billion to military retirees last year, compared to $35.1 billion in 2002, based on Department of Defense Office of the Actuary figures. At the same time, the ranks of military retirees have grown by about 200,000 as the nation fought two wars in Iraq and Afghanistan.

Ohio has more than 41,000 military retirees receiving payments from the Department of Defense, about half of whom were Air Force veterans, Pentagon figures show. It wasn’t immediately clear how many retirees in the state would receive less in pension payments when the rule takes effect.

Tough decisions

The reduction would save the Defense Department $6.3 billion over a decade, estimates say. That’s not enough to justify taking the benefit away from those who earned it, said Joseph DiFalco, 43, who retired in the Ohio Air National Guard and had active duty service in the Air Force.

“We’re talking about people who wrote a check to the government that said you can have my life if you need it,” the Centerville resident said.

Barron said a service member with the equivalent rank of a Air Force master sergeant retiring at age 40 would lose about $80,000 over the life of the pension. House Budget Committee figures show the lifetime retirement pay for an Army first sergeant who retires at age 38 after 20 years in service would decline from $1.734 million to $1.626 million, The Washington Post reported.

Herbert Davis, 59, a retired Army first sergeant, said the fiscal belt tightening because of the budget woes justify reduced pension payments.

“Tough decisions have to be made and if pension benefits are one of the things that have to be looked at to balance the budget, then I think it’s fair that everything is considered,” he said. He made an exception, however, to those who were medically retired.

“In those cases, many of those folks may not be able to make a living,” said Davis, executive director of the Montgomery County Veterans Service Commission.

Sympathetic to veterans

Some members of Ohio’s congressional delegation have vowed to take another look at exempting medically retired veterans from the pension cuts. The budget bill, crafted by Democratic Sen. Patty Murray of Washington and Republican Rep. Paul Ryan of Wisconsin, was aimed at bringing stability to the budgeting process, lessening the impact of sequestration and avoiding the chance of a government shutdown next month.

U.S. Sens. Sherrod Brown, D-Ohio, and Rob Portman, R-Ohio, have both indicated Congress should review the pension pay cut before December 2015, when the reduction takes effect.

“It is my hope that we can work in a bipartisan manor to address this change and find an appropriate solution moving forward,” Brown said in a statement.

Portman said he was sympathetic to affected veterans. “I do not believe the reforms to military retirement benefits currently in the budget are an ideal approach to deficit reduction, and I would have proceeded differently had I drafted the proposal,” he said in an email.

Preston Grisham, a spokesman for the U.S. Rep. Mike Turner, R-Dayton, said the congressman will be a co-sponsor to a House bill to reverse the pension reduction. Turner’s congressional district alone has about 9,300 military retirees receiving payments, according to the Defense Department figures.

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