Early retirement provision drawing ire

By Tom Philpott

The $696 billion defense authorization bill for 2008, which Congress expects to return to the White House by next week for a promised signature, has a host of critical pay and benefit initiatives for service members at war.

The House passed a revised HR 1585 last week, removing a provision that would expose foreign governments to more U.S. court actions and which sparked the president’s veto. The only other change ensures that bonus and pay authorities suspended after the veto will be applied retroactively to Jan. 1 so that no service member suffers a veto-related financial penalty.

The bill’s 3.5 percent basic pay raise means that for an eighth straight year military compensation will rise faster than average private sector wages.

The personnel issue still stirring hard feelings involves, ironically, the first-ever step by Congress to lower the age 60 threshold for Reserve and National Guard retired pay. The bill says that for every 90 consecutive days spent mobilized, reservists will see the age-60 start for payment of annuities cut by three months.

So a reservist eligible to retire who was mobilized for 18 months could begin to draw retired pay at 58 1/2.

The razor in the cake is the effective date. The early retirement provision applies only to mobilization periods after the bill is signed. It leaves out more than 600,000 members mobilized since 9/11 for Afghanistan and Iraq and to respond to natural disasters like Hurricane Katrina. About 142,000 of them have been deployed multiple times the past six years.

Unable to find budget dollars to apply the change as proponents intended, to all members called up since 9/11, Congress decided to pass what it could and risk a pummeling for denigrating earlier reserve service.

“It’s a way for Congress to appear to be doing something and actually giving nothing. What a crock!” wrote John P., an Army reservist in Iraq.

“Of all the good things I see happening to support our combat troops, this one bad decision counters much of it,” wrote Maj. Brian McManus, a member of the Alabama Army National Guard.

Retired Air Force Reserve Col. Paul Groskreutz, president of the Reserve Officers Association, said Congress has created a “disincentive” to service. Many reservists who have served multiple tours, he warned, “will likely quit in frustration.”

Capt. Marshall Hanson, USNR-Ret., ROA’s legislative director, understands the anger. He also believes lawmakers will use the dissatisfaction of so many reservists to make more retirement changes.

Last fall the Senate had accepted a floor amendment from Sen. Saxby Chambliss, R-Ga., to establish the 90-day rule to lower the reserve retirement age for mobilizations since fall of 2001. The House had passed no such provision. When House-Senate negotiators met to work out details on the bill, Chambliss and colleagues had no way to pay for his amendment.

Under congressional budget rules, which the House enforces more rigidly, any increase in entitlement spending, which includes reserve retirement, must be paid for with higher taxes or cuts in other entitlements.

Conferees did find some entitlement offsets. Most were tied to a provision that will force drug manufacturers to apply federal pricing discounts to medicines dispensed from TRICARE retail pharmacies. This freed up entitlement dollars by lowering future health costs for older retirees.

Most of that money was used, however, to expand Combat-Related Special Compensation effective Jan. 1, to thousands of veterans forced from service short of 20 years because of combat-related injuries.

“I don’t know that people recognize how big that is,” said a proud congressional staffer. Until now most dollars that Congress has spent to allow “concurrent receipt” of both military retirement and VA disability pay have gone to retirees who retired after 20 years “with inherent conditions of old age, which then are deemed service-connected,” he said.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: