Budget office rolls out fresh ideas

Military members, retirees and veterans have a few more reasons to be wary of politicians who say their top priority is to cut federal spending.

Tom PhilpottThe Congressional Budget Office last week released a report of more than 100 options for reducing budget deficits. It’s a timely product as House and Senate conferees strive to negotiate by mid-December a new debt-cutting deal to replace automatic budget cuts of sequestration.

More than a few of the CBO options are fresh ideas to roll back compensation for categories of veterans or to raise TRICARE fees for military retirees, on suggestions that the government is being too generous.

To be fair, CBO is not singling out veterans here. There are options in the report to make nervous many segments of society dependent on federal payments, from social security recipients to drug manufacturers.

But for select veterans’ programs, CBO makes some hard-edged points that lawmakers bent on cutting spending might find compelling, if not persuasive, to help address the nation’s debt crisis.

Here are some of those ideas:

• Cap military pay raises: From 2000 through 2010, Congress approved basic pay raises that averaged a half percentage point above private sector wage growth.

The military could save $25 billion from 2015 to 2023 by reversing course, capping raises yearly at .5 percent below civilian wage growth. CBO predicts only a “minor” effect on force retention.

Evidence in favor of this move are data showing cash compensation for enlisted members now exceeds wages of 90 percent of civilian counterparts, well above the Defense Department’s goal of keeping service pay ahead of 70 percent of civilians of similar age and educational background.

• Concurrent receipt: Until 2003, military retirees who drew tax-free compensation from the Department of Veterans Affairs (VA) for service-connected disabilities saw retired pay reduced by an equal amount.

Congress phased out this ban on “concurrent receipt” over several years for retirees with disability ratings of 50 percent or higher. As a result, last year 420,000 retirees received $7 billion in concurrent receipt payments.

Lifting this ban, CBO suggests, encouraged many more retirees to seek a VA disability rating. CBO says $108 billion could be saved from 2015 to 2023 if the ban on concurrent receipt were restored for current and future retirees.

• Narrow eligibility for VA compensation: The law requires VA to define “service-connected” ailments broadly so if symptoms occur in service the condition usually is compensable. Last year, CBO says, VA paid 520,000 veterans a total of $2.9 billion “for seven medical conditions that…are generally neither caused nor aggravated by military service.”

VA could save $20 billion, from 2015 to 2023, if it stopped compensating veterans for the following: chronic obstructive pulmonary disease; arteriosclerotic heart disease; hemorrhoids; uterine fibroids; multiple sclerosis; Crohn’s disease and osteoarthritis.

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


Speak Your Mind