To younger vets, pension cuts break a promise

Reduction in cost-of-living increase outrages veterans

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WASHINGTON — After 25 years of service, including combat tours in Afghanistan and Iraq, Lt. Col. Stephen Preston retired from the Army and began collecting a pension of nearly $55,000 a year. The money made it possible for Preston to go back to college, get his MBA and embark on a second career in corporate strategy.

So it happened that Preston was sitting in his new office shortly before Christmas when he heard on the radio that he had become the latest target in Washington's war on spending.

"I'm not an angry man, but I was very, very angry," Preston, 51, said in a telephone interview from his home in Tampa, Fla. "This is a pact between the greater population of the United States and the fraction of people who served and sacrificed. If you didn't want to pay us what you promised us, then you probably shouldn't have promised it."

The plan to trim pension increases for working-age military retirees such as Preston is by far the most controversial provision in a bipartisan budget deal approved by Congress and signed last week by President Barack Obama.

The cut is small, a one-percentage-point reduction in the annual cost-of-living increase, but it has provoked outrage among veterans who argue that the country is reneging on a solemn pact. And even though lawmakers, especially in the GOP, fulminate about the need to cut the cost of federal health and retirement benefits, many have vowed to roll the cut back when Congress returns to work next week.

The authors of the budget deal, House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Committee Chairman Patty Murray, D-Wash., have already agreed to amend the provision to exempt disabled retirees and survivors of those killed in action, eliminating roughly 10 percent of the $6 billion in savings projected over the next decade.

But Ryan has resisted efforts to abandon the pension cut entirely, calling it a "modest" adjustment to a particularly generous program — and therefore a more sensible choice than harder decisions that may lie ahead.

"I stand behind the need for reform," Ryan wrote in a Dec. 22 op-ed in USA Today. Noting that a special commission is due to make recommendations in May to reform the entire military compensation system, Ryan wrote, "That's why this reform does not take effect until the end of 2015 — it gives Congress ample time to consider alternatives."

Opponents say the policy retroactively penalizes a deserving group while doing nothing to contain the much larger cost of health and retirement benefits for the general public. Independent budget analysts note, however, that lawmakers have shied away from reductions in federal retirement benefits for any recipients — including changes to Social Security and Medicare included in Obama's most recent budget request — illustrating the enormous political difficulty of trimming the federal government's largest category of expenditures.

"It's easy to be bold and brave in general, but it's very hard to be bold and brave in specific," said Richard Kogan, a former Obama budget adviser who works at the left-leaning Center on Budget and Policy Priorities.

"You can talk about 'reforming entitlements.' But you can't talk about 'cutting Social Security,' because the public knows what that means," Kogan said. "Now, we've got $6 billion taken from military pensions — an infinitesimally small provision — and it causes people heartburn because it's specific."

Military pensions have long been on the chopping block, in part because the Pentagon, like many government and private entities, is struggling to cover the cost of promises made to people who now typically spend long decades in retirement. In 2012, 2.3 million military retirees and survivors of those killed in action received about $52 billion in payments, a nearly 50 percent increase over 2002, according to Defense Department actuaries.