Veteran Benefits A Flashpoint After 13 Years Of War: US Lawmakers Confront Cuts They Say Are Necessary While Veteran Groups Call For Billions In Further Spending

on February 07 2014 10:10 AM
  • US Marine Corp Memorial May 2010 by Shutterstock 2
    U.S. Veterans at U.S. Marine Corp Memorial. Shutterstock.com
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    A group of veterans await a clothing giveaway at St. Anthony Foundation in San Francisco, California November 8, 2013. Reuters
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It’s a time-honored tradition in the U.S., the largest defense spender on the planet by a far: Deciding what to do with all the future financial commitments it creates every time it expands military bases or sends Americans to fight wars overseas.

Next week, the Senate will debate repealing $6 billion in cuts to military pensions that had been made as part of a December budget deal. The deal had cut cost-of-living adjustments to working-age military retirees who served at least 20 years. The cuts were designed to reduce future increases to benefits by one percentage point below the inflation rate.

On Monday, the Senate will vote on a bill introduced by Sen. Mark Pryor (D-Ark.) that would repeal the cuts without having to find other spending in the federal budget to fund them, also known as a "pay-for." Efforts to find a pay-for to restore the cuts have stalled after Republicans opposed a Democratic proposal that included closing offshore tax loopholes.

Adam Smith (D-Wash.), a member of the House Armed Services Committee, has emerged as a vocal opponent of repealing the cuts, an increasingly lonely stance among lawmakers. Paul Ryan (R-Wis.) has also publicly supported the plan to reduce the cost of military pensions as part of an effort to cut sky-high military personnel costs. Smith defended his stance by saying he has voted against building more B-2 bombers despite the wishes of The Boeing Co. (NYSE:BA), which maintains a significant presence in his district. He lambasted lawmakers for “interest group-driven and parochial-driven” motivations for opposing cuts to military spending. He also said the repeal of the pension cuts are "likely." 

Meanwhile, this week, veterans' groups released their proposal for fiscal year 2015 spending, calling for $72.9 billion to fund the Department of Veterans Affairs' health care and other benefits. The biggest increase included in the so-called “2015 Independent Budget” -- proposed by Veterans of Foreign Wars, AMVETS, Disabled American Veterans and Paralyzed Veterans of America -- would be $3.9 billion for construction projects, or $1.2 billion more than the amount budgeted for that in the fiscal year 2014 spending bill passed last month. The group also wants $5.5 billion more for the medical care budget in fiscal year 2015 than was included in the FY 2014 bill that included allocations for next year.

In the 2013 fiscal year, public employee benefits for federal retirees and veterans made up 7 percent of total federal spending, according to the Office of Management and Budget. Defense spending -- which creates more veterans down the road who will will require more pension spending -- made up about 20 percent of the total defense budget.

This year, excluding veterans’ benefits, the U.S. defense budget stands at $520 billion, and it comprises a majority of U.S.'s discretionary spending, which is the money Congress allocates -- excluding Social Security, Medicare and other safety net programs, as well as interest on debt and other government programs, including veterans benefits.

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(Note: U.S. Veterans at U.S. Marine Corp Memorial photo by Shutterstock.com.)

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