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Public Statements

Military Retirement

Floor Speech

By:
Date:
Location: Washington, DC

Mr. GRAHAM. The Presiding Officer is from Virginia, and I know he understands military men and women very well. It is a very patriotic State when it comes to their military footprint. I am confident that he and I--and others--will be able to fix the problem that occurred in the budget agreement.

Let me say about the agreement itself that I do appreciate the fact that we were able to find a bipartisan way forward to relieve sequestration from the military and nonmilitary for a couple of years. That is just a drop in the bucket as far as what we have to do to repair the military. GDP spending on the military is moving toward an alltime low over a 10-year period with sequestration. The historical average has been well over 4 percent, and we are going to hit below 3 percent if we continue sequestration. That is an issue for another day.

The budget agreement called for relieving sequestration in the pay-fors. Quite frankly, they were not big. They did not change the course of the country. They are not what the Senator from Virginia and I hoped for. We would have liked to have done entitlement reform. I would like to do Tax Code simplification. I am willing to eliminate deductions in the Tax Code and take some of the money to pay down the debt, even though some folks on my side say we have to put it all in tax reductions. And I think the Senator from Virginia would be willing to engage in commonsense entitlement reform to keep us from becoming Greece.

This was the best deal we could get. It didn't do the big deal, but it did provide some budget relief for a 2-year period, and it was about $60-something billion; I can't remember the number.

The bottom line is that one of the ways you paid for relieving pressure on the defense budget and nondefense spending was there was a provision that will affect military retirees, which nobody will own, that got into the budget agreement.

I am on the Budget Committee. I was not consulted about the agreement; I read about it in the paper. There is a fine line between having a bunch of people involved who kind of keep things from never developing to produce a product and having a handful of people doing something in a small room, not vetted.

So the bottom line is that $6.3 billion of the pay-fors came from adjusting military retirement cost-of-living allowances for those who have served our military for 20 years and are therefore eligible for retirement. What they did was they took the COLA and reduced it by 1 percent for every military retiree until they reach the age of 62.

The President, to his credit, has called for an adjusting CPI, the way COLAs are calculated, for everybody--for civilians, military, Social Security--to make it more consistent with sustainable inflationary increases.

This didn't adjust the COLA, it left the formula as it is; it just reduced the military retiree's COLA by 1 percent until the military retiree reaches age 62, and that is the only group in the country that had that happen. So $6.3 billion is taken away from men and women who have served for 20 years, and no one else had the pleasure of that experience.

Civilian employees, new hires, had to contribute additional funds to the Federal retirement system to help pay for the deal, but it only affected new retirees; the people who are in the system were grandfathered. The only group that Congress found fit to single out for the retroactive application was the retiree community.

All I can say is that military pay--retirement, pension pay, health care benefits are going to be subject to being reviewed and they will be subject to reform, because a larger portion of our budget in DOD is personnel costs. The Congress, in its wisdom, set up a commission to look at this issue. They are supposed to report back in 2014--now maybe it is as late as 2015--about how to reform military pay and benefits as part of an overall restructuring of the Pentagon.

One thing Congress put into the commission's charter was that they had to grandfather people who are currently in the system. In the budget agreement we singled out military retirees for a 1-percent reduction of their COLA and nobody was grandfathered--$6.3 billion coming out of the pockets of those who have served. For an E-7 who is going to retire at 40 and has his or her COLA reduced to age 62, it is between $71,984 or $80,000, depending on who you talk to, in loss and benefits. And the E-7 receives in retirement pay after 20 years of faithful service about $25,000 a year--not exactly becoming independently wealthy.

We have one of the leading voices on this issue, Senator Ayotte from New Hampshire, who took up this challenge and came up with some solutions early on and has been a great voice about how unfair this is. So I will yield to the Senator from New Hampshire.

BREAK IN TRANSCRIPT

Mr. GRAHAM. Senator Ayotte mentioned this Washington Post editorial. The Washington Post is, in my view, a very good newspaper. I like the editorial board. They have been right on Syria and a lot of other issues. Sometimes we disagree, that is for sure. But this one editorial has gotten my attention to the point that I have to respond and, quite frankly, ask my friends at the Washington Post to reevaluate their position and think a little bit about what they are saying in their editorial when it comes to military retirees.

As she said, the editorial says this is a ``teensy-weensy'' small cut. I said that we were screwing the military retirement community and maybe a better way of saying it was we are disrespecting the military retiree community, because when I said we were screwing the military retirees, it was sort of like the financial package. They are having to give up retirement benefits--the COLA reductions--that not one other person in the entire country has to go through. And it is not teensy-weensy. When it is 1 percent calculated from 40 to 62, it is $71,000 to $80,000; if you are an officer, $100,000. Again, you get about $25,000 in retirement when you are an E-7; some in the thirties if you are an O-5. But to get that you have to serve your country for 20 years, uprooting your family--probably the average number of moves has to be five or six. If you have been on Active Duty since 9/11, God knows how many times you have been to Iraq and Afghanistan and other places.

Here is the deal: Your children are not subject to being drafted. Why? Because we abolished the draft, and we put in place an all-volunteer force, and part of the deal was that we would take care of the military member and their family in an appropriate way if they would bear that burden for the rest of us.

Are these people really living large off the rest of us? Should we be offended at this ``great deal'' we are giving these people who retire at 40 or 45 or 38? You know, the ``My God, aren't they just sort of taking the rest of us for a ride'' attitude really offends the hell out of me.

To get that $25,000 in retirement for the rest of your life--and I hope you live to be 80, or you just name the number--you had to work for it, you had to risk your life for it, you had to ask of your children something that most people do not have to ask; that is, move and leave your friends every couple years. You had to do things for the rest of us that, apparently, we do not appreciate anymore at the Washington Post.

I do not know what the editorial board's makeup is. They are all patriotic, I am sure good people, and if they have veterans down there, boy, you let your fellow veteran down by approaching this issue in such a harsh, insensitive way. Their response was: No, the military retiree is not getting screwed. This is just a small step to something larger.

What they are trying to do--which offends me--is, one, they do not know what they are talking about, which is unusual for the Washington Post. Do not confuse my disgust with the singling out of military retirees in a retroactive fashion to pay for a budget deal that does not do a whole lot to change the course of the country with my desire and willingness to reform military pay and pension benefits in the future through a logical process. Now, that offends me. That is pretty clever.

So can you be for reform and be disgusted at the same time? Yes. And here is the good news. Very few U.S. Senators are taking the Washington Post tactic that these people deserve more cuts--not less--singled out. I think the Washington Post is on an island of its own, at least I hope so.

People who voted yes--Senator McCain, God knows he has earned his retirement; Senator Chambliss; Senator Isakson--have come up with a way to fix this, and all three of them will say: I will embrace military pay and pension benefit reform in the future. I am not just going to single out the military retiree and reduce their COLA when no one else gets that reduction retroactively, violating their own commission charter.

Senator Shaheen on the other side wants to fix it. Senator Murray wants to fix it. I am really pleased that a lot of people have said: Now that I understand how this works, we need to fix it.

I have not even mentioned the fact that it does apply to disabled retirees. If you had your legs blown off in Afghanistan, it might be pretty hard to get another job. Your COLA is reduced too.

What do you say to those people? Thank you? Itsy-bitsy, teensy-weensy? Really? But they did not mention in the editorial that it applies to the disabled retiree. Mr. President, $600 million of the $6 billion comes from that community.

Here is my point: It is not so much that we were insensitive. It just shows me how far we have fallen as a nation and how comfortable we are for other people to do the fighting and we see these folks almost as the hired help, even though we profusely praise them, and we should. We welcome them home when they come back. We cheer when they go away. We trip over ourselves as politicians to show our love and affection. The average person at the airport says: Thank you for your service. We are well-meaning people. But to believe that somehow they are being fairly treated in this budget deal and really we are just not doing enough from the Washington Post's perspective, I think loses sight of what they have done for the rest of us.

Let's say we never reformed a penny of military retirement in the future and we left it as it is. About $1.734 million is the package over the lifetime from the 20-year retirement point to death, which the average could be 40 years. We need to look at that. But let's say we did not change a penny. Over a 40-year period, at $25,000 a year, do you begrudge these people this package? After 20 years of service, they are now in their forties, their late thirties--the average is probably in the mid forties--they have to start over again. Go do that. Not so easy. And somehow we are suggesting that we are being too generous?

Would you send your kid? If I gave you $1.74 million over the next 40 years, is that worth it for you to have your kid sent over to Afghanistan or Iraq, if they did not want to go? That is what this is about.

So to my friends at the Washington Post, I do not know what happened here. I do not know how you could justify and defend this provision in the budget agreement that nobody wants to claim credit for. Again, I will reform military pay and pension benefits through the commission process prospectively, but I will not sit on the sidelines and watch these people, yes, get screwed financially but, more than that, be disrespected.

To my House and Senate colleagues, Republican and Democrats, we created this problem together. We will have to fix it together. And to the military retiree community, the disabled retiree, I am confident that Republicans and Democrats will right this wrong.

Having said that, there will come a day when we will sit down and look long and hard about the sustainable nature of personnel costs--TRICARE reform--pay and pension reform--but we are going to do it understanding you have a special place in our heart, but when it comes to balancing the budget and writing the Department of Defense long-term financial obligations, that we will look at this in a professional manner, and we will do it in the way least intrusive, and we will give people notice. We will not change the deal.

Can you imagine what it is like to have fought since 9/11; you are getting ready to retire in 2016, after 20 years of faithful service--or maybe longer--you are from your last deployment in Afghanistan; you have been to Iraq a couple times, Afghanistan a couple times; you had a couple buddies die; you have missed countless birthdays and Christmases, and every time a strange car pulls up into the driveway, your spouse loses their breath, and you read that this is what the Congress is doing to you--changing the deal? You did your part of the deal, but all of a sudden we decide to change the deal because we have to find some money around this place to pay for a budget deal that does not do a whole lot for the long-term indebtedness of the country. And when we look to find money, we saw you as a source of money--not as the patriot, not as the front-line defender of freedom, not as the volunteer who took the burden off our backs and gave our families a pass. Shame on us all.

But the way you fix it is you fix it. To my friends at the Washington Post, Bowles-Simpson never said as part of their efforts to balance the budget--and I embrace their process--that we would eliminate military retiree COLAs as a recommendation. They set a target goal of saving $70 billion over 10 years from a Federal workforce entitlement task force to be set up to look at civilians and the military who work for the Federal Government, and they created the task force with a target goal of achieving $70 billion as a contribution toward reforming entitlements on that side of the ledger.

They gave examples of what the task force might look at: Use the highest 5 years of earnings to calculate civil service pension benefits for new retirees, rather than the highest 3 years. That could save $5 billion. Defer cost-of-living adjustments, as we are talking about here. That could save $5 billion. Adjust the ratio of employer-employee contributions to Federal employee pension plans to equalize contributions, $4 billion. These are examples of things to look at--not Bowles-Simpson recommendations. The recommendation of Bowles-Simpson was to find $70 billion from military and civilian retirement programs over 10 years through a task force.

What did the Congress do? We set up a commission--rather than a task force--to do exactly what Bowles-Simpson said to do. And to our wisdom, we told the commission, when it comes to the military, grandfather those who are currently in the system. That made sense to me. But under the budget agreement, we violated our own instructions to the commission by getting $6.3 billion from the military retirement community retroactively, from everybody in the system up to age 62, and only them. The civilian workforce had to make a contribution only for new hires.

If that is OK with the Washington Post, then I would suggest you have lost your way down there. I hope I never get so smart that taking $72,000, $80,000, $100,000--whatever the number is; the bottom line is, the minimum was $72,000 out of the E-7 cost-of-living adjustment; 3 years of their retirement--I hope I never get so smart about the budget that I find that to be itsy-bitsy, teensy-weensy. I hope I never get so callous that I could sit on the sidelines and allow the military retirement community to be singled out, unlike anybody else in the Nation, to find $6.3 billion when we are looking for money.

The bottom line is we will find the $6.3 billion. We are going to find it in a more acceptable way. And there will come a day when we reform benefits, but we are going to do it consistent with the charter that the Congress has created.

To our military community, you need to fight. You need to show up during the holiday break, and you need to remind all of us--just not Members of Congress--you need to toot your horn a little bit because it is so darn hard for you to do. You should humbly ask the U.S. House and Senate to reconsider this. You should humbly ask that the pay you received has been earned, and to change the deal in midstream is wrong. And you should remind us that: I have lived up to my end of the bargain. I am only asking that you live up to your end of the bargain. We need your voice.

So to the Senator from Virginia, who is presiding over the Senate, I know you will be part of the solution. There is a sweeping movement here in the Senate to try to find a way to right what I think is an injustice. Reform will come with it. But it sure as hell is not going to come this way.

I yield the floor. Merry Christmas.


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