Ryan-Murray Budget Deal: Reaching Compromise on the Backs of Military Retirees

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Ryan-Murray Budget Deal: Reaching Compromise on the Backs of Military Retirees

by Linda Szugyi

Last week, I men­tioned how tough it is to opine on some­thing that impacts me in a per­sonal way. In that post, the topic was the war in Afghanistan.

This week, it is the bud­get war on the Hill.

Sheesh.

How do I objec­tively assess the Ryan-​Murray bud­get deal, when it stands to cost thou­sands of dol­lars a year for my hus­band and all oth­ers who plan to retire or have already retired from the mil­i­tary at a younger age than 62?

The cut sounds incon­se­quen­tial at first blush: a 1% cut in Cost of Liv­ing Adjust­ment (“COLA”) until you reach the age of 62. But if you retire at age 42, then you have the cumu­la­tive effect of 20 years of infla­tion – dol­lar value shrink­age – before you get the 1% adjust­ment back. In other words, that wee 1% cut ends up a 20% loss in value for the per­son who retires at age 42.

Let’s talk more about that young retiree, shall we?

First of all, retir­ing at a younger age isn’t just an employee perk. It’s nec­es­sary for a func­tional mil­i­tary. We all know that the mil­i­tary is in the busi­ness of fight­ing, and fight­ing is a young man’s job. Still, it prob­a­bly looks like a pretty sweet deal, get­ting this full mil­i­tary pen­sion at such a young age, and get­ting to add it to what­ever sec­ond career you choose post-​military.

That’s because it is a pretty sweet deal.

That’s why peo­ple agree to it. They agree to risk their lives. They agree to uproot their fam­ily any­where from 4 to 12 times (we are on our 7th move in 15 years). They agree to lose the abil­ity to invest in real estate with the sweat equity that requires years of liv­ing in the same four walls. They agree to be worn down by hard labor, dan­ger­ous work envi­ron­ments, reg­u­lar sleep depri­va­tion, and bat­tle stress.

They agree to give up all the earn­ing growth poten­tial of entre­pre­neur­ship or cor­po­rate ladder-​climbing. (That goes for their spouses, too. The spouse who can main­tain a lucra­tive career while being dragged to the four cor­ners of the world is a rare one indeed.)

There’s another impor­tant aspect to con­sider: you can’t just put in two weeks notice and quit. We call quit­ting an Unau­tho­rized Absence (“UA”) in the Navy, and it’s a crime under the UCMJ. In order to func­tion suc­cess­fully in a mil­i­tary career, you have to under­stand that you don’t own your own life. You are the military’s inden­tured servant.

That’s why it takes a pretty sweet deal to lure enough moti­vated indi­vid­u­als into an all-​volunteer mil­i­tary for twenty or more of their very best years.

It’s a major expense for the U.S. gov­ern­ment. Life­time pen­sions that can start as young as age 38 will in most cases be paid out for a very long time. With health­care costs soar­ing, it’s no sur­prise that Tri­care for Life is the most expen­sive part of all.

This bal­loon­ing cost of mil­i­tary per­son­nel might be get­ting out of hand. It may need reform­ing. Con­gress already cre­ated a com­mis­sion to study this very topic, and its rec­om­men­da­tions are due this com­ing May.

Instead of wait­ing for the rec­om­men­da­tions of their own com­mis­sion and craft­ing non-​retroactive reform, how­ever, the House chose to renege on a promise. The House chose to retroac­tively shrink the ben­e­fits that untold num­bers of ser­vice mem­bers relied on when they weighed their options at re-​enlistment and decided to con­tinue their mil­i­tary career.

Paul Ryan can take his rugged, good-​looking fis­cal con­ser­vatism and stuff it in a sock. The fed­eral gov­ern­ment spends $11 bil­lion dol­lars a day, and I bet he can find his $7 bil­lion of sav­ings some­where else. As you might have noticed, I’ve thrown objec­tiv­ity to the wind for this post. I am emphat­i­cally stat­ing that this bud­get deal blows mon­key chunks.

At least you can use my sub­jec­tive view in order to make an objec­tive assess­ment of your own. The fact is, moves like this will impact the career deci­sions of every ser­vice mem­ber. And they won’t be hold­ing their breath for an Armed Forces panel to review this retire­ment cut before it takes effect.

So Con­gress, do you want an all-​volunteer mil­i­tary that is capa­ble of the sus­tained action that your for­eign poli­cies have required? Or are you going to rein­sti­tute the draft? Or what?

Update: (DTG) Usu­ally the lead post of the day is reserved for me but Linda as a Mil­i­tary wife asked spe­cial per­mis­sion for the blog to lead with it and given this deal directly impacts her I decided to go with it.

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[olimome­ter id=4]

Yes­ter­day In the rush to shovel I for­got to make my lead pitch for DaTip­Jar to start the week (didn’t hit save) and it shows.

Sun­day we only drew $2 toward our $340 weekly goal.

I usu­ally don’t attack DaPitch to Da Mag­nif­i­cent Seven even though it helps pay them but as this is the lead post of the day the pitch is here.

If you like these new writ­ers adding to the blog and like what you get at DaT­e­chGuy blog and want to see this (and per­haps more) in the future, it’s all pos­si­ble, but only with your support.

If you think it’s worth­while, please hit­ting DaTip­Jar below

We are only 60 14 new sub­scribers at $20 a month to cover both the Mort­gage and the Mag­nif­i­cent Seven with­out a daily shake of DaTip­Jar all year.

Give your­self a Christ­mas present that will inform and enter­tain you 365 days a year in 2014 Sub­scribe below.




by Linda Szugyi

Last week, I mentioned how tough it is to opine on something that impacts me in a personal way.  In that post, the topic was the war in Afghanistan.

This week, it is the budget war on the Hill.

Sheesh.

How do I objectively assess the Ryan-Murray budget deal, when it stands to cost thousands of dollars a year for my husband and all others who plan to retire or have already retired from the military at a younger age than 62?

The cut sounds inconsequential at first blush:  a 1% cut in Cost of Living Adjustment (“COLA”) until you reach the age of 62.  But if you retire at age 42, then you have the cumulative effect of 20 years of inflation–dollar value shrinkage–before you get the 1% adjustment back.  In other words, that wee 1% cut ends up a 20% loss in value for the person who retires at age 42.

Let’s talk more about that young retiree, shall we?

First of all, retiring at a younger age isn’t just an employee perk.  It’s necessary for a functional military.  We all know that the military is in the business of fighting, and fighting is a young man’s job.  Still, it probably looks like a pretty sweet deal, getting this full military pension at such a young age, and getting to add it to whatever second career you choose post-military.

That’s because it is a pretty sweet deal.

That’s why people agree to it.  They agree to risk their lives.  They agree to uproot their family anywhere from 4 to 12 times (we are on our 7th move in 15 years).  They agree to lose the ability to invest in real estate with the sweat equity that requires years of living in the same four walls. They agree to be worn down by hard labor, dangerous work environments, regular sleep deprivation, and battle stress.

They agree to give up all the earning growth potential of entrepreneurship or corporate ladder-climbing.  (That goes for their spouses, too.  The spouse who can maintain a lucrative career while being dragged to the four corners of the world is a rare one indeed.)

There’s another important aspect to consider:  you can’t just put in two weeks notice and quit.  We call quitting an Unauthorized Absence (“UA”) in the Navy, and it’s a crime under the UCMJ.  In order to function successfully in a military career, you have to understand that you don’t own your own life.  You are the military’s indentured servant.

That’s why it takes a pretty sweet deal to lure enough motivated individuals into an all-volunteer military for twenty or more of their very best years.

It’s a major expense for the U.S. government.  Lifetime pensions that can start as young as age 38 will in most cases be paid out for a very long time.  With healthcare costs soaring, it’s no surprise that Tricare for Life is the most expensive part of all.

This ballooning cost of military personnel might be getting out of hand.  It may need reforming.  Congress already created a commission to study this very topic, and its recommendations are due this coming May.

Instead of waiting for the recommendations of their own commission and crafting non-retroactive reform, however, the House chose to renege on a promise.  The House chose to retroactively shrink the benefits that untold numbers of service members relied on when they weighed their options at re-enlistment and decided to continue their military career.

Paul Ryan can take his rugged, good-looking fiscal conservatism and stuff it in a sock.  The federal government spends $11 billion dollars a day, and I bet he can find his $7 billion of savings somewhere else.  As you might have noticed, I’ve thrown objectivity to the wind for this post.  I am emphatically stating that this budget deal blows monkey chunks.

At least you can use my subjective view in order to make an objective assessment of your own.  The fact is, moves like this will impact the career decisions of every service member.  And they won’t be holding their breath for an Armed Forces panel to review this retirement cut before it takes effect.

So Congress, do you want an all-volunteer military that is capable of the sustained action that your foreign policies have required?  Or are you going to reinstitute the draft?  Or what?

Update:  (DTG)  Usually the lead post of the day is reserved for me but Linda as a Military wife asked special permission for the blog to lead with it and given this deal directly impacts her I decided to go with it.

***************************************************

Olimometer 2.52

Yesterday In the rush to shovel I forgot to make my lead pitch for DaTipJar to start the week (didn’t hit save) and it shows.

Sunday we only drew $2 toward our $340 weekly goal.

I usually don’t attack DaPitch to Da Magnificent Seven even though it helps pay them but as this is the lead post of the day the pitch is here.

If you like these new writers adding to the blog and like what you get at DaTechGuy blog and want to see this (and perhaps more) in the future, it’s all possible, but only with your support.

If you think it’s worthwhile, please hitting DaTipJar below

We are only 60 1/4  new subscribers at $20 a month to cover both the Mortgage and the Magnificent Seven without a daily shake of DaTipJar all year.

Give yourself a Christmas present that will inform and entertain you 365 days a year in 2014 Subscribe below.