Big Red Car here. So The Boss is back for Christmas. Not like him to leave Steamboat when the snow’s still good but the babies — the Investment Banker and the Perfect Daughter — are coming home so he had to be there to greet them. Still, the snow was damn good.
So The Boss is exercised about the recent budget deal and the provision to reduce the military pensions contained therein. [The Boss is a Veteran and his Old Man is a retired Sergeant Major, so he comes by his interest honestly.]
The Boss does not think we should be balancing the Pentagon or National budgets on the backs of our soldiers. Not at a time like this when the Nation is at war. Simple notion really. Particularly while the justification is to shift funds to other Pentagon programs including procurement programs. Money for government contractors but no money for soldiers?
The Compact
When a soldier enlists in the Army (Air Force, Navy, Marines, Coast Guard), he enters into a contract which obligates him or her to go in harms way to defend the Nation at the behest of the President. The young American soldier takes an oath to protect and defend the Constitution of the United States against all enemies foreign and domestic.
The young American soldier literally recites a blood oath. An oath that includes a burial plot.
The Nation, in turn, agrees to pay the soldier and to provide care to keep him healthy and to heal him should he be wounded. If he is killed in the line of duty he will be buried with honors and his survivors will receive a $100,000 death gratuity.
Part of this contract is a promise — made at the time of his first enlistment — to pay him retirement pay should he serve 20 years. This promise of a retirement pay is an inducement for the soldier to enlist, re-enlist and to serve 20 years minimum. It is a foundation of the bargain, the contract.
The soldier may also be medically retired if he is wounded and disabled in the line of duty.
Military Pay
Military pay is not very grand. A new private is paid approximately $18,000 per year and is expected to risk his life in the bargain.
This is not a particularly attractive wage and yet patriotic men and women enlist to serve their country in time of war such as today.
They sign their name. They shoulder their end of that dangerous bargain. They serve diligently.
They deserve to have their contract honored. By us. By the US Congress. By the President of the United States.
The Budget Deal
In the Congressman Paul Ryan and Senator Patty Murray negotiated Budget Deal one of the provisions is to reduce the COLA (cost of living allowance) by 1% per annum for all retired soldiers until they reach age 62 years old. The COLA is intended to keep retiree buying power undiminished by inflation. It is a normal part of most retirement programs. It was part of the original bargain.
This has two important impacts on the retired soldier:
1. During the time period from retirement until attaining age 62, the soldier will see a decrease in his contracted retirement pay and his retirement pay will not keep pace with inflation.
2. Once the soldier has attained the age of 62, he will start receiving his full annual increase but from a now diminished base. This impact will be permanent.
The net impact is that the retired soldier will see a permanent and irreversible erosion of the promised retirement arrangement.
It is worthy to note that neither Congressman Ryan nor Senator Murray suggested any commensurate reduction in their own Congressional retirement system. Only for the military.
If you want to see what the Congressional retirement system looks like, you can see it here. Congressional Retirement System
Think the US Congress would stand for having their plan unilaterally changed? Not. Bloody. Likely.
Anti-military Sentiment
The Boss is OK with the fact that the country and its leaders disingenuously praise the military — Our Heroes — when it is election time or on Veterans Day.
This decision to reduce retiree pay however drowns out and rips that phony sentiment naked.
Remember those Hellacious traumatic amputees who have lost a limb or two? Well it is those guys who are being impacted by this reduction in retirement benefits. Another horror visited upon them.
This betrayal by the House, Senate and the President should be remembered at the ballot box in November. Get rid of all of them.
But, hey, what do I really know anyway? I’m just a Big Red Car.
Contracts must be honored always, regardless if the country is at war or not. The problem is that most public pension systems are ponzi schemes and they are easy to abuse by the organizer. Converting to a capitalization system requires a huge effort because you need to screw someone to build that capital, so it is unlikely that it will be done.
One question out of curiosity. Are there any limitations on the things that Army retirees can do in term of jobs or economic activity? if there are it seems like a huge waste of human capital to keep people in their 40s/50s out of the market.
.
The volunteer army has been such a success — the best we’ve ever had — that the notion of going back to a draft is considered unlikely. And, yet, the draft has been the norm since the original Colonial militias.
We do not pay our Army particularly well though at the General officer level the pay is almost competitive with the civilian world.
The real unspoken issue with retirement is the amount of combat time a soldier is subjected to. I would have no problem with extending the retirement period to say 25 years for staff positions and administrators while keeping a lower limit for the actual warfighters.
In recent years, a soldier might have spent half of his time in combat — Iraq and A’stan. This time in combat — as society advances — is progressively more taxing and a more unequal burden. Therefore, it is going to have to be bought more dearly.
There are no restrictions on what a soldier can do when he retires and some continue in the National Guard (state militias subject to Federalization in time of war) or the Reserves (regular Army components subject to call up in crisis).
General officers never technically retire.
Merry Christmas and Happy New Year, my friend.
BRC
.
I had not thought about the differences between generations and positoins in terms of combat time. It is clearly an issue. I read recently ‘No Easy Day’ by Mark Owen (a Navy Seal in the team that killed OBL) and the guy had done like 7-8 tours in Irak and Afghanistan. That can’t compare with being in the US doing other things or serving mainly in peace time.
Merry Christmas and Happy New Year to you too. I hope you enjoy with The Real Boss, The Perfect Daughter and The Investment Banker!
.
Soldiering is fun. I enjoyed my time as a soldier. It was a great learning experience and it was a great test of character. There is almost literally nothing I needed to know as a businessman that I did not learn as a platoon leader or company commander.
It is a young man’s game and it requires a very high level of fitness. Constant fitness. Particularly in elite units which must be able to move instantly. The Seals are the best of the best.
The psychological stress of living in an otherwise peaceful civilian world — or coming and going to and from a civilian world — which is otherwise not engaged in the war is perhaps the greatest cause of stress.
America has not had to make a “guns or butter” choice since World War II. Purposely so and with the volunteer Army effectively so also.
This creates an enormous stress.
This is one of the reasons why I think we should pay our Army very, very well. It is frankly a duty that most men are not willing to do and therefore is an internal mercenary military. While it is tempting to say that that vanquishes the nobility of the undertaking, it is very effective. We get the best patriots and the best minds.
Stay well and enjoy life.
BRC
.
I don’t disagree that Congress ought to feel the pain. I don’t disagree that the military should be taken care of. What was the COLA prior to the budget being passed? A COLA of more than 3% per year is probably too much for anyone given the rate of inflation in this generation.
.
The essence of leadership, effective leadership, is to lead from the front. It is “Follow Me” not — ya’ll wander up ahead there and let me know what happens while I stay back here and ponder the future.
The Congress is not even symbolically in the game. They routinely pass laws while exempting themselves. Not only do they not lead from the front, they have absolutely NO intention of ever following.
Witness the recent insider trading law change. No public debate. Just a unanimous consent by both parties in the Senate and House and the President signing it at midnight on a Saturday.
The COLA is almost purely symbolic. It shouts — the military is a useful voting block but face it they’re going to vote on the right regardless of how we treat them.
Those who understand the military pay system will remember that active duty pay and retirement pay were disconnected during the Eisenhower administration. There is no connection between what an active duty Sgt Major makes and a retired Sgt Major makes.
The retiree can only look to COLA to protect his buying power. It is driven solely by the CPI and therefore already takes into account changing economic conditions.
Merry Christmas and 2014 is going to be YOUR year, friend.
BRC
.
open source gov ?
Shameful.