Veterans, the 1% COLA cut, longterm impact – Yes, we have a problem

If you are a military veteran under the age of 62 you undoubtedly believe that the recent congressional budget accord reached by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA), and approved overwhelmingly by the House is a really, incredibly bad deal.

Part of the deal is funded by realigning the pension plans of almost every federal recipient with a pension under the age of 62.

Mea Culpa: I criticized the reaction of some veterans groups which played up the cuts as if military veterans were getting gored and carrying the budget debt burden almost on their own — certainly there was no mention of the more significant impacts on other parts of the federal government. I also criticized the huge numbers being thrown out and challenged them to do the math. I want to admit that my own math had issues. The math of the veterans groups is essentially correct, albeit without some important context provided to their audience.

Math, Options and the Need for Balancing the Federal Books

I am one of those veterans that will take cuts to my retired paycheck.

Veteran Group Math: My challenge to veterans groups is that I wanted to see the math. A conversation broke out and an interactive spreadsheet (Excel required) was sent to me that shows how the math worked. If you are a veteran you can enter your current monthly retirement pay in the green spreadsheet cell, press your return key, and a calculation across 24 years will automatically be done. The spreadsheet assumes that COLA/CPI increases an average of 2.5% each year.

My Math: Actual COLA/CPI can shift radically from year to year as economic conditions change. I tested the 2.5% average COLA, adjusted it down to 1.5% average per year (the new REDUX solution by Ryan/Murray), and contrasted it against historical COLA/CPI rates for the last 22 years — which is the time period that Ryan/Murray used to achieve their numbers.

I provide my math as a PDF spreadsheet that lets you see all the numbers together on one page. My example retiree is an E-7 with 20 years of service.

Short version of the results:

  • Using 2.5% as an average annual baseline COLA/CPI rate tracks relatively well with the results of using actual COLA/CPI rates across time.
  • Due to the magic of compounding interest, even at 1% of the annual COLA/CPI rate, there are significant longterm impacts on the veteran retiree paychecks.
  • An E-7 with 20 years of services would take home approximately $7,070 less per year by my calculation in their 22nd retirement year, and $10,750 per the 2.5% average COLA/CPI calculation.

Over 22 years the example E-7 will lose enough money to put several kids through a state university plus probably buy a new car. That is a significant impact.

Unhappy? Sure. However,  if we want this fixed then we need to offer up some options.

We need folks to step forward and to do more than just decry cuts to their pensions and to their programs. We need a bigger conversation about federal funding of budgets, programs and promises.

If we want our pay restored then we need to do more than to focus on ‘me’. We need options and solutions that address how the federal government itself is funded.

Yes, military retirees were asked to give up 1% of their annual COLA/CPI adjustment — which is what their annual pay increase is based upon, and not based upon the pay raise given to the active military.

However, MANY federal employees are being asked to now pay an additional 4.4% of their full pay into their pension fund — which is the equivalent of the military being asked to pay 8.8% instead of just 1% of COLA/CPI.

I do not want to be an apologist for what is a hurtful policy. Yet our nation is facing an unparalleled financial challenge and as long as a majority of Americans and/or their congressional representatives refuse to raise taxes to pay our nation’s debts and promises then the only other alternative is to make cuts.

Veterans have powerful lobbyists working in their behalf. The cuts do not go into effect until 2015. We have time yet to achieve some different outcome. Yet every other group that also got hit will also be scrambling to get their cuts fixed too. If veterans and veterans groups want an equitable outcome then we need to offer up options and to put those options on the table. One of the reasons that we are in our situation is that we want without also wanting to pay for the benefits.

Brainstorming Time

We need to be creative. Every problem needs a solution, a menu of options. We, and veterans groups and all special interest groups, need to do more than just decry hurtful decisions. We/they need to step forward and to also offer policy options.

I look forward to hearing your options proposals. I will cheerfully help get out the word and work for change.

Please keep in mind that they cuts were based upon each of the 12 federal budgets taking cuts in proportion to their size within the overall federal funding schema. So to restore military veteran pay the BIG QUESTION remains: are you asking that Americans pay higher taxes, OR what military programs would you cut, OR what military efficiencies would you demand to pay for restoring the cuts?

The cuts were balanced proportionately.  It will not work to in these challenging times to demand that the others that took cuts also give up more to pay for restoring our cuts without their concerns also being remedied.

Best regards,
Bill G.
WGolden@Bill4Dogcatcher.com

GOP, Intellectual Conservatism, and winning the hearts and minds of your own base

Earlier today I read several critiques of what really caused the GOP debacle in the budget wars with the Senate and President Obama: moderates, RINOs, and false conservatives.

Supposedly 50-60 of these spineless creatures were behind the inability of the GOP to do the impossible.

Rush Limbaugh was even heard to wail on his program that the GOP has become “irrelevant” and responsible for “creating one of the greatest political disasters” he has ever seen. He also blamed the spineless creatures. Luckily for us all, Rush is just an entertainer and no one in the GOP listens to him anyway.

The real reason for GOP failure

Conservatives have abandoned almost any pretext of intellectualism and desire to compete in the marketplace of ideas. They have become what they rant against: they want outcomes. They do not want to have to work for them or to justify them.

BTW – Purging the GOP of spineless creatures even further is not going to help the party.

Do not trash talk “moderates” and “RINOs” as stabbing the GOP in the back … especially when many of those RINOs have 90%+ conservative American Conservative Union (ACU) ratings, or ratings in the high 80s … AND when these folks already vote with you 99% of the time. You need allies. You do not need to threaten your allies for violating rightwing political correctness when the next election rolls around.

Some of your allies should also include conservative Blue Dogs and moderate Democrats.

24 hours later, Tea Party Nation says that it is time to declare ‘open season‘ on RINOs: “The Tea Party is still here and conservatives are now declaring open season on RINOs. The Civil War in the Republican Party is on!”

About that Big Tent thing, could it be that there is an element of the Republican party that constantly wants to purge the spineless creatures and yet maybe a small bit of housecleaning is in order among the purgers? Just some housecleaning — am a big believer in ‘big tents’. Tea Partyers and traditional GOP liberals and moderates and main street conservatives should feel welcome within the party.

Tea Party Favorability

My advice as Bill4DogCatcher

#1 – Create actual budget/appropriations for each branch of government as required by the Constitution. The House GOP (chair of such committees) drafted/passed appropriations for only 4 out of 12 required budgets (appropriations). Put your wants and cards on the table. Man up! Negotiate.

#2 – Allow amendments. Debate them. Vote straight up as yes or no. Show your math (this needs to be done for both sides — BUT when you are chair of the appropriations committees then your math matters more because you control the eventual outcome.)

—- Avoid taking 43 ‘Repeal and Replace’ votes and showboating. If you don’t have the votes then you don’t have the votes.

—- If you need public support then take your case to the public. What happened to ‘Replace’? Replace with what? Not a single House vote was ever taken on any form of ‘Replace’. …. Yes, several dartboard ‘we could do’ plans emerged from time to time but not a single one made it out of committee (chaired by GOP members) and went to the floor for a vote.

—- You don’t overturn omnibus laws (Obamacare) with an all-or-nothing vote. It could happen … but it will happen when the Keebler elves actually show up with cookies. Instead of ‘overturn’, make your case and replace portions of the law. It is because of the GOP not wanting to play ball back in 2009 that Obamacare is the abomination that it is … or is in the minds of many of the GOP. Count your votes. If you can do it your way then go for it. If not then you need to get in the game and make whatever pops out as law the best law possible.

#3 – Go to Appropriations Conference reconciliation with the Senate in good faith. Do not claim that the Senate has failed to appoint a conference committee team when your own party blocked attempts to do so 19 times over the last 5 months since April 23rd.

And please stop trashing anyone that is to the left of the far right. Some of us once voted Republican. Regularly. Some of us once automatically pulled the Republican party lever in the pollbooth when we were not sure which candidate to vote for. Regularly. But not anymore. Dear GOP, you have become scary, unstable and erratic … at least at the national level … and in several of these United States.

Will the troops get paid on time? Probably. Maybe not. Just because Congress passed a bill and the President signed doesn’t make it so.

Military Pay during GOV SHUTDOWN?

Doctrine Man!! a popular web destination on Facebook for DoD policy and occasional nonsense asks: Translate this. Is DFAS reneging on military pay?

DFAS.mil homepage as of 2013.10.05 10:00
DFAS.mil homepage as of 2013.10.05 10:00

From the DFAS.mil website homepage as of 2013.10.05 10:00

During the government shutdown, the Department of Defense will have no legal authority to pay any personnel – military or civilian – for the days during which the government is shut down. The shutdown will not affect payments to retirees and annuitants as those funds come from a retirement trust fund. Below is the effect the government shutdown will have on active duty military, civilian personnel, retirees and annuitants, and DoD contractors.

Attention: We are aware the President has signed the “Pay Our Military Act.” We are awaiting further guidance from the Department of Defense to ensure we accurately implement all elements of the Act. We will update you with additional information as soon as possible. Thanks for your patience.

Military: Active, Reserve, and National Guard members will be paid on time for pay entitlements earned September 30 or earlier. Military members cannot be paid for duty performed after the expiration of the current CRA on September 30. Once another CRA or an appropriations act is signed into law, normal disbursement of military pay will resume.


Bill Golden, CEO of IntelligenceCareers.com, sez:

No, they are not reneging. They are making a simple statement of fact.

Yes, the troops will eventually get paid, and probably will get paid on time but … the U.S. government runs out of money o/a October 17th, 2013 per a letter from the Treasury to Congress … with or without there being a SHUTDOWN.

Based upon the taxes collected and expected within the pipeline, the U.S. GOV can pay only about 60% of all authorized expenditures that are on the books. So 40% of something will have to go unpaid.

Bombers, ships or paychecks? Social Security, interest payments on the national debt or ? Someone will need to send money.

The entire crux of the federal budget battle/government shutdown/national debt talks is that we have obligated far more debt than we can pay for.

Being authorized to pay something does not mean that it will be paid.

Sorry. It is what it is … and we have about 12 more days to find out what ‘it’ is …

I encourage you to contact your Congressman and Senator and ask: WTF?!

Best regards,
William “Bill” Golden

CEO, IntelligenceCareers.com
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