Lawmakers in Congress introduced a bill this week that will cut $6 billion from the federal budget. Called the Bipartisan Budget Act, the proposed legislation will prevent another government shutdown from happening in 2014. However, it might impact the military benefits of many retirees.
According to Military Times, the budget compromise will reduce the annual cost-of-living adjustments for military retirees under the age of 62 over a three-year period. The COLA will decrease 0.25 percent in December 2014 and 0.5 percent in December 2015, while the full reduction will be enacted in December 2016. Former servicemembers who are on disability will not be affected by the reduction.
While the bill still needs to be voted on in the House, the news source stated that Senate leaders might oppose the bill if it reaches their chamber. Senate leaders have already struck down legislation that would harm both active-duty and retired servicemembers, including increases of TRICARE fees and cuts to tuition assistance.
Although the proposed bill presents new challenges to military retirees and veterans with disabilities, their families and survivors will be receiving a 1.5 percent COLA increase beginning Jan. 1, Military.com reported. The announcement was made last week by Secretary of Veterans Affairs Eric Shinseki.