Congress, Military Retirement Benefits, and Deficit Reduction: A Comparison of Military Retirement Adjustments Between the 103RD and 104TH Congress.

Abstract : Concern over large annual budget deficits and the contribution entitlement growth has played in this growth, has forced Congress to seek deficit reduction through entitlement reform. This thesis examines congressional policy toward military retirement reform as one part of this process. Through budget reconciliation, Congress enacted military retirement deficit reduction measures in 1993 which delayed retiree COLAs in fiscal 1994- 99, but subsequent legislation partially rolled back these delays. Reconciliation instructions in 1995 led to a new deficit reduction initiative affecting military retirement called High- One. Political pressure prevented High-One from becoming law, with mineral sales substituted to achieve the necessary savings. The Balanced Budget Act of 1995, which incorporated the mineral sales, was vetoed. Study of this legislative activity provides important insight into Congress's view of military retirement in deficit sensitive times. It provides a comprehensive record of these events and concludes that fliture deficit reduction entitlement reform is certain to include military retirement. The form and value of future reform is likely to include further CPI based COLA reductions. While other structural military retirement reforms are feasible, their contributions must be more critically assessed relative to their impact on force structure objectives.