Tuesday, March 31, 2015

Obama Supports Military Retirement Pay Cuts

by JASmius

Actually a bit more of a nuanced issue, for a change.  But it still leaves near-term discharged veterans high and dry:

Barack Obama said Monday that he supports the idea of reducing military retirement pay by about 20%.

According to the Washington Times, Obama wrote a letter to congressional leaders saying he favors the recommendations put forth by a military commission.

Under the plan, troops serving at least twenty years would not be affected and would continue to receive full retirement benefits. Those serving [fewer] than twenty years, however, would have their retirement checks slashed by about 20%.

And if the story ended there, it would be the usual Red Barry double-extended middle-fingers to his enemies to which we've grown accustomed over the past six-plus years.  Not that he isn't looking at this with the green eyeshade mentality he eschews and vilifies when it comes to doling out the goodies to his own constituencies - he most certainly is - but this isn't simply throwing vets into the nearest snowbank to eat Alpo:

On the other hand, the proposal would help boost troops' retirement savings accounts, as the Department of Defense would contribute up to 6% of a soldier's basic pay for those serving more than two years. Under the current system, the Defense Department automatically contributes 1%.

This is what's known as an "employer matching contribution".  It is, essentially, additional gross pay that is income tax-deferred and is never subject to FICA and Medicare levies at all.  It goes into a qualified retirement (defined contribution) plan, there to earn a return per the mutual funds into which it is invested along with the percentage of gross pay deferred by the employee.  DOD itself cites 401(k) plans as the template they are using and recommending for this plan.

The catch, though, is that in civilian DC plans, the employee can't touch it until age 59.5.  I don't know what the equivalent age would be for military retirement plans, but I would imagine it would be twenty years after discharge at the very least.  And that does pose a problem, because military pay isn't exactly lucrative, even with family, housing, and other allowances, even for officers.  So the "employer" matching contribution is a higher percentage of a very low gross base in the first place.  Whether the present value of the "employer" match is greater or less than the status quo direct military pension payments, I don't know.  Although it's probably a pretty good bet that they're lower, and this move does constitute an obfuscated military retirement pay cut.

The proposals are "an important step forward in protecting the long-term viability of the all-volunteer force, improving quality-of-life for service members and their families, and ensuring the fiscal sustainability of the military compensation and retirement systems," Obama wrote, according to the Times. [emphasis added]

"Fiscal sustainability" is not a term Barack Obama makes much of a habit of uttering.  This means, of course, that since veterans - whom his VA is still neglecting unto death to this day - aren't one of his constituencies, he's free to whack away at their goodies - which they, unlike any other federal welfare recipient, really DID earn.  Whereas the "fiscal sustainability" of Social Security, Medicare, Medicaid, ObamaCare, civilian federal pensions, etc. are orders of magnitude more grave, and need logarithmically larger such privatization overhauls than the military retirement system.

But that will never happen, because senior citizens, the "poor," public employee unions, and, well, everybody else, ARE Barack Obama's pawns, and there is no way in hell he will ever relinquish his leverage over their votes.

It makes one wonder how many vets, particularly injured combat veterans, regret the sacrifices they made defending our former freedoms, given that We, The People, have almost entirely forfeited them at the ballot box.  That almost to a man (and woman), they would say, "Hell, no!" is a testament to the quality of human being that undertakes the defense of such corrupt, ignorant, and ungrateful countrymen, and their leaders' green eyeshade costume fetishes.  Which is why they deserve so much better.

No comments: