Tuesday, September 2, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Shutdown ends, but budgets still feel pinch

By
From page C4 | October 20, 2013 |

With the government shutdown ended, Reserve and National Guard members can resume weekend drills. Hundreds of thousands of federal civilians have returned to work.

Disabled veterans, Veterans Affairs pensioners and eligible survivors will get November benefit payments. Promotion boards are operating again and active duty folks who had transfer orders in limbo can firm up moving plans.

But military personnel and defense civilians still work under the cloud of budget sequestration. The stopgap-funding bill President Barack Obama signed Wednesday allows the Department of Defense to operate through Jan 15, 2014, at budget levels in effect Sept. 30. So first-year sequestration cuts continue to crimp military training and to freeze civilian hiring. Pressure is building on the services to curb military personnel costs.

Favored methods for doing so, if Congress can be persuaded to partner on the task, include:

n Caps on annual military pay raises, penciled into future budgets at 0.5 percent in fiscal 2015, 1 percent in 2016 and 1.5 percent in 2017.

n Higher Tricare fees for military retirees, particularly those under age 65 who still work in second careers. Defense officials contend out-of-pocket costs for retirees under Tricare are a small fraction of health cost paid by private sector workers with employer-provided health plans.

Advocates for military retirees counter that the cost of generous health benefits was paid “up front” through 20 or more years of service, often under arduous or dangerous conditions and far from home.

n Deepening cuts to active and Reserve component forces.

n Adopting a new method of adjusting federal entitlements for inflation. Called the “chain” Consumer Price Index, it would reduce cost-of-living adjustments by a fraction of a percentage point every year and, over time, produce significant savings on military and federal civilian retirement, veterans’ benefits, survivor payments and social security.

These familiar initiatives for holding down personnel costs are likely to be discussed with greater urgency on Capitol Hill and at the Pentagon during the next several months for two reasons.

One, Democrats and Republicans will focus anew on negotiating a major debt reduction deal to replace the across-the-board cuts of sequestration. That’s when higher Tricare fees and smaller pay raises can get tossed into a stew of ideas to curb spending.

Two, if such talks fail, sequestration will hit defense budgets so hard that the armed services committees might have no choice but to accept new curbs on pays and benefits.

Military leaders revealed last summer they might try to protect readiness and modernization dollars by changing the formula for setting stateside housing allowances or by modifying Tricare so younger retirees encouraged to use their employers’ health insurance.

The legislation to reopen the federal government until Jan. 15, 2014, includes language to establish a conference committee of House and Senate budget committee members to negotiate a fiscal 2014 budget compromise by mid-December. Conferees also are encouraged to produce a larger, multiyear debt reduction deal, like the one a House-Senate “super committee” tried but failed to achieve in 2011.

That failure triggered a provision of the Budget Control Act to begin automatic cuts through budget sequestration, with half of a trillion dollars to be taken out of defense budgets during the next decade.

Defense officials and the armed services committees hope budget committee conferees can reach a debt reduction deal big enough to sideline year two of sequestration cuts. If not, in January 2014, the defense budget is to fall to $475 billion, 10 percent below the administration’s request of $527 billion for fiscal 2014 and 8 percent below current spending.

Defense Secretary Chuck Hagel warned in July that such a cut is “too steep and abrupt” and will leave the military at greater risk, and with fewer options, in the event of “major new national security contingency.”

Obama is using his authority under the BCA to exempt military personnel accounts for a second year from automatic cuts of sequestration. Such cuts, even to force structure, just won’t produce the needed savings, officials said, given separation pay obligations, travel costs and the fact that a large portion of current ground forces is funded with overseas contingency operations dollars, which are exempt from sequestration.

If personnel accounts were forced to absorb their full share of $52 billion in cuts this year, Hagel said, the effects would be “severe and unacceptable.” They could include a halt to signing any new recruits, a freeze on promotions and suspension of permanent-change-of-station moves.

On the other hand, by sparing personnel accounts, spending to modernize weapons and sustain readiness take bigger hits. Hagel has urged the armed services committees to avoid this by allowing closure of unneeded bases, raising retiree Tricare fees and capping raises.

So far, Congress hasn’t agreed. But a grand bargain on debt reduction could force lawmakers to make the tough choices they’ve avoided.

Obama first endorsed the chain CPI two years ago as part of a package of administration initiatives to address the debt crisis. When Republicans refused to raise taxes or close some tax loopholes in return, the chain CPI concept stayed on the shelf.

Proponents argue chain CPI is a more accurate measure of inflation to set cost-of-living adjustments because it accounts for product substitution in shopping behavior. Consumers, for example, will buy more chicken when beef prices are high. Yet the current CPI for tracking prices in a market basket of goods keeps the mix and weighting of products steady from month to month.

Critics argue that a chain CPI will lower the value of COLAs and, over time, impact beneficiaries’ quality of life. But it is likely to be one of the president’s most valuable bargaining chips to coax Republicans, who rail about entitlement growth, into accepting some tax hikes in budget deal.

To comment, write Military Update, P.O. Box 231111, Centreville, VA, email milupdate@aol.com or tweet Tom Philpott @Military_Update.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Labor Day not a holiday for everyone

By Amy Maginnis-Honey | From Page: A3, 1 Comment | Gallery

 
Labor Day breakfast introduces union-backed candidates

By Susan Hiland | From Page: A3 | Gallery

Pool provides last dose of summer fun in the sun

By Amy Maginnis-Honey | From Page: A3 | Gallery

 
SafeQuest schedules peer counseling training course

By Susan Hiland | From Page: A5

Labor Day sees more Solano freeway crashes

By Glen Faison | From Page: A5

 
Fairfield police log: Aug. 31, 2014

By Susan Hiland | From Page: A12

 
Suisun City police log: Aug. 31, 2014

By Susan Hiland | From Page: A12

Suisun City police log: Aug. 30, 2014

By Susan Hiland | From Page: A12

 
Fairfield police log: Aug. 30, 2014

By Susan Hiland | From Page: A12

.

US / World

VP Biden says workers deserve ‘fair share’

By The Associated Press | From Page: | Gallery

 
Obama: ‘Revving’ economy calls for higher wages

By The Associated Press | From Page: | Gallery

Senegal monitors contacts of 1st Ebola patient

By The Associated Press | From Page:

 
San Francisco to be 1st to test urban farming law

By The Associated Press | From Page:

GOP challenger tries novel tactics against Brown

By The Associated Press | From Page: | Gallery

 
Texas’ Perry says disparaging tweet unauthorized

By The Associated Press | From Page:

US eating habits improve a bit – except among poor

By The Associated Press | From Page: | Gallery

 
No gray area: Beliefs shape views of Brown killing

By The Associated Press | From Page: | Gallery

Americans detained in North Korea call for US help

By The Associated Press | From Page: | Gallery

 
Iraqi prime minister pledges to root out militants

By The Associated Press | From Page: | Gallery

Poland’s PM: Ukraine’s war must be stopped now

By The Associated Press | From Page: | Gallery

 
Pro-Russian rebels lower demands in peace talks

By The Associated Press | From Page: | Gallery

US helicopter crashes in Gulf of Aden; all rescued

By The Associated Press | From Page:

 
.

Opinion

.

Living

Community Calendar: Sept. 2, 2014

By Susan Hiland | From Page:

 
.

Entertainment

Inquiries begin into nude celebrity photo leaks

By The Associated Press | From Page: | Gallery

 
‘Guardians’ tops Labor Day, summer box office

By The Associated Press | From Page: | Gallery

TVGrid

By Daily Republic Syndicated Content | From Page: A11

 
.

Sports

Kirk rallies to win the Deutsche Bank

By The Associated Press | From Page:

 
Rockies top Giants after losing end of suspended game

By The Associated Press | From Page:

Dunn homers in 1st at-bat as A’s top Mariners

By The Associated Press | From Page:

 
Right guard Boone passes physical, rejoins 49ers

By The Associated Press | From Page:

Raiders name rookie Derek Carr as starting QB

By The Associated Press | From Page: B1

 
Armijo beats Vanden 2-0 to claim All-City boys soccer title

By Brian Arnold | From Page: B1 | Gallery

Armed with new deal, Chiefs’ Smith looks forward

By The Associated Press | From Page:

 
Column: Stewart’s Chase status doesn’t matter

By The Associated Press | From Page:

 
Raiders ink CB Dowling, 9 others to practice squad

By The Associated Press | From Page:

Serena Williams, Djokovic roll to US Open quarters

By The Associated Press | From Page:

 
Houston Astros fire manager Bo Porter

By The Associated Press | From Page:

Hamels, 3 Phillies relievers no-hit Braves

By The Associated Press | From Page:

 
.

Business

Markets drift as Wall Street has day off

By The Associated Press | From Page:

 
Austerity debate flares as Europe recovery fades

By The Associated Press | From Page: | Gallery

Civil disobedience expected in fast-food pay fight

By The Associated Press | From Page: | Gallery

 
.

Obituaries

.

Comics

Beetle Bailey Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Zits Sept 2

By Daily Republic Syndicated Content | From Page: B6

Wizard of Id Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Sally Forth Sept 2

By Daily Republic Syndicated Content | From Page: B6

Bridge Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Blondie Sept 2

By Daily Republic Syndicated Content | From Page: B6

Rose is Rose Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Sept 2

By Daily Republic Syndicated Content | From Page: B6

Sudoku Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
B.C. Sept 2

By Daily Republic Syndicated Content | From Page: B6

Baldo Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest Sept 2

By Daily Republic Syndicated Content | From Page: B6

Crossword Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Dilbert Sept 2

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Peanuts Sept 2

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Garfield Sept 2

By Daily Republic Syndicated Content | From Page: B6

Word Sleuth Sept 2

By Daily Republic Syndicated Content | From Page: B7