With the release of the FY 2015 President's budget, the Obama Administration has now presented six annual budget plans (and an additional proposal to the Super Committee). As you can imagine, there are a lot of policies in this year's budget that are holdovers from previous ones, but there are also new ones. This blog will highlight major new policies in this year's proposal.
In a somewhat atypical move, Defense Secretary Chuck Hagel previewed in a speech yesterday the Department of Defense's (DoD's) budget request for FY2015, which will be a part of the President's Budget submitted to Congress next week. The budget shows the types of cuts necessary to comply with congressionally mandated budget cuts that transition DoD from an era of wars in Iraq and Afghanistan and real growth in the defense budget to a new era of discretionary spending restraint.
Earlier this week, Congress moved quickly on a bill to repeal the military cost-of-living adjustment (COLA) reduction for working age retirees that was included in the Ryan-Murray budget deal. The bill repeals the reduction for all service members who started before 2014, effectively delaying any part of the reform for 20 years and delaying its full phase in until 2058.
With the debt ceiling having been reinstated last Friday, lawmakers are scrambling to come up with legislation to lift or suspend it again before extraordinary measures likely run out by the end of the month. Originally, House Republicans had planned on attaching a repeal of the military retirement cost-of-living adjustment reduction for people who joined the service prior to 2014 to a debt ceiling suspension through March 15 of next year.
Soon, the Senate may consider the Comprehensive Veterans Health and Benefits and Military Retirement Pay Restoration Act legislation (the CBO scoring is available here) introduced by Senator Bernie Sanders (I-VT) to reverse the military retirement reforms from the Bipartisan Budget Act and creat
The war savings gimmick is back! As the debate over how to offset a permanent "doc fix" to Medicare's Sustainable Growth Rate formula heats up, the idea of "paying for" it with "savings" from the war drawdown already underway has resurfaced.
One of the most contentious provisions in the Ryan-Murray budget agreement that became the Bipartisan Budget Act was a provision that reduced cost-of-living increases for military retirees under age 62 (read our explanation here). The provision generated the ire of many veterans groups, and some lawmakers have vowed to reverse the reduction.
Military personnel costs continue to increase as a share of the defense budget. One of the fastest growing components is military health care, where spending has outpaced even overall health care spending growth, according to the CBO. With base defense spending being reduced in recent years and through 2021, as a result of the Budget Control Act and sequestration, controlling health care spending will be important, or it will crowd out other defense priorities.
Among the many things we noted yesterday on the blog about the omnibus appropriations bill was the similarity between war spending in the bill and in the past fiscal year. Spending for overseas contingency operations declined by only $1 billion -- from $93 billion to $92 billion -- between 2013 and 2014, and spending was more than $20 billion higher than what CBO assumes in its drawdown scenario.