On Dec. 26, President Barack Obama signed into law H.R. 3304, the National Defense Authorization Act for Fiscal Year (FY) 2014. The bill authorizes $632.8 billion for the Department of Defense (DoD) and defense-related programs, including $80.7 billion for the war in Afghanistan and other overseas contingency activities.
Defense spending rose in response to the 9/11 attacks when the United States went to war in Afghanistan and Iraq. Although those wars have ended or are winding down, DoD's base non-war budget is still double what it was in 2000. To date, Congress has failed to pass reductions in base defense spending even though reductions have been mandated by deficit reduction legislation.
Lower defense spending began in 2011 when Congress enacted the Budget Control Act (P.L. 112-25), which imposed spending caps through FY 2021 that would reduce the growth of projected defense spending over 10 years by $450 billion. Because the joint deficit reduction committee created by that law failed to find another $1.2 trillion in savings, a lower set of "sequestration" caps went into effect that reduced defense spending by $490 billion through FY 2021.
The first round of sequestration cuts occurred during FY 2013 of $43 billion and in FY 2014, defense is to receive a $21 billion cut. However, the House and Senate budget committee leaders agreed last month to roll back a portion of the sequester for two years, which would restore $23 billion of defense spending for FY 2014 and $9 billion for FY 2015. That measure, the Bipartisan Budget Act (H.J. Res 59), establishes a $520.5 billion cap for defense for FY 2014 and $521.3 billion for FY 2015.
The NDAA's $552.1 billion authorization for non-war defense spending includes $544.4 billion in discretionary spending and $7.7 billion in mandatory funding. The total includes $239 billion for operations and maintenance, $146.2 billion for personnel costs, $105.1 billion for procurement and $67.9 billion for research and development.
The recently passed budget bill, H.J. Res. 59, included a tax on some working-age military retirees by way of a 1 percent reduction in their annual cost-of-living-allowance (COLA) for retired pay every year until age 62. There are published estimates that the potential loss of income is about $70,000 on the low end to $120,000 on the high end, depending on retired rank and years of service.
The COLA provision doesn't go into effect until 2016. According to Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, that will give Congress and interest groups plenty of time to "evaluate" the proposal.
On Dec. 17, Sen. Jeanne Shaheen, D-N.H., introduced S. 1844, the Military Retirement Restoration Act, which would restore full military retirement benefits by closing corporate tax loopholes. The measure currently has 20 co-sponsors. A House companion bill, H.R. 3793, was introduced two days later by Rep. Dan Maffei, D-N.Y., and it has 44 cosponsors. The American Legion has two resolutions that support these bills: Resolution 29, "Oppose lowering of cost-of-living adjustments," and Resolution 25, "Support for military quality of life standards."