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Congressman Garamendi Supports Military Retirement Restoration Act — Press Release

December 19, 2013 by
Filed under: Congress, Events, Federal Budget Process, Press Releases 

Legislation would undo military retiree benefit cuts included in the Bipartisan Budget Act

WALNUT GROVE, CA – Today, Congressman John Garamendi (D-Fairfield, CA), a Member of the House Armed Services Committee, announced that he is an original cosponsor of the Military Retirement Restoration Act, legislation that would repeal cuts to military retiree cost-of-living adjustments (COLAs) included in the Bipartisan Budget Act. This legislation will be fully paid for by closing tax loopholes for offshore corporations. Congressman Dan Maffei (D-Syracuse, NY) is introducing the bill in the House of Representatives. Companion legislation has been introduced in the Senate by U.S. Sen. Jeanne Shaheen (D-NH) and U.S. Sen. Mark R. Warner (D-VA).

Congressman Garamendi said, “The bipartisan budget compromise was needed to support our economic recovery and to prevent harmful unfocused cuts to vital defense functions. However, the bill’s provision that cuts military pensions places an unjust burden on military servicemembers who have already made enormous sacrifices for our country. It seems eminently fairer to end loopholes that allow corporations to avoid paying taxes. Simply put, I cosponsored the Military Retirement Restoration Act, so that we don’t balance our budget on the backs of the men and women who valiantly served us and earned their pension.”

“The Bipartisan Budget Act is an important step in the right direction that creates some certainty for our middle class families and businesses across Central New York, but it is not perfect,” said Congressman Maffei. “The cuts to military pension COLAs included in the Bipartisan Budget Act unfairly target our military families and could create serious hardship for some of our veterans. The bill I am going to introduce will fix this problem and ensure our military retirees get the benefits they have earned and deserve. As a member of the House Armed Services Committee, I urge my colleagues on both sides of the aisle to support this common sense legislation.”

The Military Retirement Restoration Act would replace the cuts to military retiree benefits included in the Bipartisan Budget Act by preventing companies from avoiding U.S. taxes by abusing overseas tax havens.  Specifically the bill:

  • Repeals the provision in the Bipartisan Budget Act (Section 403) that modifies the annual cost-of-living adjustment for working-age military retirees by making the adjustments equal to inflation minus one percent. This provision, which is scheduled to go into effect in December 2015, would result in a benefit cut for working-age military retirees. The Bipartisan Budget Act modifies the annual cost-of-living adjustment for working-age military retirees by making the adjustments equal to inflation minus one percent. At age 62, the retired pay would be adjusted as if the COLA had been the full CPI adjustment in all previous years, and the service members would receive the full COLA from then on. The provision would have saved approximately $6 billion over ten years.
  • Prevents companies from avoiding paying their fair share of U.S. taxes. The repeal would be fully offset by stopping companies incorporated offshore but managed and controlled in the United States from claiming foreign status and avoiding U.S. taxes on their foreign income. It would require these companies to be treated as U.S. domestic corporations for tax purposes. This provision is expected to raise over $6.6 billion over ten years.

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