Military Update: Disabled retiree money lacking

By Tom Philpott

Active duty and reserve component members are closer to landing a 3.4 percent basic pay raise next January, which would be the 11th consecutive annual increase set higher than private sector wage growth.

But in approving a $550.4 billion fiscal 2010 defense authorization bill and $130 billion for wartime operations last week, the House Armed Services Committee couldn’t find money to support President Obama’s plan to extend “concurrent receipt” to 103,000 more disabled retirees.

Rep. Ike Skelton, D-Mo., committee chairman, said some funds still might be found before the defense bill reaches the House floor where final amendments will be offered.

The target of Obama’s plan are “Chapter 61” retirees — those forced by their disabilities to retire, usually before they can complete 20 years of service and earn regular military retirement. Today they receive either military disability retirement or VA disability compensation. Obama’s plan would allow many of them also to receive an annuity based on years served.

The cost would be $5.1 billion over 10 years but the greater difficulty for the committee was finding the right type of funding, explained Skelton. The president’s plan, in effect, would enhance an entitlement, which means mandatory spending.