CBO Provides Controversial Options for Deficit Reduction

February 10, 2017

The Congressional Budget Office (CBO) in December 2016 published its options (analysis) for reducing the federal deficit, in a report it provides at the start of each new Congress. Under the options provided for mandatory spending, the CBO provided as one of the options the elimination of concurrent receipt of retirement pay and disability compensation for disabled veterans. This was presented as an option, not a recommendation - one of a number of options provided to congressional decision makers in the report. There is no move in Congress to implement the CBO option by changing federal law to eliminate concurrent receipt. 

 “Concurrent receipt” means to receive both the full amount of the service-earned military retired pay and the full amount of the VA disability compensation. Up until FY 2001, however, any retired servicemember who received VA disability compensation had an amount equal to that VA compensation deducted from their military retired pay - called an “offset.” 

A coalition of associations, led by MOAA, worked in earnest to eliminate that offset and restore full retired pay and full VA disability compensation. Total elimination was too costly to garner the necessary support in Congress, so the coalition initiated a very limited, “first step” legislative provision authorizing a modest allowance ($100-$300 monthly), which Congress passed. This mitigated the effects of the offset - but only partially, and only for retirees who received a VA disability rating of 70 percent or more within four years of leaving service. 

In subsequent years, this authority was gradually expanded, as grassroots efforts persuaded Congress in 2004 to totally eliminate the offset for combat-related disabilities. Additionally, for non-combat disabilities, Congress approved a 10-year phase-out period of the offset for retirees with over 20 years of service with a disability rating of 50 percent or higher. 

These were significant accomplishments, but there is more to do. MOAA is leading the charge to phase out the entire offset for all retired servicemembers, including those who were medically retired prior to reaching 20 years of service due to severe, service-connected disabilities. 

Current update: working with a coalition of associations, MOAA engaged congressional leaders, who already have introduced three bills this year supporting the effort to eliminate the offset. The House bills are H.R. 333, introduced by Rep. Sanford Bishop Jr. (D-Ga.), and H.R. 303, introduced by Rep. Gus Bilirakis (R-Fla.). The Senate bill, S. 66, was introduced by Sen. Dean Heller (R-Nev.). There are other bills being worked as well, and MOAA will continue to help shape any effort to eliminate the offset while seeking broad support from Congress.  


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