COLAs for Military Retirees: Summary of Congressional and Executive Branch Action, 1982-2003 (FY1983-FY2004)

Publication Date: January 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government; Labor; Military and defense

Type:

Abstract:

The Omnibus Reconciliation Act of 1982 (which applied to FY1983 budget issues) suspended previously existing permanent law pertaining to cost-of-living adjustments (COLAs) for federal civilian and military retirees, and changed the COLA calculation formulas to postpone and/or reduce future COLAs for military retirees during 1983-1985 (FY1984-FY1986). Although the COLA situation during 1983 (FY1984) remained unchanged, despite some proposals to modify the 1982 legislation so as to further reduce COLAs, the period from 1984 (the FY1985 budget) to 1986 (the FY1987 budget) was marked by intense debate over reducing COLAs and an actual elimination of the 1986 (FY1987) COLA. Reagan Administration budget proposals in both 1987 (FY1988) and 1988 (FY1989) did not propose any changes in military retirement COLA provisions contained in permanent law, a major change from the previous several years. Neither did any such changes take place as a result of congressional action.

The original Bush Administration budgets in both 1989 (FY1990) and 1990 (FY1991) proposed canceling the COLAs scheduled for January 1, 1990, and January 1, 1991, respectively, and reducing future COLAs. However, none of these proposals were eventually enacted into law. The Bush Administration budgets in 1991 (FY1992) and 1992 (FY1993) did not include any proposals for reducing COLAs, and no such proposals were acted on by the Congress. The Clinton Administration's budgets for 1993-1999 (FY1994-2000) did not include any proposals for reducing COLAs, although COLA reduction proposals were considered by the Congress during some of these years. Some were enacted in each of the years 1993-1995 (FY1994-1996), providing that in each of those years, disabled military retirees and survivor benefit recipients were first paid their COLA on January 1; nondisabled military retirees first received their COLAs on April 1.

However, the FY1997-FY2004 budgets, enacted in 1996-2003 respectively, contained no changes in the COLA formula. Hence, the FY1997-FY2004 military retirement COLAs were first paid on January 1 of each of those years, respectively, to all classes of military retirees. These eight years are the longest period since military retirement COLAs were first authorized in 1963 in which no legislative changes in the COLA mechanism have been made; the six years FY1999-FY2004, calendar years 1998-2003, are the longest period in which no COLA cuts have even been proposed, let alone enacted.