Budget deal, tax reform require sacrifices

Somebody has to give up something. Or else.

Or else there is no hope that the federal government can either cut spending or reform the unfair tax system.

Today, the law is full of spending for countless interests, while the tax code provides breaks to promote countless activities.

Anytime Congress considers a serious proposal to eliminate some of the federal spending or close some of tax loopholes, the potential losers protest loudly. Politicians listen to the outcry and almost always back off the proposal.

The case in point these days are military pensions.

Generally, if a person serves for 20 years or more, he or she is eligible to begin receiving pension payments upon leaving the service.
Most people who serve in the armed forces do not stay for 20 years. Less than one-fifth become eligible for a military pension.

The new budget bill reduces the cost of living adjustment, known as the COLA, by one percent for the period from the beginning of military retirement until the person reaches 62 years of age.

When a person hits 62, the pension takes a big jump up, because the retiree then receives payments as if the full COLA had been in effect in past years. From then on, he or she gets the regular unreduced COLA.

In other words, after having served for at least 20 years, a person gets a reduced pension until reaching 62. And the vast majority of those who serve are unaffected, because they get no pension.

Of course, that temporary COLA reduction means a veteran receives a lower lifetime amount and the federal budget spends less. The logic is that most of these people will get another job after retiring from the military and before finally retiring from all work, so they can manage.

No sooner was the bill passed than the protests arose. The message seemed to be that the federal budget crisis was being settled on the backs of those who had voluntarily risked their lives in Iraq and Afghanistan to protect their country.

Claims like that are political dynamite. It takes a strong politician to explain that the cuts affect a relative few, apply only temporarily and are part of a package of sacrifices needed to meet demands to cut the size of government and spending.

Both of Maine’s U.S. senators and Rep. Mike Michaud voted for the budget bill, but say they are opposed to the military pension change. Rep. Chellie Pingree voted against the bill.

The three supporters of the budget bill now want the military pension provision repealed. But that means there must be other cuts, undoubtedly with a new group of protesters, to keep the budget under the control that Congress says it wants.

Pingree thinks the budget savings should come from cutting benefits for the rich and large corporations benefiting from tax loopholes. But those interests have big lobbying budgets and make campaign contributions that shield them from such changes.

And so the wheel continues to turn.

There are only two ways to control the federal budget. One is to cut spending and be ready to withstand the political wrath of those losing some financial benefit. The other is to raise taxes.

Both involve difficult political choices. The budget package adopted in December made some of those choices. When faced with a widely unpopular government shutdown or the package, Congress took the easier way out – adopting the package at least temporarily.

The easiest budget cutting measure has been to take money away from the poor and those least able to bring political and financial pressure on the politicians.

That means cutting off unemployment payments for the long-term jobless and reducing or eliminating food stamps for low-income people. In politics, that’s called throwing people under the bus.

Pingree’s position is perhaps the most honest, but probably unrealistic, because there are not enough people in Congress willing to resist the power of big money.

The point is not that the military pension cut was the right thing to do. It’s impossible to know that unless it is placed in the context of a broad review of all government spending and tax breaks.

That means setting priorities. How do military pensions fit with tax breaks for oil companies? What commitments must the government keep and what can it change?

Instead of enacting last-minute legislation to prevent shutdowns and picking on the less fortunate as targets of opportunity, the president, if he has an agenda, and the Congress, if it really wants to control spending, ought to propose comprehensive budget plans.

Gordon L. Weil

About Gordon L. Weil

Gordon L. Weil is a former local, state, national and international organization official. He is an author and publisher.