The Senate voted to restore military pensions on Wednesday, ending a months long battle over a controversial provision in the bipartisan budget deal that cost veterans thousands in lost retirement pay.
The Senate approved a House bill that restored the cost-of-living adjustments (COLA) for all military retirees on Tuesday by a 95-3 vote. The legislation makes up the savings by promising to extend the sequester for Medicare spending by one year a decade from now.
Only three senators voted against the repeal: Tom Carper (D., Del.), Dan Coats (R., Ind.), and Jeff Flake (R., Ariz.).
Veterans of the wars in Iraq and Afghanistan praised the Senate vote, but warned that the deal would reduce COLAs for new enlistees.
"This bipartisan action – rare in Washington these days – corrects the significant mistake Congress made in December by trying to balance the budget on the backs of those who have sacrificed so much," said Iraq and Afghanistan Veterans of America (IAVA) CEO and founder Paul Rieckhoff. "It’s wise and appropriate that Congress has responded to the widespread anger in our community by restoring the retirement benefits of servicemembers and their survivors."
"But let’s be honest: Congress never should have put veterans on the chopping block to begin with," he said. "While we are pleased to see the restoration of retirement benefits for those who already have served, we are concerned that Congress has left future retirement cuts in place, and we will keep fighting until benefits for all who serve are restored."
Repealing the cuts looked in doubt earlier this week, as Democrats and Republicans could not agree on how to pay for the $6 billion cut.
House Republicans signaled they would tie a repeal of the military pension cuts to a bill to raise the debt ceiling, but soon scrapped the idea. The House instead passed a standalone bill to repeal the cuts, offset by prolonging the sequester for Medicare.
Some Republicans saw a chance to close a costly loophole in the tax code that allows illegal aliens to receive tax credits. The Additional Child Tax Credit (ACTC) provides incentives for immigrants to enter the country illegally and cost taxpayers $4.2 billion alone in fraudulent payments in 2010.
Senate Republicans favored this proposal pushed by Sen. Jeff Sessions (R., Ala.) and Sen. Kelly Ayotte (R., N.H.), which would have required a Social Security number in order to receive the ACTC. Minority Leader Mitch McConnell (R., Ky.) lent his support to the idea on Tuesday.
Senate Democrats strongly opposed closing the loophole, blocking Ayotte’s amendment in January. Senate Majority Leader Harry Reid (D., Nev.) said he opposed the offset on Tuesday because it is "unfair to children."
Senate Democrats had preferred a "clean" repeal of the cuts, offering no pay-for.
"I’ve said it a hundred times today, and I’ll say it again: No, I don’t think we need to pay for this," said Sen. Mark Begich (D., Alaska). "These guys have already paid. We made a promise, we need to keep it."
Sessions blasted the idea that the cuts would not be paid for on the Senate floor Wednesday morning.
"A Democratic majority here blocked proposal after proposal," he said. "One was to more than pay for it by reducing fraudulent income tax credit checks being sent out to people illegally here who don’t qualify for it. That was blocked, too."
Reid was set to bring up the Democrat bill for a vote on Wednesday, but changed course and opted for the House bill, which he had opposed just the day before.
The controversial provision originated in the bipartisan budget deal crafted by House Budget Committee Chairman Paul Ryan (R., Wis.) and Senate Budget Committee Chairman Patty Murray (D., Wash.), hitting military retirees under 62 with a 1 percent reduction in their COLAs.
The change meant that veterans would face as much as $124,000 in lost retirement income. Current civilian federal retirees were not affected by the budget deal.
Controversy grew when it was revealed that disabled military veterans were not exempt from the deal. Congress repealed the cuts for disabled service members in the omnibus spending bill last month, though the vast majority of the pension cuts remained.
"I applaud my colleagues in Congress today for doing the right thing and restoring the earned benefits of our current and future military retirees that were irresponsibly cut in the recent budget deal," said Sen. Jim Inhofe (R., Okla.). "This is an unfortunate trend we have seen in the Obama administration over the past five years where our national security has carried the burden time and again to pay for the president's reckless spending. Those currently serving in our military, and those who have already sacrificed and who are now retired, have bravely fulfilled their vow to protect and defend the United States of America."
"Today Congress has acknowledged we in return must be faithful to the promises made when they enlisted," he said. "Our men and women in uniform deserve the best, and I applaud my colleagues for keeping politics out of this vote."