By Jeremy Herb and Kristina Wong - 01/07/14 04:18 PM EST
Senior Democrats on Tuesday signaled they could support a deal to repeal $6 billion in military retirement benefit cuts, even as they acknowledged there’s no clear path to pay for it.
Senate Majority Leader Harry Reid (D-Nev.) hinted Tuesday that the military pension reductions included in last month’s budget deal could get reversed in the omnibus spending bill to fund the government.
Republicans said they will continue their efforts to tack on legislation to repeal the cut to the cost-of-living adjustment (COLA) for military retirees, but so far Democrats aren’t endorsing the way the GOP measures would pay for restoring the benefits.
The “pay-for” sticking point was made clear Tuesday when Senate Armed Services Committee Chairman Carl Levin (D-Mich.) initially endorsed a bill from Sen. Kelly Ayotte (R-N.H.) to repeal the benefit cut — but then said later that he was opposed to her measure because of the offset.
Ayotte’s bill, as well as a companion measure in the House, would repeal the $6 billion cut by preventing illegal immigrants from receiving a child tax credit.
“Sen. Levin would support legislation to repeal the military pension cuts if such an amendment didn’t endanger underlying legislation and if he supported the offset,” a Levin aide said. “He doesn’t support the offset in Sen. Ayotte's legislation, so he couldn’t offer support for her legislation.”
Levin and other Democrats are backing legislation from Sen. Jeanne Shaheen (D-N.H.) that would repeal the military pension cut by closing overseas corporate tax loopholes. That is a non-starter with Republicans, however.
The difficulty in finding an offset for the pension cuts is also emerging in the fight in the Senate over unemployment benefits, a $6 billion measure that Republicans insist must be paid for.
Reid said that he was opposed to adding the pensions amendment to the unemployment measure because the cuts are likely to be addressed in the omnibus spending bill that is being negotiated by Sen. Barbara Mikulski (D-Md.) and Rep. Hal Rogers (R-Ky.).
“I would bet that that’s addressed in this deal that Mikulski and Rogers come up with, this helping veterans,” Reid said on the floor.
The pension cut negotiated late last year by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), who lead the House and Senate Budget panels, would cut the annual cost-of-living increase by 1 percentage point below inflation beginning in December 2015 for working-age retirees.
One in three lawmakers have come out in favor of repealing the military cuts, and more than a dozen bills have been introduced to do so amid a major lobbying push by veterans and service organizations.
But so far no bill has attracted significant bipartisan support, besides one that simply repeals the cuts without an offset.
Ryan has defended the retirement cuts, and Murray said she was open to replacing them but only if there was an offset.
Levin told reporters that he would vote for measures to replace the cuts, so long as the provisions did not interfere with the underlying legislation, like the unemployment insurance.
He said he is focused on the hearing that his committee plans to hold in the coming months that will look at the military pension benefits as part of the larger compensation and entitlements issues.
“I’ll vote for it, but what I want to do is focus on a hearing in case it doesn’t work that way,” Levin said. “The main problem is that it was singled out, and how you can overcome that problem without a greater entitlement reform is one of the issues which someone needs to address in testimony.”
Ayotte told The Hill that she is gaining sponsors to her legislation and plans to introduce it as an amendment to the unemployment insurance bill — and everything else that comes to the floor afterward.
“Not only would it pay for the COLA fix, but it would also pay for the UI for three months as well,” Ayotte said.