Veterans fight changes to disability payments

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Veterans groups are rallying to fight any proposal to change disability payments as the federal government attempts to address its long-term debt problem. They say they've sacrificed already.

Government benefits are adjusted according to inflation, and President Barack Obama has endorsed using a slightly different measure of inflation to calculate Social Security benefits. Benefits would still grow but at a slower rate.

Advocates for the nation's 22 million veterans fear that the alternative inflation measure would also apply to disability payments to nearly 4 million veterans as well as pension payments for an additional 500,000 low-income veterans and surviving families.

"I think veterans have already paid their fair share to support this nation," said the American Legion's Louis Celli. "They've paid it in lower wages while serving, they've paid it through their wounds and sacrifices on the battlefield and they're paying it now as they try to recover from those wounds."

Economists generally agree that projected long-term debt increases stemming largely from the growth in federal health care programs pose a threat to the country's economic competitiveness. Addressing the threat means difficult decisions for lawmakers and pain for many constituents in the decades ahead.

But the veterans groups point out that their members bore the burden of a decade of war in Iraq and Afghanistan. In the past month, they've held news conferences on Capitol Hill and raised the issue in meetings with lawmakers and their staffs. They'll be closely watching the unveiling of the president's budget next month to see whether he continues to recommend the change.

Obama and others support changing the benefit calculations to a variation of the Consumer Price Index, a measure called "chained CPI." The conventional CPI measures changes in retail prices of a constant marketbasket of goods and services. Chained CPI considers changes in the quantity of goods purchased as well as the prices of those goods. If the price of steak goes up, for example, many consumers will buy more chicken, a cheaper alternative to steak, rather than buying less steak or going without meat.

Supporters argue that chained CPI is a truer indication of inflation because it measures changes in consumer behavior. It also tends to be less than the conventional CPI, which would impact how cost-of-living raises are computed.

Under the current inflation update, monthly disability and pension payments increased 1.7 percent this year. Under chained CPI, those payments would have increased 1.4 percent.

The Congressional Budget Office projects that moving to chained CPI would trim the deficit by nearly $340 billion over the next decade. About two-thirds of the deficit closing would come from less spending and the other third would come from additional revenue because of adjustments that tax brackets would undergo.

Isabel Sawhill, a senior fellow in economic studies at The Brookings Institution, a Washington-based think tank, said she understands why veterans, senior citizens and others have come out against the change, but she believes it's necessary.

"We are in an era where benefits are going to be reduced and revenues are going to rise. There's just no way around that. We're on an unsustainable fiscal course," Sawhill said. "Dealing with it is going to be painful, and the American public has not yet accepted that. As long as every group keeps saying, `I need a carve-out, I need an exception,' this is not going to work."

Sawhill argued that making changes now will actually make it easier for veterans in the long run.

That's not the way Sen. Bernie Sanders sees it. The chairman of the Senate Committee on Veterans' Affairs said he recently warned Obama that every veterans group he knows of has come out strongly against changing the benefit calculations for disability benefits and pensions by using chained CPI.

"I don't believe the American people want to see our budget balanced on the backs of disabled veterans. It's especially absurd for the White House, which has been quite generous in terms of funding for the VA," said Sanders, I-Vt. "Why they now want to do this, I just don't understand.

Sanders succeeded in getting the Senate to approve an amendment last week against changing how the cost-of-living increases are calculated, but the vote was largely symbolic. Lawmakers would still have a decision to make if moving to chained CPI were to be included as part of a bargain on taxes and spending.

Sanders' counterpart on the House side, Rep. Jeff Miller, R-Fla., the chairman of the House Committee on Veterans' Affairs, appears at least open to the idea of going to chained CPI.

"My first priority is ensuring that America's more than 20 million veterans receive the care and benefits they have earned, but with a national debt fast approaching $17 trillion, Washington's fiscal irresponsibility may threaten the very provision of veterans' benefits," Miller said. "Achieving a balanced budget and reducing our national debt will help us keep the promises America has made tdirector for Veterans of Foreign Wars, acknowledged that veterans would see little change in their income during the first few years of the change. But even a $36 hit over the course of a year is "huge" for many of the disabled veterans living on the edge, he said.

The amount lost over time becomes more substantial as the years go by. Sanders said that a veteran with a 100 percent disability rating who begins getting payments at age 30 would see their annual payments trimmed by more than $2,300 a year when they turn 55.