Budget deal offers stability to Pentagon spending

WASHINGTON - Working-age military retirees would see fewer dollars in their federal pensions and the Pentagon would get some long-sought stability in spending under Congress' budget deal.

The accord eases some of the pain of the automatic, across-the-board spending cuts past and current defense secretaries, senior military leaders, and Congress' defense experts have fought. It would reverse a $20 billion financial hit that the Pentagon faced next month, although the robust, post-9/11 military spending through wars in Iraq and Afghanistan is clearly over.

Under the deal, defense spending in the current 2014 fiscal year would be capped at $520.5 billion, up from the current level of $498.1 billion. In fiscal 2015, the amount would be capped at $521.4 billion, up from $512 billion. Pentagon spending would be about the same in 2014 as in the 2013 fiscal year.

The numbers weren't what they wanted, but defense leaders and members of Congress' military panels welcomed the certainty seen in the deal. A House vote is likely Thursday.

Working-age military retirees under age 62 would see lower cost-of-living raises, adjusted to the rate of inflation minus 1 percent. The formula would be no change this year, a 0.25 percent drop in December 2014, and a 0.5 percent drop in December 2015. It would not apply to retirees who left due to disability or injury.

"These are people who are under the age of 62 who retire early. Most of them have another job," said Rep. Mac Thornberry (R., Texas), a member of the Armed Services Committee. "It's minus 1 percent, it's phased in gradually so it's the least painful way possible."