washingtonscene
program that is subject to automatic ad- justment mechanisms (e.g., COLAs) and doesn’t require annual appropriations. It includes such programs as Social Securi- ty, Medicare, military and federal civilian retirement and survivor programs, TRI- CARE For Life, VA disability payments, and more. PAYGO rules also require offsetting
the cost of any proposed tax cuts with equivalent spending cuts. The new House cut-go rule requires
any new increase in mandatory spend- ing to be offset only by other mandatory spending cuts and not by tax increases. The new rule also exempts tax cuts from any offset requirements. What will this mean? The focus in the House clearly is to
force significant spending reductions and make it easier to enact tax cuts. But the different rules between the
House and Senate raise the prospect that un-offset tax cuts approved by the House would violate Senate rules, and revenue increases proposed by the Senate to cover the cost of Medicare or other fixes would violate House rules. To add to the complexity, the PAYGO offset rules are set in law, even though the House has chosen to use different rules for its deliberations. In the past, the most frequently used
way for Congress to get around the statutory PAYGO rule was to declare the spending increase as an “emergency” need, because emergencies aren’t subject to PAYGO offset requirements. The new House rules likely will cut
down on emergency spending increases, but will House members now seek “emergency tax cuts”? All of these technical budget rules can be difficult to understand. However, the bottom line should be pretty familiar to everyone: expect more gridlock.
Survivors Get A
a Break RCSBP changes are coming.
new update in computation rules for the Reserve Com- ponent Survivor Benefit Plan
(RCSBP) will end the practice of deduct- ing RCSBP premiums from the survivors’ Survivor Benefit Plan (SBP) annuities. RCSBP provides coverage for Guard
and Reserve retirees in the so-called “gray area” between the time they retire from drilling status and attainment of re- tired pay eligibility at age 60. Unlike reg- ular SBP, the beneficiary receives RCSBP coverage before the premiums start. Also unlike regular SBP, RCSBP is not subsidized by the government — which means premiums must be set at rates that fully cover the cost of the interim coverage. RCSBP premiums are paid in addition
to regular SBP premiums. And because members who die in the gray area will never pay any premiums, RCSBP premi- ums until now have been deducted from both the retirees’ retired pay and the survivors’ SBP annuities, with premiums calculated individually for each couple based on their relative ages. DoD has revised RCSBP premiums pe- riodically to reflect changes in mortality rates and other changing factors (projected COLAs and interest rates, etcetera) and has established different premium schedules for members who retire at different times. The most recent calculation update al-
lowed DoD to stop deducting premiums from RCSBP survivors’ annuity checks — a significant benefit improvement. That change will be applied immediately for survivors of retirees who die in Decem- ber 2010 or later.
MARCH 2011 MILITARY OFFICER 37
COLA Crawl • The CPI increased 0.2 percent in December 2010. Because the CPI still is below where it was at the start of FY 2009, it will have to rise another 0.2 percent before we can start the COLA clock for 2012.
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