High One Is a Low Blow

Oct. 1, 1995

Sept. 5, Washington D.C.–Imagine that you are a senior master sergeant about to complete twenty-six years of service. You had your papers in to retire next February. Suddenly, because of a congressional curveball known as “High One,” your retirement pay is going to be $161 a month less than you had expected, a reduction of 8.4 percent.

Multiply the bad news by some 653,000 military people more than seventy percent of them enlisted members who would be affected by retirement pay cuts ranging from three percent to nine percent if High One goes into law as planned. It has already created a morale problem of epic proportions. Defense officials, military leaders, and veterans groups have tried without success to persuade Congress to back off.

The idea grew out of an estimate by the Congressional Budget Office that $649 million might be saved over seven years by changing the formula for computing military retirement pay for people with more than fifteen years of service. The change would be to base it on an average of basic pay during the last twelve months (the member s high one-year average) rather than, as now, on final pay.

High One was included as a cost-reduction measure in the budget resolution adopted in June by the House of Representatives. The House National Security Committee endorsed it in August. It touches 334,000 active-duty and 319,000 Guard and Reserve members who entered service prior to September 8, 1980.

The “worst case” examples are individuals who retire the month after receiving a longevity increase which occurs every other year up to twenty-six years of serviceand an annual pay raise. Monthly retired pay for the twenty-six-year senior master sergeant in the example above would be $1,753 rather than $1,914. High One does not apply to those presently retired. Neither does it affect those who joined the armed forces after September 8, 1980. The retirement program for those members, adopted before they began service, is based on a high three-year average.

In a letter to Rep. John R. Kasich (R-Ohio), chairman of the House Budget Committee, asking that High One be reconsidered, Secretary of Defense William J. Perry said that “While the Congress has made significant reductions to retirement benefits for new military service members who enlisted over the past fifteen years, at no time in that period has the Congress broken faith by changing the retirement benefits of current members.”

The reaction will extend beyond those (about twenty-eight percent of the force) directly hurt. CMSAF David J. Campanale believes that “people with four to eight years of service will look at this and say, ‘Gee, do I stay twelve more years? What have I got to look forward to? “

The Joint Chiefs of Staff sent Rep. Floyd D. Spence (R S. C.), chairman of the House National Security Committee, a strongly worded letter on August 2, saying that “the most compelling reason to dismiss this proposal is its break of faith with people who have been serving this country since before 1980.” At the same time, the Chiefs said, High One is predicated on “flawed cost assumptions, and, as a result, this proposal will result in much lower savings than projected (in fact, it could cost us money).”

The Congressional Budget Office estimate does not take into account the obvious probability that military members will modify their retirement plans to avoid times that penalize them several hundred dollars a month. “As people delay their retirements to protect retirement earnings, we will experience an unanticipated increase to the programmed military personnel accounts,” the Joint Chiefs said.

“The Services have not finished personnel drawdowns and absolutely do not need anything in place that would encourage people to delay retirement,” they added. “Doing this requires that we increase involuntary retirements in order to meet strength controls. This is a prospect we find abhorrent. Additionally, almost all of the people who desire to retire in [FY 1996] have already submitted their retirement date requests, based on the law as it exists today. To change the rules at this stage of the process is blatantly unfair and unwarranted.”

In a speech on August 11, Secretary Perry said that changing the formula to reduce retirement pay “is a bad idea that keeps coming back to life, even when we think we have killed it. I call it the Dracula Proposal.” He drew applause with a promise “to do everything I can to drive a stake through the heart of this idea once and for all.”

On top of everything else, High One is awkwardly timed. Congress had just indicated that it will correct an earlier inequity, created by the 1993 budget bill, that delays cost-of-living increases for military retirees for six to nine months beyond the dates they go into effect for other federal retirees. Now this.

Secretary of the Air Force Sheila E. Widnall said it exactly right: “If our people perceive their government will abandon long-standing promises, even after they have served more than twenty years in good faith, we’ll certainly have a difficult time attracting and retaining the quality airman upon which our military readiness depends.”