Is Congress Planning to Use COLA Restoration As Bargaining Chip?

  Words by Bridget Foster.

As the February 27 deadline for raising the debt ceiling approaches, it appears that House Republican leaders are readying to offer the restoration of the COLA cut as the price for agreeing to lift the debt limit. A bill restoring the cut was passed by the House last week and the Senate voted 94-0 on Monday night to bring their version of the bill up for a full Senate vote later this week.

Is congress planning to use COLA restoration as bargaining chip?

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The Senate has the option of moving the bill ahead with or without amendments to pay for the $6 billion bill. A co-sponsor of the bill, Senator Mark Begich stated there was no need to “pay” for the bill as veterans have already paid for it with their service to the country.

 Proposals to pay for the restored cuts include closing a loophole that allows undocumented workers to claim a $1500 child tax credit, taking money from the Pentagon’s war budget as proposed by Senator Bernie Sanders in his huge bill last month, ending Saturday mail delivery, and among others, consolidating the Veteran’s Affairs and Defense Department’s prescription drug purchasing programs.

Is congress planning to use COLA restoration as bargaining chip?

Senate Majority Leader Harry Reid, D-Nev., said Tuesday that a move to restore full cost-of-living adjustments for working-age retirees likely would be included in the omnibus spending bill being negotiated by Senate appropriators. (J. Scott Applewhite / AP)

The Republican proposal would need the support of Democrats in the House as there are some Republicans who are adamantly against raising the debt ceiling under any circumstances. According to an AP story, a spokesperson for Nancy Pelosi said the Democrats want a clean debt ceiling bill, free of any add-ons, including the COLA restoration.

Last year, the Republicans and President Obama engaged in brinkmanship over the debt-ceiling, resulting in a 16 day shutdown of the government.  The cut to the cost-of-living-adjustment was part of the budget deal that ended that shutdown.  President Obama has since taken the stance that he will not negotiate over raising the government’s spending limit so if the Republicans succeed in linking the COLA restoration to a debt-ceiling bill, the country could be in for another showdown like last October.

With several Democratic senators up for reelection in 2014, it is easy to see how the GOP proposal could again become a political football. If successful in linking the restoration of the cuts to debt-ceiling legislation,  Democrats facing reelection would be caught up in a dilemma of supporting Obama in not negotiating on the debt ceiling and having to explain to constituents why they voted against a bill that would benefit veterans.

Is congress planning to use COLA restoration as bargaining chip?

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In election-year politicking, both sides can say the other is politically motivated.  Republicans have been quick to point out that the Democratic Senators who sponsored the measure, previously voted against the COLA restoration when Republicans offered up a bill that would pay for the restored cuts by rolling back the child tax credit that benefited American-citizen minors whose parents were illegal immigrants. The final bill may still face Republican opposition if it is presented without some means to pay for the restored cuts.

If passed into law, the restored cost-of-living-adjustment for veterans aged 62 and under would not take effect until 2015.



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