[Congressional Record Volume 140, Number 86 (Thursday, June 30, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
         THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL 1995

  The Senate continued with the consideration of the bill.
  Mr. GLENN. Mr. President, I am pleased to support S. 2182, the 
National Defense Authorization Act for fiscal year 1995. I want to take 
a few moments today to summarize for my colleagues the portions of the 
bill dealing with issues under the jurisdiction of the Subcommittee on 
Military Readiness and Defense Infrastructure which I chair, and then 
offer my observations and comments on other portions of this important 
bill, including two issues falling within the jurisdiction of the 
Governmental Affairs Committee which I chair also.
  Mr. President, before I turn to the specifics of the bill, I would 
like to offer a few comments about my views on the impact continued 
defense spending reductions are having on our ability to meet our 
national security requirements and our ability to fulfill the 
objectives laid out in our defense planning guidance.
  Like most of my colleagues, I would very much like to shift funding 
from defense into other vitally important programs and work on 
eliminating our deficit. unfortunately, I am not persuaded that peace 
has broken out throughout the world and that the United States can 
simply shed its military capability.
  I have a chart here, Mr. President, using data from the Historical 
Statistics of the United States which depicts the history of our 
defense outlays for the past 100 or so years, measured as a percentage 
of our Gross National Product. Superimposed on the line depicting our 
actual defense outlays is a dotted line depicting what our spending 
would look like on a hypothetical 17-year cycle.
  The interesting pattern over this 100-year period, going back as far 
as the Spanish-American War, is that our actual defense outlays come 
pretty close to following that hypothetical 17-year cycle with peaks 
and valleys showing a 7-year period of buildup followed by a 10-year 
period of drawdown. The only exception occurs in World War II which 
increased our defense outlays a few years after the 17-year cycle would 
have.
  If the 17-year cycle is applied to the present day and carried 
forward into the future, we are just about at the low point of the 
valley and can expect to start the 7-year buildup in the next couple of 
years.
  I'm not trying to be melodramatic, but when I look at that chart, Mr. 
President, I can't help but think about the fact that in 1917 my father 
went off to fight in the war to end all wars. Yet, I fought in two wars 
after that and the United States participated in two more major 
conflicts after those, in Vietnam and in the Persian Gulf.
  Having won the cold war, we have entered a period of relative peace, 
a period in which we have found ourselves to be the world's only 
remaining superpower. It is critical that we retain our superpower 
status because, while the world may be different, it is still a 
dangerous place. We must be able to protect our vital interests around 
the globe and the vital interests of our allies. In addition, 
superpower status preserves our ability to help keep peace and support 
the spread of freedom and democracy worldwide.
  In order to keep that superpower status, I believe we have to 
maintain the two kinds of power, Mr. President, that allowed us to win 
the cold war--economic power and military power.
  Congress and the administration are working to retain and increase 
our economic power and global competitiveness by trying to tackle the 
deficit problem, by investing in productivity programs, and by 
reinventing government--these are all important to maintaining our 
superpower status through economic strength and I wholeheartedly 
support these efforts.

  At the same time, I am very concerned that we may be slowly eroding 
our military power through unabated downsizing. The Armed Services 
Committee's bill approves the administration's glidepath which will 
bring our active duty end strength down from our current level of about 
1.6 million active duty personnel to 1.45 million.
  My preference, Mr. President, would be to level out at 1.6 million. 
Our current worldwide commitments and high-operating tempo, which are 
straining our existing force, argue against making further cuts. But, 
notwithstanding my concerns, I supported the committee's action because 
I recognize that fielding a force of 1.6 million active duty personnel 
cannot be accommodated within the current budget without hollowing out 
the force either in the near term by paying for the additional 
personnel out of operation and maintenance funds or by hollowing out 
the force in the long term by supporting the additional personnel at 
the expense of the investment accounts that pay for equipment and 
weapons modernization and research and development.
  I certainly do not believe that we can go below the 1.45 million 
proposed by the administration and I will resist efforts to do so. 
Moreover, fielding a smaller force with an end strength of 1.45 million 
means that that force has to be more capable and must maintain 
extremely high levels of readiness--especially if they are called upon 
to conduct the two nearly simultaneous major regional conflicts 
contemplated by our defense planning guidance, the Bottom-Up Review.
  Consequently, I urge my colleagues to resist the temptation to reduce 
personnel in order to pay other defense costs as others in Congress 
have proposed. Certainly, I urge my colleagues not to view the defense 
budget as the funding source for programs outside of defense.
  Mr. President, I would now like to comment on the work we've done on 
the Readiness Subcommittee, which I chair. The primary focus of the 
Subcommittee on Military Readiness and Defense Infrastructure is on the 
combat readiness and combat capability of our military forces. Other 
very important areas under our jurisdiction include base closings, 
environmental cleanup, and military construction--but combat readiness 
remains the bottom line for our work on the subcommittee.
  In my judgment, the recommendations in this bill under the 
subcommittee's jurisdiction include important enhancements to maintain 
the readiness and capability of the military services in fiscal year 
1995.
  This year the full committee heard testimony from the service chiefs 
and from the unified combatant commanders on readiness issues. Our 
subcommittee followed up these full committee hearings with five 
hearings that focused on maintaining the readiness and combat 
capability of our military forces as we reduce the defense budget and 
draw down the size of our defense establishment.
  The subcommittee also visited the Norfolk naval complex to discuss 
readiness concerns with front-line operating units. This field visit 
was very helpful and informative, and I hope we can follow up this 
first field visit with other ones throughout the year.
  Secretary Perry and General Shalikashvili testified before the 
committee that readiness programs had received the highest priority of 
any area in preparing the fiscal year 1995 budget. O&M funding grows by 
approximately $5 billion, or 2 percent in real terms, in the fiscal 
year 1995 budget request, compared to an overall negative growth rate 
of 1 percent in the defense budget as a whole.

  Although a portion of this $5 billion increase is budgeted to cover 
inflation and the fiscal year 1995 civilian pay raise, it is important 
to recognize that these costs represent must-pay bills. If the costs of 
these must-pay bills are not fully reflected in the budget, the result 
is that funds are often reprogrammed during the fiscal year from other 
areas of the O&M budget--including readiness activities--to meet these 
costs.
  The testimony before the committee this year indicates that the 
readiness of our military forces remains high, but all of the services 
expressed concern about their ability to sustain current readiness 
levels in the future at current funding levels.
  For example, each of the services will continue to have large 
backlogs of equipment for depot maintenance at the end of fiscal year 
1995. Under this budget the Army funds only 62 percent of its annual 
depot maintenance requirement; the Navy only 85 percent; and the Air 
Force only 80 percent. The Marine Corps funds only 26 percent of its 
total depot maintenance requirement in fiscal year 1995, but this 
figure is somewhat distorted by the large backlog from prior years. 
Overall, this is better than last year, but still below where we should 
be.
  Another area of concern is real property maintenance--the repair and 
maintenance of facilities and bases. The Defense Department's own 
figures show that, even with the continued closure of unneeded bases, 
the backlog of real property maintenance and repair will reach $12.6 
billion in fiscal year 1995, an increase of 12 percent over the fiscal 
year 1994 level and an increase of 50 percent over the fiscal year 1993 
level.
  Finally, I am concerned about the increasingly difficult recruiting 
environment facing all of the military services. Recruiting sufficient 
numbers of high quality people to serve in the Nation's armed forces is 
a critical component of current and future readiness.
  In both full committee and subcommittee hearings this year, DOD 
witnesses testified that the overall level of O&M funding requested for 
fiscal year 1995 is the minimum adequate to maintain current readiness. 
In light of this testimony, we did our best to preserve the O&M funding 
level in the fiscal year 1995 budget request to the maximum extent 
possible.
  At the same time, we also looked for savings that could be applied to 
some of the readiness programs identified by the military services as 
areas of concern that could lead to readiness problems in the near 
future.
  Overall, Mr. President, the subcommittee made reductions of 
approximately $1.5 billion in the programs under the jurisdiction of 
the Readiness Subcommittee. The largest area of savings--approximately 
$1.2 billion--is in the area of civilian personnel. These savings are 
available because the drawdown of DOD's civilian workforce in the 
current fiscal year has occurred much faster than DOD anticipated when 
they put their budget together last January. This entire $1.5 billion 
in savings was redirected by the committee toward high priority 
readiness programs.
  We used almost $800 million of the savings to increase some of the 
high priority readiness areas that we identified in our hearings: depot 
maintenance; support for Marine Corps' operating tempo; real property 
maintenance; and recruiting.
  Another $300 million of these savings went to high priority readiness 
and quality of life military construction projects.
  The balance of the savings--approximately $400 million--was applied 
toward the cost of increasing the military pay raise next year from the 
1.6 percent requested by DOD to 2.6 percent. In my view, this increased 
pay raise is important to maintain the morale and quality of life--and 
the readiness--of the men and women in the armed forces.

  Mr. President, I want to reassure the Senate that the Readiness 
Subcommittee has continued to monitor the implementation problems with 
the Defense Business Operation Fund, or DBOF. This bill includes 
provisions to: Make permanent the authority to operate the DBOF, as GAO 
and DOD recommended; maintain the requirement for DOD and GAO to report 
on the implementation of the DBOF Management Improvement Plan; and 
address problems in the management of capital investment projects in 
the DBOF.
  In addition, the bill continues the current cap on obligations from 
DBOF for purchases of new inventory at 65 percent of sales in fiscal 
year 1995. This cap was put in place 4 years ago in response to long-
standing, pervasive problems in inventory management throughout the 
Defense Department.
  Although some services indicated during our hearings that it was time 
to lift this cap, none of the services has asked the Secretary of 
Defense to use his authority to waive this cap in the current fiscal 
year. I am a little tired of the services complaining about this cap 
but refusing to provide any justification for removing it and refusing 
to ask for a waiver from the Secretary of Defense.
  I even wrote Deputy Secretary Deutch after one of our hearings this 
year and urged him to grant a waiver from this cap if any of the 
services demonstrated that the cap was hurting readiness.
  This year we have included a provision in the bill specifically 
addressing the problem of the services complaining to us about this 
limitation while refusing to ask the Secretary of Defense to waive it: 
within 60 days of enactment of this act, each of the military services 
will be required to report to the Secretary of Defense on the readiness 
impact of this cap. If the Secretary of Defense determines that the cap 
is hurting readiness, he can waive it.
  We are not keeping the cap on just to be obstinate. We are keeping 
the cap on because for too many years inventory management received 
scant attention, and billions of dollars went into unneeded new 
procurement largely because the services didn't know what was already 
on the shelf, in spite of repeated requests to do something about it. 
We do believe there has been much improvement in inventory management, 
and hope it continues to the point where we can eliminate the 65-
percent cap. For now, we retain the 65-percent cap with a DOD waiver 
where justified.
  Mr. President, I want to take this opportunity to commend the 
Comptroller of the Defense Department, Dr. John Hamre, for his efforts 
to improve financial management in DOD. We have had hearing after 
hearing in the Governmental Affairs Committee and in the Armed Services 
Committee in past years that highlighted major weaknesses in DOD's 
financial management systems. John understands the importance of 
addressing these problems.
  He has the strong support of Secretary Perry and Deputy Secretary 
Deutch, and he is consulting with GAO and with the Congress. There is a 
great deal of work to be done in this area, but John Hamre is doing an 
excellent job and I look forward to working closely with him in the 
future on these matters.
  In the depot maintenance area, the bill includes a provision that 
would require DOD to continue the practice of competing depot 
maintenance workload between DOD depots and between DOD depots and the 
private sector. Deputy Secretary Deutch issued a directive to the 
military services recently that canceled all public-public 
competitions--competitions between DOD depots and all public-private 
competitions--competitions in which DOD depots and the private sector 
compete, for depot maintenance workload.
  The committee does not really understand why DOD is trying to 
eliminate competition for depot maintenance workload when GAO and DOD's 
own internal studies show that competition has saved money and made DOD 
depots and the private sector more efficient.
  The bill also contains a provision to put the finances of the Armed 
Forces Retirement Home on a sound financial footing. Currently, the two 
retirement homes that make up the Armed Forces Retirement Home are 
financed with fines and forfeitures in the military services, a monthly 
assessment of 50 cents on all enlisted personnel and warrant officers, 
and residents' fees. As we reduce the size of the military services, 
these sources of funds are inadequate to support the operations of the 
home.
  Based on the recommendation of DOD and the Armed Forces Retirement 
Home Board, we have given the Secretary of Defense the discretionary 
authority to increase the monthly assessment up to $2 over a 3-year 
period, and to raise the fees charged to residents of the home. At the 
same time, we have urged the Secretary to look at alternative methods 
of financing the operations of the home so that the full increase in 
the assessment will not be necessary.
  Mr. President, I want to take a few minutes to talk about the 
committee's recommendations in the military construction portion of the 
bill. The bill makes some important changes which I recommended in the 
way the committee deals with military construction projects and with 
disposal of excess DOD property.
  This year, in the final stages of preparing the fiscal year 1995 
budget, OSD reduced the military construction accounts by approximately 
$1 billion to meet the final budget targets. As a result, the fiscal 
year 1995 military construction request is almost $1.1 billion below 
last year's level, a reduction of almost 15 percent in real terms. OSD 
officials told the committee that the only reason for this large 
reduction in military construction in fiscal year 1995 was the need 
``to absorb a departmentwide inflation increase'' in fiscal year 1995.
  All of the military services have complained this year that the sharp 
cut in military construction funding in the fiscal year 1995 budget 
would make it increasingly difficult to meet their facility 
modernization goals.
  This year the committee received a large number of requests to 
authorize military construction projects that were not included in the 
Defense Department's budget, approximately $1.3 billion. For some time 
I have been concerned about the process of adding military construction 
projects to the budget. I know that Senator McCain, the ranking 
minority member of the Readiness Subcommittee, shares my concerns on 
this point. We should not authorize any military construction project 
that does not meet a military requirement and is not needed by the 
military services, whether it is in the Pentagon's budget request or 
requested by a Member of Congress.
  This year the committee adopted very stringent criteria for adding 
military construction projects to the budget. The committee reviewed 
each project proposed to be added to the budget request based on the 
following criteria: the project had to be consistent with past base 
closure actions; the project had to be a valid military requirement; 
the project had to be in the military service's current 5-year program; 
and the military service had to be able to execute the project in 
fiscal year 1995 if authorized.
  Mr. President, every military construction project recommended as an 
addition to the fiscal year 1995 budget in the markup package meets 
these criteria.
  Let me turn briefly now to the subject of land transfers.
  For many years, Congress has authorized the Secretary of Defense and 
the Service Secretaries to transfer surplus DOD land or facilitate to 
specific recipients, generally State or local governments. The Armed 
Services Committee acted on these transfers on a case-by-case basis, 
after consulting with the Defense Department. However, these land 
transfers were never subjected to the Federal real estate disposal 
process run by GSA to make sure that there were not alternate Federal 
requirements outside of DOD for the land or facilities involved in 
these transactions.
  This bill contains a provision that establishes expedited procedures 
for GSA to review all but one of the specific land transfers contained 
in this bill under which land would be turned over to a non-Federal 
entity. GSA will subject these transfers to screening for alternate 
Federal uses as well as State and local uses. This screening process 
must be concluded with 125 days after enactment of this bill.
  I believe that this new process represents an important model for the 
future to ensure that conveyances of surplus DOD land and property are 
made in a way that fully protects the interests of the Federal 
Government as a whole and follows the general procedures for disposal 
of Federal property required of every other department of government.

  Mr. President, the final issue I want to mention under the Readiness 
Subcommittee's jurisdiction involves the Fitzsimons Army Medical Center 
in Denver.
  Two years ago Congress authorized the Army to construct a replacement 
hospital at Fitimons. The total cost of this 400-bed facility was $390 
million, of which $32 million has been appropriated for design and site 
work. Earlier this year, DOD notified Congress of their decision to 
downsize this facility to a 200-bed hospital, which the DOD IG 
estimates would cost approximately $300 million.
  In March of this year, the DOD IG issued a very strong report that 
found the construction of this new hospital was no longer justified for 
the following reasons: the new hospital was too expensive; the new 
hospital would serve only a small percentage of active duty personnel; 
the local civilian hospitals in the Denver area are underutilized; and 
other military medical facilities in the area could accommodate the 
active duty medical needs.
  The DOD IG recommended the termination of this construction project, 
and the Acting Assistant Secretary of Defense for Health Affairs at the 
time agreed with the findings of the DOD IG.
  At a time when we are reducing infrastructure throughout the Defense 
establishment, we need to find ways to eliminate marginal projects and 
programs. This new hospital clearly falls in that category. After 
careful review, the committee decided to follow the recommendation of 
the DOD IG, and this bill includes a provision that would terminate the 
construction authorization for a new hospital at the Fitzsimons Army 
Medical Center.
  Now, Mr. President, I would like to turn to an issue that falls 
within the jurisdiction of the Governmental Affairs Committee and to 
which I object involving the issue of so-called ``COLA equity.''
  In the process of marking up this bill, the Armed Services Committee 
voted 13 to 8 to recommend that a committee amendment be offered during 
floor consideration of this act that would equalize COLA dates for 
military and civil service retirees by moving the dates for military 
retiree COLA's forward and the dates for civil service COLA's back in 
each fiscal year from 1995 through 1998. Adoption of such a proposal, 
would completely rewrite last year's budget reconciliation bill by--in 
effect--increasing instructions to the Governmental Affairs Committee 
and decreasing instructions to the Senate Armed Services Committee.
  I strongly support treating military retirees fairly. But the 
proposed committee amendment would be unprecedented in that it would 
rob one retirement system to pay for a completely different retirement 
system. I believe we have to find another way to approach this problem 
if we are to eliminate the difference in the way civil service and 
military retiree COLA's are treated as a consequence of last year's 
budget reconciliation. I'm sure that we will have a full discussion of 
this issue when the committee amendment is offered and I will make more 
extensive comments at that time.
  Mr. President, let me turn briefly now to some other major areas of 
this important bill.
  Mr. President, I would also like to express my strong support for a 
provision contained in the bill that would restore an SR-71 
surveillance aircraft contingency capability. The Committee recommended 
the authorization of $100 million in fiscal year 1995 for an SR-71 
contingency capability, and directed the Defense Airborne 
Reconnaissance Office Program manager to report to the congressional 
defense and intelligence committees prior to the DOD authorization 
conference on his estimate of the costs and benefits of such a 
capability.
  The primary rationale for the restoration of the SR-71 is the 
committee's concern about the adequacy of warning and surveillance 
capabilities on the Korean Peninsula.
  As a member of both the Senate Select Committee on Intelligence as 
well as the Senate Armed Services Committee, I have always been a 
supporter of the SR-71. And I was strongly opposed to the Bush 
administration's decision to terminate further operations of this 
outstanding reconnaissance asset in fiscal year 1990.
  Mr. President, the SR-71 was a proven reconnaissance asset that 
brought a truly unique capability to America's Intelligence Community. 
The SR-71 was a high-altitude, high-speed, long-range airborne 
reconnaissance platform that served our Nation well since it first flew 
in the mid-1960's. The SR-71 provided coverage on demand with little or 
no warning to the reconnaissance target; it was a highly flexible 
system.
  Because it is the world's fastest and highest flying aircraft, the 
SR-71 is able to penetrate hostile territory with comparatively little 
vulnerability to attack unlike other reconnaissance platforms. This 
would make it particularly useful in crisis situations such as in a 
conflict on the Korean Peninsula. While opponents of the SR-71 used to 
argue that national technical means were capable of performing the same 
mission, these systems are far less flexible and survivable than the 
SR-71.
  Mr. President, intelligence systems such as the SR-71 are the eyes 
and ears for our Nation's defense and are therefore true force 
multipliers. The decision to cancel the SR-71 was a grave mistake. I am 
delighted that the Senate Armed Services Committee is taking the lead 
in restoring this important capability.
  I am also pleased that the committee bill fully funds the bomber 
program request. I have come to the Senate floor on many occasions in 
the past to fight to include funding for the B-1 bomber, the aircraft 
the Air Force now calls the ``backbone'' and ``workhorse'' of the 
bomber fleet. I am pleased that this program is receiving the full 
funding it needs.
  On the other hand, I opposed the committee's initiative that provides 
$150 million to keep the B-2 production line ready to produce 
additional B-2's. I do not believe we need additional B-2's, and 
working with Senators Levin, Leahy, Cohen and McCain, I will move to 
eliminate that funding during this debate.
  Mr. President, that concludes my general remarks on the bill, I would 
like to take one last minute to recognize the committee staff who 
worked so hard in this past year. I'd like to thank David Lyles, 
Madelyn Creedon, Julie Kemp, Frank Norton, and Shelley Gough of the 
committee staff. Their expertise and assistance have been invaluable to 
me.
  Thank you, Mr. President, I yield the floor.
  Mr. WARNER. Mr. President, may I inquire of the Chair as to the time 
limitation for the Senator from Virginia?
  The PRESIDING OFFICER. The 2 hours are to be equally divided.
  Mr. WARNER. I thank the Chair. I shall yield to myself such time as I 
may require, and following that, I shall yield to my distinguished 
colleague, the senior Senator from Maryland [Mr. Sarbanes], such time 
as he may require.


                           Amendment No. 2143

  Mr. WARNER. Mr. President, I send the amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Virginia (Mr. Warner), for himself, Mr. 
     Sarbanes, Mr. Harkin, Mr. Cochran, Mr. Gorton, Mr. D'Amato, 
     and Mr. Bingaman, proposes an amendment numbered 2143.

  Mr. WARNER. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       At the appropriate place in the bill, insert the following 
     section:

     SEC.    .ELIMINATION OF DISPARITY BETWEEN EFFECTIVE DATES FOR 
                   MILITARY AND CIVILIAN RETIREE COST-OF-LIVING 
                   ADJUSTMENTS FOR FISCAL YEAR 1995.

       (a) In General.--The fiscal year 1995 increase in military 
     retired pay shall (notwithstanding subparagraph (B) of 
     section 1401a(b)(2) of title 10, United States Code) first be 
     payable as part of such retired pay for the month of March 
     1995.
       (b) Definitions.--For the purposes of subsection (a):
       (1) The term ``fiscal year 1995 increase in military 
     retired pay'' means the increase in retired pay that, 
     pursuant to paragraph (1) of section 1401a(b) of title 10, 
     United States Code, becomes effective on December 1, 1994.
       (2) The term ``retired pay'' includes retainer pay.
       (c) Limitation.--Subsection (a) shall be effective only if 
     there is appropriated to the Department of Defense Military 
     Retirement Fund (in an Act making appropriations for the 
     Department of Defense for fiscal year 1995 that is enacted 
     before March 1, 1995) such amount as is necessary to offset 
     increased outlays to be made from that fund during fiscal 
     year 1995 by reason of the provisions of subsection (a).
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated for fiscal year 1995 to the Department of 
     Defense Military Retirement Fund the sum of $376,000,000 to 
     offset increased outlays to be made from that fund during 
     fiscal year 1995 by reason of the provisions of subsection 
     (a).

  Mr. WARNER. Mr. President, I know the Senator from Arizona [Mr. 
McCain] likewise expressed an interest earlier this evening to address 
the body with respect to his interest in this legislation. Should he 
still be available, I assure him time will be available to him.
  The 1993 budget reconciliation bill delayed the COLA's for Federal 
civil service retirees and for military retirees. But there was a clear 
distinction. We understand a COLA to be that adjustment to the monthly 
and, indeed, the cumulative annual return on retirements earned by both 
civil retirees and military retirees, to help them partially--underline 
partially--offset the hidden tax of inflation.
  These men and women dedicated their careers, indeed, often the most 
productive years of their life, to public service of the United States 
of America. And in the case of military retirees, often much of that 
career was in farflung stations, posts, and ships throughout the world.
  During my career in the Senate, I have fought to restore COLA cuts, 
and where full restoration could not be achieved, both for civil and 
military, then I have tried with others to protect the military 
retirees so that they would be treated the same as the civil and the 
entire class of retirees receive such equitable treatment as the 
Congress will accord them with respect to their COLA's.
  But this time, Mr. President, in a very drastic manner, the military 
retirees were treated, in my judgment, very unfairly because of the 
disparity of their COLA adjustments with that of the civil service.
  This amendment seeks to restore just part of that COLA in but 1 
fiscal year. As much as I would like to correct it for the entire 
period of the fiscal year covered by the 1993 Budget Act, I have to 
recognize that that is not achievable. I confess with regret to the 
retirees that we cannot in this Congress at this time make that 
correction. So I set forth in this amendment that goal which I believe 
is achievable here and now in connection with this bill.
  What we have done is establish in this amendment an equality between 
the COLA date for the civil service retiree and the COLA date for the 
military retiree absolutely the same.
  The amendment would make the effective month, and that would be April 
1995, for the COLA and again that would be the same effective date as 
now in the 1993 Budget Act for the civil service retiree.
  The amendment treats both, as I say, the same for 1995. And to put it 
very simply that is being, in my judgment, simply fair--one word, 
``fair''--to both. These two classes of retirees should never be put in 
a position where they are competing head on for what is owed them 
legally in my respects and, indeed, in every respect morally for their 
service. That competition should never take place.
  This amendment corrects the COLA disparity in the 1995 act and allows 
the administration and Congress time to resolve the outyear inequity. 
This is in line with the language in this year's budget resolution. If 
I may read that, it reads:
  Recognizes the existing discrepancy between the cost-of-living delay 
schedule for the military and the civilian Federal retirees and urges 
the Department of Defense and other appropriate executive branch 
agencies to cooperate with Congress in identifying budgetary savings 
necessary to offset the costs of equalizing the delay schedules.
  The House of Representatives, upon learning that I and the Senator 
from Maryland and others were going to introduce legislation like this, 
took into consideration what we intended to do and what we are doing 
tonight, and put the identical provision of this amendment in House 
legislation. So therefore, if this body supports this amendment, it 
will then go into our bill and be a nonconferenceable item at such time 
as the conference may take place.
  I yield such time as my distinguished friend and colleague may need. 
I wish to express to my colleague from Maryland appreciation for his 
hard work. From the very first day that I indicated a desire to work on 
this, the Senator stepped forward to be a full and equal partner and I 
appreciate that.
  Mr. SARBANES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, I thank the distinguished Senator from 
Virginia for his very generous comments. I must say it has been a 
pleasure to work closely with him on this very important issue, and I 
have been pleased to be aligned with him throughout this effort.
  Mr. President, I am very pleased to join with the distinguished 
Senator from Virginia in offering this amendment. It is a very simple 
amendment. It would shift the 1995 cost-of-living adjustment for 
military retirees forward from October 1 to April 1.
  This problem arose because at the time the COLA schedules were 
adjusted pursuant to the budget resolution in fiscal 1994, different 
target dates were achieved within the Governmental Affairs Committee 
for civilian COLA's and in the Armed Services Committee for military 
COLA's. Both COLA's were delayed until April of 1994. So instead of 
being paid on January 1, as had been scheduled prior to last year's 
budget resolution, they were paid on April 1 of this year.
  The first point I wish to make that a delay has taken place; a 
sacrifice has already been made by these retirees. It was made this 
year. However, when the authorizing committees scheduled the COLA for 
1995 and beyond, the military COLA was delayed not until April 1, as 
was done with civilian retirees, but until October 1. We now are 
seeking for the next fiscal year only--which would give us some time to 
address the longer-range problem--to shift the military COLA forward 
from October 1 to April 1 and thereby reestablish equity with civilian 
retirees. It is to address this problem that Senator Warner and I have 
joined in proposing this amendment which corresponds with legislation 
that we introduced earlier this year and which some 40 Members of this 
body have joined in cosponsoring.
  As the distinguished Senator from Virginia has indicated, an 
identical measure has been included in the defense authorization bill 
passed by the other body with very strong bipartisan support.
  Mr. President, the next point I wish to make is that retirement 
benefits are perhaps better viewed as deferred income. I think that 
needs to be clearly understood. Employers provide a compensation 
package for their employees, and one of the common elements of that 
package is retirement benefits. If no retirement benefits were 
provided, clearly the immediate payment to employees would be higher 
because I assume the argument would be that employees would then have 
to provide for their retirement out of their immediate earnings.
  But this is not the usual practice. Rather, employers typically 
provide a retirement program. Some people participate, others do not. 
However, Federal retirement is best considered an earned benefit which 
represents the deferred compensation of the employee.
  The second point with respect to the military is that retirement 
benefits are also used as a means to attract people into the military. 
The military is not unique in this regard. Many companies in the 
private sector highlight their retirement programs in recruiting 
employees. The Federal Government also holds out retirement benefits as 
an attraction to the Federal service.
  It is also important to understand that the COLA adjustment is a 
catch-up adjustment. It does not put the employee ahead. It is an 
effort to catch up with increases in prices that have already occurred. 
It is designed to protect a retiree's pension from losing value over 
time. COLA's do not increase the value of the annuity but, rather, hold 
it constant against inflation. If we fail to make the COLA adjustments, 
we are consigning our retirees to a lesser standard of living. And it 
is for that reason that I have long been a strong supporter of COLAs, 
particularly for those who are already dependent upon them.
  What happened in last year's budget process is that we severed a 
linkage between civilian and military COLA's which has existed for the 
past 25 years. Since 1969, military and Federal civilian retirees have 
received an identical COLA on the same date. With military recruitment 
in decline, career stability affected by force drawdown, and even more 
intense operational requirements on the remaining forces, I think it is 
very important that we not send the message that military retirees will 
receive disparate and unequal treatment. These benefits have been used 
to induce military members to complete full military careers, to stay 
in the service, and it really comes down to honoring commitments that 
have already been made. I assume later an argument is going to be 
raised between discretionary and mandatory spending, but, in my view, 
you have to look at your total resources and make a judgment as to the 
best application of them.
  There are some who may say that the people affected by this have 
retired. They are no longer in the military. Therefore, cutting their 
retirement benefits does not affect the operations of the military. I 
believe that is a very shortsighted view. I submit that breaking these 
commitments will have an obvious impact on people still in the military 
who are considering sustaining that career, or people thinking of going 
into the military in order to make it a career. If they look beyond and 
say to themselves, what will happen to me at the end of my working life 
when I participate in the retirement program? And what sort of 
treatment will I then receive and what will happen to me in terms of 
meeting my needs and the needs of my family? If they ask these 
questions in light of the recent actions taken against their COLA's, 
they are, in my view, less likely to begin or sustain a career in 
military service.
  Mr. WARNER. Mr. President, will the Senator yield on that point?
  Mr. SARBANES. Certainly.
  Mr. WARNER. That is a very important point. Although the COLA's are 
not written into a service person's contract, since 1963 COLA's have 
been promised in nearly every military publication that discusses the 
military retirement system. Military retirees receive their COLA on 
April 1, 1994, and are scheduled to receive their next COLA on October 
1, 1995.
  Mr. SARBANES. That is right. So if it is included as part of the 
benefit package that is presented to people, then naturally there is a 
reliance placed upon it.
  The military retirees are not saying they should not make any 
sacrifice. In fact, the amendment would shift their COLA forward. 
However, they would still be taking a delay in their COLA from what the 
law has heretofore provided. They would not receive it on the 1st of 
January, which has been the past practice. In fact, they would receive 
it, if our amendment is accepted, on the 1st of April. If this 
amendment is not accepted, the military retirees who just received a 
COLA adjustment on April 1, 1994, would not receive the next adjustment 
until the fall of 1995.
  Of course, there are calculations of what this cumulative 5-year COLA 
delay that is now provided for would cost the average military retiree. 
It varies according to what their earnings have been as either an 
average enlisted retiree or an average retired officer. But, in any 
event, it is clear that an extra heavy, and I think therefore unjust, 
burden is being placed on our military retirees who have made 
significant sacrifices for their country in the course of serving in 
the military.
  I think it is not the right message to send to active-duty personnel 
or people considering going into the military, that they are going to 
be treated this way in their retirement years. It has potentially 
serious implications for troop morale, as well as for recruitment and 
retention. In fact, as the Senator from Virginia pointed out, in 
numerous publications directed at military personnel, the mention of 
retirement benefits, and specifically annual COLA adjustments, is 
explicit.
  This amendment offers us an opportunity to correct that for 1 year, 
for 1995, and shift the military COLA forward to April 1, thereby 
providing the protection against inflation which I believe our retirees 
are entitled to have.
  Of course, there is a very strong coalition in support of this 
measure. They are not arguing that they make no COLA sacrifice. I think 
it is very important to underscore that. This is not an effort by 
military retirees to be held totally immune to making a sacrifice with 
respect to last year's budget package. Rather, this is an effort to 
bring military COLA's forward and thereby to put military retirees and 
civilian retirees on the same COLA schedule.
  We may experience an effort to try to move the civilian COLA's back 
in order to move military COLA's forward. I, of course, am very much in 
opposition to that approach. In fact, all of the organizations of the 
military coalition that seek to move their COLA forward have taken a 
very strong and equitable position, much to their credit I would 
assert, on that particular issue.
  So I join the distinguished Senator from Virginia in urging the 
adoption of this amendment. I believe it will correct an inequity that 
needs to be corrected. The opportunity is before us now to do this. I 
very much hope our colleagues will support this effort.
  Mr. President, I yield the floor.
  Mr. SHELBY. Mr. President, I am supporting the correction of a gross 
inequity that directly affects the welfare of our Nation's military 
retirees. I have been involved for over a year now in attempting to 
fashion a much-needed solution to the inequity between the delays in 
cost of living adjustments (COLA's) for military and civil service 
retirees that resulted from the Omnibus Budget Reconciliation Act of 
1993. Certainly, those men and women who dedicated their careers to the 
defense of this country deserve a resolution of this disparity, a 
disparity that has placed the well being of our military retirees below 
that of other Federal retirees.
  Mr. President, resolving this disparity has not been easy. Military 
retired pay has been adjusted for inflation since 1963, with military 
and civilian retirees receiving COLA's of identical percentages on 
identical dates since 1969. Last year, however, the Budget Resolution 
adopted by the House of Representatives contained reconciliation 
instructions that assumed savings of $4 billion over 5 years from both 
military and civilian retirement. The Senate Budget Resolution 
contained no such instructions. However, in conference, the managers of 
the bill assumed $2.4 billion in savings from military retirement 
accounts, while only $350 million was provided from civilian 
retirement.
  As the chairman of the Subcommittee on Force Requirements and 
Personnel of the Armed Services Committee I was saddled with finding a 
way to achieve these savings. Since we needed to find these savings 
from entitlement accounts we were presented with very few alternatives. 
The formula that had been presented by the report accompanying the 
House Budget Resolution was altogether unworkable. It called for one 
COLA formula for those under 62 and another formula for those over 62. 
There was discussion of providing half COLA's and a maximum COLA of 
$400 per year.
  Instead, the Armed Services Committee achieved the required savings 
from military retirement by delaying the COLA's for military retirees 
for 3 months in 1994 and for 9 months in 1995, 1996, 1997, and 1998. 
The Governmental Affairs Committee, needing to meet much small spending 
targets, delayed COLAs for civil service retires by 3 months in 1994, 
1995, and 1996 and did not delay COLAs at all in 1997 or 1998. This 
action left military retirees with a 6-month inequity in 1995 and 1996 
and a 9-month inequity in 1997 and 1998. I maintained that this 
discrepancy was unjust and inequitable, and joined with my colleagues 
on the Armed Service Committee in recommending that this injustice be 
corrected in the Budget Reconciliation bill. No such action was taken 
last year.

  Mr. President, the amendment offered by Senator Warner would address 
the inequity between military and civilian retiree COLAs for fiscal 
year 1995 through the transfer of $376 million from Department of 
Defense funding to the military retirement trust fund. I believe this 
amendment to be identical to S. 1805, which was introduced by Senator 
Warner this year and to a provision in H.R. 4301, the House version of 
the National Defense Authorization Act for fiscal year 1995.
  I have strongly supported the thrust of Senator Warner's amendment, 
but have been concerned about the transfer of funds from discretionary 
accounts to direct spending accounts. That is why I have examined a 
number of alternative methods of funding; including delaying civil 
service retirement COLAs to offset the cost of advancing military 
retirement COLAs and equalizing COLAs by adding to the deficit. I have 
come to the conclusion that these alternatives would also, in the end, 
be inequitable and unworkable. I say this because we should not try to 
aid one group while hurting another and must not further add to the 
deficit.
  Mr. President, I support the Warner amendment because it provides the 
Senate with the best method available to provide equity between 
military and civilian retirees in fiscal year 1995. Furthermore, it is 
budget neutral and therefore does not violate the Budget Act. It is my 
sincere hope that in the future the executive branch will work with 
Congress to identify the necessary savings to offset the cost of 
equalizing the COLAs in 1996, 1997 and 1998 and thus, eliminating the 
need to revisit this issue again next year.
  Mr. President, our military retirees provided the most productive 
years of their lives to the defense of this great nation--always 
prepared to give their lives to ensure the preservation of the freedoms 
that we enjoy as Americans. To treat them as second class Federal 
employees is nothing less than a failure to honor the debt that we owe 
these men and women. I urge my colleagues to join me in correcting this 
inequity and thereby honoring this obligation.
  Mr. INOUYE. Mr. President, the amendment offered by the Senator from 
Virginia is one that I wish I could support. The Senator's amendment 
would advance the cost of living adjustment for our military retirees 
by 6 months, making it available in April rather than October. The goal 
of the Senator is to have our military retirees receive the COLA 
adjustment at the same time as retired civil servants. The Senator 
argues that our military retirees should not be treated any differently 
than our civilian retirees, and I agree.
  The problem with the amendment offered by the Senator is that it does 
not actually change the COLA, it merely would allow for the increase. 
Somebody else would have to pay for it. That somebody is the Senate 
Appropriations Committee--specifically, the DOD Appropriations 
Subcommittee.
  As my colleagues are aware, COLA payments are part of the mandatory 
budget, and are the jurisdiction of authorizing committees. The 
appropriations committee has no budget allocation to pay for increased 
COLA's.
  Had the Senator proposed to increase the COLA as an entitlement, 
then, despite the resulting increase in the deficit, I would have 
supported his amendment. Had the Senator proposed increasing the COLA 
by cutting another entitlement, then I may have been inclined to 
endorse his efforts.
  However, the Senator's amendment does not provide for mandatory 
entitlement funding. The amendment allows for an increase, so long as 
the appropriations committee cuts defense programs to pay for it. This 
is not acceptable. The Senator knows that we have cut defense spending 
too deeply already. Adding additional requirements for COLA's would 
only exacerbate problems which have resulted from the sharp reductions 
in defense discretionary spending over the past 5 years.
  In addition, I think all my colleagues should consider the precedent 
which would be set by the Warner amendment. This amendment would break 
down the barrier between entitlement and discretionary programs. It 
says that we should pay for unfunded entitlement increases by cutting 
discretionary spending.
  Mr. President, many of my colleagues have spoken frequently on the 
floor on the need to hold down entitlement spending. It was not my 
impression that they meant to hold down mandatory payments for 
entitlements by using discretionary funds to pay these bills.
  If we adopt this amendment today, tomorrow there will be--I predict--
other very worthy unfunded entitlement programs that many Members will 
want to increase. Those proponents will turn to the appropriations 
committee to pay the bill.
  Mr. President, discretionary spending is already too low to fund all 
of the discretionary requirements and legitimate interests of the 
Members of this body. I would urge my colleagues not to add unfunded 
mandatory payments to our list of necessary discretionary funding 
requirements. I suggest that all my colleagues consider these points 
and vote against this amendment.
  Mr. GLENN. Mr. President, I rise today regarding the current inequity 
in the Cost-of-Living-Adjustment [COLA] delay schedules for military 
versus Federal civilian retirees. As chairman of the Committee on 
Governmental Affairs and joined in these views by Senator Roth, the 
Ranking Minority Member, we have long supported equity between the 
retirement systems of military and Federal civilian retirees.
  However, there is one issue related to so-called COLA equity which we 
must object to. In the process of making up S. 2182, the Department of 
Defense Authorization Act, the Armed Services Committee voted 13 to 8 
to recommend that a committee amendment be offered during floor 
consideration of this Act that would equalize COLA dates for military 
and civil service retirees by moving the dates for military retiree 
COLAs forward and the dates for civil service COLAs back in each fiscal 
year from 1995 through 1998.
  Adoption of such a proposal, would completely rewrite last year's 
budget reconciliation bill by--in effect--increasing instructions to 
the Governmental Affairs Committee and decreasing instructions to the 
Senate Armed Services Committee.
  Such an amendment would be unprecedented. Robbing one retirement 
system to pay for another retirement system is simply wrong. To propose 
increasing military retiree COLAs at the expense of civilian retiree 
COLAs is not equitable.
  If we are to correct the COLA inequity between military and Federal 
civilian retirees, we believe that the proper course of action is that 
suggested by Senators John Warner and Paul Sarbanes. The federal and 
military committees are unanimous in their opposition to Senator Nunn's 
proposal, or any alternative that would provide COLAs to one group of 
retirees at the expense of another. This is why military, Federal 
employee and postal associations and unions are supporting the Warner/
Sarbanes amendment. Attached is a list of these groups. The Warner/
Sarbanes amendment would rectify the COLA disparity in 1995 by shifting 
the COLA for military retirees to April through a reduction in the 
nonreadiness accounts in the defense budget. As you may know, the 
Warner/Sarbanes amendment was included in the House-passed DOD 
reauthorization bill.
  For many years, Social Security, the civil service, and the military 
retirement systems have used the same adjustments for inflation. Last 
year's budget reconciliation bill changed COLAs for Federal civilian 
retirees in one way and military in another. Social Security was left 
untouched. We have consistently supported equitable COLA treatment 
between the three systems, and we favor raising the COLA for military 
retirees. However, we do not believe that the proposal being 
recommended by the distinguished chairman of the Armed Services 
Committee is the appropriate solution to COLA equity. In the interest 
of restoring equity and fairness, we urge you to support the Warner/
Sarbanes amendment.

   Federal Civilian and Military Organizations That Oppose the Nunn 
      Substitute or Any Amendment That Will Reduce Civilian COLA's

       The Retired Officers Association.
       Non Commissioned Officers Association.
       Air Force Sergeants Association.
       National Association for Uniformed Services.
       The Retired Enlisted Association.
       Enlisted Association of the National Guard Association of 
     the U.S.
       Marine Corps Reserve Officers Association.
       National Military Family Association.
       Commissioned Officers Association.
       Marine Corps League.
       CWO and WO Association, U.S. Coast Guard.
       Jewish War Veterans of the U.S.
       United Armed Forces Association.
       Naval Enlisted Reserve Association.
       Navy League of the U.S.
       The Military Chaplains Association.
       U.S. Army Warrant Officers Association.
       U.S. Coast Guard CPO Association.
       National Guard Association of the U.S.
       Naval Reserve Association.
       Reserve Officers Association.
       Air Force Association.
       Association of Military Surgeons.
       Fleet Reserve Association.
       Association of the U.S. Army.
       American Federation of Government Employees.
       American Federation of State, County and Municipal 
     Employees, AFL-CIO.
       American Postal Workers Union.
       Federal Managers Association.
       International Association of Fire Fighters.
       National Postal Mailhandlers Union.
       National Association of Letter Carriers.
       National Association of Postal Supervisors.
       National Association of Postmasters of the United States.
       National Association of Retired Federal Employees.
       National Federation of Federal Employees.
       National Rural Letter Carriers Association.
       National Treasury Employees Union.
       Senior Executives Association.

  Mr. WARNER. Mr. President, I yield such time as I may require.
  I thank my distinguished colleague. He pointed out the importance to 
the men and women on active duty today. Here is a publication entitled 
``Wifeline,'' which helps families. This is the Chief of Naval 
Operations addressing the active duty, and pointing out the importance 
of the career retention program, and how the COLA's are instrumental in 
the career retention program.
  I would just like to read from another military publication entitled 
``Retirement; Family Matter.''
  The purpose of the retired person's cost-of-living adjustment is to 
maintain military retirees' purchasing power. In other words, military 
retirees should be able to buy the same amount of goods and services in 
the future as when they retire; no more, no less. Cost-of-living 
adjustments are the mechanisms  used to accomplish this.

  Mr. SARBANES. Mr. President, will the Senator yield on that?
  Mr. WARNER. Yes.
  Mr. SARBANES. I want to point out that the COLA adjustment is made at 
the end of the time period during which prices are rising. So, for the 
period of time before the COLA adjustment is made, the retiree is 
absorbing those price increases. COLA's never put them ahead. In strict 
terms, the COLA adjustment does not even hold them even, since the 
adjustment comes at the end of the period during which prices had 
already risen.
  Therefore, retirees must absorb out of their existing retirement pay 
the increase in prices that takes place until they actually receive 
their COLA adjustment.
  To that extent, they are making even that much more of a sacrifice 
over time. We provide our retirees with a COLA to bring their 
purchasing power back up. But they never get ahead of the game. That is 
very important to understand.
  Mr. WARNER. Mr. President, the Senator is quite correct. To be 
precise, they get nothing in January, nothing in February or March. It 
is not until April when they begin to get a very modest--2.6 percent in 
the current rate--a very modest compensation for a lifetime in their 
most productive years.
  It is my hope and expectation that the Senate will accept this 
amendment.
  I yield the floor.
  The PRESIDING OFFICER. Does the Senator from Virginia yield his time?
  Mr. WARNER. Mr. President, I reserve the remainder of my time.
  The PRESIDING OFFICER. For what purpose does the Senator from Georgia 
rise?
  Mr. NUNN. Mr. President, I yield myself such time as I may require.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. NUNN. Mr. President, it is a late hour of the night to be 
debating this issue. I am not under any illusion that our colleagues 
are all around the television sets beaming in on C-SPAN in anticipation 
of what we are going to say next. I hope there are a few people 
listening. Perhaps I do not want too many people listening because I am 
on the unpopular side of this debate. I doubt if there are many 
constituents out there who are interested in this issue except the ones 
who are going to benefit by the Warner amendment, the military retiree 
community that would benefit. I agree with the Senator from Virginia 
that this problem needs to be solved. But the Warner amendment involves 
more than just COLA equity.

  Mr. President, this simple-sounding amendment is really a direct cut 
to the defense budget. It does not address the COLA equity problem 
after 1995. And it would set what I think is a very dangerous and 
unfortunate precedent of bypassing the pay-as-you-go system by raiding 
discretionary spending programs to fund entitlement programs.
  Mr. President, I support the goal of my friend from Virginia, which 
is to ensure that military retirees are treated fairly. But I believe 
the method proposed in the amendment by the Senator from Virginia and 
the Senator from Maryland is so seriously flawed that its cure is worse 
than the disease.
  But, Mr. President, I think the military retirement community has not 
been told by their representatives, the people who are here in 
Washington, that this money is coming directly out of the defense 
budget. So we are curing one problem, and it is an inequity. I do not 
think there should be a disparity between military retirement COLA's 
and civilian COLA's. They ought to all be the same. From my point of 
view, all COLA's ought to be the same. If we are going to reduce one, 
we ought to reduce them all. If we are going to make one whole, we 
ought to basically take care of them all.
  But what the military retirees out there that are corresponding with 
me do not really recognize, until I write them and then they recognize 
it, is that this money is coming right out of the defense budget. And 
because of the outlay implications of this cut in the defense budget to 
restore COLA equity, it is going to have to come out of, in all 
likelihood, military readiness.
  So I do not think anybody should make any mistake about it. In order 
to correct an inequity, in my view, this cure is worse than the 
disease. We cannot afford to continue to bleed the military budget. 
This is a direct cut in the defense budget.
  I share the view of my colleagues from Maryland and Virginia on the 
inequity here. I will not rebut anything they have said, because they 
are essentially correct that the civil service retirement has not been 
treated the same as the military retirement, and they ought to be 
treated the same. The inequity is there and there is no denying that. I 
wish it had not happened. Our committee warned last year it was going 
to happen, but at that stage we could not get anyone's attention, and 
it appeared there was no other way to carry out our responsibilities. 
We have only one little tiny bit of so-called mandatory accounts in our 
whole jurisdiction.
  We were mandated by the budget resolution to make a cut that amounts 
to about $2 billion over 4 years. We had nowhere else to get it. It had 
to come out of the mandatory jurisdiction --not the 050 function; it 
had to come out of the function 600 budget. We worked with the military 
retirement community, and they worked cooperatively. They did not want 
to be treated inequitably, and we worked with them. Instead of cutting 
more out of people retiring before age 62, we chose a way so it would 
be across the board. Of course, they do not like what happened, and 
that is the realization that they are being treated differently from 
civil service retirees.


                        what is the discrepancy?

  Mr. President, the COLA equity problem was created by the Fiscal Year 
1994 Budget Resolution and the Omnibus Budget Reconciliation Act of 
1993.
  The conference report on the Concurrent Resolution on the Budget for 
Fiscal Year 1994 contained reconciliation instructions requiring 
savings in both military and civil service retirement. To carry out 
these reconciliation instructions, the Budget Resolution assigned 
deficit reduction targets for military retirement to the Armed Services 
Committee, and deficit reduction targets for civil service retirement 
to the Governmental Affairs Committee.
  The Armed Services Committee achieved our required savings from 
military retirement by delaying COLAs for military retirees for 3 
months in 1994 and for nine months in 1995, 1996, 1997, and 1998. The 
total five-year savings from military retirement was $2.358 billion.
  COLAs for civil service retirees were only delayed by 3 months for 
1994, 1995, and 1996 and were not delayed at all in 1997 or 1998. The 
total 5-year savings from delaying civil service retirement COLAS was 
$788 million. This was twice the amount that had been assumed in the 
Budget Resolution, but only one-third the amount of savings required 
from military retirement, even though annual civil service retirement 
outlays exceed military retirement outlays.
  The result is that the Omnibus Budget Reconciliation Act of 1993 
delays COLAs for military retirees for 6 months beyond the date on 
which civil service retiree COLAs are paid in 1995 and 1996. In 1997 
and 1998, the additional delay for military retirees grows to 9 months. 
In 1999, both military and civil service COLAs will once again be paid 
in January.
  Before this 1993 Act, permanent law called for COLAs to be paid to 
military and civil service retirees on January 1 of each year. Military 
and civil service retirees have received COLAs of identical percentages 
on identical dates since 1969.
  The discrepancy in COLA delays in the Reconciliation Act does not 
result from the failure of any committee of jurisdiction to achieve its 
deficit reduction target. The discrepancy was inherent in the targets 
themselves.


                  how did this discrepancy come about?

  There appears to be some confusion about how this discrepancy was 
created. An article in the Washington Post of June 22 stated that ``The 
Problem has its roots in a decision by Congress last year to halve the 
cost-of-living increases for federal civilian and military pensioners 
under age 62.''
  Mr. President, this is not correct. Congress never decided to reduce 
COLAs for retirees under 62 and exempt retirees over 62. In fact, when 
presented with instructions to save money from military and civil 
service retirement, all four committees of jurisdiction, and the 
Congress as a whole in the reconciliation bill, decided exactly the 
opposite. We decided to apply one COLA delay to all civil service 
retirees, regardless of age, and one COLA delay policy to all military 
retirees, regardless of age.

  Unfortunately, as we all know, the problem was the delay for civil 
service retirees was not the same as the delay for military retirees. 
The reason for this goes back to the assumptions the Budget Committees 
made in setting the numbers.
  The whole idea of COLA reductions originated in the House Budget 
Committee last year. The House version of the fiscal year 1994 Budget 
Resolution assumed equal savings of $4 billion over 5 years from 
military retirement and $4 billion from civil service retirement. The 
report language accompanying the House Budget Resolution was the only 
place where any assumptions about how savings in COLAs would be 
achieved were stated in any Budget Resolution last year. These 
assumptions were basically to give COLAs equal to one-half the 
inflation rate to retirees under 62, and COLAs one percentage point 
below the inflation rate to retirees over age 62.
  This was the House Budget Committee assumption--not to make savings 
only from retirees under 62, but to require savings from all retirees. 
The Senate version of the fiscal year 1994 Budget Resolution had no 
such provision on COLA savings--none whatsoever.
  Now when the conference report came to the Senate, the compromise 
between the House version with COLA savings and the Senate version with 
no COLA savings was to come out in between. The Budget Resolution 
conference required COLA savings of about one-third the amount the 
House had originally proposed.
  This kind of thing happens on almost any bill. There is a provision 
in one bill but not the other, you go to conference, it comes out 
somewhere in the middle, it's one item among a large number of 
provisions in a non-amendable conference report that you have to vote 
up or down on taking it as a whole.
  That's how this COLA discrepancy came about, Mr. President. The first 
and only time the Senate had a chance to vote on saving money from 
COLAs was as one item in the entire non-amendable conference report on 
the fiscal year 1994 Budget Resolution.
  And this conference report did not contain one word about how these 
savings would be made--that's not what Budget Resolutions do. The 
conference report merely stated how much money had to be saved. Neither 
the bill language nor the report made any statement that it was 
Congressional policy to make the savings from retirees over 62 or 
retirees under 62 or anything else. So it is incorrect to say Congress 
``decided'' to make savings only from retirees under 62.

  That may be what the Budget Committees assumed. But Congress never 
specifically endorsed differential treatment of retirees based on their 
age. Nor did the Budget Resolution endorse treating military retirees 
worse than civil service retirees.
  What the Budget Resolution conference did say was that the savings 
expected from military retirement COLAs were now assumed to be greater 
than the savings from civil service COLAs. That numerical difference is 
consistent with a policy of taking all the savings from retirees under 
62, since more military retirees than civilian retirees are under 62.
  When it got the reconciliation process where the actual legislation 
was written to achieve the savings, the Congress rejected the policy, 
the assumption, of treating retirees differently based on their age. 
But rejecting that assumption did nothing to change the inequality of 
the savings required from military and civil service retiree COLAs. 
That is how we ended up with the unequal delays, Mr. President.
  The Armed Services Committee recognized this discrepancy last year 
and recommended that the Congress correct this inequity. In our report 
of June 10, 1993, transmitting our legislation to delay military 
retirement COLAs to the Budget Committee, the committee stated:

       The members of the Armed Services Committee are concerned 
     that the required reductions in military retirement spending 
     will result in greater COLA delays for military retirees than 
     for other federal retirees. COLA equity for all federal 
     retirees should be a basic principle and we urge the full 
     Senate and the conferees on the Reconciliation Bill to take 
     this into consideration.

  Unfortunately, no such correction was made last year, which is why we 
are here today debating this issue.
  I am not going to talk a lot about it tonight, but there is another 
alternative to the Warner amendment, and perhaps it is even more 
unpopular than leaving the situation at the status quo. We will have to 
make that judgment before we vote. I will have an amendment, and I will 
decide after we see the vote on the Warner amendment whether to push 
that amendment to a vote or not. I would like to cure the problem by 
equalizing civil service and military retirement, so there is equal 
sacrifice on both accounts, rather than taking it out of the defense 
budget.

  If the Warner amendment passes, though, I see no need to propose that 
amendment, because the Senate will have spoken, and it will have taken 
basically what is an entitlement cut from last year and made it whole 
out of a discretionary account. That, to me, is not only a mistake, but 
it is setting a very dangerous precedent. One thing about military 
retirees, they are the most patriotic people in the United States, in 
my view, without disparaging any other group. They have dedicated their 
lives to the security of our Nation, and they have risked their lives 
for the security of our Nation, and they have sacrificed family time 
over the years for the security of our Nation, and they have served in 
remote locations, and they have served in periods of war, and they have 
served in periods of grave danger, and they have indeed enabled our 
Nation to remain free.
  The one thing that I think most of them would agree with is that they 
would rather continue to make sacrifices, if required, than to deplete 
the readiness of our military forces to fight a war today. Yet, in 
their name, in good faith, the readiness of the U.S. military forces, 
if this amendment passes, is going to be decreased because of this 
restoration of what is a mandatory program out of a discretionary 
account.
  I must add this also: It is not the intent of the authors of this 
amendment, but it will be here as a precedent, if we get into a squeeze 
on the health care budget, if people are having to take cuts there. As 
the occupant of the chair knows, the entitlement programs are growing 
like mad in this overall budget, and I am going to show a chart on 
that. This is the precedent, make no mistake about it. We will have set 
precedent for the first time, as far as I know, that you can take an 
entitlement program and make it whole, or add to it, or prevent it from 
being depleted, by taking discretionary funds.
  The problem with our budget situation now is that the entitlement 
programs are eating up the overall Federal budget. I would like for my 
staff, if they would, to bring a chart in on the entitlement programs, 
because it shows very vividly what has happened.
  What we really ought to be doing is restraining the growth of 
entitlement programs. It is not the military or civil service 
retirement that is causing the main problem. Everyone ought to be aware 
of what is on this chart. This is basically the heart of our fiscal 
problem, and we are going to make it worse. Mr. President, this chart 
represents the difference between the cumulative spending over the 
previous 5 years and what we are going to spend over the next 5 years. 
This shows it very vividly. This is the zero line. This would mean--if 
you were on the zero line--there is no difference in the future 5 
years, from the previous 5 years. Here is what is happening. The 
defense budget of the United States, which is being cut by this 
amendment, is going down $190 billion compared to the previous 5-year 
period. This is the only part of our budget going down. These are 
actual dollars.
  The domestic discretionary accounts are going up $250 billion over 
the next 5 years compared to the previous 5 years. Social Security is 
going up about $440 billion. That is funded by the Social Security 
taxes, and so this is not increasing the deficit; this is more than 
funded. In future years we are going to have big problems with this 
account; after people leave from here and are sitting back and pointing 
their fingers at someone else, that is when we are going to have 
problems on that account. Right now it is in surplus.

  Health care, which we are debating now, over the next 5 years 
compared to the previous 5 years--and this is just the increase, not 
the total--it is going up almost $800 billion. Other entitlement 
programs--and this gets into the civil service retirement, military 
retirement, and it also has other accounts in it, food stamps are in 
that account, and there are a number of other accounts. This is going 
up approximately $100 billion.
  Remember, defense and foreign affairs is going down $190 billion. And 
then this is just a coincidence, but it tells us what our problem is in 
this country. Interest on the debt in the next 5 years goes up by $190 
billion. It just so happens that is the same number as defense is going 
down. People ask where the peace dividend is going, and you can wipe it 
out right here, an increase of $190 billion in interest on debt, and a 
decrease of $190 billion in defense. This amendment is not the main 
problem we have. I do not want to pretend that it is. I say that what 
we are doing here is decreasing the defense line more, and we are 
increasing entitlement spending, or at least making it whole.
  So what is happening is we are taking the part of the budget that is 
basically being eroded very rapidly--some of it for good reason because 
the world situation has changed. But in my opinion we are going much 
too far and too fast in our defense cuts. This amendment is going to 
make it worse.
  Mr. President, everything the Senator from Virginia said about the 
equity of the situation, I agree with. Sometimes, however, you have to 
recognize that sometimes in trying to cure a problem, the way you cure 
it can make the situation in other areas worse.
  The delay--I will not go into tonight as to why it happened, but I 
will say that our committee had no choice whatsoever but to cut 
military retirement. I think the Senator from Virginia would agree with 
that. We had no other place to get the money under the mandate of the 
Budget Committee last year. So we recommended the delay in COLA because 
that was the only choice we had.
  Mr. President, the defense budget is discretionary spending. It must 
fit within the discretionary caps. Military retirement is not part of 
the defense budget. It is not part of the 050 function. It is under 
function 600, military retirement, what we call mandatory or 
entitlement spending. Unless the law is changed, it goes up every year; 
it is automatic. It is not in a pot the appropriators make decisions 
on. It is in the income security function of the budget; as I 
mentioned, it is function 600 of the budget. Under the rules of the 
Budget Enforcement Act, increases or decreases in military retirement 
are supposed to operate under the pay-as-you-go system as with any 
other entitlement program.

  Military retirement has nothing more to do with the defense budget 
than the retired pay of civil servants does with the budgets of their 
former agencies. The Warner amendment proposes to start mixing the 
funding of discretionary programs constrained by the discretionary caps 
with the funding for mandatory programs which are under the pay-as-you-
go system.
  Mr. President, there is another alternative here, and again, I do not 
know whether we will vote on it or not; but we would have an 
alternative of taking the overall cut that had been required last year 
and equalizing it between the civil service retirees and the military 
retirees so everybody is on one playing field.
  That means the civil servants who are retired would sacrifice some 
more. They would have a little less increase in their COLA over the 
next few years because of this approach, and the military people would 
be better off than they are now under the current law, because of last 
year's restraint on COLA's. But they would certainly still be making 
some sacrifice.
  If you did it that way, the total amount of the average military 
retiree's cut over the next 4 or 5 years would be about $650 instead of 
about $1,300 under the current law.
  Each civil service retiree's average sacrifice would be about $650 
spread over 4 years. We are not talking about a huge amount of money, 
although I know to some people it represents a very substantial amount.
  That is another alternative. As I said, I am going to have to decide 
whether to propose that if the Warner amendment passes. Frankly, I see 
no need to propose it. I think everyone here who votes tomorrow ought 
to be aware of the issue. I hope everyone recognizes the implication of 
what this is going to do.
  The Senator from West Virginia, Senator Byrd, will be making a very 
brief talk tomorrow morning. He is going to make it abundantly clear 
that this money is going to have to come out of the defense budget. 
There is no place else from which it is going to come. It is going to 
come out of the defense budget. As chairman of the Appropriations 
Committee, he is going to say that the appropriators will decide this. 
I think my friend from West Virginia will answer this question. This 
money is subject to approval. This does not cure the problem unless 
there is an appropriations bill that funds it.
  Mr. WARNER. Mr. President, the Senator is correct.
  Mr. NUNN. Mr. President, let me just give the people who may be 
interested in this a little rundown on the implications of the Warner 
amendment. I also want to make it clear this solves the COLA inequity 
problem for only 1 year. This does not take care of the next 3 years. 
If you take care of those, you are going to have to cut the defense 
budget $2.1 billion. If you take care of all the inequity problems it 
is $2.1 billion.
  So the numbers I am dealing with now only represent this year's cut 
in the defense budget, which is $376 million. I am talking about $376 
million in this amendment for this year. But make no mistake, that axe 
is going to have to be $2.2 billion if we are going to cure this 
inequity problem over the next 3 or 4 years.
  In my opinion, in addition to all the other problems in the defense 
budget, this would be a serious blow. I believe tomorrow we will be 
hearing from the Department of Defense. I am not going to speak for 
them, and I never presume to make announcements on what they are going 
to say unless I actually see the letter and see the signatures. I think 
we will hear from the Defense Department on this.
  We do have a letter from Mr. Leon Panetta, the Director of the Office 
of Management and Budget. Basically, he makes a couple of points in 
opposition to this Warner amendment. He says: First, the amendment 
would create a loophole in the budget process of ensuring discipline 
and reducing deficits. The Warner amendment will create a dangerous 
precedent by financing increased entitlement spending by cutting 
discretionary programs.
  In effect, the Warner amendment will undermine the basic pay-as-you-
go precept of mandatory payments. Pay as you go means if you increase 
one mandatory program, you have to decrease another.
  We have that system, and it has helped restrain the growth in 
entitlement programs.
  This undermines pay as you go because this is not another entitlement 
account paying for this, it is a discretionary defense account.
  Mr. Panetta goes on to say that the Warner amendment, no matter how 
well-intentioned, reduces resources currently budgeted for high 
priority defense programs. He then says that the President cannot 
support cuts in the defense program of this magnitude no matter how 
deserving the cause.
  I repeat. That is a deserving cause. The question is whether we are 
going to do harm that will outweigh the benefits of the cure.
  I think we ought to think through just a moment, and then I will 
yield back some of my time and be prepared to answer questions: Where 
are we going to pay for this? How are we going to pay for it?


            the warner amendment means further defense cuts

  The amendment proposed by the Senator from Virginia and the Senator 
from Maryland adds $376 million to the cost of this bill. It is not 
paid for. The Dear Colleague letter that the Senators from Virginia and 
Maryland sent out states their intention to cut nonreadiness defense 
funding. Yet this amendment does not identify one dime of those cuts. 
If they know where these cuts are coming from, they are keeping it a 
secret. Of course their amendment looks easy to vote for. It promises 
COLA equity with no pain. Nothing is being cut in this amendment to pay 
for it.
  What would you have to do to get these cuts?
  Does the Senate favor cutting $400 million from the personnel 
accounts? Are we in favor of laying people off in the active duty 
military forces or the active duty civilians in the military?
  I know that is not what the Senator from Virginia wants. I doubt 
seriously that is what the Senator from Maryland wants.
  Do we want to do it by reducing military pay? We have a 2.6-percent 
military pay raise in this bill. We could cut the pay raise back to 1.7 
percent to pay for this amendment, but we would have to do the same 
thing for military pay next year, and the year after, and the year 
after, to be able to do that.
  I doubt seriously either of the Senators proposing this amendment 
want to cut military pay. I doubt very seriously if they want to lay 
off military or civilian employees.
  So let us look at the alternatives. If we do not cut personnel, if we 
do not cut pay, does the Senate favor cutting $500 million from the 
operating accounts? That is what it would take, since you do not spend 
out at the same rate in the operating accounts as you do in this COLA. 
O&M money is spent out a little slower than a COLA payment, so in order 
to make this kind of outlay cut in what we call readiness you have to 
cut about $500 million from O&M. It takes $500 million in readiness 
cuts to offset the $376 million in outlays of COLA compensation; the 
reason being the operating account spends a little slower.
  That would cut the number of flying hours, the number of steaming 
hours, it would cut depot maintenance, and real property maintenance.
  The Senator from Virginia is alert, perhaps more than anybody in our 
committee, to maintaining military readiness going back to the 1970's. 
I doubt seriously he would want to cut military readiness.
  So my assumption is that neither the authors of this amendment nor 
the Senators who sponsored it, nor the Senators who are going to vote 
for it, want to reduce force structure. They do not want to lay people 
off. They do not want to reduce pay. They  do not want to deplete 
readiness.

  Where else can we go to get the money?
  We could cut it out of something like environmental restoration. I 
doubt very seriously if the Senator from Maryland would want to cut it 
out of the environmental cleanup fund.
  What about the research and development account? It would take $800 
million in cuts to pay for this $376 million amendment.
  The reason for that is because the R&D accounts spend out over 2 or 3 
years. In order to offset this, which we would have to do in defense, 
you need to offset the outlays actually spent in 1 year. This $376 
million is all spent in 1 year, so you would have to cut $800 million 
out of R&D.
  I doubt very seriously if those who favor this amendment favor 
cutting that much from research.
  Then we get down to procurement. What will it take in order to pay 
for this $376 million if we cut it out of procurement? As far as I 
know, that is about all that is left. You have pay; you have operation 
and maintenance; you have force structure; you have research and 
development; you have procurement.
  To take it out of procurement really has a big effect, because the 
procurement account spends out slowly. To get $376 million in outlays 
out of the procurement account, which you would have to do just to pay 
for the 1995 COLA, not talking about what is going to happen in 1996, 
1997, and 1998--because if we adopt this amendment now we will have to 
do it again for the next 3 years-- we would have to cancel the aircraft 
carrier, the CVN-76. We would have to cancel the Navy F-18 fighter. We 
would have to kill the D-5 missile, eliminate the LMD amphibious ship--
that may be done any way. We are not through with that. That may have 
to be done by tomorrow because we have the Sealift money coming back 
in. We would have to eliminate all these programs as well as eliminate 
all Guard and Reserve procurement from this bill.
  So that all has to be done--that is not either/or--if we tried to 
offset this $376 million from procurement. We could find other ways of 
doing it. This is one hypothetical example. I think it is 
representative and a fair example. That is $8.7 billion worth of budget 
authority cuts in order to get this $376 million.
  Mr. President, this is just the cost of 1995. We would have to cut 
somewhere in that neighborhood in procurement every year. I doubt if we 
would take it all out of procurement. We probably would not take it all 
out of any of these accounts. We would probably find some way to spread 
it around. But there is no way you can do this without cutting defense 
and harming the defense budget.
  The Senate of the United States does not have to face these questions 
when we vote tomorrow. The Appropriations Committee will have to face 
these questions before the year is over. And the Senate of the United 
States will have set in motion an inevitability--an inevitability--of 
defense cuts of a very serious nature. Most importantly, our military 
forces in the field will have to live with the effects of our decision 
for a long time to come.
  Mr. President, I know military retirees probably about as well as I 
know any group in this country. I think they are, as they should be, 
conscious of what their own benefits are and what their own basic 
rights are and what their expectations are.
  But I also know military retirees well enough to believe that most of 
them--not all, but I believe a majority of them, a substantial 
majority--do not want to weaken the defenses of this country. They 
spent their entire lives sacrificing for this country, and I do not 
believe they really want to see defense cuts coming in order to make up 
this inequity.
  They have been told by their representatives--and I am not talking 
about the Senator from Virginia and the Senator from Maryland; I am 
talking about the representative organizations--they have been told 
this can be done out of the defense budget; in effect, it is a free 
ride.

  Mr. President, that is wrong. They have been misled. In some cases, 
they have been misled by people who do not know any better, but in 
other cases they have been misled by people who should know better. I 
will be very prudent with my words.
  I would like to remind my colleagues that President Clinton, in his 
State of the Union addressed this January, told us,

       Nothing, nothing is more important to our security, than 
     our Nation's Armed Forces . . . This year, many people urged 
     me to cut our defense spending further to pay for other 
     government programs. I said no . . . We must not cut defense 
     further. I hope the Congress, without regard to party, will 
     support that position.

  The President said we should not cut defense further. He did not say 
``except if it's to fund an entitlement program.'' I would say to all 
my colleagues who are concerned that we are cutting defense too deeply, 
that we are already seeding some ragged edges in readiness. If we vote 
here on this floor today to start funding entitlements out of the 
defense budget, we won't need a special panel to tell us a few years 
from now how we got a hollow military.
  Mr. President, the most serious implication of this, however, is not 
what happens this year; that will be serious--but what happens next 
year and the year after and the year after. But even more than this $2 
billion, if we make this mistake--and it will be a mistake and in my 
view we are going to make it; I think the votes are probably going to 
be here to pass this amendment--if we make this mistake, how are we 
going to deal with entitlement programs in the future?
  What is going to happen when someone comes in and proposes a Medicare 
amendment and says that we cut in the health reform bill or in last 
year's reconciliation bill too much out of Medicare or too much out of 
Medicaid or too much out of farm support prices or too much out of food 
stamps? And how can we possibly avoid taking it out of defense?
  This is creating a precedent of avoiding, or restoring, entitlement 
cuts by taking it out of the defense budget. If this amendment passes, 
this will haunt us for a long time to come.
  Because there are people in this body--not the people here tonight; 
probably no one is even listening tonight--but there will be people on 
this floor of the Senate within 2 years that will be after the defense 
budget to fund other entitlements.
  I go back to the chart, Mr. President. The problem in our fiscal 
picture in this country is not the discretionary accounts, although 
there is waste and abuse and fraud there like everywhere else, and it 
can be trimmed and it can be cut. The problem is in entitlement growth.
  But what this amendment does is take money from defense, which is 
coming down, and put it over into entitlement accounts, which are going 
up.
  So, as worthy as the cause is, I have to, in good conscience, oppose 
this amendment. I wish I did not. I doubt very seriously if I will get 
a single letter, maybe one; maybe there is somebody out there that will 
write and say thank you for opposing this amendment. I suspect I will 
get several thousand that say we do not understand why you opposed our 
COLA.
  But, Mr. President, at some point somebody has to say what is 
happening to our national security and our defense--not today, not 
tomorrow, not next week. We are still a strong country, stronger than 
any in the world. But you cannot keep doing things like this without 
paying a price. And we are going to pay the price. It is inevitable.


                               Conclusion

  Mr. President, the Warner amendment promises COLA equity, but it does 
not deliver on that promise. We have 4-year problem. The Warner 
amendment only attempts to solve that problem for 1 year.
  The Warner amendment does not guarantee COLA equity, even in 1995, 
for a single military retiree. It says there will be COLA equity if the 
Appropriations Committee can find the money to pay for it. But the 
Senator's amendment has not such offsets. This amendment tells the 
Appropriation Committee to go find the money to pay for this benefit, 
without asking the Senate to face up to finding these offsets.
  Ultimately this amendment will lead to cutting the defense budget to 
pay for retirement benefits, despite the President's request to 
Congress to hold the line on further defense cuts, and despite the 
concern that I and many of my colleagues in both the House and Senate 
have that the current 5-year defense plan is already underfunded.
  The Warner amendment undermines the budget process by providing an 
escape hatch from the pay-as-you-go system. As a result, it puts all 
discretionary spending programs, not just defense, at risk. If we adopt 
this amendment, the Senate will be setting a precedent whereby any 
entitlement program can be increase as a discretionary program, without 
adhering to the pay-as-you-go rules, simply by offering floor 
amendments to appropriation bills.
  We all agree that the current COLA inequity is a problem. But the 
Warner amendment is not the right way to solve this problem. The 
Congress has already established a pay-as-you-go process to deal with 
situations like this. We should be willing to live within the rules we 
have set. I urge my colleague to reject the Warner amendment.
  Mr. President, I ask unanimous consent that a letter from the Office 
of Management and Budget Director Leon Panetta be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
         Executive Office of the President, Office of Management 
           and Budget,
                                    Washington, DC, June 29, 1994.
     Hon. Sam Nunn,
     Chairman, Committee on Armed Service, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman: As you know, the defense authorization 
     bill passed by the House on June 9 contained a provision that 
     would adjust the effective date for cost-of-living 
     adjustments (COLAs) for military retirees to the same date as 
     for civilian retirees. We understand that your committee 
     considered this issue during your markup of the authorization 
     bill, and that Senator Warner intends to offer a similar 
     amendment on the floor of the Senate during consideration of 
     your bill. I am writing to let you know that the 
     Administration does not support the Warner amendment.
       We fully recognize the inequity--created by congressional 
     action last year--of the current situation where cost-of-
     living adjustment for military retirees lag similar 
     adjustments for civilian employees. The Warner amendment is 
     unacceptable, however, for two reasons. First, the amendment 
     would create a loophole in the basic process insuring 
     discipline in reducing deficits. Current budget guidelines 
     require increases in so-called mandatory spending to be 
     offset by cuts in comparable mandatory accounts. The Warner 
     amendment would create a dangerous precedent by financing 
     increases in entitlements through cuts in discretionary 
     programs. In effect, the Warner amendment undermines the 
     basic ``pay as you go'' precept for mandatory spending. If 
     enacted, this amendment would open wide the defense budget 
     and other discretionary funds to finance politically-popular 
     entitlement programs.
       Second, as you know well, the President has insisted that 
     the defense budget not be cut further. The Warner amendment, 
     no matter how well intentioned would reduce resources 
     currently budgeted for high priority defense programs. 
     Moreover, since the Warner amendment would involve $375 
     million in outlays, this would necessitate offsetting cuts of 
     $500 million in readiness-related O&M funding, or as much as 
     $2 billion in procurement if readiness funding is to be 
     insulated from the effects of the amendment. The President 
     cannot support cuts in his defense program of that magnitude, 
     no matter how deserving the cause.
       For these two reasons, I request your support in defeating 
     the Warner amendment.
           Sincerely,
                                                     Leon Panetta,
                                                         Director.
  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER (Mr. Mathews). The Senator from Virginia.
  Mr. WARNER. How much time does the Senator from Virginia have 
remaining?
  The PRESIDING OFFICER. The Senator from Virginia has 38 minutes 51 
seconds.
  Mr. WARNER. Mr. President, I do not intend to take that much time.
  Does the distinguished Senator from Maryland desire any additional 
time?
  Mr. SARBANES. Yes.
  Mr. WARNER. Would he kindly indicate the amount he would like?
  Mr. SARBANES. Five or ten minutes.
  Mr. WARNER. I yield such time as the Senator from Maryland might 
require.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, I just want to point out a couple of 
things.
  I understand the litany of horror stories that the distinguished 
Senator from Georgia has laid before us. I was particularly interested 
in his apprehension about the far-reaching effects of rectifying the 
COLA problem. But I want to make one point.
  What this amendment is addressed to is intimately related with the 
defense program. The basic premise on which we are proceeding is that 
retirement for military people has a direct relationship to the 
military program.
  First of all, these are people who have made the military program 
work in the past. The country has some obligation to them as a 
consequence of that. If we chose not to uphold that obligation, we 
could eliminate their retirement, pick up a lot of money, and boost all 
these other programs within the defense budget. No one is suggesting we 
do so.
  So the real question is, what is fair? What is equitable? How do you 
allocate your resources?
  I would assert this has a direct effect on our military because it 
clearly affects the morale of our men and women in the service, and 
therefore, our ability to encourage them to sustain a military career.
  The use of discretionary defense spending to meet military 
compensation obligations is not unprecedented. The military pay 
increases are absorbed within discretionary defense spending almost 
annually. Furthermore, if you regard retirement benefits as deferred 
compensation, it argues even more strongly for making the COLA 
adjustment that the distinguished Senator from Virginia and I are 
seeking with this amendment.
  Of course, the House has asserted that this can be achieved using of 
discretionary nonreadiness defense funds. I understand that the 
chairman of the committee differs with that and I submit that this will 
require a careful analysis of the defense budget.

  However, my understanding is that the defense budget for fiscal 1995 
provides $270 billion in outlays. I think that is the correct figure--
$270 billion. On the other hand, this amendment costs $376 million.
  So you have a universe of $270 billion in outlays out of which to 
find the $376 million to cover this COLA adjustment.
  I appreciate that the task is a challenging one and I understand the 
arguments that the chairman of the committee has made. But, 
nevertheless, there are people who have examined this issue and seem to 
believe it is within reason to achieve.
  I want to now make a couple of points about their interesting 
entitlement chart.
  The real entitlement problem is health care costs. There is 
absolutely no doubt about it. Here it is. And, of course, that is why 
we are trying to do health care reform. One of the purposes of the 
health care reform, amongst others, is to have comprehensive coverage 
for all our people. But another purpose is to achieve effective health 
care cost containment. And, of course, that is addressed at trying to 
control these increases in health care indicated on the chart. However, 
this has nothing to do with the issue that we are addressing here this 
evening. Nothing whatsoever.
  The second big outlay increase in entitlements is Social Security. 
But, as the distinguished chairman of the committee, the distinguished 
Senator from Georgia, pointed out, this program is actually more than 
paying for itself. In fact, the Social Security Trust Fund is running a 
surplus, not contributing to the deficit in any way. In effect, it 
represents a judgment on the part of the American people that they are 
willing to pay the Social Security taxes in order to sustain the 
program and pay the Social Security benefits.
  Now, the distinguished Senator from Georgia said there are problems 
coming up in the future with respect to that program. And if you look 
at the projections there is a certain accuracy to that. But we have had 
that problem in the past. And every time we had it, we adjusted the 
Social Security System in order to address it.
  Most recently, in the early 1980's, we restricted the benefits and 
increased the taxes in order to get the trust fund back into a proper 
balance. I am very frank to say I have every anticipation that, if 
necessary, we will do that again. That takes care of your two big 
outlay increases. The other, of course is an increase in domestic 
discretionary spending with a corresponding decrease in defense and 
foreign assistance.
  The argument is maybe there should be a decrease in these areas. One 
has to examine what the security situation is in determining whether 
this decrease is reasonable, whether it is too much, or not enough. And 
whether the domestic discretionary increase is too much or not enough. 
I have no magic answer for that.
  I do not think you can simply call something an entitlement and say 
it is bad. You have to know what the program is. You have to make your 
comparisons. Obviously what we are trying to do in this amendment will 
require some lowering of defense spending in other areas. You then need 
to ascertain those areas. You have to ask yourself the question: Is 
that a reasonable tradeoff to make?
  We are not going outside of the defense-related area, which is a 
danger that the Senator from Georgia raised and frankly which I believe 
is a very remote danger. I do not anticipate a situation in which 
people are going to propose paying for the Medicare Program out of the 
defense budget. We are proposing this tonight because we assert that 
this retirement program for the military is directly related to the 
military budget and the whole approach with respect to the military. In 
addition, the entitlement group which military COLA's are a part have 
increased the least of all the items on this chart.
  I very much hope the Members will support this amendment. I 
appreciate there will be some of the difficulties which the chairman of 
the committee has outlined. But it would seem to me they could be 
overcome. That was certainly the position that was taken in the House. 
In fact, as I understand it, in the course of the consideration it was 
repeatedly asserted that they would be able to find the funds out of 
nonreadiness funds in the budget.
  But I understand the chairman asserts that is not the case and that 
is one of the things--
  Mr. NUNN. If the Senator will yield at that point, it is interesting 
the Appropriations Committee is the one who has to find the money. The 
House Appropriations Committee did not find the money. They did not put 
it in their bill. The authorized money is not appropriated in the House 
bill. If it is not appropriated in the Senate bill it will not be 
found, notwithstanding.
  Mr. SARBANES. I understand it is a two step process, but if we do not 
take the first step here the second step cannot be taken there. There 
is no guarantee if we take the first step here the second step will be 
taken, but if we do not do this step there is no possibility of doing 
the second step.
  Mr. NUNN. The Senator is absolutely correct. No quarrel on that 
point. The only point I was making is when the Senator says it is not 
going to be that difficult to find, the House appropriators did not 
find it and it is not in the House appropriations bill.
  Mr. SARBANES. I believe in trying again. I think we ought to take 
this step and then see what can be done. The consequence, of course, of 
taking this approach is that it opens up the possibility of being able 
to remedy this discrepancy and bringing the military retirees forward 
to the first of April instead of deferring them to October 1st.
  So, given all of that I very much hope our colleagues, when they come 
to consider this amendment, will be supportive of it.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. WARNER. Mr. President, I simply wish to conclude my remarks by 
saying the Senator from Maryland is exactly right and that is that it 
is the responsibility of the Department of Defense. I listened very 
carefully while my good friend, the distinguished chairman, enumerated 
a number of areas which would have to be cut if this amount of money, 
relatively small as the Senator from Maryland pointed out, $376 million 
versus $270 billion--
  Mr. SARBANES. Million against billion.
  Mr. WARNER. But I can summarize my argument in one sentence. That is 
an obligation of the Department of Defense. The first obligation is not 
to the tanks and the airplanes and to the ships, but it is the men and 
women who operate them, who operate them today and who are counting on 
this COLA and this Congress to take care of them out of fairness 
tomorrow. If we do not take care of those who have retired and 
fulfilled their obligation there is less incentive for those who are on 
active duty today, roughly 1.3 million, to remain and assume those 
hardships and those risks together with their families.
  I yield my time.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. NUNN. Mr. President, I will send an amendment to the desk, which 
will be offered if the Senator from Virginia's amendment is not agreed 
to. I think, however, if his amendment is agreed to it will be my view 
that the Senators have really voiced their view on this and I see no 
need to push this amendment.
  But this amendment would address the COLA inequity that the Senators 
from Virginia and Maryland have identified. I agree with their 
description. I repeat that--I think they are right. There is an 
inequity. I just do not think we can cure every inequity, and I 
certainly believe we cannot cure this inequity, and should not cure it, 
by taking it out of the defense budget.
  Mr. President, this amendment would share the sacrifice. This would 
basically say for the civil service retirees and the military retirees, 
COLA restraint would be equalized. It would mean military retirees 
would basically have about half as much sacrifice as under the status 
quo. Civil service retirees would basically have about $700, over a 4-
year period less in terms of increases. Nobody is getting cut in this 
process. I think that is one point that ought to be made. These are all 
increases. We are talking about increases here. We are not talking 
about cutting anybody's retirement. We are talking about how much 
increase they get as a compensation for the cost of living.
  The difference between this amendment and the Warner amendment is, 
first of all, the Warner amendment is a 1-year amendment. It will 
basically restore approximately $270 to the average military retiree 
next year.
  Mr. WARNER. That is $376 million.
  Mr. NUNN. I am talking about the average retiree: $270, 
approximately.
  What my amendment would do is take the entire sacrifice the military 
retirees are going to be making over the 4-year period, which is about 
$1,300, and say you take only half of that. So this amendment basically 
would save the average military retiree about $650. The Warner 
amendment saves them about $270 the first year. This amendment saves 
them more. But if you continue this process and you have the Warner-
Sarbanes amendment every year and take that amount out every year for 4 
years, you would save more under their approach. But theirs is a 1-year 
balancing. My amendment restores equity for all 4 years.

  What it does not do is increase the deficit. Neither does the Warner 
amendment. My amendment solves the problem without cutting any 
important spending programs in defense. It solves the problem without 
creating what I consider to be a very dangerous precedent of raiding 
the discretionary spending to pay the costs of the mandatory 
entitlement, and violating the pay-as-you-go principle of the 1990 
budget agreement which said in effect, very simply, if you raise one 
entitlement program you have to lower another one. Our colleagues on 
the Governmental Affairs Committee, Senator Glenn and Senator Roth, 
wrote a letter saying:

       Such an amendment would be unprecedented. [This is talking 
     about the Nunn amendment] Robbing one retirement system to 
     pay another retirement system is simply wrong. To propose 
     increasing military retirees' COLAs at the expense of civil 
     service retirees is not equitable.

  I quote from their letter in opposition to my approach and the 
committee approach. Our committee voted for this second approach, I 
believe 13 to 8, the Armed Services Committee did.
  What Senator Glenn and Senator Roth are saying is they do not believe 
in the pay-as-you-go system. The pay-as-you-go system, which was 
enacted in 1990, said if you raise one entitlement program you have to 
cut another one. So, basically they are saying when you do that you are 
robbing. They are basically saying we are going to keep letting 
entitlements go. This is not the Senator from Virginia and Senator from 
Maryland who said this. I just believe, since there is going to be so 
little time--almost no time tomorrow for debate--it ought to be said.
  I fundamentally disagree with this particular letter. The approach 
the Armed Services Committee voted for--although we did not do it in 
the bill because we did not have sole jurisdiction over these 
programs--did not violate the pay-as-you-go principle. It would stick 
to that principle. It would say we are not letting entitlement growth 
get any worse.


                alternatives considered by the committee

  Mr. President, I think most of my colleagues agree that Congress made 
a mistake last year when we put the COLAs for military and civilian 
retirees on different schedules. Most members of our committee felt 
this was wrong and wanted to address this issue this year.
  During our markup of this bill, the committee considered five 
different options for equalizing the dates on which military and civil 
service retiree COLAs are paid.
  The first option was to move the military retirement COLA date up 
each year to the same date as civil service retiree COLAs are paid by 
adding the cost to the deficit. This would increase the deficit by $2.1 
billion over the next 4 years. Not one member of our committee spoke in 
favor of this approach during our markup.
  The second option was to move civil service retiree COLAs back to the 
same dates on which military retiree COLAs are paid. While this 
approach would reduce the deficit by $2.8 billion over the next years, 
I think it is fair to say this would be an unpopular approach.
  The third alternative was to not change the civil service COLA date, 
but to find some other nonretirement entitlement that could be reduced 
to offset the increased cost of the military retirement COLA, as 
required under the pay-as-you-go rules of the 1990 Budget Summit 
Agreement. This was not a realistic option in our markup, as we have no 
other entitlements under our committee's jurisdiction large enough to 
cover the cost of COLA equity. However, some of my colleagues may have 
some nonretirement entitlement program savings in mind, and of course 
any Senator is free to offer an amendment to do this if neither the 
Warner amendment nor the committee amendment is adopted.
  The committee discussion focused on two major alternatives, one of 
which is the amendment proposed by the Senator from Virginia, and one 
of which is the committee amendment which I am proposing.


                       warner/sarbanes amendment

  The fourth alternative the committee considered was the Warner/
Sarbanes amendment which we have been debating. I will not repeat my 
arguments as to why I oppose that approach.


                          committee amendment

  Mr. President, the final alternative looked at, and the one 
recommended by the committee by a vote of 13 to 8, is this committee 
amendment to eliminate the discrepancy in COLA delays by splitting the 
difference between the current COLA dates.
  This approach would equalize the COLA dates for military and civil 
service retirees by moving the military retirement COLA date forward 3 
months in 1995 and 1996, while moving the civil service COLA date back 
3 months so that both COLAs would be paid on July 1. In 1997 and 1998, 
the military retirement COLA date would be moved forward 5 months, 
while the civil service COLA date would be moved back 4 months so that 
both COLAs would be paid on May 1.
  The committee amendment would correct the inequity in COLA dates and 
would not increase the deficit. It would reduce spending in one 
entitlement to fund an increase in another entitlement, as provided for 
in the pay-as-you-go procedures set up by the Budget Enforcement Act of 
1990, without requiring additional reductions in already scarce defense 
resources and without setting new budget precedents.
  Mr. President, this amendment corrects the current COLA inequity 
created by the Omnibus Budget Reconciliation Act of 1993, and it 
continues the policy the Congress has followed for the past 25 years: 
Ensuring that military and civil service retirees receive the same 
COLAs on the same dates.
  This amendment operates on a basic principle we use to solve 
difficult problems all the time: splitting the difference. To eliminate 
the 6-month difference in 1995 and 1996, the military retiree COLA 
would be moved up 3 months and the civil service retiree COLA would be 
moved back 3 months. The 9-month discrepancy in 1997 and 1998 would be 
eliminated by moving civil service COLAs back 4 months and moving 
military retiree COLAs up 5 months.
  Let me explain exactly what this discrepancy means to the typical 
retiree. The average military retiree and the average civil service 
retiree both receive pensions of about $1500 to $1600 a month, or 
$18,000 to $19,000 per year. The cost of living increase for 1995 is 
estimated to be 3 percent. Three percent of $1,500 a month is $45. The 
issue then is how much longer does a military retiree have to wait for 
his $45 increase than civil service retirees do?
  Under current law, that is if we do not fix the discrepancy, military 
retirees will have to wait 6 months longer than their civilian 
counterparts in 1995 and 1996. So to the average military retiree the 
discrepancy comes out to about $270 a year in 1995 and 1996--that's $45 
a month for 6 months. In 1997 and 1998 the discrepancy grows to 9 
months, so the average military retiree will lose about $400, compared 
to his retired civil service counterparts. So for the whole 4-year 
period the discrepancy equates to about $1,350 for the average military 
retiree--that is the cost of his additional delay.
  The amendment recommended by the Armed Services Committee would delay 
civil service retiree COLAs for three additional months, in order to 
move the military retiree COLA up by 3 months. So instead of the 
military retiree getting $270 less than his civil service counterpart, 
the military retiree would get about $135 more next year, and the civil 
service retiree would get about $135 less than they would under current 
law.
  No retiree's pension would be reduced. I know some people might think 
that was the case given all the rhetoric about this amendment, but it 
is not. Nobody would get less. But rather than one group getting more 
in April while the other group has to wait until October, they would 
both start getting more in July.
  The Committee amendment would mean that the average civil service 
retiree would get a $45 increase 3 months later in 1995, and the 
average military retiree would get a $45 a month increase 3 months 
sooner, compared to current law. That is what we are talking about Mr. 
President. One hundred and thirty five dollars. We would be asking one 
group, who due to what I would call a mistake got $270 more than their 
neighbor, to split that $270 with their neighbor.
  While I was not all that surprised to find that the groups 
representing the retirees that got the $270 windfall were not prepared 
to share in the name of fairness, I was somewhat surprised to find that 
groups representing the military retirees who got less also oppose 
having their neighbors share the $270 with them. Many of the groups 
lobbying the Congress on this amendment seem to think the only fair 
solution is to leave the first group--who got more--alone, and find 
another $270 to give to each person in the second group by cutting it 
out of the defense budget.
  Mr. President, I do not agree with funding entitlement COLAs by 
cutting our defense budget even further. I believe the committee 
amendment is a better way to deal with this problem. The committee 
amendment pays for itself in every year. It is in keeping with the pay-
as-you-go procedures contained in the 1990 budget summit agreement, 
whereby an increase to one entitlement program can be offset with a 
decrease to another entitlement program.
  This amendment will not weaken the budget process by undercutting the 
discipline of the pay as you go process.
  This amendment will not weaken the committee system by handing over 
the functions of the authorizing committees to the Appropriations 
Committee.
  This amendment will not force us to make cuts in the operations and 
maintenance accounts which will further jeopardize the readiness of our 
forces.
  I urge my colleagues to support the committee amendment.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. I ask unanimous consent I may have printed in the Record 
at this point a list of those associations, Federal, civilian, and 
military organizations, that oppose the proposition of the 
distinguished chairman. I think they have communicated with the 
Congress and they are well deserving to be mentioned in this Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

 Federal Civilian and Military Organizations that Oppose the Nunn COLA 
          Equity Substitute to the Defense Authorization Bill

       The Retired Officers Association.
       Non-Commissioned Officers Association.
       Air Force Sergeants Association.
       National Association for Uniformed Services.
       The Retired Enlisted Association.
       Enlisted Association of the National Guard Association of 
     the U.S.
       Marine Corps Reserve Officers Association.
       National Military Family Association.
       Commissioned Officers Association.
       Marine Corps League.
       CWO and WO Association, U.S. Coast Guard.
       Jewish War Veterans of the U.S.
       United Armed Forces Association.
       Naval Enlisted Reserve Association.
       Navy League of the U.S.
       The Military Chaplains Association.
       U.S. Army Warrant Officers Association.
       U.S. Coast Guard CPO Association.
       National Guard Association of the U.S.
       Naval Reserve Association.
       Reserve Officers Association.
       Air Force Association.
       Association of Military Surgeons.
       Fleet Reserve Association.
       Association of the U.S. Army.
       American Federation of Government Employees.
       American Federation of State, County and Municipal 
     Employees, AFL-CIO.
       American Foreign Service Association.
       American Psychiatric Association.
       American Postal Workers Union.
       Federally Employed Women.
       Federal Managers Association.
       Fund for Assuring an Independent Retirement.
       Graphic Communications International Union.
       International Association of Fire Fighters.
       International Federation of Professional and Technical 
     Engineers.
       International Union of Operating Engineers.
       Laborers' International Union of North America.
       Military Sea Transport Union.
       National Association of Air Traffic Specialists.
       National Association ASCS County Office Employees.
       National Association of Federal Veterinarians.
       National Association of Government Employees.
       National Labor Relations Board Union.
       National League of Postmasters of the United States.
       National Postal Mail Handlers Union.
       National Association of Letter Carriers.
       National Association of Postal Supervisors.
       National Association of Postmasters of the United States.
       National Association of Retired Federal Employees.
       National Federation of Federal Employees.
       National Rural Letter Carriers Association.
       National Treasury Employees Union.
       Organization of Professional Employees of the Department of 
     Agriculture.
       Overseas Education Association.
       Patent Office Professional Association.
       Public Employee Department AFL-CIO.
       Senior Executives Association.
       Service Employees International Union.

Federal Civilian and Military Organizations That Support the Nunn COLA 
          Equity Substitute to the Defense Authorization Bill

       None.
  Mr. NUNN. Could I ask the Senator from Virginia, is there any 
organization out there that favors my amendment?
  Nobody who gets paid in Washington favors my amendment and that is 
why we have such problem with entitlement programs today, because 
everybody paid in Washington gets paid to protect the entitlement 
programs when they are in debt. So it is no surprise to me that not a 
single organization in Washington would endorse this amendment. I think 
it would be basically shocking if I found anybody who did. So that is 
why we have the kind of fiscal problem we have today. There is really 
no better example.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I know debate time is going to be very 
limited tomorrow. I know it is very late in the evening. I just want to 
take a moment or two to address the amendment the distinguished Senator 
from Georgia indicated he may offer tomorrow. I, of course, would very 
much oppose that amendment. I want to be very clear. The amendment that 
Senator Warner and I have offered is deficit neutral.
  The distinguished Senator from Georgia does not like how we hope to 
pay for it. It will be paid for. It is deficit neutral.
  Mr. NUNN. I think I said that. I agree with that.
  Mr. SARBANES. This amendment the Senator from Georgia is talking 
about would pit one group of Federal retirees against another. I urge 
Members to think very carefully to support any amendment that would 
lead us down such a divisive path.
  To their credit--and I want to underscore this--to their credit, the 
organizations and members who are part of the military coalition and 
who wish to shift forward military COLA's unequivocally opposed to any 
amendment that would offset one COLA against another.
  They are against this amendment, and they do not want to see this 
conflict developing here.
  I want to include in the Record the letter of the chairman and 
ranking member of the Governmental Affairs Committee which the chairman 
of the Armed Services Committee quoted just a moment or two ago.
  Let me just quote the next paragraph from that letter:

       If we are to correct the COLA inequity between military and 
     Federal civilian retirees, we believe that the proper course 
     of action is that suggested by Senators John Warner and Paul 
     Sarbanes. The Federal and military communities are unanimous 
     in their opposition to Senator Nunn's proposal, or any 
     alternative that would provide COLA's to one group of 
     retirees at the expense of another.

  And there is a list of the groups attached to this letter which 
oppose this amendment.
  So I very much hope that on tomorrow when we vote, the Members will 
support the amendment put forward by the Senator from Virginia, Senator 
Warner, in which I joined, and if the Senator from Georgia, Senator 
Nunn, was to offer the amendment he described that they would defeat 
that amendment.
  Mr. President, I ask unanimous consent that the letter I referred to 
be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

         U.S. Senate, Committee on Governmental Affairs,
                                    Washington, DC, June 23, 1994.
       Dear Colleague: We are writing today regarding the current 
     inequity in the Cost-of-Living-Adjustment (COLA) delay 
     schedules for military versus Federal civilian retirees. As 
     Chairman of the committee on Governmental Affairs and the 
     Ranking Minority Member, we have long supported equity 
     between the retirement systems of military and Federal 
     civilian retirees.
       However, there is one issue related to so-called COLA 
     equity which we must object to. In the process of marking up 
     S. 2182, the Department of Defense Authorization Act, the 
     Armed Services Committee voted 13 to 8 to recommend that a 
     committee amendment be offered during floor consideration of 
     this Act that would equalize COLA dates for military and 
     civil service retirees by moving the dates for military 
     retiree COLAs forward and the dates for civil service COLAs 
     back in each fiscal year from 1995 through 1998. Adoption of 
     such a proposal, would completely rewrite last year's budget 
     reconciliation bill by--in effect--increasing instructions to 
     the Governmental Affairs Committee and decreasing 
     instructions to the Senate Armed Services Committee.
       Such an amendment would be unprecedented. Robbing one 
     retirement system to pay for another retirement system is 
     simply wrong. To propose increasing military retiree COLAs at 
     the expense of civilian retiree COLAs is not equitable.
       If we are to correct the COLA inequity between military and 
     Federal civilian retirees, we believe that the proper course 
     of action is that suggested by Senators John Warner and Paul 
     Sarbanes. The federal and military communities are unanimous 
     in their opposition to Senator Nunn's proposal, or any 
     alternative that would provide COLAs to one group of retirees 
     at the expense of another. This is why military, federal 
     employee and postal associations and unions are supporting 
     the Warner/Sarbanes amendment. Attached is a list of these 
     groups. The Warner/Sarbanes amendment would rectify the COLA 
     disparity in 1995 by shifting the COLA for military retirees 
     to April through a reduction in the nonreadiness accounts in 
     the defense budget. As you may know, the Warner/Sarbanes 
     amendment was included in the House-passed DoD 
     reauthorization bill.
       For many years, social security, the civil service, and the 
     military retirement systems have used the same adjustments 
     for inflation. Last year's budget reconciliation bill changed 
     COLAs for federal civilian retirees in one way and military 
     in another. Social Security was left untouched. We have 
     consistently supported equitable COLA treatment between the 
     three systems, and we favor raising the COLA for military 
     retirees. However, we do not believe that the proposal being 
     recommended by the distinguished Chairman of the Armed 
     Service Committee is the appropriate solution to COLA equity. 
     In the interest of restoring equity and fairness, we urge you 
     to support the Warner/Sarbanes amendment.
           Sincerely,
     John Glenn,
                                                         Chairman.
     William V. Roth, Jr.,
                                                   Ranking Member.
                                  ____


   Federal Civilian and Military Organizations that Oppose the Nunn 
      Substitute on any Amendment that will Reduce Civilian Colas

       The Retired Officers Association.
       Non Commissioned Officers Association.
       Air Force Sergeants Association.
       National Association for Uniformed Services.
       The Retired Enlisted Association.
       Enlisted Association of the National Guard Association of 
     the U.S.
       Marine Corps Reserve Officers Association.
       National Military Family Association.
       Commissioned Officers Association.
       Marine Corps League.
       CWO and WO Association, U.S. Coast Guard.
       Jewish War Veterans of the U.S.
       United Armed Forces Association.
       Naval Enlisted Reserve Association.
       Navy League of the U.S.
       The Military Chaplains Association.
       U.S. Army Warrant Officers Association.
       U.S. Coast Guard CPO Association.
       National Guard Association of the U.S.
       Naval Reserve Association.
       Reserve Officers Association.
       Air Force Association.
       Association of Military Surgeons.
       Fleet Reserve Association.
       Association of the U.S. Army.
       American Federation of Government Employees.
       American Federation of State, County, and Municipal 
     Employees, AFL-CIO.
       American Postal Workers Union.
       Federal Managers Association.
       International Association of Fire Fighters.
       National Postal Mailhandlers Union.
       National Association of Letter Carriers.
       National Association of Postal Supervisors.
       National Association of Postmasters of the United States.
       National Association of Retired Federal Employees.
       National Federation of Federal Employees.
       National Rural Letter Carriers Association.
       National Treasury Employees Union.
       Senior Executives Association.

  Mr. SARBANES. Mr. President, I yield the floor.
  Mr. WARNER. Parliamentary inquiry, is there any further business to 
come before the Senate?
  Mr. NUNN. Mr. President, if there is no other Senator who wants to be 
heard--do we have any time remaining on the amendment that we need to 
yield back?
  The PRESIDING OFFICER. The Senator from Georgia has 23 minutes and 20 
seconds. The Senator from Virginia has yielded back his time.
  Mr. NUNN. Mr. President, I believe under the unanimous consent 
agreement, as I recollect, there will be no further time if I did not 
yield back my time for that time to be used. There would be no time 
tomorrow morning because we have votes from 10:30 on, and all the other 
time is allocated to other amendments; is that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. WARNER. Parliamentary inquiry. I am not sure I followed what the 
Senator said. It is my understanding the agreement explicitly states 
that the Senator from Virginia has 10 minutes on his amendment tomorrow 
morning, as well as the Senator from Georgia has 10 minutes on his 
amendment, assuming it is offered.
  Mr. NUNN. The Senator is correct. What I am saying is if I do not 
yield back my time, there is no additional time available in the 
morning. We have that 20 minutes. I believe that will be wrap-up on 
this debate.
  Mr. President, I yield back the remainder of my time, the time we 
have left this evening, not the time tomorrow.
  The PRESIDING OFFICER. The Chair understands.

                          ____________________