Armed Forces News

The House version of the fiscal 2005 defense authorization bill contains a three-and-a-half-year phase-out of the current 36 percent reduction in military Survivor Benefit Plan annuities at age 62 for beneficiaries, most of whom are widows. In a Statement of Administration Policy about the bill, the Office of Management and Budget said the “current program provides the survivor with a constant 55 percent of the retiree’s retired pay.” This suggests that Social Security payments should somehow make up the difference and ignores that beneficiaries of both federal civilian SBP systems do not incur such a slash in annuity payments. Unlike last year, however, OMB did not threaten to recommend a veto. The Senate version contains no provision to fix the widow’s tax, but Sen. Mary Landrieu, (D-La.), is expected to initiate a floor amendment to place a similar version in the Senate bill during its debate.