Health care benefits for troops, military retirees, and their families -- or, as in this picture, their pets -- are an ever-growing cost to the Defense Department.

Health care for troops, retirees, and their families — or, as seen here, their pets — is a growing cost to the Defense Department.

As bitter as the budget battle has become, there’s no topic more toxic than pay and benefits for military personnel. Pentagon budgeteers and the top brass warn that increasing compensation costs, especially for health care, are growing at an unsustainable pace that threatens every other priority from weapons procurement to combat training. But personnel advocates are well organized, especially military retirees defending their healthcare and pensions, and no one wants to do badly by our hard-fighting troops. But, argues Stimson Center scholar Russell Rumbaugh, a former Pentagon and Hill staffer himself, there’s a new willingness in Congress to take the problem on.  – the editors.

For the most adamant, personnel costs are about to eat the entire Department of Defense budget, reducing it to just a welfare agency and leaving the United States at the mercy of its enemies. Since the creation of the All-Volunteer Force, spending per servicemember has risen inexorably. The Department—as with the rest of the country—has watched its healthcare costs dramatically outpace inflation. Since the defense budget started expanding in the late 1990s, Congress has consistently heaped largesse on defense personnel. It repealed the retirement reform passed in the 1980s just before it kicked in, let former military members double dip by taking their military retirement pay while drawing a full civil service salary, allowed retirees to keep both their retirement and disabled pay, created the $10 billion-a-year TRICARE for Life Medicare supplement, and expanded eligibility for both healthcare and retirement benefits.

But the Murray-Ryan budget deal shows that personnel costs can be changed — and that sometimes Congress is the one caring for the national defense. The Murray-Ryan deal includes two provisions that shift defense spending from personnel costs to other defense priorities, like readiness and modernization. The first provision slows the appreciation of pensions for military retirees under the age of 62, keeping annual increases at one percent less than the normal adjustment. CBO estimates such a provision will generate savings of over $1 billion a year within a decade; savings that will continue to occur each year. Since the eventual costs of these pensions are paid for by accrual payments from the Defense Department’s discretionary funds, spending less on pensions frees up money underneath the spending caps that can be used for other priorities.

The second provision in the Murray-Ryan deal does something similar for civilian pensions; it requires new civilian employees to contribute a greater share to their pensions. Since the Defense Department is responsible for the remainder of the pension costs—again out of its discretionary funds—it has to spend less. Yet there is one big caveat; the deal does not let Defense keep that savings because it uses the new revenue to pay for existing civilian pensions that are not fully funded. Once that unfunded portion is paid off—though that will not be for decades—the Defense Department will start seeing savings of around several hundred million dollars a year that can be used to fund other priorities.

Both of these measures are prime examples of ways to shift funding from personnel costs to other defense spending that keeps the military ready and well-equipped. And both were enacted by Congress without prodding by the Defense Department, undermining the usual narrative that it’s Congress who is profligate with military spending and the Pentagon who carefully stewards it. That narrative also ignores how the very benefits now being lamented came about; both the repeal of retirement reform and the creation of TRICARE for Life were first proposed by the military service chiefs, not Congress, as part of an effort to undo the caps on defense spending that were in place at the end of the 1990s.

Today’s chiefs have started to be more vocal about the need to shift costs from personnel, most notably in a November hearing of the Senate Armed Services Committee, but more is needed. It’s unreasonable to expect members of Congress, who were elected to represent the very constituents whose benefits are being cut, if the men and women whose first job is to protect and defend the nation are not leading the call to reform pay and benefits.

Maybe the biggest missed opportunity was the weak input the Pentagon provided last month to the Military Compensation and Retirement Modernization Commission, which is charged with recommending better ways to care for military members . The Pentagon’s required official recommendation to the commission was a three-page letter that simply repeated relatively small proposals, like fee increases and greater cost-sharing, the Pentagon had already made.

The commission itself is one of the best hopes for change. It has a wide writ, good staff, and a prestigious membership. By looking at the question holistically, it has the chance to truly modernize military pay and benefits so military members get more out of their compensation while still freeing up resources for the equipment and training they also need.

The All-Volunteer Force has performed superbly in Iraq and Afghanistan, and answered a call few have. Those who serve must be compensated generously. But how matters. When the Gates Commission recommended going to an all-volunteer force, it recommended increasing military pay. It also recommended differentiating pay by skills, getting rid of in-kind compensation, and doing away with the 20-year requirement for retirement. That was forty years ago, and none of those recommendations have been implemented.

The current commission has a chance to propose such far-reaching changes. With the vocal support of the current military chiefs, change is possible. The Murray-Ryan deal shows Congress will support it.

Comments

  • AFSFCOL

    Interesting that he praises Congress for having the COURAGE to tackle military compensation, but doesn’t address the fat driven by Congressional demands. For example, we have way too many bases for the current force structure. It’s pure overhead. Reduce those costs and you could easily keep paying people what they deserve.

    • T.C.

      Want a cut, how about pay for congress and senate and their lavish life stiles that they get for life no matter how long they serve. What about the money given to other Countries. .COME ON MAN

      • FL MCPO

        No matter how nice it sounds to you, Congress does not receive a full pension for serving one term. http://www.senate.gov/CRSReports/crs-publish.cfm?pid='0E%2C*PLC8%22%40%20%20

        • ETC_RET

          MCPO, you are correct, they don’t earn a FULL pension after one term… However, unlike those of us that served, they only have to serve 5 years to receive a pension from the US Government (at 62)! So, with that said, every Military member who is honorably discharged, after serving 5 or more years, should be recieving a military retirement check at age 62! Does that happen? Hell NO! It is Congress looking out for themselves and screwing those of us that have put our lives on the line!

    • fishaddict

      I am thinking that cutting welfare off at the knees for those in this Country illegally would save my benefits(and yes due to the fact that I am a currently serving reservist balancing Home/civilian work/Military duties they are benefits as put forth in my enlistment and re-enlistment papers). CBSLA(not a Bastion of conservative thought by any stretch)reports that expects to fork over $650 million to illegals in 2013. $650 mil in one county alone. Want a welfare check? Get an ID, prove you are here legally. The money quote from the article is at the end.

      http://losangeles.cbslocal.com/2013/09/16/undocumented-la-county-parents-projected-to-receive-650m-in-welfare-benefits/

  • J.L.
    • Retired USN CPO

      Just went to this WH website. Seems you cannot even make a comment on this site unless you “REGISTER”.. I do not trust this WH so will not be registering. So, by adding this requirement, BHO limits the discussion. I will keep my comments to myself and work through my House and Senate representatives.
      DO NOT TRUST THIS ADMINISTRATION!!!!

  • Disgusted

    Really, Fox News? Double dipping? Really? If you want to make a change, you change it for those who have not entered the service yet. You don’t change the rules of the game after it has been played. This is another broken promise to those serving as well as retirees. If the military keeps breaking promises, what do you think will happen to retention? Why should I serve, if the govt can break its word at anytime on what was promised when I joined? There are other ways to save a billion a year in DOD other than off the backs of those serving. Look at the waste in the F-35 program alone or the wasteful spending of the Afgan Air Force. How about cleaning up acquisitions and other wasteful programs before taking the money out of the pockets of those that served.

  • GR

    “Both of these measures are prime examples of ways to shift funding from
    personnel costs to other defense spending that keeps the military ready
    and well-equipped.” In other words–direct money to expensive (over-priced) defense contracts that keep politicians in office and and money coming into their reelection pocketbooks.What else is new.

  • John S.

    They can take on compensation as long as there isn’t a union involved.

    • MK75Gunner

      John,

      That is no longer true. You should be getting both without the reduction…

      http://www.dfas.mil/retiredmilitary/disability/crdp.html

      • John S.

        Fortunately my disability is not 50%, at least from the point of view of my health. From the health of my finances, …. So CRDP does not apply and my retirement is still reduced by my disability.
        They do say that once my asbestos or radiation exposure starts to affect my health I can reapply and then I should be over 50%. Given the time it took to get the first eval I’m sure it will be of comfort but little value to my family.

  • Don Bacon

    Medical costs in the US are increasing all out of proportion to inflation. Now we have $1200 a night hospital stays, and US medical costs far higher than the same procedures overseas.
    *Heart bypass: $8,500 in India; in the U.S., $144,000
    *Liver transplant: $75,000 in Latin America; in the U.S., up to $315,000
    *Dental implant: $1,000 in Costa Rica; in the U.S., $2,000-$10,000

    Has the US government ever studied this problem, and attempted to correct it?

    No. Not a peep. Instead, we get talk of “of ways to shift funding from personnel costs to other defense spending that keeps the military ready and well-equipped.”

    So screw the victims and let the rich get richer. Even the uniforms may be on board. “Today’s chiefs have started to be more vocal about the need to shift costs from personnel.”

    If that’s the case then WE need to get more vocal about putting a big damper on enlistment. Stay the hell out, the chiefs don’t like you,. Let them operate and maintain the equipment, they’re so smart. Then see how ready and well-equipped you are, after you’ve shifted away from people.

    • bob

      As one of them, I can definitively state that the “uniforms” as you call us are not onboard with the steady and continuing erosion of our benefits

    • Pat Patterson

      I’m not going to go to a third world country to get any medical care no matter how low the price is.

    • FL MCPO

      By “Chiefs” they mean the Chiefs of Staff, not Chief Petty Officers in the Navy.

  • Tom

    “The first provision slows the appreciation of pensions for military retirees under the age of 62, keeping annual increases at one percent less than the normal adjustment.”

    This is a grossly misleading statement. Military pensions do not appreciate, they are a defined benefit…they are intended to maintain their value year after year. This provision reduces COLA below the rate of inflation which reduces the value of a military pension by 1% per year. Over two decades this will cut pensions by 20%. These men and women have already met their commitment, have already completed every task they were asked to accomplish… including putting their lives on the line for their country… and now the rules are being changed. This provision reneges on the contract America has with millions of military retirees…it is dishonest, dishonorable and is a disgrace to this nation.

    “The All-Volunteer Force has performed superbly in Iraq and Afghanistan, and answered a call few have. Those who serve must be compensated generously. But how matters.”
    Lets try fair and honest compensation for the service provided…these men and women don’t expect or deserve anything more or less than what they were told they would receive. They don’t however deserve to be lied to, cheated or defrauded of a benefit they earned with blood sweat and tears.

    • 1hopelessoptimist1

      The All-Volunteer Force did not achieve pacification in either Iraq or Afghanistan, did not face the level of combat that WWI, WWII, Korea or Vietnam warriors did, were infinitely better paid and trained and weren’t drafted. Those of us who served in prior wars were often confronted with hardships that seem nearly unbelievable today. So stop complaining and patting yourselves on the shoulder about a great job done. We need to reduce manpower, both civilian and military, eliminate many fringe benefits, reduce overall personnel cost, but leave basic pay as is or even increase it for E-! thru E-5.

      • DD

        Spoken like a true imbecile. The only one I see whining here is you… You can thank me and my family for our 26 years of service by just going away.

      • OEF/OIFvethonoredtoserve

        And for god sakes re-instate the draft..good answer, right?!

      • Brian Mulkeen

        @hopelesslystupid
        Pacification was not the mission goal. Korea is still at war and you guys left Vietnam in quite a hurry with you tails being shot at. don’t lecture anyone that’s been in combat asshat.

    • George Engelhardt

      Well put. Also, remember 2010 and 2011? There was NO COLA INCREASE for Military Retirees. If these traitors had their way, Military Retiree COLA would go into the negative, regardless of any existing laws to prevent that occurrence. Don’t think it will happen? Just look at the track record of eroding benefits and broken promises including this heinous act…

  • Don Bacon

    personnel costs are about to eat the entire Department of Defense budget, reducing it to just a welfare agency

    So the troops are on welfare. Not.

  • Rice Thims

    So let me get this straight your going to enlist people to fight two decade long wars and then just about when they are ready for retirement change the deal? This article would have you believe I’m a rich E-7. Give me a break. Double dipping? Really? Let’s see hire me when I’m 18 and work me to my mid forties where I’m forced to change careers….most likely at a pay loss. Federal employees don’t need to double dip. They can work their job into their 60s.

  • Pat Patterson

    The Commission has nothing to do with hope; it’s only concern is screwing with and sharply reducing military retirement benefits by blaming us for everything. It’s the DoD budget that has outpaced inflation in every category! The Service Chiefs are lying when they say medical and other benefits are the fault for not being able to afford weapons.

  • Retiree under 62

    What an ass this guy is. I’m sure he will go far in the Democratic-Socialist Reform Movement of Obama’s third term. He puts his Army Commendation Medal in his bio like it was something more than an officer separation freebie? Give me a break.