Security Insiders: It’s Time to Reduce Military Health and Pension Benefits

Murray-Ryan budget deal is good for defense, Insiders say.

WASHINGTON, DC - NOVEMBER 13: U.S. Rep. Paul Ryan (R-WI) (L) listens to Sen. Patty Murray (D-WA) (R) during a Conference on the FY2014 Budget Resolution meeting November 13, 2013 on Capitol Hill in Washington, DC. Congressional Budget Office Director Doug Elmendorf briefed the conferees on CBO's budget and economic outlook. 
National Journal
Sara Sorcher
Jan. 2, 2014, 12:21 a.m.

The time has come: Mil­it­ary health and pen­sion be­ne­fits, which have more than doubled in the past dec­ade, should be re­duced as the de­fense budget comes down, said a whop­ping 90 per­cent ma­jor­ity of Na­tion­al Journ­al‘s Na­tion­al Se­cur­ity In­siders.

Pentagon lead­ers have been call­ing for changes to curb the skyrock­et­ing com­pens­a­tion costs, which threaten to usurp oth­er key pri­or­it­ies in the de­fense budget dur­ing aus­tere times — even train­ing for com­bat op­er­a­tions and weapons pro­cure­ment. But re­form ef­forts have been com­plic­ated in part be­cause mil­it­ary-per­son­nel is­sues are a polit­ic­al land­mine on Cap­it­ol Hill. In the budget deal clinched by Sen. Patty Mur­ray and Rep. Paul Ry­an, however, mem­bers did take a step to cut be­ne­fits to mil­it­ary re­tir­ees, al­beit slightly, de­creas­ing the an­nu­al cost-of-liv­ing ad­just­ment for work­ing-age mil­it­ary re­tir­ees by 1 per­cent, which would cut roughly $6 bil­lion in spend­ing over the next dec­ade. 

Some 52 per­cent of the pool of na­tion­al se­cur­ity ex­perts are open to slight cut­backs to mil­it­ary be­ne­fits. “We must con­trol run­away per­son­nel costs,” one In­sider said, “but we need to take care not to break faith with those who signed up to risk their lives for their coun­try.” The rate of growth, an­oth­er In­sider ad­ded, is what needs to be re­duced. “Too of­ten we call it a ‘cut’ when it’s really a slow­ing of growth rates. We need to re­store bal­ance across de­fense-spend­ing ac­counts so that we can train and equip the mil­it­ary as well as pay them.”

Pay and be­ne­fits are not out of line with the amount of de­fense spend­ing, which has also in­creased over the past dec­ade of wars, one In­sider said. “But they are now an en­ti­tle­ment for the fu­ture, which means they need to be brought un­der con­trol. The re­tire­ment pack­age needs to be re­writ­ten, so the mil­it­ary mem­bers vest earli­er, but draw a pen­sion later, like the civil ser­vants,” the In­sider said. “Pay in­creases should have a COLA and mer­it fea­ture, mak­ing pay raises more ap­pro­pri­ate and not across the board. And the re­tir­ees need to pay more for their gen­er­ous health care be­ne­fits — an en­roll­ment fee that is one-tenth of the ci­vil­ian av­er­age is not a ‘re­ward’ for ser­vice, it is a deep in­equity.” 

Thirty-eight per­cent of In­siders called for more sig­ni­fic­ant cut­backs. “The com­pens­a­tion of mil­it­ary per­son­nel has doubled over the past dec­ade, but go­ing for­ward, few will be risk­ing their lives in con­flict,” one In­sider said. “Health be­ne­fits for nondis­abled re­tir­ees and spouses cost only one-tenth as much as sim­il­ar be­ne­fits for ci­vil­ian fed­er­al re­tir­ees. This gap is un­jus­ti­fied.”

Poli­cy­makers, one In­sider said, have had to “juice be­ne­fits to en­tice people to en­list in a mil­it­ary they’ve been mis­us­ing for dec­ades. De­fend­ing the coun­try doesn’t re­quire a mil­it­ary nearly this big, so be­ne­fits should be cut, as should end-strength.”

Only 10 per­cent of In­siders said mil­it­ary health and pen­sion be­ne­fits should be off-lim­its. “The size of the force should be re­duced but not pay and be­ne­fits,” one In­sider said. 

Sep­ar­ately, a wide 88 per­cent ma­jor­ity of In­siders said the Mur­ray-Ry­an budget deal was good for De­fense. The deal, far short of a grand bar­gain to undo se­quest­ra­tion al­to­geth­er, would partly pare back the across-the-board cuts fa­cing the Pentagon over the next two years. The deal, one In­sider said, is “bet­ter than noth­ing, and at least it tapers se­quest­ra­tion.”

“They got it all: budget sta­bil­ity for the next two years, com­plete flex­ib­il­ity as to how to move the funds around and plan, and an $80 bil­lion over­seas con­tin­gency op­er­a­tions ac­count nobody is talk­ing about,” one In­sider said, “Such a deal! Happy Hol­i­days, Pentagon!”

The agree­ment will re­lieve some short-term ad­just­ment pres­sures that the De­fense De­part­ment “brought onto it­self by not do­ing more pri­or to this year to pre­pare for budget down­turns,” an­oth­er In­sider said. “Un­like DOD, for sev­er­al years the de­fense in­dustry has been stream­lin­ing op­er­a­tions, con­sol­id­at­ing struc­tures, and delay­er­ing man­age­ment. Per­haps more than ever, in­dustry is now cost-ef­fi­cient re­l­at­ive to DOD’s own costs.”

But 12 per­cent of In­siders said the deal was not ideal — though the ex­perts who com­men­ted ac­tu­ally said the Pentagon should be cut even more. “The cuts should be much deep­er,” one In­sider said. “We need to be­gin dir­ect­ing re­sources back to the home­land to re­pair the crum­bling in­fra­struc­ture, im­prove health care, and be­gin at­tack­ing the nu­mer­ous oth­er prob­lems with­in the coun­try.”

1. Should mil­it­ary health and pen­sion be­ne­fits, which have more than doubled in the last dec­ade, be re­duced as the de­fense budget comes down?

(58 votes)

  • Yes, slightly 52%
  • Yes, sig­ni­fic­antly 38%
  • No 10%

YES, SLIGHTLY

“Con­gress has amply in­creased mil­it­ary pay and be­ne­fits over the past dec­ade, in some cases, over the ob­jec­tions of De­fense De­part­ment lead­ers. It is easy to say yes that be­ne­fits should be re­duced, but what is needed is a new de­fense strategy that in­cludes new force struc­ture with a suf­fi­cient com­pens­a­tion pack­age to at­tract and re­tain mil­it­ary per­son­nel to ex­ecute that strategy.”

“What really needs re­du­cing is the rate of growth. Too of­ten we call it a ‘cut’ when it’s really a slow­ing of growth rates. We need to re­store bal­ance across de­fense-spend­ing ac­counts so that we can train and equip the mil­it­ary as well as pay them.”

“But not mine, of course.”

“There are those who claim these are in­di­vidu­al be­ne­fits rightly earned by the ser­vice­mem­ber. True, but there are changes that must be made based on the chan­ging demo­graph­ics of Amer­ica. For ex­ample, the 20-year re­tire­ment mark was con­ceived when Amer­ic­an males gen­er­ally lived only in­to their mid-60s. That is no longer the case — the budget simply can­not af­ford NOT to change!”

“Mil­it­ary per­son­nel and health care costs are un­sus­tain­able. Al­though our ser­vice mem­bers should be well-com­pensated, the past 10 years have wit­nessed the cre­ation of pay scales and be­ne­fits out of pro­por­tion even to the sac­ri­fices re­quired of a mil­it­ary ca­reer.”

“As one who be­ne­fits from both, yes. But only if they serve as mod­els for en­ti­tle­ment re­form across the gov­ern­ment. Cut­ting the mil­it­ary is easy — the real test of mor­al cour­age is to take on en­ti­tle­ments.”

“I’m afraid like a lot of things in gov­ern­ment, the costs are grow­ing too much. While it hurts, all fed­er­al em­ploy­ees need to con­trib­ute to this ef­fort to close the debt.”

YES, SIG­NI­FIC­ANTLY

“Such be­ne­fits need to be re­duced gov­ern­ment-wide, so of course they need to be re­duced for the mil­it­ary, par­tic­u­larly if the mil­it­ary isn’t go­ing to be en­gaged in ground wars over the com­ing dec­ade.”

“For re­tir­ees who are work­ing in full-time private-sec­tor jobs, their em­ploy­ers should pay for their health care rather than take ad­vant­age of Tri­care.”

“The health and pen­sion be­ne­fits provided to the U.S. mil­it­ary are not sus­tain­able — Bob Gates said es­sen­tially the same thing be­fore he stepped down as sec­ret­ary of De­fense.”

“If per­son­nel costs aren’t cut — yes, the claw­back should be gradu­al — they’ll be­come the en­tire budget.”

“Sim­il­ar to ci­vil­ian health care pro­grams, our na­tion has to find a way to bend the mil­it­ary health care pro­gram cost curve down­ward.”

“Prob­ably as good a time as any to move away from a defined-be­ne­fits re­tire­ment and al­low sol­diers to in­vest in a 401K with high­er monthly pay.”

NO

“The size of the force should be re­duced but not pay and be­ne­fits.”

“Ac­tu­ally, they have already been de­creased in terms of what in­di­vidu­al re­tir­ees get. Re­tire­ment pay is no longer com­puted based on the fi­nal monthly pay the re­tir­ee re­ceived while on act­ive duty (un­less you en­lis­ted pri­or to Septem­ber 1980). In­stead, it is com­puted based on an av­er­age of the last three years of pay re­ceived. Mil­it­ary Re­tire­ment Pay is ba­sic­ally a prom­ise to take care of our vet­er­ans in re­turn for them tak­ing care of us. It’s also a means of de­ferred com­pens­a­tion, be­cause mil­it­ary per­son­nel will­ingly take them­selves out of the private-sec­tor com­pet­i­tion for high­er salar­ies. In or­der for its re­tire­ment sys­tem to be altered, the mil­it­ary would have to al­ter its pro­mo­tion and re­ten­tion sys­tems. Those is­sues have not been ad­dressed yet, “¦ and we risk grave dam­age to Na­tion­al Se­cur­ity by hav­ing a lower-qual­ity mil­it­ary per­son­nel pool.”

“No, not re­duced — though in­creases can be re­duced.”

2. Is the budget deal clinched by Sen. Patty Mur­ray and Rep. Paul Ry­an good for De­fense?

(58 votes)

  • Yes 88%
  • No 12%

YES

“If the budget provides mil­it­ary lead­ers the flex­ib­il­ity to make tar­geted cuts, then it is bet­ter for de­fense. Pre­cise cuts should en­able DOD to re­tain more muscle and re­duce fat.”

“The Ry­an-Mur­ray budget agree­ment provides some re­lief to the vise of se­quest­ra­tion, which is break­ing ma­jor pro­grams in De­fense as well as in in­tel­li­gence. The me­dia have failed to re­cog­nize this in re­port­ing.”

“DOD needs to re­turn to fisc­ally dis­cip­lined longer-term pro­gram­ming, with a fu­ture-years de­fense pro­gram that can be planned for and ex­ecuted. This budget deal is a sol­id step in that dir­ec­tion and should per­mit a bet­ter FY15 budget pro­pos­al and real au­thor­iz­a­tion and ap­pro­pri­ations bills.”

“The de­fense es­tab­lish­ment has grown to be ex­cess­ive in size and ex­pense and should be smal­ler in light of the ex­ist­ing threats.”

“At least it stops the rot and cre­ates some pre­dict­ab­il­ity for the next two years.”

“Few­er cuts. More flex­ib­il­ity. What’s not to like?”

“At least DOD got back $20 bil­lion it would have lost. That said, DOD will still take a $30 bil­lion re­duc­tion in FY14.”

“Yes, but bad for the rest of the budget and coun­try as a whole.”

“While the new budget is not good for the mil­it­ary; it is good for our over­all se­cur­ity to be able to plan de­fense ex­pendit­ures and not run a gov­ern­ment based on con­tinu­ing res­ol­u­tions.”

“Com­pared to the al­tern­at­ive. However, a more thought­ful and de­lib­er­ate budget­ing pro­cess tied to the real­it­ies of the na­tion­al se­cur­ity en­vir­on­ment might be help­ful.”

“More im­port­antly, the budget deal is good for the na­tion, as it shows that mod­er­ate ele­ments of both parties might be able to rein in their more ex­treme mem­bers.”

“It will al­low some lee­way in cuts and serve as a pub­lic pound of flesh from the DOD. Now show some cour­age and get the rest of the budget un­der con­trol.”

“Yes, it was the best deal you could come up with un­der the cir­cum­stances. We are out of Afgh­anistan and Ir­aq. It’s time to con­sider cut­backs ap­pro­pri­ate to our needs.”

“Any agree­ment across party lines and re­turn to reg­u­lar or­der is good for de­fense and gov­ern­ment. Sets the table for de­fense to be more thought­ful about re­set­ting and cut­ting the de­fense budget.”

NO 

“The cuts should be much deep­er. We need to be­gin dir­ect­ing re­sources back to the home­land to re­pair the crum­bling in­fra­struc­ture, im­prove health care, and be­gin at­tack­ing the nu­mer­ous oth­er prob­lems with­in the coun­try.”

“The ef­fort to achieve a fed­er­al-budget agree­ment takes from the one ele­ment of the U.S. gov­ern­ment that per­forms the best. Be­ware of the re­turn of the Bo­nus March­ers from the 1930s.”

“It’s an im­prove­ment over the se­quester for Belt­way Ban­dits, but the in­creased mil­it­ary spend­ing will per­mit poli­cy­makers to do mar­gin­ally more dumb things with the U.S. mil­it­ary.”

Na­tion­al Journ­al’s Na­tion­al Se­cur­ity In­siders Poll is a peri­od­ic sur­vey of more than 100 de­fense and for­eign policy ex­perts. They in­clude: Gor­don Adams, Charles Al­len, Thad Al­len, James Bam­ford, Dav­id Barno, Milt Bearden, Peter Ber­gen, Samuel “Sandy” Ber­ger, Dav­id Ber­teau, Steph­en Biddle, Nancy Bird­sall, Mari­on Blakey, Kit Bond, Stu­art Bowen, Paula Broad­well, Mike Breen, Mark Brun­ner, Steven Bucci, Nich­olas Burns, Dan By­man, James Jay Cara­fano, Phil­lip Carter, Wendy Cham­ber­lin, Mi­chael Cher­toff, Frank Cil­luffo, James Clad, Richard Clarke, Steve Clem­ons, Joseph Collins, Wil­li­am Court­ney, Lorne Cran­er, Ro­ger Cres­sey, Gregory Dahl­berg, Robert Dan­in, Richard Dan­zig, Daniel Drezn­er, Mack­en­zie Eaglen, Paul Eaton, An­drew Ex­um, Wil­li­am Fal­lon, Eric Farns­worth, Jacques Gansler, Steph­en Gan­yard, Daniel Goure, Mark Green, Mike Green, Mark Gun­zinger, John Hamre, Jim Harp­er, Mi­chael Hay­den, Mi­chael Her­son, Pete Hoek­stra, Bruce Hoff­man, Linda Hud­son, Paul Hughes, Colin Kahl, Don­ald Ker­rick, Rachel Klein­feld, Lawrence Korb, Dav­id Kramer, An­drew Kre­pinev­ich, Charlie Kupchan, W. Patrick Lang, Cedric Leighton, James Lind­say, Justin Lo­gan, Trent Lott, Peter Mansoor, Ron­ald Marks, Bri­an Mc­Caf­frey, Steven Metz, Frank­lin Miller, Philip Mudd, John Nagl, Shuja Nawaz, Kev­in Neal­er, Mi­chael Oates, Thomas Pick­er­ing, Paul Pil­lar, Larry Pri­or, Steph­en Rade­maker, Marc Rai­mondi, Celina Realuyo, Bruce Riedel, Barry Rhoads, Marc Ro­ten­berg, Frank Rug­giero, Kori Schake, Mark Schneider, John Scofield, Tammy Schultz, Steph­en Ses­t­an­ovich, Sarah Se­wall, Mat­thew Sher­man, Jen­nifer Sims, Con­stan­ze Stelzen­müller, Frances Town­send, Mick Train­or, Su­z­anne Spauld­ing, Ted Stroup, Richard Wil­helm, Tamara Wittes, Dov Za­kheim, and Juan Za­r­ate.

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