February 12, 2014
By Col. Mike Hayden, USAF (Ret)
During a Senate Armed Services Committee hearing on the COLA cuts for working-age military retirees
established in the Bipartisan Budget Act of 2013 (BBA), Pentagon witnesses
repeatedly talked about curbing military personnel costs. It became
crystal clear the Pentagon does not intend to wait until the Military
Compensation and Retirement Modernization Commission’s (MCRMC) completes its
review in February 2015 to start adjusting currently serving compensation and
Although the hearing focused on the COLA-cutting
provision, committee members also discussed the rate of personnel cost growth,
which Pentagon witnesses characterize as unsustainable.
Regarding the FY 2015 budget submission,
acting Deputy Secretary of Defense Christine Fox said, “We are seriously
considering proposing additional changes to compensation, not retirement … but
modest proposals on other parts of compensation.”
Fox outlined in her statement that “Secretary
[Chuck] Hagel, the Joint Chiefs, and the service secretaries agree that we
cannot afford to sustain the rate of growth in military compensation that we’ve
experienced over the last decade.”
The witnesses further outlined that much of the rate
of growth since the early 2000s “reflects the convergence of multiple
motivations, all of them well-intentioned,” such as eliminating the pay gap and
zeroing out out-of-pocket housing expenses.
Vice Chairman of the Joint Chiefs Adm.
James Winnefeld Jr., USN, warned, “Demanding at this point that our
compensation not only remain at its currently high relative level but that it
continue to rise faster than that of the average American is simply not sustainable.”
Fox went on to say, "The one-third
of the defense budget consumed by military compensation cannot be exempt as an
area of defense savings. We must find ways to slow the rate of
Instead of acknowledging that in the
late 1990s retention and recruiting were on the ropes and subsequent plus-ups
in personnel costs were needed corrections to keep the previous
years of cutbacks from breaking the career force, it appears the Pentagon now uses
the steep growth rate over the past decade to forecast the future personnel
cost growth glide path — a glide path that’s much more horizontal since
Military members will not see pay increases that
exceed private-sector pay by 11.5 percent over the next two decades, and they
won’t have their out-of-pocket housing expenses zeroed out — again.
But the writing on the wall is clear. The gains over
the past 13 years are now targets for cuts.
So what’s on the chopping block? We
don’t have a crystal ball, but the following forms of pay and benefits have
emerged as leading candidates:
- capping pay raises or even freezing pay;
- making additional end-strength cuts;
- changing basic allowance for housing to
make servicemembers assume more of the costs;
- reducing the commissary benefit savings;
- means-testing TRICARE fees and
establishing TRICARE For Life/TRICARE Standard enrollment fees.
maybe more are facing the chopping block. More clarity will surface once the
budget rolls out March 4.
line:The Pentagon will push pay and benefit cuts, and they will be more than
“tweaks.” These proposed changes will definitely impact the purchasing power of
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