Military pay and benefits panel begins hearings
By LEO SHANE III AND CHRIS CARROLL | STARS AND STRIPES Published: November 5, 2013
ARLINGTON, Va. — Efforts to reform troops’ pay and retirement could mean sweeping changes to every aspect of military life: fewer housing moves, early retirement options, bigger paychecks and smaller health plans.
Or, they could mean nothing.
Members of the Military Compensation and Retirement Modernization Commission held their first round of hearings this week in an effort to radically re-imagine how military pay and benefits are handled.
The congressionally mandated panel will compile a report by May on ways to “ensure the long-term viability … and fiscal sustainability” of military compensation. The charge comes at a time when Pentagon planners say personnel costs are rising rapidly and lawmakers are focused on cutting government costs.
White House officials have pledged any moves won’t affect the current force, but the preliminary discussions have already started heated debate about what’s owed to the fighting force and how to best meet their needs.
That means examining the 20-year retirement system — a mark of longevity that fewer than one-fourth of servicemembers reach — and benefits such as health care, housing stipends, dependents pay and tuition assistance.
But making any of those changes has been politically impossible, with lawmakers and troops advocates decrying most cost-cutting proposals as dangerous to national security and insulting to servicemembers.
In testimony Tuesday, David Chu, former undersecretary for defense personnel, told the panel that studies have repeatedly shown that younger troops prefer bigger pay raises now to costly pension promises later. Changing those benefits could save the department billions annually.
But he also acknowledged that’s a difficult sell.
“Just mentioning retirement has poisoned the discussion,” he said. “Even the (troops) who likely won’t reach the 20-year retirement are worried that we’re breaking faith with them, that we’re breaking promises.”
In a letter sent to the commission Friday, Deputy Defense Secretary Ash Carter recapped the Pentagon’s recent proposals on limiting troop pay increases and raising Tricare fees and copays for military retirees.
But while the Pentagon has been studying changes to the retirement system designed at reducing costs, the letter made no recommendations, instead offering to “informally discuss” the options with the commission.
Phil Odom, deputy director of government relations for the Military Officers Association of America, said the Pentagon took the easy way out, failing to weigh in on touchy but critical issues.
“It’s a terribly disappointing memo,” he said. “I would say they’ve offered up nothing in terms of recommendations to a commission that’s struggling with two major issues.”
The MOAA — and a host of other veterans advocates — supports the current military pay and retirement system, and has opposed major overhauls.
The groups have been particularly incensed over a 2011 suggestion by the Defense Business Board to transition to a 401(k)-style retirement system, allowing even those who serve fewer than 20 years to collect some retirement pay. They insist the move would hurt recruiting and encourage midcareer military officers to leave the service early.
But such a move is what’s needed to bring rising retirement expenses in line, said Lawrence Korb, senior fellow at the Center for American Progress, a left-leaning Washington think tank.
After watching what happened in the wake of the 2011 proposal, Korb said the Pentagon likely saw no upside in presenting reform ideas, but plenty of risk in the current polarized political environment in Washington.
“You get nothing for it politically, but you get the heck beaten out of you by the veterans’ lobbies,” said Korb, a former assistant secretary of defense for manpower.
Even if the commission recommends sweeping changes to military compensation, any changes will still have to survive congressional debate before becoming law. With lobbyist opposition and the current political gridlock, that’s not an assured result.
Still, Commission Chairman Alphonso Maldon Jr. told members Tuesday that he’s confident they can spark an important rethinking of how to better compensate troops while reigning in personnel costs.
“We have to get this right,” he said. “We may not have another chance like this.”
The public can weigh in at: www.mcrmc.gov/index.php/public-comments