Allow pay curbs or harm readiness, Joint Chiefs expected to tell Congress
By Tom Philpott | Special to Stars and Stripes | Published: April 17, 2014
Sen. Carl Levin, chairman of the Senate Armed Services Committee, is giving the Joint Chiefs of Staff an unusual and potentially powerful opportunity to persuade senators they risk a readiness crisis if they don’t take significant steps this year to slow growth in military compensation.
All seven of the nation’s top four-star officers are to testify May 6, a rare event. They are expected side by side to urge support for pay and benefit curbs. The scene will be in sharp contrast to pleadings for higher pay by service chiefs during earlier times of crisis for the all-volunteer military.
The Joint Chiefs hope to make clear the dilemma Congress has created by trying to shield compensation from the effects of the 2011 Budget Control Act of 2011, with its deep cuts to overall defense spending and its automatic enforcement tool of sequestration.
The chiefs have said their budgets for 2015 and beyond offer a balanced approach to absorbing those cuts because they include $2.1 billion in compensation curbs next year and $30 billion in pay and benefit savings over five years. If Congress won’t back those, or offer alternative offsets, then the arbitrary across-the-board defense cuts of sequestration kick in.
The 28-star panel is expected to present fresh details on the consequences of that, for force structure, unit training, equipment and facility maintenance, worldwide operations and overall readiness.
Levin also has invited a second panel, of military association presidents, to testify. At least some of them will oppose any rise in troop or retiree out-of-pocket costs. To date, the most influential lawmakers on personnel matters are embracing that message, and shrugging off the warnings of defense civilian and military leaders.
Chairmen and ranking members of the military personnel subcommittees – Sens. Kirsten Gillibrand, D-N.Y., and Lindsey Graham, R-S.C., Reps. Joe Wilson, R-S.C., and Susan Davis, D-Calif., – have suggested in recent hearings they will oppose any curbs on compensation.
The Pentagon proposals they bristle at would:
- Cap military pay raises for several more years, starting with a one percent raise cap in January 2015 to match the 2014 increase.
- Dampen increases in basic allowances for housing until BAH recipients, on average, pay five percent of rental costs out of pocket.
- Consolidate Tricare health insurance options into a preferred provider network that would have new fees and also higher fees.
- Make a phased cut in taxpayer support of commissaries so that average savings on groceries drop from 30 percent down to 10.
The Military Coalition, an umbrella group of 33 associations and veteran groups, has urged lawmakers to reject this “piecemeal” approach to curbing compensation and await the recommendations of the Military Compensation and Retirement Modernization Commission due next February.
Retired Air Force Col. Mike Hayden, testifying on behalf of The Military Coalition before the House military personnel subcommittee, lauded the commission’s “holistic” approach to pay reform, and dinged Pentagon initiatives as just transferring more costs onto “the backs of the beneficiaries [to] free up additional funding for other priorities within the department.”
Davis asked Hayden whether it “makes a difference” if it’s the Pentagon this year recommending changes that impact quality of life for military families or if it’s an independent commission doing so next year.
“The difference is their charter. They are not looking at a budget cutting drill, which this definitely is,” Hayden said, pointing to DOD’s budget.
Also, commission members have given assurances their priority is not to cut pay and benefits but to make military compensation more efficient and possibly provide better benefits, Hayden said. That “could end up improving retention and recruiting, which is the overall driver for strong readiness.”
The Pentagon proposal drawing the harshest criticism from lawmakers and family advocates would lower the commissary appropriation from $1.4 billion down to $400 million over three years. Wilson praised current shopper savings and also the jobs that commissaries provide for family members.
“It’s unique and simply can’t be recreated,” Wilson said.
Even military exchange executives reacted with alarm to a first draft of the legislative proposal to implement commissary cuts, warning the entire military resale system could be at risk. That proposal is being modified. By mid-April, lawmakers still didn’t have bill language to consider.
In a March 26 memo, acting Deputy Secretary of Defense Christine Fox described the department’s scramble to shape a legislative proposal “that stands the greatest chance of enactment on a complex topic with the potential to impact not only our service members, their families and retirees, but also the exchange system and MWR [morale, welfare and recreation] funds” which are exchange profits used for on-base, quality-of-life programs.
Fox said the revised proposal would make two “significant changes to current statute” governing commissaries: lift one restriction that goods must be sold at cost, and another that commissaries can sell only brand names.
“These two changes will provide…enough price and product flexibility,” Fox wrote, for commissaries to save $200 million in fiscal 2015.
Otherwise, current store operations should be sustained, she said, while the department reviews “what additional changes to statute may be required” to make the Defense Commissary Agency self-sustaining even with its annual appropriation cut by $1 billion.
“This review should consider…having commissaries adopt an Exchange-like business model and other options for consolidation of commissary and Exchange functions,” Fox wrote.
Hayden warned that if shopper savings fall to 10 percent, the announced target, patrons will go elsewhere and stores will close. Defense officials have said that’s not the intent but they don’t dispute the possibility.
That angers family advocates. Kathleen Moakler with the National Military Family Association told the Senate subcommittee that for every dollar spent to run commissaries last year, “military families realized two dollars in savings. Why are we messing with a successful system?”