Congress and military leaders point with pride to recent legislation that enhanced military retirement benefits for much of the current career force, set “across-the-board” pay raises above private-sector wage growth and established Tricare-for-Life coverage for Medicare-eligible beneficiaries.

Those initiatives, however, helped to boost the cost of military pay and benefits by 32 percent in just five years and probably made it more difficult to sustain a 21st century superpower force to fight a global war on terrorism.

That’s the theme of a new book, “Filling the Ranks: Transforming the U.S. Military Personnel System” from MIT Press. The anthology of essays by prominent analysts on military personnel issues criticizes spending additional billions of dollars on a Cold War-era compensation mix and dusty personnel systems that resist change.

Edited by Cindy Williams of MIT’s Security Studies Program, a former senior analyst with the Congressional Budget Office, the book supports Defense Secretary Donald Rumsfeld’s call to transform the military with marketplace innovations. It warns of trouble ahead for the all-volunteer force if military leaders and politicians continue to ignore long-touted pay and personnel reforms.

Williams and colleagues challenge traditional thinking on military compensation including the wisdom of protecting “in-kind benefits” like base housing and discount shopping, and continuing to rely on old force-shaping tools like 20-year retirement and tax-free allowances.

When faced with a recruiting and retention crisis in the late 1990s, military leaders sought and Congress approved broad increases in traditional pays and benefits. That, the book contends, was precisely what not to do.

Personnel costs jumped by a third, even as the services were reducing combined active and reserve strength by 33,000 personnel, Williams writes in the book’s introduction.

“By 2003, overall recruiting and retention bounced back. Yet much of the new spending has little chance of solving the underlying problems that caused the crisis in the first place,” she charges.

Rather than address serious job skill imbalances, for example, large across-the-board pay raises boosted “incentives for people with the least valuable skills to stay in the military well past the period when their low-tech contributions are most useful,” Williams writes.

Likewise, creating Tricare for Life enhanced medical benefits for 1.7 million elderly retirees, spouses and survivors and, in time, will benefit a small fraction of the force who served long enough to retire. But “it will do nothing,” Williams writes, “for the 23 million veterans who served in uniform for fewer than 20 years. Thus, to the extent that motivating individuals serving today and rewarding veterans for their service is the goal, the new entitlement is money wasted.”

The total annual cost of military personnel is now $140 billion, or $100,000 per active-duty member, claims Williams.

Changes needed to modernize personnel and compensation systems, making them more efficient and flexible, the book contends, include:

• Switching from a “one-size-fits-all” basic pay system to different bands of pay at each grade to reflect the outside “market value” of skills.

• Cutting military training and infrastructure costs by recruiting skilled personnel, like electronics technicians and mechanics, direct into middle enlisted grades after private-sector training and experience.

• Replacing the rigid 20-year “all-or-nothing” retirement plan with a more flexible system that vest members in some benefits after five years, has separation incentives short of 20 years and entices careerists to serve well beyond 20 years routinely.

• Changing up-or-out promotion and advancement rules for officers and enlisted to allow higher-skilled individuals to continue to serve even if their supervisory responsibilities don’t increase.

• Enriching career patterns for longer-serving officers by allowing longer tours in critical positions and more pay as experience grows.

• Overhauling reserve compensation in ways that reflect “new realities” of their direct support of active duty forces for war on terrorism.

• Transforming traditional “in-kind” benefits like base housing and shopping discounts into cash.

• Shifting more family support functions off base and hiring more staff, in recognition that only 30 percent of families today live on base and fewer spouses today have time to serve as volunteers.

For now, the nation can “buy its way out” of military recruiting and retention problems. But without “fundamental” changes to the way personnel are paid and managed, the book concludes, “the services will find it increasingly difficult to attract and keep the people they need.”

— Comments are welcomed. Write to Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, e-mail or visit:

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