DOD budget leaves tough pay, benefit decisions for future years
By CHRIS CARROLL | STARS AND STRIPES Published: February 13, 2012
WASHINGTON — Military spending will fall in 2013, but the first Defense Department baseline budget decrease since 9/11 leaves for the future difficult decisions about pay and benefits, now one-third of the defense budget and growing.
The budget request rolled out Monday at the Pentagon drops the base defense budget to $525.4 billion from $531 billion the year before. The contingency budget to support fighting overseas drops to $88.5 billion from $115.1 billion, reflecting the end of the Iraq War.
The planned cuts are being made in light of a new U.S. defense strategy that turns away from planning for extended counterinsurgencies like the Iraq and Afghanistan wars, while refocusing on security concerns in Asia and building special operations, cyberoperations and other capabilities identified as vital for coming conflicts.
“This budget plan represents a historic shift to the future, recognizing that we are at a strategic point after a decade of war,” Defense Secretary Leon Panetta said early Monday in a written statement. “This plan is aligned to strategic priorities we have identified to keep America safe.”
Budgets would begin inching back up again after 2014, but the cuts to planned spending would total $259 billion in five years and $487 billion over a decade, as mandated last year by Congress.
Force structure and acquisitions programs are being hit far harder than pay and benefits in 2013. But as announced earlier, over the next five years, the Army and Marines would lose nearly 100,000 troops combined, while the Air Force and Navy would see major weapons systems cut back, delayed or, in a few cases, canceled.
Conspicuously absent from the budget was any sign of planning for threatened larger cuts of more than $1 trillion, under a process known as sequestration, which could result from Congress’ failure last year to cut the overall federal budget by a sufficient amount. Panetta has maintained the current strategy can’t be implemented with cuts of that magnitude.
Pay, fee increases: Only a small fraction of the cuts over the next five years come out of personnel expenses, according to a Pentagon news release Monday.
“Total savings in military pay and benefits amount to about $29 billion over the next five years,” the statement said. “These changes amount to slightly more than 10 percent of the required savings even though pay and benefits represent about one-third of the defense budget.”
If legislators approve the budget request, servicemembers would see a 1.7 percent pay increase in 2013, up a tenth of a percent from 2012’s raise. DOD civilians would see a 0.5 percent pay increase after two years of federal pay freezes. The military basic housing allowance would increase an average of 4.2 percent and the basic subsistence allowance will rise 3.4 percent.
Troops would see the rate of pay increases fall after 2014, according to the Pentagon’s five-year budget plan. The change would save $16.5 billion over five years, according to budget documents.
The Military Health System’s proposed budget of $48.7 billion has more than doubled since 2001. Though active-duty and medically retired servicemembers would avoid paying more, retired Tricare members would see hefty increases in fees and co-pays, with yearly enrollment fees quadrupling by 2017 for some families with annual retirement incomes of more than $45,179.
The thorny question of reforming military retirement is left to Congress, with DOD requesting a study into the possibility of benefit reduction for future members. Panetta has promised benefits for current troops and retirees would be grandfathered.
Capabilities, programs: Terminated programs, including a variant of the Global Hawk surveillance drone and C-27J cargo plane, will save $9.6 billion over five years, the Pentagon statement said.
Far greater savings would be found in restructuring and delaying programs rather than canceling them. Delayed purchases of the Pentagon’s most expensive weapon, the F-35 Joint Strike Fighter, will save $15.1 billion over five years. Pushing back Navy shipbuilding would save $13.1 billion, and delaying the Army’s Ground Combat Vehicle would save $1.3 billion, according to budget documents.
An additional $60 billion in reduction is expected from improved business practices and changes in low-priority DOD programs, officials have said.
It’s not all cuts across the board, however. A number of high-priority programs and capabilities would have increases or have their funding levels largely remain the same. Among them are cyberoperations, with a proposed 2013 budget of $3.4 billion; missile defense, with a budget of $9.7 billion next year; and special operations, with $10.4 billion budgeted.