Posted at 12:11 PM ET, 09/19/2011

Military retiree benefits may be cut as Congress struggles to reduce debt

Defense Secretary Leon E. Panetta recently said he was willing to look at a tremendously hot-button issue to save money — reforming the 100-year-old military retirement system.

Leon Panetta has struggled with whether (and how) to reform the 100-year-old military retirement system to save money. (Melina Mara/THE WASHINGTON POST )
Panetta’s words came after the Defense Business Board conducted a study on retiree benefits, The Post’s Walter Pincus reports. The study found that military retirement plans now exceed levels of the private sector. Retirement plans, the board said, are “unfair” because 83 percent of those who serve receive no retirement pay.

Perhaps most telling, the study found that the costs of military retirement plans were growing exponentially. Military pensions and health care for active and retired troops now cost the government a whopping $100 billion a year. And that will only get larger as life expectancy increases.

While Panetta says he has made no decisions, he has certainly been influenced by the board’s findings, recently telling PBS, “We’ve got to put everything on the table.”

This is a marked departure from years past, when making any reform to military benefits was frustrated by strong veterans groups, public support for troops and the many years it takes for savings to appear.

In large part, Panetta may have been convinced by the general consensus of the board that the plan was designed for a different era, “when life spans were shorter,” when military pay “was not competitive with civilian pay” and when second careers for former service members “were rare.”

Military officials and experts also point to the push in Congress this year to reduce the debt and trim Pentagon programs. If Congress doesn’t adopt debt-reduction recommendations this fall, the Defense Department will have to find about $900 billion in savings over the next decade.

For that reason, MSNC reports, retiree benefits have “suddenly ... [been] made vulnerable.”

By  |  12:11 PM ET, 09/19/2011

Tags:  National; veterans; military; pension benefits; health benefits; Leon Panetta; Pentagon

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