Three summers ago, Richard V. Spencer, a retired investment banker who serves on a Pentagon advisory board, proposed shutting down the commissary at Camp Lejeune and every other domestic military base, a step that would save taxpayers about $1 billion a year.
He called several large retailers to see if they would be willing to take over the markets. None were, but Wal-Mart, which has stores within 10 miles of most U.S. bases, proposed offering equivalent discounts to troops, their spouses and their retired brethren. He figured other national chains would follow suit.
When the Defense Department bureaucracy that runs the commissaries learned of Spencer’s plan, it sounded an alarm among allies in industry and in Congress. A trade group whose mission is to represent companies that sell goods in military stores fired off a letter to Defense Secretary Robert M. Gates, warning him it would be “ill-advised” to make major changes. Senators and representatives dispatched similar missives. So did veterans groups. As the correspondence stacked up in his inbox, Gates summoned Spencer and other members of the Defense Business Board.
“Richard, my fax machine is vomiting letters of complaint,” Spencer recalled Gates telling him. Worried that congressional anger would doom other Pentagon cost-cutting initiatives, Gates told Spencer to drop his commissary plan.
The commissary fight was an opening salvo — and a glimpse of the opposition — in the next big war facing the U.S. military: confronting the enormous cost of pay raises, benefits programs and other taxpayer-subsidized services, which have increased almost 90 percent since 2001 and have become the fastest-growing part of the Defense Department’s budget. With Pentagon spending set to shrink over the next five years, senior military leaders warn that they will be forced to order reductions in troop strength, training and equipment purchases if personnel expenditures are not curtailed.
“We are on an unsustainable course,” said Arnold Punaro, a retired Marine major general who chairs the Reserve Forces Policy Board. “We are trading off active-duty combat readiness to protect all of these benefits.”
Personnel costs now account for more than a quarter of all defense spending, which consumes the largest single slice of the federal budget after Social Security. Although no part of the Pentagon’s allotment is easy to cut — it is impossible to eliminate a weapons system or close a base without running into a welter of opposition — military pay and benefits will be among the most difficult to scale back, pitting growing demands for fiscal austerity against promises to support those who serve to defend the country.