Gen. Raymond Odierno, Army chief of staff, sounded a budgetary alarm last Thursday before the Senate Armed Services Committee.
“The cost of [an Army] soldier has doubled since 2001; it’s going to almost double again by 2025. We can’t go on like this, so we have to come up with [new] compensation packages.”
His point: The growth of pay and allowances for active and retired service personnel has to be reduced before it eats up most of the military services’ budgets.
Other service chiefs voiced similar concerns.
And for the past three years, Congress has ignored the more vocal calls from President Obama and defense secretaries Robert Gates and Chuck Hagel to support their efforts to reduce the growing costs of military benefits, particularly the health-care programs for retirees.
Up to now, Congress has listened to retirees and their lobbyists, who assert that these benefits were promised to them.
Lawmakers should listen to Adm. Jonathan W. Greenert, chief of naval operations, who last week said, “About 50 percent of every Defense Department dollar goes to personnel predominantly as compensation. And if we keep going this way, it’ll be at 60, and then it’ll be at 70 in about a decade plus. . . . I think it’s our responsibility to take a hard look at it.”
“I pay 62 cents on the dollar right now for manpower,” said Gen. James F. Amos, the Marine Corps commandant. “That’s not because Marines are more expensive; it’s just my portion of the budget is smaller. That’s going to go well over 70 percent by the end of [the next five years] if something is not done.”
Referring to a study, Amos added that by 2025 or so, “98 cents of every dollar [will be] going for benefits.”
Gen. Mark A. Welsh III, Air Force chief of staff, said that with his service’s personnel costs “somewhere between 38 percent and 50 percent right now, the problem for us is — that range would be fine — it’s the growth that we’re worried about.”
That growth, he said, “is now the threat to modernization and readiness.”
So where are the answers to the personnel cost problem?
All four chiefs mentioned programs being studied: reduction in active pay increases, reduced retirement pay and benefits, higher premiums for retirees for TRICARE (the broad medical support program for active and retired service personnel and their families), higher co-pays for pharmaceuticals, smaller off-base housing allowances and the commissary system.
Greenert outlined the dilemma. Whatever change is made, he said, “has to be reversible.”
His example: “If we were to slow pay raises . . . when done, look at the impact on the constituency . . . because we have to maintain the all-volunteer force. That’s very important.”
Actions “must be transparent” to the active and retired service members and their families, he said, so they understand “what is the purpose.”
Finally, Greenert said, “a balance” is key. When costly programs such as pay, housing or TRICARE are changed, less-expensive benefits such as tuition assistance, other training and child care must be maintained.
Amos said the Marines had reviewed in the past 12 months internal controls on “things like bonuses in everything from reenlistment to things we do to recruit and assess Marines.” They found significant savings, he said.
Amos also mentioned raising TRICARE premiums, which for retired and working retirees are far below civilian levels. And “there is room to maneuver” on pay raises and the annual 2 to 3 percent increase in basic housing allowances, he said.
A Congressional Budget Office study released Wednesday reported that, between 2001 and 2012, basic military pay rose by 28 percent in inflation-adjusted dollars. During the same time, private-sector wages for white-collar and blue-collar workers roughly stagnated.
According to the CBO, cash compensation for enlisted personnel, including the advantage that military food and housing allowances are not subject to federal taxes, is greater than the wages and salaries of 90 percent of civilian counterparts. That surpasses the Pentagon goal of exceeding pay of 70 percent of civilians with comparable education and work experience.
As Amos noted, there’s room to maneuver in reducing base pay for new service personnel.
Here’s my favorite moment last Thursday:
Sen. Saxby Chambliss (R-Ga.) pointed out one place where several hundred million dollars a year could be saved through elimination of Congressionally Directed Medical Research Programs. I’ve written about the programs before and they represent one of many costly items Congress adds each year that no past administration or Defense Department has sought.
The programs have grown since they began more than 20 years ago as an earmark of $25 million to the defense bill for breast cancer research. Chambliss puts it at $150 million a year for breast cancer research, plus $80 million for prostate cancer research, $25 million for ovarian cancer and more for lung cancer and other diseases.
The Army had to set up a special unit to supervise contractors who pick the research projects and monitor their execution.
As Chambliss said, “These are types of research that simply have no place, in my opinion, at [the Defense Department]. They ought to be done at [the National Institutes of Health]. I understand further that there is not real coordination between the . . . medical research done at NIH and what is done at DOD.”
The senator, who is retiring next year, said that “the money would be better spent as a replacement for sequestration.”
Good luck to him and to the chiefs in trying to get Congress to reduce these programs.
For previous Fine Print columns, go to washingtonpost.com/fedpage.