Fine Print

Eying the Pentagon, Gates considers three changes

Walter Pincus
Washignton Post Staff Writer
Tuesday, August 17, 2010

If you need further guidance about how far Defense Secretary Robert M. Gates is preparing to go in his effort to change the Pentagon culture and to cap spending, take a look at three new targets he identified last week that have all been "third rail" issues for his predecessors.

Last Thursday, before San Francisco's Marines' Memorial Association, Gates raised questions about the Marine Corps' future and said he had ordered the new commandant, Gen. James Amos, and Navy Secretary Ray Mabus to define "the unique mission of the Marines going forward."

He said it after noting that the Corps had become "too heavy," having functioned in Iraq and Afghanistan "as a so-called second land army." The issue, he said, was going back to the Marines' unique capability for amphibious operations, having assault ships that can provide platforms to project forces across water and into countries.

Even so, while noting the ships are useful for humanitarian efforts, Gates questioned how many are needed when wartime enemies can have accurate and long-range anti-ship missiles that would require disembarking up to 60 miles offshore.

This isn't the first time the Marine Corps mission will be questioned and studied. Gates pointed out that in the inter-service rivalries after World War II, Congress, influenced by Marine Corps veterans, passed legislation that put into federal law the Marines' mission. "The only service to do so," he added. It might have to happen again.

In discussing with reporters other steps he is taking, Gates recently mentioned that two other "third rail" issues, personnel policies and health care, are on his agenda.

He said last week that some of the steps were recommended by the Defense Business Board (DBB), an advisory committee of former defense officials and business experts that he had asked to propose trims for the Pentagon's overhead.

It's worth studying the board's "initial observations" about personnel issues and health care as presented last month by the task force chairman, Arnold Punaro. He is a former senior vice president of defense contractor Science Applications International Corporation, staff director of the Senate Armed Services Committee, and retired Marine Reserve major general who once served as director of the Marine Reserve.

Gates has said, as he did recently in an interview in Foreign Policy magazine, that when it comes to changing military retirement, "I may be bold, but I'm not crazy." But the DBB took it on directly.

Punaro called the system a "pre-volunteer force retirement system" based on when most servicemen were low-paid draftees. The task force, he said, found the program "encourages our military to leave at 20 years when they are most productive and experienced, and then pays them and their families and their survivors for another 40 years."

Too long have those promoting military pay and benefits focused on paychecks and ignored "the long-term, fully burdened costs of the most expensive personnel," he said, adding "a substantial amount of the personnel costs are focused on those who no longer serve on active duty."

The average cost of a full-time service member has grown from $60,000 a year in 2001 to $206,000 today, with non-cash and deferred military compensation approaching 50 percent of that figure.

The DBB's argument, however, is that these additional benefits go to a small number who join the military because only about 17 percent who join stay for 20 years. About 80 percent of those who served in the Korea and Vietnam wars and during the Cold War, or were in Iraq or Afghanistan, "never earn a nickel in military retirement because they don't stay in for 20 years," Punaro said. "It is an unsustainable trend," he added.

Changing that has proven difficult. In 1986, recognizing military retirement was "the largest unfunded liability of the federal government," Congress limited the existing 20-year retirement program to those then in service. But 20 years later, in 2006, when the lower approach was to go into effect, Congress changed it again. "Any projected savings were lost," Punaro said, adding, "Congress also added 'Tricare for life,' which is the most expensive new health-care benefit in our country."

Two years ago, the DBB warned: "The Department cannot continue to let its overall spending on Defense healthcare grow at the same pace it has over the past seven years." In that time it rose 144 percent, from $17.4 billion to $42.5 billion, with retirees accounting for almost 65 percent of the expenditures.

Last week, Gates said health care next year will cost more than $50 billion and about $65 billion by 2015. He called it "unsustainable," adding: "I think it's safe to say that, as far as I'm concerned, in this effort there are no sacred cows, and health care cannot be excepted from that."

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