LES ASPIN, chairman of the House Armed Services Committee, has come up with an idea for getting the military to go along with needed reforms in its pension system. He would simply cut the Pentagon's authority to accrue pension obligations by $4 billion and tell the military to figure out how to find the savings. The proposal won't go down in history as one of the great acts of political courage, but it just might work to the advantage of both the armed services and the taxpayers.
As Rep. Aspin observes, over the past 15 years at least nine studies have been made of the pension system, including five done within the Defense Department. All concluded that the system needs an overhaul, and most have agreed on certain central changes. What is lacking is the political courage to revamp the system in the face of strong opposition from the active military, current retirees and veterans groups.
Military pension costs have increased more than fourfold since the early 1960s, even after adjusting for inflation. Partly that's because of wartime surges in military personnel and the need to compete with higher civilian wages. But the pension system is also very generous -- up to three times as generous as a good private-sector plan. A retiree can draw fully indexed benefits equal to 50 percent of final pay after 20 years, 75 percent after 30 years. Still, studies find the system ineffective in recruiting and holding both the "journeymen" personnel who fill most career positions and the senior personnel the services increasingly need for specialized jobs.
No one would, or should, propose substantially changing the rules for people already retired or with many years of service. But that constraint also gives little incentive for Congress to push for pension changes, since they would not reduce the current $18 billion-a-year payout. However, under a reform sponsored by Rep. Aspin a few years ago, the Pentagon must now count in its authorized budget an amount sufficient to cover future pen- sion entitlements being accrued by current per- sonnel. Cutting that authorization by $4 bil- lion wouldn't reduce current deficits, but it would force the Pentagon to either cut current pay or find a way to reduce the pension entitlements based on it.
The Pentagon could then look at the many options that have been laid out and decide what mix of deferred payments, increased reenlistment bonuses, inflation adjustments and so on would best serve its manpower retention requirements. Ideally, of course, Congress -- as the public's representative -- would have a say. But there is ample historical basis to accept Mr. Aspin's judgment that the matter demands more courage than Congress can supply. Perhaps there is a precedent here for other areas of the military budget as well.