PEOPLE WHO MAKE the military a career can now retire after 20 years of service at half the average of their highest three years' pay. Many do -- their average retirement age is about 42 -- and their benefits are then indexed to inflation. The system is extremely expensive; it will cost an estimated $18.5 billion next fiscal year. It also drains the services of many of their best people well before their time. The House Armed Services Committee is proposing to rein it in.
The issue is an old one. Since the late 1960s the system has withstood nine major proposals for reform. David Stockman blurted out a year ago that he had been unable "to get anything done on military retirement downtown," and remarked of the military, "when push comes to shove, they will give up on security before they give up on retirement." (He later apologized.) When the Armed Services Committee later ordered Secretary of Defense Caspar Weinberger to propose ways to cut the system back, he did so only under protest.
The bill that the committee reported out last week treads lightly on this history. No one now in service would be affected, only future servicemen. These would still be able to retire after 30 years at 75 percent of the average of their highest three years' pay, the same as now. But after 20 years -- to discourage them from leaving then -- they could retire at only 40 percent of their highest five.
Eventually this would cut the cost of the system by about a sixth (though not for many years, because the current generation would be exempt). Critics have warned that if benefits are cut this way the services will find it harder to recruit, the average age of those in uniform will rise and the military will become less vigorous. Defenders reply that in an age of technology the services cannot aford to lose their most sophisticated people so early.
There is a fairness argument as well. When the retirement system was set up years ago, it was in part to compensate for low military pay; that is one reason it was made so generous. But in the 1960s Congress set out to make military pay comparable to civilian. Some of the retirement system's rationale has thus disappeared. The committee would not tinker with the benefits of those who joined the military under the old expectations. In a way that is already a double standard; there are lots of proposals to change the rules in midstream for civil service employees.
People in the military make sacrifices for society. They deserve compensation for the risks they take. But the retirement system is not well structured now. The committee has taken a useful step in the right direction. Congress ought to pass such a bill this year.