Defense Secretary Caspar W. Weinberger has declared war on the proposal by Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, to slash the military retirement fund by $4 billion in fiscal 1986.
Weinberger wrote Aspin that it would be "ill-advised" and "devastating" to the nation's all-volunteer force to overhaul the pension fund, which the Armed Services subcommittee on military personnel has voted to do. The full committee is expected to approve the proposal later this week.
"Unless one is willing to accept an unspecified reduction in our national security posture," Weinberger told Aspin, "changes to the military retirement system of the magnitude required by this bill would be ill-advised."
Even though reduced pensions would apply only to those who join the armed services in the future, not the 2.1 million personnel now in uniform, "the negative impacts on recruiting and retention would be felt almost immediately," Weinberger wrote.
"This devastating effect," he continued, "would build over time because of the loss of future income combined with a perception of an unstable retirement system."
Weinberger sent the letter to Aspin last week in a vain attempt to dissuade the subcommittee from approving the proposed $4 billion cut in the $18 billion military pension fund and leaving it to the Pentagon to figure out how to achieve the savings.
A Pentagon spokesman said yesterday, "There has been absolutely no change of policy since Secretary Weinberger wrote the letter to Chairman Aspin," terming reports to the contrary "totally incorrect."
Weinberger said he could support a change in the retirement system that was "prospective" and did not "impair combat readiness," but said that in drafting the Aspin proposal "it appears that an a priori judgment was made that the future military retirement system should be cut by $4 billion." He said that with the reduction, a future "typical enlisted retiree" would receive $730 a month instead of the $940 received today.
Aspin, however, remained undeterred, declaring last night that "there have been nine different proposals over the last 15 years to alter the military retirement system, five of them done by the Pentagon. The question is whether the time has come for the change. If we don't do it this year, it will be there next year."
There is widespread agreement among congressional and Pentagon leaders that Congress will approve some kind of change this year. Lawrence J. Korb, Pentagon manpower chief, has been directed by the House Appropriations Committee to determine how the Defense Department would absorb the $4 billion cut advancing through Aspin's committee.
While not endorsing the proposed cut, the Pentagon has responded with a report that shows that $3.7 billion could be saved by stretching out retirement pay. Instead of receiving 50 percent basic pay after 20 years of service and 75 percent after 30 years, the Pentagon study said that $3.7 billion would be saved if retirees received 35 percent of their basic pay after 20 years, 55 percent after 25 years and 75 percent after 30 years.
In the Senate, Sen. Paul Simon (D-Ill.) is the leading advocate of changing the military pension system. One of his proposals is to figure the cost-of-living allowances for service people on their basic annual salary instead of adding in the previous COLA increases before computing the new one.
Also, personnel would have to serve 25 years instead of the present 20 on active duty before collecting half their base pay in retirement. Simon intends to offer those and other changes as an amendment to the fiscal 1986 military procurement bill when it reaches the floor. The Congressional Budget Office has estimated that 74,616 enlisted personnel and 8,114 officers would quit the career military force if Simon's proposal were adopted. The senator said other benefits could be offered to prevent such a drain of talent.
Simon estimates his proposals eventually would save $10.7 billion a year.