IN THE POLITICS of defense spending, cutting expensive weapons programs plays the role that taxing the wealthy plays in the overall fiscal debate. Though undoubtedly necessary to any credible plan, it is far from sufficient. Yet advocates often talk as if reining in Pentagon spending is all about wasteful weapons.
In fact, weapons programs account for only about a third of defense spending, and the Obama administration is already planning significant reductions. The costs of operations and personnel make up the majority of the defense budget, so any balanced approach must deal with those as well.
Here, too, the administration plans cuts, including shrinking the Army and the Marine Corps. This is risky, given the potential threats the United States faces. Unfortunately, Congress is compounding the problem by protecting expensive items that inflate personnel costs without any corresponding payoff in defense readiness.
We refer to the Senate Armed Services Committee’s refusal to accept an administration proposal to trim Tricare, the military health-care program for which 9.7 million active and retired military personnel and family members are eligible. Obviously, those who serve or served their country deserve generous health benefits. But Tricare goes well beyond that. The service is free for active-duty service members and their families except for some prescription copayments. For retirees under the age of 65, many of whom are in the work force and eligible for employer-provided benefits, Tricare costs at most $1,000 per year out of pocket — less than a fifth of civilian plans, according to the Congressional Budget Office.
Tricare’s costs have surged in recent years, from $19 billion in fiscal 2001 to $52.8 billion in fiscal 2011. Much of the growth was driven by Congress’s 2001 decision to add what is essentially a free Medigap plan for retirees over 65. But the main issue is the ultra-low fees and deductibles — which give retirees still of working age little incentive to economize or choose employer plans.
President Obama’s budget plan would save $12.8 billion over five years by gradually increasing working-age retirees’ annual enrollment fees, with lower-income retirees paying the least, and then adjusting them according to national health spending growth thereafter. The maximum fee would quadruple to $2,000 — still far less than most civilian plans. Most beneficiaries would not pay even that much.
The Armed Services Committee, however, voted to forbid any Tricare increases greater than the annual cost-of-living adjustment in military retiree pay. No doubt America’s military retirees are a powerful lobby, their might enhanced by the basic justice of their claim to have given much to their country. At the moment, however, debt is one of the main threats to future U.S. national strength and security, and it makes no sense to deal with it in ways that would also undermine military readiness.
The modest cuts in Tricare benefits that Mr. Obama seeks are abundantly justified by the national interest. His Office of Management and Budget announced Thursday that the president’s advisers will urge a veto of a defense bill without Tricare reform; they would be right to do so.