It's Time to Cut Military Health and Pension Benefits

The time has come: Military health and pension benefits, which have more than doubled in the past decade, should be reduced as the defense budget comes down, said a whopping 90 percent majority of National Journal's National Security Insiders.

Pentagon leaders have been calling for changes to curb the skyrocketing compensation costs, which threaten to usurp other key priorities in the defense budget during austere times—even training for combat operations and weapons procurement. But reform efforts have been complicated in part because military-personnel issues are a political landmine on Capitol Hill. In the budget deal clinched by Sen. Patty Murray and Rep. Paul Ryan, however, members did take a step to cut benefits to military retirees, albeit slightly, decreasing the annual cost-of-living adjustment for working-age military retirees by 1 percent, which would cut roughly $6 billion in spending over the next decade. 

Some 52 percent of the pool of national security experts are open to slight cutbacks to military benefits. "We must control runaway personnel costs," one Insider said, "but we need to take care not to break faith with those who signed up to risk their lives for their country." The rate of growth, another Insider added, is what needs to be reduced. "Too often we call it a 'cut' when it's really a slowing of growth rates. We need to restore balance across defense-spending accounts so that we can train and equip the military as well as pay them."

Pay and benefits are not out of line with the amount of defense spending, which has also increased over the past decade of wars, one Insider said. "But they are now an entitlement for the future, which means they need to be brought under control. The retirement package needs to be rewritten, so the military members vest earlier, but draw a pension later, like the civil servants," the Insider said. "Pay increases should have a COLA and merit feature, making pay raises more appropriate and not across the board. And the retirees need to pay more for their generous health care benefits—an enrollment fee that is one-tenth of the civilian average is not a 'reward' for service, it is a deep inequity." 

(Read more: Here’s Why the Proposed Military Retiree Benefit Cuts Are No Big Deal)

Thirty-eight percent of Insiders called for more significant cutbacks. "The compensation of military personnel has doubled over the past decade, but going forward, few will be risking their lives in conflict," one Insider said. "Health benefits for nondisabled retirees and spouses cost only one-tenth as much as similar benefits for civilian federal retirees. This gap is unjustified."

Policymakers, one Insider said, have had to "juice benefits to entice people to enlist in a military they've been misusing for decades. Defending the country doesn't require a military nearly this big, so benefits should be cut, as should end-strength."

Only 10 percent of Insiders said military health and pension benefits should be off-limits. "The size of the force should be reduced but not pay and benefits," one Insider said. 

Separately, a wide 88 percent majority of Insiders said the Murray-Ryan budget deal was good for Defense. The deal, far short of a grand bargain to undo sequestration altogether, would partly pare back the across-the-board cuts facing the Pentagon over the next two years. The deal, one Insider said, is "better than nothing, and at least it tapers sequestration."

"They got it all: budget stability for the next two years, complete flexibility as to how to move the funds around and plan, and an $80 billion overseas contingency operations account nobody is talking about," one Insider said, "Such a deal! Happy Holidays, Pentagon!"

The agreement will relieve some short-term adjustment pressures that the Defense Department "brought onto itself by not doing more prior to this year to prepare for budget downturns," another Insider said. "Unlike DOD, for several years the defense industry has been streamlining operations, consolidating structures, and delayering management. Perhaps more than ever, industry is now cost-efficient relative to DOD's own costs."

But 12 percent of Insiders said the deal was not ideal—though the experts who commented actually said the Pentagon should be cut even more. "The cuts should be much deeper," one Insider said. "We need to begin directing resources back to the homeland to repair the crumbling infrastructure, improve health care, and begin attacking the numerous other problems within the country."

1. Should military health and pension benefits, which have more than doubled in the last decade, be reduced as the defense budget comes down?

(58 votes)

• Yes, slightly 52%
• Yes, significantly 38%
• No 10%

YES, SLIGHTLY

"Congress has amply increased military pay and benefits over the past decade, in some cases, over the objections of Defense Department leaders. It is easy to say yes that benefits should be reduced, but what is needed is a new defense strategy that includes new force structure with a sufficient compensation package to attract and retain military personnel to execute that strategy."

"What really needs reducing is the rate of growth. Too often we call it a 'cut' when it's really a slowing of growth rates. We need to restore balance across defense-spending accounts so that we can train and equip the military as well as pay them."

"But not mine, of course."

"There are those who claim these are individual benefits rightly earned by the servicemember. True, but there are changes that must be made based on the changing demographics of America. For example, the 20-year retirement mark was conceived when American males generally lived only into their mid-60s. That is no longer the case—the budget simply cannot afford NOT to change!"

"Military personnel and health care costs are unsustainable. Although our service members should be well-compensated, the past 10 years have witnessed the creation of pay scales and benefits out of proportion even to the sacrifices required of a military career."

"As one who benefits from both, yes. But only if they serve as models for entitlement reform across the government. Cutting the military is easy—the real test of moral courage is to take on entitlements."

"I'm afraid like a lot of things in government, the costs are growing too much. While it hurts, all federal employees need to contribute to this effort to close the debt."

YES, SIGNIFICANTLY

"Such benefits need to be reduced government-wide, so of course they need to be reduced for the military, particularly if the military isn't going to be engaged in ground wars over the coming decade."

"For retirees who are working in full-time private-sector jobs, their employers should pay for their health care rather than take advantage of Tricare."

"The health and pension benefits provided to the U.S. military are not sustainable—Bob Gates said essentially the same thing before he stepped down as secretary of Defense."

"If personnel costs aren't cut—yes, the clawback should be gradual—they'll become the entire budget."

"Similar to civilian health care programs, our nation has to find a way to bend the military health care program cost curve downward."

"Probably as good a time as any to move away from a defined-benefits retirement and allow soldiers to invest in a 401K with higher monthly pay."

NO

"The size of the force should be reduced but not pay and benefits."

"Actually, they have already been decreased in terms of what individual retirees get. Retirement pay is no longer computed based on the final monthly pay the retiree received while on active duty (unless you enlisted prior to September 1980). Instead, it is computed based on an average of the last three years of pay received. Military Retirement Pay is basically a promise to take care of our veterans in return for them taking care of us. It's also a means of deferred compensation, because military personnel willingly take themselves out of the private-sector competition for higher salaries. In order for its retirement system to be altered, the military would have to alter its promotion and retention systems. Those issues have not been addressed yet, … and we risk grave damage to National Security by having a lower-quality military personnel pool."

"No, not reduced—though increases can be reduced."

2. Is the budget deal clinched by Sen. Patty Murray and Rep. Paul Ryan good for Defense?

(58 votes)

• Yes 88%
• No 12%

YES

"If the budget provides military leaders the flexibility to make targeted cuts, then it is better for defense. Precise cuts should enable DOD to retain more muscle and reduce fat."

"The Ryan-Murray budget agreement provides some relief to the vise of sequestration, which is breaking major programs in Defense as well as in intelligence. The media have failed to recognize this in reporting."

"DOD needs to return to fiscally disciplined longer-term programming, with a future-years defense program that can be planned for and executed. This budget deal is a solid step in that direction and should permit a better FY15 budget proposal and real authorization and appropriations bills."

"The defense establishment has grown to be excessive in size and expense and should be smaller in light of the existing threats."

"At least it stops the rot and creates some predictability for the next two years."

"Fewer cuts. More flexibility. What's not to like?"

"At least DOD got back $20 billion it would have lost. That said, DOD will still take a $30 billion reduction in FY14."

"Yes, but bad for the rest of the budget and country as a whole."

"While the new budget is not good for the military; it is good for our overall security to be able to plan defense expenditures and not run a government based on continuing resolutions."

"Compared to the alternative. However, a more thoughtful and deliberate budgeting process tied to the realities of the national security environment might be helpful."

"More importantly, the budget deal is good for the nation, as it shows that moderate elements of both parties might be able to rein in their more extreme members."

"It will allow some leeway in cuts and serve as a public pound of flesh from the DOD. Now show some courage and get the rest of the budget under control."

"Yes, it was the best deal you could come up with under the circumstances. We are out of Afghanistan and Iraq. It's time to consider cutbacks appropriate to our needs."

"Any agreement across party lines and return to regular order is good for defense and government. Sets the table for defense to be more thoughtful about resetting and cutting the defense budget."

NO 

"The cuts should be much deeper. We need to begin directing resources back to the homeland to repair the crumbling infrastructure, improve health care, and begin attacking the numerous other problems within the country."

"The effort to achieve a federal-budget agreement takes from the one element of the U.S. government that performs the best. Beware of the return of the Bonus Marchers from the 1930s."

"It's an improvement over the sequester for Beltway Bandits, but the increased military spending will permit policymakers to do marginally more dumb things with the U.S. military."

National Journal's National Security Insiders Poll is a periodic survey of more than 100 defense and foreign policy experts. They include: Gordon Adams, Charles Allen, Thad Allen, James Bamford, David Barno, Milt Bearden, Peter Bergen, Samuel "Sandy" Berger, David Berteau, Stephen Biddle, Nancy Birdsall, Marion Blakey, Kit Bond, Stuart Bowen, Paula Broadwell, Mike Breen, Mark Brunner, Steven Bucci, Nicholas Burns, Dan Byman, James Jay Carafano, Phillip Carter, Wendy Chamberlin, Michael Chertoff, Frank Cilluffo, James Clad, Richard Clarke, Steve Clemons, Joseph Collins, William Courtney, Lorne Craner, Roger Cressey, Gregory Dahlberg, Robert Danin, Richard Danzig, Daniel Drezner, Mackenzie Eaglen, Paul Eaton, Andrew Exum, William Fallon, Eric Farnsworth, Jacques Gansler, Stephen Ganyard, Daniel Goure, Mark Green, Mike Green, Mark Gunzinger, John Hamre, Jim Harper, Michael Hayden, Michael Herson, Pete Hoekstra, Bruce Hoffman, Linda Hudson, Paul Hughes, Colin Kahl, Donald Kerrick, Rachel Kleinfeld, Lawrence Korb, David Kramer, Andrew Krepinevich, Charlie Kupchan, W. Patrick Lang, Cedric Leighton, James Lindsay, Justin Logan, Trent Lott, Peter Mansoor, Ronald Marks, Brian McCaffrey, Steven Metz, Franklin Miller, Philip Mudd, John Nagl, Shuja Nawaz, Kevin Nealer, Michael Oates, Thomas Pickering, Paul Pillar, Larry Prior, Stephen Rademaker, Marc Raimondi, Celina Realuyo, Bruce Riedel, Barry Rhoads, Marc Rotenberg, Frank Ruggiero, Kori Schake, Mark Schneider, John Scofield, Tammy Schultz, Stephen Sestanovich, Sarah Sewall, Matthew Sherman, Jennifer Sims, Constanze Stelzenmüller, Frances Townsend, Mick Trainor, Suzanne Spaulding, Ted Stroup, Richard Wilhelm, Tamara Wittes, Dov Zakheim, and Juan Zarate.