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Opinion: Military Pay and Benefits Unsustainable

Sailors assigned to Naval Branch Health Clinic at Naval Support Activity, Bahrain, wait for a uniform inspection on June, 17 2013. US Navy Photo

Sailors assigned to Naval Branch Health Clinic at Naval Support Activity, Bahrain, wait for a uniform inspection on June, 17 2013. US Navy Photo

Study after study show that the U.S. military’s pay and compensation system is unsustainable. Defense experts from all across the Washington Beltway forecast a steep decline in readiness and capability due to escalating personnel costs and overall declining defense budgets. There is an urgent need for a frank discussion on pay and compensation reform throughout the ranks.

Whereas the think tanks and defense experts have offered up all manner of fiscal programs, processes and policies to the chopping block of change or disposal, the fact is military pay, compensation and benefits have received particular attention—and with good cause. The money we make, the money we are promised in retirement, the money that maintains our health care—and that of our families—is eroding our ability to do our jobs.

The numbers are stark and sobering. Military pay, allowances, and health care costs have risen more than 90 percent since 2001, while the size of the active duty force has grown by less than 3 percent in that same time, according to the Council on Foreign Relations . Today the average total cost per sailor, Marine, soldier, or airman is nearly $115,000 compared with $58,000 in 2001, according to a study from the Center for American Progress. The military retirement system is projected to have an unfunded liability of $2.7 trillion by 2034, according to a Defense Business Board report.

Yes, that was trillion—with a ‘T.’

It is recognized that reforming pay, benefits, and retirement policies is difficult and emotional. But that does not lessen the need. What’s more, our leaders and legislators are painted into the proverbial corner, as the prospect of changing troops’ benefits is tantamount to professional suicide. No one wants to be responsible for cutting benefits to the men and women who volunteer to serve our country, especially those who have been at war for the past decade.

For that reason, we, the men and women in uniform today, find ourselves in an unprecedented position. Our benefits continue to escalate. We have experienced pay increases above the Employment Cost Index, and by percentages greater than what our uniformed leaders have asked for, while in the same period, our civilian Department of Defense counterparts have persisted through a virtual pay freeze.

Military health-care benefits have also increased without an associated increase in payment. TRICARE for Life, a recent benefit established under the 2001 National Defense Authorization Act, has become a promise no one is willing to break or modify, despite our uniformed leadership’s recommendations for modest co-pay increases.

Looking solely at the military retirement system, one can lose track of the number of reports that have been published in the past decade that call for reform and recommend change. There’s no question but that this system is outdated—it hasn’t materially changed for a century. Likewise there’s no question it is inequitable—anyone serving fewer than 20 years gets no benefits. There also is no question that military retirement is an amazing benefit, even though, ironically, only a limited few reap its benefits. Eighty-three percent of the men and women in uniform will leave the ranks prior to 20 years of service. (Defense Business Board). That means a meager 17 percent of the uniformed population enjoy the defined benefit that is military retirement. The majority of that 17 percent are officers, further skewing an unbalanced and unfair system.

Each time there is call to change, outcry can be heard throughout the ranks and sensational headlines are printed in our defense-related media. It is almost certain that 100 percent of personnel will have a very strong opinion of a benefit that affects fewer than one in five. A further twist of irony is that almost without exception, the calls and recommendations for change all promote a grandfather clause, meaning 100 percent of personnel in uniform today would not see their retirement benefits touched—even though only 17 percent will actually realize said benefits.

To say reform to military compensation is too difficult is ridiculous. To say it’s easy is ludicrous. Change, however, cannot happen unless there is an honest discussion about these topics within the ranks and, in essence, we give our leaders and legislators permission to lead. They need the assurance that we understand these reforms are neither an assault on our service nor the breaking of any moral contracts. The true contractual break would be to let these systems continue and risk other programs that arm us, train us and allow us to do the job for which we have so proudly volunteered.

  • James Joyner

    This seems contradictory: “a grandfather clause, meaning 100 percent of personnel in uniform today would not see their retirement benefits touched—even though only 17 percent will actually realize said benefits.” If only 17 percent will realize benefits, what exactly is the cost associated with preserving the option for the 83 percent who will separate without drawing benefits?

  • Godblessourchildren

    The actual reason for the bloating of the Pentagon budget is not soldiers pay and benefits which are exaggerated by the above article since it is assuming that each individual will realize these benefits, which is far from accurate, but the cost of hired contractors who receive far greater pay and benefits than do our service men and women. There is no reason that our national security should be placed in the hands of business men and women and middle men that needlessly drive up the cost of our military budget.

  • GBS

    “Change” and “reform” are buzzwords for “reduction”, nothing more. The premise of retirement system “inequity” is bogus, and the author misses the point of a vested retirement system. The incentive is designed to keep a relatively small number of qualified senior enlisted and officers in uniform to train and lead the revolving door of new servicemembers. Field / Flag Grade officers and E-7/8/9s aren’t hired from the classified ads; they have to be developed. If you are motivated towards a career and good enough to get promoted, you get to serve 20 years and beyond. If not, you move on at a relatively young age to a job in the civilian world. Besides, if such a comparatively small percentage of servicemembers see retirement benefits, then how is that the cause of fiscal crisis? How effective is a fix that won’t affect anyone currently in service? I guess the bloated and ever-growing military and civilian bureaucracy at DOD couldn’t have anything to do with our budget problem? How about the BILLIONS that are wasted annually by inefficiency, and incompetence in the weapons development and procurement system? Why do those that have already served get tagged to pay (through eroded health care benefits) the burden of current mismanagement?

  • Marc Apter

    Cost numbers start in 2001, interesting start date. Does the costs include all the war casualties? How about the taxes not collected in a war zone? And then there is all the Reserve/Guard call up costs!

  • aniptofar

    No retirement benefits, military or civilian, should be paid until the age that SS pays out. Disability payments should not be paid in addition to retirement benefits. Disability payments should not be made to spouses after the death of the disabled. Common sense.

    • Pat

      Would love to see that system work….it won’t.

    • Pat Patterson

      So you’re going to tell someone who retires at 38 that they can’t get their retired pay for another 32 years until they turn 70? That’s totally asinine and patently criminal. Disability pay doesn’t have a damn thing to with retired pay and denying that to someone who has suffered an injury while in the service is cruelty. Who the hell would ever go into service if they knew that was going to happen?

  • Pat Patterson

    I really get tired of this “fairness” garbage that wants everyone to be the same and equal; pure Marxist-Socialist dogma. Life is not fair in almost every respect. I don’t want to hear about DoD civilians who have not made the sacrifices that we have. And exactly how do the 17 percent of people who are retirees supposedly account for the alleged whopping increases in costs to the military? If everyone got retired benefits, how much would costs increase over what they are now – show me the statistics! If people don’t want to or can’t stay in for 20 years they can put money into the Thrift Savings Account for their retirement. How difficult can that be?

  • chuckberlemann

    The last time DOD tried to ratchet down retirement benefits, the re-enlistment rate went down with the benefits. They had to go back to the original formula.

  • des111168

    No surprise that the Center for American Progress wants to slash military pay. Their motives are well known. So it stings to admit that they’re right, in the whole, about overall levels of pay. They do have a point.

  • Luddite4Change

    If this officer worked for me at OSD or on the Joint Staff I would question his perspective, judgment, and analysis, despite the fact that I believe that a significant overhaul of the personnel system is long overdue.

    First, the personnel and retirement systems have not remained static for 100 years as the author suggests. In fact, for most of our nation’s history (up until the just after WWII) the length of a career was 40 years, as opposed to todays 20 year eligibility for retirement with a 30 year max. Additionally, our present “Up or Out system” was initially conceived as a qualification based system, as opposed to the vacancy based system that we have had since the late 60’s/early 70’s. (Note, under the original manifestation of “Up or Out” if you were qualified by no vacancy existed you were not considered to have been passed over by the board). As people are now generally more healthy and living longer than in the 30’s and 40’s, its perhaps time to revisit the idea of having careers that span 30-40 years, as is the norm with many of our most professional allies.

    Second, the author brings up the usual diatribe that only 17% of all people who enter service, serve a full 20 years and receive retirement. He conveniently leaves out the fact that 80% of attrition for this 83% is incurred at the end of the service members original Active Duty Service Obligation and the next 10 to 15% is incurred in the 4th to 8th year of service when officers are at their most marketable for outside employment.

    Third, without conducting his own analysis the author take the Defense Business Boards statistics of military compensation at face value. While I give the board credit for placing a marker on the table, the data they used (comparing the average of military compensation for field grade officers to a national average) was highly skewed as a significant quantity of these officers were serving in high cost area of the country (Imagine comparing the salary of person of similar skills and experience working in DC vice working in Kansas City, in DC they would be paid more; but I they would also have significant more expenses which were not included in the analysis). A more truer comparison of an officer’s or SR NCO’s value would have looked at what that persons former peers are/were making at the same time, this analysis would actually have been pretty easy to accomplish by conducting a survey of former officers from the service academies who would have been current field grade had they remained in service.
    The current system (with all its many flaws) maximizes long term service stability for the nation. Sacrificing this long term approach to retain personnel with 8 to 20+ years of service to go to a system that basically eliminates the “cost of exit” for fully trained and functional personnel is not a choice to be made lightly.
    For the record, the DOD Comptroller stated that the retirement pay (in and of itself ) was not the problem, the bigger problem is the increasing cost of healthcare; which is way beyond the scope of DOD only solutions to solve.

  • Truthiness

    I love it when some senior officer decides that we are all overcompensated from his air conditioned cubicle in the Pentagon. LTCDR Halttunen is probably pulling down 6 figures as an O-4 with the allowances authorized in DC. Before that I suspect he spent most of his “operational” time inside the safe confines of US Navy surface ship, far away from any real danger. How altruistic of him to offer up the benefits of junior enlisted Marines and Soldiers and their NCOSs that have deployed into real danger in Iraq and Afghanistan 4 or 5 times over the last 12 years. Perhaps senior officers, especially those in the sea and air services, are really out of touch. There are plenty of places the service GOFOs and career executives would like to cut outside of benefits, but the President, his appointees in OSD, and Congress will not allow them due to competing political interests.

  • MB

    Sure, lets balance the budget on the backs of career servicemen. Look at the nonstop gravy train for any of this administrations pet projects like solar energy to name but one in thousands. Have the courage to stand up to that nonsense before selling out the few people left in this great country who believe in their oath and our constitution

  • BlackhawksCmc

    Equally ‘urgent need’ is to consider the following:
    -DOD budget % to GDP varied very little in last forty years. Defense spending also at its smallest share of federal outlays. http://www.cna.org/sites/default/files/research/04.%20USN%20in%20the%20World%20-%201970-2010%20-%20Vol.%20I%2C%20D0026417.A1.pdf

    -Personnel and Health care costs no more unaffordable now than in past 30 years http://www.moaa.org/uploadedFiles/MOAA_Main/Main_Menu/Take_Action/Storming/Storming2013Handout.pdf

    -Dire projections in the past not only wrong but continue to fail to put a premium on selfless sacrifice and extraordinary devotion to duty required of shipmates who wear the cloth of our nation. http://www.cfr.org/defense-budget/trends-us-military-spending/p28855

    -30% average cost overrun from data-driven review of big-ticket Pentagon programs in past 20 years. Concern with “things that overrun by 200, 300 or 400 percent.” http://www.defensenews.com/article/20130713/DEFREG02/307130012

    -Mind Overboard http://nation.time.com/2012/07/05/a-quarter-billion-dollars/

  • a sanchez

    Why am I not surprised, so busy investing billions in modernizing our armed forces that they fail to invest in the most important factor: People.

    I guess the suits and stock holders would love a military ran by contractors at triple the cost to tax payers but with no benefits, maybe that is more cost effective, like in the old days of the English hessian soldiers.

    In the past years it appears that the US DoD prefers private contractors to wounded veterans because the later ones are a tax burden. Maybe it would be best if this country returns to the days of the draft …

    How many more jobs will active military personnel loose to civilian contractors for triple the actual salary that could be used to properly fund the most important factor: PEOPLE.

  • Ken Miller

    Honestly, I don’t understand why people are so quick to try to cut the pay of those in uniform, especially based on data without sufficient context. Of course total manpower spending has gone up – there are two wars on. When you mobilize large numbers of reservists and members of the national guard, and have to pay them at active-duty rates, it’s going to cost money. When you have two carriers deployed in the middle east, both drawing hazardous duty pay, it’s going to cost money. Shifting sailors from shore duty to the tip of the spear costs money. Treating wounded warriors costs money.

    In all of these cases, the higher cost is not a reflection of excessive compensation, but a necessary cost of sending our troops into harm’s way. If you want to dial back those costs, then dial back the wars – other than that, any attempt to rob our troops is misguided or immoral.

  • Nick

    Easy for a fucking officer to say

  • Dying_in_this_Crap_World

    True military pay is far higher than civilian pay. You may as well have an army of MBAs, because that’s what they are getting paid. Obviously there is no sense in this, what really is happening is political correctness gone crazy.

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