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Personnel costs threaten military budgets

Gen. Raymond Odierno, Army chief of

staff, sounded a budgetary alarm last

Thursday before the Senate Armed Services


“The cost of [an Army] soldier has doubled

since 2001; it’s going to almost double

again by 2025. We can’t go on like

this, so we have to come up with [new]

compensation packages.”

His point: The growth of pay and allowances

for active and retired service personnel

has to be reduced before it eats up

most of the military services’ budgets.

Other service chiefs voiced similar


And for the past three years, Congress

has ignored the more vocal calls from

President Barack Obama and defense

secretaries Robert Gates and Chuck Hagel

to support their efforts to reduce the

growing costs of military benefits, particularly

the health-care programs for


Up to now, Congress has listened to retirees

and their lobbyists, who assert that

these benefits were promised to them.

Lawmakers should listen to Adm. Jonathan

W. Greenert, chief of naval operations,

who last week said, “About 50 percent

of every Defense Department dollar

goes to personnel predominantly as compensation.

And if we keep going this way,

it’ll be at 60, and then it’ll be at 70 in

about a decade plus. . . . I think it’s our

responsibility to take a hard look at it.”

“I pay 62 cents on the dollar right now

for manpower,” said Gen. James Amos,

the Marine Corps commandant. “That’s

not because Marines are more expensive;

it’s just my portion of the budget is

smaller. That’s going to go well over 70

percent by the end of [the next five years]

if something is not done.”

Referring to a study, Amos added that

by 2025 or so, “98 cents of every dollar

[will be] going for benefits.”

Gen. Mark Welsh III, Air Force chief of

staff, said that with his service’s personnel

costs “somewhere between 38 percent

and 50 percent right now, the problem

for us is — that range would be fine — it’s

the growth that we’re worried about.”

That growth, he said, “is now the threat

to modernization and readiness.”

So where are the answers to the personnel

cost problem?

All four chiefs mentioned programs

being studied: reduction in active pay

increases, reduced retirement pay and

benefits, higher premiums for retirees for

TRICARE (the broad medical support program

for active and retired service personnel

and their families), higher co-pays

for pharmaceuticals, smaller off-base

housing allowances and the commissary


Greenert outlined the dilemma. Whatever

change is made, he said, “has to be


His example: “If we were to slow pay

raises . . . when done, look at the impact

on the constituency . . . because we have

to maintain the all-volunteer force. That’s

very important.”

Actions “must be transparent” to the

active and retired service members and

their families, he said, so they understand

“what is the purpose.”

Finally, Greenert said, “a balance” is

key. When costly programs such as pay,

housing or TRICARE are changed, lessexpensive

benefits such as tuition assistance,

other training and child care must

be maintained.

Amos said the Marines had reviewed

in the past 12 months internal controls

on “things like bonuses in everything

from re-enlistment to things we do to

recruit and assess Marines.” They found

significant savings, he said.

Amos also mentioned raising TRICARE

premiums, which for retired and working

retirees are far below civilian levels. And

“there is room to maneuver” on pay raises

and the annual 2 to 3 percent increase

in basic housing allowances, he said.

A Congressional Budget Office study

released Wednesday reported that, between

2001 and 2012, basic military pay

rose by 28 percent in inflation-adjusted

dollars. During the same time, privatesector

wages for white-collar and bluecollar

workers roughly stagnated.

According to the CBO, cash compensation

for enlisted personnel, including

the advantage that military food and

housing allowances are not subject to

federal taxes, is greater than the wages

and salaries of 90 percent of civilian

counterparts. That surpasses the Pentagon

goal of exceeding pay of 70 percent

of civilians with comparable education

and work experience.

As Amos noted, there’s room to maneuver

in reducing base pay for new service


Here’s my favorite moment last Thursday:

Sen. Saxby Chambliss, R-Ga., pointed

out one place where several hundred

million dollars a year could be saved

through elimination of Congressionally

Directed Medical Research Programs.

I’ve written about the programs before

and they represent one of many costly

items Congress adds each year that no

past administration or Defense Department

has sought.

The programs have grown since they

began more than 20 years ago as an earmark

of $25 million to the defense bill for

breast cancer research. Chambliss puts it

at $150 million a year for breast cancer

research, plus $80 million for prostate

cancer research, $25 million for ovarian

cancer and more for lung cancer and

other diseases.

The Army had to set up a special unit

to supervise contractors who pick the research

projects and monitor their execution.

As Chambliss said, “These are types

of research that simply have no place,

in my opinion, at [the Defense Department].

They ought to be done at [the National

Institutes of Health]. I understand

further that there is not real coordination

between the . . . medical research done

at NIH and what is done at DOD.”

The senator, who is retiring next year,

said that “the money would be better

spent as a replacement for sequestration.”

Good luck to him and to the chiefs in

trying to get Congress to reduce these



Keith Hansen

Vice President of Audience


Mike O’Rourk e

Associate Editor

Terr y McCollough

Former Publisher

Dick Peterson

Community Representative


Personnel costs threaten military budgets

By Walter Pincus

The Washington Post