Committee for a Responsible Federal Budget

Generals: Don't Turn Away from Reforming Military Retirement Benefits

Jan 21, 2014 | Other Spending

One of the most contentious provisions in the Ryan-Murray budget agreement that became the Bipartisan Budget Act was a provision that reduced cost-of-living increases for military retirees under age 62 (read our explanation here).  The provision generated the ire of many veterans groups, and some lawmakers have vowed to reverse the reduction. But today, a group of retired generals wrote an op-ed in The Hill, explaining that the provision is a necessary first step towards getting personnel costs under control before they crowd out the rest of the military's budget.

The U.S. military is at a crossroads. We can either properly train and equip our future warriors or maintain overly generous benefits for young military retirees who have many years in the workforce ahead. We cannot do both. How the nation chooses will, to a great degree, determine how secure Americans will be in decades to come.

The current military retirement system is10 times more generous than equivalents in the private sector.  The generals explain, "In the case of a service member who retires at age 38, pension payments and health coverage could easily continue for more than 40 years, totaling over 60 years of pay and benefits for 20 years of service, a very unusual – and expensive – benefit."  They argue for keeping the reduction, which will make room in the Pentagon budget for other defense priorities. Already, rising personnel costs (largely due to health care, but also retirement payments) are taking a larger share of the Pentagon's budget than core military functions.

For example, in Fiscal Year (FY) 2013, the federal government budgeted more for military retirement and health care benefits ($143 billion) than it did for military procurement ($110 billion). When total personnel costs are considered, the contrast is even starker. The total budget for pay and benefits for active and retired service members in FY 2013 ($264 billion) was greater than the budget for military operations and maintenance (excluding healthcare-related operations, which are more appropriately classified as a personnel cost).

As the generals conclude:

Congress was wise to take the first step toward military retirement benefit reform in the BBA. Much larger reforms must come in the near future. We must rethink every aspect of military spending, including benefits. In doing so, policymakers should protect the Veterans Administration and other benefits for service members who were wounded or disabled in the course of their service. Very generous health care and pension benefits for able-bodied, working age (38-62) military retirees – benefits that have no parallel in either the private or public sectors – cannot remain the same without causing damage to our war-fighting ability in an era of constrained resources.

Click here to read the full article.
 

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