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Drawing Down Personnel Costs

The Pentagon’s FY 2013 budget proposal contains provisions that will hit both active-duty and retired personnel in their wallets – for years to come.

When it was finally passed on Dec. 23 of last year, the Department of Defense’s (DoD’s) fiscal year 2012 budget contained a provision that had never appeared in a military appropriation, despite the repeated attempts of previous administrations: a modest increase in the enrollment fee for TRICARE Prime, the military’s HMO-style health insurance plan for retired people under 65.

The ongoing budget discussions and documents from both the White House and Pentagon made it clear that the fee increase would be the first of several provisions aimed at bringing the military’s personnel costs – especially health care costs, which the Pentagon now estimates at about $50 billion a year – down to a more manageable level. The military’s personnel costs continue to increase at three times the rate of inflation, and to consume a greater percentage of the overall defense budget every year.

3rd Platoon, A Company, 3-1 Special Troop Battalion

Spc. Aaron Sellars, serving with 3rd Platoon, A Company, 3-1 Special Troop Battalion, provides security during a convoy stop, Khoshi district, Logar province, Afghanistan, Jan. 25, 2012. Service members deployed to places such as Afghanistan will now receive imminent danger pay only for days they actually spend in hazardous areas, Pentagon officials announced Feb. 2, 2012, in Washington D.C. U.S. Army photo by Spc. Austin Berner

The Pentagon has been aware of the problem of personnel costs for years, but the wars in Iraq and Afghanistan, naturally, have made many Americans and their elected legislators reluctant to trim benefits for those who serve. For the past 10 years, military personnel have enjoyed an expansion of benefits unrivaled in the history of the nation’s military – salary, health care benefits, pensions, and special pay rates have all risen steadily in the post-9/11 era.

Several factors have lent the effort to control military personnel costs a fresh urgency. The nation’s lingering economic crisis, which reduced tax revenues and helped balloon the national debt, ratcheted up a political showdown in Congress last summer that produced two important outcomes, one of which has had a direct effect on ensuing budget proposals – and one of which the Pentagon is choosing to ignore for now.

The Budget Control Act, passed on Aug. 2, 2011, introduced several complex mechanisms for reducing future deficits. One of the simpler measures was to place caps on future spending: The law mandates $487 billion in cuts to defense spending over the next decade.

The law also aimed to cut future budgets further through the work of a newly created Congressional Joint Select Committee on Deficit Reduction – the “Super Committee” – charged with agreeing on additional targeted spending cuts that would prevent self-imposed sequestration, or automatic across-the-board cuts, from being triggered.

The Super Committee’s notorious November failure to agree on targeted cuts has triggered an automatic provision that almost nobody wanted: an additional $1.2 trillion in unspecified government cuts over the next 10 years.

Defense budget and policy analysts – along with everyone who currently serves or has ever served in the military – anxiously awaited the Pentagon’s budget proposal for FY 2013, the first fiscal year requiring these mandatory budget cuts. When the Pentagon released its proposal on Feb. 13, it outlined a five-year plan that, predictably, made many people unhappy.

 

End Strength and Basic Pay

Defense Secretary Leon Panetta, in remarks delivered upon the budget overview’s release, made it clear that the five-year plan was devised with an eye on the bottom line, with a long-term aim at deficit reduction. Many of the provisions outlined for 2013 and beyond will directly affect active-duty, Reserve, and retired personnel, including:

•Reductions in military end strength. Through 2017, the Pentagon proposes to trim the Army (active, Reserve, and National Guard) by 6.8 percent; the Navy by 3.9 percent; the Marine Corps by 8.3 percent; and the Air Force by 2.3 percent. This isn’t surprising, given the redeployment of troops in Iraq and Afghanistan; it’s a peacetime reduction on par with the post-Korea and post-Vietnam reductions.

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Craig Collins is a veteran freelance writer and a regular Faircount Media Group contributor who...

    li class="comment even thread-even depth-1" id="comment-31103">
    Tim McReynolds

    For 20 years, it was very hard to find doctors to take the kids to because Tricare was so bad. My family proctice doctor just fired us because Tricare is so bad. So now they want to balance the budget on the backs of the personnel that can afford it the least. Talk about symbolism over substance! Get some some leadership by example and we in the military will receive the same standard of care and cost that the Senate, Congress and President receive. Marines live by the motto, “Troops eat first!” let that principle apply here too.

    li class="comment byuser comment-author-chuck-oldham odd alt thread-odd thread-alt depth-1" id="comment-31157">

    If everyone lived by that principle, it would be a radically different world, and I think a radically better one. Unfortunately, it seems like the motto today is often “Me first!”

    li class="comment even thread-even depth-1" id="comment-31486">

    How about you pay celebs less and stop punishing the men and women who protect and save our country everyday because all celebs are is entertainers they don’t do anything for for our country so do not punish the people who make sure you have a safe nation to call America because of our unsuccessful economy.

    li class="comment byuser comment-author-chuck-oldham odd alt thread-odd thread-alt depth-1" id="comment-31585">

    Have you ever considered that the people who are paid the most in our society are those whose careers revolve around childish things? The biggest salaries go to those who play pretend, sing songs, or play baseball, football, basketball, or some other sport we all enjoyed in some vacant lot before we grew up.