The Pentagon is pulling out its big guns in a fight over the growing cost of compensating the men and women who fight our wars.
In recent weeks, Defense Secretary Chuck Hagel and three members of the Joint Chiefs of Staff all called for slower growth in military pay and benefits.
“Without serious attempts to achieve significant savings in this area,” Hagel warned in a Nov. 16 speech, “we risk becoming an unbalanced force, one that is well-compensated but poorly trained and equipped.”
But Hagel faces counterfire from well-known veterans' groups — including the Military Officers Association of America and the Veterans of Foreign Wars — who argue that the Pentagon is hyping the threat of an unbalanced force.
They note that military personnel costs haven't crowded out other defense spending and, as a percentage of the overall defense budget, have changed little in the past 30 years. They say the current package of pay and benefits has made it possible to maintain an all-volunteer military force, even during the long and wearying wars in Iraq and Afghanistan.
It upsets them to see senior leaders argue for reining in pay and benefits.
“What we're hearing from the leadership is 'Thanks for your service, but you're not worth what we're paying you,' ” said Paul Cohen, a retired Air Force brigadier general from Omaha who formerly served on the military officers association's national board of directors.
It's a debate that has grown more important as the Pentagon deals with shrinking budgets, including cuts required under the budget sequester approved by Congress and President Barack Obama in 2011.
Obama also is proposing to limit troops' pay raise this year to 1 percent, instead of the 1.8 percent cost-of-living rate. The House of Representatives has voted to give service members the full raise, while the Senate Armed Services Committee supported the smaller pay hike. The full Senate hasn't voted.
U.S. Sen. Deb Fischer, a Nebraska Republican who serves on the Armed Services panel, supported the reduced raise for 2014. She backs the financial targets set in the Budget Control Act of 2011, which imposed the sequester. She acknowledges that the cuts will affect the Defense Department, which represents roughly half of federal discretionary budget.
“These are tough decisions,” Fischer said. “The military is hopefully going to recognize that the (pay and benefits) costs are ratcheting up.”
Joint Chiefs Chairman Gen. Martin Dempsey told the Wall Street Journal last week that the chiefs will present a multi-year package of cuts limiting the growth of basic pay as well as benefits such as housing, health care and education.
“There are some things we must do in the next few years,” said Dempsey, speaking to a conference Nov. 16 at the Ronald Reagan Presidential Library in Simi Valley, Calif. “We have to control manpower costs, and we're going to need help to do that.”
Opponents say personnel costs are not a dire problem. Such spending, they say, remains about the same share of the overall defense budget: 28.4 percent in 2001, 29.1 percent in 2012.
“Military personnel costs really haven't varied much since I was in,” said retired Lt. Gen. Leo Smith of Omaha, who was the Air Force's budget director in the late 1980s.
An article last week on the news site Military Times showed that military personnel costs — including basic pay, housing costs, bonuses, health care and retirement pay — rose at about the same rate as the overall Pentagon budget.
Adjusting the pay and benefit numbers for inflation and the size of the force, though, tells a different story. It shows that per-troop costs have jumped about two-thirds since 1960, from about $63,000 per service member (in current year dollars) to nearly $106,000 this year.
Most of that increase has taken place since 2002, after Congress beefed up benefits when recruiting and retention slipped. As a result, military pay rose at a faster pace than inflation, housing allowances and college tuition reimbursements increased, and military retirees became eligible for a new health plan to supplement their Medicare benefits.
Budget hawks worry that personnel costs will become a problem as the Defense Department continues to feel the impact of the sequester law, which forces $50 billion a year in cuts from a defense budget that totaled $622 billion last year.
So far, the Obama administration has exempted military pay from sequester cuts, leaving them to fall harder on other areas: civilian pay, military contracts, procurement maintenance and training. It also has begun cutting troop strength.
Meantime, for the first time in 30 years, Congress and the military are looking seriously at changes to the military retirement system. The battle is taking place before the Military Compensation and Retirement Commission, a nine-member, bipartisan committee created in last year's defense authorization bill.
Charged with recommending long-term fixes to Congress by next spring, the commission held three public hearings last month.
Former Nebraska Sen. Bob Kerrey, one of the commissioners, said he's concerned that so many veterans are attending the hearings to oppose any cuts to their benefits.
“We're robbing from our future,” Kerrey said. “We don't want to be remembered as the people who said, 'The hell with the country, I want to get my monthly check.' ”
Unlike civilian retirement plans, military retirement benefits begin immediately after the service member retires — for some as early as age 40. It is equal to between 50 and 75 percent of the service member's three highest years of basic pay. But it is only paid to service members who complete at least 20 years on active duty.
Military retirees argue that their retirement benefits are just compensation for the long hours, terrible risks and long separations that come with military service. And they say the pensions are necessary to get the highly trained specialists who make up the military's middle and upper levels to stay instead of taking their training to the private sector.
“You have to provide some benefit to build a career, all-volunteer force,” Cohen said. “The idea is to reward those who stay.”
Kerrey, though, says the nation simply can't afford the ballooning cost of old-style pensions that promise a set payout each month for life, whether the recipients are military or civilian.
“It isn't just the military. We've overpromised across the board,” Kerrey said. “These are retirement promises we've made that we just can't keep.”
Kerrey, a former Navy SEAL who lost his lower leg and received the Medal of Honor during the Vietnam War, said he thinks it's patriotism and service, not money, that motivate those who join the military.
“People aren't signing up for Navy SEALs because of pay and retirement,” Kerrey said. “You diminish the most important part of service by saying, 'I did it for the money.' ”
Observers like Todd Harrison, a former Air Force Reserve officer who analyzes the defense budget for the nonpartisan Center for Strategic and Budgetary Assessments, note that the political climate in recent years has dictated more spending on military pay, not less.
But he thinks that may be changing. Last summer, Harrison was one of more than two dozen analysts from think tanks across the political spectrum who signed an open letter calling for the Pentagon to rein in military compensation.
“We're spending too much on things that don't really matter to the troops,” Harrison said. “I see signs that the politics on this are changing. I see a narrow window of opportunity for some common-sense changes.”
Paul Cohen, though, sees it quite differently. He remembers times past — the post-Vietnam War 1970s, and the post-Cold War 1990s, for example — when spending cuts weakened the military.
“Start eroding the (pay and benefits) package,” he said, “and history tells us you'll start eroding the force.”