Military benefits survive defense cuts
The House Armed Services personnel subcommittee voted unanimously on Wednesday to leave intact the current military health care system, the housing allowance and much of the Pentagon’s $1.4 billion in direct subsidies to the commissaries.
“I’m just really concerned about military families and this doesn’t need to be,” Rep. Joe Wilson, R-S.C., chairman of the personnel subcommittee, said of the proposed Pentagon cuts after the panel vote. “To me the primary focus of the national government is national defense. We will be providing.”
The panel’s action marked the first step in the defense budget process on Capitol Hill, with the full Armed Services Committee expected to approve the bill next week.
Facing diminished budgets, three defense secretaries and senior officers have maintained that the cost of personnel benefits have become unsustainable and threaten the Pentagon’s ability to prepare the force for warfighting.
The department has proposed gradual reductions that would increase out-of-pocket expenses for current and retired military as it faces a sober reality — military pay and benefits comprise the largest share of the budget, $167.2 billion out of $495.6 billion.
“America has an obligation to make sure service members and their families are fairly and appropriately compensated and cared for during and after their time in uniform,” Defense Secretary Chuck Hagel told Congress last month. “We also have a responsibility to give our troops the finest training and equipment possible — so that whenever America calls upon them, they are prepared.”
Every attempt by the Pentagon to trim benefits has faced fierce resistance from congressional Republicans and Democrats as well as powerful outside military organizations that argue the benefits help attract men and women to the all-volunteer force.
They also contend that service members and their families make unique sacrifices and deserve all the benefits.
Still, concerns about fiscal realities emerged during the panel’s brief discussion about the legislation.
Rep. Susan Davis of California, the top Democrat on the panel, said she supported the bill’s preservation of the military benefits, but Congress needs to “begin a conversation to address these issues.”
“Hard decisions will need to be made,” she said, warning that escalating benefit costs will force costly trade-offs, including reducing the number of active-duty members and the money used to prepare the force.
For example, Congress’ budget analysts estimate that a member of the Army receives $99,000 worth of benefits and pay compensation. The Congressional Budget Office says non-cash compensation amounts to about 60 percent, and includes health care, housing, education and subsidized food.
The Pentagon currently covers 100 percent of off-base housing costs for an individual who doesn’t receive government-provided housing. The department had proposed a gradual reduction to 94 percent, meaning a service member’s out-of-pocket expense would be about 6 percent — 5 percent for the housing allowance and 1 percent in renter’s insurance.
For a sergeant with dependents, the average cost would be $41 next year, $82 in 2016 and $102 in 2017. For an Army captain, the amount would be slightly higher.
The subcommittee rejected any change in the housing allowance.
The commissaries, which sell reduced-price, brand-name items from Reese’s Peanut Butter Cups to Huggies diapers, receive direct subsidies of $1.4 billion. That means a military family of four that shops only at the commissary saves about $4,500 a year, according to the department.
The Pentagon wants to reduce the direct subsidies by $1 billion over three years. Hagel said the commissaries operate rent-free and tax-free.
The full Armed Services committee is expected to restore about $100 million of the $200 million cut to the commissary subsidies in the fiscal 2015 budget.
In its legislation, the panel would require the defense secretary to “to conduct a review, utilizing the services of an independent organization experienced in grocery retail analysis, of the defense commissary system.”
It also seeks an “anonymous survey of random members of the armed forces regarding pay and benefits, including the value that members place on forms of compensation, relative to one another, including basic pay, allowances for housing, bonuses and special pay, health care benefits, and retirement pay.”
Health care has become one of the biggest entitlement programs in the military at a cost of some $52 billion a year.
Three years ago, then Defense Secretary Robert Gates tried to increase fees by $5 a month after the Pentagon had gone 16 years without an increase. He faced stiff opposition in Congress and from outside groups.
In this year’s budget, the Pentagon proposed simplifying the TRICARE system, which would have meant slight increases in out-of-pocket expenses for active duty families and retirees. Active duty members would have no out-of-pocket expenses.
The subcommittee rejected those changes.
Facing intense pressure from outside groups, Congress reversed course earlier this year on military benefits, voting to restore full cost-of-living pension increases for younger military retirees. Less than two months earlier, lawmakers had backed a modest cut.
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