September 27, 2011

Utahns Say Plan to Cut Military Benefits Not Good

Forget the fog of war.

From his perch in Pleasant View, Frank D. Maughan says he sees foggy thinking descending on Washington and the nation’s time-tested way of enticing warriors to spend a career in the military: sweet pensions and inexpensive health care for life.

Tucked into President Barack Obama’s deficit-reduction plan unveiled 10 days ago are the seeds of dramatic changes in both.

The president wants military retirees age 65 and older to pay what he calls a "modest" fee, starting at $200 a year, for health care. He wants to push retirees and the dependents of those serving to use generic drugs or pay more for prescriptions, a move "closer to parity" with other federal workers.

But more ominous for veterans’ advocates is the suggestion that the nation can no longer afford to let career military folks retire after 20 years — as early as age 38 — with pensions worth half their salaries.

Such pensions have helped retain "a vigorous and highly effective force," Obama writes in his plan. "But the system was designed for a different era of work, and is now out of line with most other government or private retirement plans."

Obama wants a commission to study military retirement, using an approach similar to the 2005 Base Realignment and Closure Commission. Proposals by the Department of Defense panel for shuttering military bases or moving their job assignments could be approved or rejected — but not tweaked — by Congress or the president.

‘God help us.’ Steve Strobridge, a retired Air Force colonel who works for Military Officers Association of America, says, "God help us if we do these things."

Congress cut military benefits in 1986, but reversed course a decade later due to the devastating effect on recruitment and retention, he says. The administration’s current direction "would make far greater cuts than what was done in 1986."

People won’t sign up for military careers if they are offered a "civilian-type benefit package," Strobridge says.

Such changes, he suggests, would have driven constant personnel turnover and destroyed the all-volunteer military in this past decade of war. "When you just churn the force, you’re not training future leaders."

About half of officers and 15 percent of enlisted service members remain in the military for at least 20 years.

Terry Schow, executive director of the Utah Department of Veterans Affairs, says the current pensions do not provide a life of ease for service members. "Every retired enlisted person I know has to have another job after they retire," he says.

Maughan, who was awarded a Purple Heart for combat injuries in the Vietnam War, says the 20-year retirement was what induced him to stay in the military for 28 years — 13 years of active duty in the Army and 15 years in the Army Reserves.

"Now somebody who has spent way too much money has decided that maybe we can balance the budget not by reducing spending but by reducing promises we made to people," says Maughan.

Most advocates of the changes say only new recruits would be affected, but Maughan says that can only hurt the military’s ability to attract good people.

The Weber County resident is in line to be commander of the national Disabled American Veterans in six years.

"Guys who did this [military service] for a living are fond of talking about the fog of war," he says. "I think we have a fog with all this folderol."

‘Too politically challenging.’ The Department of Defense budget has almost doubled in the past decade of war, and the military gets a fifth of all federal spending.

The Pentagon could face across-the-board cuts that amount to $900 billion if Congress does not adopt recommendations from a bipartisan supercommittee, created under the debt ceiling agreement between Obama and Congress.

Defense Secretary Leon Panetta told the Senate Armed Services Committee on Thursday that such cuts would seriously endanger the military’s ability to defend America and its vital national interests, according to a DoD news report.

But Panetta said he is committed to providing the supercommittee with changes that will save $450 billion over the next 10 years without "hollowing" the armed forces. Besides looking for ways to increase efficiency, Panetta said he will look at compensation, according to the DoD.

"In some of those areas, the costs have increased by 80 percent," Panetta told senators.

Cutting compensation "has been seen as too politically challenging to touch," says Nora Bensahel, a senior fellow at the Center for a New American Security in Washington.

Yet pay and benefits comprise 45 percent of defense spending, she says. Preserving those would reduce the force and slash spending on equipment and training.

"None of the veterans organizations that are talking about hollowing the force have addressed the counter argument," Bensahel says.

The Defense Business Board, which advises the Pentagon, is calling for a retirement system similar to a private-sector 401K plan, which would apply even to those who serve only five or 10 years.

Otherwise, the current pension plan’s liability will grow from $1.3 trillion today to $2.7 trillion in 2034, the board wrote in a summary released in July.

‘Painful choices.’ As civilians have watched their heath insurance disappear or rise sharply in cost, military families and retirees’ expenses for enrollment, co-payments and deductibles remain at their 1995 levels, the Congressional Budget Office says in a March report.

Tricare health insurance, created by the DoD in the mid-1990s, is so attractive that many retirees now take a pass on their civilian employers’ plans. Tricare spending more than doubled between 1999 and 2009.

At some point, the costs "are going to undermine the DoD’s military capacity" and force "painful choices," says Bensahel.

"You get very, very deep reductions in military capability if you leave all the benefits and pay off the table," she says.

Veterans groups are bracing for the worst, but hoping for better.

"Unfortunately, the size of the deficit is such that it’s a reasonable expectation that the country will have to do some dumb things … and pick up the pieces later," says Strobridge. "We’re hoping sanity will prevail, that if we highlight the lessons of history we will at least mitigate some of the changes."

Schow is confident the public will make a fuss if Washington turns stingy.

"I know two things," says Schow. "People love the military and the veterans, and they’re not terribly fond of folks that want to mess with them."