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Hayden on pay and benefits reform: Repeat mistakes, break the force

Apr. 10, 2014 - 10:31AM   |  
(MOAA)
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The goal of the Military Officers Association of America is to promote the common defense by sustaining a strong all-volunteer force and ensure our nation keeps its reciprocal commitments to current and previous generations of career troops and families.

The claim that MOAA, with our Military Coalition partners and the American Legion, waged a “misleading campaign” against the plan to reduce annual retiree cost of living adjustments ignores financial and moral realities.

Simply put, a 40-year-old E-7 retiring this year with 20 years of service stood to lose nearly $83,000 by age 62, and a 42-year-old O-5 stood to lose $124,000.

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MOAA stood firm on its belief that if you’ve served for more than two decades, you deserve the benefits promised to you. The collective efforts paid off. With more than 297,000 messages sent to Capitol Hill by our members, Congress listened and repealed the COLA caps.

From a broader perspective, we believe it’s important to discuss personnel cost growth since the turn of the century.

Have those costs gone up? Yes. Since 2000, growth averaged nearly 7.6 percent a year, exceeding growth in the private sector. But using 2000 as the baseline implies 2000 was an appropriate benchmark for estimating what reasonable personnel spending should be. It’s not.

By 1999, years of budget cuts led to a 13.5 percent gap between average military and civilian pay. Troops were paying nearly 20 percent of their housing costs out of pocket. Beneficiaries over 65 were thrown out of the military health care system. Retention and recruiting were on the ropes.

Over the next decade, with the help of Congress, plus-ups in personnel costs were necessary to keep the previous years of cuts from breaking the career force.

Since 2010, cost growth has already slowed dramatically to less than 2 percent a year, and will slow further in the out-years due to force structure cuts and retirement system changes for new enlistees.

But the Pentagon’s fiscal 2015 budget plan proposes several significant pay and benefit cuts: capping basic pay raises, cutting housing allowances by 5 percent, reducing commissary savings, and charging active-duty families and retirees more for health care.

Add all that up, and an E-5 family of four would lose nearly $5,000 a year in purchasing power while an O-3 family of four would lose nearly $6,000. Is that a cut, or merely “slowing growth”? From a pocketbook perspective, that is definitely a cut.

We believe the Pentagon is starting to repeat some of the same mistakes that led to the significant retention problems of the late 1990s. MOAA strongly believes that with the war in Afghanistan winding down, DoD should urgently look internally at greater efficiencies before simply shifting costs onto the backs of troops and retirees. For example:

■In January, the Defense Business Board said DoD could save up to $37 billion a year through logistics reform (to include another base closure round).

■In October, a Government Accountability Office report noted that the 85 major weapons acquisition programs were a collective $411 billion over initial cost estimates — a sum that could offset all the remaining years of DoD’s sequestration budget cuts.

Decades of dire predictions about “unaffordable” personnel costs have proved consistently wrong. The only times the all-volunteer force has been jeopardized have been due to budget-driven benefit cuts that failed to offset the extraordinary demands and sacrifices of a service career.

History tells us the Pentagon’s proposals will significantly devalue the compensation and benefits needed to sustain our seasoned, trained and talented troops, and ultimately have a negative impact on retention, as well as recruiting and overall readiness.

As patriots, we’ll continue to speak out for what we believe is right for our nation’s security.

_____

Retired Air Force Col. Mike Haydenis the director of government relations for the Military Officers Association of America, focusing on active-duty and retiree compensation issues. He served in uniform for 25 years, the last five as chief of the Air Force’s military personnel policy division.

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