Report: Billions in Savings by Making Retirees Pay

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The Pentagon could slash the defense budget by more than $900 billion over a decade without sacrificing significant combat capabilities, according to a Washington think tank.

The Stimson Center, which labels itself as a nonpartisan nonprofit, assembled recommendations to slash spending on personnel compensation, the use of manpower and procurement practices. The center, however, did not endorse any of the recommendations in its report, which was released Monday.

"Essentially, we're hoping by drawing attention to these things to make it easier for (the Department of Defense) to avoid debilitating cuts in forces and weapons programs," said Barry Blechman, a Stimson Center distinguished fellow and one of the authors of the report.

The Pentagon finds itself in the midst of sequestration, or forced cuts of about $500 billion over the next decade, because Hthe White ouse and Congressional leaders could not reach a deficit-reduction pact to avoid the automatic cuts. That's in addition to $487 billion the Pentagon agreed to absorb over the same time period.

Among Stimson's cost-cutting recommendations: pegging pay to specialization in high-demand areas; requiring military retirees to pay more for health care; curtailing the number of health care beneficiaries; and reforming military retirement plans to more closely resemble civilian-style retirement options.

The report suggested, among other actions, trimming the number of civilian and contractor employees, using service members to perform "inherently military functions" and reducing redundant support services inside each military branch. The report also outlined better management acquisition practices.

This year, the Air Force must cut $10.8 billion by the end of September. Among other actions to cut spending, the service has drastically slashed flying hours, grounded aircraft and deferred maintenance. It could furlough 13,000 civilian employees at Wright-Patterson Air Force Base, among tens of thousands possible furloughs in the Defense Department.

High-ranking Pentagon leaders have said the combined reductions would "hollow out" the military. Even so, many of the report's recommendations are unlikely to get political or bureaucratic backing, Blechman said.

"It's an uphill slog, but our hope is because of budgetary pressures and the need for new appropriations for the coming fiscal year that the department and the Congress will understand it's better to take some of these efficiencies than, say, cut the number of Army brigades," he said.

A Pentagon spokeswoman declined comment on the report.

The projected Department of Defense budget for fiscal year 2014 doesn't incorporate sequester reductions because the budget was submitted prior to March 1. But with a possible $52 billion cut on the table for the next fiscal year "substantial additional cuts driven by sequestration ... could force major changes," Army Lt. Col. Elizabeth Robbins, a Pentagon spokeswoman, said in an email.

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Defense Budget Sequestration and the Military
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