President Obama on Thursday sent his principles for modernizing and restructuring military compensation and retirement benefits to Congress, and a commission has stood up to direct the task.
Chief among these, according to the three-page document, is that the commission does nothing to alter the current retirement system for those already serving, retired or in the process of retiring.
“While we have successfully transitioned from a conscripted force to an all-volunteer force, sustaining this force requires responsive and prudent management, especially given the fiscal challenges we face as a nation,” he wrote.
The president also informed the nine-member Military Compensation and Retirement Modernization Commission that, along with a review of compensation, it should also look at the “interrelationship of the military’s current promotion system … as well as associated force shaping tools.”
Joe Davis, spokesman for the Veterans of Foreign Wars, said the commission’s charter “is to save the government money, but I hope they fully consider all the downsides to each recommendation, because a professionally-led, all-volunteer military must first have commanders and senior enlisted advisors who are selected for being the best qualified, not the last ones standing."
Now, he said, the Defense Department offers “only two carrots” to get and keep people for 20 years or more: the immediate receipt of retirement pay and low Tricare premiums for the member and spouse.
“Any major adjustment to either, coupled with a resurging economy that offers more attractive alternatives, could mean this commission’s recommendations could go by the wayside just like the High-3 and REDUX plans of the recent past,” he said.
The country’s 1.9 million military retirees and 22 million veterans made large, upfront investments to earn their retirements and healthcare, he said, and they know that lessening these will directly impact retention.
“The troops are watching, too, because once the economy rebounds, picking stability over unpredictability, or a business suit instead of body armor, are not very difficult choices to make,” Davis said.
The commission was established by Congress as part of the 2013 National Defense Authorization Act. Under the act, Obama appointed one member, with the majority and ranking members of the Democrat and Republican parties in the Senate and House appointing two each.
The law stipulated that the president spell out guidance for the commission and send a copy to Congress.
The guidance comes even as the Pentagon has let it be known it wants to trim back in some areas of compensation. With the Defense Department looking at nearly $500 billion in cuts over the next 10 years under the Budget Control Act, and another $500 billion in sequester cuts still possible, it is looking for places to save money.
In the letter he sent out, Obama says the commission must review “the full breadth of the . . . systems,” including healthcare, military family support, and any federal government programs that could influence current or future servicemember to stay in uniform or leave.
The letter details a number of areas for the commission to study and upon which to make recommendations, including manpower and compensation interrelationship; living standards; pay; effectiveness; flexibility; what motivates people to advance.
On the first item, Obama said compensation and retirement systems should consider differences between service in the military and other uniformed services, differences between regular and reserve military service, and “facilitate, as appropriate, the use of the reserve … to support regular military service.”
Also, he said, “while military compensation and retirement systems should prove a reasonable standard of living, they should be fiscally sustainable and impose the least burden on the American taxpayer.”
Compensation, meanwhile, to the extent possible should be comparable to pay in the American economy. It should be competitive externally with private-sector pay and internally to incentivize servicemembers to continue to acquire skills and accept challenging assignments, to recognize hardships and danger. It should also facilitate the distribution and separation of servicemembers when appropriate, he wrote.
To be effective in both war and peace, he said, the systems have to be robust and enable the services to expand or contract as needed. Any changes also have to be flexible enough to adjust to changes in the U.S. economy, and be able to motivate and encourage meritorious performance and the desire to seek positions of greater responsibility, he said.
They would also have to be fiscally sustainable to ensure long-term certainty for servicemembers and retirees.