Hagel Warns Major Changes Coming to Pay and Benefits

New Defense Secretary Chuck Hagel speaks during a news conference regarding the automatic spending cuts, Friday, March 1, 2013.

Outgoing Defense Secretary Chuck Hagel warned of major changes coming to pay and benefits in the military while stating that those currently serving would likely be "grandfathered" against cuts.

Compensation will be as big an issue in coming budget debates with Congress "over the next year as there is, and it should be, because when you are talking about that entire compensation package for all of you and your families, I mean that is key," Hagel said Wednesday on a visit to the new amphibious assault ship USS America.

The debate will be shaped by the Feb. 1 report of the Military Compensation and Retirement Modernization Commission, which was created by Congress in 2013 to recommend possible changes to military pay, benefits, health care and retirement.

In remarks first reported by Military Times, Hagel said in response to a sailor’s question that "I think this year will be the beginning with those commission recommendations of where we start moving forward on making some of these calls."

However, Hagel also spoke to grandfathering those currently serving against major changes, especially on the retirement package.

"This country cannot afford you all, each of you, being worried about your future retirement, your future benefits, your future pay," Hagel said. "We want you focused on your job."

Earlier this week, Sen. John McCain, R-Arizona, the new chairman of the Senate Armed Services Committee, also said he expected changes to pay and benefits to come out of the coming budget debates in Congress.

"I can probably support a number of changes that need to be made," McCain said without giving specifics. He singled out the military health care system, which he said "has to be reformed."

In regards to grandfathering current service members, McCain said that "anybody who has already joined the military is eligible for those pay and benefits, but as of a certain date, people joining may be subject to changes in those benefits."

In an interview last week with Military.com, Rep, Joe Heck, R-Nevada, the new chairman of the House Armed Services Subcommittee on Personnel, also said he favored grandfathering service members while calling on the Pentagon to cut waste and cost overruns on weapons systems before looking for savings from pay and benefits.

"Before you start making significant changes in compensation, you’d better figure out where every penny can be saved in procurement and acquisitions," Heck said.

Hagel was on a final tour of military bases before leaving office as Defense Secretary. President Obama has nominated former Deputy Defense Secretary Ashton Carter to succeed Hagel, and Senate confirmation hearings were expected to begin early next month.

-- Richard Sisk can be reached at richard.sisk@military.com

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