Military Advantage

Gates Puts Pay Cuts on the Table

Under pressure to reduce the DoD budget, Defense Secretary Robert Gates has -- until recently -- avoided asking for a reduction in military pay and benefits. However, the Wall Street Journal has reported that increasing pressure on lawmakers to make bigger cuts in the federal deficit has convinced defense budget planners that Congress is willing to look at cutting military compensation.

Since the beginning of his term as Sec Def, Gates has avoided asking for military pay freezes or reductions. He has instead sought to reduce the cost of TRICARE by increasing annual premiums and fees for military retirees and taxing their employers if retirees opt-out of employer provided health care. So far his repeated attempts to make major changes to TRICARE have been thwarted by Congress – mainly due to pressure from groups like the Military Officers Association of America.

However, pressure from the White House to make $400B in cuts may have forced Gates’ hand. In fact, Sec. Gates reently floated the idea that reducing military compensation may not be a bad idea. Gates told a group that reducing military pay wouldn't negatively impact recruiting; pointing out that even during the worst of the Iraq war the Army was the only service that didn't exceed their recruiting and retention goals.

In a down economy with over 9 percent unemployment, a reduction in military pay probably wouldn’t have much of an effect on recruiting, but it will most certainly hurt retention and morale.

Mr. Gates has stated that he is concernrd that our military’s ability to remain a world power under these budget cuts may be difficult. Gates recently told the graduating class at the University of Notre Dame, "…our military credibility, commitment and presence are required to sustain alliances, to protect trade routes and energy supplies, and to deter would-be adversaries from making the kind of miscalculations that so often lead to war." That may be difficult if the budget cuts undermine troop morale and retention.

Mr. Gates’ replacement, Leon Panetta, may not have the same restraint when it comes to cutting military pay. Panetta has a reputation for being a no-nonsense cost cutter, dating back to the Clinton years. Panetta’s nomination makes the threat of future reductions in military compensation more likely. Especially considering the fact that Panetta will be asked to meet the President’s goal of $400 billion in defense budget cuts.

Although unwilling to say specifically where these compensation cuts may occur, the fact is, Gates has now put military pay and benefits on the table.

Show Full Article

Veterans Day Discounts and Events

Most Popular Military Pay Articles

2018 Military Pay Charts
Check out the 2018 US military pay scale charts for all ranks for active duty, as well as Reserve and Guard components.
Military Retired Pay Overview
The military retirement system is arguably the best one around, but proper planning is needed to ensure you can retire comfor...