The Pentagon’s top civilian says it’s time to tame burgeoning military personnel costs, but he’s facing a test of wills with the nation’s powerful veterans groups, which want no cut in their benefits.
Veterans groups are fighting curbs in annual pension increases for military retirees under age 62 that are part of the new budget deal passed by Congress last week and awaiting President Barack Obama’s signature. After a barrage of protests from the military community, lawmakers said they’ll review the cut next year and possibly reverse it. But Defense Secretary Chuck Hagel said Thursday that reform of military compensation can’t be avoided.
“We all know that we need to slow cost growth in military compensation,” Hagel told a Pentagon press conference. “We know that many proposals will be controversial and unpopular. ... Tough decisions will have to be made.”
Retirees want the belt-tightening done elsewhere.
Here’s a look at what members of the U.S. armed forces get now and the debate:
WHAT TROOPS EARN
Due to pay and benefit boosts in recent war years, officials and military analysts say compensation is competitive with the civilian sector — and well above it when comparing people with similar education and experience.
For example, an Army private with fewer than two years of service and no dependents earns on average about $40,400 annually, said Navy Lt. Cmdr. Nathan Christensen, a Defense Department spokesman. About two-thirds of that is base pay and the rest a housing allowance and a food allowance, with no taxes paid on the two allowances. An Army captain with six years of service and no dependents averages $93,800 annually.
Active duty military members also get all of their health care for free. Their spouses and children get free care at military treatment facilities. If dependents use a private doctor, dentist or pharmacy, they get the care through the department’s TRICARE system, paying no premiums and no co-pays, said Austin Camacho, a system spokesman.
The force also gets what the Pentagon calls “quality of life” benefits, like help paying for continuing education, separate schools in some places for their children, commissaries where they buy food at an estimated 30 percent below retail prices and exchanges where they buy other deeply discounted goods like clothing and household items. Greatly discounted day care is available through the department’s child development system, which officials say has grown to serve the largest number of kids daily among the nation’s employers — now that more than half of the 1.4 million-member force is married and they have 1.2 million children.
While serving, some are and some aren’t able to build much of a retirement nest egg on their own. There’s a savings plan, though there are no employer matching funds, and moving every two or three years due to reassignment can affect the service members’ ability to build equity in their homes and the spouse’s ability to build a career that brings in a good second income.