If President Obama and Defense Secretary Chuck Hagel get their way, a typical U.S. Army sergeant stands to lose up to $5,000 in annual benefits, according to a leading veterans group that is mobilizing for battle over the proposed cuts to the retirement, health care and other compensation offered to those who serve.
The budget restructuring outlined by Mr. Hagel last month calls for a series of politically tricky compensation reductions that risk outraging active-duty and retired service members who signed up for duty with the belief that they could rely on a rock-solid pension system to help pay for expenses such as food, housing, health care and college tuition for their children.
The Military Officers Association of America has calculated the cost for that Army sergeant, and its analysts say officers stand to lose even more under the Obama administration’s proposed fiscal 2015 budget. Mr. Hagel and other Pentagon officials say the military’s historically generous benefits must be trimmed to rein in costs and free up money to reshape the nation’s armed forces for challenges of the future.
Active-duty members approached by The Washington Times have shied away from speaking out on the issue, but some retired service members are weighing in with frustration and anger.
“It is a slap in the face to every soldier that has served or will serve,” said retired Army Maj. Karel Butler. “The stress that your family goes through, that your body goes through in a 20-year career, it is tremendous. And for them to even consider reducing those benefits is a slap in the face.”
The proposed budget calls for slashing subsidies for base commissaries that thousands of young military families use for discounted groceries. It also calls for a 5 percent increase in the cost of military housing for average active-duty service members and a cap on active-duty pay increases at 1 percent annually.
“When you combine all these different issues, you have quite a bit of a financial impact,” said retired Air Force Col. Mike Hayden, who heads government relations at MOAA.
The cuts, he said, may result in an increase in the number of active service members who decide not to renew their military contracts.
Compounding the situation is a separate proposal unveiled by the Pentagon last week that calls for changes to the military retirement benefits system.
Under the current system, service members typically do not qualify for retirement pay until they have served for 20 years. The proposed change would allow troops who have served just six years to begin receiving such pay, but at the cost of smaller average monthly pension checks over the long term.
Mr. Butler, a war veteran who served in the Air Force for 20 years, said the proposal has sparked concerns that Pentagon leaders may pursue more reductions in military retirement entitlements.
Military retirees have faced threats to cost-of-living adjustment benefits in recent years. For 2013, Congress voted to reduce those benefits by 1 percent for all military veterans younger than 62. Lawmakers restored the benefits for 2014, essentially offsetting them by extending spending cuts elsewhere in the federal budget.
Separately, the Obama administration is pushing for a change to the military health insurance program known as Tricare.
Mr. Hagel told a Senate panel last week that the Pentagon wants to merge Tricare’s three options. The consolidation would require “modest increases in co-pays and deductibles that encourage using the most affordable means of care,” he said.
Although the Pentagon continues to provide free health care to active-duty service members, the proposed changes would require those members to contribute more. Retirees also would face a modest co-pay increase.
Outlining the pressures the Pentagon faces as it deals with sequester budget cuts, Mr. Hagel told lawmakers, “The longer we defer these difficult decisions, the more risk we will have down the road forcing our successors to face far more complicated and difficult choices.”
The annual health care bill for a military family of four would increase from about $504 to $612, according to the MOAA analysis. By 2019, that per-year rate would be $816.
The association did not have data available to indicate how military retirees would be affected by the proposed Tricare reforms.
Mr. Butler is concerned that even a marginal impact to his retirement benefits could derail his ability to provide for his family.
“I have a daughter that’s getting ready to graduate from high school, and any change to the benefits package — I would probably advise against serving our country,” he said.
Kinyell Haymore, who served in the Navy for 10 years, said she is concerned that some of proposed changes to the military retirement system may discourage recruits.
Military benefits are something “any young person would look at and say, ’I would want to join,’” she said. “So now, if you take that away from them, you might not get the quotas that you want.”
Sen. Kay R. Hagan, North Carolina Democrat, said during a hearing last week that although the Pentagon faces “significant fiscal challenges,” Congress “can’t seek to balance the budget on the backs of our service members.”
• Maggie Ybarra can be reached at mybarra@washingtontimes.com.
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