As fiscal uncertainty continues to plague our government, the discussion about compensation reform comes up more and more often. It is important to recognize the difference between reform and reductions, to acknowledge the purpose of a 20-year retirement and to understand where misinformation is being spread to get to the root cause of the matter.
The fiscal uncertainty that is being faced is known as sequestration. Although $2.5 trillion was reduced from the budget, a 2011 law known as sequestration mandates across the board cuts if another $4 trillion was not reduced. This first took effect in 2013. Since Congress has been unable to achieve the requisite reductions, we are facing another year of sequestration. As a result, many have called for cost savings to come from the services themselves.
There are many aspects to military service and budgeting. From personnel costs, operational and maintenance costs (upkeep), acquisitions, and health care, the Department of Defense budgets have ballooned over the last fifteen years. In 2000, the total budget authority for the Department of Defense’s base budget was $384.5 billion. In 2014 it was $501.7 billion, an increase of $117 billion. Each of these costs has a purpose in the short and long term. A peace time military does not have the same financial costs as a military during a time of war when fighting in two different countries simultaneously. Yet it is often those very soldiers that are fighting who have their value called into question.
It has become a common refrain from senior leaders that the personnel costs are unsustainable. Yet, when contrasted with overall Department of Defense spending, it has actually decreased or remained flat. In 2001, military personnel accounted for 24.13% of the total budget. In 2012 it was 24.16%. Studies conducted between 2006 and 2010 identified that nearly 12% of officers leave service after year four, 8% after year five, and then a sharp decline until year 20 when the majority of officers begin to leave service. This is coupled with an excess of officers at the Lieutenant and Captain rank, followed by a shortage of officers at the Major rank. Recognizing that in 2010 the surge was just beginning to end and the number of Brigade Combat Teams was larger than today, the situations have changed slightly. Regardless, the 20 year retirement still stands.
Much can be said about the rigors of military service. The effects on the body over two decades of service can be profound for both physical and emotional aspects. Multiple studies of the Korean and Vietnam conflicts identified that quality of life, health, and happiness decrease over a lifetime as time in combat increases. Other aspects that are just as important include the military’s emphasis on constantly moving service members and their families every few years, reducing the ability for spouses to establish long term employment. This undercutting of the financial stability of the family results in less income earned over a lifetime for families. Finally though, consider the effect of these constant moves on the purchase of a home.
There has been much discussion after the last housing bubble whether home ownership was a short term or long term practical investment. With current timelines of three to four years at a duty station, many service members cannot see a practical reason for home ownership given the current market. In contrast to their civilian counterparts, who can purchase and begin paying off a home years earlier than service members, the Army’s 20 year retirement process helps make up this difference as well.
There are absolutely ways to cut costs for the military in the future. It should be a deliberate and thought out process. With only 17% of service members staying in to receive a 20 year retirement, changing it to reduce their amounts in order to save money in the long run is not reform, it is reduction. Just because it saves money, does not make it the right decision. If the last few years of conflict in the Middle East have taught us anything, it is that smart bombs and unmanned aircraft are effective on the battlefield, but they do not win wars.
Disclaimer: The content in this article is the opinion of the writer and does not necessarily reflect the policies or opinions of US Patriot Tactical.