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CBO suggests tough defense spending cuts

Jan. 8, 2014 - 06:00AM   |  
A CBO official on Jan. 8 delivered options for defense savings that would total between $10 billion and $495 billion through 2023.
A CBO official on Jan. 8 delivered options for defense savings that would total between $10 billion and $495 billion through 2023. (Getty Images)
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The nonpartisan Congressional Budget Office has proposed six ways to reduce defense spending ranging from deep cuts to the military services to controversial reductions in pay and benefits.

In a presentation Tuesday before a group of retired and current government personnel and federal budget experts, CBO senior analyst Carla Tighe Murray delivered options for defense savings that would total between $10 billion and $495 billion through 2023.

The largest savings would draw from what would be the most untenable option for the Defense Department: further cuts to the size of each military service. According to Murray, reductions could yield $495 billion in savings over 10 years, but they would mean eliminating 10 Army brigade combat teams, 34 major Navy ships, two Marine Corps regiments and 170 Air Force fighters.

Other options proposed by the CBO would have less impact on readiness but likely would generate ire from military advocacy groups and affected constituencies if they were formally pitched, since most would affect active-duty pay and alter benefits for retirees.

They include:

■Capping military pay raises. The CBO would reduce the size of annual military pay raises to save money, as was done this year by capping the basic pay raise at 1 percent instead of the 1.8 percent required under a federal pay formula. The CBO estimates this would save $24.6 billion in savings through 2023, but Murray also added that recruiting and retention might be compromised.

■Replace military personnel with civilians. This option, which could save $19.4 billion over 10 years, could add stability to the Defense Department because civilians would not have to transfer every few years, but could reduce the number of trained military personnel available for contingencies.

■Increase Tricare fees for working-age retirees or make this group ineligible for Tricare Prime. These options could save $19.7 billion and $71 billion, respectively, over 10 years. DoD has asked Congress a number of times to allow enrollment fee, deductible and co-payment increases for retirees under age 65 and is likely to continue to press for additional contributions from this group.

■Establish an enrollment fee for Tricare for Life. This option would save $30.7 billion through 2023. Murray said it could encourage retirees to use other employer-sponsored health care and be more disciplined in obtaining medical services but added that implementation could hinder retention or cause some people to delay getting medical treatment.

Finally, according to the CBO, the Pentagon could save money by canceling some programs such as the Joint Strike Fighter. Replacing the program with F-16s and F/A-18s could save $37.1 billion through 2023.

Whether any of these proposals make it into the administration’s fiscal 2015 budget proposal remains to be seen. The spending plan is unlikely to be unveiled until late February at the earliest, according to budget experts.

If lawmakers consider CBO’s pay and benefits proposals, they likely will face an imbroglio similar to the one occurring now over reductions to military retirement pay increases that will start in 2015.

Military advocacy groups say that by not exempting currently serving personnel and retirees from the reductions, Congress has “broken faith” with professional military members who served during two extensive wars.

But some troops say the proposals don’t phase them. Navy Yeoman First Class Vernon Parker said in an email Wednesday he’s surprised that annual military pay raises have not been curtailed.

“As a 13-plus-year active duty sailor, I would and could support no annual pay raise for a few years,” Parker said. “I plan and execute my budget so not to live paycheck to paycheck.”

The CBO proposals presented by Murray were first published last November.

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