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DoD official: 'Tough choices' necessary on pay and benefits reform

Mar. 26, 2014 - 07:27PM   |  
Hagel And Dempsey Testify Before House Hearing On
Defense Department Comptroller Robert Hale testifies during a March 13 hearing of the Defense Subcommittee of the House Appropriations Committee on Capitol Hill. (Alex Wong / Getty Images)
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Defense Department Comptroller Robert Hale pleaded with Senate lawmakers Wednesday not to undo money-saving personnel changes in the fiscal 2015 budget proposal, saying such a move would devastate spending plans for years to come.

But members of the Senate Armed Services Committee said they will at least brainstorm ways to reverse the planned cuts, calling them financially crippling to enlisted members and military families.

“Their paycheck isn’t going to go as far with these cuts,” said Sen. Kirsten Gillibrand, D-N.Y. “We really are changing the deal.”

Pentagon planners have proposed a 1 percent basic pay raise, a 5 percent cut in housing allowances, a reduction of more than two-thirds in the annual commissary budget and a radical overhaul of Tricare fees as part of a broader effort to bring defense spending into balance with congressionally mandated budget targets.

Hale argued that none of those proposals are cuts in compensation, but rather “slowing the growth” of those accounts. Planners have argued that while the cuts are unpopular, they are necessary to ensure that funding for modernization and readiness programs are not compromised.

“These are tough choices,” Hale said. “But if you choose to roll them back, you’ll have to take the money out of somewhere else.”

Sen. Lindsey Graham, R-S.C., said he’s happy to give that a try. He said he sympathizes with military officials struggling with the budget restrictions of sequestration, but added that he worries the proposed changes demand too much sacrifice from troops and families.

He pushed the committee to find $2 billion in savings elsewhere — either within the Defense Department budget or in other nonmilitary accounts — to stave off any changes until the following budget cycle, so that the recommendations of the Military Compensation and Retirement Modernization Commission can be taken into account. That congressionally mandated panel is due to produce a final report next February.

But Hale said waiting that long will create other budget headaches, as increases in personnel spending compound in coming years. Defense officials have decided to hold off on making any changes to military retirement benefits until the commission issues its report next year, but Hale said the other changes proposed by the Pentagon “are well thought out” and should be put in motion as soon as possible.

Military advocacy groups have lobbied lawmakers to wait on any changes until the commission checks in, arguing the results will provide a framework for a holistic and measured approach to changes. They have argued that moving too quickly will jeopardize retention and recruiting.

Hale dismissed that assumption, saying he thinks an improving economy is more of a threat to retention than changes to the already generous military compensation package.

But he also said that if the commission finds evidence the pay and benefits changes would be harmful to recruiting and force morale, military officials would consider reversing the moves next year.

Senate and House lawmakers will spend the next three months finalizing their own versions of the defense budget proposals.

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