ENTITLEMENT GROWTH CONCERNS

Abell Testifies At House Armed Services Subcommittee Hearing
By Tom Philpott, militaryupdate.com

A senior Defense official has warned Congress against creating an entitlement-rich military that the nation cannot afford.

Charles S. Abell, principal deputy under secretary of defense for personnel and readiness, was asked March 24 while testifying before the Total Force Subcommittee of the House Armed Services Committee, to list a few issues that keep him awake at night.

“Recruiting and retention are constant concerns,” said Abell. “Another big worry,” he said, “is the sweep of military compensation and benefits after recent gains and given new initiatives that Congress appears to favor.”

Growth And Entitlement Spending

“You and your colleagues are very generous to our folks and, in most cases our folks deserve everything that you give them,” Abell told Rep. Vic Snyder (D-Ark.) “However, it is possible to create a force that is too expensive for the nation, especially when it comes to programs that are essentially deferred compensation, or where the benefits accrued only to those who no longer serve. I worry about the cost of that and what that does to labor costs within the department of defense.”

Representatives of military associations disagreed, urging at the same hearing that the House improve survivor benefits, expand reserve health care and adopt a lengthy list of other initiatives.

Abell, a retired Army lieutenant colonel who served two combat tours in Vietnam, noted that basic pay for most service members is up 29 percent since January 2000. Mid-grade enlisted, who received higher “targeted” raises, have enjoyed a 35 percent over four years. Housing allowances, by year's end, will have climbed 18 percent faster than rental costs since 2000.

The Bush administration supported these raises, Abell says. What it opposes are initiatives to raise entitlement spending, especially for retirees, their survivors, drilling reservists and their families.

Abell's written testimony included a chart showing growth in entitlement spending, which by fiscal 2005 will reach more than $12 billion a year for just three recently enacted programs: TRICARE for Life; concurrent receipt (limited to retirees with disability ratings at least 50 percent) and TRICARE for drilling reservists who are unemployed or lack health insurance.

The Senate's budget resolution for 2005 earmarks funding to phase out over 10 years the sharp drop in military survivor benefits that occurs at age 62. Abell said that would cost $1 billion a year within five years. It also would open military health care to all drilling reservist and their families willing to pay modest premiums. That would cost at least $1 billion too, Abell said.

Phase-in of concurrent receipt for all retirees, as some legislators propose, would boost that program $2-billion annual cost by 40 percent.

Lowering from 60 to 55 the age at which annuities begin for Reserve retirees could cost $14 billion over the next 10 years

Testifying for The Military Coalition, a group of more than 30 service associations, Joe Barnes, Erin Harting and Lee Lange urged approval of all these initiatives to correct inequities for retirees and survivors and to properly compensate the over-worked current force.

Military To Civilian Jobs

Just as advocates for service people refuse to give ground on compensation issues, the Bush administration resists pressure for a permanent increase in force levels, despite the higher pace of operations since 9/11. Abell said more forces would be costly and unnecessary.

The Army, strained by Iraq, will be allowed to grow by 30,000 more active duty soldiers under a temporary manning initiative. Another initiative, to convert military billets to civilian positions, will free up 10,000 uniformed personnel across the services this year and 10,000 more in 2005.

But Abell confirmed that the cost of filling former military jobs with new civilians, as military move to more warrior-like jobs, must be paid for out of existing service budgets rather than with new funding.

“At the Office of the Secretary of Defense level, we're going to say this is funded,” said Abell. “The services are going to say, `You didn't give us any money to do this.' We're both going to be right.”

“It's a much different program than many of us perceived it to be,” said Rep. John McHugh (R-NY), subcommittee chairman.

Retention and Stop Loss

Testifying with Abell March 24 were the service personnel chiefs who agreed that while recruiting and retention rates have hit their goals, they remain top concerns for 2004 and beyond.

“As good as the environment may appear to be today,” said McHugh, “I worry that improvement in the job market and continued stress on the force will yield a very hostile recruiting and retention environment in the near future.”

McHugh said one reason he didn't have confidence in the rosy retention numbers is that some services still relied on “stop loss” programs in 2003, which bar service members from leaving active duty.

“You're right about the numbers,” Lt. Gen. Franklin L. Hagenbeck, Army deputy chief of staff for personnel, told him. “As of February, stop loss was keeping 44,500 soldiers beyond their service obligations and planned retirement dates. The purpose is to ensure unit stability through lengthy deployments to Iraq and Afghanistan,” Hagenbeck said.

He projected that stop loss will continue for deployed units through fiscal 2005, impacting at any time next year about 31,000 soldiers.