Sunday, December 2, 2012

Take military and veterans benefits off the Grand Bargain table

A US Marine stands guard outside the Pentagon This Marine is not causing the deficit. Last year, the Defense Business Board, a committee of corporate executives established by Donald Rumsfeld, issued a plan calling for drastic reductions in military pensions. Secretary Panetta said at the time he was considering the proposal but ultimately decided to hand off any decisions about pension benefits to a blue ribbon commission. Back in April, Army Times reported on how the commission would be constructed:
First, none of the nine commissioners appointed by the president and Congress would belong to a military or veterans advocacy group, and no more than four commissioners could have active-duty military experience. These limitations may prevent those mostly likely to oppose retirement reform from forming a majority on the commission.

Second, one of the commission's guiding principles will be to save money. While there are other goals ' modernizing retirement benefits, helping with career management, and aiding recruiting and retention ' the savings goal guarantees that the result will not be a more generous retirement plan.

The commission would work much like the Base Realignment and Closure Commission in that it would come up with a non-amendable bill that faces an up or down vote in Congress. Considering the DBB has already recommended converting military pensions to one of these awful 401(k) plans, it should be pretty clear what a new military pension commission would recommend.

Military families are already facing tremendous increases in copayments in Tri-Care being aggressively pushed by the Pentagon and the White House. The White House has even issued a veto threat if the Defense AutWorse, is news like this:

The 2013 raise will be 1.7%. We are deeply concerned about DoD's pay proposals for 2015 and beyond. DoD officials state they plan to set raises below ECI beginning in 2015'their proposals show these raises would be almost miniscule'starting with just 0.5% in 2016, significantly lower than any recent ECI annual increase.
To use a naval term, it is time to drop anchors. FULL STOP. It is absolutely unconscionable that Congress is seeking savings on the backs of active duty service men and women or veterans. This country is still engaged at war all across the globe and has just concluded one of the longest military conflicts in our history. The last thing Congress or the Administration needs to be doing is looking for areas of savings in military benefits. Washington certianly shouldn't consider military pay and benefits in the same way it considers physical military infrastructure, as if our men and women in uniform are merely another part of the complex. How could they even think such a commission would be accepted by the American people when a majority of its members are required to have no experience or knowledge of the challenges military families face?

There is plenty of fat in the Defense budget to be cut. The Pentagon spends about one third of the budget on military pay and benefits. The rest is spent on civilian pay, weapons programs, and war. It would seem to me that these last two areas would be the first places one should cut considering they cost the most. And if necessary, the Pentagon should propose a war tax strictly for the funding of military benefits. I think it is a tax most patriotic Americans would be happy to pay and it wouldn't cost much:

A 10 percent tax surcharge, similar to the one during the Vietnam War, would bring in roughly $112 billion if applied in 2012, according to Alan D. Viard, a scholar at the American Enterprise Institute and former senior economist at the Federal Reserve Bank of Dallas. That would just about cover the expected $116 billion for war costs in 2012.

Although Viard said he was not endorsing such a step, he said the surtax would not affect the 40 percent of American households that pay no income tax at all and would add just one-tenth to rates of those who do pay income tax.

But before anything is proposed or negotiated with respect to military and veterans benefits, these matters should not be discussed in the context of deficit reduction. Our people in uniform deserve better than that.


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