Are Veterans Benefits Too Generous?

For several years, the Department of Defense (DoD) has been suggesting ways to trim parts of the Defense budget to make room for other military spending. These recommendations have included modest cuts in benefits for active-duty servicemembers and veterans.  However, Congress has repeatedly rejected cost savings that rein in the benefits for servicemembers.

This week, retired Lieutenant Colonel Tom Slear wrote an op-ed that appeared in the Washington Post saying "I'm an Army veteran, and my benefits are too generous."

Slear noted that although he served for almost 30 years, he was never in harm's way: "I never fired a weapon other than in training, and I spent no time in a combat zone." Nonetheless, he was entitled to generous pensions, inexpensive health insurance through the military's health-care program TRICARE, and other perks such as having access to tax-free stores on military bases.

Slear suggests there are many service members like him, who get generous pensions despite having never seen combat:

I am hardly unique. Despite the extended operations in Iraq and Afghanistan, nearly half of the 4.5 million active-duty service members and reservists over the past decade were never deployed overseas. Among those who were, many never experienced combat.

It’s a fact of warfare called the logistical tail. For every soldier, Marine, sailor or airman whose job is to engage the enemy, there are three or more service members in a well-guarded, reasonably comfortable bivouac area ensuring that the troops are fed, resupplied, paid, entertained and attended to medically.

These jobs are important. Battles are won based on logistics just as much as tactics. But these support jobs aren’t particularly hazardous. Police officers, firefighters and construction workers face more danger than Army public affairs specialists, Air Force mechanics, Marine Corps legal assistants, Navy finance clerks or headquarters staff officers.

Military retirees have been given large benefit packages in recognition of their service to the country, but these compensation packages take a growing share of the Pentagon's budget. According to Defense Secretary Gates in 2010, "Health-care costs are eating the Defense Department alive, rising from $19 billion a decade ago to roughly $50 billion." Current Secretary of Defense Chuck Hagel said “Without serious attempts to achieve significant savings in this area, which consumes roughly now half the DoD budget and increases every year, we risk becoming an unbalanced force, one that is well-compensated but poorly trained and equipped, with limited readiness and capability.”

As CRFB President Maya MacGuineas recently noted, funding for military health care rose 130 percent between 2000 and 2012, even after adjusting for inflation. Former generals wrote that: "We can either properly train and equip our future warriors or maintain overly generous benefits for young military retirees who have many years in the workforce ahead. We cannot do both." As Slear explains,

Simply put, I’m getting more than I gave. Tricare for military retirees and their families is so underpriced that it’s more of a gift than a benefit. A fourfold increase in premiums would leave Tricare safely on the side of hearty largesse, yet the Pentagon’s attempts to raise premiums by as little as 10 percent have had shelf lives shorter than ice cubes.

Last year's Ryan-Murray budget agreement would have trimmed the cost-of-living increases for those working-age retirees by 1 percent. However, Congress reversed the change before it ever took effect. Slear explains the difficult politics:

The budget agreement last year included a trim of 1 percent in the cost-of-living increase in military retirement pay for those under 62. Predictably, the American Legion, the Veterans of Foreign Wars and the Military Officers Association of America would have none of it. “Breaking faith” is how the MOAA’s chairman characterized the deal.

Oh, please. One percent on a non-contributing pension while the retirees are still in their productive working years? That’s not breaking faith. It would be a judicious concession to the expanding federal deficit and would go largely unnoticed by recipients.

Forfeiting 1 percent of military retirement pay would not shortchange those wounded and disabled in combat, the ones most deserving of benefits. Disabled retirees were promptly exempted from the cut, and there was never a proposal for reducing disability care or benefits. But veteran interest groups refuse to abide by that distinction.

In this time of excessive expenditures for government pensions, wouldn’t a very small decrease in pay to military retirees be reasonable, particularly during the period of their lives when they are fully capable of civilian employment?

The policymaker's desire to honor those that have served with generous compensation and benefits is understandable. Many of those men and women have risked their lives and gone through great physical and emotional trauma to defend the United States. Nonetheless, with the national debt on a path to reach unsustainable levels in the next few years, policymakers must carefully examine every corner of the budget for savings, and military benefits should not be an exception. As senior Pentagon officials have repeatedly warned, there are consequences for the federal budget and military readiness.