U.S. Military Eyes Cut to Pay, Benefits | Wall Street Journal

Joint Chiefs Grapple With Less to Spend


SIMI VALLEY, Calif.—The U.S. military’s top commanders, groping for ways to cope with a shrinking Pentagon budget, have agreed to a plan that would curb the growth of pay and benefits for housing, education and health—prized features of military life that for years have been spared from cuts.

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said in a weekend interview that without such changes, the cost of military personnel would soon rise to 60% from about half of the defense budget.

“What we have asked these young men and women to do over the last 10 years, we can’t pay them enough,” Gen. Dempsey said during a conference at the Ronald Reagan Presidential Library. “Having said that, we also have an institution to manage.”

Military officials haven’t revealed details of the plan, which still must be approved by the Defense Secretary Chuck Hagel and President Barack Obama before it is sent to Congress for approval.
Gen. Dempsey said the chiefs would unveil the changes when the proposed military budget is released in February. He said the new plan wouldn’t immediately cut the benefits received by service members or retirees.

Over the past nine months, the Joint Chiefs of Staff have been analyzing military compensation—from pay and health benefits to housing allowances to the discounted prices at base commissaries.

Previous efforts to curb benefits have met stiff opposition from veterans groups and lawmakers. Gen. Dempsey said the military’s previous efforts to change compensation were flawed because they were one-year fixes. The new approach would offer a multiyear plan to slow the growth of military compensation.

The Pentagon will make a persuasive argument to lawmakers that the changes are needed to balance the budget and fair to troops, Gen. Dempsey said.

“We have the analytic tools that potentially we didn’t have before,” he said. “We have a body of knowledge that has convinced us doing it once is the right answer.”

Lawmakers are far from certain about the plan.

Without curbs on compensation-spending growth, there will be too little money for building new weapons systems or training forces in 10 years, Gen. Dempsey said during the interview Saturday.”Last year Congress established a compensation review commission to look at this issue, and we have not yet received their feedback,” said Rep. Howard “Buck” McKeon (R., Calif.), chairman of the House Armed Services Committee. “I would like to see how much we can get out of institutional reform before we look at cutting benefits for the troops.”

Off the table for now are changes in the retirement system. Because the military hopes to allow current service members to keep their existing retirement plans, it will be two decades until any savings from changes in military retirement are realized, making shifts in the program less urgent.

Gen. Dempsey made his comments on the sidelines of the Reagan National Defense Forum.

During the conference, current and former Defense officials, as well as members of Congress, spoke about the need to approve Pentagon budgets and lift the across-the-board government spending cuts known as the sequester.

“You can’t expect this country to maintain a strong military if we aren’t maintaining some kind of common-sense budgeting,” Leon Panetta, the former Defense secretary, said at the forum. “We are sending a message that the United States is going to be weak and that is the wrong message to send.”

If Congress doesn’t agree to lift the sequester, the Pentagon faces $52 billion in cuts in January. About $41 billion was cut this year from military spending.

Mr. Panetta’s successor, Mr. Hagel, said in a speech that the military’s ability to respond to crises was impaired by budget cuts.

“Inevitably, we are shrinking the size of the force that is ready and available to meet new contingencies or respond to crises across the globe,” Mr. Hagel said.

Gen. Dempsey said in the interview that if the sequester stayed in place, a large number of military units wouldn’t be ready for war or other duties. Under the sequester, the military in five years will be without the necessary depth to tap in the event of unforeseen crises, he said.

“You have just what you need,” Gen. Dempsey said. “But my view of the future is, just what you need is not enough.”

Write to Julian E. Barnes at julian.barnes@wsj.com

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