White House backs changes to military pay, benefits
FORT DRUM, N.Y. — The White House and Pentagon on Monday backed proposals that would overhaul pay and benefits for troops and military retirees — including a 401(k)-style retirement plan for all troops.
The 15 recommendations released earlier this year by the Military Compensation and Retirement Modernization Commission would save an estimated $12 billion annually. The White House plans to report to Congress by April 30 on the changes that can be implemented quickly.
Release of the White House letter on the changes coincides with Defense Secretary Ashton Carter's two-day trip to Pennsylvania and New York to underline one of his priorities: recruiting and retaining the skilled troops the military needs to fight the wars of the 21st century.
Keeping seasoned troops in the ranks was the focus of Carter's visit with soldiers here. Extending retirement benefits to all troops is a key component of that effort. About 83% of troops, including most of the enlisted men and women who have done the majority of fighting in Afghanistan and Iraq, do not qualify for retirement pay.
Changing military pay, retirement and health benefits is tricky. Retirees, for instance, have resisted calls to increase co-payments for health care.
The pension system pays out 50% of a soldier's pay after 20 years' service but nothing prior to that. The commission's proposal would match funds each member of the armed forces put into a retirement account.
Another recommended change would allow troops and retirees to choose commercial health care plans. Retirees would be required to pay an increasing share of their health care costs but less than the rates paid by government employees.
Personnel costs, such as pay, health care and retirement, have consumed an unsustainable share of the Pentagon's budget. In the last decade, the cost per person in the active duty force grew 46%, excluding war funding and adjusting for inflation, according to the Center for Strategic and Budgetary Assessments. At that rate, and a Pentagon budget that accounts for inflation, personnel costs will consume the entire defense budget by 2039.
Carter also announced that s oldiers from the 10th Mountain Division, one of the most heavily deployed in the Army and based at Fort Drum, will serve in Iraq as soon as this summer. They'll train and advise Iraqi security forces.
About 1,250 soldiers from the division's 1st brigade will be sent to Iraq as soon as August. They'll replace soldiers from the 82nd Airborne Division and serve there for nine months.
Earlier Monday, Carter made a pitch to 1,100 high school students that was part call-to-service and part flat-out recruitment. Carter referred to the 9/11 generation of troops, and their sacrifices, but noted that many would be leaving the armed services. Faced with the need to add about 250,000 troops per year, Carter stressed G.I. Bill and its promise to pay as much as $284,000 toward college tuition and the chance to graduate debt free.