2015 Budget, Hagel Deliver Slap in the Face to Service Members

Military bases and Washington have been abuzz for weeks with news of the impending defense budget proposal for FY2015, but when the proposal was announced last week, it came as a slap in the face to military members and their families.

Under the proposed budget, service members would see their compensation package cut beginning in October, while leaving unpopular and unnecessary programs in place — though there are some safeguards in place to cushion the immediate financial shock.

The timing of the announcement didn’t help the budget’s reception. The news came during Military Saves Week, a week when service members are encouraged to practice financial responsibility and the Pentagon has been doing damage control ever since. Nearly every release on the subject by the pentagon for the last two weeks has made an effort to downplay the effects that this budget proposal will have on service members pay and benefits if it is approved, and it likely will be.

In making the initial announcement of the budget proposal last month, Secretary of Defense Chuck Hagel said that the Department of Defense can no longer put off the cuts to military compensation and that the continuous state of fluctuation within the department would ultimately affect troop morale.

“Continuous piecemeal changes will only magnify uncertainty and doubts among our service members about whether promised benefits will be there in the future,” Hagel said at a press conference on February 24.

Chairman of the Joint Chiefs of Staff, Martin Dempsey, echoed the same sentiment in his remarks at the presser.

“I know this weighs heavily on the minds of our men and women in uniform and on their families,” Dempsey said. “Our force is extraordinarily accepting of change. They are less understanding of piecemeal approaches. They want — and they deserve — predictability.”

Hagel and Dempsey went on to say that the money that is taken from troop compensation will be used to further equip and train the force, but doing so fails to take into account painful lessons learned from history. Various communist and totalitarian regimes have tried paying troops little to nothing, and expecting them to pay for their own equipment, essentially what would be happening under this budget proposal. The result was a force that was little better than farmers with pitchforks that collapsed at the first sign of trouble.

The pair stressed that no troops will actually see a pay cut, but that annual cost-of-living raises would be capped at one percent, below the current 1.5 percent rate of inflation and the three percent 100-year average. This means that while service members won’t actually be missing money from their paychecks immediately, over a short period of time the effect will be the same — do more with less.

Also on the chopping block is the Basic Allowance for Housing (BAH). Hagel said that the DoD is looking to reduce this allowance by about 5 percent, but stressed that no one would see a reduction in their current rate. In fact, it would take an act of Congress to reduce the current rate that service members receive. Members would be subject to the reduced rate once they transfer to a new geographical area.

Under this budget request, the department will also cut subsidies for commissaries, the military’s on-base grocery stores which sell their products at or just slightly over cost. The move further straps military families’ budgets, as many of them — especially the lower ranks — depend on the cost savings to make ends meet.

“Over three years, we will reduce by $1 billion the annual direct subsidy provided to military commissaries, which now totals $1.4 billion,” Hagel said.

He went on to say that the commissaries won’t be closing, and while on the surface this might be true, that assertion really doesn’t make economic sense in the long run.

In essence, the elimination of commissary subsidies means that nearly all the money currently provided to keep costs low will be gone. This will cause prices to have to increase dramatically in order to stay in business, eventually leading to the shutdown of commissaries when they can’t compete with retailers like Walmart.

In addition, the DoD is manipulating Tricare benefits for active duty family members and retirees. They would see higher deductibles and cost share payments and would be pressured even more so than they are currently to use Tricare Prime — the military equivalent of an HMO. The problem is that this is the plan that offers members the least choice in their care. Sure the care is free, but beneficiaries often have long wait times to see providers only to be given substandard care.

All of this doesn’t add up to high morale and good retention numbers of high quality troops, but that doesn’t seem to be something that the DoD is worried about. In fact, it could work in their favor.

It was also announced that the DoD plans to cut some 80,000 troops from the ranks of the Army, reducing it to its lowest level since World War II.  The Marine Corps would also lose 8,000-10,000 troops, though if sequestration returns, that number would increase. Yet, the defense department maintains that these cuts will not affect readiness or security.

And while the DoD is cutting compensation to the troops and scuttling the force, they are dumping money into ineffective programs. The very popular A-10 aircraft would be retired in favor of the F35, an aircraft that has yet to prove itself, has already overrun its budget by $163 billion, and is said to be virtually useless without the F22 for support purposes, according to General Michael Hostage, head of air combat command for the Air Force.

“We recognize that no one serving our nation in uniform is overpaid for what they do for our country,” Hagel said at the same press conference.

Despite that statement, that seems to be exactly the message the DoD is sending to the troops.