The Defense Business Board, a panel of corporate types who advise the Pentagon’s civilian leadership, has trained its sights on a problem that urgently needs fixing: the military retirement system.
Didn’t know it was broken? Well, a recent DBB study concludes that military benefits are “more generous and expensive” than those available in the private sector, and have therefore become “unaffordable” and “unfair.” Created back when military skills did not easily translate into civilian second careers, the system is also unnecessary, the study argues. And with retirees no longer dying as quickly as they once did, it’s inconvenient to boot.
With the Pentagon pressured to tighten its belt, the DBB wants to lift a page out of the corporate playbook: “renegotiate” (i.e. “reduce”) the workforce’s benefits package. Of course, the workforce in this case has spent the past decade not pulling shifts on an assembly line, but rotating between various theaters of war.
What exactly has attracted the DBB’s ire? Put simply, the retirement system promises military members half of their pay for life in exchange for 20 years of service, with the percentage of money increasing incrementally for those who serve more than 20 years. In its place, the DBB advocates a 401(k)-type arrangement with service members and the government both kicking in contributions. (The proposal would have no effect on members who have already retired.)
From the Pentagon’s point of view, the plan offers two advantages. First, it promises to save money. Employing what we might call the Afghanistan cost metric (an ACM is the monthly bill for waging the Afghan war, which the Pentagon estimates at $10 billion), military retirees set the government back five ACMs per year. By 2035, absent action taken to reduce these costs, the present system will consume 11 ACMs — almost what it costs to fight in Afghanistan for a year. According to the DBB, that could make future wars on the scale of Afghanistan too pricey to undertake.
To avert this prospect, the DBB wants the Pentagon to jettison the concept of a lifelong retirement pension. In its place, the board would institute a tax-sheltered savings account to accompany service members into the post-military workplace. Counting on civilian employers to contribute to that account, while stipulating that benefits would be “payable at age 60 to 65” rather than at 40 or 45, would reduce the money that the Pentagon is obliged to set aside. In effect, providing for Capt. Smith’s retirement would become an individual responsibility, shared by however many employers Smith could induce to pitch in — not a responsibility that the Pentagon alone would have to bear.
The DBB reforms also would give the Pentagon greater flexibility in shedding people deemed redundant. The current system makes it “very difficult to release personnel with 15 or more years of service,” the DBB laments. Yet it is this group — field-grade officers and non-commissioned officers who have borne the brunt of the post 9/11 wars — who “are a likely target for downsizing.” Eliminating career troops short of 20 years, thereby denying them a promised pension, can entail costly and undesirable severance packages.
In contrast, a portable 401(k)-type system can make it easier for the Pentagon to simply hand people their walking papers — as corporate America routinely does. Baldly asserting that today “military skills are transferable to the private sector,” the DBB takes it for granted that former service members will have little trouble finding jobs, ignoring the fact that the unemployment rate for veterans is significantly higher than the national average.
Major savings along with greater managerial flexibility seems like a no-brainer. Yet as with many money-saving schemes, this one incurs hidden costs. And the DBB’s “flexibility” dodges the real issue.
Conspicuously absent from the analysis is this phrase: “military profession.” The concept of professionalism remains alive and well in the ranks of the armed forces, where an ethos of service and a commitment to a code of personal conduct have survived. In addition to dignifying uniformed service, the military professional ethic helps to ensure that the officer corps is apolitical. Keeping the military out of politics sustains, in part, the principle of civilian control. That is no trivial matter for a country that places so much emphasis on wielding armed might.
Whether out of malice or ignorance, the DBB would junk that. Its overhaul would commodify military service. The effect would be to transform profession into trade, reducing long-serving officers and noncommissioned officers to the status of employees, valued as long as they are needed, expendable when they are not, forgotten the day they leave.
“The All Volunteer Force has proven to be an outstanding success,” the DBB declares. Yet that force costs a bundle. Trimming retirement outlays appears to offer one way to keep that force fiscally viable. Next on the docket will be cuts in medical benefits. Count on it.
Over the course of a decade, that all-volunteer force has proved to be astonishingly durable. With only 0.5 percent of Americans bearing the brunt of the nation’s seemingly interminable wars — and with the rest of us largely insulated from wars’ effects — politicians in Washington have had a free hand in deciding when and where that force will fight.
Now Washington is under pressure to trim the costs of maintaining that force. Rather than gutting the retirement system for the men and women who devote their lives to defending their country, we need to rethink the all-volunteer force and what we expect it to do.
Andrew J. Bacevich is a professor of history and international relations at Boston University and a retired Army officer. He is the author, most recently, of “Washington Rules: America’s Path to Permanent War.”
About the Author
