/.../Just like General Motors and many other previously labor-intensive businesses, the Pentagon has a labor cost problem. And just like Corporate America, the solution to the Pentagon's labor cost problem will be the substitution of new weapons for soldiers, in an attempt to get more national security output per troop. The Army and the Marine Corps, the most labor intensive of the services, should brace for the bad news to come/.../
Recent defense think-tank reports explain how large the Pentagon's personnel costs have become and, if unaddressed, what a barrier they will be to the Pentagon's ability to adapt in the period ahead. According to the Center for Strategic and Budgetary Assessments (CSBA), the Pentagon's personnel costs (military and civilian and including fringe benefits) are now 45 percent of the department's "base" (non war-related) spending. With defense spending now scheduled to drop, perhaps dramatically, over the next decade, policymakers will have to take an ax to this 45 percent of the budget if there is to be a reasonable amount of funding remaining for equipment modernization and realistic military training.
The CSBA report also notes an impending explosion in the cost of veteran benefits, even as the number of living veterans is due to decline sharply over the next decade. Recently expanded educational, medical, and disability benefits are ballooning the VA's budget. Pentagon budget planners just received an order from the White House to transfer an additional $25 billion over the next ten years to the Veterans Administration in order to protect VA medical funding from cuts, one more consequence of personnel costs.