Pension reform can save money and improve fairness. Currently, those who serve for less than 20 years -- 83 percent of those who join the military -- get nothing, while those who do the full hitch can retire in their late 30s and get decades of benefits. The Pentagon’s Defense Business Board in 2011 proposed a better system for future troops that would introduce 401(k) plans, raise retirement ages, limit annual payouts to younger retirees and benefit all those serving more than five years. This could save $70 billion a year by 2034. The Pentagon would also do well to cut a head-scratcher of a program that gives $1 billion a year in unemployment checks to people who left the armed forces voluntarily.
Some will argue that cutting health benefits and pensions and slowing pay increases will hamper recruiting and retention. That’s generally not a bad thing -- we are trying to cut manpower, after all. Second, cuts in these areas may not be deal breakers. According to a groundbreaking 2012 survey by Todd Harrison of the Center for Strategic and Budgetary Assessments, service members put a low value on many of the most expensive (and often tax-free) benefits of military life -- including Tricare for Life, free health care for dependents and receiving retirement benefits before age 50. Far more important to them were less-costly things such as more vacation days, shopping at the PX, and being able to choose their next duty stations and length of tour.
As for that giant operations and maintenance account, we simply have too many people on the payroll who are not service members and too many bases in the U.S. and abroad. The 800,000 civilian staff and 700,000 contractors -- including 5,000 in the office of the secretary of defense alone -- outnumber active- duty troops.