Lawmakers are vowing to approach a long-awaited commission report on military pay and benefits with open minds, but skepticism is already growing that Congress will do much — if anything — to act on the commission’s recommended reforms.
For two years, members of both parties in the House and Senate — particularly those on the Armed Services committees — have repeatedly said they wanted to wait for the congressionally mandated commission to complete its report before making cuts to rising military personnel costs. But defense analysts and even some lawmakers are concerned that the commission won’t change Congress’ tune of protecting pay and benefits.
“Zero,” Mackenzie Eaglen of the American Enterprise Institute said of the chances Congress enacts the commission’s major recommendations. “For Congress to pass compensation reform would mean that the majority of members would have to agree there’s a problem that needs to be fixed. There’s not step one here. We’re at step zero.”
Todd Harrison, a defense analyst at the Center for Strategic and Budgetary Assessments, said he wants to be optimistic that Congress will act this year on military compensation, but he still predicts the odds are low for any significant changes.
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“The politics of this hasn’t really changed, and what Congress has been doing is going out of their way to avoid dealing with this issue because they fear the backlash of the veterans’ lobby,” Harrison said.
Two recent fights over compensation are driving the skepticism of compensation changes. When the House and Senate passed the Bipartisan Budget Agreement in late 2013, a cut to the military’s annual cost-of-living adjustment sparked a harsh backlash from veterans’ groups and was swiftly repealed by Congress.
Last month, House Republican leaders balked at several personnel cuts in the Senate’s defense authorization bill, including an increase to some pharmacy co-pays and a cut to the growth of the housing allowance. A one-year compromise was ultimately added to the final bill for a $3 co-pay increase and a 1 percent housing allowance cut.
Washington state Rep. Adam Smith, the top Democrat on the House Armed Services Committee, has long criticized his colleagues for failing to agree to the Pentagon’s cost-cutting proposals, and suggested the latest defense authorization fight was a bad omen.
“We’ve seen the minor, minor things we’ve tried to do, and they’ve all run into stiff resistance,” Smith told POLITICO. “When the commission comes back, I think that will help. Will that help enough? I wouldn’t bet the mortgage on it.”
Like Harrison, many lawmakers who have fought past changes to the military’s compensation system say they’e optimistic the Military Compensation and Retirement Modernization Commission will propose recommendations that can spur key changes, acknowledging reforms are needed after a decade of growth in personnel accounts amid the wars in Iraq and Afghanistan.
“It’s tough politics, but necessary,” said Sen. Lindsey Graham (R-S.C.), who chairs the Senate Armed Services Personnel Subcommittee that has jurisdiction over compensation issues.
Graham was one of the leaders of the revolt against the cost-of-living cuts last year. But he said comparing lawmakers’ reaction toward that cut to the commission’s proposals was “completely unfair” because the cost-of-living adjustment was targeted without sound research to back up the reduction.
“The consequences of doing nothing are real, so what I’m trying to do is build consensus that this commission was impaneled for a reason, and we should take their recommendations seriously,” Graham said. “We’re not bound by them, but we should consider them in a serious manner.”
Still, many lawmakers with close ties to veterans groups say that the Pentagon should be looking elsewhere to find savings — rejecting the premise that personnel costs need to be reined in. Rep. Tim Walz (D-Minn.), a retired National Guard command sergeant major, said he wants to see the Pentagon audited before cuts come to the pay and benefits system.
“I’m just not convinced that we’ve found everything where we can cut first,” he said, “and it’s a little frustrating to me that it seems to me when those decisions are made they come back to enlisted soldiers first.”
Both the Pentagon and veterans groups are gearing up for the political battle that’s looming once the commission’s report is released Thursday. Retired Vice Adm. Norb Ryan, president of the Military Officers Association who led the 2014 benefits fight, said this year would be “probably the most important year” in his dozen for his association.
At the center of the fight will be the findings of the nine-member compensation commission, which is made up of former Pentagon officials, retired military officers and former lawmakers. The commission has been working since 2013 studying the military’s complex compensation system.
One reason there’s still some hope among skeptics that the commission’s findings will prompt reform is because any changes proposed to retirement pay — arguably the thorniest military compensation issue — would not affect current service members and retirees.
Harrison said health care costs are a ripe area for the commission to recommend changes that could generate savings over the next decade. He expected that could be more fruitful than other proposals like changes to cash compensation or the military’s 20-year retirement system.
One big wild card in the compensation fight is sequestration, as the spending caps have prompted many of the Pentagon’s budget cuts to the compensation system — and if sequestration is actually reversed before the start of the new fiscal year on Oct. 1, a higher Pentagon topline could lift all budget boats, from personnel to procurement.
Much of the focus will be centered on the two new chairmen of the Armed Services committees, Rep. Mac Thornberry (R-Texas) and Sen. John McCain (R-Ariz.), who are in charge of the National Defense Authorization Act that’s the likely vehicle for compensation policy changes.
Both have acknowledged the pay and benefits system must be closely examined, though they have held their cards close to the vest on what they might support. Thornberry said he’s planning hearings on the commission’s report in early February, and Graham said his Senate panel will likely do the same.
On Thursday, Thornberry took issue with the Pentagon’s previous cost-cutting proposals, accusing the Pentagon of “nickel and diming our people to death year after year.”
“It’s more helpful to step back and look at what sort of pay and benefits are working as we hope they would, which ones are not as effective, and does this structure make sense in being able to recruit and retain the kind of people we need moving ahead,” Thornberry said. “You start with that, and then you look at the cost implications of what works or what doesn’t work.”
The defense industry, which is cautiously eyeing the personnel debate and its implications on the size of the Pentagon’s procurement and research accounts, is hopeful the combination of Thornberry and Smith at the helm of the House Armed Services Committee will help get reforms across the finish line.
“If it doesn’t happen now under Thornberry and Smith, it never will,” said one defense lobbyist.