Compensation trends need examining

Tom Philpott

Tom Philpott

By Tom Philpott

Military Update

Military folks upset that recent defense budgets have targeted their pay and benefits have no reason to fear a new 358-page “interim” report from the Military Compensation and Retirement Modernization Commission.

The nine-member blue ribbon panel does present, in impressive detail, the full range of military and veteran pays, allowances and benefits that Congress has enacted over recent decades including the last 13 years of war.
It’s a document recruiters could use to great effect if not for its heft.

But the commission reaches no conclusions on whether any of the compensation offerings, or their combined effect, is excessive. Therefore, it gives little comfort to budget analysts and even military leaders who want to dampen compensation costs through caps on pay raises and housing allowances, hikes in health care fees and cuts to the commissary benefit.

Commission Chairman Alphonso Maldon Jr. says the intent of the interim report is to present a “comprehensive resource tool” for understanding military compensation. It shows what commissioners have learned the past year, and “sets the stage” for critical analysis and recommendations to modernize compensation.

A final report to President Obama and Congress is due in February.
The breadth of compensation programs for military members, retirees, reserve components, veterans and families is impressive, delivered across several federal departments. Total funding in fiscal 2014: $340 billion.

Commissioners don’t suggest here that cuts or even major policy changes are warranted due to cost growth alone. Their goal is to replace outdated programs, and “piecemeal” steps taken over time to solve compensation needs, with a more modern, flexible and efficient system.
“Although the Commission found that compensation funding has increased substantially over the last two decades, as has been repeatedly reported in the national press, these simple trends need to be examined in greater detail before any conclusion can be drawn regarding fiscal sustainability,” the report says.

It echoes a point made often by military associations and veterans groups in answer to critics who say compensation growth has been excessive the last decade or more. Any cost growth comparisons, the report says, “are highly dependent on when the comparisons are begun.”

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: