Military Retirement Reform Eyed Amid Fiscal Debate

The Secretary of Defense, Leon Panetta, recently stated in a televised conversation at the National Defense University that the Department of Defense was seriously considering military retirement reform.  According to the Defense Business Board, the reform would focus on transitioning the current traditional pension to a 401(k)-style retirement fund based on employee/employer contributions.

It must be noted that even as a veteran I am not an apologist for unlimited defense spending.  I know from personal experience that there are many areas in which better fiscal sense can be employed and where waste and abuse can be addressed, and should.  That said, this new proposal has some significant flaws from my perspective (and for the record, I am not a military retiree).

First and foremost, if eliminating a pension for retired military personnel is both necessary and proper – and for sake of the argument perhaps it is in 2011 – then it is both hypocritical and offensive to not place other government employees’ pension statuses on the table for similar consideration as well.  For example, members of Congress are eligible for up to 80% of their final salary as compared with 50% of a retired veteran’s final salary.  The codified age eligibility of representatives and senators is similar to that of military retirees due to the time in service requirements and typical ages of enlistments.*

Certainly anyone who has read my posts in the past can glean that I am an advocate of individual responsibility but the current military pension system is one exception to that general rule for me for a number of reasons.

From a practical sense, this proposed reform, if implemented carelessly (as bureaucracies so often do), will likely have a significant impact on the retention of valuable personnel with critical skills and experience.  Continuity of knowledge, experience, and abilities is absolutely requisite to the proficiency of a volunteer fighting force.  As retired General Bob Scales points out, the profession of arms is a young person’s arena.  This means that even the “saltiest” of old dogs exit the military long before their counterparts retire in the civilian or public sectors.  The reality is this puts them at a great disadvantage at times when entering the job market for, effectively, the first time as an entry-level employee at ~40 years old.  That pension helps ease the burden of transition from one profession to another at mid-life, as obviously many military professions are not directly translatable to the civilian or even public market.  Absent this safeguard, it is plausible that many servicemen who would have otherwise stayed until retirement and provided valuable skills and experience to the existing and incoming forces will attrite to begin building a civilian or public career sooner.

From an ethical perspective, military pensions and benefits have been incorporated in the American tradition since at least the French and Indian Wars and remains a constitutional reward for the honorable service of the nation’s citizens who have been asked to sacrifice the most for their country and its people’s freedom.  This is one topic that the Federalists and Antifederalists were in total agreement when debating the purpose, impact, and breadth of the then-proposed Constitution – soldiers must generally be rewarded for their service if the individual freedom to choose to serve the state was to be secured.  This is not the same situation as Social Security, whereby folks are awarded a pension typically exceeding their contributions simply for existing, or the same as other federal employees where a given career can be carried forth in exchange for services rendered until a retirement age is reached commensurate with the rest of society or whose skillsets and experience can be more readily adapted to the civilian market.  These military pensions have generally been earned via direct service at the great individual risk, quite literally, of both life and limb and the technical skills obtained across 20 years’ service by many veterans are not as easily translatable to civilian use (e.g., combat arms).  Perhaps it is my unavoidable bias revealing itself but I tend to agree with Theodore Roosevelt who said, “A man who is good enough to shed his blood for his country is good enough to be given a square deal afterward.  More than that no man is entitled to, and less than that no man shall have.”

If the intent is to be responsible and objective in addressing the nation’s fiscal woes by considering defense spending along with other political sacred cows then I applaud the intent.  But there are other, better ways to address the very real problems inherent with modern defense spending:

-First, the entire military operating budgeting process and those who participate in it are in dire need of an appropriations mindset change.  The current “use it or lose it” approach encourages waste and abuse by effectively forcing planners to base their budget requests on previous years’ spending levels, rather than well-considered projected needs for fear of losing future and/or contingency funding.  This approach has the additional adverse effect of causing unused surpluses to be spent frivolously on unnecessary expenditures at the close of the fiscal year to justify future funding requests.  These budgets should be reset year to year, from the perspective of both the approving authorities and the requesting agencies, and approvals and disapprovals should be determined based solely on the merits of the needs/requests relevant to that particular fiscal year.  Budgeters should not be penalized for returning unused funds if circumstances did not unfold precisely as predicted.

-As mentioned in a previous post, politicians need to be largely removed from the acquisitions process.   Flag officers should make their budget requests, including their equipment acquisitions, to the Defense Secretary who should have the final discretion, from a public perspective, on what the military actually needs to carry out the nation’s lawful and constitutional mission directives.  The Secretary should then consolidate the request and submit it to the Congress for review and that body should approve or disapprove it, in part or entirety, based on whatever reason(s) it deems appropriate through congressional debate and vote.  This is the constitutional way the system was supposed to work but nowadays those politicians in the Congress actively and inappropriately inject themselves into the process under the disingenuous guise of “public oversight.”  Rather than faithfully adhering to the constitutional separation of powers concept which excludes the legislative branch from direct involvement in executive functions outside of the appropriation of funds and establishment of statutory guidelines, congressional members often directly impose acquisition requirements on the military that in many cases were not asked for, or were asked for some time ago and have since become obsolete, simply to satisfy constituent special interests or local economic concerns in their respective districts and/or states.  Ask yourself this:  given that there are only about a half-dozen general mission types that a modern Unmanned Aerial System (UAS) performs, and some UASs are capable of performing all of them from a single platform, why have we well over two dozen different platforms, made by different manufacturers, all with different project teams, each with its own set of overhead, research and development, and test and evaluation costs associated?

-The military is not an international police force or a cheap substitute for international aid organizations – private or government.   Imagine the savings that could be applied to the nation’s debt if the United States Armed Forces were utilized completely within their constitutional roles instead of as a convenient catch-all for international crises for successive administrations.  Simply because a mission makes good strategic sense or satisfies emotional distress does not automatically make it constitutionally acceptable.  In this nation the Constitution is sovereign and must reign at all times if any functions of government are to retain any legitimacy, thus the consequentialist approach to the nation’s concerns – all of them, not exclusive to the military – must be abandoned for principled approaches that pay due reverence to our framing social compact.


*As a full pension, military retirees earn 50% of their final salary, averaged across the last three years of their honorable service.  They are currently eligible to draw full pensions once they officially retire after a minimum of 20 years’ service (excluding special and rare circumstances such as medical retirements).  This typically results in a retirement age of somewhere between 40 and 45 years old per serviceman/woman.  Congressmen are eligible for full pension benefits immediately after 25 years’ service (and upon retirement), after age 50 with 20 years’ service, or after age 62 with five years’ service.  Given that the minimum age of eligibility for election to the Congress is 25 years old (in the House of Representatives), this equates to an earliest de facto pension eligibility age of 50 years old.


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  1. #1 by Chuck Temm on September 9, 2011 - 2:26 PM

    Been hearing rumors of this for some time and as you say, why limit such “great ideas” to the services? If it is such a great plan, make it government wide.

    Of course that is the true indicator what a poor idea it is. The bureaucracies are homes to professional butt sitters who tend to support the party that openly champions them, a party that not so strangely is not very popular with those who are enlisted to serve our nation.

    But DoD is going to take the brunt of the inevitable budget cuts and personnel costs are going to be targeted as they have fewer Washington defenders. We’ll see what plans the Geniuses come up to offset the future failing reenlistment numbers, my bet is those plans will eclipse any “savings” this idea actually produces.

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