New proposals to shrink military compensation would hit troops in the wallet, almost immediately.
Nearly all of the changes floated — capping next year’s pay raise, curtailing housing allowances, increasing health care co-pays and letting prices rise at commissaries — would have a direct impact on troops’ household budgets.
Other more indirect forms of compensation — such as free military schools, post-retirement health care and generous retirement pay — were untouched.
That runs counter to a growing belief that the most effective way to save money without hurting morale is to avoid, if possible, affecting service members’ monthly household budgets.
“People value cash more than just about anything else,” said Todd Harrison, a military compensation expert at the Center for Strategic and Budgetary Assessments, a Washington think tank.
Harrison led a survey of troops in 2012 that revealed they place the highest value on cash up front. Many troops say they do not value the so-called deferred benefits to nearly the same degree that they cost the government to provide.
For example, Tricare for Life, which promises access to military health care for retirees in their 60s and 70s, is costly for the government — nearly $7 billion every year in accrual costs — yet underappreciated by troops.
With only about 17 percent of the force ever serving long enough to qualify for retirement benefits, the issue of deferred versus immediate compensation programs is emerging as a key consideration for the Military Compensation and Retirement Modernization Commission, appointed by Congress to study military compensation and submit a report in February 2015.
Defense Secretary Chuck Hagel said proposals to change retirement were deliberately set aside until next year when the commission completes its work.
The head of that commission, Alphonso Maldon Jr., said anecdotal evidence that “cash is king” has been so strong in town hall-style meetings with troops that the commission is planning a large-scale survey of service members to help identify what they actually value the most. The survey is slated to launch in April.
The new proposals this year emerged from an essentially top-down process, driven by senior military leaders in the Pentagon talking about what troops want.
“You’ve got to get outside this bubble of senior officers and senior enlisted leaders who have been in the military their entire adult life,” Harrison said. “They are only talking to the folks they work with.”
The commission’s survey could transform the compensation discussion by providing a more empirical, statistical foundation for discussion.
“Do you think junior enlisted are really going to feel comfortable speaking their minds to senior officers and senior enlisteds?” Harrison said.