CBO: Better GI Bill would cut retention 16% - Army News | News from Afghanistan & Iraq - Army Times

CBO: Better GI Bill would cut retention 16%

A new congressional report supports the Pentagon’s claims that vastly improved GI Bill benefits would hurt retention.

The Congressional Budget Office, the nonpartisan analytical arm of Congress, said in a report Thursday that enactment of S 22, a bill promising to pay full tuition plus a stipend for veterans attending college, could lead to a 16 percent drop in re-enlistments.

The Defense Department could counter that drop only by increasing re-enlistment bonuses. Fully offsetting the draw of a better veterans’ education program would require a $25,000 re-enlistment bonus for every first-term service member, something that would cost the Pentagon about $6.7 billion over five years.

However, that cost would be offset by lower recruiting costs, the report predicts. It estimates there would be a 16 percent boost in recruits, which would allow a cut in enlistment bonuses and in other recruiting expenses that would result in $5.6 billion in savings over five years.

The combination of better recruiting but weaker re-enlistments would leave the military with a $1.1 billion cost over five years to maintain the current force, the report said.

The report is dated May 8 but was released Friday morning.

The cost estimate for S 22, sent to the Senate Budget Committee’s ranking Republican member, Judd Gregg of New Hampshire, comes as the House and Senate are poised to attach the GI Bill improvement package to the 2008 war supplemental funding bill.

House leaders delayed work on the bill until next week because some fiscally conservative Democrats are concerned about passing a veterans’ benefit program without identifying a way to pay for it.

Overall, CBO’s cost estimate is slightly lower than the estimated price tag issued by the Bush administration. Congressional budget analysts predict S 22 would have an overall cost of $680 million in the first full year and $51.8 billion over 10 years.

VA officials told the Senate Veterans’ Affairs Committee on Wednesday that the proposal would cost $64.9 billion over 10 years.

S 22, called the 21st Century GI Bill, represents a big increase over the $1,101 basic monthly education benefit provided today for someone with at least three years of active service. It would boost the basic benefit to cover full tuition and fees, up to the cost of in-state tuition at the most expensive four-year public college or university in the state where student is attending school.

Sen. Jim Webb, D-Va., a member of the veterans’ affairs and armed services committees and chief sponsor of S 22, said better benefits are intended to help people who leave the military after one enlistment, which is the majority of those who enlist.

Seventy-five percent of Army, 70 percent of Marine, 50 percent of Navy and 49 percent of Air Force enlistees who complete their first enlistment term get out of the military, Webb said.