Big cuts coming; lower pay raises start in 2015 - Army News | News from Afghanistan & Iraq - Army Times

Big cuts coming; lower pay raises start in 2015

Service members can expect standard pay raises for the next two years — most likely 1.7 percent for 2013 — but that will change starting in 2015, according to a new budget plan unveiled at the Pentagon on Thursday.

Defense Secretary Leon Panetta released details of the 2013 budget, the first since Congress ordered the Pentagon to slash more than $450 billion in planned spending over the next decade, with a few glimpses of what may be in store beyond 2013.

Under the plan, military pay will continue to rise in tandem with the average annual increase in private-sector wages, but starting in 2015, raises may be capped a level slightly below annual growth in civilian pay.

“I want to make it clear that cuts in spending will not fall on the shoulders of our troops. There are no proposed freezes or reductions in pay. There is no change to the high quality of health care our active duty members and medically retired Wounded Warriors receive,” Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said in a written statement Thursday. “But we cannot ignore some hard realities. … Pay will need to grow more slowly in the future.”

Congress will have to approve any reduction in military pay raises because the current law requires annual increases to match the official Employment Cost Index, which would result in an increase of 1.7 percent on Jan. 1, 2013.

The Pentagon also will renew its push to raise health care costs for military retirees under age 65. That includes a proposed increase in retirees’ enrollment fees, co-pays and deductibles. Nevertheless, Panetta added, “the cost borne by military retirees will remain below levels in most comparable private-sector plans.”

Specifically, defense officials will seek fee hikes on par with medical inflation, which runs 7 percent a year or higher, rather than pegging increases to the annual cost-of-living adjustments in military retired pay, which average about 3 percent over time, according to congressional aides briefed on the Pentagon’s plans. The most recent retiree COLA increase was 3.6 percent.

To address calls to scale back military retirement benefits, President Obama will urge Congress to “establish a commission with authority to conduct a comprehensive review of military retirement,” with an assumption that any resulting changes would affect only future recruits.

Panetta said today’s troops should not worry about their retirement benefits. “The president and the department have made clear that the retirement benefits of those who currently serve will be protected by grandfathering their benefits,” he said.

Obama will also ask Congress to resume the Base Realignment and Closure process for identifying further savings.

Senior military officials know that ending the Defense Department’s decade of massive budget increases will be a bitter pill to swallow, according to congressional sources.

To that end, the Joint Chiefs of Staff and their senior enlisted advisors sent a letter to their subordinates across the force, urging them to support the benefits reductions as being in the best long-term interest of the military, sources said.

Impact on the services

Despite Panetta’s doomsday rhetoric of recent months, the budget proposal does not include any radical cuts in hardware and weapons programs that have not been widely discussed already.

Two key aspects of the budget remain largely intact: the F-35 Joint Strike Fighter program that will supply the Air Force, Navy and Marine Corps with a so-called fifth generation aircraft; and the Navy’s carrier fleet, which will remain pegged at 11 flat-tops.

The Army’s total force should be slashed by an additional 30,000 troops, down to 490,000 by 2017. That will bring the Army back to about the same level as 2001. The current force swelled to 570,000 in response to the wars in Iraq and Afghanistan, and previous plans called to reduce that to 520,000 by 2017.

The budget plan calls for the Marine Corps to fall to 182,000, down from a peak of more than 202,000 but still higher than the roughly 172,000 personnel that the Corps had in 2001.

“While the U.S. does not anticipate engaging in prolonged, large-scale stability operations — requiring a large rotational force — in the near- to mid-term, we cannot rule out that possibility,” according to a briefing prepared by the Pentagon.

To keep the force flexible and capable of ramping up if needed, the Pentagon will not significantly reduce National Guard and Reserve forces. Moreover, the Army will retain a higher percentage of mid-grade officers and senior non-commissioned officers to provide leadership if a rapid expansion of the force is required down the road.

The Air Force is likely to lose six of its 60 tactical air squadrons, bringing its total down to 54 squadrons.

The Navy will retire “low-priority cruisers that have not been upgraded with ballistic missile defense capability or that require significant maintenance, as well as combat logistics and fleet support ships.” It is unclear precisely how many ships would be affected by that move.

The Pentagon will retain its nuclear triad — the three-pronged arsenal of land-based missiles, ballistic-missile submarines and weapons delivered by Air Force bombers. However, the Navy’s next-generation ballistic submarine can be delayed “for two years without harming the survivability of our nuclear deterrent.”

Money details

The Pentagon prepared its budget under a requirement from Congress that it reduce planned spending over the next decade by more than $450 billion. In practice, the Defense Department translated that to an overall reduction of $259 billion in its planned spending for 2013 through 2017.

Overall, the Pentagon budget request for 2013 will total $525 billion as a base budget and $88.4 to fund the war in Afghanistan and other overseas contingency operations. That’s down about $53 billion, or about 8 percent, from the 2012 request of a $531 billion base budget request and $135 billion for overseas operations.

That base budget is slated to rise back to $567 billion by 2017, but it is unclear how much, if any, the Defense Department will request in supplemental money for overseas operations during those years.