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A Webb of Expenses

Posted By James Carafano On June 11, 2008 @ 11:45 am In Security | Comments Disabled

The decision by Congress to establish an all-volunteer force in 1973 ensured that American citizens have “the freedom to pursue their careers where and how they choose – in essence their right to liberty and the pursuit of happiness. [1]” The all-volunteer system, while expensive, has proven to be consistent with American values and well worth the costs required to recruit and retain highly-skilled and increasingly mobile professionals. Ensuring that America’s soldiers are sufficiently compensated for their invaluable service to their nation is and should always remain a top priority of our elected officials. Indeed, when the cash, non-cash, and deferred benefits a soldier, sailor, airman or Marine receives are totaled, Congress should be commended for ensuring America’s servicemembers are paid at a level comparable [2] to their civilian counterparts.

With a defense budget topline that is estimated to decline in the coming years—and a military compensation system that has grown at an unsustainable rate of almost 40 percent since the year 2000—the Congress must be prepared to take a long view and balance the requirements of meeting recruiting and retention priorities, continuing to modernize the force, and keeping manpower costs under control.

The so-called Webb GI Bill, introduced by Senator Jim Webb (D-VA) as S. 22 [3], the Post-9/11 Veterans Educational Assistance Act of 2007, provides a considerable expansion of GI benefits to soldiers who have served since 9/11. Unfortunately, this bill does little to help sustain retention rates while greatly expanding personnel costs without any proposed offsets. Budgeting demands Congress set priorities. Devoting resources to allow education benefits to be transferred to spouses or dependent children should be a priority—so long as it’s done responsibly.

Already projected to cost upwards of $52 billion over a ten-year period alone—doubling the present value of educational benefits—a study [4] by the Congressional Budget Office (CBO) estimated the S.22 could cause a 16% decline in reenlistment rates due to soldiers enticed to leave the service after three years to take advantage of their education benefits. According to CBO, this unintended consequence would cost an additional $6.7 billion between 2009-2013 just to pay for additional reenlistment bonuses to make up for the 16% loss.

Recent technical analyses of the current military compensation system show that non-cash benefits constitute a much larger share of compensation for the military than their private sector counterparts. (In-kind and deferred benefits include things like health care and retirement pay.) These analyses come from the Congressional Budget Office, the General Accountability Office, and RAND Corporation. Meanwhile, many military personnel believe they are underpaid when compared to their private sector peers because they focus on cash compensation levels. The Webb amendment will not resolve this perception problem. It might even make it worse. Congress would better serve the men and women in uniform by taking the money to be allocated to the expanded educational benefits proposed by Senator Webb and applying it to pay raises for military personnel.

Compensating America’s soldiers in a way that can enable the force to continue to recruit and retain highly-skilled candidates, while working to keep manpower costs under control in a future of potentially-reduced defense budgets, must be the primary aim of the Congress. The Webb GI Bill fails to do either.


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URL to article: http://blog.heritage.org/2008/06/11/a-webb-of-expenses/

URLs in this post:

[1] the freedom to pursue their careers where and how they choose – in essence their right to liberty and the pursuit of happiness.: http://www.rand.org/pubs/monographs/MG265/images/webS0243.pdf

[2] comparable: http://www.defenselink.mil/prhome/docs/Tenth_QRMC_Feb2008_Vol%20I.pdf

[3] S. 22: http://www.govtrack.us/congress/billtext.xpd?bill=s110-22

[4] study: http://www.cbo.gov/ftpdocs/92xx/doc9212/s22.pdf

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