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Military Compensation Reform: Taking a Bite Out of Defense Spending

Posted By constancerapkoch On April 21, 2009 @ 8:50 am In Ongoing Priorities | Comments Disabled

At last week’s speech at the Air War College, Secretary Gates told the officers present that, “Health care is eating the [Defense] Department alive. [1]” The massive expansion of military compensation spending in the past decade has placed the entire system in jeopardy. Healthcare spending alone for 2010 is set for $47 billion. And in fiscal year 2009, nearly 25 percent of the defense budget was allocated for military compensation. Fortunately, a solution exists.

According to Mackenzie Eaglen, [2] to achieve cost-effective reform, the system should become more competitive, flexible, and more heavily based on cash compensation; and less on non-cash and deferred benefits. Cash compensation [3] will attract recruits who want to serve in the military, but not make it a career. Not only is this type of compensation more economical, it will alleviate perceived inequalities between military and private sector pay.

Military healthcare is also in need of major changes. The current system is based on a “one size fits all” mentality. By changing from a defined-benefit plan to a defined-contribution plan, military personnel can remain under the same health care system as they move from job to job. Thus, the service member has continued coverage in both the private and government sectors. This increases flexibility and places responsibility for health care decisions on the service member’s shoulders where it belongs. Consistent with the recommendations of the Tenth Quadrennial Review of Military Compensation [4], Congress should also eliminate copayments to “encourage enrollees to seek out such care, improve their health status, and reduce their overall health care costs.”

Gates’ public recognition of the problem is a good first step. It’s time now to tame the budget beast that is military compensation.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/04/21/military-compensation-reform-taking-a-bite-out-of-defense-spending/

URLs in this post:

[1] Health care is eating the [Defense] Department alive.: http://www.montgomeryadvertiser.com/article/20090419/NEWS02/904190305/1009/rss04

[2] Mackenzie Eaglen,: http://www.heritage.org/Research/nationalSecurity/bg2144.cfm

[3] Cash compensation: http://www.defenselink.mil/prhome/docs/Tenth_QRMC_Feb2008_Vol%20I.pdf

[4] Tenth Quadrennial Review of Military Compensation: http://www.defenselink.mil/news/QRMCreport.pdf

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