Sequestration Sets Generals Against Soldiers And Soldiers Against Retirees

Back in 2010, the conventional wisdom in Washington was that the sequestration provision of the Budget Control Act was so onerous that it would force the legislative and executive branches to compromise on their various demands for cuts in spending and increases in taxes. As it turns out, the conventional wisdom was wrong and we now have sequestration. Moreover, while not as severe and immediate as some predicted, the impacts of these draconian budget cuts are bad and become worse with time. Government employees are being furloughed with disruptions to activities in excess of the actual number of working days lost. Military readiness is declining. The Air Force grounded one-third of its combat-coded squadrons for part of the year; the Army has cancelled training activities for 78 percent of its combat brigades. This is just the beginning.

The impacts of sequestration on military cohesion, credibility and morale could make this situation even worse. The effort to develop a rational strategy for managing sequestration while still maintaining a credible, even viable, military is pitting the generals against enlisted personnel, the active Component against the Reserve Component and currently serving members of the military against retirees. In a speech yesterday at the American Enterprise Institute, the Army’s Chief of Staff, General Raymond Odierno, said that the House of Representative’s proposal to bump up the proposed increase in military pay from 1 percent to 1.8 percent would put additional strain on an already overtaxed defense budget. As Odierno explained, “That sounds like a little difference; but it’s a huge difference throughout the years. It’s billions of dollars.” It sounds as if the Army’s leadership is begrudging the troops a few measly extra dollars a week. But, this is very serious business. According to Odierno, “If we continue along the way that we are going now, we believe by 2023, 80 percent of our budget’s going to be [spent] on compensation. We can’t operate on that.”

Military leaders, Defense Department officials and outside experts all have called for reform of the pay and compensation system. The cost of personnel has doubled since 9/11, due in large measure to Congress’s eagerness to provide the military with generous pay increases and its granting of expanded benefits to a range of military-related constituencies. However, modest efforts at reform (for example, small raises to co-pays for military health care and cut backs on military commissaries) have produced a heated backlash from retirees. This sets up a situation in which by the end of the next decade the cost of retiree pay and benefits will exceed the cost of maintaining the entire active duty personnel. Here is a clear example of what critics warned that the ever-expanding American welfare state would create: an inter-generational war for resources. The problem is that with respect to the military this is becoming a war between those who honorably served their nation and those who now and in the future will go in harm’s way.

Trying to accommodate both cohorts will make it absolutely impossible for the military to invest in modernization. Just taking personnel reductions off the table for fiscal year 2013 and, prospectively FY 2014, is placing severe additional pressure on the Pentagon’s Acquisition and Operations and Maintenance accounts. The department squeezed the O&M accounts even further to find an additional $900 million just for FY 2013 in order to reduce the number of planned furlough days for DoD civilians from 11 to 8. The House of Representatives has even taken the extraordinarily bad step in its version of the FY 2014 defense bill of forbidding any furloughs of defense civilians.

There is growing tension between the Active Army and the National Guard and Reserve over how much pain each will have to endure. The Reserve Component rightly asserts that it cost less than the active Component — provided it is not activated. If personnel issues are not addressed sensibly and the compensation system is not reformed, while critical modernization programs are maintained and essential training and sustainment activities continue, then the size of the military will have to be reduced drastically, perhaps by as much as 50 percent. This would probably destroy the All-Volunteer Force. At some point, size matters for a global power and we are fast approaching that point.

Well before that point is reached, however, the bond between officers and enlisted, Actives and Reserves and retirees and current military personnel could be sundered. These would be intolerable costs to incur for the relatively small budget savings achieved by sequestration.