Friday, January 06, 2012

Strong National Defense

It's a slogan I hear again in these presidential campaigns. But there are also plans to reduce the military budget:
Defense Secretary Leon E. Panetta is set this week to reveal his strategy that will guide the Pentagon in cutting hundreds of billions of dollars from its budget, and with it the Obama administration’s vision of the military that the United States needs to meet 21st-century threats, according to senior officials.
Sounds like a good idea, given this picture:

The question is of course what to cut. This is the most troubling of the suggestions:
Many who are more worried about cuts, including Mr. Panetta, acknowledge that Pentagon personnel costs are unsustainable and that generous retirement benefits may have to be scaled back to save crucial weapons programs.
“If we allow the current trend to continue,” said Arnold L. Punaro, a consultant on a Pentagon advisory group, the Defense Business Board, who has pushed for changes in the military retirement system, “we’re going to turn the Department of Defense into a benefits company that occasionally kills a terrorist.”
Military benefits and salaries, although politically difficult to cut, are first in the line of sight of many defense budget analysts. Scaling back the Pentagon’s health care and retirement systems and capping raises would yield hundreds of billions of dollars in projected savings over the next decade.

As it stands now, the Pentagon spends $181 billion each year, nearly a third of its base budget, on military personnel costs: $107 billion for salaries and allowances, $50 billion for health care and $24 billion in retirement pay.
These arguments ignore two important considerations:

First, the implicit contract that was in force when those currently serving and retired from the military enlisted. I guess that is what the article means when stating that cutting benefits is politically difficult. Those who enlisted understood that they would be taken care of, in exchange for the risks they took.

But the second problem may have somehow slipped past the notice of those who support this plan: If the pay and retirement benefits for the military will be cut, how will this affect those who might plan to enlist in the future? Fewer people would be willing to serve in the military, because it would pay less well and presumably the dangers would remain the same.

That may, of course, be the intended effect. Still, those who would be willing to enlist at lower total benefits are more and more likely to consist of those who have few alternatives.