Shutdown Ends, Budget Woes Endure

The government shutdown having come to an end, it may be easy to assume that all has been made right in the military world; hundreds of thousands of civilians have returned to work, and those who are eligible will still receive their November benefit payments. Promotion boards are now in operation, and active duty service members recently in limbo – awaiting the status of stalled transfer orders – need not wait any longer.

Trouble in paradise looms, however, as first-year sequestration cuts continue to hinder military training and freeze civilian hiring. Thus, pressure weighs heavily on the services to curb military personnel costs in a number of ways. Mechanisms for doing so range from capping annual military pay raises to increasing TRICARE fees for military retirees, specifically targeting those under the age of 65 who have chosen to pursue a second career outside the military. Advocates for military retirees counter this proposition by arguing that such retirees have already paid the price for generous health care benefits by dedicating decades of service under dangerous conditions, many far from home.

Another argument advanced in the interest of curbing costs: the adoption of a new method for adjusting federal entitlements for inflation, labeled the "chain" Consumer Price Index. Executing this new plan, dubbed the 'CPI', entails marginally reducing the cost-of-living adjustments each year, which proponents argue would eventually produce significant savings on military and federal civilian retirement, veterans' benefits, survivor payments and social security.

Defense Secretary Chuck Hagel has warned that cuts "too steep and abrupt" will pose too great a risk to the military, resulting in a "major new national security contingency." Hagel cited potential "severe and unacceptable" side effects, such as freezes on signing new recruits and issuing promotions, as well as suspension of change-of-station moves. Accordingly, Hagel proposed alternative forms of budget cuts, suggesting the closure of unneeded bases, the capping of raises, and the increasing of retiree TRICARE fees.

The proposed initiatives for cutting personnel costs are to be raised for discussion on Capitol Hill and at the Pentagon in the coming months. Additionally, the legislation opening the federal government until Jan. 15 provides text purporting to require that a fiscal 2014 budget compromise be negotiated by mid-December. Defense officials hope that such a compromise can be achieved to prevent a second year of sequestration cuts; otherwise, the defense budget will plummet further below the administration's request for the fiscal year.

Categories: Military News
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