Fairly steep Department of Defense cuts announced

Congressional negotiators have come up with a plan to cut costs at the Department of Defense which represents a compromise between proposals from the House and the Senate. Assuming this comes up to a vote and is approved there’s going to be a 25% reduction in the civilian workforce in addition to the introduction of a new retirement plan for the troops. Government Executive Magazine has the details.

The 2016 defense authorization compromise bill would require $10 billion in cuts, half of which must occur by fiscal 2018. The one-quarter staff reduction was a compromise between the 20 percent cuts required by House-backed legislation and a 30 percent decrease approved by the Senate. Savings already realized by the Pentagon’s self-initiated cuts implemented in recent years would count toward the final reduction goal, which must be met in fiscal 2020.

The agreement, if approved by Congress and signed into law by President Obama — who has threatened to veto a provision allowing Defense spending to sidestep sequestration caps by increasing the “emergency” Overseas Contingency Operations fund — would surpass the 20 percent cuts the Pentagon has imposed on itself.

There’s quite a bit more in the agreement to digest. The military would receive the same 1.3% pay raise which the White House proposed for federal civilian workers. That’s going to come as a disappointment to service members who were hoping for a raise more in the two to three percent range to try to catch up with matching civilian pay rates. (Military Times)

For an E-4 with three years of service who’s making roughly $28,000 this year, the White House’s 1.3 percent plan means a boost of around $360 for 2016. An O-4 with 12 years of service, making almost $84,000 this year, will see $1,100 more under the raise plan.

Typically, the pay raise is set to match anticipated growth in private-sector salaries, expected to be 2.3 percent in 2016. But the law allows the president to set an alternative pay plan in cases of a national emergency or budgetary constraints, something Obama has done for three consecutive years.

The changes to the retirement system will only affect new recruits who enlist after these changes go into effect. (Current members will be grandfathered into the old plan.) The Thrift Savings Plan – already available – will provide government matching funds to savings the troops put away toward retirement. In some ways this will be an improvement for service members who don’t stay in for a full twenty years, currently the threshold for getting any sort of serious retirement benefits. But they can also expect less generous terms if they do the full stretch.

This isn’t the most appealing set of options imaginable but since there was a general agreement that we have to trim costs across the board I suppose they had to come from somewhere. The worrisome aspect of all this is that it’s hard enough to attract and recruit excellent candidates to a life of military service as it is in a country which is pretty much perpetually at war. A solid retirement plan in an economy where many will have trouble keeping steady work in the civilian sector is one of the few features keeping us staffed up on the military front. These are tough decisions all the way around, but I hope these cuts don’t come back to bite us in the end.

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