FOR YEARS, DEFENSE LEADERS have told Congress per- sonnel costs are rising out of control and, if left unchecked, will consume most of future defense budgets. In May 2010, during a speech in Kansas, then-Defense Secretary Robert Gates asserted, “Health care costs are eating the Defense Department alive.”
Earlier that year, then-Undersecretary of Defense for Personnel and Readiness Cliff ord Stanley testifi ed rising personnel costs could “dramatically aff ect the readiness of the depart- ment” by leaving less money to fund operations. In 2012, Undersecretary of Defense (Comp-
troller) Robert Hale said, “The cost of pay and benefi ts has risen more than 87 percent since 2001, 30 percent more than infl ation.” Accordingly, the Pentagon’s FY 2013 bud-
get proposed substantial force cuts, curtailing future military pay raises, creating a new com- mission to propose compensation and retire- ment cuts, and raising retiree health care fees by $1,000 to $2,000 a year or more. Media outlets have repeated the alarmist as-
sertions, and study groups and think tanks have jumped to propose further cutbacks. In July 2011, the Defense Business Board
(DBB) Task Group on Modernizing the Mili- tary Retirement System called the current mili- tary retirement system “unfair, unaff ordable, and infl exible.” In May 2012, the Center for American
Progress published a report titled “Reforming Military Compensation — Addressing Runaway Personnel Costs Is a National Imperative.” In July, the Center for Strategic and Budgetary Assessments (CSBA) pronounced in its report, “Rebalancing Military Compensation,” that “the all-volunteer force, in its current form, is unsustainable.”
Critics have made the same “the sky is fall-
ing” claims since the all-volunteer force began 40 years ago. But the all-volunteer force has proved to be the
cornerstone of national defense through decades of peace and war, despite pundits’ and bean coun- ters’ continual “gloom and doom” predictions. Curiously, those “down” periods where re- tention and readiness faltered occurred only after the budget-cutters had their way. The problems were corrected only when the cut- backs were reversed. How do we separate fact from fi ction in this
new round of studies and recommended cuts? Here’s a closer look at the critics’ allegations.
“Personnel costs will consume the entire defense budget.” Statements that rising personnel costs are “un- aff ordable,” “out of control,” and “unsustain- able” and “will impact readiness” are designed to make headlines, alarm the reader, and (not infrequently) generate support for pursuing additional studies. “If personnel costs continue growing at that
rate and the overall defense budget remains fl at with infl ation,” the CSBA authors hyperbolized, “military personnel costs will consume the en- tire defense budget by 2039.” Elsewhere, they acknowledged “this will
never happen.” But the quote was seized and repeated by reporters, pundits, bureaucrats, and
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