Pay, benefits, troop reduction 'on the table' as Pentagon wrestles with budget cuts
July 31st, 2013
08:49 PM ET

Pay, benefits, troop reduction 'on the table' as Pentagon wrestles with budget cuts

By Chris Lawrence

The size of the active-duty U.S. Army could fall to levels not seen since the 1950s if the Pentagon fully carries out voluntary and forced spending cuts totaling $100 billion annually over the next decade, Defense Secretary Chuck Hagel said on Wednesday.

Hagel outlined a series of worst-case scenarios - including potential pay and benefit reductions for active duty forces, civilian personnel and retirees - that would also impact the Navy, Marines and the Air Force if steps to ease the one-two austerity punch are not taken.

"This strategic choice would result in a force that would be technologically dominant, but would be much smaller and able to go fewer places and do fewer things, especially if crises occurred at the same time in different regions of the world," Hagel said.

Hagel said "everything is on the table."

It was Hagel's most comprehensive assessment of the financial challenges facing the Pentagon through the early part of the next decade.

His comments came just as Congress prepares to head home for its August break after which lawmakers and the Obama administration will again face key fiscal decisions on spending and federal borrowing.

The Pentagon is facing cuts of roughly equal value - $500 billion - in two areas over the next decade.

The first covers mandated, government-wide austerity that took effect in March after the inability of Congress and the administration to reach a deficit-reduction deal. The Pentagon's share of those cuts is roughly half of the overall government total.

The military also is planning to slash spending voluntarily as it moves away from more than a decade of warfare in Iraq and Afghanistan and prepares to reorganize and become more nimble.

Under the analysis, Hagel said the Army could have nearly 200,000 fewer soldiers compared to its recent wartime high if the double-whammy of cuts hits full force.

The active-duty Army could shrink to as low as 380,000 active-duty soldiers by 2017, as Hagel outlined a choice between cutting the size of the military or keeping its technological edge.

The Army has not been that small since the 1950s.

Hagel also suggested the Pentagon may have to eliminate three Navy aircraft carrier strike groups, slash the size of the Marines and mothball up to five of the Air Force's combat air squadrons.

Hagel's report followed a review by Pentagon officials examining the short and long-term effects of budget cuts on military strategy.

The Pentagon will consider changing military health care for retirees to increase use of private sector insurance when available, and may change how the baseline housing allowance is calculated so individuals are asked to pay a little more.

The military may also reduce the overseas cost-of-living adjustments and limit military and civilian pay increases.

"Many will object to these ideas, and I want to be clear that we are not announcing any compensation changes today," Hagel said.

But Defense officials admit overall personnel costs have risen 40% above inflation since 2001. "The Department cannot afford to sustain this growth," Hagel said.

Congress will have to sign off on some of the cuts Hagel suggested.

For instance, the Pentagon previously tried to impose small increases in health care fees for its working-age retirees. But leaders on Capitol Hill pushed back.

Now the Pentagon is signaling it will be forced to push for bigger cuts, affecting both military and civilian personnel.

Hagel described the Pentagon's current compensation plan as unsustainable if the sequester and voluntary spending reductions are imposed full force.

"If left unchecked, pay and benefits will continue to eat into our readiness and modernization. That could result in a far less capable force that is well-compensated, but poorly trained and poorly equipped," he said.

soundoff (39 Responses)
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  5. Recent Army Retiree

    Bottom line up front...we service members sign an open check for our country to cash whenever they want. We get put through the grinder for 20 plus years and our leaders now want to take what was promised to us. I have said it for years, until the politicians are put on the same playing field as the rest of us (I.e. medical, retirement, social security) nothing will get truly fixed. I honestly do not know how "WE THE PEOPLE" have aloud our leaders to become so powerful. The only laws thy can agree on are the ones that will benefit them!

    December 17, 2013 at 10:18 am | Reply
  6. Bill

    I say every politician take a pay cut. Whenever the country is in trouble, it is always military pay and benefits which is on the line. This comes from from politicians who only after serving 4 years get full retirement, full medical care, everything, for the rest of their lives. Military who spends 20 years serving his/her country only receives 50% of their base salary. Now, tell me again where the cuts need to be made.

    August 14, 2013 at 7:20 am | Reply
  7. xxclusivxx

    how about the politicians take a pay cut and face furloughs...they have not been doing their jobs to help the people anyhow. Instead of putting the burden on the middle class and lower class, politicians should start giving themselves some pay cuts to "ease" or "contribute" to the budget cuts

    August 9, 2013 at 2:02 am | Reply
  8. A True Conservative

    Darn....the sequester didn't cause the pain that the Dems and the President so badly wanted.....Hmmmm....looks like the Republican's were right.....again......

    August 6, 2013 at 4:39 pm | Reply
  9. California

    Obama not only wanted the sequester but the specific part he wanted was the military cuts. I'm sure most if not all democrats will ignore that fact like they usually do.

    August 5, 2013 at 12:05 am | Reply
  10. JoeS

    There was lot of military waste for the past 20 years because some of our military leaders though they owned the resources of the country, but they made highly sophisticated military equipment at the same time. Perhaps we need a highly mobile small but powerful military. All we need is our nuclear capability, submarine and the b2 bomber at this time. Plus we need a good inteligence network to check treat of all its form.

    August 3, 2013 at 3:35 pm | Reply
    • Political Slice

      There is a lot of pork in the Defense budget that has nothing to do with defense. If we cut non-defense related grants to universities, that would be a good start. If we cut programs that DoD has been asking for, but powerful Congressman and women refuse to cut because the work is performed in their district or state, that would easily solve the problem. This is not a budget issue, but a political one where both parties are trying to blame the other party at the expense of hard working federal workers.

      August 4, 2013 at 8:02 am | Reply
  11. QueenVelveetaJamimaLaqueetaTelmaColenderDaKeeshaaLaWafflez

    DIck Cheaney cut troop levels by 20% as secretary of defense.

    August 2, 2013 at 7:17 pm | Reply
    • Political Slice

      You forgot to mention that the President that directed that reduction was Clinton. When the media blindly reports that Hagel says that they need to cut $50 billion, they ignore the fact that the spending levels were set two years ago when President Obama signed a law that was voted for by a majority of both Democrats and Republicans. The law increased defense spending for FY2014 by $10 billion over FY2013 levels. Instead of submitting a defense budget with the terms of the bipartisan agreement, the White House requested $60 billion more than last year. Even the Democratically controlled Senate returned it to DoD to cut it by $50 billion to conform to the law. That request was ignored. This is not a cut of $50 billion, but limiting the increase to $10 billion. If you asked for a raise of $10,000 a year, but only got a raise of $5,000, would you call that a pay cut?

      August 4, 2013 at 7:57 am | Reply
  12. Palle sol Fuoco

    When a federal department is too big to audit how is it possible to quantify the spending?

    August 2, 2013 at 12:05 am | Reply
  13. Religious Guy

    Why is it that I do not hear about reduction of Pay and Benefits of members of Congress? Leaders should lead the way. Preachers should practice what they preach.

    August 1, 2013 at 8:18 pm | Reply
    • Frogman

      Their pay is guaranteed by law so why do they need to agree on a budget? They have no incentive since they will get paid regardless.

      August 1, 2013 at 8:50 pm | Reply
      • Palle sol Fuoco

        Wonder who wrote that law?

        August 2, 2013 at 12:00 am |
    • tax payer

      Do not refer to the Servants of the People as Leaders. as Leaders stick to the code they are measured against. annnnnnnd as for this Military thing....we are so fu**ed

      August 1, 2013 at 9:06 pm | Reply
  14. NNN

    DoD has squandered tens of trillions in recent decades on pure waste and fraud. This department has the most inept and corrupt civil service within the entire civil service. I bet they wish they had that money now, because no one can buy into their sales pitch anymore, the country is broke, and it has d a m n e d little to show for the expenditure on DoD. Hopefully the soon-to-be unemployed ver_min there will not contaminate other parts of American industry, that would surely spell the end of this country.

    August 1, 2013 at 7:37 pm | Reply
    • Palle sol Fuoco

      That fraud has accounted for most of the growth in the economy. Unemployment will skyrocket when these cuts are full implemented.

      August 2, 2013 at 12:02 am | Reply
      • NNN

        That so-called growth was/is paid for with borrowed money, it is unsustainable, it is fake short term prosperity. In the meantime, the national infrastructure has been sorely neglected and the government is struggling to meet its basic responsibilities.

        August 3, 2013 at 4:16 pm |
  15. Dan Cameron

    Where's the story on Pentagon's Project Funvax video?

    August 1, 2013 at 1:23 pm | Reply
  16. Steve

    The Army is too large? – let's think about that we have 330,000 million people in this country our Army has about 1.4 million active duty soldiers in the US Army according to Wikipedia, so doing the math our country is defended by just .04% of the population? I don't know about you but that concerns me, in a time of Russia's resurgence, China's increasing belligerence we are reducing our force to what – .001% of the population? At that level we are not a significant threat to Venezuela much less Russia or China.

    I have some suggestions – instead of the huge build of of Federal employees around the DC area – which drives up salaries, why not distribute those offices around the country where comparable housing can be had for 1/4 or less than the cost houses in the DC Metro area.

    August 1, 2013 at 8:04 am | Reply
    • NNN

      You're an i r r a t i o n a l n i t w i t , you go from a comparison of troop strength to population and leave that open ended drawing no conclusion whatsoever, to your personal feelings of concern, to an appeal to reduce housing costs for the military – all out of the blue with no connection made to anything. Your iq wouldn't challenge a single cell brain.

      August 1, 2013 at 7:31 pm | Reply
      • tax payer

        If you can't give ideas to help then shut up, if we followed his idea...maybe if we are invaded we have a better chance let alone out on troops WOULD FINALLY LEARN OUR OWN NATIONS TERRAIN..

        August 1, 2013 at 9:19 pm |
    • Palle sol Fuoco

      N u k e em!

      August 2, 2013 at 12:03 am | Reply

    "Small" government that the Guns over People tea potty lied and threw tantrums for is a reality. They will now lie and blame President Obama. Same old playbook.

    August 1, 2013 at 6:19 am | Reply

    This is the "small" government that the Guns Over People Shutdown Government tea potty wanted. They lied and threw tantrums until they got it. Lie and blame Obama now. Same old playbook.

    August 1, 2013 at 6:14 am | Reply
  19. TC

    Instead of cutting troop numbers and their pay how about they cut the contractors pays. You have people working along side the military getting 200K-400K a year while the troops are lucky to make up to 70K

    August 1, 2013 at 1:42 am | Reply
    • Palle sol Fuoco

      Contractors work for company's that lobby Congress. Want to guess which side those weasels will support!

      August 2, 2013 at 12:04 am | Reply
    • Twin

      Troop usually are the highest in the lower end so most troops only make around 30k a year. And that doesn't include BAH or medical but they are planning on taking away that also. With moving most of the troops spouse are forced into taking jobs constantly at lower pay because they live only in areas for 2-3 years. Most troops right now are in proverty level and qualify saddly for government assistance programs. So ask yourself if you had two children and you only earn around 30k a year how would you survive. Sadly most troops are going to have to not reenlist because of the lack of pay and benefits. I just hope they will not be forgotten because most of them have served in some pretty harsh condition and won't even be able to get there medical espenses paid. I wish I had more money to help out programs that direct support military.

      August 8, 2013 at 2:59 pm | Reply
  20. Adjust3d

    Reblogged this on Uncaged And Adjusted and commented:
    Cuts have to happen. It is a fact. The current size and cost of the US military has already reached the point of being unsustainable, although current operations are likely a huge part of the military's cost balloon. One of the biggest questions that remains: what happens to all those soldiers, sailors, airmen and marines who no longer have jobs? The job market is far from flourishing. Maybe it will lead to the US Congress to actually pass a budget. We can only hope.

    July 31, 2013 at 10:48 pm | Reply
  21. DaveG

    The Pentagon budget is triple what it was when President Clinton left office. It needs to be cut in half from it's current levels moving forward. If that means we cannot "police" the rest of the world's problems, SO BE IT.

    July 31, 2013 at 9:56 pm | Reply
    • John McKane

      I agree, Dave. Let's quit bullying the rest of the world and save our tax money!

      August 1, 2013 at 8:14 am | Reply
  22. bronson

    Oh wow $100,000,000,000 over the next decade, now what about the 16,000,000,000,000? or the few extra trillion we will add on in the next decade?

    July 31, 2013 at 9:53 pm | Reply
  23. George patton

    This is what I call a step in the right direction. Now we need to concentrate on turning over our bases in Germany to our Polish, Czech and Hungarian allies for them to man. This way, these bases can function on one tenth the cost than is currently the case.

    July 31, 2013 at 9:43 pm | Reply
    • AF wife

      Step in the right direction? Thank you for being willing to pay for our housing and for our food stamp once we loose our homes, then security clearance, then our jobs. The service members of the US military thank you for your great generosity.

      August 5, 2013 at 8:12 pm | Reply

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