Bullseye for Budget Cutters: Military Pensions and Healthcare Costs

With the failure (a foreseeable and eminently welcome development ) of the so-called supercommittee to cut a deficit deal -- a failure which may, in fact, reduce the deficit -- the military is in the odd position of facing considerable budget cuts. If the White House doesn't cave to political pressure, 2013 will commence a downsizing of the Pentagon budget over the next decade to the tune of $600 billion, on top of $450 billion in cuts mandated by the debt ceiling deal last August.

The military is certainly a bloated, juicy target. And if this target has a bullseye, it is the pension and health benefits provided to both current and former service people. As NPR recently noted, even excluding war funding, the Defense budget grew by nearly 40 percent over the last decade, largely due to annual pay raises and the rising costs of healthcare and pensions. The retirement benefits most vulnerable to cuts, costing about $50 billion a year, are those of "the roughly 17 percent of soldiers, Marines, sailors, and airmen who have served 20 years or more in uniform."

Talk of slashing military benefits isn't out of left field. Last year, the deficit commission considered just that sort of measure, and in August, Defense Secretary Leon Panetta said that restructuring retirement accounts is "the kind of thing you have to consider."

Perhaps. But if so, it's increasingly urgent that the Veterans Health Administration -- which is not under the Defense aegis -- be protected. The Agency has been nipped at by conservatives, which is mildly surprising, as the Republican Party tends to rubber-stamp the wish lists of the armed forces. Mitt Romney, for example, recently pushed for the partial-privatization of the veterans' healthcare. He managed to maintain the virtue of the idea for nearly two weeks, longer than he holds most policy positions.

Without details, it was difficult to guage the extent of the damage that would've been done by Mr. Romney's plan. But as Paul Krugman argued, the notion that privatization is a necessary measure is prima facie foolish. The Veterans Health Administration is, he rightly observed, "a huge policy success story." The VHA provides care at a level that exceeds that which is available to most Americans, and has kept costs at a minimum to boot.

Romney's attempt at deficit reduction via the private sector is politicking of the worst sort. To shave military benefits now would be particularly callous, as returning solders have enough mental and economic burdens. Whereas they were once considered attractive hires, military vets are now -- like everyone else --  faced with a weak job market. Worse:

. . . . only about half of veterans felt they were prepared to assimilate into civilian life and look for work, according to an October survey by Monster Worldwide Inc. And nearly one in five recently returned veterans from Iraq and Afghanistan screen positive for post-traumatic stress disorder, according a 2008 study by RAND Corp., a nonprofit research institute.

Now, there's certainly plenty in the industrial military complex worth cutting. As Fred Kaplan asked not too long ago:

Does the Army really need 570,000 active-duty soldiers? Does the Air Force really need more F-35 Stealth aircraft (funded at $11 billion, for 43 more planes, next year alone)? Does the Navy really need $4 billion for two more Virginia-class submarines, or $1 billion for a down payment on a new aircraft carrier? And, really, do we need to buy new nuclear weapons, or "improve" the existing ones, at a cost of $100 billion over the next 10 years?

But pensions and healthcare, whether under the Defense umbrella or not, shouldn't be the first to go. For reasons of economics and good government, the VHA shouldn't be dismantled -- especially if the impetus is simply to prove that "the private sector is always better than the government." The 99 percent shouldn't be used by the 1 percent to make a debater's point.