Troop Advocates Prep for Future Benefits Battles

Fresh off a lobbying victory to undo military pension cuts, an officers' group is preparing for more legislative battles over the upcoming Defense Department budget.

The Military Officers Association of America (MOAA) led other veterans groups on a recent lobbying blitz against legislation that reduced the cost-of-living adjustment to military retirement pay as part of a bipartisan budget deal.

The campaign was so fast and effective in scaling back the proposal that observers have since compared the military lobby to the gun lobby, another influential group on Capitol Hill. Yet association officials say they're still bracing for the Pentagon's 2015 spending plan, which is expected to be released in coming weeks and contain fresh proposals to reduce military pay and benefits.

"We anticipate a very tough and challenging year," said Mike Barron, deputy director of government relations for the association and a retired Army colonel.

Defense Secretary Chuck Hagel is expected to outline the Pentagon's 2015 budget request on Monday -- a week before the spending plan's official March 4 release. While he hasn't announced specific reductions, Hagel has hinted at the department's challenges for the fiscal year beginning Oct. 1.

"Will there be cuts across the board?" he said during a press conference earlier this month. "Of course there will. You can't do it any other way. Are there going to be adjustments across the board? Of course. But you must preserve readiness and modernization."

The Defense Department's base budget, which excludes war funding, is expected to be about $500 billion -- some $40 billion less than what the department previously budgeted for the year. Congress recently provided partial relief to automatic budget cuts known as sequestration over the next two years, but agencies still face spending reductions.

The relief came in the form of the Bipartisan Budget Act, which was initially paid for in part by reducing pensions for working-age military retirees. Under the bill, veterans between the ages of 40 and 62 were to receive a cost-of-living adjustment to their retirement pay at 1 percent less than the rate of inflation.

MOAA, headed by Norbert Ryan, a retired Navy vice admiral and former chief of naval personnel, and other veterans groups swung into action, flooding lawmakers with letters and appeals to remove the provision. The association alone has 13 registered lobbyists and spends about $1.8 million a year on lobbying, according to the Center for Responsive Politics, a nonprofit organization in Washington, D.C., that tracks money in politics.

While that's a far cry from what defense giants like Lockheed Martin Corp. spend on such activities, the association and other vets groups speak with a powerful voice, especially on the Hill. In the end, the pension cuts were modified to exempt existing retirees and troops who entered service prior to Jan. 1, 2014.

"It was a huge win, no question about it," Barron said. "Our concern going forward is we don't know what DoD is going to put out in their budget."

The Pentagon is expected to reintroduce several proposals to curb personnel costs, which account for about a third of the department's base, or non-war, budget. The initiatives range from setting pay caps to reducing basic housing allowances for troops, especially in high-cost areas, to increasing health care fees for working-age retirees.

The budget request is also likely to contain a proposal to reduce the Defense Commissary Agency's annual budget from $1.4 billion today to $400 million by 2017, forcing the agency to make major changes -- including possible widespread store closures, according to defense sources.

The Pentagon's top brass and various think-tanks in Washington, D.C., argue military compensation reform is needed after a decade of spiraling personnel costs. The cost of the military's health care system alone almost tripled to $52 billion in 2012 from $19 billion in 2001. Former Defense Secretary Robert Gates in 2009 famously warned Congress that "health care is eating the department alive."

Indeed, the average cost per active-duty member has almost doubled to about $92,000 in 2012 from $47,600 in 2001, according to a recent analysis by Andrew Tilghman, a staff writer at Military Times. At the same time, overall defense spending soared with the U.S.-led wars in Iraq and Afghanistan, and personnel costs as a percentage of the defense budget have remained flat at about 29 percent, according to the analysis.

MOAA's Barron dismissed calls to reform military compensation as "rhetoric" that helped create a political environment supportive of "unfairly targeting service members and their families." Congress should enact changes only after debating the recommendations of the Military Compensation and Retirement Modernization Commission, which is expected to conclude its work next February, he said, because the current system "does an extremely good job of sustaining the all-volunteer force."

Todd Harrison, an analyst with the Center for Strategic and Budgetary Analysis, said the Pentagon needs to take a hard look at the benefits that service members value. A survey done by CSBA found that the majority of troops don't necessarily value certain benefits -- like the commissary -- as much as the military pays for them.