Official Defends Proposed TRICARE Fee Hikes

Deputy Defense Secretary Ashton Carter defended the Pentagon's request to increase the costs borne by some TRICARE customers on Wednesday, arguing that sacrifice has to come from everywhere as the U.S. struggles to get control of its finances.

"We did not believe compensation could be exempt in this climate," Carter told an audience at the conservative American Enterprise Institute. Health care amounts to 10 percent of DoD's budget -- a percentage expected to keep growing -- and as such the department must get control over it as well as weapons or other costs.

"We need these savings," he said. "This is a difficult step to take, but it's an important one."

Congress did not agree. House Republicans and Senate Democrats both separately rejected DoD's proposal to increase TRICARE fees in their different versions of this year's defense authorization act. Carter's speech, one of the first by a top Pentagon official since the Senate Armed Services Committee's action last week, was a signal to Congress that DoD continues to stand by its earlier proposals.

Besides the steps up in TRICARE fees, Carter also reiterated the Pentagon's belief that it must be able to retire the ships and aircraft it spelled out in this year's budget submission, another idea that lawmakers rejected. DoD must live under the spending restrictions Congress itself passed last year, Carter said, and that means that each extra platform it keep against its will robs its ability to do something else or get something new.

The Pentagon, for example, wants to get rid of its fleet of Air Force C-27J Spartan cargo planes -- Carter said the Air Force has "excess capacity" in airlifters -- but under pressure from allies of the Air National Guard and Reserve, Congress would keep those aircraft. Lawmakers also would keep three of the seven cruisers the Navy asked to retire to save money, but Carter warned these kinds of changes would throw DoD's careful plans out of whack.

The final outcome of this year's wrangling is far from clear -- Washington is gridlocked in advance of November's elections, which both Republicans and Democrats hope will deliver a mandate for their proposals. Until then, however, Congress cannot act, and its agenda for December's "lame duck" session is piling up with high priority items.

The biggest, from the perspective of the Pentagon, is the threat of automatic, across-the-board spending restrictions imposed under last year's debt ceiling agreement. Congress hoped the threat of widespread seizure of projected budget growth, dubbed "sequestration," would be so draconian it would spur its bipartisan "super committee" into agreeing on another plan to attack the deficit. The scheme didn't work and unless Congress averts them, the restrictions will take effect in January.

Carter repeated the Pentagon's opposition, and he repeated that it is not planning for how it would handle losing about $487 billion in budget growth over the next ten years. It's possible that the Office of Management and Budget could order agencies to do that kind of planning later this summer, he said, but so far, DoD is not.

"Planning," Carter said, "is rational. Sequestration is not rational."