As Defense officials take to Capitol Hill to defend their proposed personnel budget, they’re beginning to hear a common theme: Complaints that civilian employees aren’t bearing their fair share of military spending cutbacks.
DoD leaders got battered on both sides of the Capitol Tuesday, hearing complaints from Republican lawmakers in both the House and Senate that the military personnel proposals in President Obama’s 2013 budget unfairly target the uniformed military, while leaving civilians, both inside and outside of DoD relatively unscathed.
Their complaints centered around two areas: the size of the overall personnel reductions in the coming years, and the Pentagon’s proposed fee increases to TRICARE, the military’s health insurance system.
“You’re recommending increases to the military in terms of health care costs, but it doesn’t seem that the President has asked for any increases as far as I can see to the civilian workforce,” said Sen. Kelly Ayotte (R-N.H.). “I think that’s a hard ask without asking for sacrifices on the civilian side too.” The DoD proposal doubles down on last year’s request, which raised TRICARE health insurance fees for the first time since 1996, and only for working-age military retirees. While active duty military members receive free health care and would continue to do so under the Pentagon’s latest budget proposal, retirees would see further increases over the next five years, depending on how much retirement pay they earn.
Higher-earning retirees could see their premiums triple from current rates, with premiums of about $1,950 per year by 2017, while retirees who left the military at lower ranks would pay much lower amounts.
The Pentagon argues the proposed increases are fair, and that Congress would be forcing the department to look to further force structure reductions if it denies DoD the ability to achieve the $12 billion it expects to save with its 2013 health care plan.
The proposal would, for the first time, tie a retiree’s health care premiums to his or her retirement pay. The department has also argued that TRICARE retirees will continue to get a much better deal for healthcare — a tab that now makes up about 10 percent of the Pentagon’s overall base budget — than what civilian employees both in and outside of DoD receive.
For example, a federal civilian will pay just shy of $16,000 per year in premiums for family coverage in 2012 under a standard 2012 Blue Cross plan in the District of Columbia. While the figures vary by locality and by health plan, OPM’s figures point to average nationwide increases of more than 3 percent this year, following 7 percent increases in 2011.
Nonetheless, Sen. Mike Enzi (R-Wyo.) indicated he’s uncomfortable with any fee increases for military members or retirees from his state.
“I got a letter just this week from a man in the military who’s about to retire,” Enzi said. “He has a sister that’s on welfare. His sister pays nowhere near the costs that he does, and he’s not sure that the military is such a good deal compared to welfare. That seems to me to be a terrible comparison.”
Health care costs now make up about 10 percent of the Defense Department’s overall budget pie. And since 60 percent of DoD’s healthcare spending gets funneled through private insurance companies and hospitals, the Defense budget is subject to most of the same health care cost increases the rest of the country is facing.
“For most of the time since 1996, up until about a year ago, there have been no (premium) increases,” said JoAnn Rooney, DoD’s acting undersecretary of Defense for personnel and readiness. “That’s very different, both in terms of health care costs and in terms of what most people have experienced in their health care premiums.”
The Pentagon argues that it can’t keep absorbing those costs singlehandedly; otherwise, they’ll continue to crowd out funding for weapons systems, training and even other pay and benefits spending.
Raising TRICARE fees
Rep. Austin Scott (R-Ga.), who serves on the House Armed Services Committee’s subcommittee on military personnel, has heard those arguments and remains unconvinced. He’s sticking by the position Congress took with last year’s proposal to raise TRICARE fees.
“Congress made it very clear,” he said. “We suggested there could be increases (in retiree TRICARE premiums), but that they should not exceed what the increase in retiree cost of living allowances were.” Other House members are irked by what they see as disproportionate drawdowns in the numbers of uniformed troops the Pentagon plans, compared with their civilian colleagues. DoD plans to reduce its uniformed ranks by about 123,000 over the next five years. So far, its civilian workforce drawdowns only include plans for next year, when about 7,000 positions would be eliminated.
“I find this stunning,” said Rep. Mike Coffman (R-Colo.). “I’m just trying to think, in my mind, how many casualties can be produced by somebody sitting behind a desk.”
Rooney said DoD has not fully developed its civilian workforce plan beyond 2013, and suggested Congress should be wary of comparing the department’s planned 2013-2017 uniformed personnel drawdowns with its civilian workforce plan, which incorporates only 2013 spending.
She said the department is still studying what its total mix between civilians, uniformed military and contractors should be in the “out years,” between now and 2017.
Though he took his share of criticism from Congress, Panetta, a former White House budget director, returned it in kind to lawmakers, telling them their failure to deal with the overall budget picture is what’s put the Pentagon in a pickle it would rather not be in.
“It’s the old game,” he said. “On one side, people will defend not touching revenues. Revenues need to be part of the deal. On the other side, you’ve got people defending the idea that you can’t touch entitlements. If you want to deal with the size of the deficits that this country has, you’d better put everything on the table.”