Pentagon’s cost savings proposals lost to compromise of authorization bill

Leaders of the House and Senate Armed Services committees reached a compromise on the annual DoD authorization bill this week. And while staff members still are working to turn that compromise into actual legislative language, it’s already clear that the deal will reject several of the Defense Department’s more controversial suggestions for saving money.

It’s become an annual exercise over the last several years. The Pentagon asks for permission to rein in its spending on infrastructure by conducting a new round of base realignments and closures (BRAC), and to cut back on personnel spending by shifting some health care costs to working-age military retirees. Congress then makes its strong disapproval known in committee hearings and shoots down the ideas in the annual Defense authorization bill.

Whether lawmakers can pass the annual policy bill in the few legislative days remaining this year still is an open question, but the last-ditch compromise Republican and Democratic leaders reached this week prohibits another round of BRAC and forbids DoD from raising retiree premiums in the TRICARE health insurance system.

While those decisions may not be surprising, they are disappointing,” said Ray Mabus, the secretary of the Navy.

“This is huge,” he said. “We’re going toward having a very small, very well-paid and very poorly-equipped force. That’s where we’re heading, because personnel costs are eating up a bigger and bigger part of the budget.”


For TRICARE, DoD’s 2014 budget proposed a means-tested system of higher premiums for retirees. They would be capped at $750 a year for most retirees and $900 per year for retired generals and admirals. The fee would gradually rise before reaching 4 percent of an individual’s retirement pay by 2017.

Currently, retirees pay $548 per year to cover an entire family.

“We are at the point where we’re going to have to decide whether we’re going to provide an incredibly good deal for retirees, or whether we’re going to give the active duty military the tools they need to do their jobs,” Mabus said Tuesday at a defense conference in Washington hosted by the U.S. Naval Institute. “That’s the equation. You can’t do both. We have to continue to push on this. You can keep doing things the way we’re doing them, but you’re going to get a smaller and smaller force that’s less well equipped.”

Small pay raise for the military

DoD leaders also argue that BRAC is central to their efforts to reduce personnel spending, particularly on the civilian side.

The military services say they are expending manpower unnecessarily to operate and maintain base infrastructure that they no longer want or need.

The compromise fiscal 2014 National Defense Authorization Act (NDAA) will incorporate DoD’s request for a 1 percent pay raise for military members — a lower level than many members of Congress would have liked.

But a fact sheet released by the Armed Services committee leaders, who reached the agreement, reveals few other details about how the measure would handle personnel spending.

In any case, it’s far from a done deal that the bill will clear Congress.

The deal only became necessary after the regular debate process over the authorization act broke down in the Senate. The House passed its version of the bill months ago.

Staff members are working to get the agreement ready for formal introduction onto the House floor, where it would need to pass by majority vote by the end of this week, because that chamber is leaving town for the rest of the year.

The Senate will be in session next week. It could continue to work as long as senators don’t make any changes that would require the House to agree. If that game plan doesn’t work, it would be the first time in 52 years that Congress has failed to pass a Defense authorization bill by the end of the year.

Sen. James Inhofe (R-Okla.), the ranking member of the Armed Services Committee, acknowledges the situation is less than ideal.

“This isn’t the way we’d like to do it, but we got to the point, a week ago today, when this is the only way that we could do it,” Inhofe said. “But I think it’s important that we actually considered 87 amendments that have been brought up, and we passed 79 of them. You know, that’s kind of hard to do. It would have been harder to do on the floor. The choices are not, do you want to have an NDAA bill the way we’re doing it here or have one the normal way it takes place, because that’s not possible any longer.”

Slimmed down version

If House members do pass the bill by Friday, they will not have had much time to review it in detail. The bill routinely runs many hundreds of pages long, and leaders insist their compromise did not result in a slimmed-down version of the NDAA.

Among the other details leaders have revealed about the agreement is how the bill will handle provisions around sexual assault in the military, one of the issues that hung up debate in the Senate.

The deal incorporates some reforms that were passed by both the full House and by the Senate Armed Services committee, including removing commanders’ power to dismiss a sexual assault conviction at court martial.

But Sen. Carl Levin (D-Mich.), the chairman of the Armed Services Committee, said the bill will not take sexual assault prosecutions out of the military’s chain of command. That issue has been pressed forcefully by Sen. Kirsten Gillibrand (D- N.Y.).

A competing amendment by Sen. Claire McCaskill (D-Mo.) opposed the idea and offered alternative reforms.

“I think all of us wanted to have votes on both amendments, regardless of whether you supported one or the other or both,” Levin said. “But there was an objection. It was debated for, I think, a day and a half in the Senate. So it’s in no one’s interest that this not be resolved. They both have filed freestanding bills now, and they both have filed them in ways that either of those or both of those bills, hopefully, can be brought up for a vote as a freestanding bill if the majority leader is able to find the time to do that. And I’ve talked to him about it, because we all want votes on those two matters. Not just Senator Gillibrand’s, but Senator McCaskill’s as well.”

Among other details lawmakers have revealed about the agreement:

  • It would tackle the controversy around the government’s reimbursement of the salaries of the executives at contracting firms by lowering the cap to $625,000 and adjusting it every year based on the employment cost index. Under current law, the government can pay firms up to $952,000 to reimburse them for the salaries of their executives. The rate has increased significantly in recent years because the current formula is based on surveys of private-sector executive compensation.
  • The bill would replenish the DoD accounts that pay for military training and readiness that were drained during the first year of sequestration. But that allocation is premised on the overall bill’s assumption that DoD will not be subject to the same spending caps during 2014.
  • The measure would cut 24 military generals and require DoD to carry out several studies around bureaucratic efficiency, including whether there’s a future role for offices like the Joint Improvised Explosive Device Defeat Organization.
  • The Defense Intelligence Agency’s upstart organization to collect human intelligence, the Defense Clandestine Service, would have its budget cut back “until the [secretary of Defense] certifies that the program primarily fills DoD’s unique requirements.”


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