Retired Marine Major General Arnold Punaro, a senior advisor to Defense Secretary Gates, warns of an apocalypse coming for the DoD if major fiscal restructuring does not occur soon. On this, he and I agree; however, his ideas about how to fix the DoD's budget are arcane to say the least and suggest that the Department of Defense's understanding of human psychology may be limited. You can read a summary of his address here.
Look the military needs restructured from top to bottom and there is way too much money spent of personnel where they aren't needed (think cushy desk jobs) and not nearly enough where it is needed. And this means that frankly we need to get rid of some people at the top who spend all day doing very little of real importance to the defense effort. But let's back stop this against some real stone cold facts. Right now and O-3 in the Navy has a 92% chance of making O-4 as long as s/he doesn't steal, or screw an enlisted person, etc. The numbers for O-4 promotion to O-5 are even higher. That number is much higher than it was when my husband and I first married and it is in part a result of the Individual Augmentee (IA) program and a war with no end in sight, so that we have sailors who do 2 sea tours (most of which they are deployed so think >60% of 3 yrs) followed by an IA of 9-18 mos (depending on your lucky star or lack thereof) before you get shore duty (which may be 9-12 mo instead of 18 mo). This is an insane op-tempo and it is really hard on families and has been handled extremely poorly by the DoD in that regard. Another part of it is that it is really easy to recruit away young officers after their initial commitment. My friend make 80K/yr for a shipyard after leaving as an O-2 and his wife gets to see him every night. So, we can say that at least in the Navy, you have to incentivize retention at this point.
Some of these incentives are direct costs to the DoD that are easily tracked on a pay chart. You get paid more for more time in. You get a retention bonus if you are in a position that is understaffed. However, many of the costs are indirect and included health care, child care, educational costs for DoD schools for the servicemember's family, as well as the holy grail (i.e. retirement at 20+ years). These may seem like low-hanging fruit to pluck, but that is where Maj. Gen. Punaro is trying to use stone tools in a machine gun world. And here's why:
The US military, including reserves and national guard makes up approximately a whole whopping 1% of the US population. That means that 99% of the population expect 1% to do all the fighting, training, family sacrifices, and potentially all the dying. As a result of this and some very effective recruiting slogans in the 70s, 80s and 90s, the average young adult citizen in this country perceives the military as a career like any other, like a postman or a doctor and most of these young citizens went to high schools and go to colleges where the teachers/professors reflect these same demographics and thus many role models to these young citizens tell kids (and I have certainly been told this) that the military is what you do when you don't have other options. (Yes, I know it is a specious argument, but it's the pervailing perception) So the average citizen doesn't see any connection between the middle-class lifestyle they live and the 1% of the population who defends the nation so that they can live it. This is a serious cognitive disconnect and it is why, until the economy tanked and people had fewer options, we had to raise the recruitment age into the 40s (which is going to generate burgeoning health care costs). This means that once the economy rebounds, the recruitment numbers will fall and retention will again be the primary issue, assuming we do not perform a major overhaul of the structure of the US military. At that point, raising the retirement age, and cutting benefits to military families, as suggested by Maj. Gen. Punaro, will negatively impact military readiness in a major way.
Let's take this one scenario I am going to lay out:
At the same time, 20% of military families (that's around 280,000 spouses) have a spouse, usually female, who has at least a bachelor's degree or higher, greater than half have at least some college coursework under their belt. Each of these spouses makes a decision to put their career behind their servicemembers' for the duration. This often leads to underemployment, which was cited by the Rand Corp. study on Military Spouses' Careers, as a key factor affecting retention. I am sure some spouses make this choice based on a sense of duty to country, but some spouses are doing this to reap the perceived benefits of their service member's retirement at 20 years. I certainly fall in this category. If we were not over the 10 year mark at this point, my husband and I would be having very different discussions over the dinner table (or in this case skype). I could make more money with better health care and child care as an academic without having to deal with deployments or an increased likelihood of being a single parent than we make with Senior Jefe in the military.
So let's raise the retirement age to 30 yrs and let's assume that 20% of military spouses with education (B.S. or higher) and none of the spouses without education (we don't know if this is true) are in the same boat as me and decide their family could make more money with lower personal commitments outside the military (in much the same way as my friend who left after his initial commitment for an 80K to start job). This would result in an exodus of 56,000 families at a minimum. This would not account for additional officers and senior enlisted who would leave for cushy civilian jobs like many of our friends. So we talking about at least 5% and probably more would pull up stakes at a time when many of the ranks most likely to be affected are already doling out large retention bonuses, like 75K our last turn at bat and more to follow if my husband stays. While a minimum of 5% sounds small (and I actually think the number would be much higher if the economy improved), it would represent a significant brain drain in the military, in addition to meaning increase recruitment requirements among a population generally averse to getting their hands bloody. I am not sure it would really save money in the long run or the short run.
I think the max increase in retirement commitment that can be feasibly pushed through is 5 years, mostly because this is my line in the sand. At 25 yr retirement minimum, we would be back around the make or break point and I could argue my way into believing the juice might be worth the squeeze. Beyond that, well I'd better start working on all the reasons I love being an academic.
So that's one issue. The next issue is changing the pay scale. Here Punaro is wrong again. The pay scale needs to stay as it is for a lot of the same reasons listed above. If the DoD really starts treating the military like any other job (only you get to potentially have your head blown off), retention will suffer. The military isn't like other jobs. It requires far more for far less pay out and I think a lot of people choose to stay in for the pay as it stands and the benefits for their families. We have enlisted families on food stamps, without the exchange, child care and health care, there is no reason for some of these people to stay in the military. So maybe just phase out the discounts at the exchange for the highest pay grades. I don't mind paying more as we have more money. However, you need to realize that I backstop my decision to support my husband's career choice in part on these benefits and on his pay. Before I started my PhD I could land a job making 60-80K to start. This is more than his salary, but the retirement and benefits swung my decision in the Navy's favor. If they start running a military like a business, then they are going to get a lot of the problems businesses deal with on a day to day basis. The fact is it is easy to change jobs as a civilian because you are competing in a marketplace where you look for the most benefits for the least amount of work. This is the antithesis of what the military demands and so they can't compete on a traditional business model.
So how do we fix this?
I think we shrink the size of the military over all and over time, so that the number of people required to be career soldiers with the retirement and benefits is a lot lower. And I think we institute national service requirements like Israel and other nations have. This allows us to create a large light infantry force that is young, agile and mobile and then we pick out the best and the brightest of those groups and lure them into military careers where we pay them the benefits we have now. This is the antithesis of incentivizing the brightest to leave by upping the retirement age and cutting benefits. In the short run, this will increase costs and potentially the deficit, but in the long run, if we made it a contingency for applying to college as in Israel, we would have more students complete college, because they would get some much needed discipline and cut the long-term costs for the military.
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