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Hagel to troops: Proposed cuts to compensation helps ensure readiness

Feb. 25, 2014 - 06:00AM   |  
Defense Secretary Chuck Hagel is interviewed by members of local and national media at Fort Eustis, Va.
Defense Secretary Chuck Hagel is interviewed by members of local and national media at Fort Eustis, Va. (Joint Base Langley-Eustis / via Facebook)
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JOINT BASE LANGLEY-EUSTIS, VA. — Defense Secretary Chuck Hagel told hundreds of troops Tuesday that the historic reductions in military compensation he proposing is, in part, an effort to keep them safe.

A day after announcing the first-ever rollback of housing allowance, a cut to military commissary subsidies and new Tricare fees for military families, Hagel visited two installations in Virginia and met with troops because he wanted to explain to them “face to face, as your Secretary of Defense ... why we made the decisions we made.”

“I would never put any of you in harm’s way without the very best training, equipment, modernization and support,” Hagel told officers and enlisted airmen at Joint Base Langley-Eustis.

“We’re dangerously close to cutting into that now,” he said.

The Defense Departments budget proposal for next year urges Congress to carve billions of dollars in savings from personnel accounts to help ensure the military can afford to maintain high readiness levels, costly equipment and a technological edge over potential adversaries.

Hagel said the 2015 budget reflects a new chapter for the military as large-scale ground wars in the Middle East come to an end, along with wartime support for defense spending in Washington.

“This budget will represent a different environment, a different era, a different time,” Hagel told a group of airmen.

He explained the new proposal to scale back Basic Allowance for Housing and make troops pay about 5 percent of their housing costs with out-of-pocket cash.

Hagel reminded troops that up until the late 1990s, service members were paying out-of-pocket cash for up to 20 percent of their housing costs.

He said no housing allowances would be cut directly, but increases would be scaled back over about a five year period so the allowance would cover only 95 percent of estimated housing costs.

“We think it’s fair,” Hagel told soldiers at the Army’s Fort Eustis.

Hagel addressed the controversial proposal to slash the annual $1.4 billion taxpayer subsidy for commissaries each year by about $1 billion. One official estimated that prices could rise by about 20 percent as a result.

“We are not closing any commissaries,” Hagel told the soldiers, noting that commissaries will continue to get free rent on bases and the new proposal exempts commissaries overseas and those in rural areas where alternative options are limited.

On health care, Hagel said active-duty troops will not see any change. Their family members, however, and military retirees under age 65 will see their co-pays rise. The current co-pay system covers about 8 percent of actual health care bills, and the new proposal would raise that to about 11 percent.

“What we’re proposing there is a very slight, modest increase in co-pays,” he said.

“It won’t change the quality of the health care,” he said. “It won’t change the availability of providers.”

Hagel assured them there will be no cuts to basic pay.

“There will be pay increases,” he said, even if those raises are limited to 1 percent and remain below the standard increase that reflects inflation and increased cost of living.

Hagel’s visit to Norfolk was one prong of the Pentagon’s effort to quell criticism of the compensation proposals.

Hagel met with veterans groups in Washington just hours before making the announcement Monday. Immediately afterward, the Joint Chiefs of Staff released a video online of chairman Gen. Martin Dempsey talking directly to troops about the need to “rebalance” the force by making more money available for readiness, training, modernization and research.

Together, the compensation changes — if they become law — would reduce many troops annual compensation by more than $1,000. The pay raise that is less than the annual consumer price index increase will shave several hundred dollars from most paychecks. Reducing BAH payments by 5 percent will likely shave several hundred more from household cash flows. The rising commissary prices could result in increases of several hundred dollars in annual costs for some military families.

The changes will require approval from Congress, which may be unlikely in the current political environment. Many lawmakers suggest waiting until next year, when a congressional commission will submit a detailed set of recommendation for modernizing both the military compensation and retirement programs.

Hagel urged the troops to keep in mind why they made an initial decision to join the military.

“Why’d you do that?” Hagel asked a group of soldiers. “I doubt it was for the pay and compensation or even the glory,” Hagel told soldiers at Fort Eustis.

“You all first have committed to do this on your own voluntarily, for something more important than that. That said, pay compensation, taking care of your families is a huge factor here, we’re not unaware of that. It needs to be a huge factor.

“You are doing something for your county. You are doing something for other people. It is as noble of a profession as there is in the world,” Hagel said.

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