Pay & Benefits

DoD braces for political battle over military pay

The Pentagon is bracing for one of its biggest political battles in years as a blue-ribbon commission on military compensation and retirement nears the end of its two-year study and moves closer to releasing its proposals for change by Feb. 1.

An internal document obtained by Military Times reveals the Defense Department is setting up a rapid-response plan that will scrutinize the commission's potentially controversial proposals and send a recommendation to President Obama within 60 days, or by April 1.

DoD leaders have no idea what the independent commission will propose to Congress, so they have tapped a team of high-level officials to review, analyze and prepare a formal response to influence a potentially historic vote on Capitol Hill.

The stakes are high; the commission's report is likely to set off a far-reaching debate about the future of the military compensation system, with a basic structure that has changed little over the past century.

In some ways, the Pentagon is eager to support big changes that might cut personnel costs and reduce long-term defense spending and save money for investments in research and new weapons systems.

At the same time, military officials worry that sweeping changes to military compensation — such as radically changing the current retirement system — could devastate recruiting and retention and threaten the long-term health of the 41-year-old all-volunteer force.

The report from the Military Compensation and Retirement Modernization Commission will include detailed legislation that members of Congress may immediately begin debating, revising or potentially putting to a vote.

The commission's recommendations likely will include contentious proposals, such as replacing the military's 20-year cliff-vesting retirement model, creating new incentive pays or eliminating some in-kind benefits that service members receive in the form of installation-based services.

As the Pentagon and the White House begin facing pointed questions about how the proposals might impact readiness, defense officials will launch an intensive internal review that ultimately will inform Obama's official position.

From Feb. 2. Through Feb. 6, several Pentagon "working groups," as well as a team from the RAND Corp, think tank, immediately will begin to analyze the proposals, according to the internal DoD document.

Separate "working groups" will study topics that include "pay and retirement," "health benefits" and "quality of life benefits," according to the four-page PowerPoint, dated Dec. 18.

The working groups will mostly include officers at the O-6 level from each service and civilians at a similar pay grade.

Specifically, the analysis will focus on the potential impact on recruiting and retention and will aim to "develop the DoD response for Presidential consideration," according to the document.

From Feb. 9 to 13, the working groups will convene at an "off-site location" for further analysis.

From Feb. 17 to 19, members of the working groups will brief their services' senior leaders on the status of the Pentagon's official response.

By Feb. 26, senior leaders, including the undersecretary for personnel and readiness, will receive a draft of the formal response.

By March 6, the Joint Chiefs will vet DoD's official position on the commission recommendations. At the same time, Pentagon civilian leaders will reviewing it in a process led by Deputy Defense Secretary Robert Work.

By March 13, the defense secretary will approve or reject a final version of the Pentagon's response. It's unclear at this point if that will be outgoing Defense Secretary Chuck Hagel or his successor, Ash Carter, who is likely to be confirmed by the Senate in early 2015.

From there the official response will go to the White House, where it will face further review.

The DoD plan aims to have Obama provide formal recommendations to Congress by April 1.

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