The Pentagon’s personnel costs for both civilians and military forces make up roughly half of all defense spending, and military analysts project that they will continue to grow.
That’s not sustainable, defense officials warn. The Defense Department has already put in place a three-year pay freeze for civilians. Now, with demands for cost-cutting, “no realistic effort to find further significant savings can avoid dealing with military compensation,” Hagel said.
Pay for US troops since 2001 has risen some 40 percent more than growth in the private sector, due in large part to the fact that Congress has hiked pay raises well above levels requested by the Pentagon.
The 2015 budget recommends a 1 percent pay raise for US troops, while generals and admirals will see their pay frozen for one year. Troops will also see a cut in tax-free housing allowances – currently the military covers 100 percent of housing expenses. Now troops will be expected to make a 5 percent out-of-pocket contribution.
Veterans groups are not impressed. “Here we go again. Washington is trying to balance the budget on the backs of those who have sacrificed the most,” said Iraq and Afghanistan Veterans of America founder Paul Rieckhoff, in a statement.
But defense analysts point out that costs are high and some cuts are necessary. “Right now the military is spending 10 percent of its budget on health care, and that percentage is expected to go up,” says Benjamin Freeman, policy adviser for the National Security Project at the Third Way think tank in Washington. “So it’s good to see them trying to rein in costs.”