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Comptroller: Budget Seeks Balance in Reducing Security Risk

By Cheryl Pellerin
American Forces Press Service

WASHINGTON, March 26, 2014 – If Congress turns down changes to force structure and military pay and benefits in the Defense Department’s fiscal year 2015 budget request, the legislators will have to find $2.1 billion in other cutbacks in 2015 and $31 billion more over five years, Comptroller Robert F. Hale said today.

Testifying before the Senate Armed Services Committee’s personnel subcommittee, Hale said the additional cuts will be needed so the Defense Department can live within budgetary limits, and that cuts will have to come out of readiness and modernization.

“There's nowhere else to go,” he added, “and this will harm the balance we believe is needed to minimize risk to national security.”

The subcommittee met to hear testimony from department officials on active duty, Guard, Reserve and civilian personnel programs detailed in the administration's fiscal 2015 budget request and the future years defense program.

Testifying alongside Hale was Jessica L. Wright, acting undersecretary of defense for personnel and readiness. Her opening remarks represented other DOD officials present at the hearing -- Dr. Jonathan A. Woodson, assistant secretary of defense for health affairs, Frederick E. Vollrath, assistant secretary of defense for readiness and force management, and Richard O. Wightman, acting assistant secretary of defense for reserve affairs.

For the subcommittee, Wright reviewed the changes proposed in the department’s budget request.

“More than a third of the Department of Defense's base budget supports our military personnel pay and benefits package,” she said, adding that the department's priority for the budget is to balance pay and benefit compensation with force readiness.

The budget plans for a capability favoring a smaller force that is trained properly and modernized to accomplish the mission, Wright said, and it reflects long and careful deliberations and sobering, but critical, choices.

The budget calls for a 1 percent raise in base pay for military personnel, except for general and flag officers, whose pay will be frozen for a year, she said. Other proposals include a slowdown in growth of the tax-free basic allowance for housing until it covers 95 percent rather than all of the average service member's housing expense. The allowance will no longer include renters insurance, and the changes will be phased in over several years, Wright added.

“We propose a $1 billion decrease over three years to the annual budget to operate commissaries. Our plan does not direct the closure of any commissaries, [and] overseas commissaries and those in remote locations will continue to receive subsidies,” she told the panel.

The budget request simplifies and modernizes the TRICARE health program by consolidating all plans and adjusting deductibles and copays to encourage members to use military treatment facilities, preferred providers and generic prescriptions. The proposed single TRICARE system consolidates various TRICARE options into one plan, the undersecretary said.

“We know that compensation and benefits are only part of what attracts and retains people in our military, Wright said. “Our members join our service also to learn and exercise their skills. We believe that readiness and training are clearly the ultimate care we can give our service members.”

The department, she said, has an obligation to ensure service members and their families are fairly and appropriately compensated and to care for them during and after their time in uniform. It also has a solemn responsibility to give troops the finest training and equipment possible.

“The president's budget fulfills both of these promises to our service members and their families,” Wright added.

In his remarks before the subcommittee, Hale said that department officials sought a balanced combination of military readiness, size and technical capability to minimize risks imposed by the budget, and did so while meeting stringent budget limits.

“Achieving this balance required a lot of difficult decisions,” he told the panel, focusing on two decisions particularly related to personnel.

“Even under the budget proposed by the president, we had to reduce the size of our military forces,” he said. “Compared to levels expected at the end of this year, total active duty military personnel will decline by about 6 percent by fiscal year 2019. Guard and Reserve personnel decline by … 4 percent. Civilian personnel decline about 5 percent.”

The personnel cutbacks will be larger if sequester-level budgets return, Hale said. If Congress does not increase Budget Control Act caps to accommodate the president's proposed budget levels, military forces will have to decline by larger amounts. Active duty would decline 9 percent rather than 6 percent, for example, he explained.

Under the proposed budgets, the Air Force will retire more than 300 aircraft, including its A-10 and U-2 fleets. The Navy will put 11 ships into phased modernization and eliminate crews while ships are in that status. The Army will reduce the number of brigade combat teams and combat air patrols, and force reductions will be even larger under sequester-level budgets, the comptroller said.

“We believe that a smaller military force, even though it means accepting more risk in some missions, is necessary so that we can comply with the budget limits while still having enough funds to modernize and provide a high level of readiness,” Hale said.

“Smaller forces are one key to maintaining the balance. That's the theme of this budget. Balance also requires some reductions and rebalancing in the Guard and Reserve,” he said. “We intend to maintain the Reserve components as full wartime partners, in addition to their homeland defense mission and the other important things they do.”

Referring to Wright’s testimony, Hale said the difficult decisions about military compensation are also key to balance. They were made to comply with budgetary limits while preserving funds for training and maintenance, allowing a return to a high state of military readiness.

“Our compensation proposals follow some clear principles,” the comptroller said. “We’ll slow the growth, but we'll not cut pay and allowances. We will ensure that compensation is sufficiently generous to attract and retain the people we need … in a very demanding profession. We will make sure that we support the all-volunteer force.”

Hale added, “The funds saved by slowing the growth in military compensation all will be reinvested in training and maintenance. That's a commitment we made to the Joint Chiefs when they developed these proposals, and we've kept it.”

This budget features difficult choices, Hale said.

“They were difficult for us … and they're also very difficult for you,” he told the panel. “But we believe we've created a balanced package of changes that meet budgetary limits while permitting us to carry out the current defense strategy though with some added risks in certain missions. We ask for your support for these budgetary proposals.”

(Follow Cheryl Pellerin on Twitter: @PellerinAFPS)


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Robert F. Hale
Jessica L. Wright

Related Sites:
Special Report: Fiscal Year 2015 Budget Proposal

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