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RYAN: An open letter to Secretary of Defense Chuck Hagel
The truth about military personnel costs
Dear Secretary Hagel,
As a former soldier and senator, you are well-prepared for what you might encounter as you begin your new job. It won’t be easy, and the hardest part will be separating fact from fiction to make the best decisions.
Here is some advice. The most important thing you can do is challenge the “experts” who use misleading rhetoric and statistics to sway you toward their conclusions.
You’ll hear that military personnel costs are “rising out of control” and will “consume future defense budgets.” Bean-counters use these bogus arguments – and pundits repeat them — to divert money from military people programs to hardware or non-defense programs.
Yet those arguments simply aren’t true.
Here are the facts:
The defense budget has consumed a progressively smaller share of federal outlays. Today, it’s at its smallest share in 50 years and will drop further – below 12.5 percent – by 2017. That share is projected to continue to decline for the foreseeable future.
Defense leaders complain military personnel and health costs are consuming roughly one-third of the defense budget – implying this is a dramatic increase from the past.
Yet personnel and health care costs have comprised that same budget share consistently for the last 30 years. They’re no more unaffordable now than in the past.
Moreover, this is a bargain when compared to the most similar corporations.
Personnel costs comprise 61 percent of the budget for United Parcel Service, 43 percent for FedEx and 31 percent for Southwest Airlines.
Your predecessors complained health care costs approach 10 percent of the non-war defense budget. However, health costs comprise 23 percent of the federal budget, 22 percent of the average state budget, 16 percent of household discretionary spending and 16 percent of U.S. Gross Domestic Product. By comparison, Defense’s 10 percent is modest.
Truth be told, the Pentagon has used the military health care account as a “cash cow” to fund other programs — $708 million was diverted from the fiscal 2012 account to other programs, and diversions totaled $2.8 billion over the last three years.
The fiscal 2012 Department of Defense reprogramming request acknowledged retiree health costs declined 2.5 percent. Budget projections have reduced outyear health cost estimates three years in a row, and fiscal 2013 Defense Authorization Act changes will reduce them further.
One trick often used by critics is to cite the percentage increase since 2001 – as if costs before 2001 represented a reasonable standard.
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