Lawmakers Noncommittal on Military Retirement and Health Care Changes

President Obama and members of Congress on Thursday were quick to praise the Military Compensation and Retirement Commission for its report – two years in the making – but are holding off on saying what recommendations may get passed into law.

The commission laid out 15 recommendations that included overhauling the Defense Department's retirement and health care systems. It even offered a new retirement system that would enroll service members into a Thrift Savings Plan and offer new retirement options beyond the pension service members can receive after 20 years of service.

Obama, in a brief statement issued after officially receiving the report, said he "will review [it] closely over the coming weeks, in consultation with our senior civilian and military leadership.

"I look forward to hearing their views and working with Congress to strengthen and modernize our military compensation and retirement systems," he said.

Sen. John McCain, R-Arizona, who now chairs the Senate Armed Services Committee, has scheduled a hearing on the report for Feb. 3. He offered no comment on Thursday, but earlier this month said he could probably support some changes to the military health care system, which he believes "has to be reformed."

Rep. Mac Thornberry, R-Texas, chairman of the House Armed Services Committee, said he appreciated "the hard work and proposals offered by the members of the Commission ... the committee will want to thoroughly study the Commission's proposals to understand how they will affect our ability to recruit and retain the top quality individuals we need."

Under the recommended retirement plan change, future troops could opt out of the current 20-year defined benefit plan for a 401k-type system t that they and the military would contribute to. And when they left they would take the plan with them.

Another recommendation makes troops eligible for a lump-sum "continuation" payment – equal to 2.5 months of basic pay – if they agree to stay on an additional four years after their twelfth year of completed service.
None of the proposals would affect the retirement pay of existing retirees.

Thornberry noted that the military, in order to continue as an all-volunteer force, must compete with the private sector for talent.

That point was also made by Rep. Mike Lee, R-Utah, who said he is "particularly interested in determining if [the recommendations] will enable us to recruit and retain the best and brightest."

"Our top priority should be ensuring the viability of the all-volunteer force and the well-being of our service-members and their families," Lee said.

The lawmaker that Thornberry said he expects to shape much of the House reaction to the report also was non-committal in his initial response to the recommendations. But Rep. Joe Heck, R-Nevada, stressed that his top priority would be limiting the impact on recruitment and retention.

"My goal is to ensure we have a pay and benefits structure that keeps the faith with those who served and are serving and allows us to recruit and retain the best all volunteer military force in the world into the future," said Heck, the new chairman of the House committee's military personnel subcommittee.

Heck said that the commission had been handed a "tough assignment."

"We all knew there would be understandably strong feelings surrounding this report from service members, their families, and the numerous organizations that represent them," he said.

Heck said he would give the report "a fair, thorough, and transparent examination before his subcommittee in upcoming hearings."

Previously, both Thornberry and Heck avoided staking out positions on pay while stressing that they were open to retirement system reforms so long as they "grandfathered" the existing system for those currently serving.

Veterans Advocates

Veterans groups and professional military associations are so far taking the same wait-and-study approach as lawmakers to the report.

"The report does contain recommendations to increase military retiree Tricare fees, as well as to alter the military retirement program for future enlistees, but the devil is always in the details," said John W. Stroud, national commander of the Veterans of Foreign Wars. He said the VFW will review the entire report in detail and address any concerns with Congress.

"Like everybody else we definitely appreciate the hard work they put into it," John Stovall, National Security Director of The American Legion said. "We're going to have to take some time to digest the details, look at exactly what the recommendations are and, if they're implemented, the repercussions on the all-volunteer force."

"We'll see what we can support and what may need more work," Stovall said. But the idea of providing some kind of retirement plan for non-career troops, he said, "that's a very worthy and valid thing to take a look at."

Retired Navy Vice Adm. Norb Ryan, president and chief executive officer of the Military Officers Association of America, said the health and welfare of the all-volunteer force will be paramount as his group studies the report and determines what it can support.

"Our No. 1 concern continues to be the sustainability of the AVF, and our members say they cannot support reforms that negatively impact recruiting, retention and overall readiness." Ryan said. "MOAA is encouraged that the armed services leadership have already voiced their plan to thoroughly review the findings and recommendations through a deliberate process."

Lawrence Korb, a Senior Fellow at the Center for American Progress and former Assistant Secretary of Defense for manpower, reserve affairs, installations and logistics, said he is glad to see a recommendation to provide some kind of retirement to service members who do not stay on for 20 years.

"I like the fact that they [want to] allow people who serve less than 20 years to get something" toward retirement, Korb said. "Not only to a lot of enlisted people not stay – particularly ground-pounders – but they won't let them stay. You think the Marine Corps is going to have a force of 40-year-olds?"

Others who benefit will be those who stay on only because they're at least halfway to retirement, he said.

Such a plan also helps remove retirement as the only incentive to stay in once a person beyond the halfway point has lost a real drive to be in the military, he said.

-- Richard Sisk contributed to this report.

-- Bryant Jordan can be reached at bryant.jordan@military.com