Military Compensation Reform: Taking a Bite Out of Defense Spending

constancerapkoch / April 21, 2009

At last week’s speech at the Air War College, Secretary Gates told the officers present that, “Health care is eating the [Defense] Department alive.” The massive expansion of military compensation spending in the past decade has placed the entire system in jeopardy. Healthcare spending alone for 2010 is set for $47 billion. And in fiscal year 2009, nearly 25 percent of the defense budget was allocated for military compensation. Fortunately, a solution exists.

According to Mackenzie Eaglen, to achieve cost-effective reform, the system should become more competitive, flexible, and more heavily based on cash compensation; and less on non-cash and deferred benefits. Cash compensation will attract recruits who want to serve in the military, but not make it a career. Not only is this type of compensation more economical, it will alleviate perceived inequalities between military and private sector pay. (more…)