Debt panel eyes Tricare hikes, federal pay freeze
By Tom Philpott
Military personnel and federal civilian workers would see pay levels frozen for three years and their out-of-pocket medical costs rise under a proposed plan to cut federal budget deficits by $200 billion a year by 2015.
The 58-part "illustrative"plan was unveiled Wednesday by former Republican Sen. Alan Simpson (Wyo.) and Erskine Bowles, chief of staff to President Clinton, who serve as co-chairmen of the National Commission on Fiscal Responsibility and Reform.
That 18-member blue-ribbon panel is to deliver a final report to the President by December on ways to tackle a U.S. debt crisis that grows continually, with annual federal deficits nearing 10 percent of the gross domestic product, a rate higher than any year since World War II.
Yet the political minefield ahead for the co-chairmen’s proposal, at least in trying to squeeze savings out of the military community, became apparent in a phone interview Monday with Rep. Joe Wilson (R-S.C.).
Wilson is expected to become chairman of the House armed services subcommittee on military personnel in the new Congress. He deems himself a member of the Tea Party. Many of them were elected this month on promises to reduce budget deficits.
But Wilson, whose districts includes Fort Jackson, Parris Island and several other bases, told me he is committed to protecting TRICARE beneficiaries from fee increases. In fact, his priorities as panel chairman included expanding entitlements: ending a Survivor Benefit Plan offset for widows, lowering the age 60 start of reserve retirement and providing some military retired pay atop disability compensation for members forced to retire before reaching 20 years due to disability or injury.
The debt commission has a far different course in mind if they can persuade the Obama administration and a more conservative Congress that a new era of fiscal restraint is needed to protect America. The co-chairmen propose dramatic cuts across government including to Social Security, Medicare and federal retirement, presumably for future service members and civil servants. They also call for a variety of higher taxes including on gasoline. Income taxes would be lowered and simplified, but popular deductions, including for home mortgages, would be cut.
"America cannot be great if we go broke,"Simpson and Bowles said. "We must stabilize then reduce the national debt,"which stands at nearly $14 trillion, "or we could spend $1 trillion a year on interest alone by 2020."
Here’s are highlights that, if adopted, would impact the military:
"MODERNIZE"TRICARE –TRICARE premiums and fees would climb for working-age military retirees, except more modestly than proposed earlier by the Bush and Obama administrations. Employers, however, would have to reimburse the government their normal share of health costs if a military retiree on the payroll opts to use TRICARE rather than employer health insurance. The aim is to end a $3 billion a year government "subsidy"of what should be "a normal business expense"for civilian employers.
All TRICARE beneficiaries including active duty family members would face a co-payment for office visits, to reduce their "higher than average usage of health care." Also, a "modest enrollment fee"would be set for all three TRICARE options, including fee-for-service coverage under TRICARE Standard and the preferred provider network using TRICARE Extra.
Finally, TRICARE would be subject to PAYGO or "pay-as-you-go"budget deficit rules so that any future increases in military health benefits are paid for through higher premiums, co-pays and deductibles.
FEDERAL PAY FREEZE –Military and federal civilian employees would see pay charts frozen for three years "to reflect the current economic and fiscal crisis"that has hit most private sector employees. Only combat pay would be exempt. The freeze would affect basic pay and housing allowances saving $7.6 billion in compensation and tax breaks in 2015. Holding down basic pay also would dampen accrual retirement costs by $1.6 billion a year.
PERSONNEL OVERSEAS –The number of military members assigned to bases in Europe and Asia would fall by a third, from 150,000 down to 100,000, to save $8.5 billion.
STATESIDE SCHOOLS –The Department of Defense would close 58 primary and secondary schools that it still operates for more than 19,000 dependent children in Alabama, Georgia, New York, North Carolina, South Carolina and Virginia. Begun on base when schools in the South were racially segregated, "it is no longer clear why the system is still necessary"at a cost per student of $51,000 in fiscal 2011, rising to $81,000 by 2015.
COLA "REFORM"–A new, more efficient formula would be used to set cost-of-living adjustments [COLAs] for Social Security and veterans benefits, military and federal annuities and survivor benefits. The co-chairmen said the current COLA formula fails to take into account new consumer choices made for their market basket when other products become too pricey.
FUTURE MILITARY RETIREMENT –The current 20-year system would be replaced, presumably for new entrants with a plan that vests some benefits after only 10 years and delays those annuities until age 60.
To critics who complain often that the first budget items cut should be U.S. foreign aid and support for the UN, well, those are targeted here too. The full proposal can be read at: www.fiscalcommission.gov
Steve Strobridge with Military Officers Association of America, who testified at the commission’s June public forum, said most of these cost-cutting ideas for the military have been seen before. But an era is at hand of "increasingly severe budget constraints,"he said. "It is different when the deficit is as large as it is."
These ideas will make many lawmakers nervous, he predicted, and early on they only will be "dabbling at the edges." But many newly elected Republicans did campaign on cutting budgets, Strobridge noted. "So I think there’s going to be some serious efforts to do some of these things."
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But healthcare is a RIGHT...
Okay, snide comment aside..
I'm all FOR this... so long as we do two things:
1. Tackle public unions
2. ACTUALLY REDUCE NATIONAL DEBT
How did Unions suddenly get involved in this conversation? And they wont get rid of national debt untill they get a handle on the old spending in the budget every year, namely Defense spending, and revenue shortfalls with the lowest tax rate in effect since 1950..
Cutting entitlement programs is the name of the game. You want to cut tricare..fine..
I don't think a teacher should work 6 hours a day, 180 days a year..and retire with 500 sick days..
The issues go hand in hand.
I agree unions are simply a product of the negotiating table in many fields. Cuts should not be in Tricare (I do not receive it, and have always wanted a universal health care system so issues like this would never come up) but in DOD contractors, wars, un needed weaponry, and corporate subsidies. The bailout of corporations that "caused" the economic meltdown in the US was not a good capitalistic decsion...they should have been left to their own devices and crash and burn according to the rules of economics. They were irresponsible and the caused huge government debt!
Military health care costly for Pentagon
Costs to provide the coverage have jumped to $53 billion
WASHINGTON - A military built for fighting wars is looking more and more like a health-care entitlement program.
Costs of the program that provides health coverage to about 10 million active-duty personnel, retirees, reservists and their families have jumped from $19 billion in 2001 to $53 billion in the Pentagon's latest budget request.
Desperate to cut spending in Washington's time of fiscal austerity, the Obama administration has proposed increasing the fees for working-age retirees in the decades-old health program, known as Tricare. After years of resisting proposed increases for the military men and women who sacrificed for a nation, budget-conscious lawmakers suddenly are poised to make them pay a bit more for their health care, though not on the president's terms.
The current fees, unchanged in 11 years, are $230 a year for an individual and $460 for a family. That's far less than what civilian federal workers pay for health care, about $5,000 a year, and what most other people in the U.S. pay.
Obama is seeking a fee increase of $2.50 per month for an individual and $5 per month for families. Future increases starting in 2013 would be pegged to rising costs as measured by the national health-care-expenditure index produced by the Centers for Medicare and Medicaid Services, which projects 6.2 percent growth.
"Health care is eating the department alive," Defense Secretary Robert Gates said bluntly - two years ago.
The explosive expense of health care rivals what the Pentagon shells out to buy fighter aircraft, submarines and high-tech weapons, and is about half of the $118 billion that the Obama administration wants in the next budget to fight the wars in Iraq and Afghanistan.
Rep. Howard "Buck" McKeon, chairman of the House Armed Services Committee, backs the proposal to raise fees for working-age retirees in the next budget, and he has the support of the committee's top Democrat, Rep. Adam Smith of Washington state.
But McKeon, R-Calif., rejects the plan to link increases in 2013 and beyond to the health-care-expenditure index. He wants to tie any future increases to military retirees' cost-of-living adjustment, which this year was zero.
McKeon planned to release his version of the defense bill today. The full committee meets Wednesday to pull together an overall defense bill for the budget year beginning Oct. 1. The committee is expected to override members of its personnel subcommittee who last week unanimously approved a one-year prohibition on any increase in health-care fees.
"I strongly believe military retirees have made significant down payments through their dedicated service to the nation," said the subcommittee chairman, Rep. Joe Wilson, R-S.C.
Congress repeatedly has resisted Pentagon efforts to increase co-payments or fees, arguing that members of the military and their families sacrifice far more than the average American, with a career that includes long and dangerous deployments overseas that overshadow civilian work.
This year, Gates singled out working-age retirees, such as those in their 40s who retired after some 20-plus years in the military, as individuals who could afford a small increase.
The Military Officers Association of America backs the one-year fee increase but strongly opposes any increase in 2013 and beyond linked to the health-care-expenditure index.
New Budget DOES NOT RAISE TRICARE OR FREEZE MILITARY PAY.
Topic is Moot!
Todays politics remind me of an old saying. - "Ideas are more powerful than guns. We would not let our enemies have guns, why should we let them have ideas?" - Joseph Stalin
They will do this to cut the debt, but at the same time they will spend more. Cut politicians pay, stop the pay for the president after he is no longer president, make the politians use the same medical care as the military, combine the ATF and the FBI into the same agency, put a stop the Carz's, cut the white house staff. Cuts should start at the top and then work it's way down, not start at the bottom and work it way up.
as I say
No one is providing a plan to "cut" the debt, just a means of reducing the increase. The entire issue is a scam perpetrated by both parties.
"We have met the Enemy and he is Us." Pogo
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