This is a repost of Tony Carr’s exceptional piece on the effects, both intended and unintended, of breaking the nation’s commitment to its military retirees. The implications of changing the COLA for the military retirement plan go infinitely deeper than simply saving the taxpayer six billion dollars. In my humble opinion this article is the best yet written on the COLA debate, and you can go to the original posting at John Q. Public.
Risk and Promise: Strategic Advice for Congress
Led by Paul Ryan and Patty Murray but abetted by Barack Obama, Congress recently gambled with our nation’s future for an extremely modest short-term gain. In doing so, it was given aid and comfort by knowledge-starved pundits, axe-grinding editorial boards, and self-anointed armchair analysts everywhere, as it left the military and veteran community standing with their jaws on the ground in despairing disbelief. Exploiting pressure to strike a budget compromise, Ryan and Murray entered into an unholy alliance to reduce veteran pensions – including those already vested under previous covenants – by an average of $84,000 to $120,000. They obscured this act, as often happens when attempting to mislead, by employing complex-sounding budget doublespeak to minimize the magnitude of the associated moral breach as well as the consequences to veterans and families. In a way, this debacle can be seen as part of our nation’s continual inability to comprehend and bear the costs of being a global superpower with quasi-imperial interests secured by less than one-half of one percent of its population. But the particulars in this case suggest something more disturbing lurking behind the standard wallet-grabbing Congressional milieu: a startling absence of strategic deliberation. When such a deficit impairs elected leaders responsible for national security, potentially grave consequences attend.
Good strategists always ask of any potential course of action two key questions. First, what will this do for us? And second, what will this do to us? Given the dearth of statesmanly impulse at the national level in modern America, it is perhaps unsurprising that in crafting the recent budget, Paul Ryan and Patty Murray asked only the former question, leaving the latter for others to worry about.
The provision at issue retroactively renegotiated the deferred compensation of more than two million military veterans – including tens of thousands still serving in harm’s way — who did their duty in reliance on promises around which they structured their lives. The vast majority of these veterans endured historically abusive operational tempos. Most will carry with them the invisible scars of war for the rest of their lives, running up against psychological limits that in subtle but consequential ways – ways no one who hasn’t served could possibly understand even if veterans were immodest enough to attempt explanation.
Many transitioned out of military service (or will in the future) to find that their skills and capabilities did not translate well in the private sector. This can slow earnings growth, making an earned military pension critical during the adaptation to civilian life in a down economy. Those retirees fortunate enough to preserve their marriages have typically dragged spouses through a dozen or so relocations, never giving them a chance to establish professional footing. This is key, not just in terms of the sacrifices rendered by military families, but in economic terms; in modern America, two incomes are now required to generate the same standard of living one income provided thirty years ago, and this is often beyond the reach of retired military families who have led very abnormal lives prior to retirement.
The All-Volunteer Force relies heavily on the 17% of its members who choose to serve for a career, most of whom are NCOs.
The shorthand employed by Ryan to sell his beloved pension cut envisions healthy, well-adjusted, fattened mercenaries stepping into corporate America to collect millions during the balance of their working years. How he arrived at this vision boggles the imagination; most retirees struggle to integrate into a new workplace with skills that don’t directly translate while trying to keep pace with competitors roughly half their age. 73% of retirees are noncommissioned officers whose pensions are barely sufficient to keep them above the poverty line. As a rule of thumb, these people are figures of sympathy rather than valid targets of the socialistic “they don’t need it anyway” notion behind Ryan’s sales pitch.
Ryan and Murray obviously weren’t thinking about these issues. They also weren’t thinking about the fact that every veteran who has retired since the year 2000 made a decision upon reaching 15 years of service: either turn down a $30,000 career status bonus and retain an inflation-protected pension upon reaching retirement, or accept the bonus and also accept a 1% annual reduction in cost-of-living adjustment with a one-time “catch-up” at age 62. Most veterans chose inflation protection, which ends up being worth far more in most calculations than the bonus. In summarily removing inflation protection from all military pensions, Congress breached the contract formed with those who turned down the 15-year bonus. It did this without holding a single committee meeting or public hearing. In a clear signal it wasn’t thinking strategically, Congress did this in a back room not populated by the joint chiefs, who claim to have been surprised by the provision altogether.
But this all makes sense if Ryan and Murray were only asking “what will this do for us?” And it did a couple of things. First, it bought them the public acquiescence of the service chiefs, who are desperate for funds given the limits of sequestration imposed without mission relief. Their only option to preclude mission failure is to hold open the gate while others raid the pensions of the very people whose interests they’re charged to safeguard. This perversely explains why they said nothing as a provision impacting the career decisions of every active duty and retired member of the military sailed through uncontested.
But what the provision really did for those who championed it was to lay the groundwork for a new funding stream to perpetuate pork barrel spending. If this provision sticks, Congress will have retroactively renegotiated the compensation contracts of more than two million war veterans during a time of war. If a promise of this magnitude can be rendered so cheap with so little effort, nothing is sacred. This will create broad legitimacy for further pension and benefit raiding, making this just the first of many breached promises and a lucrative source of cash by which Congress can purchase electoral advantage. It does this by funding needless bases and infrastructure (to supply jobs in their districts), by acquiring and continuing to operate needless weapons (again, jobs), and by continuing to support the nation’s promiscuous involvement in wars of choice that are a boon for defense contractors and war profiteers . . . and therefore, a steady source of votes and contributions. Footnote: this is an election year.
The Ryan-Murray pension-raid was not a “mistake” as some have claimed and as I’ve suggested elsewhere is a fallacious notion. It was a calculated breach of the faith for short-term political advantage. Ryan, Murray, Obama, Hagel, and the rest of those who pushed and supported this knew they were acting immorally, but were willing to accept doing so out of a rational calculation of what it would do for them. What they didn’t ask is what it might do to them . . . or more importantly, what it might do to us, the nation they claim to lead.
In the modern age, politicians tend to be tacticians rather than strategists. They’re interested in winning a series of short-term battles that supply them with talking points for use in the next election. This is so because getting elected has replaced principled leadership as the contemporary political raison d’etre. By extension, raising campaign funds has come to dominate the activity of elected representatives, displacing time and focus essential to strategic reflection. But in failing to take a sober, adult look at the future when making decisions, politicians assume huge risks on the behalf of the nation as they collect rewards that fall narrowly to them. When it comes to the legal heist recently carried out against veteran pensions, the risks are enormous.
Alienating today’s warriors risks destroying the willingness of others to step forward in the future. Military service is very much a family business; it’s difficult to find an active member who isn’t acting on the example of a relative or ancestor. Military service immerses individual warriors in a system of values rooted in honor, trust, and commitment. This makes them particularly sensitive to moral compromises. Ordinarily content to serve with quiet obedience, military members will not hesitate to sound off when they see an obvious moral wrong perpetrated (and woe betide us as a country if ever they became blithely accepting of such wrongs). They’ve shown in the past few weeks that attempts to breach trust with them will not go unnoticed or unmarked. The implication for politicians is clear: when you break a promise, you’re tampering with the delicate formula upon which the strength and vitality of the all-volunteer force is based. The consequences to future American security could be severe, and should be studied carefully before risking even the perception of a moral breach. Pension formulas were last disturbed in the mid-1990s, creating a retention crisis that sent the joint chiefs panicking to the Hill, where they persuaded Congress to restore a 50 percent, inflation-adjusted retirement package. All we’ve done since then is ask even more of our volunteers, and nothing suggests they are today any less sensitive to these kinds of budgetary shenanigans.
Politicians claim a choice between readiness and personnel funding, but this is a false choice. Tampering with promised pensions could fundamentally injure readiness by hurting morale and chilling volunteerism.
But there’s a deeper and more insidious risk already touched upon, and that’s the risk attendant to avoiding genuine reform of our defense institutions. It’s true that current defense spending is unsustainable. It’s not true that this is a result of personnel costs. They’ve remained constant at about 25% of defense spending since 2001 (despite two manpower-intensive wars) and are down from 30% of spending since 1991. Other elements of defense spending have grown explosively over the same period of time. The nation has expensively fast-tracked new capabilities from scratch as a result of being caught strategically off-guard by 9/11 (this, in turn, is attributable in part to the recklessly rapid pace of intelligence downsizing in the prior decade, which afforded America reduced global awareness as the calculus of national security shifted wholesale). It has also fielded costly new weapons systems in an attempt to contend with an uncertain future, virtually all of them coming up short of expectations and over budget as a result of a dated acquisition process riddled with misplaced influence and needless red tape. Meanwhile, unneeded bases remain open and their facilities remain operating due to Congressional obstruction, and no serious discussion concerning service roles and missions has been undertaken in nearly three decades. As a result, the services are tripping over one another with duplicate weapons and capabilities, a bonus for defense contractors but an injury to taxpayers.
If Congress is once again permitted to step over dollars to save dimes and mask the waste lurking in defense spending, we’ll continue tracing along the path of unsustainability without addressing it. Eventually, those masked costs will come due, and it won’t be Ryan or Murray who pay for it, but every citizen who loses security. To be fair to some counterarguments, there is a real need to study military compensation and benefit structures and ensure they fit within our means. But this should be forward-looking in order to keep the faith with those who already kept their end of the compensation bargain, and it should be preceded by a genuine attempt to address the structural reforms Congress is avoiding. If Americans really want to see a drastic reduction in defense spending, they must encourage their representatives to stop obstructing a Base Realignment and Closure Commission and to charter a Roles and Missions Commission. Moreover, Congress should bind itself to the recommendations of both in order to avoid the political mischief that has characterized previous reform efforts and led to the current morass. But even more than that, if Americans want to see drastically reduced defense spending, they should stop electing and emboldening politicians who send American troops into wars without fully advertising the costs of doing so.
This is the greatest risk of all — a risk potentially fatal to our national life. We’ve developed a nasty habit in the modern age of waging war without paying for it, and that has set us on a long road to ruin. We’ve yet to pay for the wars fought in the last 12 years, having pushed the costs off on future generations by borrowing against the national debt (save for the $6B pick-pocketed from those who did the fighting). No raised taxes (in fact, tax rates are at a record low as Congressional conservatives who voted overwhelmingly to authorize wars and troop surges complain about the national debt). No war bonds. No draft. No appeal to our richest citizens to finance an expedition. We’ve been at war for a dozen solid years without asking Americans at-large to make a single material sacrifice. Now we turn to veterans and expect them to foot the bill.
Veterans understandably refuse to willingly do so, not only because it is unspeakably wrong for them to have been asked in the first place, but because they understand covering up the cost of war is dangerous to our way of life. When war no longer carries even the faintest whiff of sacrifice for the vast majority of citizens, they will readily support it without rigorously considering its necessity or the manner of its execution. This is a path to endless war, and when we have warred enough that our interests have become overextended and we’re bogged down with inescapable obligations we can no longer sustain (hints of which are noticeable already), national collapse becomes inevitable. It’s not a new story historically, and we’re not so exceptional that we can avoid it. Paying our veterans what we owe them is one of the ways we feel the pain of having supported going to war (and by extension, failing to prevent it), and for that reason more than any other, we must pay what we owe . . . even (and perhaps especially) if doing so feels inconvenient.
So as Congress returns to session, it seems like a good moment for some unsolicited strategic advice, even if it disturbs the self-congratulatory saccharine party Washington has undertaken in the wake of a signed budget. Congress, you can either have an honorable military, or one that accepts broken promises. You can either have a cheap military, or the world’s best. And you can either have an expensive but secure way of life, or something less. Oddly, doing the morally right thing leads to the best outcome in each of these choices, proving that strategy and morality need not be misaligned. Reconciling the two is matter of considering not only what a course of action does for you, but what it does to your country. Thinking about it this way should compel a swift amendment to restore the promises made to our veterans and their families.
Posted by Tony Carr on January 2nd, 2014. You can view the original here.