August 23, 2014

Pentagon’s 5-Year Plan Illustrates Need for Reforms

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

A recent report by the Congressional Budget Office (CBO) found that the Pentagon’s latest five-year plan would cost substantially more than the funding allowed under the sequester caps.

Each year the Department of Defense provides Congress with its “Future Years Defense Program.” The CBO, studying the plan submitted last spring, found that the gap between the plan and the sequester’s budget cap would average $81 billion a year between 2014 and 2021.

Elected officials should pay particularly close attention to health care spending and compensation for both military and civilian employees, which are among the fastest growing items in the Pentagon budget.

Retiree costs are rising rapidly as more and more of them drop their private insurance plans in favor of heavily subsidized coverage through TRICARE, the military health care system. Congress keeps their TRICARE premiums and co-payments so artificially low that only 23 percent of military retirees and their dependents now use private health insurance -- down from roughly 50 percent in 2001.

Unfortunately, Congress has not approved reforms to hold down such costs. Unless that changes, the military may need to make difficult cuts to its forces, the development and purchase of weapons, and the scope of its operations and training.