Panetta to recommend military pay cut

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Panetta: Fiscal Crisis Poses Biggest Immediate Threat to DOD(CNN) — Just days before he leaves office, Defense Secretary Leon Panetta is recommending military pay be limited, effectively decreasing troop salaries next year.

Panetta will recommend to Congress that military salaries be limited to a 1% increase in 2014. The Pentagon has calculated that the Labor Department’s 2014 Employment Cost Index is expected to be above 1% but wants to still cut back on pay because of “budget uncertainties,” a department official told CNN. In 2013, a 1.7% increase was approved, based on the index, which has been the basis for military pay for the last several years.

Three Pentagon officials have confirmed details of the plan to CNN. The Joint Chiefs of Staff have also agreed to Panetta’s proposed pay plan. Final approval for the pay would come from Congress in the form of the 2014 budget.

The recommendation is tied to the Defense Department’s 2014 budget recommendation, which was expected to be sent to Congress this month, one of the officials said. But the officials acknowledge it is going to be seen as an effort to push Congress to stop the automatic budget cuts that could go into effect if no deal is reached on spending reductions.

The decision comes as the secretary is stepping up the rhetoric about dire cuts at the Pentagon if sequestration goes into effect. President Obama in 2012 walled off military pay from cuts, so if this current pay plan goes into effect, it’s widely seen as “cutting our pay,” one military officer familiar with the plan told CNN. “It’s a smart move, it puts it in Congress’ hands,” he said.

Panetta, in one of his last official speeches as secretary of defense, told an audience at Georgetown University on Wednesday that the Pentagon faced “the most serious readiness crisis in over a decade.”

The defense secretary outlined a series of possible cuts should the Pentagon be forced to find half a trillion dollars more in savings. He warned that 800,000 civilian workers could furloughed for 22 days and that the Army would need to cut back on training and maintenance, putting two-thirds of combat teams at “reduced readiness levels.” Pacific naval operations could be cut by as much a third, and Air Force flying hours and weapons maintenance could be cut.

CNN has also learned that this week, the Navy is expected to announce it does not have the money to pay for refueling and maintenance of the aircraft carrier Abraham Lincoln. That will essentially mean the Navy is short a carrier and overseas deployments will be cut.

“No good options exist,” Panetta said.


  • Chris Rankin

    Wrong place to cut! Military deserves their pay far more than the entitled deserve their welfare benefits!

  • Liz

    "no good options exist." BALONEY

    Here's a good option: Don't backdoor force the DOD to buy equipment and use vendors that they don't want or need because the factory that builds "Big Bob's Bazookas" is in congressperson A's district, the plant that makes the munitions for a "big Bob Bazooka" is in congressperson B's district, the salespeople who "sell" "Big Bob's Bazookas" are in congressperson C's district, and the trucking company that ships "Big Bob's Bazooka's" is in congressperson D's district.

    Not only will you save money on the actual STUFF that you don't want, you will save money training people to use and repair stuff you don't want and land and buildings in which to STORE the stuff you don't want.

    Does it suck for the people who provide all of those goods and services to the military, yes, it does. But the military isn't supposed to be in the business of keeping a congressperson's constituents employed, happy, and voting. The military is in the business of protecting our country and our interests. And they SHOULD NOT have to do it for peanuts.

  • Flyerd

    –> Everyone always wants more pay and everyone likes to sound-off that the military doesn't get decent pay…
    Well, I'm a former military member and I just wanted to clarify something most people have grossly wrong (presumably because they are misinformed). While on active duty I occasionally had to have this "talk" with fellow military members who always had a much different perspective on their pay after our discussion. Hopefully it helps clarify military pay a bit.

    People like to say: "an E2 with 2yrs of service only makes $1.5K/month". First, the current "base pay" your figure references is actually $1,700 not $1,500. More importantly, the actual "total compensation" is closer to $44K/yr ($3,650/mo). Here's what is overlooked by the "basic pay" figure:

    2013 Mil Pay for E-2:
    "Basic Pay"- $1,700/month

    Other monthly pay (or equivalence) in addition to “Basic Pay”:

    1- Food allowance- $350 (or Free meals at messing facilities)
    2- Housing allowance- ~$1,000 (or equivalent Free room/elec/wtr)
    3- Health Ins- ~$450
    TOTAL OF ABOVE: $3,500/month or $42K/Year.
    4- Taxable equivalent: $45-46K/Year.

    *There’s also a yearly Tax-Free “clothing replacement allowance”, as well as other special pays paid to various job specialties. None of which are included here.

    **If deployed into combat: The combined affects of a Tax-FREE status on ALL pay received while in a combat zone, and the addition of extra pays (like imminent danger, family separation, hardship duty, etc.), results in an actual tax-equivalent pay of ~$55,000/Yr or $4,600/month for this same E2 example.

    Expanded explanations of 1-4 above:

    1- The free messing facility food is actually quite good (FAR better than the typical young-adult menus of Top-Romen , mac-n-cheese, etc.) and easily equivalent to at least $350/mo.

    2- Exact monthly housing allowance depends on location and dependent status. For Example- Sea $1,500, SF $2,800, even Spokane is $1K). FREE Housing in barracks (similar to college dorm) must be contrasted to what we’d be paying out of pocket to cover same expenses if not living in free housing. Location dependent (actual cost equivalent value depends on where you’re stationed, i.e. cost of living). Additionally, we pay NO electric or water bills which would add another $100-150/month of value. At the very least, free housing, electricity, & water would have an avg value of $1,000/month.

    3- Avg of $400 just to have employer provided healthcare at typical jobs (via some combination of employer/employee payments). Additionally, contrary to typical healthcare, military members pay ZERO for prescriptions, deductibles, co-pays, co-insurance, etc. which typically avg at least $600/yr or $50/month for people who have to pay these cost/fees. $400+$50 = $450/month.

    4- All "allowances", like Housing & Food allowances, are not taxed. Therefore, the “tax equivalent” yearly pay for this E2 example is $45K/yr (takes into account tax-free status of allowances). It would be even higher in an area with higher housing costs because the "allowance" pay would be higher (as would the tax equivalent amount).

    That's it. Sorry for the length but I wanted to be clear and complete. Have a nice day. :-)

    • Giacomo

      Nice figures…but where have you been since 2003. I can tell you where I have been: away from my wife and three kids. The food? MREs (meal, ready to eat), my housing? A tent at best. I respect your comments but combat deployments in Iraq, Afghanistan, and Bosnia & Kosovo, (yup, spent quality time there too) are things not quantifiable by the rosy personnel retention figures posted by DFAS.
      I suggest all concerned parties consider the following:
      1. The government's savings when a service member is KIA with more than 20 years of service, less than 20? Throw a new E2 into the grinder.
      2. NO 401k plan…TSP is the closest you get…
      3. Costs of PTSD…no complex math here either: failed marriages, unemployable or unemployed vets (especially within the reserve force), and Dishonorable or Other Than Honorable Discharges as a result of PTSD. I'll go out on a limb here and state that the government lacks the fiscal and moral stomach to tackle that issue. What I have seen over the past two years is this: don't diagnose, don't treat, and kick them out with an OTH. Sensationalizing? Not a chance. Look at press repotrting citing violence by former military members. That said, I know that the Navy is taking initial steps to look into this trend. I remain optimistic that we'll do the right thing.
      4. Health and life insurance: I can't imagine what an insurer would charge our men and women knowing our combat deployment cycles…does anyone?

      I don't respect Secretary Panetta's recommendation just days before he quits as reported by CNN…that is weak leadership. I strongly concur with Chris' and Liz's comments…especially the pandering and single-source contracts that are let. I'm also a taxpayer who's forced to pay for this same stuff that ends up at DRMO (aka military leavins').

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