Hearing of the Senate Armed Services Committee - Recent Changes to the U.S. Military Retirement System

Hearing

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Senator AYOTTE. Thank you, Mr. Chairman. Thanks so much for this hearing. It's a very, very important topic.

Let me just ask you, Admiral Winnefeld. I think it's been clear--and Secretary Fox--not one DOD official was consulted on this cost of living increase cut, were they?

Admiral WINNEFELD. To my knowledge, there were no DOD official consulted. We heard about it in the end game, as other people did.

Senator AYOTTE. Just to be clear, the way this went down is that many of us sitting around this table actually also serve on the Budget Committee, and as a member of the Budget Committee and a member of the Armed Services Committee we weren't consulted about this cut to the cost of living increase.

As far as I know, the Chairman of the Armed Services Committee was not consulted on this cost of living increase cut. And in fact the cut actually violated the principles in our own law that we passed that said that if there are going to be any changes to retirement that they would be grandfathered. Isn't that right?

Ms. FOX. That's correct.

Senator AYOTTE. Wonderful that we can reach a 2-year budget agreement. But you know what was astounding to me is once this became public that people from both sides of the aisle said this is wrong. Before we even voted on it, people on both sides of the aisle had ideas on how to fix it, but we couldn't get it fixed then before we inked this deal. That would have been the right thing to do. And now, the right thing to do is to fix it now, not to leave this hanging over our men and women's heads in terms of the unfair cuts here. I hope that we can agree to fix this now, not to delay it.

But this is a lesson. To not consult our men and women in uniform is outrageous. To not include people who serve on the Armed Services Committee to make cuts to military retirees--only in Washington. I think that we should commit ourselves around this table to find a fix for this. We can pay for it. Many people, including myself, have ideas on how to do it, not taking further from the military budget, so that we don't have a further impact on sequestration and the service to our men and women in uniform, making sure they have the equipment that they need.

Let me just ask you, Admiral. Sergeant first class--the chairman used an example of you enlist at 18, you put 20 years in, you retire at 38. Well, someone who has done that in the last 20 years, how likely is it that that individual has done multiple tours in Iraq and Afghanistan?

Admiral WINNEFELD. Certainly it depends on the branch of Service, but no question that if you're a soldier or a marine or someone in the other Services who serves on the ground, you've probably done more than one tour.

Senator AYOTTE. When you do a tour in Iraq or Afghanistan, do you have a chance to put roots down in a place, so that when you do retire that you already have roots there, that you can establish a career? Is that so easy?

Admiral WINNEFELD. I'd say regardless of whether you're serving in Afghanistan or Iraq or around the world--

Senator AYOTTE. Or anywhere.

Admiral WINNEFELD.--that one of the facets of our life in the military that we accept is that we don't have the opportunity necessarily to set some roots down. As the son of a naval officer, I don't even know what roots are.

Senator AYOTTE. Right.

Admiral WINNEFELD. But there are a number of people who come into the service from States all around the country who might have residual roots there. But you're absolutely right, for 20 years you're moving around.

Senator AYOTTE. Isn't that different from your average individual in terms of the ability to establish a career even post 20 years in the military?

Admiral WINNEFELD. Senator, it's even more than that. It affects the spouse's employment. Many of them face severe disruptions as they move from place to place. We've gotten some help from the Congress on that, frankly, but it's still very hard for a spouse to move from one place to another and jump right into the same job.

Senator AYOTTE. So often for a family now you need a two-income household. So when your spouse is moving around all the time, he or she can't have a situation where they can establish their career also. So you're losing income there as well, aren't you?

Admiral WINNEFELD. It's income, and I think there's a frustration and an anxiety level of, next time we move am I going to be able to find a job.

Senator AYOTTE. So let's be clear. A military retirement is very different in terms of the sacrifices that are made than your average civilian retirement; do you agree?

Admiral WINNEFELD. Yes.

Senator AYOTTE. In terms of the sacrifices made by your family, in terms of the opportunities that you lose to earn income, in terms of the opportunities that you lose to put roots down because of the sacrifices you have made for our Nation; is that right?

Admiral WINNEFELD. I absolutely agree, and that's why we tend to not try to make direct comparisons between civilian and military retirement.

Senator AYOTTE. In fact, when you retire from the military you can be recalled, can't you? As far as I know, in a civilian retirement generally you aren't mandatorily recalled back to your job, are you?

Admiral WINNEFELD. It's unusual, but in the event of a crisis, a national emergency, absolutely, you can be recalled.

Senator AYOTTE. In fact, we've been informed since 9--11 about 3400 retirees were actually recalled back to active duty service. Does that sound about right?

Admiral WINNEFELD. I don't have the numbers, but I wouldn't be a bit surprised if they were accurate. And there are some who come in voluntarily, but others are recalled, yes, ma'am.

Senator AYOTTE. So that's another huge difference and I think a disconnect with what happened in this budget agreement.

I want to ask you about an issue that was brought to our attention that involves general officer retirement pay, both you, Admiral, and Secretary Fox. As we looked, I saw a report that said that in 2007 legislation provided incentives for senior officers to continue serving by extending the basic pay table from a cap of 26 years to provide increase in longevity to pay out for 40 years of service. According to one press report in USA Today, using 2011 numbers, this could result in a four-star officer retiring with 38 years of experience receiving $84,000 more in retirement than previously allowed.

Now, I understand why these changes were made, because we were in wartime and I assume the purpose was to encourage combat- experienced one and two-star admirals and generals to continue serving during the war. However, now we're in a situation where the Congress has made cuts to--and I want to say these cuts, by the way, are a penalty. It's a one percent decrease in your cost of living increase. It's a penalty.

And we haven't even looked at issues like do we need to continue the increases to the generals and admirals that they've received now that we are winding down in Iraq and Afghanistan. Could you comment on that? Think about the impact on a sergeant first class losing $80,000. That is a huge impact.

Admiral WINNEFELD. Senator, we think the commission should look at all elements of retirement, all pay grades, and all of the many variables that I listed earlier. So we look forward to what the commission has to say on that and other issues.

Senator AYOTTE. Also, looking as well at, obviously, admirals, generals, and seeing what is fair in terms of their compensation as well, because it seems to me that the people that took the biggest hit under this--the officers take a big hit under this as well and I don't diminish that. But your average enlisted person, from what they take as a hit, basically as I understand it their average retirement is about $25,000 a year and, with moving around and everything like that, they have to try to find another job just to feed their family. Do you agree with that?

Admiral WINNEFELD. I do. We are looking at all of the proposals we are considering under the budget submission that we'll make this year. Flag and general officer pay is one of them.

Senator AYOTTE. Well, I appreciate that. I just hope that we can fix this wrong and right it now and not wait, Secretary Fox. I don't think we should wait.

Thank you.

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Senator AYOTTE. Thank you, Mr. Chairman.

I want to thank all of you for your leadership and for being here today on this incredibly important issue.

Here's what worries me as I think about how we ended up where we are. You have a budget agreement that the only group that really takes a hit right now are men and women in uniform. So what worries me is that we grandfathered the Federal employees, meaning only new hires would they get impacted by it. But our men and women in uniform, who have taken the bullets for us, they got the cuts right now to their cost of living increase.

Is it because only less than one percent of the population defends the rest of us? Is it because the Federal employees and other groups around here just have stronger lobbyists and voices, we're going to protect our people?

What worries me about this is that it was a huge disconnect from Washington in terms of those who have sacrificed the most, that they would be the one group targeted in all of this. I just wanted to get your thoughts on all of this as leaders of our military organizations, because as I think about the big picture on this what is the lesson we need to learn from this? That just really worries me as I think about the big picture of the message that we are sending to our men and women in uniform when we have been at war--Iraq, Afghanistan. It's been a tough time for them.

Sergeant DELANEY. I think the problem we face is that a lot of people view the military as an easy target. We're a small group and they say, okay, we'll take some money from them. And it's over a five or ten-year period, rather than say, okay, let's adjust this. If we're going to do it, let's grandfather it and wait a little longer to get a return on our money.

But when I reenlisted in 1972, which would take me over the halfway point, I believed, yes, I'm going to get medical care when I retire. When I retired they said, now, you may not be able to get into the base hospital here; they're there for the active duty. I said: Fine, I can deal with that, but I've still got my medical care off base. Now they're looking at ways to change all that.

There's a bunch of targets on our back--commissaries, they're talking about closing those. They're looking at putting enrollment fees on TRICARE for Life. I have to pay for part B to get TRICARE for Life. Now I've got to pay for TRICARE for Life, too? Increasing copays on medical costs, copay raises, or even freezing the pay.

There's a lot of things. It just seems to me that we're an easy target, and that's what really bothers me.

Senator AYOTTE. General Sullivan, General Tilelli, what kind of message do we send with this? And what do we need to learn from this?

General SULLIVAN. Well, as I said in my remarks, we're causing our people in uniform to think about the issue, to think about an issue which they don't understand. And by the way, I don't want to ascribe any motives to anyone on whatever happens.

Senator AYOTTE. But did we forget? I'm worried. What are our priorities?

General SULLIVAN. Well, I think that's it. You have to decide, how will we spend the National budget? Where will we spend it? Will we spend it on our security or on other things? I think that's a decision that has to be made. Right now it appears, I'm sure it
appears to some of the troops, that all of this, and their families, all of this is being placed on their back. Go out here and fight for the last 25 years beginning in Panama, right through to this day when we're fighting in Afghanistan. And oh, by the way, how we change the formula. I don't get it.

of all, I think we all have to understand that our service men and women and their families are getting a message and the message is being sent every day. You can read it every day in any number of periodicals, starting with the Minus One Percent, the copays, the commissaries, the TRICARE. They see that there is a devolution, if you will, of support for them.

The other issue is the service men and their families, their contract is with the United States of America and they count on the Congress to take care of them. They don't have a union. They depend on us to take care of them. When we look at it, they are willing to do extraordinary things for this Nation and for each other and put themselves in harm's way, be without a family, not have equity in a house, change six or eight times, kids out of school, and do all those things, and count on the Congress of the United States and America to take care of them.

And they are getting a serious message now. I can tell you from the amount of emails that we get from family members on all of this, it would choke a horse, that they are very, very concerned about all this.

General SULLIVAN. But I don't think--and I'd like to clear the air here on one point. I don't think they're asking more than they deserve. I don't get that feeling at all. I think all they want is a fair shake. And they want to know that people like you--and you are,
by the way, to your credit--are paying attention to what's going on. I thank you for it.

Senator AYOTTE. I thank you all for being here. I will also add that when people call things like an $80,000 cut to a sergeant first class whose average retirement is $23,000 ""teensie-weensie,'' like the Washington Post did, or ""minuscule,'' it's offensive. And we
should fix this, and we are sending the wrong message.

Thank you.

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