Wednesday, January 12, 2005

 

Does this add up?

Yesterday's New York Times ran an Op-Ed by someone named Cindy Williams explaining that the real culprit in America's excessive military spending is the Pentagon's excessive generosity to retirees (who make up a small percentage of all veterans, since you have to serve 20 years to qualify). Except...
Making the Cuts, Keeping the Benefits

By CINDY WILLIAMS

Cambridge, Mass. — In an effort to reduce the growth of the military budget, the Bush administration is poised to cut back a wide array of Pentagon programs, from jet fighters to a missile defense system. Pentagon leaders say the cuts will save more than $55 billion over six years.

Whether these reductions herald the end of the rapid rise in military spending that began in 1999, however, is open to question. While fewer weapons systems than planned will be purchased during the next six years, in financial terms, putting an end to the buildup will require cutting far more than what is now on the chopping block. One reason is that much of the recent rise in spending has been fueled not by new tanks or missiles, but by new costs associated with military personnel - especially retirees. These costs amount to a permanent increase in the military budget. Unlike spending on equipment, they cannot be canceled or deferred.

In recent years, Congress has expanded retiree benefits substantially, making them the fastest-growing category of entitlements for military personnel. In 1999, Congress reversed a 1986 law that would have trimmed pensions for retirees who joined the military after 1986. That change costs the Defense Department some $1 billion annually. A health care entitlement granted by Congress in 2000 pays virtually all medical expenses for older retirees and their spouses - including the cost of prescription drugs - that are not covered by Medicare. That entitlement costs the Defense Department nearly $4 billion now and its costs will rise over the coming years.

Another benefit, granted by Congress last year and scheduled to be phased in over a decade, will permit retirees who depart the military with moderate to severe disabilities to collect retirement pensions in addition to their disability payments. Its cost, about $500 million this year, will rise to some $2.5 billion a year in six years. In addition, a change authorized in October 2004 will enrich the pensions of spouses who outlive retired service members, at a cost of about $200 million this year and nearly $1 billion in 2011.
Let's see...$1 billion + $4 billion + $2.5 billion + $1 billion = $8.5 billion. Granted, that's probably not all we're spending on retirees, but not all that $8.5 billion is on this year's budget. We're spending about $1 billion a week in Iraq (this is not on the annual Defense Dept. appropriation). We're spending something like $400 billion a year on defense. And it's the $8.5 billion we're spending on retirees that is breaking the budget?

Unquestionably, I don't know anything about this. But I can add - and this doesn't add up.
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