July 25, 2014

REPEALING MILITARY PENSION REFORMS WOULD SEND WRONG FISCAL SIGNAL

WASHINGTON--Concord Coalition Policy Director Robert Bixby told the Military Personnel Subcommittee of the House Armed Services Committee that repealing the 1986 military pension reforms known as "Redux" would signal a dangerous breakdown in the political will to enforce prospective and necessary changes in entitlement programs.

"At a time when our nation is preparing for the fiscal challenges of an aging population by debating the tough choices involved in Social Security and Medicare reform, we can ill afford to undo one of the few tough choices about long-term spending that already has been made," Bixby testified.

Bixby told the subcommittee that the Concord Coalition believes that any proposal to increase spending on national security should be assessed by two overall criteria: Will it contribute, in a meaningful way, to a stronger national defense; and does it accomplish this goal in a fiscally responsible manner?

Bixby testified that Congress and the White House should keep the following caveats in mind while considering increasing spending on national defense.

 

  • Despite recent improvement, current fiscal policy remains unsustainable over the long-term. Demographic factors will put an enormous strain on federal resources early in the next century. Because no solution to this looming fiscal crisis has been found yet, great care should be taken to avoid new initiatives that would make the long-term outlook even worse.

     

  • It is not fiscally responsible to make long-term commitments, such as those under consideration for military pay and retirement reform, based on projections of large and growing budget surpluses for "as far as the eye can see." Congress must be careful not to over-commit surplus dollars that may or may not materialize. If the assumed surpluses do not in fact happen, the budget would quickly fall back into the ditch of large chronic deficits.

     

  • Military compensation is not the only, or necessarily the most important, national security priority. A good case can now be made to increase defense spending on acquisition, modernization, maintenance, and training as well as compensation. But these needs must be addressed in a cost-effective manner and the total increase, if any, must be balanced against other national priorities.

     

  • There is little evidence to suggest that repealing the 1986 pension reforms would contribute to national security in any meaningful way. Indeed, by drawing funds away from more critical defense needs and re-instituting a system that was found on a bipartisan basis to be wasteful and excessive, it may well weaken readiness.

     

  • As a matter of long-term fiscal policy, repealing the 1986 pension reforms would be dramatic step in the wrong direction.