Foreign and Defense Policy, Defense

Putting military personnel costs in context

Image Credit: shutterstock

Image Credit: shutterstock

The debate surrounding military compensation has grown louder in recent years as budget cuts have pushed this issue to the front burner.

Congress has been presented with compelling arguments on both sides. As one side has argued, “If any defense costs are ‘spiraling out of control,’ they’re not personnel costs.”  Yet on the other hand, in the words of former Secretary of Defense Leon Panetta, personnel costs are “simply put, on an unsustainable course.” And as Chairman of the Joint Chiefs of Staff Martin Dempsey echoed, “compensation…and health care costs are growing at rates that are unsustainable to the all-volunteer force.”

Up until this point, these seemingly conflicting messages have only served to confuse Congress about whether there is a problem at all, and if so, the scope and nature of the challenge.

Part of the issue is that percentages of the total pie, including the oft-cited figure that personnel spending has remained roughly flat as a percentage of the defense budget, are only one metric. Without context, they do not tell policymakers much. What matters is how many people a given share of the budget is buying.

A new chartbook from AEI and the Bipartisan Policy Center explores the growth in military personnel costs over the past decade in particular.

As the new study finds, while the real cost of military compensation per active duty troop rose by 42% from 2001 to 2012, the active duty force grew by less than 1%.

This means that military personnel costs are up significantly as the number of people in uniform are down, which is understandable given the wartime demands of the last decade. Yet this is happening at a rate that cannot stand with falling top lines.

The same share of the defense budget in 1980 bought over two million active duty troops. Today, one-third of the defense budget buys about 1.4 million service members.

Congress and Pentagon leaders will need to carefully act upon the forthcoming recommendations from the Military Compensation and Retirement Modernization Commission. Otherwise, the force will only shrink further—the same military that is already too small to meet all the demands placed upon it by the nation.

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4 thoughts on “Putting military personnel costs in context

  1. Considering the fact that “Prepare for the common defense” is in the Preamble of the Constitution, I would venture that it takes precedence over DEA, DOE both
    energy and education, EPA, and a whole host of other alphabets. As the failure of the Dept of State to represent the interests of the US, their budget could go to the DOD

    • ‘Provide’ for the Common Defense. But I do agree that as a nation we could easily afford 5% of GDP or $850 billion for the baseline DOD budget. An extra $350 billion could easily support both the force size and modernization we need.

  2. Our “national security” outlays are largely wasteful, no surprise—we are discussing public agencies with decades of ossification setting in.
    Lifetime pensiln and medical after just 20 years of employment? French railway workers would blush at that…

  3. Mackenzie,

    What is the ‘net cost’ of the DOD budget? If you deducted all corporate, corporate employee and DOD employee taxes paid minus the DOD budget what is the ‘net cost’ to the nation?

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