Faith No More?

The strong bond of trust that retired service members thought they had regained is in danger of unraveling.

Washington, D.C., March 17, 2006

In 1995, various federal budgeteers advanced the novel idea that government-sponsored health care for service retirees was nothing more than a “contingent benefit”—in other words, it was a privilege, and not a right. We remember their words today mostly as an example of shocking ignorance.

Ninety percent of military retirees insisted they had been promised these benefits, and they papered Capitol Hill with their complaints. Chastened officials repudiated the budgeteers and accepted “the promise” as valid. Elderly retirees were by law given access to the Pentagon’s Tricare medical system and related benefits. The system itself was expanded.

Yet questions persisted. Was this care supposed to be “free,” “low-cost,” or what? Should the country’s liability be limited? Eleven years on, some officials still argue about this.

In a Feb. 6 statement, William Winkenwerder Jr., the assistant secretary of defense for health affairs, raised alarms about rising cost. In 1995, health care consumed five percent of DOD’s budget; now, it’s eight percent, and, unless something is done, the figure in 2015 could top 12 percent. Winkenwerder called this “unsustainable growth.”

A senior official who is always ready to deliver a jab is David S.C. Chu, the undersecretary of defense for personnel and readiness, who famously declared of retiree and veteran benefits, “They are taking away from the nation’s ability to defend itself.”

Pentagon chief Donald H. Rumsfeld told Congress retiree care must change “because it’s an enormous amount of money.” That prompted a riposte from Stephen P. Condon, AFA’s Chairman of the Board. “We appreciate that the Administration is attempting to make the best out of a tough fiscal situation,” he said on Feb. 22, “but the budget must not be balanced on the backs of veterans.”

That shouldn’t happen—but it might. The Bush Administration’s approach to fixing these problems, as laid out in the Fiscal 2007 budget, paints the bull’s-eye on retirees. DOD would sharply raise Tricare enrollment fees—doubling or tripling some—as well as co-payments for retirees under age 65. This is supposed to yield savings of $32 billion over 10 years, but it could anger a great many of the three million affected retirees and dependents.

“You’re about to take your best recruiters and turn them into your worst nightmare,” Rep. Gene Taylor (D-Miss.) warned senior defense officials at a recent House Armed Services Committee session.

Indeed, it was not that long ago that the Pentagon’s penchant for bean-counting and sharp practice nearly destroyed the faith which military people had always placed in the nation they served. Much good has happened in recent years, but the strong bond of trust that retired service members thought they had regained is in danger of unraveling.

There are some 2.1 million military retirees and survivor benefit recipients and another six to eight million dependents. If the fee increases are imposed, and many retirees revolt, it will be because Washington lost sight of some important truths. Here are some friendly reminders:

Paying for retiree care is not a favor, but an obligation. It is unfortunate that costs have turned out to be so high, but that is not the fault of retirees. What if someone bought a car and then his gas, insurance, and repairs became more expensive than he expected? Isn’t he, nevertheless, obligated to pay all of his bills?

It is unseemly to declare (as many in the Pentagon do) that spending on retiree care drains money away from vital weapons and threatens national defense. That would be true only if the Bush Administration accepted an arbitrary ceiling on DOD spending. The remedy for a shortage of money for validated needs is to obtain more money, which the US easily could provide. As Condon pointed out, current defense spending consumes only four percent of the nation’s GDP, a burden that is low by historic US standards.

Costs must be viewed in context. Yes, spending on military health care has doubled over the past five years, and may rise (as DOD warns) from $38 billion to $64 billion in 10 years. That is a lot of money. Yet Americans spend nearly twice that much ($116 billion) each year just on alcoholic beverages. Surely, paying what is required to honor a solemn promise to retirees should not be considered excessive.

Brig. Gen. Elder Granger, a top DOD medical official, makes much of the fact that retirees in 1995 paid 27 percent of their own medical costs and today pay only 12 percent, largely because benefits have grown while fees have not changed. Yet the promise was for “free” treatment. The problem is not that retirees pay too little for care, but that they pay as much as they do.

Much of DOD’s expenditure increase stems from Tricare For Life, the program for 65-and-over retirees, but all of the new Tricare fee increases apply only to younger beneficiaries, mostly in their forties and fifties. Congress knew TFL would be a high-cost program. It is not fair and equitable to finance the program with fees extracted from under-65 retirees.

Is the Pentagon not embarrassed that it is trying to hit up retirees for money before all Americans have been asked to make a sacrifice? If DOD is really worried about a pinch on funds, Rumsfeld should go to the White House and demand a higher budget and send it to Congress. When has Capitol Hill ever balked on a matter of importance to the uniformed military?

Let us stipulate that Rumsfeld has a very tough job to do. However, it does no one any good to pit retired military personnel who served honorably against those who now wear the uniform.

In the past, lawmakers have rejected similar efforts. They should do so again. Killing the pet projects of senior Pentagon leaders is difficult business. Congress should get on with it.