Obama's proposal to trim back military benefits draws fire

President Barack Obama’s proposal to increase the cost of retirement or health care for service members’ families drew fire Tuesday from some military service associations.

The service groups said the Obama administration is wrongly trying to “civilianize” benefits provided to the military and their families.

Obama announced Monday a plan to cut the federal deficit by more than $3 trillion over 10 years through a broad range of tax increases and spending cuts.

“This plan is a balanced one that asks everyone to do their part,” Obama wrote in his introduction to an 67-page proposal entitled “Living Within Our Means and Investing in the Future.”

Included were recommendations to raise the cost of Tricare, the military health insurance program, for some users and to require civilian federal workers contribute more to their pension plans.

The Tricare changes focus on two areas: Tricare For Life, a program to supplement Medicare coverage for eligible military retirees, and the prescription drug program for families of active-duty personnel and retirees. The Tricare changes would reduce government costs by $27.3 billion over 10 years, according to the White House proposal. Tricare For Life recipients would be required to start paying a $200 annual fee beginning in 2013. If adopted, the fee also would rise over time.

The White House report states that the fee is considerably less than the estimated $2,100 a year paid for similar supplemental coverage by civilians.

The plan also calls for “minor” but unspecified increases in some prescription drug expenses for all Tricare recipients except active-duty service members.

Instead of paying a set dollar amount as a copay for retail prescription purchases, family members of active duty troops and retirees would pay a percentage of the prescription charge. At the same time, no copay would be required when buying less expensive, mail-order generic drugs, according to the report.

The White House notes that while the average copay for prescription drugs charged to a retired veteran at a drug store is $9, civilian federal employees pay an average of $45 under similar circumstances.

The recent benefits proposal would be in addition to changes the Obama administration requested in February as part of its annual defense budget. The budget, if approved, would require working-age military retirees to pay $2.50 to $5 more a month for Tricare benefits.

Military support organizations, which have objected to other recent proposals to trim or revamp military health and retirement benefits, said it’s wrong attempt to adjust military benefits to make them similar to civilian plans.

“We’re really taken aback by this whole proposal,” said Mike Hayden, deputy director of government relations for the Military Officers Association of America.

“The requirements associated with serving the military are significantly different than in other occupations… and the benefit package should be commensurate with that,” said Joe Barnes, executive director of the Fleet Reserve Association. “We have one percent of the population shouldering 100 percent of the responsibility for our national security.”

Barnes said he understands the need for government to control spending but military benefits are not the place to look.

“The cost of providing these benefits is part of the cost of defending our nation,” he said.

The organizations also were critical of Obama’s proposal to set up a federal commission to study changing the military retirement system, which doesn’t pay a dime in pension unless someone remains in the service for at least 20 years.

The White House report acknowledges that the benefits package has helped retain a “vigorous and highly effective” military when many employers had defined benefit plans.

“But the system was designed for a different era of work, and is now out of line with most other government and private retirement plans,” the White House report states, noting that 80 percent of service members leave the military before completing 20 years.

Former Defense Secretary Robert Gates has endorsed military pension reform, saying the current system is unfair to those who served less than two decades, as has the Defense Business Board, an advisory panel that has suggested the military adopt a program similar to private 401(k) plans which accumulate savings over time.

The president’s recommendations also call for all civilian federal employees pay a larger contribution to their pension plan. Currently the government pays 67 percent and the employees pay 33 percent. Obama’s plan, which would increase the employee’s share by 1.2 percent over three years, would save $21 billion over 10 years.

Reaction among Republican federal lawmakers to Obama’s overall deficit reduction plan was harsh, with GOP congressional leaders strongly opposing the tax increases. Bill Bartel, (757) 446-2398, bill.bartel@pilotonline.com