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Earned Deferred Compensation Proposed military earnings reforms do more harm than good

August 15, 2012

No one deserves a paycheck more than American Soldiers deserve theirs. Whether a Soldier answers duty’s call today in Afghanistan or answered earlier in Iraq, Vietnam, Korea or one (or more) of dozens of other countries, every servicemember makes unique sacrifices that are fundamentally unlike the demands of civilian employment. Precisely because of the singular nature of the military profession’s demands—and, more explicitly, because of the strategic necessity of guaranteeing that U.S. forces are always available and ready—the armed services have provided their personnel for decades with a wide range of compensation that is not always similar to the types of compensation packages with which civilian employees are familiar. Despite this, proposals that effectively “civilianize” military compensation reemerge time and again.

At present, the rationale attached to such proposals falls almost wholly into three main categories. The arguments suggest that military compensation policies must be modified to save taxpayer money to help resolve the federal budget and national debt crises; to stabilize Department of Defense (DoD) account growth because personnel costs generally (and health care costs in particular) threaten to increase as a share of the total DoD budget; or to make the system more fair to those who serve and to all Americans who foot the bill. The various policy proposals and think tank studies—whose supporters almost unanimously agree that any military compensation reform must be undertaken comprehensively—often attempt to offer cost savings in all three categories simultaneously; by doing so, they sometimes seem to imply that the quantity of objectives aimed at is more important than the depth of impact achieved in each category. In other words, they imply that any time a plan can be shown to make improvements (however slight) in any or all of the three categories, it simply must be preferable to the status quo.

Such an implication is too simple. In the real world, personnel policy changes sometimes achieve only modest improvements toward their objectives while effecting a disproportionately negative impact on real people—thus yielding questionable value. What is more, in military and strategic reality, it is sometimes more important to be effectively ready than to attempt to satisfy every conceivable metric of fairness.

A more appropriate method of evaluating military compensation policy is to assess whether any given proposal makes a meaningful difference in the cost both to military readiness and to the servicemembers for whom the system is supposed to provide. It is not sufficient to merely consider whether a proposed change might do some good. Much more nuanced factors—such as how much impact a new policy will have toward an intended goal; whether a new policy addresses root causes of challenges or merely delays difficult decisions; and to what extent a new policy breaks faith with the expectations of people who volunteered their service for their country—are always relevant criteria when considering military compensation reform. When current proposals to amend the military compensation system are weighed on this scale, the outcomes buck the existing conventional wisdom.