The Department of Defense could be facing some tough decisions regarding its retirement system and health benefits in order for the government to afford operating an all-voluntary military into the future.

A study (pdf) conducted by the Pentagon’s Reserve Forces Policy Board warned that the current system of pay, allowances, retirement and medical care is proving too costly to sustain.

“The all-in cost of the all-volunteer force is one of the time-ticking bombs that could explode our defense capabilities if not dealt with responsibly,” Arnold L. Punaro, chairman of the board, a former top staffer on the Senate Armed Services Committee and retired Marine Corps major general, told The Washington Post.

One of the biggest challenges to overcome is that the Defense Department doesn’t know what the all-volunteer force really costs. That’s because the Pentagon has not put a dollar amount on “all ancillary, life-cycle costs such as family housing, education, day care, commissaries and health care,” wrote Walter Pincus at the Post.

Currently, the military consists of 1.4 million personnel on active duty. It has another 2.4 million retirees, and nine million beneficiaries utilizing TRICARE, the Pentagon’s health care program. Military personnel receive benefits from a pension plan that kicks in on the day they retire, and those who retire after 20 years of service receive 50% or more of their salaries for the rest of their lives. However, according to Punaro, 80% of those who serve honorably never receive health care or retirement benefits after leaving active duty. The total annual cost of health care for military veterans is $52 billion.

When the Nixon administration decided to end the draft and go with an all-voluntary military, a special commission in 1970 warned that the government would have to do something about the Pentagon’s retirement system and other costly facets involving promotions and salaries. But none of these worries has been addressed since then.

New recommendations may be forthcoming.

Congress and President Barack Obama agreed to establish the Military Compensation and Retirement Modernization Commission, which will be charged with suggesting changes “to modernize such systems in order to ensure the long-term viability of the All-Volunteer Force,” according to Pincus.

-Noel Brinkerhoff

To Learn More:

Paying for the All-Voluntary Military (by Walter Pincus, Washington Post)

Eliminating Major Gaps in DoD Data on the Fully-Burdened and Life-Cycle Cost of Military Personnel: Cost Elements Should be Mandated by Policy (Reserve Forces Policy Board) (pdf)

Create a Non-Military Draft: William L. Hauser and Jerome Slater (by Noel Brinkerhoff, AllGov)

U.S. Military Looking for Skilled Immigrants (AllGov)

Almost Half of U.S. Tax Money Goes to Military and Health Care (by David Wallechinsky and Noel Brinkerhoff, AllGov)