Panetta: Any Retirement Changes Won’t Affect Serving Military

WASHINGTON, Aug. 19, 2011 — In his clear­est state­ment on the sub­ject to date, Defense Sec­re­tary Leon E. Panet­ta said today that if the mil­i­tary retire­ment sys­tem changes, it will not affect serv­ing ser­vice mem­bers.

Defense Sec­re­tary Leon E. Panet­ta, right, holds a round­table dis­cus­sion with mem­bers of the press in his office at the Pen­ta­gon, Aug. 19, 2011. Writ­ers rep­re­sent­ing Amer­i­can Forces Press Ser­vice, Stars and Stripes, and the Mil­i­tary Times Media Group inter­viewed Panet­ta on issues relat­ed to secu­ri­ty and mil­i­tary forces.
DOD pho­to by U.S. Air Force Tech. Sgt. Jacob N. Bai­ley
Click to enlarge

“I will not break faith,” the sec­re­tary said dur­ing a round­table meet­ing with mil­i­tary media rep­re­sen­ta­tives in the Pen­ta­gon.

Panetta’s pre­de­ces­sor, Robert M. Gates, asked the Defense Busi­ness Board to look at the mil­i­tary retire­ment sys­tem and make rec­om­men­da­tions. The final report is due lat­er this month, but Panet­ta said he is famil­iar with the out­lines of the pro­pos­al.

“I cer­tain­ly haven’t made any deci­sions” on retire­ment, he said.

“Peo­ple who have come into the ser­vice, who have put their lives on the line, who have been deployed to the war zones, who fought for this coun­try, who have been promised cer­tain ben­e­fits for that — I’m not going to break faith with what’s been promised to them,” Panet­ta said.

Peo­ple in the ser­vice today will come under the cur­rent retire­ment sys­tem, which gives retirees 50 per­cent of their base pay after 20 years of ser­vice.

“Does that stop you from mak­ing changes?” Panet­ta asked. “No, because obvi­ous­ly you can ‘grand­fa­ther’ peo­ple in terms of their ben­e­fits and then look at what changes you want to put in place for peo­ple who become mem­bers of the all-vol­un­teer force in the future.”

One aspect of the retire­ment issue is one of fair­ness, the sec­re­tary said. Most ser­vice mem­bers do not spend 20 years in the mil­i­tary and there­fore do not get any retire­ment ben­e­fits when they leave the ser­vice.

“They are not vest­ed in any way,” Panet­ta said. “The ques­tion that is at least legit­i­mate to ask is, ‘Is there a way for those future vol­un­teers to shape this that might give them bet­ter pro­tec­tion to be able to have some retire­ment and take it with them?’”

Health care is anoth­er area that has to be dealt with, the sec­re­tary said. In fis­cal 2001, the DOD health care bill was $19 bil­lion. It is more than $50 bil­lion now, he said, and it soars to the neigh­bor­hood of $60 bil­lion in future years. Among pro­pos­als Con­gress is con­tem­plat­ing is an increase in some TRICARE mil­i­tary health plan pre­mi­um pay­ments.

“I think those rec­om­men­da­tions make sense,” Panet­ta said. “Espe­cial­ly with tight bud­gets, it does make sense that peo­ple con­tribute a bit more with regards to get­ting that cov­er­age.”

The Defense Depart­ment — which is respon­si­ble for a large part of the nation’s dis­cre­tionary bud­get — will do its part to reduce the bud­get deficit, the sec­re­tary said. But while Defense has a role to play, he added, Con­gress has to deal with the more than two-thirds of the fed­er­al bud­get that rep­re­sents the manda­to­ry spend­ing.

“If you are seri­ous about get­ting the deficit down,” Panet­ta said, “you have to deal with the manda­to­ry side of the bud­get and tax­es.”

DOD has a respon­si­bil­i­ty to look at all aspects of the bud­get, the sec­re­tary said, and offi­cials at the Pen­ta­gon are doing that.

“This is not because it is nec­es­sar­i­ly going to hurt areas,” he added, “because frankly, a lot of this can be done through effi­cien­cies, a lot of it can be done look­ing at the admin­is­tra­tive side of the pro­grams: what can we do to make these pro­grams more effi­cient?”

The sec­re­tary said he believes the bud­get crunch can rep­re­sent an oppor­tu­ni­ty to make DOD a more effi­cient, effec­tive and agile force that still can deal with the threats of the future.

The depart­ment also needs to ask how to pro­vide ben­e­fits for troops and their fam­i­lies that will be effec­tive at ensur­ing the nation always has a strong vol­un­teer force, Panet­ta said.

“That’s a debate and dis­cus­sion that it’s impor­tant for the Defense Depart­ment to have, the White House to have, the Con­gress to have and the coun­try to have,” he said. “[We] need to have that debate about ‘How are we going to do this in a way that main­tains the best mil­i­tary in the world?’”

The Defense Depart­ment will face some tough choic­es, Panet­ta acknowl­edged.

“I think the bot­tom line is this can be an oppor­tu­ni­ty to shape some­thing very effec­tive for the future that can still rep­re­sent the best defense sys­tem in the world,” he said.

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)

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