US Military Benefits Costs Spiraling

One of the key sources of savings proposed for the new CVN-21 Class aircraft carriers is a trend toward more automation and fewer personnel. Now the GAO helps shed light on the larger phenomenon behind those moves. A recent GAO report that pegged the average for active duty enlisted personnel and officer compensation at $112,000 a year, 51% of which takes the form of health care and other benefits (NAVSEA’s figure was $90,000 FY 2004).

This amounts to about double the average for civilian pay, and also represents a much higher benefits ratio than civilian pay. Ironically, the GAO report also found that the US military’s efforts to educate its personnel about this important recruiting and retention lever did not get good marks, and that many military members were unaware of how competitive their compensation was.

GAO Comptroller David Walker’s key point at a recent GovExec.com breakfast was that the budgeting process needed to reflect the full financial impact of funding decisions. For example, health care costs since are not only spiraling in the present thanks to a benefits expansion in 2000 – they also represent a major future stinger. Specifically…

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