Adam Weinstein reports: With time fast running out for the so-called deficit supercommittee, the mammoth amount of government money spent on the military has become a prime target in Washington. But the main focus isn’t on big-ticket weapons projects or expensive wars—it’s on retirement benefits for the roughly 17 percent of soldiers, Marines, sailors, and airmen who have served 20 years or more in uniform. Currently the total cost of their benefits is about $50 billion a year.
Cuts to military pensions are “the kind of thing you have to consider,” Defense Secretary Leon Panetta said in September. When President Obama unveiled his $3 trillion debt reduction plan the same month, it called GIs’ benefits “out of line” with private employee retirement plans, saying the system was “designed for a different era of work.” When Congress held a hearing on military retirements in October, Rep. Austin Scott (R-Ga.) promoted a cheaper 401(k)-style plan that would slash existing benefits for many troops. “I see nothing wrong with them being able to choose a different retirement plan,” he said.
These ideas may sound like a bold new approach in an urgent moment—but in fact, the push for pension cuts and other corporate “reforms” at the Pentagon originates from an obscure advisory panel that has existed for a decade: the Defense Business Board. Its 21 members know little about military affairs, but they are rich in Wall Street experience, including with some of the biggest companies implicated in the 2008 financial meltdown. They are investment bank CEOs and CFOs, outsourcing experts, and layoff specialists who promote a corporate agenda of “behavior change” and “business solutions” [PDF] in the military bureaucracy. The board proposes not only to slash and privatize military pensions, but also to have the Pentagon invest in oil futures, boost pay for its executives and political appointees, and make it easier for them to fire rank-and-file employees while scaling back those workers’ collective-bargaining rights.
Indeed, “this sounds like what’s being done now around the country with the public unions,” affirms Charles Tiefer, a University of Baltimore law professor and defense contracting watchdog who’s testified to Congress about the board’s recommendations. The board was launched in 2001 by then Defense Secretary Donald Rumsfeld, who famously wanted to downsize the military and corporatize its management system. The essential reason it exists, Tiefer says, is so that “a pro-business attitude—especially on personnel issues—remains intact” inside the Pentagon.