Earlier this month, Defense Highlights reported that the House Armed Services Committee (HASC) released an analysis of the effect on military capabilities that would be caused by what it called “irresponsible” cuts to the defense budget. The primary audience for this analysis was the Joint Select Committee on Deficit Reduction. This so-called “supercommittee” is trying to reach an agreement on spending cuts and revenue reforms that will reduce the budget deficit by $1.5 trillion over the next 10 years. If the committee does not reach agreement by November 23, discretionary budgets will be cut automatically by $1.2 trillion over the period.
Last week, Senate Armed Services Committee (SASC) chair Sen. Carl Levin (D-MI) and Ranking Republican Sen. John McCain (R-AZ) joined HASC chair Rep. "Buck" McKeon (R-CA) and HASC Ranking Democrat Rep. Adam Smith (D-WA) in urging the supercommittee to avoid additional defense budget cuts. The president originally directed $350 billion in cuts to security budgets over 10 years. Since then, Secretary Panetta has said DoD, possibly anticipating additional cuts by the supercommittee, is planning to reduce the defense budget by $450 billion through 2021.
In his letter to the supercommittee, Levin said he agreed with Secretary Panetta’s assessment that as much as $600 billion in additional defense cuts would be devastating. “I am unable to recommend further discretionary cuts to DoD’s budget as part of the Joint Select Committee’s deficit reduction proposal,” Levin said.
McCain, in his letter, said the committee “must take all steps possible to avoid further cuts to Department of Defense (DoD) spending beyond the more than $450 billion over the next 10 years that have been directed by the president.” He told the supercommittee that the administration’s strategic review, currently underway, is the only way to identify savings that will not put at risk US security interests.
Addressing other potential cuts being considered by the supercommittee, both Levin and McCain support President Obama’s proposal to establish a special commission to review the current military retirement benefits system. However, they advise that any changes should “grandfather” current retirees and servicemembers. Both senators also propose that the scope of such a review should include all aspects of the current military compensation system. HASC chair McKeon does not support any comprehensive change to the current military retirement or compensation system that would "break faith" with servicemembers and retirees.
Regarding potential cost savings in the TRICARE program, both Levin and McCain differ from McKeon’s position. McKeon essentially rejects the TRICARE enrollment fee increases or changes to pharmacy co-pays proposed by the president. Levin and McCain are open to increases in beneficiaries’ payments in both cases.
Levin and McCain recommend consideration of the president’s proposal to set a $200 annual enrollment fee in 2012 for TRICARE for Life beneficiaries, increasing to $295 in 2013 and adjusted for health care cost increases after that. McCain said “this fee increase is a reasonable step and should be considered.”
They are also open to considering pharmacy co-pay increases. However, McCain said that if co-pays were increased, DoD and VA “must be allowed to use their market force buying power to negotiate lower pharmaceutical costs” with any generated savings passed on to servicemembers and retirees.