Defense budget includes Army reduction, cuts to other branches - - Columbia, South Carolina |

Defense budget includes Army reduction, cuts to other branches

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Pay raises, housing allowances and medical costs for some military personnel could change in the new budget proposed for the Department of Defense.  The budget also includes shrinking the Army to its smallest size in 74 years.

Defense Secretary Chuck Hagel and Army Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, previewed the fiscal 2015 budget request Monday at the Pentagon. The budget also proposes closing some military bases.

Under the Hagel plan the active-duty Army would shrink from its current 522,000 soldiers to between 440,000 and 450,000. That would make it the smallest since just before the U.S. entered World War II.

The budget is subject to change by Congress.

Hagel's proposal includes the elimination of the Air Force's fleet of A-10 aircraft and its U-2 spy planes, as well as cuts in the size of the Army National Guard. Hagel said the administration will propose a new round of domestic military base closings in 2017, while noting that Congress has rejected such requests in recent years.

The budget request recommends a 1% increase in military pay and it freezes pay for general and flag officers. But Hagel and Dempsey say nobody in uniform will get a pay cut.

"I know this weighs heavily on the minds of our men and women in uniform and on their families," said Dempsey. "Our force is extraordinarily accepting of change. They are less understanding of piecemeal approaches. They want -- and they deserve -- predictability."

Military and civilian compensation accounts for 50%of the DOD budget. Defense leaders said this puts the department out of balance and savings from the compensation reforms would help keep service members properly trained and equipped.

"Total pay and benefits increased 40% faster than the private sector between 2001 and 2012, and while that was the right thing to do at the time, we can't continue at that rate over the long term," Hagel said.

Also, the budget request begins the process to slow the growth rate of tax-free housing allowances, which will continue for five years until the allowances cover about 95% of the average service member's housing expenses.

Hagel said no one will see a decrease in their basic housing allowance. He said the change will happen slowly, so that no one's housing allowances will go down. The DOD also would no longer reimburse service members for renter's insurance.

Hagel said under the request, the department will not shut down any commissaries, but will cut subsidies for some of them.

Under the proposed budget, the department will simplify and modernize the TRICARE health insurance program by consolidating plans and adjusting deductibles and co-pays in ways that encourage members to use the most affordable means of care -- such as military treatment facilities, preferred providers, and generic prescriptions.

"We will ask retirees and some active-duty family members to pay a little more in their deductibles and co-pays, but their benefits will remain affordable," Hagel said.

Under the budget recommendation, the average military retiree would go from paying 8% of health care costs out of pocket to paying 11%. Retirees old enough to use Medicare and who choose to have TRICARE as well, eventually would be asked to pay a more to enroll in TRICARE.

Hagel said the approach encourages retirees to use free military facilities if they are close to home, which are often underused.

The compensation proposals do not recommend any changes to the military retirement benefits for those now in the services, Hagel said.

"We are awaiting the results of the Military Compensation and Retirement Modernization Commission, which is expected to present its report in February 2015, before pursuing reforms in this area," he added. "But DOD continues to support the principle of ‘grandfathering' for any future changes to military retirement plans."

Officials at Fort Jackson have yet to comment on the budget proposals.

Former Columbia Mayor Bob Coble was part of a group who worked to keep South Carolina military posts open during the most recent round of BRAC closures.

"I think it's an opportunity for consolidation," Coble said. "We have to be positioned to take functions here at Fort Jackson if they consolidate.  We need to be prepared as a community.  We need to be vigilant."

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