April 26, 1977
Page 12207
DEFENSE MANPOWER PAY AND COMPENSATION
Mr. MUSKIE. Mr. President, during the past several years, I have become increasingly aware of the concern of our Nation's servicemen that defense manpower pay and compensation is being diminished piecemeal by Congress, with no attempt to relate partial changes in the system to their overall effect on the living standards of servicemen and their families.
The issue is vital, not only because manpower costs consume a sizable proportion of our defense budget, but also because of the interest we all have in maintaining a high degree of professionalism and dedication in our armed services.
There is a clear need for a reform of manpower pay and compensation policies which can lead to substantial savings in the military manpower budget. Without such reforms, I am concerned about the potential rate of outyear cost increases for manpower accelerating, and this rate of momentum cannot continue without seriously undermining our ability to build and maintain the needed improvements in our defense forces.
At the same time, it is impossible for our service members to maintain their morale and dedication when they fear that their concerns are being ignored by Congress, and their compensation whittled away without regard to their needs.
That is why I welcome the President's decision to appoint a commission to study the total compensation package of the uniformed services and to recommend necessary adjustments within the framework of the total system.
One of my constituents, Captain Wallace of the U.S. Navy, has expressed far better than I could the feelings of the career serviceman as he faces the future. I ask unanimous consent that this letter be printed in the RECORD.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
March. 17, 1977,
Hon. EDMUND S. MUSKIE,
U.S. Senate,
Russell Office Building,
Washington, D.C.
DEAR SENATOR MUSKIE: I very much appreciated receiving your recent mailing detailing your remarks on the economic stimulus package. It is not often that those of us serving in the Armed Forces outside of Maine are included on the mailing lists of our Senators or our Representative. I would personally appreciate being retained on your mailing list if possible.
As a career naval officer with over twenty years of service, I wish to address to you a matter of great personal concern to me and many of my fellow service members. Hopefully, my thoughts will be of some value to you as the issue I am about to discuss is debated in the Senate during the 95th Congress. The issue to which I am referring is the ever mounting criticism of the proportion of total Defense spending allocated to manpower costs, and from my perspective, the mistaken resultant conclusion that military personnel are overpaid.
I wish to preface my remarks by assuring you that I, personally, do not consider myself underpaid. If that were so, I would quite likely have left the Navy long before now. On the other hand, I do not consider myself to be lavishly compensated when I view the demands of a service career relative to alternative professions. On the opposite end of the spectrum from myself as a relatively senior officer are the junior enlisted members who, relative to many of our fellow citizens of Maine, are also reasonably well compensated for their service. However, these service members are not lavishly paid either, as attested to by the difficulties facing the Services in attracting adequate numbers of recruits even during the prevailing period of high national unemployment.
I know you are well aware of the inequitable tax that the draft formerly imposed upon the young men of this nation. When we abolished the draft in favor of an All Volunteer Force concept, we accepted the fact that as a nation we would all have to share in the payment of this tax by providing our first term personnel equitable wages. This was a relatively expensive decision, but in the aftermath of Vietnam, one which was readily made by a war weary and conscience stricken nation. To date the All Volunteer Force concept has enjoyed a measure of success many of us doubted possible; however, in my opinion, this success has been due in large part to a sustained high unemployment rate and a concurrent major force reduction. Recent trends and future prospects cause me to be less than sanguine about the viability of the concept in the years ahead unless we squarely face difficult compensation equity questions.
In January of 1972, the Department of Defense reported to Congress that military pay had attained "reasonable competitiveness" with the private sector. Over 60% of those of us on active duty today were recruited into the All Volunteer Force and entered military service since that time. These volunteers were recruited on the promise of continued equitability of pay and an advertised "fringe benefits" package that marked the military as a model employer at that time. In the intervening five years employers in the industrial sector of the private economy with whom the Services compete for manpower have developed fringe benefits packages that now rival or exceed that of the military. Largely as a result of union-negotiated labor contracts, employees of these firms have also received basic wage increases which have not only kept up with skyrocketing inflation but also provided a modest measure of real growth in purchasing power.
Over this same period Federal employees, including the military, have had their wage growth restrained in an effort to hold down Federal spending, and as noted by the President in 1975, to set an example of fiscal responsibility for the nation. Unfortunately, the example was not widely emulated, and Regular Military Compensation has suffered a decline in purchasing power since 1972 while gains were being realized in the private sector. It is against this backdrop of hard economic reality that the service member has viewed the raging debate over excessive manpower costs and the need to reduce overly generous fringe benefits. It has been a disheartening and demoralizing experience to many, and the direct cause of failure to reenlist, resignation and early retirement for others.
Virtually every major military pay and benefit area has either been altered or totally withdrawn over the last five years: retirement, medical care, education, leave, specialty pays, reenlistment bonuses, and even the method of applying the annual "comparability" raise. Some of these same elements and others as yet untouched have been under continual review and threat of cut: retirement, commissaries, medical care, housing and tax free allowances. The result of these uncoordinated piecemeal, changes, real or only threatened, has been a growing anxiety among service members over the future security offered by a military career. A recent DOD survey reveals that 85% of the 20,500 enlisted members surveyed believe their pay and benefits to have been eroded over the last four years. This view was held by 23 out of every 24 members surveyed in pay grades E-4 through E-9.
I believe the Services and DOD have acted responsibly in attempting to address the problem of rising manpower costs. We developed and proposed a retirement reform in1972 which at the time was viewed as a drastic benefit cut by our people, but which has recently been characterized as not drastic enough by many critics. Nonetheless, failure to act on the proposal has already cost taxpayers over $3 billion in potential savings through the year 2000. In 1974 the services also supported a change in the law to terminate the so-called "Rivers Amendment" which placed all of the annual comparability raises in basic pay, thereby further escalating retirement costs. In 1976 we supported elimination of the 1% add-on increase in each retired pay adjustment which had unduly escalated retirement annuities during our recent inflationary years.
Throughout this time frame the Services have been appealing for definition of a comprehensive military compensation policy, including an agreed-to, defined standard against which to judge the adequacy of total military pay and benefits. Somehow this determination has always been too difficult to make; and lacking it, the random, uncoordinated changes to pay and benefits have continued in the hope that, while making apparently reasonable economies, we weren't inflicting a fatal blow on the All Volunteer Force.
President Carter has now announced his intention to establish a Blue Ribbon Panel to review the findings of the recent Defense Manpower Commission, Third Quadrennial Review of Military Compensation and other relevant studies. The Panel is to report its recommendations for a comprehensive military compensation policy to the President on or about 1 September 1977 with the intent of implementing recommended changes, if any, beginning in FY 79. Speaking as a career serviceman with a great love of the Navy and a strong desire to continue serving until forced into retirement, I fervently hope this time we will allow the Panel to conclude its deliberations and then act to implement its recommendations.
We careerists aren't adverse to change. We are merely frustrated and disheartened as a result of remaining under continued fire from the public we have chosen to serve. Whatever recommendations the Panel should make, I am certain the career service members will support them provided they include an agreed-to standard against which to evaluate pay and benefits in the future; a standard which guarantees the reasonable expectations of career service members for their own and their dependent's or survivor's future security.
Senator Muskie, I urge you to speak out from your influential position in the Senate in favor of a moratorium on further pay and benefits changes until such time as the President's Blue Ribbon Panel can conclude its deliberations and the Congress can act upon its recommendations to establish a comprehensive military compensation policy that is both fiscally responsible and in the best interest of national security. I am convinced that only in this way can we traditional Service leaders in the Congress, the Administration, and the Services themselves restore the confidence of our people that we are prepared to represent them in their aspiration to preserve military service as an honored and attractive profession. Failing this, I fear that none of us will succeed in stemming the rising sentiment favoring military unionization; an eventuality I believe would irrevocably alter the two hundred year tradition of Service to Nation which has been the hallmark of the U.S. Armed Forces.
Thank you for taking time to consider this lengthy letter. It need not to be answered or acknowledged unless you choose to, as I have provided it merely to acquaint you with my views on an issue of personal concern to me.
Sincerely yours,
RICHARD J. WALLACE,
Captain, U.S. Navy.
Permanent Residence: Topsham, Maine.