A recent Congressional Budget Office (CBO) report shows that the average cost to maintain an active duty soldier is now $158,000 a year, a 50 percent jump since 2001. Military personnel costs per service member are expected to continue to increase by approximately $4,700 a year for the foreseeable future.
The Department of Defense has been scrambling to cut costs, but the report predicts that it’s not going to be enough. In fact, per-person costs are expected to rise as the drawdown continues.
The CBO is predicting $170,000 per person by 2017, up to $215,000 by 2030.
Pay has been the majority of the problem, according to the report. Military pay raises are tied to the Bureau of Labor Statistics’ employment cost index (ECI), a measurement of the cost of goods and services. The last few years, lawmakers have been granting raises above the ECI in an effort to reduce the pay gap between civilian and military jobs.
Pentagon officials have submitted a plan to reduce military pay raises starting in 2015, but the CBO report predicts that Congress will ignore this and continue to give raises at least equal to the ECI. The cost of military pay and benefits is expected to rise from $201 billion in 2013 to $211 billion by 2017, up to $258 billion by 2030.
The other part of the problem is the cost of health care. An estimated 10 million people qualify for subsidized care through either military treatment facilities or civilian providers under contract with TRICARE. The DOD has budgeted $47 billion for health care in 2013, but the CBO report is projecting a cost of $51 billion. Health care costs are expected to continue to climb from $65 billion by 2017 to $95 billion by 2030.
The DoD intended to increase TRICARE fees to help pay for the rising cost of care, but as of last month, four different subcommittees have rejected the plan. Given the circumstances and with sequestration still looming, the current military budget restrictions look unrealistic and are unlikely to be met.
Photo courtesy of The U.S. Army.