New Report Shows Military Personnel Costs Spiraling Out of Control

The cost per service member is steadily increasing.

The cost per service member has nearly tripled since 1980, according to a recent report.

A recent Congressional Budget Office (CBO) report shows that the average cost to maintain an active duty soldier is now $99,000 a year, a 31 percent jump between 2000 and 2014. The continual increase is mainly caused by the increasing costs for military personnel, and operation and maintenance.

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.

Military Investing Big in Service Members

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 submitted a plan to reduce military pay raises in 2012, beginning in 2015. This plan proposes a flat 0.5 percent raise in pay, followed by a 1 percent raise in 2016. However, last December, the Department of Defense announced a 1 percent increase in pay for all service members, after accounting for inflation. The cost of military pay and benefits is expected to rise from $497 billion in 2015 to $533 billion by 2016, up to $598 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 is trying to restructure TRICARE to a single system designed to encourage beneficiaries to seek care from military facilities or network providers. Health care costs are expected to continue to climb from $65 billion by 2017 to $95 billion by 2030.

The average military family spends $13,615 a year on medical costs, however the military covers nearly 100 percent of that amount. In reality, families spend around $166 a year. Given the circumstances with uncertain pay raises, the DOD adjusting for inflation, and a new TRICARE program, the current military budget restrictions look unrealistic and are unlikely to be met.

 

Photo courtesy of The U.S. Army.