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i 

71–451 2012

[H.A.S.C. No. 112–80] 

MILITARY RETIREMENT REFORM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON MILITARY PERSONNEL 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

OCTOBER 25, 2011 
(II) 

SUBCOMMITTEE ON MILITARY PERSONNEL 

JOE WILSON, South Carolina, Chairman 

WALTER B. JONES, North Carolina 

MIKE COFFMAN, Colorado 

TOM ROONEY, Florida 

JOE HECK, Nevada 

ALLEN B. WEST, Florida 

AUSTIN SCOTT, Georgia 

VICKY HARTZLER, Missouri 

SUSAN A. DAVIS, California 

ROBERT A. BRADY, Pennsylvania 

MADELEINE Z. BORDALLO, Guam 

DAVE LOEBSACK, Iowa 

NIKI TSONGAS, Massachusetts 

CHELLIE PINGREE, Maine 

MICHAEL HIGGINS, Professional Staff Member 

DEBRA WADA, Professional Staff Member 

JAMES WEISS, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2011 

Page 

HEARING: 

Tuesday, October 25, 2011, Military Retirement Reform ..................................... 1 

APPENDIX: 

Tuesday, October 25, 2011 ...................................................................................... 25 

TUESDAY, OCTOBER 25, 2011 

MILITARY RETIREMENT REFORM 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Davis, Hon. Susan A., a Representative from California, Ranking Member, 

Subcommittee on Military Personnel ................................................................. 3 

Wilson, Hon. Joe, a Representative from South Carolina, Chairman, Subcommittee on Military Personnel ........................................................................ 1 

WITNESSES 

Davis, John, Director, Legislative Programs, Fleet Reserve Association ............ 7 

Penrod, Vee, Deputy Assistant Secretary of Defense for Military Personnel 

Policy ..................................................................................................................... 5 

Rooney, Dr. Jo Ann, Principal Deputy Under Secretary of Defense for Personnel and Readiness ........................................................................................... 4 

Strobridge, Steve, Director, Government Relations, Military Officers Association of America ..................................................................................................... 6 

APPENDIX 

PREPARED STATEMENTS: 

Davis, Hon. Susan A. ....................................................................................... 31 

Rooney, Dr. Jo Ann .......................................................................................... 32 

Strobridge, Steve, joint with John Davis ........................................................ 38 

Wilson, Hon. Joe ............................................................................................... 29 

DOCUMENTS SUBMITTED FOR THE RECORD: 

‘‘Modernizing the Military Retirement System,’’ the Defense Business 

Board’s Report to the Secretary of Defense ................................................ 61 

Written Statement of the Reserve Officers Association of the United 

States and the Reserve Enlisted Association of the United States .......... 96 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Coffman ...................................................................................................... 103 

Mrs. Davis ......................................................................................................... 103 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Ms. Bordallo ...................................................................................................... 107 

(1) 

MILITARY RETIREMENT REFORM 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON MILITARY PERSONNEL, Washington, DC, Tuesday, October 25, 2011. 

The subcommittee met, pursuant to call, at 1:08 p.m. in room 

2212, Rayburn House Office Building, Hon. Joe Wilson (chairman 

of the subcommittee) presiding. 

OPENING STATEMENT OF HON. JOE WILSON, A REPRESENTATIVE FROM SOUTH CAROLINA, CHAIRMAN, SUBCOMMITTEE 

ON MILITARY PERSONNEL 

Mr. WILSON. Good afternoon, and ladies and gentlemen, welcome. 

Today the Military Personnel Subcommittee will address the subject of military retirement, an issue of immense importance to service members, and in turn to combat readiness. 

I want to thank Congressman Dr. Joe Heck for recommending 

that this subcommittee conduct this hearing. Dr. Heck very astutely recognized that military retirement would be a pivotal issue 

in the coming months and that it was essential that this subcommittee address this issue expeditiously. 

Thank you, Dr. Heck, for your insight and call to action. 

The Defense Business Board, one element of the Department of 

Defense, was quick to present a major retirement reform proposal 

that set the tone of the retirement reform debate. The board’s proposal would move the retirement system aggressively toward a private sector defined contribution system based on the personal investments of service members. The proposal received immediate 

criticism from service members and military associations. 

The proposal is certainly a radical solution that would result in 

a significant reduction of retired benefits for all service members. 

As could be anticipated, the unveiling of the Defense Business 

Board proposal injected considerable uncertainty into the force, to 

include troops fighting in the wars in Iraq and Afghanistan. The 

proposal created an immediate morale firestorm as service members feared that senior members within the Department of Defense 

and the military departments were seriously considering its implementation. 

We invited the Defense Business Board to testify today to face 

the arguments of their critics and explain the merits of their proposal, but they declined the invitation. I am concerned that the Defense Business Board knowingly elected to pursue a very controversial proposal with immediate negative consequences for morale and 
2 

combat readiness, and yet they were unwilling to come before this 

subcommittee and defend their actions. 

In my view, their failure to appear speaks volumes about their 

own lack of conviction that their proposal is deserving of serious 

consideration. 

Secretary of Defense Leon Panetta has been clear that retirement reform must be on the table for consideration as the Department of Defense contemplates the wide array of programs that will 

be considered for cuts to meet the budget reduction goals. I am 

pleased that the Secretary understood the morale problem that had 

been created by the Defense Business Board and announced his 

clear support for grandfathering the benefits to be provided to currently serving service members who have borne the burden of war 

over the last 10 years. 

We simply cannot betray the trust of the service members who 

have performed with such courage and expertise in Afghanistan 

and Iraq. 

I was disappointed that Secretary Panetta did not disavow the 

Defense Business Board proposal. That statement would have removed a major irritant to the force. I was, however, very pleased 

at General Dempsey’s statement before the House Armed Services 

Committee that recognized the unique requirements of military 

service and that strongly asserted that the military requires a retirement system totally different from any civilian retirement program. 

Today, we hope to learn more about the current positions of the 

Department of Defense and the military advocacy groups concerning the need to reform military retirement. I would like to welcome our witnesses, Dr. Jo Ann Rooney, the principal Deputy 

Under Secretary of Defense for Personnel and Readiness. 

Dr. Rooney, this is your first opportunity to appear before the 

subcommittee. Welcome. I am certain we will be seeing more of you 

in the future. 

Next, we have two highly respected professionals that are longstanding friends of the subcommittee: Ms. Virginia S. Penrod, the 

Deputy Assistant Secretary of Defense for Military Personnel Policy; and Colonel Steven P. Strobridge, USAF, retired, the Director 

of Government Relations of the Military Officers Association of 

America, MOAA. 

Finally, let me introduce Mr. John Davis. He is a Marine, not a 

Marine veteran or a former Marine, a Marine. And so, we appreciate so much you being here today; the Director of Legislative Programs, Fleet Reserve Association. 

Mr. Davis, this is also your first time as a witness before the subcommittee. Welcome. 

Congresswoman Davis, you are recognized for your opening remarks. 

[The prepared statement of Mr. Wilson can be found in the Appendix on page 29.] 
3 

STATEMENT OF HON. SUSAN A. DAVIS, A REPRESENTATIVE 

FROM CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON 

MILITARY PERSONNEL 

Mrs. DAVIS OF CALIFORNIA. Thank you. Thank you, Mr. Chairman. 

And Dr. Rooney, welcome. I know that this is your first time testifying before the subcommittee and so we are glad to have you. 

I also wanted to welcome Ms. Penrod, of course, and Colonel 

Strobridge and Mr. Davis. Thank you all. 

I look forward certainly to hearing your comments on potential 

reform to the military retirement system. 

While we all know the concerns about the current state of our 

Nation’s economy, the discussions on the condition and the future 

of military retirement are, once again, being raised. No surprise, I 

would suggest. Such discussions are not new. During previous economic downturns, focus has turned to the sustainability and the affordability of our military retirement programs. 

However, for the most part, the current military retirement program was established over 60 years ago. So it is valid, I think, no 

matter how difficult, certainly difficult knowing the nature of the 

service and the sacrifice of the men and women who serve, it is still 

appropriate, I think, for us to ask ourselves whether the current 

program still meets the requirements it was set up to achieve, 

which, of course, we know is the focus of today’s hearing. 

Only 17 percent of the force actually completes a full 20 years 

of service in order to qualify for a non-disability retirement. And 

many have expressed concerns that the current program does not 

recognize the sacrifices of those who served during 10 years of conflict and may not stay the full 20 years to earn a retirement. Is it 

fair that that person, who may have been deployed once and stays 

to retirement is eligible for a lifetime benefit, while an individual 

who may have multiple deployments in a combat theater does not 

stay 20 years, that person walks away with nothing more than the 

admiration of a grateful nation. 

When the 20-year retirement program was established, the life 

expectancy in 1949 for a white male was 66.2 years. For a black 

male, it was 58.9 years. Compared to the latest data available, the 

life expectancy in 2009 for a white male is 76.2 years and for a 

black male, 70.9 years. 

So there is no doubt that Americans are living longer and more 

fuller lives, which means that an average individual who receives 

military retirement for 20 years of service will receive retirement 

for nearly twice as long in his adult life—his or her adult life. 

In addition, many of those who retire at 20 years of service have 

gone on with an ability to seek another full career in a different 

field. 

Changes to the personnel compensation programs, including the 

retirement system, often strikes fear in the force. So it is important, critically important, that we do not necessarily undermine the 

faith of those who are currently serving. 

But we do have a responsibility to ensure that the compensation 

package that is provided to service members are meeting the needs 

of our Nation’s national security, and that, of course, includes looking at the military retirement package. 
4 

Thank you, Mr. Chairman. This is an important hearing, and I 

look forward to our witnesses testifying today. 

Thank you. 

[The prepared statement of Mrs. Davis can be found in the Appendix on page 31.] 

Mr. WILSON. Thank you, Ranking Member Davis. 

I ask unanimous consent that the Defense Business Board report 

on their proposal to reform military retirement and a statement 

from the Reserve Officers Association be entered into the hearing 

record. 

Hearing no objection, so ordered. 

[The information referred to can be found in the Appendix on 

pages 61 and 96.] 

Mr. WILSON. And at this time, we will proceed in order with our 

witnesses, beginning with Dr. Rooney. 

STATEMENT OF DR. JO ANN ROONEY, PRINCIPAL DEPUTY 

UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND 

READINESS 

Dr. ROONEY. Good afternoon, Chairman Wilson, Ranking Member Davis and distinguished members of the subcommittee. Thank 

you for the opportunity to come before you on behalf of the women 

and men who so ably serve in our Nation’s Armed Forces. 

I am here today to speak to you about the military retirement 

system of our uniformed services. Since the military transitioned to 

an All-Volunteer Force, military compensation has been under continuous scrutiny. The primary goals of the military compensation 

system are to attract, retain, and eventually separate members so 

the United States forces can support the numerous missions both 

here and abroad and when called upon, succeed on the battlefield. 

Even though some consider military benefits far-reaching, we 

must remain cognizant that they support the brave men and 

women who volunteer to defend this great Nation. Over time, while 

the military retirement system has remained relatively constant, 

pensions in the private sector have changed and more closely ally 

to support the more mobile workforce in that sector. 

Unlike the private sector, the military services must grow most 

of their military workforce internally. It generally takes 15 to 20 

years to develop the next generation of infantry battalion commanders and submarine captains. As a result, the Department 

must ensure military compensation, promotions and personnel policies all foster greater retention and longer careers necessary to create these experienced leaders. 

This need for greater longevity and continuity suggests there are 

valid reasons why mirroring a private sector compensation package 

may not necessarily be the proper approach for the military. 

However, the Department does believe that reviewing the retirement system is both a fair and reasonable endeavor, and over the 

past year has begun reviewing such retirement in the context of a 

total military compensation system. 

The officer, enlisted, and civilian leadership of all Services, from 

the Active Duty, Reserve, and National Guard Components, as well 

as the U.S. Coast Guard, are participating in this review. The review is designed to be deliberate, careful, and pragmatic. 
5 

The Defense Business Board proposal is just one of several concepts that are being reviewed and modeled to determine the impact 

on recruitment and retention. The Department is working to strike 

the correct balance. This includes weighing the impact of a new 

system on recruiting and retention, considering the welfare of the 

individual service members and families, which includes 

grandfathering our existing force who took their oath under the 

current system, and acknowledging our responsibilities to the 

American taxpayer. 

The Department needs to ensure any proposed changes do not 

break faith with the current members, or negatively impact the 

current force. Before proposing changes to the military retirement 

system or any part of the military pay and benefit structure, however, the Department is committed to conducting significant evaluation and in-depth analysis of any proposal. 

The Department must ensure its ability to continue recruiting 

and retaining the highest quality members, and must understand 

to the fullest extent possible the impact of any changes on the future of the All-Volunteer Force. 

Finally, while the Department acknowledges the military retirement system appears expensive, it is neither unaffordable nor spiraling out of control, as some would contend. The Department annually contributes amounts to the military retirement funds in accordance with the requirements set forth by the DOD [Department 

of Defense] Office of the Actuary. The contributions as a percentage 

of military basic pay are projected to remain relatively constant 

over time. 

At this time, the Department does not have any specific proposals or recommendations ready to offer. Within the last month 

the President recommended forming a commission to review the 

military retirement system. If this commission is formed, the Department expects to provide significant input to the commission. 

The Department also expects that any proposals offered will be 

similarly presented to the Congress and to this committee for assessment and discussion. 

I look forward to continuing to work with each of you as the Department moves ahead on this issue, and thank you again for the 

opportunity to testify, and for your continued support of our military members and their families. 

I look forward to your questions. 

[The prepared statement of Ms. Rooney can be found in the Appendix on page 32.] 

Mr. WILSON. Thank you, Dr. Rooney. 

We now proceed to Ms. Penrod. 

STATEMENT OF VEE PENROD, DEPUTY ASSISTANT 

SECRETARY OF DEFENSE FOR MILITARY PERSONNEL POLICY 

Ms. PENROD. Good afternoon. Chairman Wilson, Ranking Member Davis, and distinguished members of the subcommittee, thank 

you for the opportunity to come before you to discuss the military 

retirement system for our uniformed services. 

Dr. Rooney told you that the Department has begun a review of 

military retirement, and it is my office that has been tasked with 

this tremendously important undertaking. The purpose is to deter-
6 

mine the impact and feasibility of restructuring the statutory and 

policy framework for military retirement. 

We are aware that numerous commissions and studies have criticized the retirement system. However, I would like to point out 

that the current system has supported the most successful All-Volunteer Force in the world. The question now is whether the current 

system is still relevant in today’s environment. If not, should it be 

modified to meet future requirements, and in a manner more in 

line with the private sector? 

To ensure that in doing our review we get it right, we are considering the major aspects of military pay and benefits, along with the 

associated personnel and force management policies that have an 

impact on recruiting and maintaining the All-Volunteer Force. We 

are not looking at retirement in isolation. 

Our work is not yet complete, so I am unable to report to you 

on the results of the review. However, I can assure you that sustaining the All-Volunteer Force and the men and women that so 

ably serve our Nation will be at the heart of whatever we do. 

I look forward to your questions. 

Thank you. 

Mr. WILSON. Thank you, Ms. Penrod. 

And Colonel Strobridge. 

STATEMENT OF STEVE STROBRIDGE, DIRECTOR, GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION OF 

AMERICA 

Mr. STROBRIDGE. Thank you for this opportunity to present our 

views on military retirement concerns. We are grateful to the committee for standing up as champions, both now and in the past, to 

ensure military retirement incentives remain commensurate with 

the extraordinary demands of career service. 

The primary purpose of the military retirement package is to induce top quality people to serve multiple decades under conditions 

few Americans are willing to endure for even one term. After a decade of war in which career service members deployed time after 

time after time with ever-increasing odds of coming home a 

changed person, we found it shockingly insensitive that some now 

seek to curtail their retirement package to, ‘‘make it more like civilian workers.’’ 

These are the primary incentives that have sustained the career 

force in peace and war. We are very concerned the recent proposals 

are aimed mainly at achieving budget savings, with scant regard 

to longer term damage to retention and readiness. The fact is we 

already have considerable history with military retirement cutbacks. Enactment of the high 3 year average basic pay system in 

1980 cut retired pay by about 8 percent for subsequent entrants. 

Through the 1980s and 1990s, military pay raises were capped 

below private sector pay growth nearly every year, dramatically reducing lifetime retired pay for all the thousands of people who retired under those depressed pay tables. 

And in 1986, Congress passed the so-called REDUX Retirement 

System that cut lifetime retired pay value by more than 25 percent 

for a 20-year military retiree. At that time, Secretary Weinberger, 

Secretary of Defense at the time, warned Congress that REDUX 
7 

would inevitably undermine retention and readiness, which proved 

true a decade later and Congress repealed it in 1999. 

Recent proposals by the Defense Business Board and the 10th 

Quadrennial Review of Military Compensation envisioned far more 

dramatic cutbacks than REDUX did, delaying most retirement 

compensation until age 57 or 60, even though the Services don’t 

want to keep most people anywhere near that long. 

Both also proposed a vesting option for people who choose to 

leave early. We believe this is a formula for retention and readiness disaster. It would have destroyed the career force had it been 

in effect over the past 10 years. Some support vesting on a principle of fairness with private sector workers, but it is an odd concept in fairness indeed that would dramatically cut compensation 

for those who serve and sacrifice the longest to pay more for those 

who leave early. 

Defense leaders have sought to quell concern in the field by saying they plan to grandfather the current force. But the REDUX experience proved that grandfathering doesn’t avoid adverse retention effects, it only shifts them to the laps of future leaders. And 

in contrast to Secretary Weinberger’s dire warnings about REDUX’ 

threat to future readiness, current defense leaders have repeatedly 

expressed support for significant retirement cutbacks for future entrants, without a word about long-term retention risks. 

In our view that is an abdication of their responsibility to protect 

future as well as current readiness. We are extremely grateful that 

this subcommittee and the full subcommittee have stood up to 

highlight those retention and readiness concerns to the ‘‘super committee’’ [Joint Select Committee on Deficit Reduction] when few 

others seemed so inclined. 

That concludes my portion of the coalition statement, sir. 

[The joint prepared statement of Mr. Strobridge and Mr. Davis 

can be found in the Appendix on page 38.] 

Mr. WILSON. Thank you very much, Colonel. 

And now we proceed to Lieutenant Davis. 

STATEMENT OF JOHN DAVIS, DIRECTOR, LEGISLATIVE 

PROGRAMS, FLEET RESERVE ASSOCIATION 

Mr. DAVIS. Thank you for the opportunity to testify on this important issue. 

The All-Volunteer Force has successfully fought a protracted war 

due primarily to the dedication and patriotism of our men and 

women in uniform, but we should not underestimate the pay and 

benefits keeping the force sustained during this time of challenge. 

Many wrongly believe that the uniformed services receive 50 percent of pay for 20 years of service, but that is not the reality. The 

retired pay calculation is based solely on the basic pay, excluding 

housing and subsistence allowances. Personnel with 20 years of 

service earn retired pay that replaces 34 to 37 percent of their 

gross cash pay and allowances. Any fair share accounting should 

acknowledge retirees that have already given under the past budget cuts. 

Hundreds of thousands retired under depressed pay tables between the mid-1980s and the mid-2000s. They have already forfeited $3,000 to $5,000 a year for the rest of their lives. Regarding 
8 

the chained CPI [Consumer Price Index], some economists believe 

that the Consumer Price Index overstates inflation by failing to 

recognize that consumers change their behavior when prices rise 

sharply. When that happens, they say, people simply buy cheaper 

substitute products, such as chicken instead of beef, when the price 

rises. 

It is more complicated with other substitutes. Is a compact car 

a substitute for a full-size car? Over time, this leads to a major 

change in living patterns. The chained CPI would reduce lifetime 

retired pay for an E–7 with 20 years of service by $100,000. The 

TMC [The Military Coalition] opposes any kind of COLA [cost of 

living adjustment] cuts, because that violates the very purpose of 

COLAs, to protect the erosion of benefits by inflation. 

Another proposal is to use the high five in lieu of the current 

high three. This would cut retired pay by 6 percent over 4 years. 

We oppose this, because it is just another way to devalue military 

service. The 10th QRMC [Quadrennial Review of Military Compensation] report suggests a 401(k)-type retirement payment starting at age 57 to 60. This would reduce retiree pay for an E7 with 

20 years of service from $24,000 a year, already a modest amount, 

to a ridiculous $3,600 a year. This dramatic change would do grave 

harm for retention and recruiting. 

A recent FRA [Fleet Reserve Association] survey indicates that 

90 percent of respondents believe that if benefits were delayed 

until age 60, fewer people would join and they would serve shorter 

periods of time. The survey also indicates that more than 80 percent would leave the military sooner if military retirement was 

switched to a 401(k) plan, and 84 percent believe fewer people 

would join. 

Career senior NCOs [noncommissioned officers] are the backbone 

of our military, and their leadership and guidance are invaluable 

as a result of many years of experience. Civilianizing benefits likely 

result in many of them leaving the military early, and these positions are very difficult to replace. 

But the bottom line is the current retirement system is that it 

has worked as intended, sustaining a quality career force through 

good and bad budget times, through war and peace. It only stopped 

working after Congress cut it back in 1986. And that is a lesson 

we shouldn’t have to relearn. 

Thank you. 

[The joint prepared statement of Mr. Davis and Mr. Strobridge 

can be found in the Appendix on page 38.] 

Mr. WILSON. Thank you very much. 

We will proceed now, and each member will have a 5-minute period of asking questions. And again, we have a person above reproach, Mike Higgins, who is going to be our timekeeper. And so, 

you can almost look at his face and tell when the 5 minutes is up. 

I would like to begin with Dr. Rooney and Ms. Penrod. It is been 

widely reported that with the Defense Business Board reform proposal last summer, that there was a great deal of distress among 

career service members. DOD’s reluctance to disavow the proposal 

has given rise to concern that there is strong support at DOD for 

such reforms. 
9 

With this report, does DOD intend to support the Defense Business Board proposal? And then, it has already been identified by 

both of you that there are studies underway as to how this proposal will affect retention. When should we expect a report on the 

effect on retention? 

Dr. ROONEY. Yes, sir. In regards to our posture on the Defense 

Business Board, you indicated that early on we did not come out 

adamantly against it. But I believe that recent statements by the 

Secretary, the Chairman, and even in our opening statements 

clearly indicated that we are seeing the Defense Business Board 

proposal as just one data point for consideration in review as we 

are looking at the overall retirement and compensation system. 

Again, the key factor for us is that any change or any system, 

frankly, must ensure that we are able to recruit and retain the AllVolunteer Force and not at all damage the current faith that the 

troops have in us. So that report has some very strong limitations. 

It is a data point for us and we see it just as that, as a data point. 

You also asked where are we in terms of a proposal coming forward. And as Ms. Penrod indicated, we have a group that is currently looking at a number of alternatives. And we are working 

closely with the RAND Corporation to also help us in the analysis 

of that, again with the idea that recruiting and retention are key 

factors to consider in any kind of proposal. 

So at this point we don’t have a specific date. However, with the 

President’s proposed commission, if that would stand up in the 

springtime should that go forward, we would be prepared at that 

point in time to be very much informing the conversation with 

them. 

Mr. WILSON. And Ms. Penrod. 

Ms. PENROD. Yes. As Dr. Rooney stated, we are working with 

RAND to model any proposals or changes to the current retirement 

program. We preliminarily have the final report of the DBB [Defense Business Board], and it does have a negative impact on retention. That is what it is showing us at this time. We are not complete with that review, but again, as Dr. Rooney stated, it is a data 

point. And we will take that report and it will inform as our review 

goes along. 

Mr. WILSON. I thank both of you. I was very impressed, Colonel 

and Mr. Davis, the facts that you pointed out. People should know 

how this affects individuals. And with that in mind, what is your 

reaction that the retirement reform is unavoidable because it is fiscally unsustainable? What would be your response, each of you? 

Mr. STROBRIDGE. The testimony we have heard here today from 

the DOD witnesses kind of refutes that, where they said it is neither spiraling out of control, nor unsustainable. Their projection is 

that it is going to be about the same percentage of basic pay into 

the future. I think the committee has statistics that has shown 

that retirement costs as a percentage of the DOD budget have been 

relatively stable over time. 

The first time I worked on military retirement was in 1977 and 

we showed projections at that time that critics were pointing out 

that it was going to be the system would go broke by the year 2000. 

Well, we are still here and we just fought a war since the year 

2000, so I kind of pooh-pooh those kinds of ideas. 
10 

Mr. WILSON. Thank you. 

Mr. Davis. 

Mr. DAVIS. Well, I would certainly agree with everything Colonel 

Strobridge just said. And I would just add that, you know, the price 

of military retirement, the price of military benefits, is really part 

of the cost of fighting a war that we are currently involved with, 

and the price of defending our Nation, and should be put in that 

category as well. 

Mr. WILSON. And I want to thank all of you as I conclude, because I can see your appreciation of the career NCOs, the junior 

officers. We can, ‘‘get new recruits,’’ but the expertise must be 

maintained for the security of our country, of our NCOs and junior 

officers. 

Proceed to Congresswoman Davis. 

Mrs. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman. And 

again, thank you all for being here. 

I wonder if you could address the issue of fairness? As I mentioned in my opening statement, that we have certainly hundreds, 

thousands of our military personnel who serve out the 20 years, 

though they may only deploy once, if at all, in a conflict theater, 

versus those who deploy on many occasions. Certainly we know in 

the last 10 years that is quite common, and yet do not serve the 

full 20 years. 

How do you think we should go about looking at that issue? And 

do you think it is one of fairness, or is it, you know, just the way 

it is? 

Doctor, do you want to start, or that is fine. 

For all of you. 

Mr. STROBRIDGE. To me the key purpose on the retirement system is sustaining the career force. National defense comes first. I 

am all in favor of fairness. I have built my career on arguing issues 

of fairness. But you have to sustain the system through peace and 

war, through good budget times, through bad budget times. 

And we all have seen periods in the past where we have pulled 

out all the stops to retain people, when we have had service conditions so terrible, or an economy that was so strong, that we had 

to raise retention bonuses, we had to pay, you know, extra things. 

Those are going to happen in the future as well. 

And when we acknowledge that the military service conditions 

are unique and vastly different from civilian conditions, the fact 

that we can only get 17 percent of enlisted people to stay for the 

current system to me speaks for itself about the arduousness of the 

career and the few people who are willing to endure that for a long 

time. 

To then turn around and say, ‘‘But we need to pay more to people who leave,’’ to me, any time you have a vesting system it by 

definition detracts from a career incentive. It can’t do anything 

else. And in bad budget times, it leaves the Government bidding 

against itself for their services, which only drives up costs. 

So to me if you want to talk fairness, the first thing we have to 

do is be fair to the people who suffer and sacrifice the longest, and 

that is the career person. And the last thing we should be doing 

is cutting their package to fund a better package for people who 

leave. 
11 

Mrs. DAVIS OF CALIFORNIA. All right. 

Dr. Rooney, did you want—— 

Dr. ROONEY. Certainly. When we are looking at fairness, and you 

brought up a good point, because you were even talking about the 

range of people and deployments and all. And that is why in my 

opening statement, and you have heard other comments from the 

Department of Defense, that we look at compensation as a total 

package of which retirement is only one segment of it. 

So across that, whether it is basic pay, hazardous duty pay, imminent danger pay, all of the different aspects that go into compensation, that is how we get that balance of fairness. 

The other thing in terms of the overall system for fairness is 

when people come into the military they understand this system. 

They come in knowing what the various pieces are, and as a result, 

they are feeling because we are viewing it from not only basic pay, 

but all the tenets of compensation up to retirement, that we do get 

a balance of fairness. 

The point you did bring up though, in terms of should we be adding a component to retirement to compensate for those people less 

than 20 years, that is one of the reasons that we are saying it is 

very prudent to be looking at military retirement as part of the 

overall compensation to determine if in fact there is something in 

that aspect that we need to look at more closely. 

Mrs. DAVIS OF CALIFORNIA. Thank you. And in the little time 

left, if Mr. Davis, did you want to comment? 

Mr. DAVIS. Yes, I just want to point out that we did a survey and 

that was one of the questions that we asked 350 Active Duty personnel, do you think it is fair for people that, you know, to get a 

pension, you have to serve 20 years? And 81 percent of them 

thought it was fair. 

So, you know, in the ranks of the military, apparently there is 

no feeling that, gee, you know, if I serve 10 years and get out, it 

is unfair because someone else serves 20 years and they get a pension and I get nothing. 

And I also would like to just point out too, it is not under the 

jurisdiction of this subcommittee, but if someone serves 10 or 12 

years, of course, they are not—they are then under the jurisdiction 

of the Veterans committee. And they do have benefits, of course, 

such as the G.I. Bill and a whole latitude of things that they can 

use basically to get benefits from their service. 

Mrs. DAVIS OF CALIFORNIA. All right. Thank you. 

Yes, Ms. Penrod, did you want to comment? 

Ms. PENROD. I think I agree with you, Congresswoman Davis, 

that it is the 20-year retirement has sustained an All-Volunteer 

Force, but I believe we should look at it. We have a different cohort 

coming in every year. How do we know what the future will look 

like, what people are looking for in a retirement system? 

It may make the military more enticing to come in if an individual thinks that they may have something they could take with 

them. Also, even though you have the G.I. bill, I think that is an 

outstanding benefit, you still have an individual that will be separated possibly during drawdown with 12 years of service. And so, 

I think we need to look at that, and that is what we are going to 

do, is look at the whole program. 
12 

Mrs. DAVIS OF CALIFORNIA. Thank you. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. WILSON. Thank you. 

And we proceed to Mr. Coffman of Colorado. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

And I guess my first question is I think some of the testimony 

today had referenced that it is a relatively low percentage of payroll that supports the retirement system. But nobody has said what 

that is, and I am wondering if somebody could give me a percentage number? 

Dr. ROONEY. At this point, we have some of the numbers. I would 

like to take that for the record, please, sir. 

[The information referred to can be found in the Appendix on 

page 103.] 

Mr. COFFMAN. Very well. 

You know, I just think that there are—first of all, I agreed with 

the Secretary of Defense, when he testified before the House Armed 

Services Committee recently, and he said that whatever reforms we 

do, should not affect those who are currently on Active Duty and 

went in with the understanding that this is what the system is 

when they, in fact, enlisted or were commissioned in the Armed 

Forces of the United States. 

However, with that said, and myself being a retiree from a kind 

of an Active Duty and Reserve combination, that I remember as I 

was approaching the 20th year mark—and when you are a Reservist and if you are injured, not when you are on Active Duty, it is 

not considered line of duty, ‘‘not misconduct’’ would be the category. 

And you don’t fall into that, you report back for duty. 

I was in the Marine Corps Reserve in that weekend. And if you 

are determined that you can’t do what they ask you to do, because 

you have sustained an injury skiing, then you are automatically 

out. And there is nothing there for you. And I gave up skiing in 

Colorado as I got closer to that 20-year mark, just to make sure 

that nothing happened there, as I got close to that. 

I just think that there—we need to take a look at that—not so 

much the Reservists, but I think the Active Duty Component. And 

I disagree with the notion that we ought to go in the direction of 

all defined contribution. I just think that we are asking our service 

members to give a lot. And I think that there needs to be a component of certainty in that. 

So perhaps a more bifurcated approach that would be defined 

benefit with an element of defined contribution for those who would 

enter the Armed Forces after the effective date of the new system, 

when it was put in place. So I just think that this system needs 

to be reformed, it needs to be revised. 

It is something my father was under this system as a retired 

Army master sergeant, was in World War II and Korean veteran, 

and I think that as Congresswoman Davis has said, things certainly have changed since then in terms of life expectancies and a 

number of other issues. So I just think that everything we ought 

to look at. 

But I understand the Defense Advisory Board only looked at one 

issue, if I understand that, only came across with one suggestion, 
13 

and that was just completely defined contribution. Is that my understanding? 

Dr. ROONEY. Yes, that is the only proposal we have seen, is one 

that is a defined contribution. 

Mr. COFFMAN. Yes, and I am surprised by that and disappointed 

by that. I just think that, I mean, if you look at the system for Federal civil service, or for Members of Congress, I think for Members 

of Congress and their staffs, it is 1.7 percent a year for the first 

20 years. It is 1 percent thereafter for the next 10 years. 

And there is a Thrift Savings Plan, which is the defined contribution part, which is there for all Federal employees. And it is a 

lower, I think, factor. I can’t remember what it is for Federal employees. 

But the difference between Federal employees and the military 

or members of Congress, if you will—and I am not a fan of our retirement system. I think it ought to go. But for the military it is 

the fact that they don’t have—and we don’t really want them to 

have—the sort of career protections that Federal civil service has. 

And so, when you compare the two retirement systems, I think 

you need to recognize that in the military system. And it has to 

complement the fact that they are all at-will employees when making determinations about retirement. 

So I look forward to working with you, or all of you, in terms of 

coming up with a new system. I am certainly not going to say that 

the old system ought to be replicated going forward. I don’t believe 

that. But coming up with a new system. And I do believe that we 

need to look at, in particular, those folks that serve less than 20 

years, that I think that they ought to accrue something for that. 

And I think there ought to, in the new system, again for those 

who are not members of the Armed Forces yet, I think we ought 

to look at the notion that should you begin drawing the defined 

benefit portion of your retirement, right at the end of the 20-year 

mark, or whatever the mark is. So I think that there are a number 

of issues that ought to be on the table. 

With that, Mr. Chairman, I yield back. 

Mr. WILSON. Thank you very much. 

We now proceed to Congressman Dr. Joe Heck. 

Dr. HECK. Thank you, Mr. Chairman. I especially want to thank 

you for pulling this hearing together so quickly after my request. 

I want to thank all the panelists for being here today and providing your testimony. 

You know, I agree that it is certainly reasonable to review the 

pay and benefits in the retirement system of our Armed Services, 

but where I disagree is when the Defense Business Board’s proposal is released publicly without much information given to our 

men and women who are currently serving in harm’s way. 

And then I receive the e-mails and phone calls from folks wondering what is going on with their potential retirement and hearing 

first-hand what the impact was on morale in theater, not that they 

are not already worried enough about whether or not they are 

going to get their next paycheck back home, so their wife can make 

the mortgage. But now they are worried about what is going to 

happen when they hit their 20-year mark and what is going to go 

on with their potential retirement. 
14 

You know, the question of is the current benefits package or the 

current retirement relevant, I think, poses a concern in that how 

do you define relevance? You know? And I hope that that is not a 

euphemism for the costs associated with the retirement program, 

especially when only 17 percent of the folks who spend their lifetime in, you know, enter the service wind up qualifying for a full 

retirement. 

I know it is hard enough under these fiscal times when we are 

trying to figure out how Department of Defense is going to meet 

the $450 billion reductions over 10 years that this Administration 

has already called for. 

But is this review of benefits and pay taking place in a vacuum? 

Or, is it being looked at in conjunction with the amounts that we 

spend on basing and facilities and the amount that we are spending on hardware and weapons systems? Or, is each one of these 

things being reviewed in a silo? 

Because my concern is we can have the best piece of equipment, 

the best weapon system, but if we don’t have the person to gain 

the site picture or pull the trigger, like the great pilots I have at 

Creech Air Force Base, manning the RPAs [remotely piloted aircraft] now in theater, that weapon system really doesn’t do anything. 

So is this being done in a vacuum, or is it being looked at acrossthe-board in the entire DOD budget? 

Dr. ROONEY. Sir, I will be happy to comment on that. 

No, it is not being looked at in a vacuum. We are looking at, as 

you said, the challenge that we have for budget cuts, but as not 

just across-the-board cuts or arbitrary cuts, but very strategically 

looking to what does our future force need to look like? And how 

then, once we determine that future force, how do we attract and 

retain the best people using compensation as the tool to be able to 

again support that All-Volunteer Force, keep our current troops, 

the faith of them, but also going forward to attract and retain. 

So it is part of an overall strategic look at how we are going to 

face not only the budget challenges, but our challenges as a Department of Defense going forward. 

Dr. HECK. Well, and I appreciate what Colonel Strobridge stated, 

having lived through the years of having to give recruitment bonuses or incentive bonuses, and then using stop-loss to keep people 

in. And now we are getting to the point where we are cutting the 

Active Duty force in both the Army and the Marine Corps. 

So how does that play into this decision? I mean, we are already 

trying to downsize the force on purpose, and now we are talking 

about potentially changing the retirement program, which may 

cause an additional exodus? 

Dr. ROONEY. Actually, sir, when I was indicating strategic, I do 

mean we are taking into consideration that we are doing a force 

drawdown. But we are also looking forward and acknowledging 

that in addition to keeping the faith with our current forces, we 

will be recruiting new forces going forward. 

You mentioned some specific capabilities at Creech. So that is 

part of the area that we know our forces for the future will rely 

on new technologies, and we may have new requirements for recruiting those folks. 
15 

So as we are looking at what does this force look like, what are 

the attributes, we just want to make sure that our overall compensation package, of which the retirement is one, is the right combination of package. 

And that is why we are saying that there is no decision that has 

been made on any component of that. But as the Secretary has said 

several times, we must put everything on the table because that is 

the prudent way to approach this challenge. 

Dr. HECK. And in my limited time just a quick final question. 

Has there been set a dollar figure that is supposed to be attained, either in retirement or overall in pay and benefits, in trying 

to help balance the DOD budget? 

Dr. ROONEY. Not a specific one. 

Dr. HECK. Thank you. 

Thank you, Mr. Chair. Again, thank you for holding this hearing. 

And I yield back. 

Mr. WILSON. Thank you, Doctor. 

We proceed to Congressman Allen West of Florida. 

Mr. WEST. Thank you, Mr. Chairman, and Madam Ranking 

Member, as well. 

And thanks for the panel for being here. 

And I guess I am one of those guys that the ranking member 

talked about that did do a career in the military and was young 

enough to continue on to have a, I guess, a second career. Which 

is kind of a laughable hypocrisy, in that 22 years in the United 

States military Active Duty I got a 55 percent retirement. And I 

believe in 5 years on this side I could get vested into an even greater retirement. So we can talk about that later. 

But as I sit here today, I am very concerned, and it takes me 

back to the quote by George Washington, where George Washington talked about how future generations will regard their service to this Nation based upon how well we treat our veterans. 

And I recall my father, who was a World War II veteran, sitting 

down and talking to me about how great it would be to serve a career in the military. 

So when I look at a career in the military, when I look at people 

that are serving in our military, that is a defined contribution. And 

on the backside, I think that we should be giving them a defined 

benefit for that contribution because of what they do. 

Now, my first question is, do we still have the Thrift Savings 

program, the Thrift Savings Plan, for those men and women out 

there who, you know, may just serve, you know, 5 years. And while 

they are in a combat theater they are allowed to go into that Thrift 

Savings Plan, so they can put—start putting away some money? 

Ms. PENROD. Yes, Congressman West, we continue to have the 

Thrift Savings Plan. 

Mr. WEST. Okay. Now, when we talk about comparing military 

service to the civilian sector, does the private sector, civilian sector 

have something that is equal to the Uniform Code of Military Justice? 

Dr. ROONEY. No, sir, they do not. 

Mr. WEST. Okay. In the private sector, other than being a professional athlete, does your position and your ability to progress 

through the ranks depend on your physical abilities? And do we 
16 

mandate that people have to get up at 6:00 in the morning regardless of the conditions thereof to participate in physical training and 

activity? 

Ms. PENROD. Well, Congressman, I cannot comment on private 

sector employment. However, I can say that I think we all agree 

that the sacrifices are not the same for our military personnel as 

they are for our private sector civilians. 

Mr. WEST. And I think that is my biggest concern, is that what 

we ask the men and women to do, ever since those men answered 

the call of arms at Lexington and Concord, is different from someone just going to a bank, or different from someone even coming 

here to work on Capitol Hill. 

So it is a very dangerous road when we start to go down the comparative analysis of the private sector or business sector to the 

United States military. So I ask that we be very careful about that, 

because I think that we are already starting to make some decisions thereof. 

How many people in the panel do you remember what happened 

after Desert Shield/Desert Storm when we all of a sudden offered 

people money to exit the United States military? I do. Have you all 

done any research as far as the degradation of leadership, which 

is something that General Martin Dempsey talked about when he 

came and testified before us up here a couple of weeks ago? Have 

we looked at that and what could happen as far as the progression 

of leadership? 

Dr. ROONEY. Yes. I believe General Dempsey used the term 

‘‘hollowing of the force,’’ and the Secretary has also talked about 

that that is something we have learned many lessons from the 

past. And we will not do anything to our compensation system so 

that we end up with that hollowed force. 

Mr. WEST. Okay. Any comments, Colonel? 

Mr. DAVIS. I would just like to say I know what you are saying 

about that. And that, you know, from the enlisted side, you have, 

you know, senior enlisted people, a sergeant major, whatever—— 

Mr. WEST. You need first sergeants and sergeant majors. 

Mr. DAVIS. You need first sergeants, to nothing else to they, 

those people, combined with the junior officers, have, you know, a 

hard-charging junior officer. But you also have a senior enlisted 

person who can, you know, have a wealth of experience with the 

military, 20 or 30 years, that they can, you know, explain things 

to the junior officer, can call on them for their experience. And that 

makes a very powerful combination. 

Mr. WEST. And I will testify to that, as a young stupid second 

lieutenant when I first came in. 

Colonel, you have anything you want to add? 

Mr. STROBRIDGE. Yes, sir. I think so many of these things and 

these analyses treat people in the context of, ‘‘human resources,’’ as 

if they were widgets in a box instead of thinking, planning human 

beings. 

And when we model—I have got a lot of, you know, doing a lot 

of studies, working with RAND. I spent a lot of time working with 

RAND. 

The problem with all these is the models don’t include things you 

can’t quantify, such as sacrifice, such as time away from home. 
17 

They include all the money people spend, you know, they can measure behavior. But they don’t talk about—there is nothing in the 

model that accommodates the chance that we might go to war tomorrow, and you might be going to Iraq every other year for the 

next 10 years. 

There is nothing in there that accommodates for the fact that we 

might do the opposite. We might stop a war or we might have a 

budget-driven drawdown and you have built your plans on staying 

for a career, and all of a sudden we are going to force you out. 

And those are the kinds of things that, you know, service leaders 

are always seeking additional flexibility to be able to micromanage 

the force. And the only thing we know about those kinds of plans 

is whatever you plan for 5 or 10 years is going to be wrong, because the world is going to change your plan for you. 

And to us, that is one thing, when you have a very powerful career incentive like the 20-year retirement plan, it is very resistant 

to day-to-day manipulation. And that is a good thing. 

Mr. WEST. Thank you. 

And I just hope that our fiscal irresponsibility on this side does 

not become borne on the backs of our men and women in uniform 

or their families. 

And with that being said, I yield back, Mr. Chairman. 

Mr. WILSON. Thank you very much. 

And Congressman Scott of Georgia. 

Mr. SCOTT. Thank you, Mr. Chairman. 

And I am going to focus more on the gentlemen, ladies, with my 

questions, if I may. 

And I would like to focus, if we could, on the 80 percent—83 percent that get nothing. And, Colonel, you were just talking about the 

potential of somebody to go overseas every other year for the next 

10 years, five tours, and then you have a drawdown or a force reduction. And the bottom line is that person would not qualify even 

though they may have wanted to stay for 20 years, they would get 

nothing, is that correct? 

Mr. STROBRIDGE. Well, no, I don’t think that is correct. When we 

have these kinds of drawdowns, for example, Congressman West 

was talking about what happened in the 1990s. We had very special programs to provide additional incentives to try to entice people to separate voluntarily. For people with 15 to 19 years, Congress authorized an early retirement program. 

As difficult as those things are, that was probably the best example of the kind of thing that can be done. 

Now, the challenge is the drawdown that is coming up in this fiscal environment, I think it is going to be a lot tougher for Congress 

to authorize those kinds of programs. So we are going to be seeing 

less incentives. There will be some incentives, but probably less. 

Mr. SCOTT. Of the 17 percent who receive the benefits from the 

20 years, what percentage of them are enlisted? 

Mr. STROBRIDGE. The—— 

Mr. SCOTT. Seventeen percent of the men and women qualify. 

Mr. STROBRIDGE. Of the people who stay for a career? 

Mr. SCOTT. Right. 

Mr. STROBRIDGE. What percentage are enlisted? Probably about 

70 percent, I would think. 
18 

Mr. SCOTT. Okay. So 70 percent are enlisted. 

I guess my question is, you know, I hear your objection to having—you object to having any other plan, is that correct? 

Mr. STROBRIDGE. No, I don’t object to having any other plan. I 

object on the face of it to saying that because civilians do these 

things, that the military should, too. 

The military is a very different system. It is built to serve a very 

different purpose. And so to me, it has to start with that uniqueness and not assume that what happens in the private sector is in 

any piece is a good thing. It needs to be evaluated on its own merits. 

Mr. SCOTT. Well I certainly agree with you that they are different, but I do think that it is necessary for this committee and 

for us as a Congress to do something that helps that 83 percent 

who don’t qualify under the 20 years. And you know, there are 

many of them that have served many tours overseas. And I understand that we have to have our experience in our officers and 

maintaining those things. 

But I also I will tell you I do think that we need to remember 

those 83 percent of the people who have spent their time and their 

family’s time and contributed a great deal to the freedoms that we 

enjoy in this country. And I see nothing wrong with them being 

free to choose a different retirement plan on their own will. 

So we will work on that as time goes on. 

I would ask, Mr. Davis, would you give me that math again that 

you used, where you said 3,000 was the last number, and maybe 

24,000 was the first in your presentation. 

Mr. DAVIS. That was the 24,600 for an E7 with 20 years as compared to taking the plan proposed by the 10th QRMC, which was 

to put them into a 401(k). But they wouldn’t be able to get that 

until age 57 to 60. I believe it came out to $3,600 a year, the 401(k) 

benefit. 

Mr. SCOTT. How many years would they have contributed to that 

401? Could you just share that math with the committee? I would 

like to—— 

Mr. STROBRIDGE. If I could clarify that calculation? You are referring to a chart that we made. The $3,600 would be 

the initial value of the defined benefit retired pay. In other words, 

the 24,000 would be reduced by 5 percent for each year the person 

left before age 57. 

And assuming an enlisted person leaves at age 40, that means 

it would be reduced 85 percent. So the defined benefit contribution, 

or the defined benefit portion, would be $3,600 a year. There would 

be some additional amount that person would receive from their 

Thrift Savings Plan that would be in the range of $10 to $13,000 

that they could start drawing at age 60. 

Mr. SCOTT. But that would be contingent upon how much money 

they put into the direct savings plan? 

Mr. STROBRIDGE. Correct. 

Mr. SCOTT. I would like, if I could see that math on that? I would 

just like to see the math on that. 

Mr. STROBRIDGE. Yes, sir, we have a chart on that in our formal 

statement. I can get it to you. 

Mr. SCOTT. Great, thank you. 
19 

Mr. WILSON. Thank you very much. 

We now proceed to Congresswoman Hartzler of Missouri. 

Mrs. HARTZLER. Thank you, Mr. Chairman, Ranking Member 

Davis. Appreciate all of you being here. 

I wanted to start, if I could, with Colonel and ask you to expand 

a little bit more on your comment earlier that you don’t think 

grandfathering in, if there was a new plan, you don’t support, you 

know, having a new plan and just grandfathering in current members of the military. And could you expand on your concerns? 

Mr. STROBRIDGE. Sure. I think my point was people look at 

grandfathering is a panacea that everything will be okay as long 

as we grandfather the current force. 

I have a letter. The letter that I referred to that Casper Weinberger wrote back in 1985 that went to Tip O’Neill expressing concern about the REDUX plan Congress was about to enact. And he 

spoke, that letter spoke very eloquently on grandfathering. If you 

don’t mind, I would like to read it for a moment. 

It says, ‘‘While the changes we have been required to submit 

technically affect only future entrants, we expect an insidious and 

immediate effect of the morale of the current force. No matter how 

the reduction is packaged, it communicates the same message, that 

is, the perception that there is an erosion in support from the 

American people for the service men and women for whom we call 

upon to ensure our safety. 

‘‘It says in absolute terms that the unique and dangerous and 

vital sacrifices they routinely make are not worth the taxpayers’ 

dollars they receive, which is not overly generous.’’ 

Now, the issue, there was a line in there where he said, basically, you have two categories of people serving side by side who 

each know that they have different benefits. And that was a very 

accurate predictor of what happened in the 1990s, where you had 

the people who were trying to reenlist people say either they mislead them and tell them what the benefit they have which, when 

the people find out that that wasn’t true, they get particularly 

upset. Or, you have these people saying, I am sorry, but the benefit 

you have is not what your predecessors have. 

There is just no way, as those people go through 20 years serving 

together, that that doesn’t become a burr under their saddle. 

Mrs. HARTZLER. Okay. So you are not for any changes at all? You 

want to keep the system the way it is now forever? 

Mr. STROBRIDGE. It is probably not realistic to say there will 

never be any changes at all. The thing that I think we would have 

to—and very frankly, there would probably end up being budgetdriven changes of some type. I think we have to start from the 

standpoint that we have tried some of these things before. The one 

that we know was a tragic failure was the REDUX system, which 

compared to the things that are on the table today was pretty modest. 

Mrs. HARTZLER. All right. Could I hear from the Department of 

Defense representatives on why you initiated this whole process? 

What is—why do you think there needs to be some changes? What 

is the rationale? 

Dr. ROONEY. It is actually multiple purpose. One is that we are 

looking to our future force. And again, we talked about such con-
20 

cepts as we don’t want to hollow out the force as we are changing. 

We know we are facing drawdowns. We also know that our future 

force very much can look different in terms of the type of force we 

must recruit, the qualifications, the technical aspects. So right 

there is we are doing that review that prompted us to say are we 

sure we have the correct pay/benefits/compensation package going 

forward? 

The timing of that review, and not only the speed, but the deliberateness of it clearly ties in to our budget concerns going forward. 

And the budget we must meet and the reductions we must meet. 

So all of that is coming together at the same time. And again, because we are trying to view all of the budget reductions strategically, and as though they are interconnected, this does become part 

of that discussion, but is not solely driven because it is a budget 

exercise. 

Mrs. HARTZLER. Okay. I wanted to jump to a concern that I have 

heard at home and see if any discussion is taking place with this. 

There are about 30 seconds left. 

But is there any incentive currently in the system, which I don’t 

believe there is, to encourage people to stay 30 years? 

Some of the concerns I have heard from some of my retired military at home was that right now, we have many people retiring at 

20 years and we are losing that knowledge and all that experience. 

So, is there anything being looked at to encourage people to stay 

longer? 

Ms. PENROD. Actually, as we look at our review, we look at the 

whole force profile, and agree the 20-year retirement pulls people 

with 20 and it is cliff-vested. And the force today of the Services, 

they have built their force profile around that behavior. 

You continue to earn 2.5 percentage points for every year you 

stay in the military up to 100 percent, or over 100 percent. So we 

do have changes that happened several years ago as far as retirement. But that will be part of your review. We have a model, as 

Steve said, RAND has a very strong model to look at the impacts 

on retention, but that just informs the process. 

We also have our senior enlisted advisers are part of the working 

group. All Services are represented. Coast Guard is represented. 

Guard and Reserve are represented. So that is where you have that 

human piece of this review and the experience. 

Mrs. HARTZLER. Thank you. And I just encourage all of you as 

you go through this process to continue to get input from as many 

people as possible affected by this, as well as Members of Congress. 

This is a very, very important topic to certainly people in my district, but to our national security. And so, no change should be 

made lightly, obviously. 

So thank you for what you are doing. Thank you for the input, 

and thank you for your service. 

Thank you, Mr. Chairman. 

Mr. WILSON. Thank you, Ms. Hartzler. 

Mrs. Davis, do you have another question? 

Mrs. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman. I wasn’t 

sure if we were going to have another round, but there are a few 

questions. 
21 

And one is really to Mr. Strobridge and Mr. Davis. I know how 

difficult this is in getting input from all the people who you speak 

to. But I am wondering within this discussion whether there are 

really some priorities, perhaps, that had been identified? Whether 

there were some areas in which you feel that you could find savings? Can you prioritize any of the benefits for us? What should be 

protected? What could be modified, reduced or eliminated? 

Acknowledging, of course, that you would rather not see any reductions at all, and that even the targeting here is problematic. 

But are there some areas in which you could define for the committee that might be helpful? 

Mr. STROBRIDGE. Well, I think one thing you have to recognize 

is we are here representing 34 organizations, and that does require 

a wide diversity. We did have some difference of opinions on 

healthcare, on the TRICARE fees. In the end, you know, the kinds 

of differences we were talking about were $5 a month, you know, 

and those were very significant within the coalition. 

We had a lot of debates over those, you know, whether we should 

just say no changes. 

I think there are a reasonable number of groups that would say 

no changes, the system works. You know, this is what people were 

promised, we ought to stick with it. I think there are people who 

would be willing to discuss those things, but I think that it is much 

tougher on retirement, very frankly, than healthcare. And even 

healthcare, when we were talking about that, we were talking 

about relatively small differentials. 

The kinds of things in healthcare that are on the table now, 

which were very disappointing to us who did buy into a $2 increase 

on pharmacy fees, to then have the Administration turn around before that even gets enacted and say, you know what, no. We are 

going to raise that to $40. That is a big problem. 

And that raises some serious credibility issues that, you know, 

give, you know, support to the idea that give an inch, you take a 

mile. So that is a very significant concern. 

Retirement, every retirement plan that has been put forth for the 

past 4 or 5 years, when you go back to look at the Defense Advisory 

Committee for Military Compensation proposal, the QRMC proposal, the Defense Business Board proposal, all of those entailed 

radical changes, way worse than the REDUX that failed. 

And so, when you see that, I think we all get our arms—our, you 

know, hair on fire and say, ‘‘I am sorry, you are just starting from 

the wrong place.’’ We are starting from how much money can we 

take out of it, when what we should be starting for is what should 

people earn for a career of service and sacrifice under conditions 

that can range anywhere up to and including deploying every other 

year for 10 years, or giving up your life, or coming back with PTSD 

[post-traumatic stress disorder] and TBI [traumatic brain injury] 

and not only your life, but your family’s life is going to be changed 

forever? 

Those are the kinds of things, as Congressman West said, that 

we believe have to be counted as the contribution. That is what 

people really pay in a career of service and sacrifice. 
22 

Mrs. DAVIS OF CALIFORNIA. Thank you. I certainly appreciate 

what you are saying. I think we all do. I appreciate that. If there 

are things that you can offer to us, that is always helpful. 

Mr. Davis, I don’t know if you wanted to comment further. And 

I had one other question. 

Mr. DAVIS. I just wanted to, you know, second his information. 

But also, just to remember when looking at the retirement system, 

I think it is important to remember that, you know, our Armed 

Services are there to fight wars, and war is a young man’s or woman’s profession. And I look back at some of the stuff I did when I 

was in the Marines, carrying artillery shells and all that kind of 

activity that you do. I probably couldn’t be able to do it today. 

So, you know, when you think about it, you know, it is a young 

man’s or woman’s profession and the retirement system should reflect that. 

Mrs. DAVIS OF CALIFORNIA. Yes, thank you. If I may just for our 

Department of Defense witnesses, and you can do this certainly for 

the record, because my time is almost up. Could you also help us 

understand where you are looking to address other increased costs 

and expenditures that we have in our contracted services? 

I would like to know what we are doing about that, because the 

concern, of course, is that we are looking here at retirement benefits and other benefits to the military, and yet we see that despite 

the fact that perhaps you are trying to look at some of those costs, 

at the same time we are maybe doing away with some services 

from our civilian personnel that we would have to go back and then 

contract with the outside. 

And I would like to know what else you are doing? How are you 

going about addressing those issues so we are talking about costs 

across the board? And I know in response to one of the other questions, you did say this is not the only thing we are looking at, of 

course. But I would like to know how you are going about that and 

how far along we are in looking at a lot of the contracted services 

that also cost us a great deal of money? 

Thank you very much. 

Dr. ROONEY. Certainly, we will take that for the record, given 

our time. 

Thank you, Congresswoman. 

[The information referred to can be found in the Appendix on 

page 103.] 

Mr. WILSON. Thank you very much. 

During our whole debate, I was impressed several times, it was 

referenced about military families. And as we are looking into the 

issues of retirement, the military families truly are of service and 

sacrifice. 

And I just hope that every effort is made to work with military 

families and get their input, because they really truly sacrifice so 

much, but they are counting on a very positive career, a very fulfilling career for their spouses and for themselves. 

A question that I would have is for Colonel Strobridge and Mr. 

Davis. Has the Department of Defense consulted with your organizations, Fleet Reserve, MOAA? Or, have they consulted with other 

military organizations and associations for their input on this issue 

of retirement reform? 
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Mr. STROBRIDGE. Not to date, no sir. I think there are probably 

people who would prefer that they didn’t. 

Mr. WILSON. Well, I hope—and Mr. Davis, your view? 

Mr. DAVIS. Yes, we have not been contacted by them for our 

input. 

Mr. WILSON. Well, I certainly know what a resource you can be. 

And so I hope that you would be contacted, and I know how broadbased both of your organizations are. And I pay dues to ROA [Reserve Officers of America] and some others, too. So, American Legion comes to mind, VFW [Veterans of Foreign Wars]. So, retiree 

organizations, active. And I would just note that they would give 

heartfelt, real-world examples first-hand of the consequence of any 

reform effort. 

I would like to proceed to Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

I was in the military, in the Army, on Active Duty during the 

first, well, reduction in force that I can remember, which was in 

the early 1970s, post-Vietnam. 

Now, fortunately, I don’t—there was no separation pay as was in 

the early 1990s post-Gulf War and that reduction in force, where 

I think they gave a lump sum payment to separating, I think, senior noncommissioned officers and officers who were forced out in 

that process. 

And I think that what is stressful for that population in a reduction in force is that there is no understanding of what the system 

is going to be until they receive notice that they are going to be 

out. Then there may be a decision that will help them, and there 

may not, and that is unfortunate. 

And I think that is one reason why I think it is important to 

have a reform that reflects some accrued retirement benefit for people less than 20 years. And I think that is something that it is important to look at, watch out for. And certainly I want to reiterate 

again that I think that whatever system we put in place should not 

impact the people currently on Active Duty. 

With that, Mr. Chairman, unless there are any responses from 

the panel to what I just said? 

Mr. STROBRIDGE. I would just comment, sir, that the separation 

pays that you are talking about, at least as far as the law is concerned, those are deemed—we don’t think that is right, but when 

you look at the law, it is hard to come to any conclusion that it is 

deemed a kind of retired pay payment. 

If you take that and then come back in the service and qualify 

for retirement, they are going to deduct that separation pay from 

your retired pay. 

So we don’t like that, but that is the way it is. In other words, 

under current law, that is the retired pay outlay, the separation 

pay. 

Mr. COFFMAN. Just one final point, and that is, on Active Duty 

in the Army and the Marine Corps, I served in combat arms, except for my last tour in Iraq was civil affairs. But, Gulf War, I was 

a light-armed infantry military officer, and then I was mechanized 

infantry in the United States Army. 

And I got to tell you that that pretty much wore me out. And I 

think, to the casual observer, they will verify that, that there is 
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such a wide disparity in occupations in the military. And I got to 

tell you, there are a lot of them that people show up to work in 

the morning and leave in the afternoon, and it is not a whole lot 

different than, quite frankly, than a civilian job. 

And there are those jobs that are just tough. And I believe that, 

if we can’t recognize that in retirement, we ought to recognize it 

in plussing up hazardous duty pay, plussing up sea duty pay and 

all those other things that recognize people that don’t punch out on 

Saturday, on Friday afternoon and go home, and just, you know, 

go day after day after day. 

And I have done that in theater, in war, twice. And it is tough 

stuff. And so I think we need to recognize that. Certainly, I appreciate everybody who serves in the United States military, but I also 

appreciate that there are differences. 

And with that, Mr. Chairman, I yield back. 

Mr. WILSON. Thank you very much. 

And, Congressman Heck? 

Dr. HECK. No further questions. 

Mr. WILSON. No further questions? 

And, Colonel West? 

Mr. WEST. No further questions. 

Mr. WILSON. My goodness, Colonel. And Congressman Scott of 

Georgia? 

Mr. SCOTT. No further questions. 

Mr. WILSON. Mrs. Davis, any further? 

There being no further, thank all of you for being here. You could 

tell the high interest and appreciation for your service. And again, 

military families—what we are talking about are consequences far 

beyond today, and we are looking for a very strong and positive future. 

The meeting is adjourned. 

[Whereupon, at 2:24 p.m., the subcommittee was adjourned.] 
A P P E N D I X 

OCTOBER 25, 2011 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

OCTOBER 25, 2011 

(29) 

Statement of Hon. Joe Wilson 

Chairman, House Subcommittee on Military Personnel 

Hearing on 

Military Retirement Reform 

October 25, 2011 

Today the Military Personnel Subcommittee will address the subject of military retirement, an issue of immense importance to service members and, in turn, to combat readiness. 

I want to thank Dr. Joe Heck for recommending that the Subcommittee conduct this hearing. Dr. Heck very astutely recognized 

that military retirement would be a pivotal issue in the coming 

months and that it was essential that Subcommittee address the 

issue expeditiously. Thank you, Dr. Heck, for your insight and call 

to action. 

The Defense Business Board, one element of the Department of 

Defense, was quick to present a major retirement reform proposal 

that set the tone of the retirement reform debate. The Board’s proposal would move the retirement system aggressively toward a private sector defined contribution system based on the personal investments of service members. The proposal received immediate 

criticism from service members and military associations. The proposal is certainly a radical solution that would result in a significant reduction to retired benefits for all service members. As could 

be anticipated, the unveiling of the Defense Business Board proposal injected considerable uncertainty into the force, to include 

troops fighting the wars in Iraq and Afghanistan. The proposal created an immediate morale firestorm as service members feared 

that senior leaders within the Department of Defense and the military departments were seriously considering its implementation. 

We invited the Defense Business Board to testify today to face 

the arguments of their critics and explain the merits of their proposal, but they declined the invitation. I am concerned that the Defense Business Board knowingly elected to pursue a very controversial proposal with immediate negative consequences for morale and 

combat readiness and yet they were unwilling to come before the 

Subcommittee and defend their action. In my view, their failure to 

appear speaks volumes about their own lack of conviction that 

their proposal is deserving of serious consideration. 

Secretary of Defense Leon Panetta has been clear that retirement reform must be on the table for consideration as the Department of Defense contemplates the wide array of programs that will 

be considered for cuts to meet the budget reduction goals. I was 

pleased that the Secretary understood the morale problem that had 

been created by the Defense Business Board and announced his 
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clean support for grandfathering the benefits to be provided to currently serving members who have borne the burden of war over the 

last 10 years. We simply cannot betray the trust of the service 

members who have performed with such courage and expertise in 

Afghanistan and Iraq. 

I was disappointed that Secretary Panetta did not disavow the 

Defense Business Board proposal. That statement would have removed a major irritant to the force. I was, however, very pleased 

at General Dempsey’s statement before the House Armed Services 

Committee that recognized the unique requirements of military 

service and that strongly asserted that the military requires a retirement system totally different from any civilian retirement program. 

Today, we hope to learn more about the current positions of the 

Department of Defense and military advocacy groups concerning 

the need to reform military retirement. 
31 

Statement of Hon. Susan A. Davis 

Ranking Member, House Subcommittee on Military 

Personnel 

Hearing on 

Military Retirement Reform 

October 25, 2011 

Given the current state of our Nation’s economy, discussions on 

the condition and future of military retirement are once again 

being raised. Such discussions are not new, during previous economic down turns, focus has turned to the sustainability and affordability of our military retirement program. However, for the 

most part, the current military retirement program was established 

over 60 years ago, so it is valid to ask ourselves is this program 

as it currently exists still meeting the requirements it was set up 

to achieve, which is the focus of today’s hearing. 

Only 17 percent of the force actually completes a full 20 years 

of service in order to qualify for a non-disability retirement. Many 

have expressed concerns that the current program does not recognize the sacrifices of those who served during 10 years of conflict 

and may not stay the full 20 years to earn a retirement. Is it fair 

that that person who may have been deployed once, and stays to 

retirement, is eligible for a lifetime benefit, while an individual 

who may have multiple deployments in a combat theater, but does 

not stay 20 years, walks away with nothing more than the admiration of a grateful nation? 

When the 20-year retirement program was established the life 

expectancy in 1949 for a white male was 66.2 years, for a black 

male it was 58.9 years. Compared to the latest data available, the 

life expectancy in 2009 for a white male is 76.2 years, and for a 

black male it is 70.9 years. There is no doubt that Americans are 

living longer and more fuller lives, which means that an average 

individual who receives military retirement for 20 years of service 

will receive retirement for nearly twice as long in her or his adult 

life. In addition, many of those who retire at 20 years of service 

have gone on with an ability to seek another full career in a different field. 

Changes to the personnel compensation programs, including the 

retirement system, often strike fear in the force, so it is important 

that we do not unnecessarily undermine the faith of those who are 

currently serving. But, we do have a responsibility to ensure that 

the compensation package that is provided to service members is 

meeting the needs of our Nation’s national security, and that includes looking at the military retirement package. 
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DOCUMENTS SUBMITTED FOR THE RECORD 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

OCTOBER 25, 2011 

(103) 

RESPONSES TO QUESTIONS SUBMITTED BY MRS. DAVIS 

Dr. ROONEY and Ms. PENROD. Contracted Services are currently the largest cost 

element of the Total Force. The Department is committed to enhancing its understanding of what we contract for and why. For all elements of our force, we must 

look at whether the returns justify the investments, and if alternative Total Force 

mix solutions may be less costly or are more appropriate. As we have seen in the 

last decade, expenditures on contracted services have steadily increased, and as an 

element of the Total Force, must be comprehensively reviewed to ensure necessary 

reductions do not risk readiness and the delivery of critical capabilities. The Congressionally-mandated Inventory of Contracts for Services must continue to be improved so that it can be used by managers for these purposes. 

In accordance with the FY11 authorization and appropriations acts, my office is 

working with all DOD organizations, to move towards collecting data from the private sector firms providing services for the Department. It is important that we 

have information on contracted services that can be translated to units of measure 

that are comparable to the other elements of our workforce (military and civilian 

personnel) in order to make these critical value and planning judgments. 

In the past few years, we have seen the Army make judicious and highly costeffective decisions regarding contracts governance by relying on both their inventory 

process and internally-developed information system. P&R has engaged to assist the 

Departments of the Navy and Air Force to enhance their service contracting governance ability by leveraging the Army system, as directed in the FY11 appropriations 

act. Additionally, we are also assisting the Defense Agencies, Field Activities, and 

Combatant Commands as they report their plans to collect this information. This 

year, the Components will prepare an improved FY2011 Inventory of Contracts for 

Services by relying on the best information they have available in their internal systems as opposed to the Federal level aggregated reporting system, while leveraging 

the Army’s proven processes and data. 

Finally, my office has drafted guidance that will be soon released Departmentwide. This guidance will require, in addition to an improved inventory, that each 

DOD Component complete a thorough review and analysis of the contracted services 

for which they are the requiring activity, and will require the Component Head to 

submit a letter to my office certifying completion of such review, delineating the results in accordance with all applicable Title 10 provisions. This additional accountability will ensure each DOD Component can report workforce mix decisions and 

that contracted services are validated against mission requirements that justify current and proposed expenditures during annual program and budget reviews, and 

that corrective action is taken when functions at risk of inherently governmental 

performance or involving unauthorized personal services are identified. [See page 

22.] 

RESPONSE TO QUESTION SUBMITTED BY MR. COFFMAN 

Dr. ROONEY. The Defense Department annually contributes into the Military Retirement Fund a portion of the actuarially determined amount required to pay retired pay to future military retirees; the Treasury Department pays the remainder 

of the actuarially determined amount. 

For the 2012 fiscal year, the Defense Department contributed an amount equal 

to 34.3 percent of active component military basic pay to fund retired pay for future 

active duty retirees and 24.3 percent of reserve component military basic pay to 

fund retired pay for future reserve component retirees. It is projected that these contributions, as a percentage of military basic pay, will remain relatively constant well 

into the future. 

In FY 2012, the Treasury Department contributed to the Military Retirement 

Fund 8.8 percent of active component military basic pay and 3.6 percent of reserve 

component military basic pay. The Treasury Department’s portion represents the 

cost of ‘‘concurrent receipt’’ benefits first enacted in 2004. [See page 12.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

OCTOBER 25, 2011 

(107) 

QUESTIONS SUBMITTED BY MS. BORDALLO 

Ms. BORDALLO. How can the Department consider ‘‘breaking faith’’ with the troops 

and propose drastic reforms to retirement and benefits to the military’s all-volunteer 

force to meet declining budgets, while at the same time failing to achieve a realistic 

accounting of expenditures on contracted services, which have increased drastically 

in the past decade? In fact, for nearly half of that decade, the Department has failed 

to implement a required inventory of contracts for services, directed by Congress in 

FY08 NDAA. P&R was directed, twice in fact, in the most recent legislative cycle 

to take specific and deliberate actions to move the Department forward in that area. 

Without this critical tool, how can the Department control costs in a time of fiscal 

austerity, reducing military and civilian end-strength, but ignore the work performed by contractors? Wouldn’t this be a more natural first choice for identifying 

budgetary savings than at the expense of ‘‘breaking faith’’ with our dedicated men 

and women in uniform? 

Dr. ROONEY. While it is accurate that possible retirement and compensation reforms are being considered, the Department is still in the very early stages of developing any potential options for such reform and no decisions have been made. The 

Secretary and I, along with many other senior leaders, take very seriously the commitments we’ve made to our men and women in uniform and we will not break faith 

with those service members. Any proposed reforms and changes to retirement will 

contain a requirement for grandfathering. 

I agree that work performed by contractors comprises a significant portion of the 

Department’s budget that must be reviewed in order to achieve balanced, meaningful and lasting savings and cost reductions. To that end, we are committed to enhancing our understanding of the services we contract for and why, and how much 

we spend on those services. The Inventory of Contracts for Services must continue 

to be improved so that it can be used as a tool by managers for these purposes. In 

accordance with the FY11 NDAA and the recent appropriations bill, my office is 

working with all DOD organizations to move towards collecting data related to level 

of effort and costs from all private sector firms providing services for the Department. On November 22, the Department delivered to the Congressional defense 

committees a plan that delineates both short and long term actions to be taken by 

the Department to begin collecting data from private sector firms and fully comply 

with requirements of sections 235 and 2330a of title 10, United States Code. It is 

important that we have information on contracted services that can be translated 

to units of measure that are comparable to the other elements of our workforce 

(military and civilian) in order to make critical value and planning judgments. With 

the right data, opportunities for savings can be identified, thus ensuring that returns justify investments. The data will also assist in promoting alternative workforce solutions that may be less costly and more appropriate, or eliminating or reducing in scope those services determined to be no longer required or of low priority. 

Ms. BORDALLO. In this hearing there was a lot of discussion about comparison between the military and private sector employment, specifically the specialized training, physical attributes, and sacrifices made by uniformed men and women that ensure a constant state of readiness. As we reduce our operational tempos overseas, 

and drawdown those force levels, what is the Department doing to ensure that military men and women are not being placed into jobs that do not contribute promote 

unit readiness or further their careers, and consequently generate a hollow force? 

This is of particular concern as the Department operates under a civilian personnel 

constraint and there are thousands of control grade officers in headquarters or administrative type functions that may be better suited for civilian performance? 

Dr. ROONEY. The Department’s ‘‘sourcing’’ of necessary functions and work between military, civilian, and contracted services must be consistent with workload 

requirements, funding availability, readiness and management needs, as well as applicable laws. As operational tempos in Iraq and Afghanistan decrease and the Department makes force structure adjustments, military personnel availability will 

certainly be a consideration in workforce structure decisions to most effectively and 

efficiently perform the missions, including those at headquarter staffs and of an administrative nature. In making such staffing decisions, the Department must be 
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mindful of using military personnel to perform tasks that could limit their availability to perform the operational missions or maintain a required state of readiness. 

Consistent with DOD policies, tasks that are not inherently governmental or military essential in nature must be designated for Government civilian personnel or 

contract performance unless military-unique knowledge and skills are required for 

performance of the duties; military incumbency is required by law, executive order, 

treaty, or international agreements; military performance is required for command 

and control, risk mitigation, or esprit de corps; and/or military manpower is needed 

to provide for overseas and sea-to-shore rotation, career development, contingencies 

or wartime assignments. 

My staff has currently begun a study to review the grade/billet appropriateness 

and allocation of control grade officers. This study may result in more in depth reviews of military billets at headquarters and administrative functions and activities 

across all organizations of the Department. Among other things, consideration for 

military to civilian conversions or organizational efficiencies that will reduce military personnel performing overhead activities will reduce the likelihood of hollowing 

the force. 

Ms. BORDALLO. Much attention has been paid to the role of contractors in theater—as well as the sustainment, infrastructure, and maintenance support provided 

to the Department by the private sector. However, as we shape the force of the future and discuss the likely impact the possibility of retirement and compensation 

reforms will have on the Department’s ability to recruit and retain a ready and capable force, what steps are being taken to ensure that the future mix of the Department’s workforce is appropriately balanced? Declining end-strengths and civilian 

personnel limitations would seem to lead to a ‘‘default’’ of contracted support to 

meet future operational needs (similar to the post 1990s drawdown). What controls 

are being implemented, related to contracted service levels, to preclude favoring one 

element of the Total Force overt another? 

Dr. ROONEY. As a result of fiscal constraints and declining budgets, the Department is assessing all aspects of its Total Force, including contracted support. These 

assessments may result in force structure changes, organizational realignments and 

restructuring, workload prioritization, and the identification of lower priority mission/functions for elimination. As part of these assessments, workforce structure decisions must be consistent with workload requirements, funding availability, readiness and management needs, and applicable laws. Decisions regarding the use of 

military personnel, Government civilians, or contract support must follow workforce 

mix and risk guidance in DOD Instruction 1100.22, ‘‘Policy and Procedures for Determining Workforce Mix’’, and, when appropriate, cost considerations in accordance 

with Directive Type Memorandum 09–007, ‘‘Estimating and Comparing the Full 

Costs of Civilian and Military Manpower and Contract Support.’’ 

In addition, the Department has prepared policy reiterating and reinforcing statutory prohibitions against converting work currently performed (or designated for 

performance) by military and civilian personnel to contracted services. This policy 

highlights the importance of preventing the inappropriate conversion of work, or 

‘‘default’’ to contract performance. 

Lastly, the Department is committed to enhancing its understanding of current 

and planned services contracts. On November 22, the Department delivered a plan 

to the Congressional defense committees that delineates both short and long term 

actions for the collection of data from private sector firms. These actions will improve the Department’s ability to assess contracted services in a manner comparable 

to the other elements of our workforce in order to make critical value and planning 

judgments, as well as precluding unjustified or unintended growth in this sector of 

the Total Force. 

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