Military will go Greek first ...

You heard it all last week. Indications & Warnings.

Every witness before a recent Senate subcommittee hearing on military compensation – all experts on service pay and benefits – called directly or indirectly for Congress to end its 12-year run annual military pay raises that exceed private-sector wage growth.

No witness suggested that future raises each January shouldn't match annual wage gains for private sector workers as measured by the government Employment Cost Index, or ECI.

But with personnel costs soaring to sustain a quality all-volunteer force in its ninth year of war, lawmakers like Sen. James Webb, D-Va., chairman of the Senate armed services personnel subcommittee, are seeking ways to make military compensation more efficient.

A common theme at this hearing was the need for more targeted payments, such as bonuses and incentive payments, versus continuing a string of beefier across-the-board raises, which were deemed inefficient and a catalyst for driving up basic pay and retirement costs.
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Webb and colleagues heard from three outside pay analysts and a Defense policymaker suggesting Congress not continue to push for across-the-board raises in excess of private sector wage growth because it only aggravates the challenge of soaring personnel costs.

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... comparing military and civilian compensation is always a challenge given the unique factors of service life and difficulty of comparing benefits like health care or deferred compensation like retirement.

But GAO agreed with the 10th Quadrennial Review of Military Compensation that the Department of Defense should begin to weigh the value of retirement and health care compensation in making pay comparisons with other Americans.

Farrell said defining and comparing military compensation more broadly could help recruiting and retention. When this yardstick is used, military compensation today exceeds compensation packages for 80 percent of peers in the U.S. work force.

That is just the opening. This is part of a larger problem in our guv'munt.

Salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.
Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

How long will the taxpayer be content having those who work for them being paid more than they are? Probably a while longer.

There is an old phrase that there is a lot of ruin in a nation - especially the larger ones. Where once we could giggle at the debt levels of Greece and Italy ... but no longer. In the last year, we have seen our nation put on a path to reach their levels of national debt within half a decade. When you reach over 100% GDP in national debt, there is little you can do.

When you need to cut - you have to cut programs or people; the Greeks plan to do this,

Civil servants will lose up to two months in wages, with salaries and pensions being frozen during the three-year programme.

I have faith that our self-correcting system will stop us from going the way of Portugal, Italy, Ireland, Greece, and Spain .... but I do know this; personnel policies will have to change.

As the public sector workers have a very strong lobby, they will not be the first to feel the cut - the military will. It is easier to sell sacrifice to us.

If we are smart, we will get ahead of the curve like SECDEF Gates has asked us to do - cut bloat. That is easy if you have the right leadership willing to make the right decisions. Earlier this week, we put out some options here at the last link. You will step on some toes - but that is OK.

If we don't do it our way - others will do it another. Instead of cutting non value-added programs and priorities - everyone will get a shave. Less pay, fewer benefits. We'll be back to the '70s just in time for the "Terrible '20s" shipbuilding trainwreck. Bad combo - but one that can be mitigated with the right leadership now.

For those who were at the Milblog Conference and saw the complete dodge that the panel executed in response to my question on military personnel cost options - let me summarize them again.

If hard decisions are not made to cut numbers - the only way to address costs is to benchmark what other like militaries do. The only comparable systems out there for the USA is Western Europe. Their big differences? Retirement pay, tax status, income stream.

Sure, you can retire after 20 years - but depending on the nation, you won't see a pension until your mid-50s to 60s. Deployed in a combat zone? Congrats - but you aren't getting any tax free money. And then there is the wonderful French conversation,

"Did you hear that Andre's daughter got married last week? She married and Air Force officer. Poor thing, they will never have enough money."

Overall compensation will be less. That is unless we can cut overall numbers. We can do that. Again, look at the Admiral to ship ratio. A rough metric - but one useful in starting a conversation.

The budget pressures will not get easier. So many obligations have been made that will be hard to undo. Those of other Presidents and Congresses - from Social Security to Prescription Drug programs - are unfunded and are coming due soon. In the last 18 months, we have exploded out debt to the point that we are just a few short years from no longer being able to painlessly service that debt - and the Boomers have only started to retire now.

Two choices - uncomfortable fixes soon - or exceptionally painful fixes later. Either way - sooner or later economics and the harsh lesson of the ledger will stop the gravey train.

The military will go first - and then the guv'munt workers.

Like my father often told me, "Son, no one owes you a living - and if you rely on others for your dime, you will wind up desperate and poor."

Heck, even the Uber-Boomer Tom Friedman sees it coming,

DEATH NOTICE: The Tooth Fairy died last night of complications related to obesity. Born Jan. 1, 1946, the Tooth Fairy is survived by 400 million children living largely in North America and Western Europe, known collectively as “The Baby Boomers.” “We’ll certainly miss the Tooth Fairy,” one of them said following her death, which coincided with the 2010 British elections and rioting in Greece. The Tooth Fairy had only one surviving sibling who will now look after her offspring alone: Mr. Bond Market of Wall Street and the City of London.

Sitting in America, it’s hard to grasp the importance of the British elections and the Greek riots. Nothing to do with us, right? Well, I’d pay attention to the drama playing out here. It may be coming to a theater near you.

The meta-story behind the British election, the Greek meltdown and our own Tea Party is this: Our parents were “The Greatest Generation,” and they earned that title by making enormous sacrifices and investments to build us a world of abundance. My generation, “The Baby Boomers,” turned out to be what the writer Kurt Andersen called “The Grasshopper Generation.” We’ve eaten through all that abundance like hungry locusts.

Snort. Looks like he has been reading Salamander.