These days, everybody is talking about military personnel costs, from Sec Bob Gates to the blogosphere. Recently, Bryan McGrath put forward two ideas on controlling retirement costs.
Commenter milprof passed along a paraphrase from the defense leadership: "Plan to take it out of force structure because it sure won't be coming out of pay and benefits". Indeed, we need to think critically about force structure, which directly relates to the personnel cost issue. As a primer for the discussion, I've found Dr. Cindy Williams's defense series to be illuminating. Holding the Line is a great book on alternative force structure and a discussion on the ideas. Filling the Ranks is another great book on incentives and personnel policy.
I've touched on this topic before.
Here are a few more proposals. The way to control medical cost is to make the military responsible. If the brass has to make the budget choice between retiree medical care and weapon acquisition, perhaps they will be more sensible.
A couple of quick examples: Sit-ups are known to cause lower spinal injury and later disabilities, yet it is still the standard in the Army. With budgetary incentives the brass would be in a greater hurry to change that. Hearing loss: passing through Al Asad Air Base (Marine) in '07, I saw the junior Marines frequently worked without hearing protection on the flightlines. In the army infantry only used earplugs on the rifle range. Electronic ear muffs have been a proven technology for 20+ years, yet only the start of OIF did the military purchase Peltor and other muffs in significant quantities.
Soldier care is an empty slogan until we hold the brass budgetarily accountable.
Retirement benefits: With so many military retirees working in the federal government, we need to start "means-testing" military retiree benefits. For example, if you're drawing retirement and GS salary at the same time, you will lose retirement dollar for dollar until (a) you're getting total GS-13 lvl 1 pay or (b) only 50% of retirement pay [not counting GS], whichever is higher. And maybe we do the same to federal contractor employees, too.
Moreover, if we do away with the 20-year vesting, and start giving retirement at 10-yr mark [but who would have to wait until 62 or 65 to start drawing retirement], then many more people will opt to retire earlier, thus ending up saving Gov't money. [The present value of that 15-20 years of retirement pay (48 to 65) may worth more than the retirement pay of that 2nd replacement soldier.]
So there are plenty of ways to lower the personnel cost. The only worry is that the various Associations will not be courageous and farsighted enough to take this problem head on, and that Congress will wait until the last minute [when we're broke already] to start slashing programs willy-nilly.