What is bad for General Motors is bad for the Pentagon too

Since 12-09-05

From: Waspscpo@aol.com
Sent: Wednesday, December 07, 2005 5:04 AM
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Subject: Fw: What's bad for General Motors is bad for the Pentagon too.

Subj: The Benefits Explosion - What's bad for General Motors is bad for the Pentagon too - The WSJ
Date: 12/6/2005 11:29:40 PM Eastern Standard Time
From: p38bob@deepwell.com
Sent from the Internet (Details)

On Tue, 6 Dec 2005 13:15:02 -0800, VADM Harold Koenig USN ret, sent me this editorial from the Wall Street Journal. The day before the anniversary of Pearl Harbor. How soon we forget. Soon there won't be too many of us around to remind people of the Day of Infamy. But, I really don't think it matters because so many have already forgotten 9/11 and that is just a few years compared to the 64 years since Pearl Harbor:

http://www.opinionjournal.com/columnists/bminiter/

WSJ.com OpinionJournal

THE WESTERN FRONT

The Benefits Explosion

What's bad for General Motors is bad for the Pentagon too.

BY BRENDAN MINITER

Tuesday, December 6, 2005 12:01 a.m.

Between Medicaid and Medicare, there hardly seems to be a health-care benefit that isn't headed for a meltdown. The one exception might have been Tricare, the military's health care program. But leave it to Congress to screw that one up too.

Tucked away in one of the last pieces of legislation Congress will send to the president's desk before Christmas is a provision to turn Tricare into a broad-based entitlement for all reservists. This little gift to Hillary Clinton and those who want to enact universal health care one piece at a time passed the Senate at the behest of Republicans Lindsey Graham and John Warner. Neither seemed to be troubled by Sen. Clinton signing on as the lead Democratic sponsor or by pleas from the Pentagon that this expansion could doom Tricare by overwhelming the system with too many patients and forcing the military to pay for those who already have health insurance.

But then, Tricare is only nine years old and it has already seen two large expansions. The first was "Tricare for Life" in 2001, which allows retired soldiers to stay in the program even after qualifying for Medicare.

The second was "Tricare Reserve Select," which came online this year and allows reservists called up for full-time service (e.g., to go Iraq) to buy into the program 90 days before reporting for duty and for extended periods after returning.

Thanks to these expansions, today Tricare covers some nine million people, and its burgeoning costs threaten to put the Pentagon on the same path as General Motors--only for the military, it could lead to trading away airplanes and other war necessities for new entitlements. And this for a program created to provide health care for "free" to full-time soldiers and for modest fees to retired soldiers with decades of service.

New entitlement spending "for the troops" might be one cost of war. But in this case, it's hard to justify a hefty price tag for part-time soldiers, many of whom already have health insurance at work and all of whom are covered by Tricare while on duty.

Tricare isn't insurance, the government pays for every doctor visit and prescription and collects no premiums, only a small annual enrollment fee. Thus enlarging the program also enlarges the claim on taxpayers' wallets.

Expanding it to cover seniors has helped fuel a 500% increase in prescription drug costs since 2001.

The cost of Tricare Reserve Select hasn't yet hit the budget, but the tab for the entire program has been steadily rising and is now $19.8 billion, up from about $13 billion a few years ago. Opening it to all reservists will add an estimated $4.6 billion over the next few years.

One problem is an incentive to overuse or abuse the system. Congress hasn't raised annual fees ($230 for an individual and $460 for a family) since the program began in 1996.

With each passing year Tricare becomes a cheaper alternative to health insurance. Some employers even pay eligible employees to enroll because that's less expensive than putting them on the company plan.

By 2011, an estimated 87% of military retirees under 65 will be enrolled in Tricare, up from 64% today. At about that time 75% of Tricare's budget will be eaten up by retirees. Soldiers actually fighting the war on terror will get whatever is left.

Instead of addressing this issue with reforms that would prevent Tricare from consuming other parts of the Pentagon's budget, Congress has been on a spending binge. Over the past four years, Congress has added about $90 billion in personnel benefits to what the President has asked for in military spending.

So in the budget now being debated on Capitol Hill the Pentagon will spend almost as much on personnel costs ($129 billion) as it will to buy and design the goods it needs to fight a war ($148 billion).

This year alone the military will spend about $28 billion on benefits Congress has added just in recent years, which is more than it will spend to buy aircraft and ammunition. Some of the new spending is defensible and goes to beef up survivor benefits, special compensation for combat disabilities, active-duty pay and more.

But the vast majority goes to retirees to fund benefits not promised to them when they enlisted (see this chart from the House Armed Services Committee). And this is in addition to more than $20 billion the Veterans Administration spends each year.

Thankfully, there is some hope for fiscal sanity when members of the House and Senate meet in conference to work out their differences on the defense authorization bill. The House version of the bill doesn't include the Tricare expansion, so there is a chance to sideline the new entitlement if House members dig in their heels.

There is a certain fairness to expanding retirement benefits and ensuring reservists are healthy enough to ship out to Iraq and taken care of once they return. Soldiers have a tough job, and no one doubts they deserve excellent health and retirement benefits. But the numbers show that Congress has already given them that and more.

Mr. Miniter is assistant editor of Http://OpinionJournal.com . His column appears Tuesdays.
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Contributed, YNCS Don Harribine, USN(ret)