Health costs eat into Defense’s budget

Marketplace Staff May 10, 2010

Health costs eat into Defense’s budget

Marketplace Staff May 10, 2010


Kai Ryssdal: Defense Secretary Robert Gates found himself in Abilene, Kan., this weekend for a speech marking 65 years since the end of World War II in Europe. The United States has been a superpower all the time since. We spend more on our military than any other country does and probably will for a while, too. But Gates said this weekend the Pentagon is going to have to start living at least closer to its means.

Brett Neely has more.

BRETT NEELY: Pentagon budget analysts have long said the cost of new weapons systems is out of control. In his speech at the Eisenhower Presidential Library, Gates said there’s another threat.

ROBERT GATES: Leaving aside the sacred obligation we have to America’s wounded warriors, health care costs are eating the Defense Department alive.

The Pentagon spends $50 billion a year on health care — more than double what it did 10 years ago. Even retired service members who could be insured by their employer get cheap government-subsidized insurance.

Todd Harrison at the Center for Strategic and Budgetary Assessments says those costs are adding up.

TODD HARRISON: So if you let that continue out into the future, eventually we have a military that’s full of soldiers, airmen, marines and sailors, but we don’t have any trucks or planes or ships for them to use.

Harrison says the Pentagon is a lot like General Motors was before that company declared bankruptcy.

GM made expensive promises to its workers that it eventually couldn’t afford.

HARRISON: We’re trading, you know, taking care of today’s retirees, as opposed to taking care of tomorrow’s front line soldiers.

Winslow Wheeler at the Center for Defense Information blames Congress. With two wars underway, he says voting to increase troop pay and benefits is always popular.

WINSLOW WHEELER: Congress has layered on additional unrequested benefits for survivors, for retirees, and it’s all coming home to roost.

In his speech, Secretary Gates said Congress’s generosity is admirable.

But now that budgets are tight, he said it may be time for troops to pick up more of their own health care tab.

In Washington, I’m Brett Neely for Marketplace.

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