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tv   Military Retirement and Compensation Changes  CSPAN  February 7, 2015 12:33pm-2:59pm EST

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efresh now. >> realistically, when my to come up with a refresh document? otherwise, it is an " alice in wonderland" one. >> every year, we have asked for something higher than sequester and every year we have gotten something higher than sequester. we have not gotten everything we asked for but we believe it has been useful and productive. it is the right place to start. >> the vice-chairman said it is a strategy. this is what we need to defend the country. >> we have time for just two more. >> if you talk about the airspace initiative and if there is a need for a new type of fighter with capabilities? why continue to buy the f-35?
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>> the undersecretary can do better justice than i can. there are classified and unclassified elements to it. i would say we are talking about pretty far down the road. not as an alternative to the joint strike fighter but what follows the joint strike fighter i don't think there is a conflict between it. i was mr. kendall's battle buddy. >> you know what he says. it is be on fighter aircraft. it is how to dominate in air combat. there is a whole list of things about driving and developing technology for 15 to 40 years down the future. if we don't do that today, we
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will not stay ahead of our potential adversaries. >> thank you. i have a question about strategy and the challenge posed by emerging china. can you tell us anything about -- in this project -- the strategy? >> the specific strategy? we don't use a budget exhibit which may be why you asked that describes which items are part of the strategy in which are not. let me describe some of the major things that have been consistent in our budget. we first describe this in our 2013 budget, something we have been pursuing for many years. we have an pretty consistent on it. shifting the assets we have from the naval assets to being 50-50
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toward 6040, that continues. one of the insistent moves that we have had, anywhere in the world, have been at camp humphreys and the government of japan from okinawa to guam. we have progress to report on that front since mr. hill presented his budget with general ramsey in terms of the landfill permit and other political progress and environmental studies being completed. many of the assets we described -- we went quickly through some of the things we're going to buy in this budget, the submarines their craft -- the aircraft, the long-range bomber, applicable worldwide. >> i think you hit the high points. we have had a robust to
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dramatic effort -- diplomatic effort. we are going to remain very engaged. >> what i neglected to mention -- >> thank you. >> this weekend's newsmakers will focus on several military topics, including the pentagon's budget the fight against isis, and the nomination of arson ashton carter. our guest is the top democrat on the armed services committee
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adam smith. >> you go back to the budget control act of 2011 when it said that a certain amount of deficit savings had to be achieved or sequestration would happen, we have achieved far more than that amount of deficit savings. the goal of the budget control act has already been achieved. unfortunately, the way the law was written, you had to specifically did before the end of december 2011 or became a law. sequestration doesn't make any sense. for defense or a domestic budget. it is having a devastating impact on infrastructure. how to get around sequestration at this point when there is no consensus? republicans continue to insist that to insist that number one, they will not get rid of it and to, any savings
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that comes from sequestration has three replaced by other cuts and spending programs. the second problem is, sequestration is there and we are living with it. the pentagon is scrambling, trying to figure out how to put together a sensible strategy and budget. they come up with these ideas and you mentioned a couple of them worried there is rearranging the -- there was the idea to lay up several marine corps and navy vessels. idea after idea after idea. congress fights every single one of them. my goodness, if you want to move like five c-130s out of the base somewhere, a local member of congress goes crazy and tries to block it. if are not going to end sequestration, we are also going to tell them that they can make
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cuts, and lastly, we not going to offer any reasonable cuts as an alternative. what that does is it lines up leaving the pentagon with no choice but to cut readiness. >> you can see all of our interview with represents an adam smith tomorrow at 10 a.m. and 6 p.m. eastern here on c-span. the seven armed service committee looked at military retirement pay. their proposals include scaling back pensions by 20% walk while conserving -- the commission has also suggested the creation of an investment account similar to a 401(k) plan. the hearing is just under two and half hours at the end we plan to get your thoughts on the issue by phone, facebook, and twitter. you can look at that by the :00 eastern -- 3:00 eastern.
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>> good morning. the committee meets this morning to receive testimony on the commissioners of the military compensation and retirement modernization committee. i went to thank each commissioner for your diligence and hard work over many months to develop the recommendations he will present to us today. our witnesses are the honorable larry pressler, stephen boyer michael higgins, general peter to rally, and i understand that bob cary is snowdened in in new york.
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and retirement benefits. as we do, and courage the members of this committee and my colleagues in the house and senate to keep an open mind. we are also eager to hear from any military or other organizations that have constructive ideas to improve the current system. no one has a monopoly on good ideas and we all come to this debate as patriots who love our nation's armed forces and went to improve the lives of all those who serve and their families. we pledge to keep their well-being foremost in our thoughts as we deliberate the commission's recommendations. but upholding our sacred obligation to them does not mean resisting change at every turn. we must not strength from an
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opportunity to create a modern system of retirement benefits that would provide greater value and toys for those it serves. congress established the commission to conduct a review of the military compensation and retirement system and to make recognitions for modernization. we asked them to develop recommendations to ensure the long-term viability of an all volunteer service and improve the quality of life for service members and their families to ensure successful recruitment, retention, and careers for those numbers. and three to modernize and achieve fiscal stability. the military's current compensation and retirement systems are decades old and maybe less than suitable for
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modern military members. we have a 70-year-old military retirement system and try i-care was implanted in the mid-1990's. both retirement system and tri -care were appropriate for the time but times have changed. we are here to learn how to make benefits better for the military members and families of our current forces and forces of the future. moreover in a world of increasing threats we count on young americans to serve. as this committee evaluates the commission's evaluations to modernize, we must carefully consider how any changes will motivate young people to serve
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in the 21st century. in a constrained fiscal environment, we must consider how best to achieve the proper balance between paying for military modernization and readiness, effective equipment and advanced training that will enable our military to respond in moments of crisis and keep our citizens safe. we can meet with of these and we must. i have asked center graham to hold a series of hearings in the near future to explore all of the commission's recommendations and greater -- in greater depth, especially in areas of retirement and health care. i think him and -- i think him on his leadership.
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their recommendations come to us unanimously after nearly two years of hard work research, and debate. i encourage the commissioners to speak freely without reservations, some of them i know will do that. thank you again for your extraordinary efforts. senator reed. center carrie arrived -- senator kerry arrived. >> thank you mr. chairman. let me join you in welcoming the witnesses and thanking them. i think it is incredibly important to -- i think it is extremely important to have this meeting today. this comes after yesterday the budget for 2016 was submitted. while we await the full details, there are a few immediate notable requests. first, the request for $35
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million above the control act -- $35 billion above the control act spending cap. it was 499.8 billion dollars. it represents no growth. they have requested $35 billion more. it shows how deep the funding was overrun. particularly in the modern training accounts. the department submits these proposals last year. congress reported some and elected for others to have this recommendations. many members on both sides of the aisle have been reluctant to support compensation reforms requested by the past several years while this commission deliberate and suggests we sit way until this report was submitted. this is the context in which today we hear from this very distinguished panel. these issues are of paramount
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importance to the nation and military members and families. we charge the militarily fighting and winning the nation's wars. implicit in that responsibility is recruiting and training the best in military service. and ensuring their trained and equipped for the missions and arduous duty we ask of them. usually when we talk about caring for men and women in uniform, discussion is focused entirely on their pay. but these other elements are equally important. if we want service members to a accomplish the mission and come home home alive. it is important to save the goal of this commission is not to save money. it is to strengthen the all volunteer force. it is to modernize a retirement system that is 70 years old. and importantly, it is to ensure that service members and their families enjoy a quality-of-life and service that will enable the services to recruit and retain the best men and women needed to meet national defense objectives.
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under the current budget situation, i fear we had quickly -- are quickly pricing ourselves out of having a military sufficiently sized and adequately trained to meet the myriad threats we face. as we heard last week, the budget caps currently do not allow services need national defense objectives. these recommendations are enacted and do provide savings. such savings should be used to address structure and we invest -- re--invest in modernization. finally, i would like to highlight one inequity of the current system. only 17% of all service members will leave with any retirement benefit under the current system. officers are more than twice as likely to leave with these benefits. even while enlisted personnel have always, including the most
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recent conflicts, are the vast majority of casualties. under these recommendations, as many as 75% of all service members will leave the services with some retirement benefits even if they do not serve the full 20 years on active duty as most service members do not. >> i would like to thank all the members of the panel. they took their valuable time and effort to bring what i think is an excellent comprehensive report to which, i hope, will serve as guidance for us as we move forward with much-needed reforms. i think all of you again. mr. chairman, we are ready to listen to your statement. thank you again for your chairmanship. >> thank you mr. chairman. distinguished members of the committee. my fellow commissioners and i
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are honored to be here today and we thank you for the opportunity to testify. we also thank you for your support of the commission in the last 18 months and leadership in protecting service members compensation and benefits. as chairman, i would like to request that our report be entered into the record. >> without objection. >> their unwavering commitment to excellence in the service of our nation and never been -- has never been more clear then the last 13 years of war. as commissioners, we recognize our obligation to craft a valiant compensation system that is relevant to contemporary members and able to operate in a modern and efficient member. manner. we are unanimous in our recommendation. to strengthen the bond -- the foundation of the force and ensure national security, and truly honor those who served and their families to support them. now and into the future. our report is informed by our
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own experiences with military service and public policy, and as public servants, however our recommendations are most informed by the insides of insights of service members, veterans, retirees and families. the commission and staff visited 55 military installations worldwide. they listen to the views and preferences of hundreds along the way. more than 150,000 current and retired servicemembers provided thoughtful responses to the commission's survey. we developed a working relationship with more than 30 military and veteran service organizations. additionally, the commission received input for more than 20 federal agencies, several department of defense working groups, research institutions, private firms and not-for-profit organizations. the result of this process include 18 months of comprehensive independent research and analysis, 15 unanimous recommendations that will improve access, quality
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and value within the compensation system. i will work to represent the most comprehensive review of military commendation and benefits since the inception of the volunteer force. consistent with the mandate, we reviewed each program to determine if and how modernization might ensure long-term viability of the all volunteer force and enabled the quality-of-life for service members and their families and achieve a greater fiscal sustainability for compensation and retirement systems. our recommendations do this and more. improving choice, access quality, and value within the compensation system. our retirement recommendations propose a blended plan that extends retirement benefits from 17% to 75% of the force, as ranking member reed has already stated. it leverages the retention power
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of traditional military to maintain the current profile protect assets of servicemembers who retire after 20 years, and reduces annual federal outlays by $4.7 billion. our health benefits recommendations improve access choice, and value of health care for active duty, reserve, and retirees. while reducing outlays by $3.2 billion. our recommendations on commissaries maintain grocery discounts while also reducing the cost of delivering benefit s by more than $500 million annually. while these are significant, the commission does not engage in cost cutting drills. in fact, our recommendations to improve joint readiness service
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, members financial literacy support families, and transition assistance, require additional funding to ensure program efficacy. in summary, our recommendations represent a holistic package of reforms that modernize the structure of compensation programs to adjust the level of -- rather than adjust the level of benefits delivered to servicemembers. they sustain the all volunteer force by maintaining or increasing the overall value of compensation and benefits for servicemembers and families. they provide additional options for service personnel managers to design and manage. this approach creates an effective and efficient compensation of benefits system that after full implementation saves taxpayers more than $12 billion annually. while sustaining the overall value of compensation benefits of those who serve, and have served, and families to support -- who support them. my fellow commissioners, i thank
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you again for the opportunity, and we're honored to present unanimous recommendations. we stand ready to answer questions. >> thank you very much. i'll have a couple of brief questions because i was briefed by you already. if any of the members of the committee wish to respond to any questions, just signifying we -- signify and you will be recognized. 2 brief questions. how do you know your recommendations will provide the structure on the issue of the proposed compensation system? right now, there is an incentive to remain for 20 years. in this present plan there will be retirement compensation literally throughout.
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how does that -- do we have incentive for people to remain in for a career or not disincentive? >> we do indeed mr. chairman. in our recommendations, we do a blended plan that we already have defined benefits. we added a defined contribution to make sure that we can do the retention or provide for the retention if they wanted us to. i'm going to have commissioner higgins to talk to the specifics of that. >> thank you mr. chairman. and chairman mccain. the system we have devised includes the incentives, flexibility, and choice that people want in the force. we feel at its essence, it is going to be a very powerful retention tool.
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when we look forward at how this system will operate over time, our belief is supported by our analysis. in this case it was a model which was the dynamic retention model used. we believe this will -- our proposal will exactly model the current force profiles and we will have the tools within it, including a continuation page, thrift savings plan, which is currently not offered today. it will include the tools that will draw people through the 20 year career, much like the defined benefit as today, and into a large extent because defined benefits is retained under our proposals. about 80% of that.
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these new tools and flexibility along with defined benefits, we believe we will operate very effectively and the modeling we have done will support that. >> on the issue of health care how does this incentivize beneficiaries to seek most cost-effective means of getting health care? >> mr. chairman, thank you for the question. it was very important to us as we took a look at the programs that are providing benefits to our servicemembers. as we travel across the country and talked to servicemembers and families, listening very carefully to the conversations in terms of what people said they wanted, they preferred
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access and value with the things -- were the things that kept coming time and time again. and i'm going to ask commissioner boyer to speak specifically to that question. >> thank you chairman and members of the committee. cost effective means, well, i look at it from two ways. one is to the government another is to the family. when we looked at this, how can we achieve both. presently under tricare we don't because there really isn't sufficient unitization management tools. it's a very limited network because of the very low reimbursement rates and how the tricare contractors actually recruit providers into the networks and pay below, below medicare rates. so with regard to the families we said, you know, can we do better? not only for the government with
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regard to the cost but also with regard to the families and improve the quality of care, give them the choice that they want and get better access? and we found that if we, if we if we move to a system whereby we have what we called tricare choice, which is very similar to a model whereby they select from available plans in a particular geographic region, it does call for more empowerment of the individual. we're asking that, that that individual is able to select a plan that best fits their family. and when we do that, the plans themselves that are then administered, excuse me, managed and administered by opm, those plans will have effective management unitization tools and it becomes more cost effective not only to the families but in particular to the government chairman.
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>> thank you. senator reid. >> thank you very much, mr. chairman. let me direct this question to general chiarelli. but anyone else who would like to respond. part of your recommendation is also strengthening the military treatment facilities, the traditional facilities that have to be ready to deploy if we deploy. and part of it, as i understand the proposal, is that they would be part of these health care systems. can you come it from your perspective as former vice chief on this whole issue of strengthening the military medical infrastructure along with giving individuals more choices in the health care? or if someone else wants to. >> no, i'm more than happy to. >> yes, sir. >> i think we're in a death spiral right now from the standpoint of they just don't have the number of reps that they need to keep their doctors up to standard. and this is a way that we can bring into our military
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treatment facilities, the kinds of cases that contribute to battlefield medicine. that's what makes this system so different than any other system. we need well-trained doctors not only to treat patients in hospitals but to be ready to deploy wherever we send them and provide that same kind of treatment on day one of the conflict. this will allow us to attract into our military treatment facilities, the kind of cases that will keep those skills up. and are so absolutely crucial to our wounds rate in the last 14 years of war. and it will do that on day one of the next conflict. and i really believe that this is something that is going to ensure that we have that combat medical readiness capability we need moving into the future. and if we don't do it, we're going to have a very, very difficult time being able to provide that.
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>> so, this is not just about the benefits to the individual military personnel, this is about the overall viability of the health care system in the military? >> absolutely. and that's one of the reasons why we look so strongly at a readiness command. because we really believe there's going to have to be somebody who is keeping an eye on this system to ensure that the services are doing the kinds of things that are necessary to keep those mtfs viable training grounds for our physicians. >> let me direct this to the chairman. you can decide who is appropriate. but i'm sure i'm not alone. but when we mobilize national guardsmen and women in -- and reservists, those are the ones that sometimes have the most differenty getting into the health care plan, making sure that their family who is not close to a medical facility, in fact who may be far removed. it seems to me that this
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approach that you're suggesting, choosing among a set of private insurance plans would be much more easily accessed by reserve components. is that accurate, mr. chairman? >> that is correct. that is correct, senator reid. one of the things that happens with our proposal for the reserve components is anytime they're mobilizing or being activated, the family members normally will go without coverage. there is a. of time -- there is a. -- there is a period of time that they just don't have coverage when that happens. this will solve that problem for them because they won't have to worry about losing -- going long periods of time without coverage of health care when the reserve component member activate and deactivate. >> senator reid, i mean, that's an excellent question.
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that strategic reserve that we built over time really wasn't prepared operationally. we know that. you funded it. you did a lot of things to bring it up, round it out and make the total force that bet ner the 13 years of war. but with regard to the undesirable choices that the families had to make to be part of the operations, you're absolutely right, senator. so when we looked at this and said, with regard to that total force, even though we really pressured the chiefs, do we want an operational reserve versus a strategic reserve? they really do. they don't want to call it that because they don't want to fund it. but what is realistic when we talk about the war after next or how to fund the war after next and caring for the people, when it comes to the health care, that benefit needs to be for the total force. now so for the reserve components, the continuity of care that your question goes to, it is so disrupted for the family. if we say from day one when you join the reserve component that health care is part of that benefit, you can select the type
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of plan that best fits your family. your premium is 25%. we capped it at 25% for the premium. then there's no disruption in the continuity. they like their local providers. and then if they're on for a longer period of time, they've come, gone on active duty, they're part of the contingency operation, then they go on to the active duty plan, receive their basic allowance for health care that takes care of the premium for that of their family. >> thank you very much. >> senator reid, if you don't mind, i would like to have another member of our commission spoke speak to that as a reservist, please. commissioner carney. >> thank you. mr. reid, those of us who lived in sort of rural areas and were on reserve duty. it wasn't tricare exactly. it was more like try to find care. and this takes care of that. what we're offering now is a
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system that provides a network that is robust enough to care not only for the member when they are on their civilian side, but also for the families when the member is deployed. that's exactly what we're trying to do here and do it in a way that is fiscally sustainable. medical readiness are critical as sects of the overall readiness mission. if we can do this with a tricare choice system, then i think this is a good step forward. >> thank you very much. >> thank you. >> thank you, mr. chairman. >> to my good friend steve buyer who i used to sit next to, i agree with you except i'm more concerned about today's war than i am the war after next. right now is when we're having the problems that we're having. and we had a hearing last week. we had george schultz, madeleine
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albright. and they reminisced about what our capabilities were at that time, and what is expected, and even read the charge that president reagan had made at one time in determining what a defense budget should be. the reason i'm saying this is i look and i agree with senator reid who talked about the inadequacy in meeting the threats. i read that director clapper when he says looking back over my now more than half a century in intelligence, i've not experienced a time when we've been beset by more crisis and threats around the globe than we are right now. that, in light of the fact that we have the force structure problems that i'm very proud of all of our chiefs. the general has been before us and all of the rest of them, talking about how significant this is and it's something that's unprecedented.
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the reason i bring this up we've got a quality group here, mr. chairman. and i just think after this is over, you should reconvene and get into this thing as to the current threat that's out there and the inadequacy that we're facing. it's one thing for the chiefs to come forward and talk about what's going to happen with sequestration. but when you folks, with your backgrounds come forth, to me that gives a different sense of meaning. and i would hope that we might consider that. i was a product of the draft and look at things a little different than than others. in fact, i was one that was not at all optimistic that the all volunteer force would be the quality force that it is now. i was wrong. although there are some advantages to the draft at that time. i think that when you are examining the charges that were given to you, you would say that -- i would ask you the question. what have you decided motivates
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the young people to serve in the all-volunteer force, and then, why are so many of them leaving? what is -- if you could zero in on two or three reasons as to why they don't stay on. you know, quite often we go back and talk about how much cheaper it is for us to retain than to retrain. the extreme example is to get a pilot to the point where they can go an f-22 quality and it's -- the reenlistment bonus is 250,000 but the cost to retrain is $17 million. now scale that down to whatever forces that we have here. what is the reason that, major reason that they come in and then they leave? >> thank you for the question, senator. we spent a lot of time looking at that, that specific issue that you address. it's a very important one.
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as we think about how to modernize the compensation programs, compensation programs for tomorrow, we are thinking about exactly what is required for the military to be able to recruit and retain people. and we have to think about the way the new generation, that they value and prefer. those are the kind of things that we listened to and heard as we talked to people. as it was already indicated to today, 83% of the enlisted force actually wind up leaving without any kind of retirement benefits, which is why we made the recommendation that we did to be able to extend some of the retirement benefits for those service members who will serve and then move on to do other things from 17% to 75%. and i'd also like to point out
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that a couple of things that we were told, specifically by the service members is that there's -- they're concerned about the service to their country and the gi bill. those are two things that were very important to them in terms of why they would come in, what they were looking for. get an education benefit, be able to take advantage of that which is a strong recruiting tool, and then move on to something else. >> very good. thank you, mr. chairman. >> thank you, mr. chairman. thank you all for being here. i guess this would be to anybody who wants to answer the question. but my thing is, is that it's a very difficult position you're being put into and we all are because i don't think anyone questions the commitment the service people and all people in military have to the united states of america. i know in west virginia we feel very strongly about that, people willing to take a bullet. i've always been able to explain when i was governor, when they would explain or complain about
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whether it be our state police retirement or our fireman's retirement, they're willing to put their life on the line for you. people are willing to pay a higher price for that but they still want it to be fairly comparable. do you all look at that from the standpoint -- in most all state budgets or municipality budgets, the firemen and police pensions are out of whack, they're under water and they're trying to get them back. there's going to have to be some sacrifices to the point ma we have to recognize the sacrifice they're making for us. how do you balance this out? what would i tell the national guardsmen of my state that have been deployed three and four times and we're looking at changing some of the compensation and what type of literacy training are we giving them to help them on their retirement? and why do we have so many that leave at ten years of service in the military to go into private contracting for the extra pay overseas in afghanistan and iraq? what's the magic number of ten years?
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i find most of our soldiers that leave our military that we've spent an awful lot of time and energy training them, leaving going for the higher pay. can you give me that magic thing at ten years what they lock in and what gives them that freedom to do that? whoever wants to chime in on this. >> yes, yes, yes, senator. senator, thank you very much for that question. we certainly have spent a lot of time talking about that. i'm going to ask commissioner kerrey, bob kerrey to share the specifics of that. >> you are? [ laughter ] >> well, first of all, i think you would be having a difficult time retraining men and women to serve in the military had this congress not made all of the changes that it made since we've been fighting this war for the last 14 years. i mean if you just look at what you've done with pay and compensation, it is now better than market. and it needs to be. the changes that have been enacted by republicans and democrats have not been given enough praise in my view. had nose changes not been done
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given the stress on families today, you know, i'm a prr proud -- i'm a very proud geyser father, i've got a 13 years. if we think about having to move our son once every four or five years, it's a traumatic thing inside of our household. that's way more stability that -- than anybody in the military gets. so the stress on the families has increased over the past 14 years. and thanks to congressional action the pay and benefits are quite strong and they need to be in my opinion, otherwise we're going to have a difficult time retaining men and women. despite the thing the second thing that's happened, the american people now are quite proud of their military. and they're quite confident that they're getting the kind of support that they need. but americans are a lot more patriotic and they care deeply about the men and women who are serving. and i think that attitude make as big difference.
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to people's willingness to serve. i would say the combination of patriotism and the combination of paying benefits, those two things together have made a big difference. when i looked at the recommendations, senator, that we're making, the two big questions that i ask are, are we keeping faith with the men and women who have served? and those of you who have, you understand you give up your freedom. if you get ordered to do something or go some place, you do it. so are we keeping faith with who those have served and have serving? i answer emphatically yes. secondly to the recommendations that we make, will it enable us -- they will enable us to continue to recruit and retain. and i answer yes. it is something that you constantly have to pay attention to. i think there's a qualitative difference in the pensions of the fire and police level. as you know, those firemen can get a little on ray, and those
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please can get a little ornery and they don't have a commander in chief that tells them exactly what to do. i've got ordered report to so and solo location, i say yes sir and go. in negotiation with the fire union and the police union, you have serious negotiations. i think there's a qualitative difference between the relationship of the american people and the men and women who have signed up and sworn that oath, given up their freedoms and even in training kpesh sizes put their lives at risk. >> well, it is not a hard sell. in most states around the country are very committed to our military force and they want to make sure they're compensated and takening care of. they want to make sure we're doing anytime a sufficient manner. if we're giving them the literacy training to make decisions. >> well i would say, senator, i think the moment that ends, no matter what you pay men and women, they're not going to sign up. the moment that that attitude changes, as it was in the 1970s, it's going to be difficult to recruit people to service.
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>> on our indian reservations, a lot of people serve three or four years and very rarery go -- and very rarely go for a career. i had a difficult time getting our native americans to go to the military academies. but it seems that aside from whatever we do, there is a tradition in our country of a lot of people wanting to serve three to five years. of course we need those people. and that's a particularly true in rural areas in states such as mine and with native americans. >> thank you, mr. chairman. >> thank you, senator mccain. mr. chairman, you've mentioned flexibility a couple of times here in your statements. and in the report it says that the force may benefit from a flexible retirement system that incentivizes them to remain in service longer than other occupational specialties when with regard to doctors, cyber personnel. do you have specific proposals?
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i'd like to dig down a little bit into this. do you have any specific proposals that the commission recommended? and do you see each service setting a different requirement there? and if so, do you anticipate any problems? do you see competition among the services? >> thank you very much, senator for the question. i'm going to as the commissioner to respond to the specifics of your question, first. >> thank you, mr. chairman. senator, as you know, each of the services has different types of benefits to keep them on. for example, nuclear engineers get special bonuses in the navy and so on. our proposal does not tell the services how they need do it. what we're trying to do here is give them maximum flexibility so that if there are, as you
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pointed out, certain specialties that, frankly, like doctors, you actually get better with more time in your practice, then the services up front can decide that they want to recruit an individual and have that individual stay on longer than the normal term. essentially this is -- but it works both ways actually. it's not just to keep people longer. they can sign up with less. we wanted to give them mechanics -- maximum flexibility, so that at the same time we're giving the individual choice, we're giving the services flexibility. again it goes back to the question about what kind of a force do you want to shape? the services are the ones who know that best, of course. >> when you looked at the surveys, were there any issues identified that the commission did not make recommendations on? i guess i'm thinking specifically of the housing
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allowance and that has been a big issue in the past. the president has made proposals but yet it was not addressed by the commission. are there other instances there? and really why didn't you address the housing? we hear about that a lot. >> senator, thank you so much for the question. we indeed took a very, very hard look at the housing -- at the housing bah and b.a.s., and we actually looked at the pay table. we looked at the structure of all of those programs. and we clearly asked ourselves three questions. number one, were these programs delivering the benefits that they were intended to? number two, were the benefits being delivered in the most cost effective way possible? and thirdly, could this commission design a clear path for modernization to those programs in terms of improving those programs.
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and after looking at those, we did not feel that we could design a clear path to modernad -- modernization for those programs and instead we would -- could provide a much better benefit to the service members and do it in the most cost effective way by making the recommendations that we've made. >> would it be fair to say that commission supports with what the congress did then with the housing allowance? or do you support the president's proposal? >> senator, again, thank you for the question. i'm going to ask commissioner higgins to respond to the specifics of that question. >> thank you. >> thank you mr. chairman, senator. clearly b.a.h. in our view is operating effectively to provide the housing that our service members need. there are a number of the elements of the compensation
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system that drew our attention very dramatically, that we did not elect to mettle in, if you will. because we believe they are operating effectively. others would include the pay raise mechanism. the pay table itself we believe is operating correctly. special pays and allowances. and b.a.h. i think along with that. now on each is if you believe that you need to save money then obviously the congress could act to produce programs. and that is your choice. we were targeting our objective was modernization. and systemized modernization where we go into the structure of a program. we do not believe that the structure of those programs were deserving of modernization. if i could go back to your other question as well, senator.
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the service chiefs ask for flexibility. one of the primary complaints about the retirement system as it exists today is that it is overtly rigid, inflexible. service chiefs implored us to seek opportunities for greater flexibility. and we delivered that section you are referring to. are there some potential frictions between the services? would it cause some concern? do we believe it is going to be used instantaneously? no. there will be uncertainty. and i think that will keep that proposal in check, perhaps for years. but there will come a day when greater flexibility in the retirement system will be needed.
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and that provision will be there to deliver that to the managers. >> and it would also allow the services then to compete for the men and women that they need to perform in different areas correct? >> always a difficult issue. controlling competition between the services. the service cultures are indeed incredibly strong. you always want to endeavor to limit competition and create systems that operate for the best interest of the total force. but there will be some insecurity there. and i think that will cause this, as enticing as it may be to some people inside the pentagon, you know, whether or not it rises to a level where it's implemented is a serious question that is going to take time to resolve. >> thank you, sir.
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thank you, mr. chairman. >> thank you, mr. chairman, for this hearing. and thank you all for your very hard work. one of the most important considerations for me in terms of potential changes to benefits and compensation is that the approach will holistic and we ensure the lower enlisted troops and families do not disproportionately feel the impact. would you please walk me through why you believe this is holistic and how it will impact lower troops and their families? anyone can answer. >> thank you senator for your question. commissioner chiarelli if you would please respond to the question. >> i think we've done everything we possibly can to make it holistic and apply to everyone. we've got two charts that go into the retirement. one listed e-7 to show his retirement under the current system. and what it would be under the new system. and i think you can see that it is clear that he or she would do much better under our proposed
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system than they would under the current system. we have one for officers that shows the same thing. i think -- and i don't think just the retirement system you should look at at. i think you should look at what we're doing with healthcare. we're giving them the ability in healthcare to go out and immediately go to see a private provider that is in their insurance network. or if they would rather choose to go to the mtf because that's where they feel they can get the best care, they can go to the military treatment facility. today, under most of the tri-care programs it takes a period of time to get that referral and it's to 30 or 40 -- and it's up to 30 or 40 days if you can find a provider. this applies not only to officers and warrant officers
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, but it applies to our enlisted soldiers. so i think everything in our recommendations was geared to ensure that whatever we recommended was holistic and applied to both officer and non commissioned officer in the same way. >> in a holistic sense we included exceptional family provisions and child care issues in our report, which normally might not be in such a report. but a lot of the lower ranking service members have a very hard time with waiting lists on the child care and so forth. so we tried to be holistic in that sense. >> ma'am, holistic was not only of the moment we were very reverent to the past of the holistic traditions in heritable. >> thank you. >> if i could. >> please. >> one area we've not talked about. first of all you completely destroyed me because i tried to get the chairman and the commissioners to stop using the world holistic -- >> sorry. >> obviously i failed in that
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effort. among the other things you really need to think about is all these men and women at some point are going to transition back into the civilian life. and the changes we're recommending in the healthcare side and on the retirement side make it much easy yesh do that. there isn't an abrupt differential between what we're recommending and what the civilian population is doing. >> to continue along that line i'd love to understand better the healthcare proposal. i understand that part of the recommendation is the create base allowance to cover the cost of premiums and the co-pays. so how do you account for families with extraordinary needs? will they pay more? and i'm especially concerned about families with the special needs dependence, childrens with special needs specifically. >> senator, thank you for the question. we spend an inordinate amount of time talking to families across the country about the challenges they had with exceptional family members.
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and i'm going to as commissioner to please speak to that. >> all do the health care and -- i will do the healthcare and then the extraordinary families piece. to the basic allowance for healthcare you are correct. we want to -- in order to take that determination we'll -- it will be decided by o.p.m. and they will take the average of the premiums of the plans selected in the prior year and also look at that toe come one -- look at the co-pays and the deductibles. >> and do they help families navigate it? because this is a new system for them. >> you know, part of our recommendations with regard to literacy training, literacy is not only for financial literacy. because now as we move into the thrift savings plan and
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government contribution, there is a financial literacy piece. but there is also a health piece to help people navigate. and this really is calling for more empowerment of the individual. it goes to that opening question that mr. higgins really opposed to all of us on day one. we're very used to our military being paternalistic. so we as look at the what's happening in society and how dynamic these -- this -- i want to say the new generation is not that they are the selfie generation. they are the generation, they want greater controls about themselves. they watch their peers making contributions into to 401(k). how about me. i'm in the military, i want to participate too. we are educating them of how important it is to make the best plan for themselves and their family. when we give them the financial
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literacy and the health literacy, when they leave the service it is a better individual and it is a better family. >> senator i'd like to have commissioner higgins follow up on the latter part. >> my time is expired. it is up to the chairman. >> that's ok. go ahead, mr. higgins. >> thank you. chairman mccain. senator, we had a great deal of concern about exceptional family members and how we would care for them. we have a proposal, of course, that would add a new level of benefits for those families. and we would -- one of those areas where we would increase costs. so we were not all about cut cutting. we were about making life better for service members. in addition, if you had a catastrophic situation in a family where you had extreme costs that was related to an exceptional family member, there is also a fund that we would propose to ensure that those out
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of pocket costs did not get excessive. and we plan on that for about 5% of the people. so there is help there. >> senator ayotte. >> thank you chairman. i want to thank you for the hard work and thoughtfulness you put into this commission and for having this important discussion with us. i do have to say today i'm walking back and forth between this committee and the budget committee. and as i look at where we were senator kerrey, to use the word "holistic" in a way that i think the point needs to be made here, is that if you look at where we are. for example the president's budget that was just submitted. by 2021, our interests costs what we're paying in interest is going to exceed the defense budget.
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and as i look at the work that you have done, bipartisan commission. and we look at what the biggest drivers in our debt are overall looking at the big budget. mandatory spending, programs that we need to have similar looks at. medicare, social security. they are very, very important programs to people. i appreciate that you have done all this work. i think we're looking at our military stepping forward first in making many changes. and i think that we need to look across the entire budget to, -- too, because where we are, we are going in 2016 to defense budget only 3.1% of gdp and 14.3 percent of federal spending, which is the bottom of historic range since 1950. and the reason i want to put that in perspective in the big picture for everyone, we look at the sacrifices that our men and women in uniform make. the separations from family.
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the -- obviously the sacrifices they make putting their lives on the line. all of that. and i think that the work you have done is really important and we look forward to delving into it more deeply. but i hope in the bigger congress as we scoop into the -- scoop between here and the budget committee, today that we look at the big picture and we do not get into a situation where we continue to shrink the other nation because we o won't take on the bigger challenges and it would be great to see a group like you look at the bigger picture as well. i just wanted to say that and thank all of you for your work. in terms of the specific question, i wanted to follow up on the retention issue. because that is important to all of us in terms of keeping the very best military in the world and wanting our best and brightest to join the military.
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as we look at your proposals on recruitment and retention. what assumptions did the commission use regarding economic conditions in the country and operational tempo? meaning, what did you assume would be our -- the rest of the private economic growth? because that always drives obviously, what opportunities our best and brightest have. and also operational tempo? >> senator, thank you very much for the question. we took quite a bit of time actually looking at that and deliberating over those issues. and we actually had experts to come in and talk to us about the millennial and what that means. as well as what it means with the social environment and those kind of societal changes that have taken place and how that would effect retention. i'm going to ask commissioner chiarelli to speak to the specifics of your question. >> i would totally agree with the chairman, senator. we did. and a good example where we provided flexibility at the
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12-year mark with continuation pay. that is not a fixed amount. we are going to allow the services to set that amount based on the economic conditions that they have at the particular time to maintain the retention rates. not only the total retention rate but the retention rates by specialties that they need to continue past that 12 year mark. everything we did was based around an operational tempo of from peacetime to the fact that we would have to deploy the entire force. you know, if you had told me when i was in the army operation center on 911 that we would be able to maintain the all-volunteer force at the op tempo that by did for 13 years i would have told you there was no way whatsoever. and we did. i had '88ers that literally knew that the 367th day of the year , they were going to be back down range. they would stay down for a year and come back and get another
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year at home before they were going back down range. and why they did that? a lot of that is pure patriotism, love of country and a mission they believed in. and i think it's absolutely critical that in times where we don't have that operational tempo we give the services the tools they need. and i think you will find throughout our report we have done that. everything we can to give them that flexibility to maintain those retention rates. i would argue in the earlier question, as i live around fort lewis washington today, the big on retention today is uncertainty. they just don't know whether they are going to have a job tomorrow. and there is real concern in the force as you wander around the post and see folks, how far is the cuts going to go. is there a future for me here? and i think our retirement plan speaks to that and put us in much better position should we ever have to cut the force again to provide people who are
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leaving something when they leave. >> i want to thank all of you. i have some additional questions i will submit for the record. and i would just say general to your point, that goes to the sequester issue in terms of continuing to diminish what we're going to spend on overall force and readiness and that is in -- an issue we already had hears on and we need to do -- had hearings on and we need to do something about. thank you. >> senator. there was a modelling component for your question. i'd like to take that for the record and then get back to you too. because we do have very specific datas and details for that. >> thank you. >> general chiarelli u i wish that every member of the senate could have heard your last comment. because as, you know, you know we're going to be in a very significant struggle here in regards to sequestration. and we reflect the views that were suppressexpressed to this
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-- that were expressed to this committee by our four service chiefs last week. and i thank you for that. senator donnelly. >> thank you mr. chairman. i want to thank all after you. you have all done so many extraordinary things for us. i also want to say the importance of the extended care you are providing for extraordinary family members what you have done in that area is really significant. and will change lives for family after family. general chiarelli, i want to ask you about the unified drug formulary between d.o.d. and v.a. you have done exceptional work in trying to stop discourage of suicide. and you have worked tirelessly to provide solutions and answers here. and if you would tell us a little bit to challenge when you
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transfer from d.o.d. to v.a. with the drug formulary and what that is causing. >> thank you for that question senator. i really appreciate that. when i was vice chief of staff in the army i had no idea there were two different drug formularyies between d.o.d. and v.a. i really believed every single soldier who used krugs the way they were supposed to and the had posttraumatic --. that was -- that the doctor had to work through a bunch of the different druks sdrugs to the right one. that when they showed up on the va in day one they would -- on day one they would automatically be able to refill it. that is not the case. we with have two different drug formularies. the dod has anything about approved. and when a individual gets on the right drug and dosage and goes to the v.a. many times antipsychotics and antidepressants and the antipain medications the doctor looks at
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them and says i'm sorry i cannot refill that precipitation. you are going to hear a lot of different stories from folks. but i continue to have soldiers come to me, sailors, ss ss -- airmen and marines today. just last week. and if there is anything we can fix to get at this suicide problem, it would be ensure once question once we get a kid on -- ensure once we get a kid on the right drug and dosage where he goes in the system he can get that drug. >> isn't there also a confidence factor for that person that they feel comfortable with the drugs they're receive inging and the -- receiving and the treatment they are on and changing it up is like a life-changing experience. >> most don't senator. they find a private doc to give them the precipitation and they
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pay for it out of pocket. so here we've told them we're going to take care of you. we really care for your service. this is your benefit and they go over and say i'm sorry you can't have that drug. and i'm telling you, no one cares if you get saint joe's f aspirin in d.o.d. and bayer as prison in the army. that's not an issue. put on this drug issue for antipsychotics and pain medications these things you have to be weaned off. we should not put our men in -- and women in this situation. and if it's no at temperature drug -- not on the drug formulary somebody should hand them a card and say go to your local pharmacy and get the drug. >> we're losing 22 veterans a day to suicide. in the active duty we lost 132 young men and women in combat in 2013.
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were lost 475 to suicide. we lost almost four times as many to suicide. so your efforts on this are life-changing. and i would like to then follow up with a question. as we transition from dod to va for a number of our young men and women. obviously, there are electronic health challenges. what do you think is this next largest challenge we have to tackle and knock out? >> senator donnelly, thank you very much for the question. we spend a lot of time talking about the dod collaboration and what that really means, what ekt -- effect it has on the healthcare for veterans. i'm going to ask commissioner boyar to speak to the specifics of that questions before. >> when you look at recommendation eight we're asking that the committee has -- that has authority -- it
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doesn't have power now. we're asking that you give it statutory power to implement the recommendations. and when we met with secretary mcdonnell. two things we learned. one we agree with the commission. this wasn't in our recommendation and i throw this to you because i anticipate the secretary of the va would like to have parity. so when the joint committee meets with the undersecretary personnel. it is not the same. and if you raise that so that the deputy secretary of the va and the deputy secretary of the dod meet at the joint executive committee and give them the authority with the power to implement, big difference. so with regard to the blended recommendations and the exact antidepressants or antipsychotics general chiarelli spoke of or the pain medications, let the experts make that decision with regard to where in the formulary it should be blended.
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with respect to large capital projects. never again should we have the scenario where we all struggled to get the timelines of an army hospital and a va hospital. that should occur to us again. with regards to your specific question. what do you really anticipate the biggy that is going to happen next? it really is this challenge where as the country moves to set these national standards nor the electronic health record. so we have the scenario whereby you are responsive with regard to the va and scheduling debacle. we said that we'll move to this choice program, senator mccain that you talked about. and we'll have this increase of more non-va care. when you are on the committee in '04 in the house of veterans affairs around that time frame we were spending about 400 million for non-v.a. care. today, 6 billion. it is only going up.
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so think of this, dod once has a contract let to create their own new version of their electronic health record. va is doing the evolution of vista. and they want to make sure as they move to their new programs that they have data standards so they can be bidirectional. at the same time, the va is doing more non-va based care in the private sector. and in order for there to be continuity of care those private docs have to be able to communicate then with the va. so we're talking about bidirectional so they can communicate. that is a huge challenge. now in dod, as they move to their new electronic health record and as we make recommendations to you to move towards the selection of plans we're also meaning there is going to be a lot of care provided in the private sector. so the setting of national
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standards on how the country will communicate is extremely important. and that is what i see as what is the biggy that is about to come. it is about your leadership about those setting those , national standards. >> thank you to all of you and thank you for your extraordinary service across the board. thank you mr. chairman. >> senator sullivan. >> thank you mr. chairman. and i wanted to also thank the members of the commission. the great work that you have been doing for the country. now and before. i first want to get a sense of kind of the big macro issues the competing issues that you have seen, mr. chairman, as part of your amandamandate. and in particular what i was interested in is is there a concern about the projected growth of benefits, of retirement, that ultimately will be or could be taking away from training and readiness? i think we all want to make sure we're taking care of our troops.
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i think though sometimes what gets lost is ultimately the best way to take care of them is to make sure if and when they need to go fight that they come home alive. and with was -- is that an issue that the committee, the commission has had to deal with on a broad scale? this kind of tension between competing issues that we're looking at with regard to military expenditures. >> mr. chairman, can i take that question? >> senator sullivan, thank you very much for your question. i knew that commissioner kerrey would want to answer this question. i'm going to ask him to respond. >> since i'm notoriously holistic in my thinking of such things. i argue and i think commissioners were persuaded that for us to address this problem that you have identified, without addressing the big one -- the big one is social security and medicare.
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that is crushing all the appropriation's accounts. and it would be unfair to identify military retirement as the big problem. because it isn't. the big problem is social security and medicare. so it seems to me to address military retirement without going after social security and medicare is basically saying we're going to balance the budget on the back of the military retirees and i think it would be a wrong thing to do and sends a terrible signal. >> can i jump in here? >> yes, sir. >> since i had to deal with exactly that question when dod as comptroller. first there is if huge -- there is a huge misunderstanding as to how much is being spent on military as far as defense budget. people think it is 50%. it is not. it's 29%. we write about that in the report. if you add the defense civilians that brings it up to about 40%. but that is a whole other
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category. that is not something we focused on. the real issue is can you modernize what you are offering to your military at the amount of money that you are spending? and if you can spend a little less and modernize a little more, so much the better. and that is where we started. we started with modernizing and with choice and with what my fellow commissioner doesn't like, holistic approaches and that where we began and we looked how it fell out. and it turned out you could actually save the government money as well. you could actually do better by your people and still save the government money and which tells you how inefficient the situation is. it's not as deliberate so. when the all-volunteer force started, who was in it? mostly young men, unmarried. now look at what we have. a completely different force. we have to be concerned about echo programs and child care.
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we have to be concerned about a lot of different things that just weren't paramount in 1975. that's how we approached it. and we did save some money. but that wasn't the driver. and it shouldn't be. >> senator -- >> -- >> i'd be very careful about getting sucked into this debate of people versus procurement. >> i'm not talking about just procurement. i'm talking about hard training for our troops. >> again, this isn't the way -- frankly, it is not the issue. because the amount of spending on personnel has been level. the real problem and i think senator ayotte pointed it out and several others is there is just not enough money going to defense, full stop. that is the issue. >> when you hear personal costs are unsustainable, the baseline used for that is year 2000. the question you should and is -- you should ask is why was 2000 chosen as the baseline to prove that somehow personal
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costs were unsustainable. congress made a lot of the conscious decisions to improve the personnel system. so, we did did redux reform. we did the va reform. and the changed the pay tables and we did tricare for life. and as you go into war we did the g.i. bill and the pay raisis. so there was a clever reason the 2000 was chosen. >> and i would only add, and i'm telling on myself know, my staff asked me to come up here 21 times. that if you look back, i always quoted the fully cost of the soldier. the cost hasn't really gone occupy up. it's what you hang on that soldier. look at in m-16 rifle and what it looked like in vietnam and the same weapon system today with all the sights and bells and whistles we're putting on the it and when you look at the
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fully burdened costs you are rolling in the addition of other -- additional costs of other things and applying that to personnel accounts, which i was totally wrong in doing that. and i apologize. >> and one last point which is really important. general chiarelli pointed out that he couldn't imagine and neither could i, that we'd be at war for 13 years and be able to keep all the people we kept. well, if congress and the executive branch had not done what it done in 2001, 2002, do you think we would have kept them? >> let me add to that. that when this legislation was created, legislatively we were very limited in sense we had to assume an all volunteer force and that we would not take anything away from anybody who has it now in certain areas. so we really had a lot of the
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grand ideas, but we tried to stay within the confines of our legislative directives. >> thank you mr. chairman. >> it's very rare we get an apology from a general before this committee. and i hope we'll mark this as an historic moment. >> i'm surprised balloons and confetti didn't drop from the sky. [ laughter ] >> senator heinrich. >> thank you chairman. i want to thank all of you. lord knows what a difficult challenge this was. and coming from a state with incredibly high rates of volunteerism. i want to say how much i appreciate the fact that you came to these recommendations unanimously. serving in this body right now we don't hear that word "unanimously" as often as we would like to. but i wanted to ask you if you could elaborate a little more for everyone here and certainly for this panel about the process you used in terms of gathering feedback from our service members, from their families, at
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military installations and that v.s.o.s, veterans service sorgs -- service organizations. that was one of the things i was concerned about but was quite impressed with the level of feedback as you move towards your recommendations. >> senator, thank you so much for the question. we spent a lot of time traveling across the country meeting -- meeting at different military installations. we met with service members that is active service mek members, -- active service members reserve component members, and retirees. and we held sense conceptions and held public hearings as we traveled. and we would spend a lot of time trying -- really listening. we listened very careful to the comments that the service members and their families
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shared with this commission. about things that they really were concerned about. they talked about up tempo, the challenges with that. they talked about the long waiting list of trying to get their child into a child care center. they talked about the not getting access to healthcare and the problems that they had with trying to get specialty care and waiting to get through the referral system. all of those kind of things is what we used. and we received tens of thousands of comments that came in from across the country from service members about things they were concerned about. and then we also received the many, many responses from the survey. the survey was a very, very instrumental part of this process. and we sent out survey to over 1.3 million retirees.
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we sent it out to our active components in reserves. we received over 150,000 responses back that says here is what it is that is important to us. here is what we prefer. here is what we value. they basically stacked order one benefit over the other. so we have a pretty good indication of exactly what is important to them. >> i want to thank you for that. i want to move my next question to senator pressler because i really appreciated your comments about the culture of service that exists in our native american communities. and certainly that is one of the reasons why new mexico has had such an enormous overall rate of volunteerism, military volunteerism over the years. and i was wondering if you had look at the recommendations in
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terms of having the sort of t.s.p. model and a contribution portion at if you serve as an enlisted person for four years very much at the beginning of your lifetime career, and you build that early nest egg through this process what that looks like at aged 65 plus whenever you actually retire. and what impact that would have an tribal communities as well as on rural communities where there are very, very high rates of volunteerism. >> well -- excuse me. i have analogy not a cold. so you won't catch it. we we do have a sense in terms of the native americans. i just couldn't get mine to go through the academy but they do join the service for four years and have a a high rate of service and they are very proud of it. in your state they have american veterans and vietnam veterans
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groups and so forth. this component that they would take out at least, and most of them go with no retirement. but they would have at least one percent the government would contribute. and after two years they can contribute up to 6%, match. but then they are elderly they will have something. something. it won't the bishop-- because it depends how our stock markets work out. in our country we have to the depend on the citizen soldier. in my view it isn't to retain everybody for 20 years. it is for three, five, six. in my case i served for three years. i got no retirement but my percentage counted when my federal civil service retirement game.
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ao i got 2% a year for the time i was in the military. most native americans don't get to that. and we also have the compounded thing that most of them do not go back to careers. they go back to unemployment and they do videohave all the problems that you know about it. but for them to have some connection to some small retirement benefit at the end i think would be a very good thing in our country. >> senator i'd like commissioner higgins to also follow up on that question if you don't mind very quickly. >> chairman i'm out of time. would you be willing to indulge? thank you. >> thank you mr. chairman. >> mr. higgins. >> thank you mr. chairman. senator, tapping into the economic power of the united states through the thrift savings plan indeed a really powerful financial incentive.
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we looked at your point about examining what kind of growth would be experienced when the individual arrived at retirement age, say 67. and the individual who had done no personal contributions would still if they leave at eight years of service would still have 18,000 dollars available to them in the their thrift savings plan. but if they contributed and received the full matching of a 5% of their base pay, they receive at age 67 over $90,000 in benefit that would be available to them. so it is a pretty powerful mechanism. and i think would serve any community, including native american. >> thank you mr. chairman. and gentlemen, i most certainly echo the message from the rest of the committee up here when we talk about the work that you have done. senator pressler and i have been on the campaign trail together
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for a couple of months in the last year and we've met with a lot of members of the native american tribes. and they truly are a warrior society and we have respected what they have provided to our country in terms of service to the armed forces. my question to you today is that you are trying to put together a system that while it is similar -- or at least you want similarities for services being provided, you are trying to provide these services and benefits to a whole lot of different groups. you have got the folks that are over the anyone of 65. those between 60 and 65. retirees who have left with 20 years of service but not yet reached retirement age. and also looking at those individuals that are still there
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within the military. and then you are looking at -- looking at those who are coming into the military. how do you transition this from what it is today? i got a letter from a man who served over in iraq and he had 20 years in. came back. he says after sequestration the message he gets is my retirement because i've done my 20 years but i'm not yet 60 is i get my retirement. but instead of having an inflation factor i get inflation factor minus 1%. the savings to us was 6 billion dollars. but in the middle of sequestration the first thing people do is come back to the men and women that have served to be the first to give back. why are we the first in line to get cut? and now today i think the challenge this commission has
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and the challenge that this committee is going to have is to go back to a lot of those individuals and say look here is $12 billion that is being reduced, or at least being reallocated. are they doing it on our backs? and those who came in and thought we had a deal, knew what we had for retirement and healthcare, what is it? how are we being taken care of and. >> a transition plan that says we can choose a or b? if we skould please, i think the work you are doing here is important do. but i think the challenge we're going to to have is how do you convince these men that are serving or have served have some options available? and is there a transition plan you have thought about for those individuals. >> we indeed spend quite a wit of time talking about that very issue that you raised in your question. and as we thought through all the transition assistant kind of challenges that a service member face when they are transitioning
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out we took all of that into consideration. and i'm going to ask commissioner carney to talk to the specifics of that. >> thank you mr. chairman. once again, you know, with my colleague right here to my right the holistic approach that we took to consider the retirement and to make sure that we first of all did no harm. was one of the mandates given us to. and and senator kerrey also mentioned something very important. and that is that we don't try and balance the bank on the backs of the military. and we tried to not do that. so in terms of specifics, some of the programs that we -- and we could talk about this in further committees later on if you want to.
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but when we talk about ramp programs. so we don't transition automatically into something that might cost a little more to a retiree or the service member. that they would be built you will over 15 years for example. but one of the things that we thought was vitally important in all this things we recommend is a good sense of financial literacy. so if our recommendations are adopted there would be a very robust financial literacy component for all the troops. and that starts at their -- when they are in boot camp. a sailor or basic training. and at various points in their career. so they can make good financial decisions going forward. what the federal government does often impacts them. and that cannot always be accounted for. you know, promises have been made. and sometimes promises have beenbeen been, i don't want to say broken, but perhaps bent a little bit. when you do the financial planning, when you enable the service member to have the tools at their disposal to make good financial decisions, the impact of the bending of the promise by the government may be reduced somewhat. so i have a son whose a lance corporal in the marine corps.
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he's making a little money now and came to me on his last leave and said dad what do you know about ford f-250s? i said i don't know much but i know you can't afford one. but a lot of kipds aren't making those decisions. they are going ahead and buying that expensive vehicle so they don't have the money necessary later on. we want to have a robust as i said before financial training system so they understand the value of money, they understand the value of money later in their careers. so when they hit the 12 year mark and they are making that decision, do i want to stay in and continue on or do i want to go off -- the money is there to make a good financial for them. so to try to reduce the impact of maybe a bent promise, we want to empower the service member with the ability to make good financial decisions to kind of reduce some of that.
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>> i would only add also that the specific thing you said sir, about somebody who's served 20 and is retired is grandfathered in the current system. they will not be part of this system. now, in the area of benefits that may fluctuate and change. that might effect them. co-pays but that is done over a period of the 15 year ramp medical co-pays. but that 20 year person is grandfathered in the current system. and two you would notit would not change. >> thank you mr. chairman. i would just say i hope when we're all done with this, that the thought of the bending the promises is one that we try to get away from. >> that was certainly our intent, senator. yeah. >> and i think you should see the recommendations too,
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senator. as a continuation of what congress has done for the last 13 years. our goal is to improve the quality of paying benefits for our military. that was the primary objective of the commission. and we've set a group of holistic recommendations to you that we do think accomplish that objective. >> senator, we really honest to god tried to keep the faith. >> senator, let me just say that i think in summarizing what my colleagues have said here. is that, everything that we did was totally done to protect the benefits, protect the interests of the service members. i wouldn't want anyone to get the impression that we're implying that we were actually cutting benefits of the service members. it was quite the contrary. even though we yield savings as a result of the approach that we took in reforming the structure of those programs, there is absolutely no interest on our
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part to reduce the benefits of the service members. in fact it was to support those and improve those benefits. and i i'd just like to make that point. >> senator kaine. >> thank you mr. chairman. thank you all for your service. this is an incredible topic. a difficult one and maybe even a thankless one. i've had a chance to review the recommendations and i see a lot of real positive. focus on matters like financial literacy, the transition from veteran status to civilian live in terms of employment training and assistance. these are for a-reaching recommendations. very much appreciate your work. i'm going to make a an editorial comment that has nothing to do with any of you. you were all asked to serve on this and said yes and did a good job. i'm not a sensitive person. but when i walk in and it's a panel and we're supposed to talk about military compensation and there's not one woman sitting here. i'm like wow. really? one of the first things that happened was the -- we got so many women serving in the armed
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services now. and on these issues, military compensation, the role of military families and their thought about these things are critical. i have a youngster in the marine corps too. and as he's talking to his guys, they are often talking about what their own families are saying to them about commissaries, retirement healthcare, salary. so we send a signal. and you didn't form the committee in terms of the membership. it was probably on us for the executive. but i just got to say that it seems so obvious that if we are really trying to have a military open to women. >> -- it was you and the executive. >> ok. so i'll make it a the point obviously not critical to any of you who said yes but to us. another. stunned. that's my editorial comment. yes. >> i would invite you do actually meet the women who serve on the staff.
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they are sharp, tight. >> i'm a hundred percent certain about that but it is no substitution for being sitting at that. because we always have panels in the committee that look just like this where the folks backing up the panelists are the smart talented incredibly competent women. and i just want to see some women at the table. >> raising the caucus senator. >> yes. let me ask about collaboration opportunities. i don't think this was gotten into the significant detail when i was gone but what are the collaboration opportunity wes can harvest between the dod health system and the va? looking down the road there will have to be some economies of scale on the cost side but also have to be improvements in quality of care at both ends as we do additional collaboration. did you get into that at all or what thoughts would you have for us? >> senator kaine thank you for
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the question. we 135e7bdspend a lot of time talk about the dod/va collaboration. it was mentioned earlier by one of my colleagues by benefit of the having issues. and shared services and we talked about the need to do better standardization, have standardized policies and we've actually had conversations with the secretary of va about that and we talked to people at the department of defense about that. i'm going to ask commissioner boyer to talk a little bit about some of the additional specifics here as we -- as to how we respond to the challenge of that and what we did about it within our recommendations. commissioner boyer. >> thank you. senator, earlier we talked about the real empowerment of the joint executive committee. and it really lies to the heart of ensuring that two departments
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of government work together seamlessly. so as that solder, sailor, and marine transfer into the va they shouldn't feel it. they should feel that medical record is there and the doctor who's just taken other my care that there is true continuity of that care. and that joint executive committee that has authority, it doesn't have the power to implement. so they can just create a lot of paper. and so we're recommending that you actually give the joint executive committee. not only do we create parity between the dod and va of who lead the committee but also give it the power to actually implement. and implement what. so the recommendations of
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blending the formularies with regard to the antipsychotics call it the mental health drugs. let them stet classifications of those drugs and how it should be blended. extremely important. and general chiarelli spoke to that earlier. the other would be on capital projects. a lot of whether it's billing of military hospitals or a va hospital in close proximity or outpatient or super clinics. have some resource sharing. a lot of sharing initiatives that you find when you go around are a lot of local agreements. it's based on personality driven but there are a lot of things that work and effective from those crucibles and the committee can effect li centralize those decisions rather than being decentralized. with regard to the medical information, that is the it issuei.t. issue.
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the joint committee can really drive how the electronic health record is developed and through its evolutionary process between the evolution of vista and this new electronic health record that is about to come out of d.o.d. and how we then communicate with the civilian doctors who are providing the non military based care to the va and then if you adopt what we're recommending, this choice of civilian plans, you have doctors out there that are providing that care. and that electronic record needs to ensure that it is interoperable between, you know, your doctor back at home and that doctor from the mtf. but guess what. when they transition then over into the va you want to make sure it is interoperable too. >> my sense is with secretary mcdonald at the va, he is a guy who understands collaboration. so there is a collaboration moment that is coinciding with the issuance of these recommendations and we ought do what we can to take advantages of it. >> when we met with the secretary and the deputy secretary, they had already met with us previously and also had initiated a policy paper.
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haven't had to chance to talk to general chiarelli about it. but they are asking that doctors of whom that that they default of the precipitation that dod doctor had written. it's kind of nice to put it on paper. i'd feel much more comfortable if it were something that the joint executive committee looked at and gave it the implementation of authority to ensure that if you had a subscription on active duty, a mental health drug, when you go to dod, to ensure that you are going to get that drug is extremely important. because there are a lot of social ills that occur if he falls backwards. >> right. thank you. >> can i just add something. at the beginning senator kaine chairman invited us to speak ouren minds, which was dangerous in my case. i think this collaboration idea is not going to work. i don't think you are going to get where you want to go unless you start considering actually putting these two systems together. and because of the readiness component it is going to be dod whose going to be in charge of it. and i think you have to go further. i would give this committee authorizing authority so they can't basically rope adope you.
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you have to have substantial change in order to what you quantity. 70th anniversary of the walter reid. both of us had been trmped so what do we need to kosmt i spent a fair amount of time thinking about this. we got a good recommendation in there and you got to approve collaboration but unless you approve putting these two together and changing rules so this committee authorizes and appropriates, it seems to me unless you at least consider those two things it is going to be very difficult to get the kind of changes that you want. >> senator we've always agreed with that by the way. >> i want to go back to a question or follow up on a question that senator manchin asked about the perception and senator kerrey i think you responded to it, the perception that we're losing people because
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we're not competitive with the market. and i think you made the comment that we're at or above market. could you expand o that. >> i did say it and i can't no expand. it came from the analysis we kiddid nit the commission. we are at our above the sector. >> so the perception that people are leaving at year ten based on pay or benefits may not be right. there may notbe other reasons they are leaving. lifestyle or other but not pay and benefits. >> it is likely you can have individual cases, particularly technical individuals. and earlier dov is talking about one of the problems we've got is a lot of these new civilian companies forming up. and they will pay for security clearance. and they are apt to bid up what the military is going -- i think you will find exceptions to it. but i think in the aggregate you will see that the military pay is at or exceeds what is available in the civilian world and the benefit package as well. and i'm for that.
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i don't regard -- chiarelli talked about it earlier. i don't believe we have a real problem with paying benefits. that is not the problem. it has do a lot more with the retirement issues and there as i said earlier i think it would be groes grossly unfair to address military retirement without taking on the big ones which are social security and medicare. >> let me me follow up by having commissioner higgins talk because we did quite a bit of analysis and review around that. i want him to talk specific i on that. >> thank you mr. chairman. senator, i believe in a general sense retention today is probably as good as the military has ever seen it. having said that there are select skills that are always been historically very difficult to maintain.
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some of the stories that you here often are let's say nuclear skilled individuals in the navy are always difficult to retain. because once they acquire once they acquire those skills they are very lucrative on the outside. in recent years in the war years what emerged was the ten year departure of special anticipateoperateorsperators. and now they have very high values placed on them in the private sector. and the military responded to that with a cig bonus. and the navy has always struggled with additional bonuses and several high demand skills. i think has a general rule, and it may rely mostly on the economy, and the unemployment rate, but as we move through these last few years, retention has been quite good.
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>> one final question for the chairman, or as directed by the chairman, the recommendations that you put forth, how have they been embraced by the stakeholder community. i heard that we're providing for efficiency and value. are there areas out there that there are concern amongst some of the stakeholder groups? >> mr. chairman, i think at this point the feedback we have gotten from the vsos, and the stakeholders of that like, they're very receptive to what we're doing at that time. it would be premature to say
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they're 100% on board for this because they're still looking at the details of the report, and they have to do their analysis as well. i think d.o.d., the department of defense is doing the same kind of thing, i think the members of the joint staff and others is they understand the merits of our report and what we're recommending, how those recommendations support fiscal sustainability of the compensation programs, and the fact that we have been able to achieve efficiencies by the structures of those programs without taking away any benefits, in fact adding benefits. >> thank you, mr. chair. >> thank you, mr. chairman. i do want to commend senator cane for his observation that it is always good to have women at the table and at the committee. i'm looking at your retirement plan, and i thank you all for
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your service, and i'm looking at the retirement plan that significantly increases the number of members that will receive benefits. the plan does require contributions, basically mandatory 3% deductions from the service member's pay as well as depending on investment return. so do you, can you share with me what the current service members think about a basically mandatory 3% contribution, and what concerns you have about volatility in the market that will probably and the charts regarding your benefits. >> thank you, senator, for the question. on each of those counts that you mentioned, we looked at those and the response to the first part of your question, i think we were informed that service members felt very strongly that this is an increased benefit.
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this is kind of what they're wanting, this is what they're looking for. i think they told us through the survey responses that they really want choice. they want the flexibility in being involved and design a conversation package they prefer, and then how they would receive pay. those things are very important to them and they mentioned that to us. i am going to ask the commissioner to talk to that question and those benefits. >> thank you, mr. chairman.
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senator, first of all, in the united states generally, 97% of those put automatically into a plan stay in that plan. that already gives you one indicator. another is that right now 30% of the military are voluntarily contributing. it is four out of ten without any kind of automaticity or government matching are putting their money into tsp. if you take those two figures and put them together, you're going to get an answer that tells you that they will all see the benefit of this. >> i understand. that part i think i am reassured reassured. on the market volatility. what we assumed is that the money would be invested in very, very conservative kinds of funds. obviously, again, in tsp as you know, you can choose from a
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variety of funds, but our assumptions were that this would be a -- there is one particular fund that would essentially follow people's lifestyle so when you're younger and you're ready to take your risk, as you're older you get more conservative. again, i think the record of tsp itself, and the fact that people, that the civilians stale in, the military voluntarily go in, tells you that they trust the fund managers and, of course, are making their own choices. so i think we felt very comfortable with the recommendation in terms of
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market volatility. >> thank you that is reassuring. i'm looking at one of your other charts, chart nine. pregnancy, child birth, and care, if they move to the private sector insurance market, what kind of effects will occur as a result of that in terms of cost and other impacts? these are huge numbers for these two procedures. >> senator, thank you, commissioner would you take that question? >> i think this chart when you look at it it is surprising. it will be surprising to a lot of people when they look at this. there is an assumption that the medical providers at the mdf are providing procedures that really hone in the skills that make those doctors and nurses combat ready.
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then you say i suppose building the cohesion of the medical team, that is an added plus. with regard to the skill sets needed, something is missing here. what i will do is tag team here because there are two pieces of this. as we move to a selection of plans, we want the mtf to be part of the network because the procedures that the mtf needs are not these procedures that you see in the chart. and so the creation of the jointness and the essential medical capabilities, i will pass it other to the general if i could. >> i think it is absolutely critical that you understand the concept of emc, essential military capability. that is built into what we're doing here. those are those things simply stated that transfer to the battlefield.
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when you get the surgeon generals in here, you will argue that hey, we get a lot of great training out after taking care of all of those child bearing issues and child care issues. all we're saying is that you do but there is a way, if we could rearrange your workload, to give you more of the kinds of things, as a retired person, i'm looking at how are you going to provide care for me in my golden years. if you get stuck on that, you will miss the essential piece of what we have to do in the medical area. that is care for our men and women when they're sent into harms way. and ensure that we have people who are trained to do that based
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on the kinds of wounds they're going to get. >> thank you mr. chair. >> thank you, senator lee? >> thank you to everyone appearing here today in this commission to make recommendations that are so important. this will have a profound impact on those that have previously certained in served in our military. i hope they can take the time to give these recommendations the thorough consideration they deserve. and they can become part of a debate that we need to have to help figure out how we can provide better for the needs of those who serve us and have served us in the past, and simultaneously help us to maintain the strength, the divideability of our military.
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-- viability of our military. i will ask this question to anyone who would like to answer it, did the commission find they -- the current lack of a retirement program similar to that, recommended by the commission, that that is having the absence of a plan like that, right now, is having an impact on recruiting and retention? currently we don't have a retirement system in place in the military that provides any benefits for those who serve for less than 20 years. is that impacting recruiting? >> senator lee, thank you for the question. when we looked, we took a very strategical approach to support an all-volunteer force for the future.
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and to design that we structured the program for how we might make a recommendation to modernize the current retirement system. the recommendations that we provided within we are absolutely convinced they're the right set of recommendations here on having a blended retirement plan, and because it does two things. it supports the retention needs by the services, and it also supports the recruiting challenges that the services would have. we believe that the recommendations we made take care of the recruiting needs and it is very important that they also support the current
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force profiles that the services are very interested in, making sure we provide them with the tools to make the adjustment ps and the recruitment and retention needs as we move into the future. >> if we were to adopt something like this you think it would help recruiting and retention? >> absolutely. >> let's talk about the commission's finding, the commission found, can quote, the current compensation system is fundamentally sound and does not require sweeping overhaul. close quote. it recommends that service members that need nutritional assistance be transitioned into the snap program, formally known as food stamps.
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if service members are in need of s.n.a.p. benefits, and the report is contemplating that some or all of them will need system s.n.a.p. benefits, that would be inaddition. does that under mine their current compensation being adequate? >> we're basically talking about the pay table itself. we didn't see a need to change the pay table because we supported the all-volunteer force in the last 14 years. but we also recognize that because there is a constant change here, a new generation and also just the requirements of the service members themselves, with regard to the size of families and that kind of thing.
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snap there is an important purpose that the s.n.a.p. program served. we talked through that extensively. i will ask commissioner carny if he would respond very quickly, senator, i would like to ask commissioner higgins to follow up as well. >> ok, and mr. chairman i have a minor follow up question i want to add to that. i km curious how many people might be, if you eliminate f.s.s.a., how many will be enrolled? s.n.a.p. and what the increased cost would be. >> right now the number of enroll enrollees in s.n.a.p. is 20,000 to 22,000. in s.f.f.s.s.a. it is restrictive and harder.
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you have to go through your chain of command to get it there where these kinds of things that make is less attractive and less useful. right now for oversees it may serve some useful purpose. but the s.n.a.p. program, not with standing the fact that it needs to exist for some of our military, it is something that is easier to get, it it provides better nutritional value. so fazing out one of them is a good idea because s.n.a.p. fills in very nicely.
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>> first, i want to check that your votes were unanimous? >> yes. >> and that is an extraordinary thing for us on this side of the table, we don't see much of that particularly with the make up of this commission. i have -- i know you probably came with different viewpoints at the beginning, and the fact that you worked this hard and came up with a proposal adopted unanimously is something that i hope is something that we because and realize that you might have gotten this right. i want to compliment you in that regard. first, i need our country needs to save more and our military
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always sets the example for our country. in terms of the values and ethics. i think the way this plan embraces saving is terrific. i think most persons don't know that your tsp contributions are not matched currently unlike all other federal employees. i think that is a double standard that is inappropriate. so the fact that we would move to a match for members of the military makes a great deal of sense. i think this part of it is terrific. now, here is the tricky part, if we're going to reduce to find benefits to 40%, and someone can retire with 20 at 38, they can't access the tsp until they are 59 1/2. not too long after that they would look at social security in addition to that.
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so during that period of time, assuming someone is retiring at 38 or 39, was there any discussion about making a special rule or circumstances where someone could access tsp before they were 59 1/2. >> senator, i'm going to ask the commissioner, these are the kind of questions that these former comptrollers really love to have. >> i have missed him, we had great work when i first arrived in the senate. >> thank you so much. right now as you well know, you retire at 20, and then you start getting monthly payment.
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by definition, the 40% you're speaking about you're going to get. now in addition to that, once you retire, you can get a lump sum payment if you choose to do so or you may say i don't want that i want it later on. you have given the individual more choice than they have had today. you can choose the lump sum payment, and you can get that with a reduced payment until full social security kicks in. so that you basically, now, are in much more control of your financial situation. one other point as well, this was mentioned by my colleague commissioner carney and others. we put a huge premium on education. and we spoke to some of the
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foreign military to see how they do it as well. right now you take an 18-year-old or a 19-year-old or 20-year-old and give him or her a -- you fire hose them for a few hours about financial management and it is in one ear and out the other. what we are proposing to do is have regular sessions at key points in their degrees. key promotions, or a family change, so they can learn the nuances of financial manage. so when they hit the 20 or leave sooner they can make an informed choice about what they want to do with the money they're entitled to so to answer your question, it seems to me, at least, that you're putting the person in uniform at a far
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greater advantage because of the lump sum, pause of the financial education than they currently have today. >> i know my time is almost up. i have some questions about whether or not we should continue to make contributions matched. with their payment, whether or not that costs out in a way that would make since sense to the commission. some questions about why not just going to -- what are the advantages there, and the one that i really want to hear from you about, and i want to recognize the general for the trailblazing he worked on, especially for the suicide problem, but i'm concerned about
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another command, standing up a three star, we tried to work against quite to many flags, in fact gates did away with the joint forces command, and i am trying to think how this new $300 million a year how this stand up adds every year. i am -- i have to be convinced that we need another group at the pentagon. i have a great deal of affection for what goes on, but three stars are expensive with everything that goes with them and everything we will gain by adding this new command at the pentagon, and i am over my time by 1:48, so i don't know if the chairman want its reported now.
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>> senator mccaskill, thank you very much. i know we're out of time here, but i would like to take the opportunity so we can respond to that. let me just say real quickly the readiness command that was recommended, we took a lot of time spent on that. every recommendation that we made in this report was made with that in mind and the need for readiness, and there was a readiness implication to every recommendation that we made. so when we proposed a readiness command, we did it in a context of much bigger than a medical readiness component. they are much larger in turms of a number of things that fall underneath readiness. it is on the one component of that and we were basically wanting to make sure that the,
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that if we're going to ensure success of the medical readiness, we must have proper oversite. and that means having the right kind of people, the right person in charge with the right kind of ranking to be able to go to the budget meetings, and to those decision making vennues and hold the service presence, and to be able to have influence with the surgeon generals. i will ask the commissioner to speak to that if you will. >> it is absolutely essential that in this whole process in changing the way we deliver medical care that we keep a viable training ground for not only the doctors and physicians, but the entire medical team for the medics so they're trained for the thing that civilian hospitals don't do and that is go to war.
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there will be a tendency as we give dependency opportunity, on the outside, there could be a tendency in future budget periods to draw down on what is left on that mtf with our eyes covered not realizing we may have to deploy the people in those mtfs far away for those individuals in combat. to me that is an absolute essential piece in that entire thing to ensure that we do not allow that to at trophyeatrophy. -- atrophy. and every single one of our recommendations as i went through them, and i understood where i sat before. without getting into great detail i will tell you every single one of our
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recommendations impacts readiness in some way. this is critical, we gain efficiencies in readiness, someone has to look at the entire readiness portfolio to include medical and make sure that we maintain that. i will end by saying i think the 300 million is a conservative large number. we think it exists currently. many of them were transferred to other locations in the pentagon, and the resource, much of that we pulled out and you will see a much smaller bill than the $300 million sited in our report. >> thank you, senator grant, please. >> thank you, all, for a lot of hard work, and i think a very good product. to those that want to suggest
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alternatives you're welcome. we'll take any new good idea. we will accept criticism. if you have a good idea, bring it. if you think they missed the mark we will listen to you but change is afoot and it is necessary. congress required you to do your job, do you understand what we were asking you to do? were we trying to get you to fix a broken system, and there is an old adage, if it's not broken don't fix it, or make a system better. what was your own mandate in your mind? >> senator graham, thank you for that question. it is our understanding that our mandate was to modernize, make recommendations to modernize. >> so it was not your job to just save money.
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it was jr. understanding that congress wanted you to look at a 70-year-old system and make it better and more efficient. >> that is correct. >> do you agree that we have the best combat medicine any time in the modern history. i think we got better and better. >> but we have it now? >> yeah. >> we maintain it. >> that's right, done lose it. if the core function is to make sure the force is ready to fight, then we have to make sure we hang on to that, that is what you're telling us, right? >> exactly. >> we learned when the war first started that a lot of people didn't have dental coverage and 25% of people were disqualified because of dentist problems. >> that is true. we have overcome that. we don't want to go back to that system of having a health care
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system that did you want make you ready to fight. a health care system that can't keep you in the fight and save your life if you're injured. i think senator kerry probably knows more about that than anybody. those are my guide posts. i don't want to lose ground on the major functions. no one is suggesting that we're changing the retirement system to 40% versus 50% for those on active duty, are you? everybody is grandfathered? >> yes. >> i heard that conversation. i just walked into this room not knowing the context, i would think that a 40% retirement change had been recommended by those on the committee. this chart, who did your polling? >> that polling was done by true choice. it has to do with the survey that we conducted. >> i can't imagine too many things that i would do for 80% of the people prefer something
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new to something they have. you feel good about those numbers? >> senator, we feel very good about that unanimously. >> ok. what about the retired community. do you have data about how they feel. the proposed changes? >> well, the feedback that we have gotten is that -- >> the retired military members and find out. >> we polled retired as well as active duty and reserve components. >> what were the numbers on the retired community? >> senator, let me take that question for record. >> fair enough, i want to see both ends of the spectrum here. it seems to me that the jury is in that the people on active duty like what you're proposing. if they have an option they would take the new system. members of this committee versus the retired force, what do they think about the proposed changes.
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is that correct? >> that is correct, just retirement. >> at the end of the day, your recommendations on health care are driven by the fact that we can provide better choice, more efficient for the patient and the department of defense, and get more choice and better coverage, is that right? >> that is correct. >> if we do nothing in terms of health care costs, it is exploding in terms of d.o.d.'s overall budget. >> in terms of fiscal sustainability, that is correct. >> you have a situation where you have to deal with retiree health care, to fight the war today or tomorrow and that is a choice we don't want to make. >> thank you all for your hard work. >> thank you. >> thank you all for your service on this commission, many of you that have served in other ways.
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i have a question about retirement proposals, could we get chart three up maybe for a way of providing a point of discussions, and chairman, i will directly questions to you. if you want to farm them out that is fine. this shows on the left, the current defined benefit system and you show your blended plan of a defined benefit ail long with -- along with a tsp match. is there any consideration about trying to move to a pure contribution system? >> senator, you know, we have a defined benefit system now, and to move to a complete defying contribution system, it would not give us all of the retention benefits of the traditional military retirement.
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that is why we wanted to keep both systems blended. we could take care of our retention needs and the recruiting needs. >> does anyone else want to elaborate? so i understand that trying to keep benefits the same, or keep on example better, services and personnel flexibility, maintaining the force, and the assessment of the commission is the 20 year defined benefit plan is important to maintain that last plan. >> yes, senator, that is correct. >> any consideration of like a stair step approach to the continuation pay, owner saying the one at st 12 years, four years extension, having two or three periods within a 20 year time horizon where you're
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encouraging people to reinlest or officers to remain. >> senator, the current program as it is today, the compensation system within we have those bonuses. we have those stepping stones that service members have benefitted. this would be that retention piece that would take the service member now to a point of having 12 years plus a four-year obligation to get him to that 16th year that means they're close enough to retirement that retention will keep them there. >> so the thinking is that not many people leave after 12, and very few leave after 16? >> that is correct. >> under this proposal, the

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