Washington D.C. – Ranking Member Adam Smith made the following comments leading up to tomorrow’s hearing with the commissioners from the Military Compensation and Retirement Modernization Commission to discuss its recommendations:

I want to thank the commissioners and their staff for the hard work they put into producing this report.  It is important for the members of our committee to hear directly from the commissioners on the approach they took to bring the recommendations to us and the challenges they faced getting to this point.

Without a competitive compensation system, it would have been very difficult to sustain an all-volunteer force through thirteen years of war.    Without a doubt, the brave men and women of our armed forces have earned and deserve the top-notch compensation and retirement packages that they receive. What is equally true is that the Department of Defense continues to function in a very difficult financial environment, partially due to growing personnel costs.

Personnel costs have maintained approximately 25% of the total defense budget although the size of the force has been reduced by about half since 1990. That means the Department of Defense pays far more per service member today than it did 25 years ago. Pay increases have contributed to rising costs, but the increase of retirees using TRICARE, with almost no change in premiums since 1994, has been a significant driver. For example, the Congressional Budget Office estimates that the cost of military healthcare will go from about $50 billion in fiscal year 2015 to $84 billion over the next 10 years and, over that same period of time, payments to retirees will increase from nearly $53 billion per year to $69 billion per year.

With these concerns in mind, this committee created the commission with the intent of helping us address the difficult financial challenges the Department of Defense faces with regard to personnel compensation. Over the past 18 months, the commission worked diligently to come up with fifteen recommendations, which we will explore in much greater detail.

I look forward to receiving the President’s and Department of Defense’s input to Congress on the commission’s report.  There are no easy solutions to this challenge. Congress has struggled to address military pay and benefits for years, and I am hopeful that, after careful review, the commission’s recommendations, along with the President’s budget submission, will present Congress with an opportunity to finally begin to address this issue.