Panetta Recommends Pay Cut for Military

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By on February 6, 2013 in Pay & Benefits with 0 Comments

Outgoing Defense Secretary Leon Panetta revealed Wednesday that he is recommending a 1% pay increase for the military in 2014, which represents a decrease from the 1.7% pay increase that was approved in 2013.

The proposed pay increase is part of the 2014 DOD budget proposal which ultimately has to be approved by Congress. Panetta and Army Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, spoke at the Pentagon during a reporters roundtable about what the 2014 budget proposal would look like and what the threat of budget uncertainty — including the looming threat of sequester — would mean to it.

Panetta was careful not to call the 1% pay increase a pay cut despite it being lower than what was approved in 2013. “No one is getting a pay cut, but we will provide a pay raise that’s smaller than we’ve seen in past years in order to achieve some savings by virtue of what we confront in the compensation area,” Panetta said.

Uncertainty about the budget is to be expected. If sequester happens, DOD is looking at furloughs for as many as 800,000 civilian employees, and this would mean a 20-percent pay cut.

DOD will continue to look for savings in the military’s TRICARE health program, and Panetta added, “We will stress that retirement benefits would be grandfathered.”

The DOD will ask for money for new investment in transition assistance, sexual assault prevention, suicide prevention, and family programs to boost support for the all-volunteer force.

In the budget, Panetta proposes another round of base closures and realignments. “We will have to because … you can’t have a huge infrastructure supporting a reduced force,” he said.

The budget continues the glide path for reductions in land, naval and air forces detailed last year. Ultimately, the Army will go down to 490,000 active duty soldiers and the Marine Corps to 182,000 troops.

“These are real consequences and our fear is that it really is going to cause a readiness crisis for the military to respond to the crises that we still have to confront in the world,” Panetta said.

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Ian Smith is one of the co-founders of He enjoys writing about current topics that affect the federal workforce.