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Obama Signals Support For Slashing Military Pensions By 20 Percent

President Barack Obama Monday hinted at support for the Military Compensation and Retirement Modernization Commission’s recommendation in January to cut military pensions by 20 percent.

After two years looking into compensation and interviewing servicemembers, the commission created a set of 15 recommendations in January to reform health and retirement in the military. Obama has now come out and stated that he believes the recommendations to be “an important step forward,” Military Times reports. However, the White House made clear general approval isn’t wholesale endorsement.

One of the suggested reforms is to slash military pensions by 20 percent, and to end Tricare, the existing military healthcare system, replacing it with private insurance. Tricare costs continue to escalate while quality of care continues to decline. Some claim that Tricare is trapped in a “death spiral.” Other recommendations include better child care on military bases, as well as increased support for servicemembers who are often hit with high unemployment rates when transitioning back to civilian life.

The report notes that veterans from the 18 to 24 age bracket suffered an unemployment rate of 21.4 percent in 2013, compared to a rate of only 14.3 percent for their nonveteran counterparts. Also included in the report is a call to boost funding for adequate nutrition.

That Obama supports the underlying objectives of the report is clear, but it is likely specific proposals will be contextualized or tweaked. Obama will send a finalized list April 30 to Congress. White House support will make a difference when it comes time for Congress to seriously look into reform.

In total, the proposed changes are slated to save the Pentagon $10.4 billion per year by 2020. More immediately, after just a year of implementation, the savings will amount to $5 billion.

Speaking at Fort Drum on Monday, Defense Secretary Ash Carter confirmed the need to reexamine the military’s creaky retirement system. According to Carter, the military should be offering something that looks like a 401(k) plan, given that “80 percent of our troops leave service before 20 years are up, which leaves them nothing.”

There was no indication from Carter’s speech where the Pentagon would dredge up the money to fund a 401(k)-like proposal, and legislators on Capitol Hill still have to deal with the specter of sequestration.

Meanwhile, the commission’s report remains a point of contention among various military and veterans’ groups. But instead of being able to come to a consensus on the matter, the Military Coalition, representing 30 different organizations, is fractured.

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