The G.I. Bill and Retention

John McCain opposes the Webb and Hagel bill to update the G.I bill:

Does McCain Have a Vets Problem?, by Jay Newton-Small, Time: Of all the voting groups John McCain will target this fall, none would seem like more of a sure thing than this country's war veterans. So why is the celebrated Vietnam War hero and POW bracing for a potentially bad week with so many men and women who have served in uniform?

The point of contention between the two seemingly natural allies is a piece of legislation the Senate is expected to vote on this week to update the 1944 G.I. Bill to provide expanded education assistance and opportunities to the armed forces. The bill ... would effectively provide full tuition and housing costs at a four-year public university for veterans who have served at least three years of active duty. ... McCain, concerned about the estimated $4 billion annual price tag and the incentive he worries it might give people to leave an already strapped military, has sponsored his own competing proposal. It increases the existing monthly education benefit from around $1,100 to $1,500 a month while adding more generous benefits for those who've served more than 12 years.

McCain's concerns, however, don't seem to impress the vast majority of veterans' organizations. They are feverishly lobbying him to support the Webb and Hagel bill...

Even with the current dustup, it's hard to imagine John McCain not winning the majority of the veterans vote in November. But the nation's 26 million veterans are by no means a monolithic voting bloc, and any level of disappointment with McCain could sway some undecideds. ...

Supporters of Webb and Hagel's bill dismiss McCain's concerns about the retention issue. While the Congressional Budget Office estimates that the bill would cause a 16% drop in re-enlistment rates across all four branches of the military, the same study also predicts a 16% uptick in new recruits attracted by the benefit. The bill has 58 co-sponsors, including none other than Obama — just two shy of a veto-proof majority. It was passed last week by the House with a comfortable veto-proof majority...

Suppose you run a firm and, subject to minimum qualifications, you will hire anyone willing to accept the wage and retirement plan that you offer. Assume you currently have some number of employees, and suddenly you announce that you are going to double retirement benefits. What would happen to the number of employees? A lot of people at or above the retirement age who are still working would likely decide to retire, but you would also get a lot more people showing up at the door wanting to work for you. It seems to me that after full adjustment, it's likely employment would rise. This problem is just like the military changing education benefits and though the CBO says the bill would not change the number of people in the military, the new recruits would just equal those leaving, I think the number might actually go up here as well. But whatever the case, there's certainly a large offset from new recruits, and reduces any retention concerns. The other concern is the price tag, but the price tag of 4 billion is pretty modest - what did top hedge fund managers make last year? - so that part doesn't concern me much.

Going back to retention, I recently heard a talk where the speaker noted in passing that firms use deferred compensation schemes to create the incentive for their employees to retire at a certain date, the date they want employees to retire. That is, suppose the law says you can't force someone to retire. You can still make it economically unattractive to work past a particular date by altering the size of the deferred compensation (retirement) package. The larger it is, the more likely it is that people will leave rather than working past the retirement date.

But the decision about when to retire is also affected by what you are currently earning, and the more you earn, the longer you are likely to work before retiring (I'm assuming the income effect doesn't dominate the substitution effect). This means that if retention turns out to be a problem for the military, i.e. if people are retiring as soon as they can (at the three year minimum) rather than re-enlisting, a solution would be to provide a positive incentive to stay by promising higher wages for those who re-enlist or make it past a particular benchmark (e.g. McCain's twelve years). This would increase the price tag further, I don't know by how much, but I think the military is underpaid as it is, so again, that doesn't bother me. [And if McCain is so worried about paying for it, couldn't he just cut a few more earmarks? He seems to think that works just fine for tax cuts costing far, far more than this bill.]

So a response to McCain's concerns about retention is to say that, according to the CBO and others, it's unlikely he's correct about numbers falling, but just to be sure maybe we should adopt his proposal about increasing the compensation for people who choose to stay past some number of years. We still do the Webb and Hagel bill, but we add the additional incentive of higher future compensation for those who choose to re-enlist. With this change, it's hard to see how the number of people in the military would fall as a result of the bill.

Comments

[MDM4584]

Why do they hate our troops = 'merica = freedom?

[BJ Feng]

But it takes time to train and send new recruits to the field. There is lag time involved, and we're at the exact point where we cannot afford this transitional period. In one or two years we will, as Iraqis gradually take over security duties, but not now. We just happen to be in that perfect time where we cannot pass this legislation. A deferral method needs to be inserted into the bill to make it workable currently.

[crack]

58 is not "two shy of a veto-proof majority." It's nine. It's two shy of a filibuster proof 60.

[ken melvin]

The original was for services rendered. Only later was it seen as a recruitment tool. McCain's logic puts the volunteer army in the proper prospective; i.e., it depends on a lack of opportunity and is thus a form of indentured servitude.

[jules]

My father went to law school on the GI Bill after WWII. It is incredible that we can spend nearly a $4B a without a twitch to fight the war but McCain is worried about the $4B it will cost to educate those who fight for our country.
He really needs an 101 economics course. My AP Econ students know that an educated workforce increases economic growth and that a fully paid college education can be an incentive for joining the military. Many high school students ( and the nation) would benefit from a year of service( military or social service ).
Understanding incentives and the drivers of long term economic growth are essentials for all presidential candidates. It becomes increasingly difficult to refrain from labeling McCain "ignorant". ( at the very least.)

[macquechoux]

"it depends on a lack of opportunity and is thus a form of indentured servitude."

Oh, please. Enough of that stupid line of reasoning.

One other comment, I think all three presidential candidates could use a course in Economics 100. I think it would be a photo finish to determine which is the most ignorant of economics or chooses to ignore economic reality.

[jamzo]

mccaain's approval isn't necessary

our fighter pilot pow champion of the military is aligned with bush on this, the pentagon is following the commander-in-chief's direction

there is time to pass the bill

if 2/3s in the senate are not possilbe in this round pass the bill and the public reaction will shake more votes loose

keep the debate alive until it passes

[Andrew]

It is also worth noting that if the increased incentive to enlist raises recruitment levels, then deployments can be spread a little thinner.
One of the main reasons retention is lagging right now is operational tempo. Military personnel, especially those with families, simply aren't staying in the service because they spend 10 months a year overseas.

[Noni Mausa]

They are worried about retention and recruitment, but they don't seem to be considering the effects of long and doubled or tripled tours on forces members, and enforced tours on National Guard members, all to enable what might be most kindly termed an "elective" war.

The undefined commitment undertaken when enlisting ("I give you my body and brain, you get to keep it as long as you want for whatever reason") is tolerable as long as there are commonly agreed limits, except in the context of a war involving actual national defense, in which case everyone agrees all bets are off, whether in the military or the civilian domain.

But to expect people to sign up, offer their mind and body, and then get nothing much of value when they are finally released -- this would seem to limit enlistment to a much smaller pool of applicants, don't you think?

[TigerPaw]

One could take a reverse-handed view of the whole thing- let McCain have his way. That will likely reduce the pool of people going into the military and/or staying in it. This will reduce the ability for the US to embark on future misadventures.

Not great for the people already in the forces, but perhaps good in a forward-looking geopolitical sense.

[Worker]

In a addition to BJ's notes on training, there is another lag time.

Current members of the military will act on the benefit immediately. There are clear channels of communication and they have reason to focus on their benefits.

However, the public (potential enlistees) is more diffuse and pay less attention. Communicating the value of this benefit to new recruits will take longer.

So you would probably expect to see a brief period (maybe .5-2 years) where there is a net loss in recruitment before reaching equilibrium. Not an ideal situation in a time of war.

[me]

And how is this GI bill any different than Blackwater paying 20 times what they make and taking all the MPs and special ops people? Can't let those people get educated and leave the service, we may have to institute the draft and actually pay for these wars.

[Bruce Wilder]

On the turnover argument, I regard the prospect that more people might choose to pass through the military on a three-year hitch a feature, not a bug.

I think the professionalization of the volunteer military, especially in the lower ranks, is a danger to the Republic. To the extent that the military becomes a life-long career for too large a portion of those serving, that's worrisome.

One way the country can move away from the choice to invest less in education and give more of the national income to hedge fund managers and CEOs, is to tax the rich to fund national service with generous subsidies for education. This could build national solidarity and reverse the trend toward declining educational attainment, if extended.

[Bush's Shadow]

It’s important to remember that when the original GI Bill was passed in 1944, soldiers were under draft for the duration of the conflict. The GI Bill would not have been passed if it could have led to the loss of experienced NCOs during a time of war.

Otherwise, I think Tigerpaw and Bruce W. have the real point. We don’t need incentives for soldiers to stay longer. What we really need are greater disincentives to joining the military in the first place. And, if you do join, you should be encouraged to leave after three years. Such a plan would provide a ready pool of trained soldiers for homeland defense, but eliminate the professional zombification of the military we have today. Let’s be honest… if this were a wartime draft army, this war would have ended long ago.

The US military is no longer acting in the interest of the American people.

I’m really tired of the whole soldiers as heroes treatment. They are not heroes. Today’s soldiers are enabling a criminal regime. They are aiding and abetting war criminals. While I do understand that you can’t pin the same level of responsibility on and eighteen-year-old private that you can on our President, the fact remains that when you volunteer to kill foreigners in a foreign land through aggressive, offensive warfare, you are participating in criminal behavior.

First offense for selling crack cocaine – up to 7 years. First offense for aiding and abetting the killing of hundreds of thousands of innocent civilians – free college tuition and healthcare for life.

[macquechoux]

Retention Rates for the US Army:

Year Mission Actual %
FY07 62,000 69,777 112.0%
FY06 64,200 67,307 104.8%
FY05 64,162 69,512 108.3%
FY04 56,100 60,010 107.0%
FY03 51,000 54,151 106.2%
FY02 56,800 58,237 102.5%
FY01 64,000 64,982 101.5%
FY00 68,000 71,318 104.9%
FY99 65,000 71,147 109.5%
FY98 62,125 63,083 101.5%
FY97 79,959 79,564 99.5%
FY96 73,070 72,990 99.9%
FY95 72,610 72,127 99.3%
Source: US Army
The first figure is the Army's goal. The second figure is the actual number retained.

I believe the figures speak for themselves.

[evagrius]

You could, of course, flip the entire argument by looking at providing free education/ housing for all qualified public university students or, at the very least, lowering the present costs so that students aren't forced into massive debt.

But that would be too "European" and socialist.

[BJ Feng]

Some of the people here are clearly anti-military and are ignorant of the realities of the world today. There is nothing wrong with people choosing a military career. We do need experienced officers to lead, train, and organize green recruits, as well as veterans who have been battled tested to fight alongside those who have not. Veterans are invaluable in combat situations, which is why the Germans under Rommel were able to defeat a much later US force in their first encounter during 1942. The green US troops panicked and became disorganized, forcing US generals to call for a retreat.

I suppose what Bruce proposes would be for former soldiers to go into a reserve program after three years. Such a reserve program would still cost money, I don't know why anyone would enter into the military if they were limited to only 3 years, and if they were on call for life without any other benefit given to them other than the GI-type bill.

There will be times in the future where a military presence is needed, like for peacekeeping missions or even UN sanctioned operations. No one wants to send troops, we are the only ones that are willing and able (Russia and China have not volunteered for UN duties and are not eligible for NATO duties) to put actual boots on the ground. It was a huge ordeal just to get 3000 more troops for Afghanistan. If we disband our military, who will be able to do anything? Sorry, but there are times where soldiers are necessary. It doesn't matter if you like the Iraq war or not, the fact is that a military presence is necessary for a wide range of legitimate activities and we're the only ones who can do anything because all the other Western countries have gone the route of disbanding their troops. They whine and complain, but in the end, they depend on us, which is also why we have, and should have the most say.

Last note, interesting how much attention has been placed on Darfur, yet nothing has been done. That's because we're tied up elsewhere and no one (who is willing) has the soldiers to do anything about the situation. Everyone keeps on looking to the United States. Almost weekly I read opinions written by Mia Farrow, pleading for action. Incredible that all those European countries are helpless, rich as they are. But you need soldiers, not money, and they've destroyed their military so all they can do is watch and try to deflect blame elsewhere. Those who want to lead and are leaders must have a viable military. It's no coincidence that Putin displayed the Red Army for the first time in years, and China is actively building a first rate military including air force and navy. They understand that, in the end, peace is kept at the end of a gun. Whatever decrees, resolutions, or election outcomes you make, it takes military might to enforce it. Look at Burma which had a free election in the 1990's. That election was overturned by the junta, and the winners, well they were without guns and so they lost the ultimate battle.

[Bush's Shadow]

BJ Feng,

Where in the world today is there a need for offensive military action? I would like to see your list of acceptable offensive wars.

Peacekeeping and homeland defense are one thing, but our military, along with those that feed it and profit from it, are waaaaay out of control.

Soldiers to defend America good. Soldiers to invade other countries bad. Weapons that defend America good. Weapons that destroy other countries and their citizens BAD.

And did you ever think that if we didn't have such a HUGE military-industrial complex, maybe our allies would worry a bit more about their own self defense?

Americans just need to get over themselves already. Ever since we "lost" China in 1949, we seem to have lost our minds.

[TigerPaw]

Here's an interesting thought experiment - everyone agrees that the Wehrmacht's invasion of Russia was wrong. How far down the scale does the responsibility for that go? Ignoring for the moment that there was widespread complicity with the activities of the SS, should a generic private have been hauled before the war crimes court? A sergeant? How about a colonel? How big a general?

It was established that "I was just following orders" is not a sufficient defence at Nuremburg. So now one has to wonder - how far down the list should the line be drawn on responsibility for the current mess in Iraq? Bush/Cheney of course, Rumsfeld and his helpers sure, how many of the generals though? It has to be some of them - generals were hanged for not saying "no" after WW2, so what makes it different this time?

(of course I know what makes it different, there's no one big enough to force the US to atone - but trying to decide where to draw the line on who should have said "no" I think is a useful exercise)

And as for the "someone has to" arguments on force, there are very few occasions where someone *has* to, more often it's a lack of patience in trying to resolve a situation or all parties to agree on suitable non-violent coercion. And those occasions don't need nuclear bombs, countless aircraft carriers, and most of the rest of the fun toys that cost a trillion a year. Not to mention a fair bunch of the presumed occasions are blow-back from previous interference. High time the US stopped thinking of itself as being the white hats, that's just a laughable conceit that no one else believes anymore.

[Cynthia]

This proposed update to the 1944 G.I. Bill wouldn't be nearly so costly had we not gone to war in Iraq. But now that this war has generated a whole slew of war veterans, it's our duty as taxpayers to support them by passing this bill and other such bills as well. I must say, though, I'm shocked beyond belief that the very folks who are so gung-ho about the Iraq war could be so heartless as to block passage of proposed legislation that supports our war veterans!

[Jim D]

Junior enlisted military make far less than comparable workers at In'n'Out, so yeah, they're not very well compensated - especially if for the one's that are single, and thus have "room and board" provided for them instead of money. Trust me, it's worth exactly what they pay for it - nearly nothing. The food is almost inedible, and the rooms are far worse than public housing (which they are, of course), and often just as dangerous. (The only, and I mean *only* advantage over In'n'Out is the healthcare plan, which is, btw, socialized medicine at it's fullest, with all the good and bad of it.)

Of course, the married junior enlisted don't really have it much better - it's well known that many of them qualify for, and receive, food stamps.

If you're worried about retention, try paying them...

Sorry about the poorly formed comment, but this is one of my buttons, and McCain just pushed it.

(In case you're wondering, I served six years, and my brother's served 10 so far, and is still in. McCain's opposition to this bill now means that I'd rather vote for Satan than him, whereas previously he edged Satan out by a narrow margin.)

[Emmenthal]

Let's do a quick back of the envelope calculation here (rounding off to nearest 100). Number of army recruits in 2007 is 80,400. So a 16% increase pushes the number of recruits to 93,200. Re-enlistment is 69,800, or ~87% of recruit intake (note this doesn't mean almost everybody re-enlists, as the numbers include those who re-enlist more than once). So a quick calculation shows that 93,200 * 87% * 84% = 68,100. Slight rounding error, so I'll make that 68,000. Perhaps such pedantry is unwarranted as CBO's 16% are rough estimates to begin with, not to mention numbers can change dramatically from year to year.

12,800 more recruits - 1800 less re-enlisters = 11,000 more army soldiers each year. Recruits sign up for 4 years (not 3 years! That's just when the education benefits kick in) so at the end of a four-year cycle there's 44,000 more soldiers in the army - roughly a division or ~8.5% increase in overall army size. This would actually exceed Army growth targets. The only downside is a slight dilution in the ratio of experienced soldiers to greenhorns, but still, more men in uniform.

[Barry]

BJ Feng says...
"But it takes time to train and send new recruits to the field. There is lag time involved, "

I agree, and find it interesting that Mark's analysis missed this. Of course, Mark also missed the point where McCain is clearly lying through his teeth when he professes concern at a bill which has an annual cost of a few days of Iraq war.

"and we're at the exact point where we cannot afford this transitional period. "

that's true, but not for the reasons that you give - the real reason is that the administration only has to stall for 8 more months, and had the clusterf*ck on to somebody else.

"In one or two years we will, as Iraqis gradually take over security duties, but not now. We just happen to be in that perfect time where we cannot pass this legislation."

This is a lie; we've been 'a year or two' from this point since 2004, and even official government analyses are talking about 2010, 2012 or later.

"A deferral method needs to be inserted into the bill to make it workable currently. "

Meaning f*ck the troops.

[Barry]

"I believe the figures speak for themselves."

Posted by: macquechoux

You mean like record enlistment/reenlistment bonuses?
Record promotion rates to captain, major, and LTC?
Record percentages of a West Point class leaving as soon as they could?
Record waivers and reductions in enlistment standards?

[me]

I was drafted and got my BS on the GI bill.

My brother joined the Marines specifically for the GI bill. So he joined BECAUSE of the benefit. No, he didn't stay in, that was never his goal.

[Francois]

McCain is worried about 4 Billions a year over a budget of 2-3 trillions?

Yeah right!

[Mark]

"but just to be sure maybe we should adopt his proposal about increasing the compensation for people who choose to stay past some number of years".

Am I wrong, or is that called OVERspending?

[Mark]

@ Bush's Shadow: You're an idiot, and are clearly in the minority here.