When President Obama provides his roadmap for saving the economy, he needs to explain why it is bad to privatize Social Security but good to privatize military retirement, changing it from a government pension plan to a 401(k) investment program.  And if this really is the key to economic solvency in the retirement system, then why not privatize Social Security as well?

When things aren't broken, don't fix them.  The all-volunteer military system still attracts some of our finest young people even though we have been at war for ten years.  If a change to 401(k)s is a good idea, let Congress try it out first -- and then expand to other government employees who don't risk lives while living under deplorable conditions and enduring long family separations -- before implementing it on the military.

President Obama should clarify who will be impacted to avoid fueling fears that the government will renege on its promises.  (Ask current retirees what they were promised with respect to health care versus what they're getting.)  SECDEF Panetta said that "it will not affect serving service members"; however, the report promoting this idea recommends it be implemented immediately and includes provisions allowing those over 50 to contribute an extra $5,500 "catch-up contribution" to their new 401(k)s.

If this new development doesn't impact currently serving military members, how will it save an estimated $250 billion dollars over the next 20 years?  Try to figure this out: if it doesn't impact anyone who is currently serving, doesn't that mean that the government is committed to the same payments that it is currently promising for the next 20 years?  If anything, this front-loaded benefit will cost more over the next 20 years as the government "deposits" up to 16.5% of the serviceman's annual pay into a 401(k).  To create the "benefit," the government must increase the pay of all current service members by 16.5%, or everyone in the military will see their take home pay drastically cut.

Now let's look at the purported savings of $250 billion over 20 years.  This averages out to about $13 billion a year.  Congress and the Obama administration shouldn't put the success of our all-volunteer military at risk for what has become a rounding error in the current budgeting process.  Can't the congressmen find $13 billion of pork to eliminate each year?  A recent article in the Washington Post reported that illegal aliens cost us $4.2 billion a year in tax credits alone.  Does an administration appreciate its military when it wants to cut that military's benefits...all the while implementing a more tolerant stance on illegal immigration that will result in redirecting even more taxpayer dollars to those who break our laws rather than defend our freedoms?

If this plan does generate a savings, it does so because it will penalize the approximately 17% who serve the full 20 years.  Only in Washington, D.C. could this be considered a retention tool.  Those who promote this plan speak of an unfair system that pays nothing to anyone who separates before serving 20 years.  If their benefits are unfair, then increase their pay and benefits now.  Under the plan proposed by Congress, those with the most experience and leadership will have little motivation to serve all 20 years and more motivation to enter the competitive civilian workforce at an earlier age.  In addition, this will create a leadership and experience vacuum when we can least afford it -- in the middle of three wars.  This in turn will inevitably lead to increased training costs to replace those who leave the service, which will probably have the effect of offsetting any purported savings.

To sell the proposal to voters, some describe 18-year old enlistees who retire at 38, creating envy and resentment among those who don't serve.  Now ask yourself: why would the commander-in-chief tolerate talking points that stir resentment against those whom he leads?  In reality, not all recruits enter that young or retire at 38.  To enter as an officer, for example, one must have a college degree.  Many serve longer than 20 years, preferring not to change careers during their prime working years, if opportunities for promotion and leadership opportunities exist.

How will Obama sell this concept to our brave all-volunteer military?  Democrats have been ridiculing Social Security privatization for years as a "risky scheme."  When you're being asked to risk your life into the bargain, will a 401(k) be just compensation?

Forcing retirees to wait until their sixties to collect the benefits will be a tough sell.  Military retirement serves as a financial cushion for the retiree forced to transition to the civilian workforce.  Many need retraining or lack the networking and contacts that are so important when job-hunting.  In most cases, 50% of a member's base pay is not sufficient to enable true retirement.  Instead, it supplements what a veteran earns after he retires.  Servicemen need access to their retirement benefits exactly when this plan would deny them -- when they are forced into a career transition while supporting a family, not when they are truly retired and collecting Social Security.

Like other aspects of this proposal, it's doubtful that the savings can be realized without great costs, specifically regarding retention and replacement.  Perhaps this proposal has merits similar to privatizing Social Security -- ownership in a savings plan that can be transferred to survivors -- but I doubt if it will save $13 billion a year.  Rather, to sustain recruitment and retention, Congress will have to increase annual pay, reenlistment bonuses, and hardship pay.  Meanwhile, just as the government reneged on its promise of free health care to today's retirees, future retirees might well see the realization of the government's rumored desire to take over 401(k) plans.  Then their retirement benefits will be as worthless as the Social Security IOUs they will collect.

-Elizabeth Herring, Lt. Col., USAF (Ret)