Defense Secretary William Cohen

December 21, 1998
Web posted at: 5:54 p.m. EST (2254 GMT)

WASHINGTON (CNN) -- Facing increased difficulty recruiting and retaining quality military personnel, the Pentagon proposed Monday a package of pay and retirement benefit increases, which, if approved by Congress, could take effect in 2000.

Defense Secretary William Cohen and Joint Chiefs Chairman Hugh Shelton proposed pay increases of 4.4 percent for all military and civilian Pentagon personnel, with additional raises of up to 5 percent more for senior enlisted personnel and officers.

"We believe this package will be fair and effective," said Cohen at a Monday afternoon briefing at the Pentagon.

"We need to compensate men and women in uniform properly in relation to their peers and in relation to the larger economy," he added.

Shelton praised the U.S. military for its talent, skill and dedication. "Indeed, the men and women of our armed forces make their complex and dangerous missions look so effortless that we all risk the chance of taking this excellence for granted," said Shelton.

In addition, the Pentagon plan would restore retirement benefits to 50 percent of salary after 20 years of service. That rate was cut to 40 percent in 1986 as an incentive to get military personnel members to delay retirement until 30 years of service when retirement pay would be 75 percent, a figure that was unchanged.

But the strategy backfired. With the U.S. economy booming, many highly skilled military personnel, such as pilots and computer experts, have decided to leave government service before 30 years of service to seek higher paying jobs elsewhere.

The pay hike proposal -- part of the budget request the Clinton administration will submit to Congress next year -- comes as some of the military services report falling short of their recruitment goals. In 1998, the Navy missed its target by some 7,000 sailors; the Army was off by some 800 soldiers.

Even with the proposed 4.4 percent salary increase, the Pentagon says there is a pay gap between the military and civilian sector. The gap has been variously estimated between 5 and 13.5 percent. That's why the Pentagon also is proposing additional "targeted" increases, on top of the basic pay raises.

The pay and retirement changes are expected to garner support from members of the House and Senate Armed Services Committees, who have expressed concern over the state of morale in the ranks. But liberals have expressed alarm that pumping up the military budget would eat savings that could be put towards domestic programs.

Republican lawmakers have put pressure on the White House for a sizable increase in defense spending to improve the military's readiness.

The cost of the basic pay raise is estimated at an extra $14.4 billion between 2000 and 2005.