Along with reducing the Army’s troop strength to pre-World War II levels, the Department of Defense $496 billion fiscal year 2015 budget request would hit military troops, families and retirees right in their pocket books.

If approved by Congress, spending cuts in the proposed 2015 Defense Department budget would increase health care fees for active duty and retired service members and their families, cut off-base housing allowances, reduce subsidies for commissaries by 71%, and put raises for high-ranking officers on hold for at least a year.

In a Feb. 24 speech, Sec. of Defense Chuck Hagel said the recently adopted Bipartisan Budget Act forced the Pentagon to cut more than $75 billion from the nation’s defense budget over the next two years and $487 billion over then the next 10 years. “And sequestration-level cuts remain the law for Fiscal Year 2016 and beyond,” he added.

Also See:The President’s Annual Budget Proposal

Speaking in a follow-up press conference, Sec. Hagel defended and attempted to justify some of what he called the “modest” budget cuts.

“We recognize that no one serving our nation in uniform today is overpaid for what they do for our country,” he said. “But if we continue on the current course without making these modest adjustments now, the choices will only grow more difficult and more painful down the road.”

Higher Military Health Care Fees

Under the proposed 2015 defense budget, the average military retiree participating TRICARE health insurance program will see the out-of-pocket share of health care they are required to pay jump from 8% to 11%, according to Hagel.

In addition, military retirees old enough to use Medicare in addition to TRICARE will be required to pay slightly higher TRICARE enrollment fees.

“We will ask retirees and some active-duty family members to pay a little more in their deductibles and co-pays, but their benefits will remain affordable, as they should be,” Hagel said. “To protect the most vulnerable, under this plan medically retired service members, their families, and the survivors of service members who die on active duty would not pay the annual participation fees charged to other retirees, and would pay a smaller share of the costs for health care than other retirees.”

Also See:Veterans Groups Call for Increased 2015 VA Spending

Hagel said he hoped the approach would encourage military retirees to use “more affordable” health care alternatives, such as using free military health care facilities located near their homes, choosing TRICARE preferred health providers, and switching their prescriptions to generic drugs.

Military Pay and Benefits

While the 2015 budget proposal would halt pay raises for generals and admirals for one year, it would give all other military personnel a 1% raise next year, noted Hagel.

“Total pay and benefits increased 40 percent faster than the private sector between 2001 and 2012, and while that was the right thing to do at the time, we can’t continue at that rate over the long term,” Hagel said.

Hagel also stressed that the budget does not call for any changes to the retirement benefits of currently active troops. Changes in that area, if any, will not come until after the Military Compensation and Retirement Modernization Commission issues its report due next year, Hagel said.

Congress recently repealed a measure in the Bipartisan Budget Act that would have reduced the annual cost-of-living adjustments for working-age military retirees starting in 2015.

The budget proposal would also slow the growth in the rate of tax-free basic military housing allowances. Over the next five years, the percentage of housing costs covered by the housing allowance will fall from 100% to about 95%, according to Hagel.

Commissary Support Cutbacks, but No Closures

Despite fears of 75% commissary closures expressed earlier by veterans groups, no commissaries will be closed under the 2015 budget proposal, said Hagel. Instead, government subsidies to some commissaries will be cut.

“We are not shutting down commissaries,” stated Hagel. “All commissaries will still get free rent and pay no taxes. They will be able to continue to provide a very good deal to service members and retirees -- much like our post exchanges, which do not receive direct subsidies.”

However, commissaries located overseas and in remote stateside locations will continue to get their full direct subsidies under the proposal.

Military, Veterans Groups React

Veterans and military advocacy groups have said they will lobby Congress and President Obama to reject the proposed defense cuts.

“Washington is trying to balance the budget on the backs of those who have sacrificed the most,” said Iraq and Afghanistan Veterans of America CEO Paul Rieckhoff in a press release. “We know the Defense Department must make difficult budget decisions, but these cuts would hit service members, making it harder for them and their families to make ends meet.”