In 2010, Richard V. Spencer, then a member of the Pentagon's business board, made a modest proposal: Close all domestic military commissaries and contract with a major logistics company to offer a grocery benefit instead, saving the Defense Department roughly $1 billion per year in the process.
When the idea was revealed in The Washington Post, the backlash from military families and veterans service organizations was immediate and decisive. The idea never went anywhere.
But during a confirmation hearing this week before the Senate Armed Services Committee, Spencer, now the nominee for secretary of the Navy, hinted that tough and even unpopular choices may be ahead for the military when it comes to benefits.
"The personnel factor is growing at an unsustainable rate, where the discretionary budget is being eaten up by personnel costs," Spencer told Sen. Lindsey Graham, a Republican from South Carolina. "We owe our uniformed members and our retirees the best that we can offer. We're going to have to think of different ways to deliver just as good, if not better, services."
Reminded by Sen. Mike Rounds, a Republican from South Dakota, of the commissary episode, Spencer said the proposal was made public before it was formalized. But he never suggested he regretted the idea or had written it off for good.
"If I'm confirmed, I will look everywhere in the Navy, under every single rock where we can find efficiencies," he said. "And when I've shared with you that we're going to have to work lockstep together with the Senate Armed Services Committee, there's going to be some big boulders we might have to move."
Spencer noted he had also gotten a taste of the military and veterans' lobbying machine through his work on retirement modernization, which the Pentagon is in the process of rolling out. A veterans service organization published his personal number, he said, and he ultimately fielded 127 heated phone calls on the issue.
"And it was fascinating," he said. "Once you got through anger and frustration and you started talking to people, you came away with the following approach: You have a dollar to spend on your benefits. Your retirement costs 60 cents, your health care costs 40 cents, your commissary costs 15 cents, your morale and welfare costs 7 cents. Where do you want to spend your dollars?"
As Navy secretary, Spencer's authority would be somewhat limited. Benefits are approved and regulated across the Department of Defense, and changes are made through the Pentagon, with collaboration from the services.
But previous Navy Secretary Ray Mabus bucked tradition and pushed boundaries in that regard, developing a reputation for his unilateral decisions. Late in his tenure, Mabus announced he was tripling maternity leave for the Navy and the Marine Corps from six weeks to 18.
The move was short-lived, but ultimately prompted then-Defense Secretary Ash Carter to update the Pentagon's maternity leave policy, giving troops in each branch of service 12 weeks of paid leave. Those granted 18 weeks in the Navy were grandfathered in as the policy was revised downward.
Following the hearing, Spencer told Military.com he wants troops and veterans to weigh in on what they value most.
"We're going to have to find ways to work with everybody to make sure that we have equal or better products at more efficient cost pricing," he said. "When we addressed the military retirement system, educating everyone to what the benefits cost and conversely what the recipient, how the recipient values it is key. I don't think we've really done that. If we go out and find out that someone goes, 'My health care is more important than my commissary,' we can weigh that in there."
Some people will say they want to keep everything they currently receive, Spencer acknowledged.
"And we're going to have to come to the reality of, 'Can we afford all of it?' " he said. "And these are discussions that we're going to have to have."
Would Spencer ever return to his proposal to close the commissaries?
"I turn it the other way around: Does the community want the commissary?" he said. "If the answer's a resounding yes, you say, 'Fine, OK, how can we maximize that?' "
Spencer’s nomination is expected to receive a committee vote Thursday.
-- Hope Hodge Seck can be reached at hope.seck@military.com. Follow her on Twitter at @HopeSeck.
