Joint chiefs divide over cuts to commissary savings

All seven members of the Joint Chiefs of Staff testified Tuesday on the need to slow growth in military compensation and apply dollars saved to underfunded readiness accounts for training, equipment and spare parts.

But their united front for easing current budget burdens cracked over the notion of slashing savings for commissary shoppers.

Marine Corps Commandant Gen. James Amos called the proposal to cut commissary appropriations from $1.4 billion yearly down to $400 million within three years, and the cut in average shopper savings from 30 percent down to 10 percent, “a sore point for me.”

“That’s a 66 percent drop in savings for my Marines. I don’t like that,” Amos told the Senate Armed Services Committee. Families don’t either.

“The commissary issue itself is radioactive,” Amos said.

At the same hearing, Navy Adm. James A. Winnefeld Jr., vice chairman of the Joint Chiefs, defended lowering the appropriation for the Defense Commissary Agency in increments, starting with $200 million next year, and suggesting the initial impact at least would be modest.

“We think (the Defense Commissary Agency) can find at least the first-year savings through efficiencies, not price increases, especially since we exempted them from the 20 percent staff cuts that everyone else is taking,” Winnefeld said.

Later, Winnefeld said first-year savings might be achieved if Congress would just repeal a law requiring commissaries to stock only brand names.

It’s a law “apparently lobbied for by the food industry,” Winnefeld said, which “takes money right out of our people’s pockets. It really does.”

Industry sources said brand names do generate higher profits for suppliers but the issue is more complex and less disturbing than Winnefeld implied. Brand name suppliers can afford to support the Defense Commissary Agency with trade offs in store services such as free stocking of shelves and with product promotions.

The Defense Commissary Agency provided a statement explaining that commissaries evolved by design into a brand-name system to ensure “worldwide availability of quality, recognizable brand-name products such as Kellogg’s cereals, Kraft cheeses”

A brand name “bestows a known quality assurance that our military families rely upon wherever they serve. Providing food security and a familiar ‘taste of home’ is particularly important for those stationed overseas,” the Defense Commissary Agency explained.

Though it doesn’t carry generic items, the Defense Commissary Agency since 2000 has operated a “best value items” program with name brand products “equal to or cheaper in price than the private labels found downtown,” the agency said.

Winnefeld assured senators that the budget plan to squeeze commissaries doesn’t order any store closures. The goal is efficiency.

“Whatever they can’t ring out of efficiencies would be a price increase,” he acknowledged. “So you might go from the 30-percent claimed advantage [in prices] right now…to 26 percent” that first year.

In looking at the competitiveness of stores in each market, 26 percent savings should ensure that most thrive. But “there are probably situations where you might close one or two,” Winnefeld said.

The plan overall, he said, is “a heck of a lot gentler than it looks.”

Winnefeld did not describe the impact on commissaries if the Defense Commissary Agency takes a $500 million hit 2016 and $1 billion hit starting in 2017, as is also proposed.

Amos didn’t either. But he said a better solution to raising prices would be “to force (the Defense Commissary Agency) to become more efficient and figure out how to do it, and don’t put that burden on the back of our young enlisted Marines.”

“We don’t need to turn our back” on making commissaries part of compensation reform, Amos said. “But I think we are going at it the wrong way. I think we ought to force (the Defense Commissary Agency) to do some of the things that the services have had to do over the last year to try to live within our means.”

Base exchanges or department stores used to depend on appropriated dollars too, Amos said, but they were forced at some point to be run like businesses. Commissaries should be made to run as efficiently.

What the commandant did not mention, but that resale officials describe often and openly, is that exchanges, because they are run as businesses, deliver a level of savings about half what commissaries do. Indeed commissary prices are a magnet to bring more exchange shopping.

There were other signs in the hearing that the Joint Chiefs were out of their comfort zone in discussing the military retail store system.

Sen. Jack Reed, D-R.I., tried to sum up what he just heard on the commissary plan from Army Gen. Martin Dempsey, JCS chairman, and from Winnefeld whom Dempsey said “did most of the heavy lifting” on the issue.

“You would like to get efficiencies out of the system” and you believe DeCA “can generate these efficiencies,” Reed said. If the Defense Commissary Agency can’t, “then they are going to have to curtail some of their operations.”

Given that, Reed asked Dempsey, have you “thought about a criteria for curtailment…something other then, ‘We’ll get some efficiencies’?”

“We have sir,” Dempsey said, “and I will tell you that commissaries has been the most difficult issue to wrap our arms around, because it’s very difficult to understand the functioning of the commissary, and the effect that a reduction in the subsidy will have, until you make the decision to do it.”

That’s why, Dempsey said, the first cut would be only $200 million. Even senior enlisted advisors, he added, “say ‘Let’s see what happens.’ Let’s see how much efficiency we can ring out of it in order to gain some savings.”

Because if “left unaddressed,” Dempsey warned, “we will be providing $1.4 billion in perpetuity” to subsidize grocery shopping, “and that just doesn’t seem to be a reasonable course of action.”

A day later, the House Armed Services Committee voted for only a $100 million cut in commissary funding in 2015. Its chairman, Rep. Harold “Buck” McKeon, R-Calif., said he rejects increasing out of pocket costs for service families. But McKeon, whose family once ran a popular chain of cowboy clothing stores, also said he knows “efficiencies can be made that reduce the cost of the program without increasing prices.”

Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email or twitter: Tom Philpott @Military_Update

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Kim Skarda points at her home on a map on Thursday, June 20, 2024 in Concrete, Washington. A community called Sauk River Estates has a very steep slope above it. There is a DNR-approved timber sale that boarders the estate properties, yet they were not consulted about the sale before approval. The community has already appealed the sale and has hired their own geologist to conduct a slope stability report at the site. (Annie Barker / The Herald)
Beneath steep slope, Concrete neighbors fear landslides from logging above

Nielsen Brothers plans to cut 54 acres of timber directly behind the community of 83 homes. Locals said they were never consulted.

Law enforcement respond to a person hit by a train near the Port of Everett Mount Baker Terminal on Thursday, June 27, 2024 in Mukilteo, Washington. (Annie Barker / The Herald)
2 killed in waterfront train crashes were near Mukilteo ‘quiet zone’

In June, two people were hit by trains on separate days near Mukilteo Boulevard. “These situations are incredibly tragic,” Everett’s mayor said.

Rob Plotnikoff takes a measurement as a part of the county's State of Our Waters survey at Tambark Creek in Bothell, Washington on Monday, July 1, 2024. (Annie Barker / The Herald)
Snohomish County stream team bushwhacks a path to healthier waterways

This summer, the crew of three will survey 40 sites for the State of Our Waters program. It’s science in locals’ backyards.

Logo for news use featuring the municipality of Mountlake Terrace in Snohomish County, Washington. 220118
4th suspect arrested after Mountlake Terrace home robbery

Police arrested Taievion Rogers, 19, on Tuesday. Prosecutors charged his three alleged accomplices in April.

A 10 acre parcel off of Highway 99, between 240th and 242nd Street Southwest that the city of Edmonds is currently in the process of acquiring on Monday, July 10, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds ditches $37M Landmark public park project off Highway 99

The previous mayor envisioned parks and more in south Edmonds, in a historically neglected area. The new administration is battling budget woes.

Edmonds school official sworn in as Mount Vernon supe

Victor Vergara took his oath of office last week. He was assistant superintendent of equity and student success in Edmonds.

Everett Fire responds to  a medical incident at Northern View Apartments in Everett. (Photo provided by Everett FIre)
Everett firefighters rescue man and dog in fire that displaces 8

It took about an hour for firefighters to extinguish the flames at the Northern View Apartments on Wednesday night.

The Sounder commuter train at Everett Station Wednesday evening on October 9, 2019.   (Kevin Clark / The Herald)
Hop a Sounder train from Everett, Mukilteo, Edmonds to Mariners games

The next run is Sunday as the M’s face their division foe, the Houston Astros. The train departs Everett at 10:45 a.m.

Boeing 787's in various stages of assembly at Boeing's Everett Plant on April 29, 2017 in Everett. (The Boeing Co.)
Boeing workers signal support for strike if contract talks fail

The union is calling for a 40% raise for workers over the next three years.

A wall diagram shows the “journey of the ballot” at the new Elections Center on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Snohomish County primary election ballots shipped to registered voters

This year’s primary election will feature races in every corner of the county. Turn in a ballot by Aug. 6 to ensure your vote is counted.

A skeletonized cranium found at Scriber Lake Park in Lynnwood, WA on March 24, 2024. The remains are likely a black male estimated to be over 25 years of age and unknown height and weight. He is estimated to have been deceased at least one year. (Provided by Snohomish County Medical Examiner's Office)
Authorities seek help identifying partial skull found in Lynnwood park

A homeless man discovered the skull at Scriber Lake Park. Forensic scientists hope to connect the remains to a missing person.

Guests enjoy the sunset and wind Friday afternoon at Cama Beach Historical State Park on Camano Island on October 25, 2019. (Kevin Clark / The Herald)
State commission weighs permanent closure of Cama Beach cabins

The Washington State Parks Commission said the park’s native history, sea level rise and septic issues will figure in its decision.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.