A budget-cutting plan to shut down commissaries and instead pay an annual allowance to active-duty families for the projected increase in their grocery bill has drawn a sharp rebuttal from a research group affiliated with the military resale industry.
The Military Resale and Morale, Welfare and Recreation Center for Research, affiliated with the American Logistics Association, says in a report released Monday that the $400 allowance wouldn't come close to making up for the higher grocery costs, especially for families.
"Patrons who consistently use their commissary, can save nearly $4,500 per year for an average family of four, over $2,800 for a couple, and more than $1,500 for a single service member," the report says.
Getting rid of taxpayer-subsidized commissaries, with groceries available on base only at exchange stores, would save the government about $1.3 billion a year, according to the nonpartisan Congressional Budget Office, which has suggested this cost-cutting measure for years.
CBO has recommended cushioning families from what could be a 7 percent increase in grocery prices by providing a grocery allowance that would reduce total government savings to about $1 billion a year.
The proposed allowance would average $400 a year, but could be targeted to specific pay grades as a retention benefit or "to benefit junior enlisted members with large families," CBO says in its March 2011 version of a report called Reducing the Deficit: Spending and Revenue Options.
Military retirees and their families would not receive the annual grocery allowance under CBO's assumptions.
Because closing commissaries and consolidating grocery sales with exchanges takes time, CBO estimates the immediate savings would be just $200 million the first year but would reach $2.8 billion over five years and $9.1 billion over 10 years.
CBO's suggestion to close commissaries has been included in many deficit reduction proposals, most recently by Sen. Tom Coburn, R-Okla. In his plan for cutting Pentagon waste, Coburn said closing the 175 stateside commissaries while keeping overseas stores makes sense to him.
"By getting the Department of Defense out of the grocery business here in the United States, Congress could increase military pay across the board and allow military members to shop at the stores of their choice," Coburn's report says.
But the resale research report notes that commissary patrons "save 32 percent at commissaries and 24 percent at exchanges, according to independent surveys and market basket analysis. This equates to $4.584 billion per year in savings."
"This is a direct compensation benefit to the Department of Defense in that it extends the household budgets of military, personnel, families and retirees. If the benefit ceased to exist, military total compensation would drop correspondingly unless pay would be increased to provide the funds needed to shop at more expensive alternative sources," the resale research center report says.