#3

050 National Defense:Cut Commissary Subsidies

Savings in Millions of Dollars
  • 2016
    500
  • 2017
    1000
  • 2018
    1000
  • 2019
    1000
  • 2020
    1000
  • 2021
    1000
  • 2022
    1000
  • 2023
    1000
  • 2024
    1000
  • 2025
    1000
  • 2016-2020
    4500
  • 2016-2025
    9500

Sources

Savings are expressed as budget authority, and are from the DOD’s plans to reduce commissary subsidies by $1 billion over a three-year period, fully implemented in 2017 as described in chapter 5, page 6, in the “United States Department of Defense Fiscal Year 2015 Budget Request Overview”.

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Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.

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Heritage Recommendation:

The Defense Department should cut subsidies to its commissaries. This proposal saves $500 million in 2016, and $9.5 billion over 10 years.

Rationale:

The @deptofdefense commissaries are costing the federal government almost a billion dollars a year.

The DOD currently has an extensive and separate retail network to serve those in the military and their dependents. There are four different retail systems operated by the DOD. One of them, the commissaries, is a network of grocery stores, available to all branches of the military. In addition to commissaries, the military has three separate exchanges, or general retail stores, one for the Army and Air Force, one for the Navy, and another for the Marine Corps.

Commissaries and exchanges are managed differently. All three of the exchanges are self-sustaining, relying on the revenue from their sales rather than direct appropriations. Commissaries, which are run by the Defense Commissary Agency (DeCA), rely on an annual subsidy to pay for their civilian workforce. Unlike the exchanges, the commissaries do not mark up the prices enough to fully fund their operations.

The Obama Administration’s recommendation to cut subsidies to defense commissaries and strive toward streamlining the various systems into a single network is on the right track.1

Endnotes

  1. U.S. Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, United States Department of Defense Fiscal Year 2015 Budget Request Overview, March 2014, pp. 5–6, (accessed November 12, 2014). 

The @deptofdefense commissaries are costing the federal government almost a billion dollars a year.

Contributing Expert

Diem Nguyen Salmon is the Senior Policy Analyst for Defense Budgeting in the Heritage Foundation's Allison Center for Foreign Policy Studies. Intimately familiar with both U.S. defense platforms and government contracting practices, she brings special expertise to questions of defense hardware investment.

See publications by Diem Nguyen Salmon

Diem Nguyen SalmonSenior Policy Analyst for Defense Budgeting

Heritage Experts

James Jay Carafano, Ph.D., a leading expert in national security and foreign policy challenges, is The Heritage Foundation's Vice President, Foreign and Defense Policy Studies, E. W. Richardson Fellow, and Director of the Kathryn and Shelby Cullom Davis Institute for International Studies.

See publications by James Jay Carafano, Ph.D.

James Jay Carafano, Ph.D.Vice President for the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, and the E. W. Richardson Fellow

Steven Bucci, who served America for three decades as an Army Special Forces officer and top Pentagon official, is director of the Allison Center for Foreign Policy Studies at The Heritage Foundation.

See publications by Steven Bucci

Steven BucciDirector, Douglas and Sarah Allison Center for Foreign and National Security Policy

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