Tuesday, September 2, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Commissaries to be run as business, not benefit

By
From page C4 | March 09, 2014 |

Behind the plan to slash taxpayer support of commissaries is a concept Defense Secretary Chuck Hagel and his senior advisors have embraced that base grocery stores should operate as a business and not a benefit.

This shift is candidly revealed in budget documents released Tuesday and in a legislative packet for implementing the funding cuts drafted by the Defense Commissary Agency.

The documents make clear that individual stateside commissaries will survive only if they produce enough revenue to cover operating costs.

Hagel gave a softer summation to the Senate Armed Services Committee on Wednesday.

“We are not shutting down any commissaries. We recommend gradually phasing out some subsidies, but only for domestic commissaries that are not in remote locations,” the defense chief said.

Because stateside stores “will continue to operate tax-and-rent free, they will still be able to provide people with a very good deal.”

Resale industry officials and military associations dispute this and predict closure of most stateside commissaries. Only stores overseas and at 25 remote stateside bases would be funded after fiscal 2017. DeCA’s annual appropriation of $1.4 billion would be cut by then to $400 million.

That’s enough to offer shoppers savings of 10 percent off “high-priced, private grocery stores,” the budget documents estimate. Savings would be even “more modest” in comparison to prices at “discount grocery chains.”

“In the end, patron usage of the commissaries will determine the savings and their comprehensive advantage,” explains the overview report from the Obama administration on its 2015 defense budget request.

Commissary shoppers now save an average of 30 percent compared to prices for a range of private sector grocery stores, DeCA said. The hit to those savings would be felt “worldwide,” budget documents explain.

The draft implementing legislation has a telling description of commissaries run as businesses. Criteria for opening and closing stores, it says, would make cost recovery “the primary factor for their existence, as opposed to the needs of active-duty members and their families or the welfare of the military community.”

That statement captures what’s ahead for a long-prized benefit if Congress adopts the plan in the budget, said an industry official. He described the plan as carelessly conceived and devastating to the “ecology” of base stores, both exchanges and commissaries.

There were no signals of stiff resistance from the Senate Armed Services Committee on Wednesday when Hagel and Army Gen. Martin Dempsey, chairman of the Joint Chief, detailed the new budget with its sweeping changes impacting commissaries and the Tricare program.

Sen. Saxby Chambliss, R-Ga., called commissaries a “core benefit” that contributes “greatly to recruitment and retention, even though I am one of those who thinks (troops) may get just as good a deal at some other retail outlets around the country.” Encouraging commissaries “to act more like a business . . . makes sense. I agree with that,” Chambliss said.

But the senator questioned whether changes to this benefit should be delayed until the Military Compensation and Retirement Modernization Commission make its report in February 2015. He and Sen. Mark Warner, D-Va., have introduced a bill to mandate such a delay.

Hagel and his comptroller Robert Hale explained that some savings from compensation reforms are needed now because budget cuts already are impacting training, troop support and overall readiness.

Hagel noted that exchanges operate on the same business model and are successfully self-sustaining. So, senior leaders, relying on “significant analysis,” decided “we knew enough about where we thought we’re going to have to eventually go with commissaries,” Hagel said.

On Feb. 24, the day Hagel first unveiled highlights of the budget with its plan for commissaries, he recognized “senior enlisted leaders in each of the services for (their) help and input in crafting this budget.”

Two days later, however, some of those enlisted leaders told a House appropriations subcommittee that their support for compensation reforms didn’t extend to the deep hit on the commissary benefit.

Sergeant Major of the Marine Corps Micheal P. Barrett and Chief Master Sergeant of the Air Force James A. Cody noted that young families in particular depend heavily on the shopping discounts.

Barrett called it “ridiculous that we’re going to go after something that saves some young lance corporal, an E-3, $4,500 a year.” If that E-3 has two kids, he added, “and every time he shops it’s $240, well unbeknownst to him he just put $80 worth of gas into his car.”

Base exchanges could also be at risk, say industry officials. Their profits already are stressed by base closures overseas, deep force cuts and minimum wage hikes on service contracts. The plan for commissaries would deepen these challenges by reducing shopper traffic on base and by allowing commissaries to offer products now sold only in exchanges.

DeCA’s implementing legislation shows commissaries would operate far different than they do today. A surcharge of at least 5 percent would still be collected on goods sold. But to capture more revenue, DeCA seeks authorities to run its stores much like commercial supermarkets.

That means a broader mix of products, including beer and wine. Restrictions would be lifted on sale of generic or local goods to compete with brand names. A legal requirement to sell goods at cost would end so prices could climb as needed and would vary from store to store.

DeCA could advertise to try to keep patrons and hire private contractors to operate specific store functions. It also wants relief from “socio-economic” laws that dampen savings, including a requirement to buy certain supplies and services from nonprofit employers of persons who are blind or have other significant disabilities.

Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email milupdate@aol.com or tweet @Military_Update.

LEAVE A COMMENT

Discussion | 2 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Dave ShreeveMarch 09, 2014 - 10:33 am

    "Hagel and his comptroller Robert Hale explained that some savings from compensation reforms are needed now because budget cuts already are impacting training, troop support and overall readiness." Since the Commissary subsidy is around 1/4 of 1%, that is a hell of a big savings...NOT! This is all purely political and makes no economic or common sense at all. Only if your object is to discourage enlistments and retention of personnel does this make sense. Leaving large shuttered buildings on the bases also makes no sense. If the end game is to turn over the commissaries to outside contractors, i.e., Safeway or Raley's, then they should just come out and say so from the start.

    Reply | Report abusive comment
  • Rich GiddensMarch 09, 2014 - 11:20 am

    Both Obama and Hagel are hated by the troops. And its not just over the Commissaries or Tri-care either.

    Reply | Report abusive comment
.

Solano News

Labor Day not a holiday for everyone

By Amy Maginnis-Honey | From Page: A3, 2 Comments | Gallery

 
Labor Day breakfast introduces union-backed candidates

By Susan Hiland | From Page: A3 | Gallery

Pool provides last dose of summer fun in the sun

By Amy Maginnis-Honey | From Page: A3 | Gallery

 
SafeQuest schedules peer counseling training course

By Susan Hiland | From Page: A5

 
Fairfield police log: Aug. 31, 2014

By Susan Hiland | From Page: A12

 
Suisun City police log: Aug. 31, 2014

By Susan Hiland | From Page: A12

Suisun City police log: Aug. 30, 2014

By Susan Hiland | From Page: A12

 
Fairfield police log: Aug. 30, 2014

By Susan Hiland | From Page: A12

.

US / World

VP Biden says workers deserve ‘fair share’

By The Associated Press | From Page: , 1 Comment | Gallery

 
Obama: ‘Revving’ economy calls for higher wages

By The Associated Press | From Page: | Gallery

Senegal monitors contacts of 1st Ebola patient

By The Associated Press | From Page:

 
San Francisco to be 1st to test urban farming law

By The Associated Press | From Page:

GOP challenger tries novel tactics against Brown

By The Associated Press | From Page: | Gallery

 
US eating habits improve a bit – except among poor

By The Associated Press | From Page: , 2 Comments | Gallery

 
No gray area: Beliefs shape views of Brown killing

By The Associated Press | From Page: , 1 Comment | Gallery

Americans detained in North Korea call for US help

By The Associated Press | From Page: | Gallery

 
Iraqi prime minister pledges to root out militants

By The Associated Press | From Page: | Gallery

Poland’s PM: Ukraine’s war must be stopped now

By The Associated Press | From Page: | Gallery

 
Pro-Russian rebels lower demands in peace talks

By The Associated Press | From Page: , 2 Comments | Gallery

US helicopter crashes in Gulf of Aden; all rescued

By The Associated Press | From Page:

 
.

Living

Community Calendar: Sept. 2, 2014

By Susan Hiland | From Page:

 
.

Entertainment

Inquiries begin into nude celebrity photo leaks

By The Associated Press | From Page: | Gallery

 
‘Guardians’ tops Labor Day, summer box office

By The Associated Press | From Page: | Gallery

TVGrid

By Daily Republic Syndicated Content | From Page: A11

 
.

Sports

Kirk rallies to win the Deutsche Bank

By The Associated Press | From Page:

 
Rockies top Giants after losing end of suspended game

By The Associated Press | From Page:

Dunn homers in 1st at-bat as A’s top Mariners

By The Associated Press | From Page:

 
Right guard Boone passes physical, rejoins 49ers

By The Associated Press | From Page:

Raiders name rookie Derek Carr as starting QB

By The Associated Press | From Page: B1

 
Armijo beats Vanden 2-0 to claim All-City boys soccer title

By Brian Arnold | From Page: B1 | Gallery

Armed with new deal, Chiefs’ Smith looks forward

By The Associated Press | From Page:

 
Column: Stewart’s Chase status doesn’t matter

By The Associated Press | From Page:

 
Raiders ink CB Dowling, 9 others to practice squad

By The Associated Press | From Page:

Serena Williams, Djokovic roll to US Open quarters

By The Associated Press | From Page:

 
Houston Astros fire manager Bo Porter

By The Associated Press | From Page:

Hamels, 3 Phillies relievers no-hit Braves

By The Associated Press | From Page:

 
.

Business

Markets drift as Wall Street has day off

By The Associated Press | From Page:

 
Austerity debate flares as Europe recovery fades

By The Associated Press | From Page: | Gallery

Civil disobedience expected in fast-food pay fight

By The Associated Press | From Page: , 7 Comments | Gallery

 
.

Obituaries

.

Comics

Beetle Bailey Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Zits Sept 2

By Daily Republic Syndicated Content | From Page: B6

Wizard of Id Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Sally Forth Sept 2

By Daily Republic Syndicated Content | From Page: B6

Bridge Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Blondie Sept 2

By Daily Republic Syndicated Content | From Page: B6

Rose is Rose Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Sept 2

By Daily Republic Syndicated Content | From Page: B6

Sudoku Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
B.C. Sept 2

By Daily Republic Syndicated Content | From Page: B6

Baldo Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest Sept 2

By Daily Republic Syndicated Content | From Page: B6

Crossword Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Dilbert Sept 2

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Peanuts Sept 2

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Garfield Sept 2

By Daily Republic Syndicated Content | From Page: B6

Word Sleuth Sept 2

By Daily Republic Syndicated Content | From Page: B7