Commissaries Closing?

[Spekkio]

Page 15 doesn't explain anything. It's making a statement with no supporting evidence, just like every other store in existance claims you save money by shopping there.

To the commissary's credit, customers probably actually save money by shopping there. But where are they getting $2.8 billion from? They don't say, probably because it's made up or based on a bunch of unrealistic worst-case assumptions, like buying prime rib at Safeway for $12/lb.

Why don't we pay for healthcare on AD? Everyone else does.

Not everyone else pays for healthcare. It's fairly typical for high risk jobs to provide full healthcare. It would be pretty tough to get people to work for you if you wanted to put them in a situation where they can be seriously hurt and then tell them that they're going to have to pay for the resulting medical costs.

It's also typical for healthcare benefit plans to be more lucrative for people with more unique skillsets.

Also, the cost of healthcare in the military if further offset by physical requirements. They won't take people with various previous conditions. You can work at AT&T if you have to take medication for high blood pressure, but you can't be in the military.

You are missing the point with your comparison to Walmary, Costco, etc. Those locations are MORE COSTLY to the service member compared to the commissary. The commissary is not a competitive business, it is a cost + 5% BENEFIT.

Well, let's back up a bit here...

Let's look at who actually shops at commissaries most of the time:
-Retired people.
-People with dependants.

A single E-5 and below has no reason to shop at the commissary; he lives in the barracks, gets BAS and can eat at the base galley or onboard the ship for free. If he shops in town and spends more than $400/mo on groceries, he's doing it wrong and should see the CFC. Closing the commissary costs a single enlisted person $0 because your food bill never exceeds BAS in the first place.

Some single officers or SNCOs may shop at the commissary instead of at the local grocery store, but a single O-1/O-2 or E-6+ can afford the hit to shop at Walmart instead. In fact, I shopped in town as a single O-1 and my monthly food bill was less than my BAS. Closing the commissary costs a single officers and SNCOs $0 because your food bill never exceeds BAS in the first place.

So when you break it down, this benefit isn't really even being enjoyed by every servicemember. It's only for people with dependants and retirees. I'd be interested to know if it even benefits a majority of AD servicemembers. Like I said above, on my sea tour the commissary was closed by the time I got out of work. Every other grocery store stays open until 2200-0000, but the commissary closes at 1700. An AD person on sea duty practically couldn't shop there if he wanted to. Next time you're pissed off that a mom has her 3 kids in the commissary, remember she's doing it because the place isn't open when hubby gets off of work like normal grocery stores. So when I had to pick up a few groceries on the way home, I stopped at a store out in town simply because the commissary wasn't open.

 

[Tycho_Brohe]

A single E-5 and below has no reason to shop at the commissary; he lives in the barracks, gets BAS and can eat at the base galley or onboard the ship for free. If he shops in town and spends more than $400/mo on groceries, he's doing it wrong and should see the CFC. Closing the commissary costs a single enlisted person $0 because your food bill never exceeds BAS in the first place.

Some single officers or SNCOs may shop at the commissary instead of at the local grocery store, but a single O-1/O-2 or E-6+ can afford the hit to shop at Walmart instead. In fact, I shopped in town as a single O-1 and my monthly food bill was less than my BAS. Closing the commissary costs a single officers and SNCOs $0 because your food bill never exceeds BAS in the first place.

So when you break it down, this benefit isn't really even being enjoyed by every servicemember. It's only for people with dependants and retirees.

Saying it costs these two hypotheticals $0 assumes that neither of them use the commissary. I use it all the time. Pretty much everything but produce (they have Boar's Head for deli meats, so I'd say that's safe), so closing it would cost me quite a bit. I mean, who's fault is it that people aren't using their benefits? Their own. It's not that they CAN'T use them, they just choose not to. Now, if they closed all but OCONUS, then we'd be paying for a benefit most of us wouldn't use, but that's probably fair, since we'd pay a lot less for it, and we'd want the benefit if we got stationed there.
All that said, I wouldn't have a huge problem with them closing the CONUS locations if they passed some of the savings back to us somehow, as villanelle suggested.

 

[ProwlerPilot]

Words.....

Agree to disagree on the actual savings.... Hard to determine when not given the behind the scenes calculations. But you can't deny there is savings there. How much is in question.

"Not everyone else pays for healthcare." As a stickler for the facts, I'm assuming you have some numbers to back up that claim. What percentage of the private sector is being provided with 100% free healthcare from their company? I can't think of a private or public company out there that provides free health insurance. If you can find it I would love to know and apply. I don't even think loggers get free health care from their companies, but I don't work in the logging industry, so maybe they do.

By your rationale though, only those in dangerous positions should recieve free health care. Aviators, probably. SEALs, definitely. The YN1 working at PSD? Probably not. I would argue that there are more people in the military that have never been in a life and death activity than have. Therefor, I ask again, why do we recieve 100% free healthcare? That is a benefit that the rest of the working world pays for. It's the whole reason for Obamacare. There is some savings for the pool that the military pulls from... young and healthy. But there are large number of members on all kinds of different medications for a wide assortment of ailments. To argue that the military is healthy, therefor shouldn't pay for insurance also does not hold water.

Your argument on individual savings is skewed as well. If you choose not to shop at the commissary and take advantage of the savings, that is your choice. But the numbers show that a LOT of people do. To argue that because your BAS covers your in town expense has no bearing on savings. The commissary provides increased buying power. Meaning I can get more for my money there. Either way, for the people who do take advantage of it (dependents and retirees as you argue.... once again would love to see the breakdown on those numbers if you have them), eliminating the commissary will reduce their military benefits.

The remaining questions that you have not answered.... Do you think that military members should accept reduced benefits for taxpayer savings?

 

[BigBadBoJenkins]

Do you think that military members should accept reduced benefits for taxpayer savings?

I think things like a 5 year suspension of pay raises or shutting the commissary down are a lot better than reducing medical or retirement benefits. Lately it seems personnel costs are a topic of discussion for cuts, at least according to the Navy Times.

http://www.navytimes.com/article/20...sts-swamping-DoD-budget-figures-say-otherwise

 

[Flash]

.........According to the FY2012 DeCA financial report, the return on investment is about 2x for the money spent on this benefit, meaning that the $1.4B spent on DeCA by the government produces $2.8B in savings for shoppers there. So, to enact your plan, you would have to cover $2.8B, not simply $1.4B to have there be a net zero affect on the service member. Now the report does not break down the demographic of the shoppers... so if you drop everyone except active duty members, you might be able to reduce the overall savings number and thus save the $1.4B, but I think that is a tall order........The bottom line is should the military service member bear the burden of increased costs in order to save the government money? My answer in this case is still no.

The problem with your reasoning is already something you pointed out, what are the demographics of the the commissary patrons? From my own observations many times more than 50% of the folks stalking the aisles are not active duty or their dependents, just from their age alone. So who are the commissaries really benefiting?

........Do you think that military members should accept reduced benefits for taxpayer savings?

The question is who is the commissary really benefiting, active duty miltiary members or someone else? More would certainly benefit from increased BAS than the commissary. We have to make cuts in a lot of places, some shoudl be in places that are not 'core' DoD functions or provide a direct and tangible benefit to serving personnel. As Sentaor McCain put it, people don't join the military so they can shop at the commissary.

 

[ProwlerPilot]

The problem with your reasoning is already something you pointed out, what are the demographics of the the commissary patrons? From my own observations many times more than 50% of the folks stalking the aisles are not active duty or their dependents, just from their age alone. So who are the commissaries really benefiting?



The question is who is the commissary really benefiting, active duty miltiary members or someone else? More would certainly benefit from increased BAS than the commissary. We have to make cuts in a lot of places, some shoudl be in places that are not 'core' DoD functions or provide a direct and tangible benefit to serving personnel. As Sentaor McCain put it, people don't join the military so they can shop at the commissary.

The demographics are a question if we want to ensure that active duty only recieve benefits, however everyone in there is either a dependent, retiree, active duty, or reservist. All members of the military. It isn't like this benefit is being extended to some dude off the street. So do you want to reduce the reservist and retiree benefits?Financials would need to be seen as to how that effects the economies of scale (volume of items moving through the commissary) and purchasing power of the commissary itself. Prices may in fact go up due to lower number of items being stocked.

As for the BAS argument that continues to rise.... Do we all really think that if the commissary was closed down that the government would approve an increase in BAS? How much of an increase? How much of the $1.4B do you propose? If we accept the $2.8B in savings, and agree that only 50% of the customers are active duty families, then that would require $1.4B increase in BAS to break even. Once again, no savings and a less lucrative "investment" on the part of the government.

Finally McCain's comment is moronic. By that rationale flight pay should go away. After all, I didn't select aviation for the flight pay. I didn't decide to become a paddles for flight deck pay. Eliminate that and it is at least a couple million a year. Take away sea pay, family separation pay, and some others and you have even more.

The commissary is a benefit, not a business. It is not designed to make money. It is designed to reduce the cost of goods to military members. The validity of that benefit may be in question, but it comes back to the core issue. Do you believe that the cumulative benefits the military member gets today are too high? Should they be reduced in order to save taxpayer money???

 

[Spekkio]

To answer your question, I don't want to see servicemembers' benefits cut, but I can see where things just don't make sense.

Paying someone full medical benefits because your organization has its own team of doctors and because the job requires people to put their physical well being makes sense. Sports teams give their athletes full coverage, but if that doesn't work for you then you can start with this list

http://money.cnn.com/magazines/fortune/bestcompanies/best_benefits/health_care.html

And you can add policemen, firefighters, and that guy who monitors the city water supply.

But none of those people have their own exclusive grocery store. That's absurd.

Now, what doesn't make sense is collecting about $400/mo for food tax free and whining that you can't shop at a grocery store that lets you put $100 of it into the bank. BAS is meant to be spent on food. Considering I can eat well at $2 per meal for myself shopping at a private grocer, and it costs $4.25 to eat on the ship, I don't even need the commissary to give myself tax free income. If people are not spending 100% of BAS on food, then that money ought to be taxed or recuperated. I don't want it to be, but I can acknowledge that it's a bit of a scam. It's even more of a scam when someone gets a cheap apt and gets $1k a month or more in tax free income. Do I want that to go away? No because I benefit from it, but I also understand it's unreasonable to expect it. At a minimum, any BAH leftover should beus taxed as income. Lucky for us it's too hard to track where the money goes for every servicemember, so we get a nice tax break for being frugal.

So if you think that closing commissaries is costing a single SM money because he has to actually spend his BAS on food as intended instead of a car payment, I respectfully disagree. Your argument is that these servicemembers ought to be able to double-dip a benefit at taxpayer expense. So that is why I say the only people it affects are retirees and dependants.

 

[Flash]

The demographics are a question if we want to ensure that active duty only recieve benefits, however everyone in there is either a dependent, retiree, active duty, or reservist. All members of the military........

Really? Dependents are members of the military? As for retirees, why should the DoD continue to offer them this benefit?

As for the BAS argument that continues to rise.... Do we all really think that if the commissary was closed down that the government would approve an increase in BAS? How much of an increase? How much of the $1.4B do you propose? If we accept the $2.8B in savings, and agree that only 50% of the customers are active duty families, then that would require $1.4B increase in BAS to break even. Once again, no savings and a less lucrative "investment" on the part of the government.

BAS can be restructured completely, eliminate it for officers and increase it for enlisted. Put only a percentage of the $1.4 billion towards the new BAS structure. Just an idea, one of many options that could make cutting commissaries more palatable for Congress and DoD

Finally McCain's comment is moronic.

His comment was directed at folks who argue that cutting things like the commissary will hurt with recruiting, the other things you cite are for specific duties/jobs and are not universal to all servicemembers.

The commissary is a benefit, not a business. It is not designed to make money. It is designed to reduce the cost of goods to military members. The validity of that benefit may be in question, but it comes back to the core issue. Do you believe that the cumulative benefits the military member gets today are too high? Should they be reduced in order to save taxpayer money???

I think the entire benefits structure should be looked at from top to bottom from retirement (to include health care for retirees) to commissaries. Personnel costs are an ever increasing share of the budget and will soon be squeezing procurements and operations funding if something is not done. I think something is a bit wrong with our funding when the DoD puts more into funding retirement than active duty pay and the delta between the two is just going to get exponentially worse.

 

[Spekkio]

I think it's worth noting that the only thing a BAS increase would accomplish in a vacuum is raising the cost of eating at the base galley or onboard the ship for many, if not most, enlisted servicemembers. That will have the opposite morale effect of throwing them a bone for closing the commissary, considering a lot of servicemembers with spouses and children are already pissed off they get charged for meals on liberty days that they don't drive to the base to eat. You'd also need to change the rules so that BAS isn't automatically deducted in its entirety for these services in order for them to see a positive difference in pay and benefits -- a change I'd be a big fan of, but would only last as long as "what happens when an E-3 can't pay his food bill because he spent his entire paycheck on hookers and blow?"

I can guarantee that if you asked enlisted servicemembers down from a single E-4 to a married E-8 if they would prefer getting BAS actually paid to him in return for closing the commissary, most of them would take that deal without even asking for an increase.

 

[jcj]

The commissary is a benefit, not a business. It is not designed to make money. It is designed to reduce the cost of goods to military members. The validity of that benefit may be in question, but it comes back to the core issue. Do you believe that the cumulative benefits the military member gets today are too high? Should they be reduced in order to save taxpayer money???

Absolutely not. I'm just saying that the good ole' USA has some companies that have huge and efficient grocery supply chains and are really good at running grocery stores at a nice profit. Maybe they can do a better job at running CONUS commissaries then DECA, ans return the savings to go to BAS or MWR programs or something else to improve QOL of troops. And if CONUS commissaries can be outsourced like this, and the vendor has one right outside the gate where DOD commissary eligible people can shop @ commissary prices and no tax (modern check-out systems can do that now) so the commissary system isn't paying the cost of a grocery store building just inside the gate, is that bad? Re-purpose the commissary building for something else if needed.

If a CONUS base is in BFE & needs a commissary, great. See if Albertsons (just a name I pulled out of the air I'm not in the grocery business) can run it cheaper than DECA - if so bring them in. If the base happens to be NFW, why not close the commissary if eligible commissary customers can shop at the Albertsons just off base @ the south end of 18-36 @ commissary prices with no tax, and savings routed to the troops?

My problem with the "cost + 5%" statement by DECA is that the cost might just be higher for the government to run a grocery store then for a grocer to run a grocery store - at least in CONUS where a grocer has expertise, economies of scale, good transportation & a good supply chain. OCONUS & deployed locations - whole different ball game.

 

[Machine]

Most food isn't taxed anyway, so the tax-freeness of the commissary isn't much of anything.

 

[ProwlerPilot]

To answer a couple questions.....

1. If you save BAS or BAH, good on you. That is called being responsible with your money and should be encouraged, not discouraged. I understand that money is designed for a specific use, but if you can save yourself $50 by eating chicken instead of steak, then that is great. The bottom line continues to be, can you close the commissary and restructure the BAS payments in order to provide the service member with the SAME LEVEL of benefit they recieve now? And do it at a cheaper price tag than $1.4B. My argument is no. And frankly I don't trust the government budget office to make it happen.

2. Flash, am I hearing that dependents shouldn't be allowed to shop at the commissary from you? Is that your argument? Sounds reasonable. I mean when the military member is away for 6 months, his or her spouse should be required to go out in town and pay higher grocery prices. In the words of Chris Carter... "Come on Man!"

3. Eliminate BAS for officers: Are we (officers) all fine with taking a $2,900 pay cut next year? Just want to make sure I'm clear on this.

4. Personnel costs: They are increasing. That is a fact. But not as fast as the military budget. I think BzB posted a link to the navy times article showing the numbers. So the personnel costs as a percentage of the budget are actually decreasing. So again, should cuts happen to military pay, or to procurement?

5. Efficiency of private grocers: Agreed. Many chains out there have great prices and have large economies of scale to drive down prices. I would find it interesting to see how the prices compare to Walmart. I'm guessing the commissary can still beat their prices. This is because even the most efficient companies still have to make a profit. This means an average markup of 10% (Costco) to 32% (Walmart) to 42% (Target). The commissary markup is 5%. The commercial sector will never be able to match that. That is why the commissary is subsidized. But once again, this is not about contracting out the commissary. It is a question of do we think this benefit should be cut.

No one here has been able to show how you eliminate the commissary, save $1.4B, and not increase cost on the average service member. I completely agree that better options of efficiency, streamlined operations, cost cutting, better negotiated supplier contracts, reducing waste, etc need to be evaluated. But to simply cut it with a cavalier attitude of "It will save us $1.4B and after all, no one joins to shop at the commissary" is irresponsible.

I'm not saying that there aren't ways to save some money. I just think it needs a much deeper analysis on the actual effect on the service member. I personally believe that things like the mismanagement of programs like JSF, which is woefully over budget and behind schedule, is a much better target than the pockets of sailors.

 

[DanMa1156]

Spending $1.4B for customers to save $2.8B seems like a pretty good investment to me. (2x ROI).

Let's pretend there really is a 2 for 1 return on investment with the commissary - I think my point still stands - would it not be more efficient to distribute the benefit among the service-members in the form of tax-free cash payments (BAS) than having a full fledged grocer that has labor, capital, and utilities costs?

 

[ProwlerPilot]

Let's pretend there really is a 2 for 1 return on investment with the commissary - I think my point still stands - would it not be more efficient to distribute the benefit among the service-members in the form of tax-free cash payments (BAS) than having a full fledged grocer that has labor, capital, and utilities costs?

No. If the number is correct, the government is spending $1.4B and the servicemember is recieving $2.8B.

If you were to distribute the $1.4B through BAS, the service member would recieve $1.4B. Less return on the government's investment.

 

[Spekkio]

1. If you save BAS or BAH, good on you. That is called being responsible with your money and should be encouraged, not discouraged. I understand that money is designed for a specific use, but if you can save yourself $50 by eating chicken instead of steak, then that is great. The bottom line continues to be, can you close the commissary and restructure the BAS payments in order to provide the service member with the SAME LEVEL of benefit they recieve now? And do it at a cheaper price tag than $1.4B. My argument is no. And frankly I don't trust the government budget office to make it happen.

You're missing the point. BAS, were it not deducted from all servicemembers' paycheck, is to cover the cost of food for the individual servicemember (and to be specific, it's supposed to cover the cost of food incurred by eating at government mess facilities). The cost of food can be fairly easily covered and then some by enlisted BAS when shopping at private grocers. When I was a single O-1, my food bill came out to be about $80/week. That was with eating steak at least 2x a week and plenty of beer. It's really really easy to eat within BAS if you cook your own food, and BAS isn't supposed to cover the cost of eating at Applebees every night.

It is good on the servicemember if they can save $50 of that BAS, but now you want taxpayers to pay another $1.4 billion in order to keep a specialized grocery store open so a single servicemember not living in the barracks can save $75 instead of $50 of tax-free money? Be realistic here.

I am in favor of expanding the BAS benefit language to include the cost of food period so that every servicemember receives it in the form of money, and I even favor a dependant rate. You would have to do that for a BAS increase to even mean anything to a large portion of servicemembers. But I am not in favor of keeping the commissary open.

I think Flash's comment wrt officers was directed at the fact that it's intended to be spent at government mess facilities. When was the last time you ate at the base galley? For me, that was OCS five years ago. Officers spend the majority of their BAS out in town when they aren't underway, which isn't its original intended use, and I'm sure you could restructure the way the Navy does food charges underway to not have a silly system where we get paid and then hand it back to the Navy. You could take that $280/mo and add it to officers' base pay. So you still get the money, it's just taxed as income.

I also am not going to discuss comparing anything to your $2 ROI metric until someone demonstrates where that number came from. As far as I'm concerned, DECA made it up to make itself seem like a good deal for Congress. If 50% of servicemembers shopped at the commissary on a regular basis as their sole source of groceries (a reasonable assumption I think when you take out all the E-4 and below living in the barracks and officers/SNCOs who shop elsewhere), then that means the average savings are $320/month. I spend about $600/mo and about half of that goes toward diapers, baby formula, copious amounts of milk, and cleaning supply costs for an OCD wife (bless her soul for not making me do it). I've shopped at the commissary and you don't save over 50% by doing it. That is a completely unrealistic number, and a retired couple probably doesn't even spend $320/mo on food, period.

I just think it needs a much deeper analysis on the actual effect on the service member.

Yea, well, next time you're on a ship go walk the p-way and ask ship's company if they'd rather have a commissary 'available' (in quotes because it's closed by the time they get off work) or an extra ~$350/mo tax-free cash actually paid into their bank accounts instead of deducted for meals that they don't eat on base.

A married E-5 to E-7 on a sub standing 4-section duty during an availability would spend about $177/mo to eat on the ship were it charged per-meal. If BAS weren't automatically deducted in full, that would give him and his family about another $175 of tax free money to spend on groceries. You don't think that's helpful to him? You don't think that would be a ton better than being charged $353 to not eat at the base galley because he's married with kids and has a house, so he doesn't drive himself to the base on Sunday morning to eat powdered eggs? You think that's worse than having the commissary available, which is going to save him more than $175/mo provided that his wife takes his kids to shop on the base because he's working until 1900 every non-duty day?

Oh, and let's not forget that not every base has a commissary like Norfolk. I came from PNSY where the commissary had like 6 aisles of bare-bone items and stuff was frequently almost to its expiration date. There was simply not a big enough market there because you only had ~500 AD servicemembers there max at one time. You think that's BETTER than giving people their BAS to go shop at their private grocer of choice, that has fresh food and stays open until 2200-0000?

I think you're in lala land if you think that raising BAS alone is going to affect a majority of active duty enlisted servicemembers, and the same goes for shutting down the commissaries. Would I like to have both? Sure. But given the option of getting my BAS to spend how I please and having a commissary 'available,' I'll take my BAS thank you.