Beaufort News

Budget cuts might be aimed at Defense Commissary Agency

Military grocery stores operate so efficiently that the discounts provided to shoppers are worth double the value of tax dollars being spent to deliver this prized benefit worldwide to U.S. service members and families.

Joseph H. Jeu, director of the Defense Commissary Agency, made that point in an interview last week amid rising speculation that commissaries could be targeted for cuts under national debt-reduction plans being readied by Congress and the Obama administration.

In return for the "$1.3 billion that we get in appropriations support" annually, Jeu said, "we are providing nearly $2.7 billion in savings to patrons." People don't think about that "two-for-one return on investment," he said, adding, "It's really an excellent investment for taxpayers."

As national debt climbs toward $15 trillion and politicians confront a crisis decades in the making, talk in Washington is of cutting federal entitlements, such as Medicare and Social Security, and slashing future defense budgets. Commissaries have become part of that conversation, thanks to a long-standing suggestion by the Congressional Budget Office.

CBO says that up to $1.7 billion a year could be saved by ending commissary subsidies, combining base grocery and department stores into a single system and cutting shopper discounts to 5 percent. The diluted discounts could be eased in part with a new grocery allowance, CBO advises.

Last December, the Simpson-Bowles commission on budget reform listed base store consolidation as one of many possible cuts. In August, the Senate Veterans Affairs Committee liked the CBO idea enough to include it in a bill to create another entitlement. The committee voted to take dollars saved by ending the commissary subsidy and redirect them to the Department of Veterans Affairs to provide health care to veterans and their families who lived on Camp Lejeune, N.C., during an era when base drinking water was contaminated.

The bill still faces procedural challenges before it can be debated and put to a vote by the full Senate. Commissary advocates fear the committee's vote alone has made commissaries a reasonable target of savings.

Defense officials meanwhile are studying ways to save $400 billion over 10 years as ordered by President Barack Obama earlier this year. And under a separate deal reached between Obama and Republican congressional leaders this summer, a new "super committee" of lawmakers must find at least $1.5 trillion more in debt-cutting initiatives over the next decade, or automatic cuts of $1.2 trillion will hit both defense budgets and entitlements.

Commissary patrons are concerned, Jeu said. Jeu's senior enlisted advisor, Army Command Sgt. Maj. John M. Gaines Jr., travels often and gets feedback from a lot of junior members who say the commissaries are critical.

Rather than comment on any particular threat to stores or savings, Jeu chooses to explain the value commissaries create for both shoppers and taxpayers, "even in a fiscally constrained environment."

First, he said, DeCA has a tradition of efficiency that other agencies would do well to emulate. When adjusted for inflation, the $1.3 billion annual appropriation is 40 percent below what DeCA got in 1992, when it was formed through consolidation of service-run grocery stores. That's a savings of about $700 million a year to deliver the benefit, Jeu said.

Commissary shoppers save, on average, 31.7 percent over commercial-store patrons. The savings likely are less, he conceded, if price comparisons are made only for Walmart or other major discounters.

But commissaries deliver more than savings. They bring a sense of community, Jeu said. That was seen anew following some recent natural disasters, including the earthquake and tsunami in Japan last March. Shelves in grocery stores outside Misawa Air Base soon were bare of goods. But commissary shelves were full, Jeu said, with "plenty of bottled water, batteries and all those things. The (deputy wing) commander there sent me an email. He said the commissary had been a 'bedrock' of the community. That's how members view their commissary."

Before becoming DeCA director last January, Jeu spent about the first third of his 32 years in government working with Army and Marine Corps commissaries. He remembers base stores 30 years ago being more like warehouses. They carried about half the number of products being stocked today. None had their own bakery or deli or fresh seafood section.

"Thirty years ago our savings were probably running about 25 percent," Jeu said. He credits the larger savings today to a more professional staff. DeCA employees are better trained, armed with better data and have skills to manage categories of items far more efficiently.

"It really is more than a grocery store," Jeu said. Commissaries "are an integral part of the military's compensation system. That's something people are forgetting."