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Big Bite: Pentagon cuts could raise troops' grocery bills

Bill Briggs
Tuesday, 25 Feb 2014 | 1:03 PM ET

If the first casualty of war is truth, the first casualty of peace may be diaper prices.

The costs of toothpaste, pasta, diapers and other basic household goods may triple for military and veteran families who shop at stateside commissaries if Congress approves a Pentagon proposal to cut a $1 billion subsidy meant to keep on-base supermarkets more affordable than private grocers.

The commissary at Naval Station San Diego.
Denis Poroy | AP
The commissary at Naval Station San Diego.

As Defense Secretary Chuck Hagel proposed spending reductions Monday to shrink U.S. forces to pre-World War II levels and pivot to a sleek mode of peacetime readiness, military families accused Pentagon brass of losing touch with the household budgets of men and women financially and emotionally strained by a decade of war.

The commissary cuts fueled some of the loudest outcries. A $1 billion slash in that $1.4 billion annual subsidy would simply cause on-base stores to bump their prices to match civilian grocers, said Babette Maxwell, founder of Military Spouse Magazine, the wife of a Navy pilot and an advocate for service members and their families.

(Read more: Chart of the Day: US military dollars vs the world)

The other problem, Maxwell said, is a broken promise: military members willingly agreed to serve for lower wages than civilians in exchange for certain earned benefits, including discounts on goods at military installations.

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Those bargains, she added, help keep many military families and military retirees afloat. And if the cut is enacted, Maxwell envisions the eventual disappearance of U.S.-based military commissaries.

"As much as we'd like to pretend that Department of Defense leaders are dialed into what's happening in boots-on-the-ground families, they're not. We are. We know what our families can afford. They don't," Maxwell said.

(Watch: Defense cuts atthe Pentagon: Contractors win, communities lose)

"This is essentially the secretary of Defense's own version of the sequester: 'Let's just cut it off at the knees and screw whoever it hurts.' That's not a very holistic approach," Maxwell said. "We deserve, after years of dedicated service, to be part of that conversation going forward."

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Navy veteran Jeremy Hilton, whose wife is an Air Force officer who deployed to Afghanistan, calculated that Hagel's proposed reductions to the current housing allowances for troops and to the commissary subsidy would, in total, cost each military family about $3,000 a year.

"This is a pay cut, pure and simple," said Hilton, who lives near Washington, D.C. "Anyone who tells you otherwise is playing an inside-the-beltway, fuzzy-math game that doesn't take into account the bottom line for most military families. It's going to be painful."

(Read more: Budget cuts to slash Army size to smallest since WWII)

In explaining his recommended cuts, Hagel said the proposed subsidy chop would roll out over three years.

"We are not shutting down commissaries," Hagel said. "All commissaries will still get free rent and pay no taxes. They will be able to continue to provide a very good deal to service members and retirees — much like our post exchanges, which do not receive direct subsidies. Overseas commissaries and those in remote locations will continue receiving direct subsidies."

But Hagel's budget-minded pitch only deepened the financial anxieties faced by military families and veterans as their jobs, benefits and pensions recently become chips in Capitol Hill austerity battles.

That included a recent congressional measure to cut annual, cost-of living adjustments to pensions for most working-age military retirees. That idea — which spawned a social media protest carrying the hashtag #KeepYourPromise — ultimately was shelved.

(Watch: Both parties hunker down as Capitol Hill budget battle looms)

"Here we go again. Washington is trying to balance the budget on the backs of those who have sacrificed the most," veteran advocate Paul Rieckhoff said Monday.

"We know the Defense Department must make difficult budget decisions, but these cuts would hit service members, making it harder for them and their families to make ends meet," said Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America. "The Defense Department wants to cut subsidies that service members use to pay for diapers for their kids and to put bread on the table."

The Pentagon's $1.4 billion annual subsidy allows commissaries to offer most brand-name groceries at deep discounts.

To show the difference in prices paid by military families and civilians, Maxwell did some comparison shopping on Monday at a Kroger store and in a commissary at Naval Air Station Joint Reserve Base, both in Fort Worth, Texas.

  • Crest toothpaste was $3.25 at Kroger, $1.19 at the commissary.
  • Barilla pasta was $2.74 at Kroger, $0.99 at the commissary.
  • Pampers diapers were $14.99 at Kroger, $8.99 at the commissary.
  • And a case of Similac baby formula was $25.99 at Kroger, $19.99 at the commissary.

"Starting to pick away at our benefits makes everybody revisit the issue of: Am I willing to do this (military) job for $28,000 a year now because my commissary (cost) is no longer offsetting my monthly grocery bill by $500?" Maxwell said. "It impacts people's willingness to do the job, their willingness to work for less."

(Read more: Quest for more lethal U.S. warship could raise cost )

Military families generally embody a larger spirit of service to their nation. Given that mindset, they don't unilaterally oppose Pentagon reform or certain budget reductions, Hilton said.

"We're not against cuts if they're done smartly. But this is piecemeal," Hilton said. "This creates a lack of trust and, frankly, that's not what you want in the all-volunteer force.

"This simply make us all wonder what they're going to take away next. That's a bad position for our families to feel like they live in. People forget: There are plenty of people deployed now, and they all wonder what's going to be cut next."

—By NBC News' Bill Briggs.

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