COMMISSARIES TO BE RUN AS A BUSINESS, NOT A BENEFIT
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 (DeCA).
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.
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