Tallying The GI Bill

The Numbers Guy crunches the numbers:

Opponents of the bill, including Sen. McCain, have said they oppose it because the sweetened benefits package including an average tuition assistance of $1,700 per month would induce more soldiers to leave active duty for university. To back this argument, they’ve cited a Congressional Budget Office study estimating that the bill would reduce retention rates by 16%, from a current rate of 42% to 36%.

But there are a lot of caveats attached to the 16% figure.

It’s hard to predict what today’s soldiers from all branches will do using numbers about their predecessors, mostly in peacetime, and only in the Army. It’s balanced somewhat by an expected increase in recruitment thanks to the allure of the benefits to undecided would-be soldiers. And the CBO estimates that the military could adjust spending elsewhere, such as on re-enlistment bonuses and advertising, to even out the expected changes in retention and recruitment...

...The 16% decrease in retention could be counteracted by spending $6.7 billion between 2009 and 2013 to boost re-enlistment bonuses. Meanwhile, the 16% increase in recruitment could be negated by saving $5.6 billion on advertising, enlistment bonuses and other measures. These numbers, too, are extrapolated from earlier studies, but they suggest that maintaining the current force structure could be achieved with an increase in spending of $1.1 billion over five years compared with the direct cost of the benefits, about $52 billion.