When honest budget managers in the services calculate the transition of any uniformed job to a private contractor, their working assumption is that the contract employee will cost the Pentagon $100,000 a year. A sergeant barely makes a quarter of that, and a private hardly a fifth — including benefits.

It would have been interesting for this "retired officer" to at least take a stab at informing us just what positions and jobs he bemoans privatizing. I can assure you, none that are currently being performed by a fricking private, and few if any currently performed by sergeants. I spent many years in Air Force procurement, as recently as 2000 - the privatization is at the O-4 level (Major) and above...positions earning well above $100,000 when all of the military benefits are factored in.

Gee, wonder why Rumsfeld would discourage the Army performing a review on itself to determine whether more Army people should be keeping their jobs? And you wonder about the motivation of Rumsfeld?

You should know that Peters despises Rumsfeld (and Wolfowitz and probably Perle, Cambone, Crouch, and other prominent defense intellectuals in this administration). That's not to say that he may not occasionally be right about Rumsfeld, but he carries a lot of water for heavy artillery guys who hate Rumsfeld's plans to transform DoD (and the Army in particular). Everything he says about Rumsfeld has to be taken with a huge grain of salt. More like a shaker, really.

To add to Mark's comments, those 0-4's he is talking can retire after 20 years and for most that's about age 43. They will be paid a pension of about 40% of their base pay starting at retirement for the rest of their life. For every year beyond 20, the percentage goes up and ususally so does the pay.

So when you look at labor costs for military members, it's not just the dollars you pay this year, but the dollars you pay for through retirement. The labor cost for a contract ends at the end of that contract.