Senators Push Back On Plan to Privatize Some Military Commissaries

The Senate this week will consider a measure that would prevent the Pentagon from privatizing military commissaries at five installations next year.

The amendment to the fiscal 2016 Defense authorization act would require the Defense Department to study the costs and benefits of contracting out commissary operations and report the findings to Congress before moving ahead with any plans. The legislation, which the chamber resumes consideration of this week, requires a pilot program that would privatize commissaries at five installations as well as a report assessing potential costs and benefits.

The bipartisan amendment, offered by Sens. Jim Inhofe, R-Okla., and Barbara Mikulski, D-Md., does not take privatization of the commissary system off the table, but puts the brakes on any pilot program before a report is completed. The measure directs Defense to submit a report to Congress by Feb. 1, 2016.

“The Senate NDAA would begin the process of privatizing the commissaries without a proper assessment of the impacts of reforming this popular benefit, which is currently saving military families money,” said Inhofe in a statement. “This is unfortunate, because once a commissary is privatized, it will be nearly impossible for such an action to be reversed if the results negatively impact our military members’ budgets and way of life.”

The White House in a June 2 statement of the Senate fiscal 2016 Defense authorization act also advocated waiting for the results of an independent study underway on privatizing the Defense Commissary Agency before making any policy changes. President Obama plans to veto the Senate’s fiscal 2016 Defense authorization act, which also includes a 1.3 percent pay raise next year for troops, if it reaches him.

The debate over whether to privatize the heavily-subsidized commissaries on military bases where service members and their families buy food and other goods has been going on since at least 2001, as part of an overall discussion of how to run the stores more efficiently while keeping prices low for service members.

The Military Compensation and Retirement Modernization Commission recommended earlier this year that commissaries and military exchanges be merged into a single organization, a suggestion that has not been met with much enthusiasm on Capitol Hill. The Pentagon in its fiscal 2015 budget proposed a 71 percent reduction in subsidies to the stores, which lawmakers flatly rejected. Similar cuts to subsidies are included in the administration’s fiscal 2016 budget proposal in addition to a plan to save money by merging the Defense Commissary Agency and the Army and Air Force Exchange System.  

Two-thirds of military families in pay grades E-6 and above with household incomes of at least $50,000 per year “identify commissaries as an important part of their current compensation as well as future retirement benefits,” according to a 2014 survey from the First Command Financial Behaviors Index. Three out of four survey respondents said eliminating the taxpayer-subsidized benefit “would negatively impact their families,” the report said.

“Before we make drastic changes like privatizing commissaries, we need to fully evaluate what it would mean for our military families,” said Mikulski in a statement on Thursday. “I want to keep commissary doors open to provide low-cost, high-quality, healthy food to our service members and their families until we’re certain there’s a better alternative.”