White House takes appropriators to task on pay, TRICARE

The White House has threatened to veto a House appropriations bill that includes a pay raise for service members but not for civilian federal employees.

The Obama administration’s opposition to the Defense Department spending bill, which the House plans to take up next week, covers a lot of territory. In particular, the administration objected to appropriators not including a recommended 0.5 percent pay raise for civilians and for rejecting its proposals to increase TRICARE fees.

A permanent pay freeze for federal workers “is neither sustainable nor desirable,” the Office of Management and Budget said in a June 28 statement of administration policy, referencing the same language it has used to describe appropriators’ silence on a fiscal 2013 pay raise in other spending bills. The Defense spending bill does include a 1.7 percent pay raise for service members, which Obama recommended in his fiscal 2013 budget proposal. The House in May approved Defense authorization legislation that also includes 1.7 percent pay boost for military members. That legislation also rejected the administration’s recommendations to raise premiums for military retirees based on their retirement pay, among other fee hikes, but modestly raised TRICARE co-pays for brand and nonformulary drugs in 2013.

Under Obama’s plan, premiums for TRICARE retirees under the family plan would increase between $31 and $128 per month, with those in the upper-income bracket seeing the biggest hike. The White House in its budget recommendations also proposed new co-pays, initiation of standard and extra annual enrollment fees, and adjustments to deductibles and catastrophic coverage caps, all in an effort to keep pace with medical inflation. The administration said its recommended changes to TRICARE would save Defense an estimated $12.9 billion in discretionary funding and generate $4.7 billion in mandatory savings on Medicare-eligible retiree health care over the next five years. It is projected to save the department $12.1 billion over the next 10 years.

The Defense spending bill provides $519.2 billion in nonwar funding, which is about $1 billion more than current spending levels, and more than $3 billion above Obama’s budget request, according to the Congressional Budget Office. The appropriations legislation includes $128.5 billion for more than 1 million active-duty troops and more than 800,000 reservists. The funding is $2.6 billion less than fiscal 2012 levels because of the reduction in troop totals, according to a press release from the committee’s majority staff.

In addition, lawmakers appropriated $35.1 billion for Defense health and family programs, $334 million more than fiscal 2012 and $348 million above the administration’s request. That total includes $245 million for medical facility and equipment upgrades, $125 million for traumatic brain injury and psychological health research, and $20 million for suicide prevention outreach programs. The bill also provides $2.3 billion for family support and advocacy programs.

The Senate Defense Appropriations Subcommittee plans to mark up its version of the spending bill before the August recess.