Panel Approves 1.8 Percent Pay Raise for Troops

The House Armed Services Committee approved legislation on early Thursday morning that supports a 1.8 percent pay increase for troops next year, slightly more than President Obama’s recommended 1 percent bump.

The panel reported out the fiscal 2015 Defense authorization legislation during a marathon markup that began at 10 a.m. on Wednesday and wrapped up a little after midnight. The bill now heads to the House floor for consideration.

The 1.8 percent increase for service members is in line with the automatic fiscal 2015 cost-of-living adjustment scheduled for the military, but President Obama ultimately retains discretion over the amount of any raise unless Congress directly intervenes. “The president retains his executive authority to make reductions to this pay rate without congressional authorization,” stated the fact sheet from the Armed Services Committee, summarizing the provisions in the fiscal 2015 National Defense Authorization Act (H.R. 4435).

By staying silent in the text of the legislation, Armed Services Chairman Howard “Buck” McKeon, R-Calif., is supporting the raise amount that would automatically take place under the law.

The formula for determining service members’ annual pay increase is based on the Bureau of Labor Statistics' Employment Cost Index and the growth in private-sector wages. But under the law (Title 37, Chapter 19, Section 1009) the president has the authority to set an alternate pay raise for military personnel, citing a national emergency or fiscal concerns, if Congress doesn’t pass legislation adjusting the amount or canceling it. The 1990 Federal Employees Pay Comparability Act allows the president through executive order to set a pay raise for federal civilian employees under the same circumstances.

The Defense authorization bill also calls for a pay freeze for general and flag officers in fiscal 2015, as recommended by Obama. That’s pretty much where agreement ends between Obama and the Republican-led House panel on military compensation, however. In addition to the administration’s suggested 1 percent pay raise -- the same amount troops received in fiscal 2014 -- Obama has proposed a smaller increase for troops’ basic housing allowance and significant cuts to military commissaries, the heavily-subsidized stores on base where service members and their families buy food and other goods. In his fiscal 2014 budget, Obama pitched a 4.2 percent housing subsidy increase -- and service members ultimately received an average bump of 5 percent from Congress. There are 178 U.S. commissaries; the proposed budget would reduce funding from $1.4 billion to $400 million over three years, forcing many commissaries to close. 

Armed Services Chairman Howard “Buck” McKeon, R-Calif., “categorically rejects these cuts [emphasis in original],” the fact sheet stated. “When combined with a reduction in the annual troop pay increase, these cuts result in thousands of dollars of additional out-of-pocket expenses for military families.”

McKeon’s bill also rejects the administration’s proposed reductions to TRICARE, the Defense Department’s health care program. Obama’s fiscal 2015 budget would implement annual enrollment fees for the Medicare-eligible retirees in the TRICARE for Life program, phased in over a four-year period. Current participants would be grandfathered in, and not subject to the fees. The White House also wants to increase pharmacy prescription co-payments for all active-duty and military retirees to “incentivize” the use of mail order and generic drugs, which cost less.

Effective 2016, the Obama budget also would adopt a “consolidated health plan.” The plan would implement annual enrollment fees for the TRICARE for Life program for Medicare eligible retirees, phased in over a four-year period. Current TRICARE for Life participants would be grandfathered in and not subject to the fees. The recommendation also includes the proposed increase to pharmacy prescription co-payments for all active-duty families and retirees to encourage mail order and generic drugs.

McKeon’s bill jettisoned the administration’s proposal to execute another round of base closures. “The committee maintains its long held concern that BRAC rounds do not yield true savings but rather impose large up-front costs only then to shift property between federal agencies.” The fact sheet also said that the chairman “believes a BRAC round is inappropriate at a time when the final size of the military and the structure needed to support it is still in flux.”

Overall, the fiscal 2015 Defense bill in its current form would authorize $521.3 billion in spending for national defense in fiscal 2015, and an additional $79.4 billion for overseas contingency operations, which is $30.8 billion less and $1.3 billion less than enacted for fiscal 2014. Still, the House bill includes $45 billion more in fiscal 2015 than President Obama’s proposal.