How to Resolve Differences Between House, Senate Military Pay Reforms

Posted August 21, 2015 at 5:10am

“Both the House of Representatives and the Senate have passed versions of the fiscal year (FY) 2016 National Defense Authorization Act (NDAA). The two chambers are now negotiating a final bill, but according to press reports, the negotiators are stuck on the details of a major military compensation and retirement reform proposal,” writes Justin Johnson .  

“Military pay and benefits constituted 34.6 percent of DOD’s budget in 2001 and 35.5 percent of the budget in 2015. However, the cost per service member has risen dramatically. In 2014 dollars, the cost per service member has gone from roughly $93,000 in 2001 to approximately $133,000 in 2015, an increase of over 40 percent. By comparison, the cost per DOD civilian employee increased by just under 20 percent over the same period. Since 2012, however, the inflation-adjusted cost per service member and per civilian has been remarkably static.”  

“The introduction of a blended-benefit retirement system will be of significant value to the vast majority of service members who do not receive any government-sponsored retirement benefit today. It will also produce significant savings, which will allow DOD to focus on its primary task of protecting America… Married service members should not be financially penalized for being married. This is unfair and discourages those in uniform from committing to marriage… The lump-sum benefit is a good policy that gives service members more options and produces savings for DOD. However, the lump-sum proposal also carries a significant mandatory spending cost… Increasing pharmacy co-pays does not address the larger reforms in TRICARE that need to be made. Instead, Congress should move service members and their dependents into the same commercial health insurance system that federal employees use.”