SENATE PANEL: MILITARY PAY RAISE CAPS SHOULD CONTINUE
For a fourth straight year, military personnel could see their basic pay increase next January fall short of average wage growth in the private sector.
That became more likely when the Senate Armed Services Committee this week offered a first peak at its fiscal 2017 compensation reform package, which is also expected to support higher TRICARE fees and co-pays, the bulk of them targeted at retirees under age 65 and their families.
Senators endorsed a military pay raise for Jan. 1, 2017, of 1.6 percent rather than the 2.1 percent needed to match private sector wage growth as measured by the government’s Employment Cost Index (ECI).
The Senate committee is signaling once again that it is ready to take a harder stand on containing compensation costs than are House colleagues who last month marked up their own version of the fiscal 2017 defense authorization bill and voted for a pay raise to match ECI. The House panel also wants only modest TRICARE fee increases and would apply most of them only to persons who join the military after 2017. Not so the Senate committee. Its members don’t stand for re-election every two years.
“We’ve done some tough things, some long overdue things and some very necessary things for those who serve in the military,” said Sen. Lindsey Graham (R-S.C.), chairman of the armed services’ personnel subcommittee.
“This is the most comprehensive look at military health care I’ve ever been involved in. We’re trying to make it better,” Graham said. People will want to push back “because change is hard to accept. But the goal [is] to bring about efficiency, lower costs [and] improve quality.”
Graham added, “If we don’t do anything, in about 20 years 18 percent of the Department of Defense budget is going to be military health care related. That’s an unsustainable path.”
Graham said the proposed healthcare reforms, to be unveiled Friday and explained in next week’s column, not only will make the system more sustainable for taxpayers but they will expand patient services and access.
Graham and Sen. Kirsten Gillibrand (D-N.Y.) noted one other key health care provision: a $40 million initiative to reinstate the higher applied behavior analysis (ABA) therapy rates that TRICARE replaced April 1 under its demonstration for expanded treatment of military children with autism.
Families with special needs children, said Graham, will be the “biggest winners” from the committee’s health reform initiatives.
A House-Senate conference committee this summer will negotiate away any differences between the two versions of the authorization bill. In the recent past House negotiators have acquiesced to senators on the pay cap issue. Last January, the basic pay hike was capped at 1.3 percent, a full percentage point below a raise to pace the ECI. In both 2014 and 2015, military pay hikes were capped at 1 percent when 1.8 percent was needed to match wage hikes nationwide.
Every pay cap saves the Department of Defense a lot of money. Next January’s pay cap would free up $300 million through the last nine months of fiscal 2017. Smaller basic pay raises also hold down future retirement costs and all other military pays linked to basic pay levels. The Congressional Budget Offices estimates that capping basic pay increases by just a half percent point for a full decade would save almost $25 billion. The Defense Department’s current plan is to cap pay increases through fiscal 2020.
From 2001 through 2010, as hundreds of thousands of U.S. troops went to war, Congress acknowledged a military pay gap and began setting pay raises a half percentage point above ECI. But by 2011, with the nation worried about runaway debt, Congress passed the Budget Control Act, which ordered defense spending tightened by roughly $500 billion over the next decade. For the next three years, Congress set military pay raises, as standing federal law requires, to match changes in the ECI.
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