The 2015 budget will likely include a cap to annual raises as well as a reduction to Basic Allowance for Housing (BAH) rates. In addition, retirees are likely to see an increase in the fees they pay under the Tricare health care program.
The annual pay increase that service members receive would once again be capped at one percent, meaning that service members would be forced to do more with less. A one percent increase does not provide enough to keep pace with the current 1.5 percent rate of inflation, or the three percent 100-year average. Much to the chagrin of service members advocacy groups, Congress allowed this pay cap in 2014.
“What we increasingly hear [troops] saying is lacking, particularly following sequestration, isn’t their level of pay but their quality of service,” acting Deputy Defense Secretary Christine Fox told a senate panel earlier this month. “Our men and women are the first to say that they’re well-compensated but the department doesn’t have money to maintain their equipment or supply them with the latest technology, or send them to get the training they need.”
This just shows how out of touch the upper echelon of the defense department really is. Perhaps an officer or a senior enlisted member would say they are well compensated, but an E4 service member, worried about purchasing diapers or paying the rent, will describe their bi-monthly paychecks in many colorful ways. Well-compensated isn’t usually among those descriptors.
Service members’ housing allowances are also up for grabs. Some have complained that these allowances have increased by more than 60 percent over the last 15 years, but what few people realize is that when these allowances began to rise in 2000, it was because allowances were significantly too low and the way those allowances were calculated was flawed.A 1% salary increase for military service members cannot keep pace with the 1.5% rate of inflation.
Until that point, service members faced what was called the “death spiral” under the BAQ/VHA program. This was because they were paid their allowance based on 80 percent of the actual cost of their housing. So, in order to make ends meet, service members would take cheaper, sub-standard housing. Then, when service members costs were reported for the year, their allowance would go down again.
By 2005, housing allowances had increased to cover the full cost of members housing instead of just a percentage as before. But, the proposed changes to the defense budget would link the BAH to the cost of living allowances (COLA), meaning that it’s possible for service members to once again face the death spiral.
Further, the DoD has been steadily trying to get retirees to pay higher fees for their health care since 2007. The 2014 budget allowed increases to fees for future Tricare for Life beneficiaries, as well as an increase in fees for other programs, such as prescription costs.
In November 2013, the Congressional Budget Office issued a report with more than 100 cost saving measures that the government could take in order to cut costs, many of them aimed at service members or veterans.
“Contrary to what some are reporting, none of these proposals would reduce the take-home pay of anyone in uniform,” vice chairman of the Joint Chiefs, Admiral James Winnefeld, told Congress.
Mike Hayden, government relations director for the Military Officers Association of America, said he understands that the idea is to cut costs in some areas so that “extra dollars are available for other programs.” However, he added that to make the claim that service members won’t feel the pinch is false.
“Service members will have less purchasing power with their paychecks and housing allowances,” he said. “All of this is going to directly impact their pocketbooks.”