Military Families Look To a New Year with Growing Financial Uncertainty

The $560 billion National Defense Authorization Act for fiscal year 2015 may have been forgotten by the mainstream media, but some of the details of the bill remain troubling for military families. Military members will receive a one percent pay raise and lower housing allowances in addition to paying higher prices for medications.

However, the NDAA also contains provisions that have nothing to do with national defense and is set to cost millions of dollars — dollars that could go to service members and their families. Efforts to remove these unpopular provisions from the bill ultimately failed.

Military families are becoming increasingly frustrated at being on the receiving end of the defense department’s “solution” to its budget short falls and worry about how they are going to take care of their own financial obligations.

“I’m positively cringing,” says Holly Elliott, a military wife with three young children and a fourth on the way. “My husband’s rate pretty much ensures we will never get a rural posting; we’ll always be in high cost of living areas. This just adds to the insult of seeing my husband work alongside contractors who get paid twice what he does for fewer hours, doing the same work.”

Elliott went on to say that in high-cost areas, waiting lists for military housing can be long, forcing families to rent housing on the local economy that they can ill afford.

The NDAA does contain a 1.8 percent pay raise for military members. However, the bill also contains a provision that would allow President Obama to disregard that figure and give service members the one percent raise that he originally requested from Congress.

 

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While the original 1.8 percent would have given military families a bit more financial breathing room, even that would not cover the increase that military families will see in their cost of living in the coming year.

The cost method the defense department uses to determine the rate of their annual raises, instead of the more accurate monetary inflation rate, means the annual pay raises military members receive seldom cover the actual increase in the cost of living, but this is beneficial to the DoD because it allows them to pay lower wages. According to Forbes, the actual rate of inflation is hovering around five percent.

General and Flag Officers will not receive a pay raise in 2015. In a rare move, Congress has begun questioning the lavish compensation packages received by the nation’s top military brass, something that the chairman of the Joint Chiefs of Staff is not happy about.

In November, General Martin Dempsey asked Congress for the ability to keep the perks that military leadership is afforded, such as personal chefs, personal drivers, and cat sitters, in addition to what Rep. Jackie Speier (D-Calif.) called an “insane” pension plan.

The Pentagon has increased General and Flag Officer’s benefits by up to 63 percent since 2007 in an effort to retain them while the country was deeply entrenched in two wars. However, the Senate Armed Services Committee later determined that there was no problem in retaining senior officers.

Service members who are transferring to a new duty station in 2015 will be expected to cover more of their housing expenses out of their base pay. The NDAA contains a one percent decrease in housing allowances across the board.

To cover this, the DoD removed the one percent allowance for renter’s insurance from their rate computation formula. Currently, rate protections ensure that service members won’t be subjected to the lower rate while trying to cover their current housing costs. Rate protections are expected to be extended.

In addition to the pay and housing cuts, service members will be expected to pay higher out-of-pocket costs for medications. The NDAA mandates a $3 dollar per year increase for the next 10 years. This means that by 2025, service members will pay close to $50 for prescriptions.

The Defense Commissary Agency (DeCA) had their funding cut as well, though the cut was not as large as originally thought. Initially, the Commissary, the military’s supermarket that sells groceries at just above wholesale cost, was slated to lose $200 million of their $1.3 billion budget. However, the House and Senate Appropriations Committees voted to add $190 million in funding for the Commissary to the omnibus bill.

The Pentagon plans to cut the majority of its funding for the Commissary over the next three years, down to just $400 million. The defense department admits that this will significantly reduce its benefits to service members.

Currently, the Commissary provides an average savings of about 30 percent to military families. Cutting their funding will mean that prices will increase by at least 20 percent.

With all these “necessary” cuts, it makes many military families question how there were millions of dollars to establish new National Parks and Corridors, perform research studies, and purchase equipment that the services have said they do not want and to arm Syrian rebels. One “pork” provision included in the NDAA took land from the San Carlos Apache Nation and gave it to an international mining company.

Some lawmakers tried to soften the bill’s blow by introducing amendments that would counter some of the problems with the bill, but they were blocked from doing so by Senate Majority Leader Harry Reid.

U.S. Senator John McCain (R-Ariz.), who voted for the bill, released a statement, saying:

“In an unfortunate repeat of last year’s process and timeline, Majority Leader Reid’s repeated delays and unwillingness to allow an open amendment process or debate on the floor is a serious breach of the historical and Constitutional responsibilities of the U.S. Congress. By waiting until the last week that the Senate is in session and refusing to allow an open amendment process, he has effectively silenced debate on key issues vital to our national security.” – U.S. Senator John McCain

“Although this legislation contains a number of individual provisions I support, it is fundamentally flawed in that it neither protects our most basic rights as American citizens, nor safeguards the vital national security interests of the United States,” stated U.S. Senator Ted Cruz (R-Texas), who voted against the bill. “The NDAA should serve to strengthen our national security and it is imperative that Congress respects and upholds this vital function. The men and women of our military deserve no less.”