Political rhetoric must give way to reality

link Tom Philpott

Military Update

In shaping a 2015 defense authorization bill, Congress has decided to protect the prized commissary benefit from the most worrisome budget threat to base grocery stores in decades.

But military personnel are not likely to escape other key compensation curbs to include a second consecutive annual pay raise cap in January of 1 percent versus 1.8 percent needed to match private sector wage growth.

Also, a million recipients of Basic Allowance for Housing are likely to see BAH increases dampened for the next three years until rates, on average, cover 95 percent of local rental costs versus 100 percent today.

Finally, beneficiaries with prescription drug needs likely will face sharply higher out-of-pockets costs if they rely on retail pharmacies, or if they choose to use brand name medicines over less costly generic drugs.

The pay raise cap, BAH raise slowdown and higher drug co-pays are all found in the Senate Armed Service Committee’s version of the defense policy bill (S 2289) but not in the House-passed bill (HR 4435).

The Republican-led House Armed Services Committee continued its recent yearly pattern of leaving no fingerprints on any rollback in compensation growth sought by the Obama administration and military leaders to accommodate lowered defense spending targets.

But the political rhetoric of protecting troops and families from budget cuts eventually has to give way to budget realities created by the bipartisan 2011 Budget Control Act (BCA), as amended last January, with its sequestration tool to force automatic cuts if Congress doesn’t comply.

The Senate committee’s embrace of plans to raise member out-of-pocket costs are likely to become law because the House, in rejecting any compensation curbs, failed to identify alternative cuts to avoid creating a $2 billion hole in the defense budget. That means House-Senate conferees, in ironing out differences in separate versions of the bill, almost certainly will have to accept the Senate panel’s menu for slowing compensation growth.

Both the House and the Senate committee agreed to reject administration plans to consolidate TRICARE options and to raise TRICARE fees to include Medicare-eligible beneficiaries under TRICARE for Life. But pharmacy co-pay increases, to be phased in over 10 years, would mean higher out-of-pocket costs mostly for older retirees, spouses and survivors.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at:

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