2016 pay, benefits preview apparent in budget plans

Now that the four congressional committees charged with overseeing military spending have publicly offered their plans for fiscal 2016, troops and military retirees have a clearer picture of the potential impacts on their pay and benefits next year.

They include a pay raise of at least 1.3 percent next year, fewer changes at the commissary than Pentagon officials wanted, and continued relief in health care costs.

There's still a long legislative road ahead before any of the plans become law. The annual defense authorization bill has been stalled in the Senate for most of June, and Democrats in the chamber have threatened to sideline the annual defense appropriations bill over concerns about veto threats issued by the White House.

But once those political fights settle, here's what the measures will mean for troops' wallets:

Pay raise

The White House and Pentagon both have repeatedly backed a 1.3 percent raise for troops in 2016, which would fail to keep pace with anticipated private-sector wage growth for a third consecutive year.

Both the Senate Armed Services and Appropriations committees have backed that same figure, despite lobbying from outside advocates who argue it amounts to a pay cut when inflation is taken into account.

They want a 2.3 percent raise, which both the House Armed Services and Appropriations committees have endorsed. The competing plans set up a major point of contention between the two chambers when the bills are reconciled by a conference committee.

When the two chambers were similarly split over the pay raise last year, the White House won its bid for a lower figure. Pentagon officials have argued that adding even a few tenths of a percentage point equates to hundreds of millions of dollars in compounding costs for years to come.

For an E-4 with three years of service, the difference between a 1.3 percent and 2.3 percent pay bump in 2016 will total about $268 a year. For an O-4 with 12 years, it's about $838.

Housing stipends

Both Senate committees have publicly endorsed Pentagon plans to trim growth in troops' housing stipends, allowing the Basic Allowance for Housing to drop from 99 percent of actual costs this year to 95 percent in coming years, with troops covering the other few points out of pocket.

Military leaders have called that an unfortunate but necessary and bearable sacrifice for military families. Outside advocates have called it additional punishment for troops already struggling to get by.

House lawmakers have opposed the idea in their budget bills, agreeing with those financial burden arguments.

Similar to the pay raise debate, the two chambers were divided over the issue entering conference negotiations in 2014, with the Pentagon's preferred cuts to the housing stipend moving ahead in the final budget deal.

Commissary funding

Pentagon leaders had hoped to shift about $300 million from commissary support to other budget needs next year, but lawmakers appear unwilling to let that happen.

On Thursday, the Senate Appropriations Committee added $322 million in commissary funding back into their fiscal 2016 budget plan, calling the cut potentially harmful to troops and their families who rely on the stores and their lower prices.

The decision puts both House and Senate appropriators on record backing $1.4 billion in funding for commissary operations next year, a total that would avoid forced store closings, reduced operating hours and potential layoffs of staff.

Senators went along with the planned commissary cuts in their initial draft of the annual defense authorization bill, but are considering amendments to restore that money before final passage. A number have also expressed concerns over the Senate Armed Services Committee's proposed legislation to privatize base commissaries, setting up more fights on the issue this year.

New health care fees

Out-of-pocket health care costs for Tricare beneficiaries are likely to remain steady next year, despite Pentagon pleas to raise them.

Defense officials have said they need to raise revenue to offset the $48 billion military health budget, and proposed restructuring Tricare along with adding new fees for retirees. But Congress has resisted making any changes to the program as it studies a number of reform proposals.

The Senate Appropriations Committee on June 11 passed budget plans that would dump those new fees and realignments, matching similar moves in the House.

The Senate Armed Services Committee did include some pharmacy co-payment hikes in its draft of the annual defense authorization bill, leaving the door open for negotiations on the issue through the summer.

Article by Military Times