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The Defense Department’s plans to slow military pay growth and increase Tricare fees may have become less objectionable to Congress in a time of tight budgets.
At a Wednesday hearing, leaders of the Senate Armed Services Committee’s personnel panel said they were not pleased with the notion of saving money by reducing benefits — but also did not say they would oppose the plans.
Sen. Kirsten Gillibrand, D-N.Y., the personnel panel chairwoman, said it was “regrettable” that the proposed 1 percent basic pay raise for Jan. 1, 2014, would be less than the average private-sector increase and added that she is “skeptical” about Tricare fee hikes aimed mostly at working-age retirees.
Gillibrand, who took over the subcommittee in January, acknowledged the Pentagon was forced by budgetary constraints to make “difficult choices” on the budget.
Sen. Lindsey Graham of South Carolina, the personnel panel’s ranking Republican — who in the past has thrown up roadblocks to Pentagon plans to raise Tricare enrollment fees and deductibles — said he is willing to consider increases.
Graham said his primary concern is making sure the health care benefit is sustainable over the long term, and he would accept a “gradual premium increase.” The goal, he said, is to have an “affordable” benefit with “rational and logical” financing.
On the basic pay raise, Graham said, “I wish it were more” but he understood the decision to limit raises.
The 1 percent raise proposed by the Pentagon would replace the 1.8 percent increase called for under a federal pay formula that links increases to average wage growth in the private sector.
Jessica Wright, acting undersecretary of defense for personnel, said it was an “extremely hard decision” within the Pentagon to reduce the size of the raise, but the overall budget is rising slower than previously planned.
Capping the raises was a “collective decision,” she said.
In a statement provided to the panel, defense personnel officials said the reduced raise would save $540 million in the fiscal 2014 budget but “should not significantly affect recruiting and retention.”
Military associations representing the interests of service members, retirees and their families do not support the pay raise cap. Joseph Barnes, a retired Navy master chief who is executive director of the Fleet Reserve Association and co-chairman of the Military Coalition, said pay caps are not harmless.
“The current high rate of unemployment will not continue indefinitely,” he said. He suggested that an improved civilian job market could lead service members to consider leaving and potential recruits to consider other options.
The coalition, a group of more than 30 military and veterans organizations sharing a common legislative agenda, says in a statement submitted to the panel that history shows capping pay raises is “an exceptionally slippery slope which has never ended well.”
Pay caps in the 1970s led to serious retention problems that were fixed by two huge pay increases in 1981 and 1982 to make military pay competitive with the private sector. In the 1980s and early 1990s, pay was capped again, until the gap between military and civilian pay grew to 13.5 percent by 1998, resulting in another severe retention problem, the Coalition says.
New calls to reduce raises “are exceptionally short-sighted in light of the extensive negative past experience with military pay raise caps,” the Coalition statement says.