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Benefits battle: House panel hits back against lower pay raise, Tricare hikes

May. 30, 2013 - 04:34PM   |  
Howard Buck McKeon, Joe Wilson
Rep. Joe Wilson, R-S.C., chairman of the House Armed Services military personnel subcommittee, said he's prepared to fight the Pentagon on Tricare fees and pay raises for troops. (J. Scott Applewhite/The Associated Press)
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A House panel has rejected the Obama administration's attempt to cap the 2014 military pay raise and to make military retirees pay more for lifetime medical care, deciding it wants to protect current and former service members from the pain of budget cuts

A House panel has rejected the Obama administration's attempt to cap the 2014 military pay raise and to make military retirees pay more for lifetime medical care, deciding it wants to protect current and former service members from the pain of budget cuts

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A House panel has rejected the Obama administration’s attempt to cap the 2014 military pay raise and to make military retirees pay more for lifetime medical care, deciding it wants to protect current and former service members from the pain of budget cuts.

The action taken May 22 by the House Armed Services Committee’s military personnel panel is just the first round of a legislative fight over defense spending that won’t end before fall. But it puts the Defense Department and White House in the position of having to wage a tougher campaign if they want to cut costs on military pay and benefits in an era of budget belt-tightening.

Rep. Joe Wilson, R-S.C., the panel chairman, said these were bipartisan decisions and he’s prepared for the debate. The personnel portion of the 2014 defense authorization bill, approved by voice vote and with no debate, “provides our war fighters, veterans and their families the care and support they need, deserve and have earned,” Wilson said

On the military pay raise, which would take effect Jan. 1, Wilson said the panel believes the Pentagon should follow a formula set in law to provide a 1.8 percent increase, matching last year’s average increase in private-sector wages. The Obama administration wants to limit the raise to 1 percent.

Lawmakers’ action would continue a 21-year streak of providing an annual military raise that meets or exceeds private-sector pay growth.

“The actual difference between a 1 percent and 1.8 percent raise may seem small, but it means a lot to a two-striper,” said Joe Davis, a spokesman for Veterans of Foreign Wars, who retired as an Air Force major but served as an enlisted man, rising to the rank of staff sergeant before being commissioned.

The difference between the two percentage increases for an E-4 with three years of service would be $17.70 a month. For an E-7 with eight years, it would be $28.50 per month, and for an O-4 with 12 years, $54.90 per month.

On Tricare fee hikes, Wilson said the panel never seriously considered the Pentagon’s latest proposal, which called for phased, multiyear increases in out-of-pocket expenses for retirees and their families using the Tricare insurance programs and pharmacy co-pays that would also have applied to active-duty family members.

Noting this was the third consecutive year that the Defense Department has made similar proposals, Wilson said, “Congress spoke last year and the year before on this matter, so I find it difficult to understand the department’s continued effort to increase fees.”

DoD’s estimates of growth in health care costs “have been wrong,” he said, and the Pentagon keeps diverting money out of the health care program to pay other expenses — hardly a sign of severe problems covering medical costs.

Wilson was referring to the fact that the Pentagon’s medical budget ended up with a surplus of $708 million last year. However, the overall military medical budget has spiked in the past decade, from $19 billion to about $50 billion.

Mike Hayden, government relations director for the Military Officers Association of America, said he’s not surprised that the panel rejected Tricare increases, but he cautioned that it’s preliminary.

Hayden expects the House of Representatives to agree with the recommendations of the Wilson panel to limit Tricare fee hikes to no more than the cost of living adjustment in retired pay, and to not create any new fees, but “what we do not know is what might happen in the Senate.”

The Senate Armed Services Committee is scheduled to begin writing its version of the annual defense policy bill June 12.

Wilson’s panel did leave an opening for a smaller raise to take effect by not specifically setting the size of the 2014 raise in the bill; instead, the panel relied on an existing federal law that calculates the size of the increase due to military members. That law allows the president to reduce the raise through an executive order if he chooses.

If Obama were to use this option, it would happen in September.

“If the president wants to make a decision the military raise needs to be capped because of tight budgets or sequestration, we do not prevent that from happening. But he’ll have to make his case to troops and the American people that this sacrifice is needed,” said a Wilson aide who asked not to be identified.

Unlike with the pay raise, Obama could not order the Pentagon’s plan for new and higher Tricare fees to take effect without congressional approval because new fees require new authority. By law, increases in existing Tricare fees are limited to no more than the annual cost-of-living adjustment in military retired pay. That means Oct. 1 fee hikes could be no more than 1.7 percent, unless Congress provided authority otherwise.

DoD has been counting on the smaller pay raise and both new and bigger Tricare and pharmacy fees to save $1.4 billion next year.

Without those savings, something has to give, but Wilson’s panel is not responsible for finding offsets. Under budget-writing rules, the panel must cover only the costs of things that change law; in rejecting the Pentagon proposals, the panel basically voted to make no changes in law.

Defense officials have told Congress if they cannot cut personnel costs, something else will have to be cut in the military budget.

“Reductions in forces, training and modernization alone will degrade our nation’s military capabilities beyond an acceptable level of risk; therefore, it is necessary to slow the growth in military pay and benefits,” officials said in a letter to Congress transmitting details of the 2014 budget.■

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