Congress Agrees to Troop Pay, BAH Cuts in Budget Compromise

Service members next year will be paying more for prescriptions bought off base, getting less of a housing subsidy and a picking up a smaller pay raise under an agreement reached between Senate and House lawmakers.

The deal between the Senate and House armed services committees on the 2015 National Defense Authorization Act is bound to draw criticism from military associations and veterans' service groups, which lobby Congress on behalf of service members' pay and benefits.

The bill that will go before the full Senate and House includes higher co-pays for prescriptions filled at off-base pharmacies, a curb on basic allowances for housing – BAH – by 1 percent next year, and rolling back the statutory 1.8 percent troop pay raise to 1 percent, first reported by Military Times.

Though the Pentagon got what it wanted in terms of the smaller pay raise, the cuts it wanted to BAH spending and the increases it wanted for prescription drug co-pays were more than what lawmakers agreed to. The Defense Department originally asked for a 5 percent reduction to BAH over three years and a $30 increase in drug fees over a decade.

The pay and benefit cuts are included in the overall $521 billion budget package. In addition, the NDAA includes $64 billion for the overseas contingency fund – the budget for U.S. combat operations.

Military and veterans groups have insisted that the budget should not include pay and benefit cuts to service members.

"The losers in this compromise are once again the troops and their families," Veterans of Foreign Wars spokesman Joe Davis said on Tuesday. "Congress should wait until after the ongoing Military Compensation and Retirement Modernization Commission puts all of its cards on the table in their February report. "

Norb Ryan, president of Military Officers Association of America, told Military.com last month that service members are being unfairly targeted in the Pentagon's drive to cut spending.

"They think we have to fund readiness by taking the money away from the people who are being asked to do more and more," he said.

Officials with Keep Your Promise, a group that lobbies for military pay and benefit protections, agreed.

"Congress forgot, in their haste to pass a bill, that they promised not to balance the budget on the backs of our military," said Lori Volkman, a spokesman for the group. "We're asking why we have to continue to sacrifice, when some military families are already living in poverty. Military families should be the last to experience cuts."

In August, the American Legion passed a resolution at their national convention opposing any increases in Tricare costs, which would include the roughly $3 increase for prescriptions agreed to between the House and Senate panels.

The increase would go into effect in January for all prescriptions except mail-order generic drugs, the paper reported.

National Commander Michael D. Helm also criticized plans to roll back the expected 1.8 percent pay increase to 1 percent.

"With a war in Afghanistan, boots back on the ground in Iraq, and ISIS on the loose in the Middle East, is a 1-percent salary raise really the best we can do for the men and women we expect to meet those challenges?" he said in September.

The House panel's version of the 2015 defense budget includes no reductions in benefits but is silent on scaling back the pay increase – suggesting lawmakers' sympathy with the Pentagon's argument that personnel costs are consuming ever higher portions of the defense budget.

The House version gives President Barack Obama the authority to set the 2015 raise at 1 percent, which he has vowed to do.

Defense Department officials have been pushing for the cuts, saying they are needed to reign in personnel spending.  Personnel costs are currently budgeted at $177 billion for 2015, or more than a third of the Pentagon's non-war budget of $496 billion.

Personnel costs are nearly half the department's non-war budget when civilian personnel are factored in, the Pentagon says.

In early November, the Congressional Budget Office reported that the Pentagon's base budget climbed from $384 billion in 2000 to $502 billion in fiscal 2014, in inflation-adjusted terms. The CBO also pegged "the largest rate of growth" to personnel costs, which increased by 46 percent over the 14 year period.

-- Bryant Jordan can be reached at bryant.jordan@monster.com