On Tuesday, the U.S. House and Senate reached an agreement on the 2015 National Defense Authorization Act (NDAA). The bill, setting the Pentagon’s expenditures and budget, is one of the least controversial items on Congress’ annual agenda; an NDAA has been passed every year for the past 52 years.
There was some concern that the FY15 authorization would break this legislative streak after reports surfaced last month of a dispute between Senate negotiators, who favored cuts to military compensation, and House negotiators, who did not. It appears those differences have been ironed out in a compromise; compensation will be reduced, but not by nearly as much as the Department of Defense (DoD) asked for.
Three pay and benefits reductions made it into the FY15 NDAA:
- Pay increases for service members, which would automatically go up by 1.8 percent to keep pace with the private sector, will be capped at 1 percent.
- Troop housing allowances will be reduced by 1 percent in just FY15 instead of by 5 percent over three years.
- Copays for pharmaceutical prescriptions filled via mail-order or retail will go up by $3 instead of doubling or tripling.
Although these cuts are ultimately trivial compared to what was originally requested by the DoD, they represent a small but noteworthy step towards reducing military compensation expenses. The fact that these cost-saving measures made it into the NDAA at all is a sign that the fiscal pressures imposed by sequestration, along with rapidly rising personnel costs, can no longer be ignored by lawmakers.
Senior DoD officials and defense experts have become increasingly vocal about the need to constrain compensation and reduce the overall share of personnel costs in the military budget. The Chairman of the Joint Chiefs of Staff, General Martin Dempsey, stated in 2013 that, “Compensation…and health care costs are growing at rates that are unsustainable to the all-volunteer force.” He was echoed by outgoing Secretary of Defense Chuck Hagel, who told reporters last February that, “We will inevitably have to either cut into compensation even more deeply and abruptly, or we will have to deprive our men and women of the training and equipment they need to succeed in battle.”
On the other side of the argument are an array of advocacy organizations, including the Military Officers Association of America (MOAA) and the Veterans of Foreign Wars, who contend that reducing military compensation will harm the All-Volunteer Force by making it difficult to recruit and retain qualified personnel. The influence of these groups, and their ability to stop legislation seen as hurting the troops, has led some experts to dub military compensation reform “the real third rail of American politics.”
While advocacy organizations managed to stave off most of the compensation cuts in the FY15 NDAA—MOAA flooded lawmakers with 55,000 letters during the final legislative negotiations—the reductions that passed may indicate that politicians have a greater appetite for reforms than was previously thought. This bodes well for February, when an independent commission tasked with providing a comprehensive set of compensation reform proposals will release its final report. Opponents of spending reductions, such as outgoing House Armed Services Committee chair Buck McKeon, have said that it makes sense to hold off on making major changes until after the commission delivers its recommendations. In a few months, elected officials will no longer be able to put off grappling with the substance of reform proposals.
If the Pentagon does not get any budget relief from Congress, lawmakers will be faced with a stark choice: take the politically unpalatable step of reducing manpower expenses—along with other, equally unpopular measures, like starting a new round of base closures—or face a dramatic decline in U.S. military readiness. Thus far, the politics of this issue have worked against the compensation reformers. As the tangible negative effects of sequestration become increasingly clear, however, the political dynamics may begin to swing in the other direction.
Jesse Sloman is a research associate at the Council on Foreign Relations and a member of the Truman National Security Project’s Defense Council. He served on active duty in the Marine Corps from 2009 to 2013.
