December 21, 2012
The Senate on Friday approved the conference report on the fiscal 2013 Defense authorization bill, which includes a pay raise for service members and a provision directing the Pentagon to reduce its civilian and contractor workforces.
The House passed the compromise on the legislation Thursday evening; it now heads to President Obama. The White House previously threatened a veto on the Defense authorization measure because of several provisions, including the one directing the department to shrink its workforce. Given the impasse over the fiscal cliff and other pressing issues, it’s unclear whether the president will actually veto the $633.3 billion bill.
The legislation contains several provisions related to military pay and benefits. It authorizes a 1.7 percent pay raise for service members in 2013, and rejects an Obama administration proposal calling for higher fees on pharmacy drug co-payments under TRICARE. Specifically, the bill caps pharmacy co-pays beginning in 2014 so that such fees are in line with the annual retiree cost-of-living adjustment. The costs associated with the fee increases would be offset by a five-year pilot program requiring TRICARE for Life recipients to obtain maintenance drug refills through the mail, which is cheaper than obtaining them through retail pharmacies.
A provision that directs the Pentagon to shed thousands of civilian and contractor jobs through fiscal 2017 also survived House-Senate conference negotiations over the bill. It directs the Defense secretary to rebalance and reduce the civilian and contractor workforces from fiscal 2012 through fiscal 2017 by a rate that is at least equal to the percentage of funding saved from planned troop reductions, or 5 percent. The bill also gives the Defense Department discretion over whether to exempt certain mission-critical jobs, including medical services and maintenance of military equipment, from the cuts. The provision means the department could eliminate up to 36,000 jobs during the next few years.
The language in the conference report gives the Pentagon more flexibility than the original provision in the Senate version of the Defense authorization bill. It directs the Defense Department to ensure that the civilian and contractors workforces are “appropriately sized” with the military force to carry out its mission and to find “the most appropriate and cost-efficient mix of military, civilian, and service contractor personnel.” The Senate provision, inserted by Sen. John McCain, R-Ariz., was criticized by the American Federation of Government Employees and the Pentagon for directing arbitrary, across-the-board personnel cuts that didn’t take into account the department’s workforce needs. The original House version of the bill did not contain language to reduce civilian and contractor personnel.
“Requiring DoD to make equal cuts across its blended workforce would have deprived the department of the ability to make strategic decisions about how to best meet its mission needs,” said Stan Soloway, president and CEO of the Professional Services Council. “We’re glad Congress listened to the call from us and others to reinforce DoD’s ability to make strategic decisions about its total workforce needs and how best to balance their continued use of military personnel, DoD civilians, and contractors. Such flexibility is necessary as the mission needs of the department change.”
AFGE, however, was not pleased about the provision’s survival. The union said in a lengthy statement on Wednesday that the cuts will hit the civilian workforce harder than contractors because the Pentagon lacks an inventory of contract services, so it can’t reliably identify those reductions. “That means civilian personnel costs can be identified and controlled, but service contractor costs cannot,” the statement said. “And, inevitably, this means that the cuts are far more likely to be carried out on civilian personnel and less so on contractors, even though the civilian workforce is cheaper and smaller.”
The Defense authorization bill that conferees crafted also establishes a commission to review military compensation and retirement benefits, enhances suicide prevention and sexual assault prevention programs in the military, and authorizes the department to pay for abortions in cases of rape and incest.
December 21, 2012