Obama: Growth of Military Pay and Benefits Cannot Be Sustained

American soldiers conduct a partnership patrol with members of the Afghan Uniformed Police in Kandahar in December. American soldiers conduct a partnership patrol with members of the Afghan Uniformed Police in Kandahar in December. Defense Department

President Obama proposed less generous increases to several aspects of military compensation in his fiscal 2015 budget, saying service members’ pay and benefits have grown at an unsustainable rate in the last decade.

Obama proposed a 1 percent raise in basic pay, the same amount service members received in 2014, but significantly less than in previous years.  He also called for a smaller increase in fiscal 2015 for the basic housing allowance – 1.5 percent – and a 3.4 percent increase to the basic subsistence allowance. In his last budget, Obama pitched a 4.2 percent housing subsidy increase -- and service members ultimately received an average bump of 5 percent from Congress -- while the subsistence increase for 2014 was the same rate as this year’s proposal.

“All of these changes have been recommended by the uniformed military leadership and are necessary to slow the growth in compensation and benefit costs in a responsible way and preserve funding needed for investments in platforms and readiness,” the White House wrote in the budget.

Effective 2016, the budget also would adopt a “consolidated health plan.” The plan would implement annual enrollment fees for the TRICARE for Life program for Medicare eligible retirees, phased in over a four-year period. Current TRICARE for Life participants would be grandfathered in and not subject to the fees. The recommendation also includes a proposed increase to pharmacy prescription co-payments for all active-duty families and retirees to “incentivize usage of mail order and generic drugs.”

The TRICARE changes would save the Pentagon about $4 billion over 10 years. The compensation reforms are a part of a larger effort by Obama and Defense Secretary Chuck Hagel to reduce the overall size and fiscal footprint of the military in the post-war era.

Also included in the budget was $5 million for the Military Compensation and Retirement Modernization Commission, which will produce a more macro evaluation of military pay and benefits. The panel will issue its findings and recommendations in early 2015. 

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.