Everyone wins in the military compensation portion of the fiscal 2000 Defense Authorization Bill, said Navy Capt. Elliott Bloxom, the Defense Department's director of compensation.
The bill, passed by both houses of Congress Sept. 22, authorizes a 4.8 percent across-the-board pay raise on Jan. 1, 2000. It also makes pay table reform a reality. Some 75 percent of all service members will receive a further pay raise July 1, 2000.
"The authorization bill is huge in terms of what it will do for our men and women in uniform," Bloxom said.
The changes to basic pay, retirement, fixes to the military pay table and pay raises to DoD civilians total about $35 billion over the next six years. Bloxom said DoD officials proposed the military pay "triad" in response to the changing demands of U.S. forces today and the competition DoD faces from a vibrant economy.
"We must adequately compensate the men and women in uniform so they will stay with us, instead of being lured to do something else," he said. Also, more military personnel have achieved higher levels of education than in the past and DoD has to adequately reward them, he added.
The president's budget request-submitted to Congress in February 1999-contained a 4.4 percent pay raise. However, 4.4 percent is only .1 percent higher than the employment cost index. The ECI is a series of indices that measure employment cost changes in the private sector. One index measures changes in salaries and wages from year to year.
Congress boosted the pay raise to 4.8 percent, making it the military's largest since fiscal 1981. Further, over the next six years, the authorization bill calls for the annual raise to match the ECI plus .5 percent. So, if the index is 3.9 percent, for instance, the military raise must be 4.4 percent.
The second pay initiative is pay table reform. First, a little history. The current pay tables have been around since 1949 and few changes have been made since, with the exception of adding E-8 and E-9 pay grades in the late 1950s and the chief warrant officer 5 grade recently. The last two Quadrennial Review of Military Compensation panels recommended pay table reform. It is finally accomplished in the fiscal 2000 authorization.
"What this will do is place the emphasis on performance rather than longevity," Bloxom said. "Under the current pay tables only 37 percent of pay raises are tied to promotions and 73 percent to longevity." Reform will make promotions more meaningful and more valuable than simple longevity, he said.
While pay table reform has also been called "targeted pay raises," pay table reform does more. It affects the entire pay table, and the effects are lasting. The July 1 raise should not be considred so much a "raise" as a permanent correction to past distortions in the pay table.
On July 1, 2000, 75 percent of all service members will receive pay raises ranging up to an additional 5.5 percent. With the 4.8 percent pay raise from January figured in, some service members will receive raises totaling 10.3 percent in fiscal 2000.
"This is a one-time pay table adjustment," Bloxom said. "But what's important for service members to remember is not what raise you get on July 1, but the raises you will get if you stay in the service and perform well. Don't look at where you are now, but where you expect to be in five years."
The authorization bill calls for 75 percent of the money devoted to pay table reform to go toward correcting imbalances in the enlisted chart, whereas normally the split occurs on a 66 to 33 percent basis. Some pay cells in the officer chart will see marked raises, but they are the ones "most out of whack," Bloxom said.
Once pay table reform is adopted, 53 percent of the raises service members receive during their careers will occur with promotions vs. 47 percent via longevity. Further, the raises become larger as service members go up the ranks.
"This is a good-news story," Bloxom said. "Changes in pay and retirement are designed to recognize the sacrifices of our men and women in uniform. All personnel will benefit."