Pay Uncertainty

By Kellie Lunney

June 13, 2013

Lawmakers have reliably disagreed over the federal civilian pay raise for a while, whether to freeze or unfreeze it, and for how long. Now they’ve got differences over how much to boost military pay in 2014.

The House this week is considering the fiscal 2014 National Defense Authorization Act, which would give members of the military a 1.8 percent pay increase next year. The Senate Armed Services Personnel Subcommittee marked up its version of the defense authorization bill on Tuesday, however, with a 1 percent pay raise for service members in 2014. The 1 percent figure is in line with the Obama administration’s recommendation for next year.

It’s likely that each chamber’s pay raise number will remain intact as the bills wind through the House and Senate. That means lawmakers will have to reach consensus during conference committee on how much of a raise to give members of the military in 2014.

As for a civilian pay raise in 2014, it’s still possible. So far none of the spending bills have ruled it out and President Obama has proposed a 1 percent raise, but it’s only June.

Additionally, both the House and Senate versions of the fiscal 2014 NDAA reject most of the administration’s proposed increases to TRICARE fees for retirees and other changes to the military’s health care system. Congress has modestly increased some TRICARE enrollment fees and prescription drug costs for retirees during the past few years but has opposed the White House’s more aggressive proposals, including establishing an enrollment fee for TRICARE-for-Life beneficiaries, who are aged 65 and older.

Retired TRICARE Prime beneficiaries now pay between $39 and $79 more in annual fees than they paid nearly two decades ago. At the end of 2012, Congress rejected an administration proposal to tie TRICARE fees to retired recipients’ income and impose higher co-payments for pharmacy drugs. Requiring TRICARE beneficiaries to pay more for their health care is a politically sensitive topic. No one wants to be seen as breaking faith with troops, their families or retirees, and military service organizations are a powerful lobby in Washington.

Congressional Pay

Lawmakers also are using their own pay as a bargaining chip. Some Democrats are taking a page from their GOP colleagues by introducing legislation that ties their pay to a political hot potato -- the debt ceiling.

The 2013 Pay Your Bills or Lose Your Pay Act -- based on the concept behind the No Budget, No Pay Act, which Obama signed into law earlier this year -- would prevent lawmakers from receiving pay if Congress fails to raise the debt ceiling and the government defaults. The salaries of congressional members would be placed in escrow until the debt ceiling is increased or at the end of the 113th Congress, whichever happens first. The 27th Amendment to the U.S. Constitution prohibits a sitting Congress from increasing or decreasing its own pay, although it can change the pay of future legislative bodies. Supporters of these types of measures argue that placing salaries in escrow does not change the rate of lawmakers’ pay, and therefore is constitutional.

“If members of Congress are willing to let America become a deadbeat nation by not paying our bills, we should not be paid our salaries,” said Sen. Barbara Boxer, D-Calif., who introduced the Pay Your Bills or Lose Your Pay on Wednesday. “Our legislation would help prevent a catastrophic default by putting pressure on lawmakers to do the right thing and honor our nation’s financial obligations.”

The Treasury Department earlier this month suspended investments into the government securities G Fund, using one of its “extraordinary measures” to delay hitting the government’s debt ceiling. The government will hit the ceiling in September or early October, observers predict, coinciding with the beginning of the new fiscal year. Republicans have said they will not raise the debt ceiling, so get ready for some pay-related fireworks this summer and fall.

By Kellie Lunney

June 13, 2013