washingtonscene
Losses From Repeated Pay and BAH Caps 2014
E-5 Basic Pay
Housing Allowance2 Cumulative Loss O-3
Basic Pay
Housing Allowance2 Cumulative Loss
$295 --
$295
$563 --
$563
2015 $597 $277
$1,169
$1,141 $329
$2,033 2016
$989 $555
$2,713
$1,885 $661
$4,579 Because both the E-5 and the O-3 likely 20171
$1,201 $842
$4,756
$2,288 $1,002 $7,869
1 Assumes 2017 average rental prices remain flat 2 Assumes Washington, D.C., BAH rates Source: DFAS, Defense Travel Management Office
The chart shows the progressive, incremental losses combined pay and basic allowance for housing (BAH) caps have imposed on an E-5 and an O-3, each with 10 years of military service.
So how much are we talking about? First, let’s summarize the relative size of the caps for each year to date. For 2014, the military basic pay raise
was capped 0.8 percent below the aver- age American’s pay raise (as measured by the Employment Cost Index, which is supposed to be the standard for military raises under the law unless the president proposes something different). For 2015, there was an additional
0.8-percent pay-raise cap. In 2016, the cap was a full 1 percent. The FY 2017 budget proposes an additional 0.5-percent cap. For 2015 and 2016, the BAH raise was capped 1 percent below housing cost growth, and current law requires another 1-percent BAH cap for 2017, 2018, and 2019. While the first-year pay loss was rela-
tively small, the compounded losses have mounted with each passing year. The pay and allowance loss for 2017 alone will have grown above $2,000 for an E-5 and almost $3,300 for an O-3. Their four-year cumulative losses will approach $5,000 and $8,000, respectively.
32 MILITARY OFFICER MAY 2016
would have been promoted at some point in those four years, the amounts would be larger still.
What about their future retired pay? Without even considering any subse-
quent promotions or longevity increases or further pay-raise caps, the O-3’s retired pay loss after 20 years’ service would be about $1,100 a year for life, just from these four “modest” pay-raise caps. Add in pro- motions, longevity increases, and likely further caps, and the future retired-pay loss would grow dramatically. Think this sounds a little alarmist? The last period of pay-raise caps began in the mid-1980s and continued through most of the ’90s. Servicemembers who retired under those depressed pay tables between 1994 and 2004 lost (and still are losing) upward of $5,000 in retired pay each year for the rest of their lives. Unfortunately, history shows that once
administrations and Congresses start cap- ping military pay raises, they don’t stop until the cuts start hurting military reten- tion and readiness. That’s why MOAA is urging Congress to learn from the past and restore military pay raises to match the average Ameri- can’s — before the troops’ cumulative losses get any larger.
Cuts Hurting T
Force Morale Enlisted leaders say troops notice erosion of benefits.
he Senior Enlisted Advisors for each of the military services testified in mid-March before the
House Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies about quality-of-life
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