Sunday, April 26, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Leaders laser pay, benefits as debt-deal targets

By
From page B10 | November 18, 2012 |

The Congressional Budget Office has released a report on military compensation that puts a red laser dot on near-term pay raises, beneficiary health care fees and retirement of future forces as potential cost-saving targets Congress might want to consider in any debt-reduction deal.

Thanks in part to what the CBO says were pay raises that exceeded private sector wage growth through much of the last decade, the report estimates that military cash compensation increased by 52 percent from 2002 to 2010 while private sector wages rose by only 24 percent.

In 2012, a married Army corporal with four to six years of service will receive “regular military compensation” valued at $50,860.

RMC is the “salary” yardstick for the military. It combines basic pay – in this case, $27,200 for that corporal – with subsistence allowance of $4,180, average Basic Allowance for Housing for the pay grade across U.S. housing areas of $14,820 and an estimated value for the tax advantages on tax-free allowances of $4,660.

An officer example is given too. RMC for a married Army captain with six years of service is $92,220 this year.

In addition, CBO notes that some members receive enlistment or re-enlistment bonuses, special or incentive pays for unique skills and pay for serving in dangerous or difficult assignments including combat areas, which can mean tax breaks on part or all of their basic pay too.

The office discusses RMC after advising that $150 billion, or more than one quarter of the Defense Department’s “base” budget, which excludes the cost of current operations in Iraq and Afghanistan, is spent this year on military pay and benefits for current forces and retirees. It goes on to propose ways to curtail compensation costs.

Costs of Military Pay and Benefits in the Defense Budget can be read on line at http://www.cbo.gov/sites/default/files/cbofiles/attachments/11-14-12-MilitaryComp.pdf.

Rep. Paul Ryan of Wisconsin, in his role as chairman of the House Budget Committee, requested the report. It describes recent gains to service compensation, projected growth, the history of cost-sharing under Tricare and even how court rulings knocked down claims by older retirees that recruiter promises had bound the military to provide free heath care for life.

One approach to cut costs is to “restrict basic pay raises” as Defense officials proposed last April, the CBO said. Congress so far has rejected the idea, but any grand bargain to address the debt crisis in coming months could include many unpleasant surprises for beneficiaries of federal programs.

The Defense Department proposed a raise of 1.7 percent this January and in 2014. These were touted as big enough to keep pace with private sector wage growth but the CBO projects they will fall short.

Even deeper pay caps are proposed for the next three years. The administration’s 2015 raise would be only 0.5 percent, followed by 1 percent in 2016 and 1.5 percent in 2017.

Pay caps could hurt recruiting and retention, the CBO concedes, but this can be mitigated with more and bigger enlistment and re-enlistment bonuses. Unlike pay hikes, the CBO says, bonuses “do not compound from year to year and they have no effect on the value of future retirement annuities.”

If negotiators were to agree to a pay-cap plan, military pay would lose 9 percent to private sector wage growth over the five-year period, the report says, but this is only an option not a recommendation, CBO adds.

Another way to slow compensation growth, it says, is to raise Tricare enrollment fees, deductibles or co-payments, actions also proposed by the administration last April. For working-age retirees, those under 65, fee hikes should be phased throughout five years and use a “tiered approach” so that senior-grade retirees would pay higher fees than lower-ranking retirees.

The Defense Department also seeks a new annual enrollment fee for the Tricare for Life insurance supplement to Medicare used by retirees 65 and older. This also would be tiered so retirees drawing smaller retirements pay less. Congress so far has rejected this proposal as well.

CBO says higher enrollment fees not only would raise collections, but also discourage retirees and families from relying on military health care versus civilian employer health insurance. Higher deductibles and co-pays would restrain use of medical services, too, and also lower Tricare costs.

The report estimates that out-of-pocket costs to military beneficiaries today are just one-fifth of what civilian workers pay for health care. Unless fees are raised, the CBO projects that military health care costs will jump from $51 billion in 2013 to $77 billion in 2013 dollars by 2017.

The CBO raises another option it floated last year: prohibiting working-age military retirees and families from Tricare Prime, the military’s managed care option.

Instead, they would use only Tricare Standard, the fee-for-service insurance option, or Tricare Extra, the preferred provider option, or, presumably, they would use health insurance offered by current employers.

Arizona Sen. John McCain, ranking Republican on the Senate Armed Services Committee, embraced this idea last year in a letter to the Joint Select Committee on Debt Reduction, a concession to avoid across-the-board cuts to defense programs called for under the “sequestration” trigger of the 2011 Budget Control Act. Sequestration must be carried out starting by Jan. 2, 2013, if Congress doesn’t agree to a $1.2 trillion debt-cutting deal.

The CBO says restricting Prime access to retirees under 65 and their family members would save as much as $10 billion a year. Congress so far has rejected this, too, along with calls to raise Tricare fees or to change military retirement for future recruits.

The CBO report reviews options for changing retirement. It notes that a less generous plan, if only for new entrants, still would save on the Defense Department accrual” costs, the funding required every year to cover obligations to future generations of retirees.

Like most Americans, military people are confused and frustrated by the failure of Congress to reach a debt-reduction deal. The CBO report reminds the military community that how the deal gets made could be as consequential to their families as that fearsome drive off the “fiscal cliff.”

Write Military Update, P.O. Box 231111, Centreville, VA, or email [email protected] or twitter: Tom Philpott @Military_Update.

LEAVE A COMMENT

Discussion | 1 comment

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • RichNovember 18, 2012 - 8:12 am

    Perhaps a good protest and occupation of military recruitment centers by the aggrieved military retirees can send a messege to the new recruits---dont expect your government to keep its contractual obligations.

    Reply | Report abusive comment
.

Solano News

Children enjoy day of fishing at Fairfield pond

By Susan Hiland | From Page: A1 | Gallery

 
Solano cities celebrate Earth Day

By Susan Hiland | From Page: A1 | Gallery

Hard-fought battle ends in victory

By Amy Maginnis-Honey | From Page: C1 | Gallery

 
Those addictive, terrible, wonderful smartphones

By Brad Stanhope | From Page: A2

 
Expo shows Kroc Center fun for whole Framily

By Bill Hicks | From Page: A3 | Gallery

Police, faith groups look to change troubled neighborhoods

By Bill Hicks | From Page: A3 | Gallery

 
Edibles in your landscape

By Daily Republic | From Page: C4

CHP offers free class for senior drivers

By Kevin W. Green | From Page: A4

 
Supervisors consider changes in various county fees

By Kevin W. Green | From Page: A4

Suisun police execute tobacco sting

By Bill Hicks | From Page: A4

 
Covered California offers Solano enrollment events

By Kevin W. Green | From Page: A5

Patrons raise a glass to toast a good cause

By Bill Hicks | From Page: A5 | Gallery

 
Walk MS hits stride along Suisun waterfront

By Susan Hiland | From Page: A5 | Gallery

Weather for Sunday, April 26, 2015

By Daily Republic staff | From Page: B6

 
Be wary of next ‘big’ thing

By Bud Stevenson | From Page: B7

Pay close attention to investment costs

By Mark Sievers | From Page: B7

 
.

US / World

With legalization, lawyers turn to business of pot

By The Associated Press | From Page: A1

 
Spring storm delivers late rain, snow to Northern California

By The Associated Press | From Page: A5

Remains of dismembered newborn found in South Los Angeles

By The Associated Press | From Page: A5

 
Starbucks stores reopen Saturday after computer glitch

By The Associated Press | From Page: A6

Nearly 17 million watch Jenner interview

By The Associated Press | From Page: A6

 
‘Operation Babylift’ kids, soldiers reunite 40 years later

By The Associated Press | From Page: A6

Aden hit by coalition airstrikes amid fierce street battles

By The Associated Press | From Page: A7

 
Mother in custody dispute freed after 8 years behind bars

By The Associated Press | From Page: A7

A dozen arrested as Freddie Gray protests turn violent

By The Associated Press | From Page: A7

 
Italy marks 70th anniversary of anti-Nazi uprising

By The Associated Press | From Page: A7

European authorities stop illegal horse meat network

By The Associated Press | From Page: A7

 
Italian navy rescues 274 from migrant ship off Libyan coast

By The Associated Press | From Page: A7

Army shutting down wounded warrior transition care units

By The Associated Press | From Page: B10

 
Warrior pose: Yoga catching on as therapy for veterans’ PTSD

By The Washington Post | From Page: B10

Toll climbs after powerful quake hits Nepal: Things to Know

By The Associated Press | From Page: A11

 
.

Opinion

How can we give them more?

By Brian Thiemer | From Page: A8, 1 Comment

 
Primary challenge could force Harris’ hand

By Dan Walters | From Page: A8

Sound off for April 26, 2015

By Daily Republic | From Page: A8

 
Corruption tarnishes values of our ancestors

By Letter to the Editor | From Page: A8

 
Obama sides with enemy

By Letter to the Editor | From Page: A8

Who’s asleep at the switch?

By Letter to the Editor | From Page: A8

 
.

Living

Today in history: Sunday, April 26

By The Associated Press | From Page: A2

 
Brides show short wedding gowns more of the love

By The Associated Press | From Page: C2

Community Calendar: April 26, 2015

By Susan Hiland | From Page: A2

 
Vatican goes on offensive to defend US-Spanish saint

By The Associated Press | From Page: C3

 
You get what you need with Jesus

By Noel Reese | From Page: C3

 
How can I trust my husband after he texted a younger woman behind my back?

By Kathy Mitchell and Marcy Sugar | From Page: C4

Horoscope: April 26, 2015

By Holiday Mathis | From Page: C4

 
Veterinarians are too expensive, and it puts pets at risk

By The Washington Post | From Page: C5

Old standby body-weight training still has moves

By The Washington Post | From Page: C7

 
Milan spiffs up for Expo 2015

By The Associated Press | From Page: C7

.

Entertainment

PUBLISHERS WEEKLY BEST-SELLERS

By The Associated Press | From Page: A10

 
More copies of Laura Ingalls Wilder memoir being printed

By The Associated Press | From Page: A10

Amber Tamblyn writes book of poetry about dead actresses

By The Associated Press | From Page: A10 | Gallery

 
TVGrid

By Daily Republic Syndicated Content | From Page: B11

.

Sports

Giants beat Rockies 5-4 in 11 innings

By The Associated Press | From Page: B1

 
Warriors complete sweep with 109-98 win over Pelicans

By The Associated Press | From Page: B1 | Gallery

Athletics drop 3rd straight game, 9-3 to Astros

By The Associated Press | From Page: B1 | Gallery

 
Rain postpones NASCAR race at Richmond until Sunday

By The Associated Press | From Page: B1 | Gallery

 
Bulldogs get 10-0 baseball win over Panthers

By Daily Republic staff | From Page: B2

Canadian teen Henderson has 1-shot lead in LPGA Tour event

By The Associated Press | From Page: B2 | Gallery

 
Klitschko outpoints Jennings to defend heavyweight titles

By The Associated Press | From Page: B2

Michael Schumacher’s son makes strong Formula 4 debut

By The Associated Press | From Page: B2

 
US routs Canada 7-2 in semifinal at under-18 hockey worlds

By The Associated Press | From Page: B2

Watford back in Premier League after 8-year absence

By The Associated Press | From Page: B2

 
Several Kentucky Derby hopefuls get workouts in before rain

By The Associated Press | From Page: B2

Levy falters at Volvo China Open; 4 tied for lead

By The Associated Press | From Page: B2

 
Former Expos executive Jim Fanning dies at 87

By The Associated Press | From Page: B2

Sandy Lyle, Ian Woosnam team to lead Legends of Golf

By The Associated Press | From Page: B2

 
Compton, Day top leaderboard in rain-plagued Zurich Classic

By The Associated Press | From Page: B2

Suzuki breaks Oh’s record for runs by a Japanese player

By The Associated Press | From Page: B2

 
A’s place Ben Zobrist on disabled list with knee injury

By The Associated Press | From Page: B3

7 players from Royals, White Sox punished by MLB for brawl

By The Associated Press | From Page: B3 | Gallery

 
Hometown report: Bicycle racing, youth track

By Daily Republic staff | From Page: B4

Bowling report for April 26, 2015

By Daily Republic staff | From Page: B4

 
Bayless’ layup at buzzer gives Bucks 92-90 win over Bulls

By The Associated Press | From Page: B4 | Gallery

Nets beat Hawks 91-83, pull within 2-1 in series

By The Associated Press | From Page: B4 | Gallery

 
Grizzlies hold off a late Trail Blazers rally to go up 3-0

By The Associated Press | From Page: B4

Sports on TV for Sunday, April 26, 2015

By Paul Farmer | From Page: B5

 
This date in sports history for April 26

By The Associated Press | From Page: B5

.

Business

Veggies take center plate as healthy fast food chains expand

By The Associated Press | From Page: B7 | Gallery

 
What’s in a hotel name? Guests try to decipher the mystery

By The Associated Press | From Page: B7 | Gallery

Is ice cream safe? Federal health officials say yes

By The Associated Press | From Page: B8

 
 
Don’t panic, college seniors: Jobs for grads likely to grow

By The Associated Press | From Page: B9 | Gallery

.

Obituaries

Elizabeth Cepeda

By Nancy Green | From Page: A4, 1 Comment

 
Janis Ruth (Sefzik) Skinner

By Nancy Green | From Page: A4

Nicole Herdia Spann

By Susan Hiland | From Page: A4

 
Reginald Morris Davis

By Susan Hiland | From Page: A4

Kirk Noonan

By Nancy Green | From Page: A4

 
Sandra King

By Nancy Green | From Page: A4

.

Comics