Military pay raises might be yet another casualty of sequestration, according to a new report released by American Action Forum.
The 2016 National Defense Authorization Act will soon take center stage again, now that leaders in the House and Senate are working out the kinks and trying to reconcile different versions of the bill in conference.
One of the main differences between the House and Senate versions is the pay increase. The Senate proposes a 1.3 percent increase, in effect supporting the proposal forwarded by the Obama administration, while the House declined to specify a pay raise cap, indicating support for the 2.3 percent increase.
The 2.3 percent increase follows the Employment Cost Index, which Congress used starting in 1983 to ensure that in a voluntary force, military compensation remained reasonably competitive to civilian compensation. Congress further enshrined the use of ECI in 1990 via the Federal Employees Pay Comparability Act and again tied military pay raises to ECI in the 2004 NDDA.
But depending on how negotiations turn out this time around, for the third year in a row, the military may receive one of the lowest pay raises in its history. The impact of setting aside the ECI over the last several years on troop morale is unavoidable.
According to one survey, 87 percent of active-duty personnel in 2009 believed their pay and allowances were good or great, but in 2014, that figure dropped to just 44 percent.
This is because the Obama administration capped pay raises at lower levels for 2014, 2015, and in a recent letter sent to Congress, Obama said he would forward a 1.3 percent pay raise for 2016, a 1 percentage point decrease from the ECI level.
In late August, he called the move regrettable but also underscored its necessity. Obama said that the proposed pay raise, lower than inflation, should not hurt retention and recruitment.
But based on a 1.3 percent pay raise assumption, the Military Officers Association of America noted that the gap between military and civilian pay would end up at 5 percent. What this means is $1,500 less for mid-level enlisted troops and up to $3,000 less for mid-level officers.
While placing a cap on pay for a single year is unlikely to cause major problems, researchers at RAND argued that “a sustained slippage…could do real harm.”
How much longer the Obama administration can cap pay raises without damaging the military remains to be seen.
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