Defense Budget Battle Begins with the HASC Mark

It’s an annual Washington ritual: waiting to see what will be included in the year’s National Defense Authorization Act (NDAA), the legislation that sets policies and authorizes funding for the Department of Defense (DoD). The Administration released its budget request in February; now the ball is in Congress’ court. The legislation needs to pass through both houses of Congress and go to the President for his signature before becoming law.

While we’re still waiting for the details of the Senate plan, we’ve had a chance to analyze the bill, or mark, passed by the House Armed Services Committee (HASC). A large portion of the bill focuses on the HASC’s vision for health care reform, but the massive bill also contains many other provisions important to military families’ quality of life.

What should military families know about the HASC mark?

Pay: The HASC bill rejects the Administration’s proposal for a 1.6% pay increase for service members in favor of a 2.1% raise. This would be consistent with the Employment Cost Index (ECI), which measures the cost of labor in the market and is traditionally used as the benchmark for calculating military pay. If the Administration’s proposal passes it will be the fourth year in a row that military pay increases are set below ECI.

Commissary: The HASC accepted the Department of Defense (DoD) proposal to fund the commissary at $1.2 billion. While this is $200 million less than the commissary received last year, it is actually enough to fully fund commissary operations. In light of past years’ proposals that would have significantly cut commissary funding, we’re pleased Congress and DoD recognized the importance of fully funding the commissary this year. However, both DoD and Congress ultimately want to reduce the commissary appropriation. Their goal is to increase revenue generated by the commissary so those revenues can be used to support commissary operations. To do this, DoD has requested and the House bill would authorize major changes to the way the commissary does business. Specifically, the proposal would allow:

  • Variable pricing. Under current law, the commissary sells groceries at cost plus a 5% surcharge that is used to renovate and build new commissaries. The new plan would allow the commissary to raise prices on some items and lower items in order to increase revenue. The only restriction would be that the average customer’s overall level of savings would have to remain the same as it is now. DoD would be required to do a study to determine the overall level of savings currently and use that baseline to set variable prices.
  • Private label products. The proposal would allow the commissary to develop and sell its own private label products, as many grocery stores do. DoD believes it can save money and generate more revenue through private label products than it currently does by only selling national brands.

We are very concerned about the impact these changes would have on the savings and quality families rely on when shopping at the commissary. We are urging Congress to move cautiously and study the possible effects of altering commissary operations before making sweeping changes. Military families cannot afford the risk that their commissary savings will be reduced or lost.

Survivors: The HASC extended the Special Survivor Indemnity Allowance (SSIA) for one year at the current rate of $310 per month. The SSIA was created in the FY08 NDAA as a first step in a longer-term effort to phase out the Dependency and Indemnity Compensation (DIC) offset to the Survivor Benefit Plan (SBP). The authority to pay the SSIA is set to expire on March 1, 2016.

The HASC moved to eliminate differential treatment under the Survivor Benefit Plan (SBP) between members of the Reserve Component who die from an injury/illness in the line of duty during Inactive-Duty training (IDT) and active duty service members who die in the line of duty.

Expanded Parental Leave: We were pleased to see the Armed Services committee recognize the importance of parental leave and expand leave for service members whose spouses give birth as well as for dual-service couples who adopt a child. Under the HASC bill, new parents will receive up to 14 days of leave when their spouse gives birth, up from 10 days currently allowed in law. Dual-service couples who adopt a child will be allowed 36 days of leave to be divided between the two parents. DoD expanded maternity leave for female service members who give birth to 12 weeks earlier this year; we’re happy to see the needs of fathers and adoptive parents addressed as well.

WIC Offices on Base: The Armed Services committee voted to approve a provision that would allow installation commanders to provide space for Women, Infants and Children (WIC) offices rent-free. WIC is a nutrition assistance program supporting pregnant moms and families with children under age five. Many military families rely on WIC to help them provide healthy food for their babies and young children. We’re pleased the House recognized military families need easy, convenient access to this vital program.

Former Spouse Protection Act: The bill would change the Former Spouse Protection Act to eliminate the “windfall” benefit and base the division of military pension on grade/years of service at the time of divorce, not retirement.

What happens next?

The bill will be sent to the full House for consideration. Meanwhile, the Senate Armed Services Committee (SASC) also completed their mark of the NDAA for FY17. Stay tuned for future articles comparing the House and Senate provisions.

Remember, we have a long way to go before the NDAA for FY17 is finalized. Both the House and Senate versions will be reviewed in conference and final details negotiated. Now is your chance to weigh-in. What do you think about the HASC mark?

Posted May 16, 2016


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