Pentagon budget would affect cost of living for troops and families

February 25, 2014
Defense Secretary Chuck Hagel said he knew the changes he announced Monday would be "controversial," but that they would enable the Pentagon to focus on military readiness. (The Associated Press)

Defense Secretary Chuck Hagel on Monday proposed trimming the Defense Department’s personnel costs with cuts in military benefits, pay and troop numbers.

The Pentagon’s 2015 budget request, due for release next Tuesday, would reduce housing allowances, increase health-care fees for active-duty families and military retirees, slash commissary subsidies by 71 percent and place a one-year hold on pay raises for the highest-ranking officers. The plan also calls for shrinking the Army to its smallest size in 74 years.

Many of the changes would increase the cost of living for U.S. troops, veterans and their families. Military groups have said they will fight those proposals.

“Washington is trying to balance the budget on the backs of those who have sacrificed the most,” said Iraq and Afghanistan Veterans of America chief executive Paul Rieckhoff. “We know the Defense Department must make difficult budget decisions, but these cuts would hit service members, making it harder for them and their families to make ends meet.”

Hagel defended some of the Pentagon proposals while outlining them Monday at a news conference.

“We recognize that no one serving our nation in uniform today is overpaid for what they do for our country,” the Pentagon chief said. “But if we continue on the current course without making these modest adjustments now, the choices will only grow more difficult and more painful down the road.”

The budget blueprint calls for reducing housing allowances by 5 percentage points. It would also require military retirees and some active-duty family members to pay more for Tricare deductibles and co-pays.

Hagel did not offer specifics on how much the rates would increase, but he said military health benefits would “remain affordable and generous” despite the additional costs.

The Pentagon plan would also reduce subsidies for the commissaries where troops can buy discounted groceries, lowering the amount from $1.4 billion to $400 million over three years. Hagel said the stores would still pay no rent or taxes, and the stores in rural areas and overseas would continue to receive direct financial support.

The Defense Department will also ask to stop pay increases for generals and admirals for one year while boosting basic compensation for all other military personnel by 1 percent, Hagel said.

The budget proposal will not recommend changes to the retirement benefits of existing troops. Hagel said his department does not plan to pursue reforms in that area until it receives a report due next year from the Military Compensation and Retirement Modernization Commission.

Congress and President Obama approved a governmentwide budget last year that would have reduced the annual cost-of-living adjustments for younger military retirees starting in 2015, but lawmakers voted this month to repeal that provision  for troops that joined the armed forces before Jan. 1.

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks@washpost.comVisit The Federal Eye, The Fed Page and Post Politics for more federal news. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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