House Panel Seeks Narrower Gap Between Military, Private Sector

By Stephen Barr
Thursday, April 27, 2006

A key House subcommittee yesterday approved a 2.7 percent pay raise for the military next January, slightly higher than the 2.2 percent recommended by President Bush in his fiscal 2007 budget.

The subcommittee also temporarily blocked an administration plan to increase fees in Tricare, the military's health-care program. The plan to raise Tricare fees had drawn spirited protests from military retiree associations and veterans groups.

The changes were approved by the House Armed Services subcommittee on military personnel, chaired by Rep. John M. McHugh (R-N.Y.), on a voice vote. In most years, the subcommittee's recommendations frame the legislative debate on military benefits and are usually accepted by the full committee and the House.

The bill, which also recommends staffing levels for active and reserve forces and provides recruitment and retention bonuses, would continue the subcommittee's commitment to members of the military, McHugh said.

He said the higher pay raise would help close the gap between military and private-sector salaries -- the eighth consecutive year that military basic pay would increase at a rate higher than the wage growth measured by a Labor Department index.

The bill also would provide money for additional pay raises, effective in April 2007, for warrant officers and mid-grade and senior enlisted personnel that the Pentagon is eager to retain, McHugh said.

The move to provide a higher across-the-board raise to the military than Bush recommended seems likely to revive a "pay parity" debate in Congress. Over the past two decades, Congress has, in most years, provided equal-size raises to the military and civil service. Bush recommended a 2.2 percent raise for both groups in 2007.

On the issue of Tricare expenses, the subcommittee delayed consideration of higher health-care fees until Dec. 31, 2007. The delay will permit the subcommittee to seek recommendations from the Government Accountability Office, the Congressional Budget Office and an independent task force, McHugh said in a statement. The goal is to devise "a comprehensive policy and fiscal basis for sustaining the future military health care benefit," the statement said.

Tricare has not adjusted its fees for 11 years, according to administration officials. The program, which Congress has expanded in recent years, provides military personnel with health benefits from the time of their retirement, usually in their mid-forties, to the time they become eligible for Medicare, usually at 65.

The administration's budget proposal called for non-Medicare retirees to pay a larger share of their health-care costs and would adjust the rates annually for inflation, in a manner similar to the rate increases faced by civil service retirees.

The proposed fees would have been levied on a sliding scale, with retired officers paying more than enlisted personnel. Administration officials portrayed the fees as modest adjustments, but opponents said they would double or triple health-care premiums for about 3 million military retirees and break the nation's promise to provide affordable care to military families.

TSP Officials Faulted

Reps. Thomas M. Davis III (R-Va.) and Jon Porter (R-Nev.) said yesterday that officials of the Thrift Savings Plan are stalling on a study to determine whether additional investment options should be added to the 401(k)-type program federal employees use to save for retirement.

Davis and Porter are sponsors of a bipartisan bill that would add a real estate investment fund to the TSP and would like to proceed with their legislation before October. At a hearing yesterday, Davis said TSP officials want "to run out the clock on us" by ensuring that the study is not completed until after Congress adjourns later this year.

The two lawmakers contend that adding a real estate option to the TSP would help federal employees diversify their portfolios.

Gary A. Amelio , executive director of the Federal Retirement Thrift Investment Board, said the TSP faces contracting requirements that mandate a review of all the plan's funds this year. As a result, he said, a consultant's report on whether to add funds to the TSP will be among the last projects completed, probably late this year.

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