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Pentagon officials and congressional staffs are working together to try to ensure that thousands of bonus-qualified recruits, and thousands of careerists ready to re-enlist, aren’t harmed financially by the current suspension of bonuses and incentive pays.

Bonuses and many special pays stopped Jan. 1 because President Bush vetoed the fiscal 2008 defense authorization bill. He refused to sign HR 1585 because of a provision that could expose assets of the fledgling Iraqi government to U.S. lawsuits from victims of Saddam Hussein’s regime.

Until the $696 billion defense policy bill is revised, passed and signed, or Congress clears separate legislation restoring bonus and pay authorities, the services must operate without key force-management tools, including all enlistment, re-enlistment and retention bonuses being paid to fill critical skills.

Capitol Hill staffers and Defense officials have been brainstorming how to rewrite the delayed Defense bill to be certain it fully protects recruits and servicemembers from unintended consequences of the bonus limbo. They want to make sure, for example, that suspended bonuses and special pays are made retroactive to Jan. 1 for everyone, whether infantrymen and health care professionals or aviators and nuclear-trained officers.

Defense officials also are pressing Congress to protect tax breaks for servicemembers who might be unable to re-enlist before returning this month from Iraq and Afghanistan. Special language could be necessary to allow war-zone tax exemptions to apply to bonus contracts whose signing must be delayed.

This will be a concern, for example, for re-enlistment-eligible soldiers in two Army Brigade Combat Teams — the 1st and 2nd Brigades of the 1st Cavalry Division.

“The language we’re working on with the Congress would protect those situations so there would be no disadvantage accruing to anyone,” said Bill Carr, deputy undersecretary of Defense for military personnel policy.

With no authorization bill, the military’s pay raise appearing in mid-January checks will be 3 percent, not 3.5 percent as passed by Congress. Standing law allows raises to match wage growth in the private sector, which is the lower figure. Congress had for a 3.5 percent hike to continue to close a perceived pay gap.

When revising the Defense bill, lawmakers are expected to make the larger raise retroactive to Jan. 1. But for it to show up in end-of-month paychecks, the revised bill would have to be signed by January 22.

For most members facing re-enlistment decisions, suspension of bonus authority isn’t a big deal. The services are offering service extensions of a month or two until bonuses are available again. The Army, which in wartime is paying bonuses to 82 percent of soldiers who re-enlist, intends to keep all bonus levels unchanged for several months.

The services were alerted to the veto two days after Christmas. For the Army at least, that was enough in time to advise soldiers with expiring contracts to re-enlist before Jan. 1 to ensure a bonus. This led to a surge of 1,500 re-enlistments in the last days of December.

The effect of bonus suspensions on recruiting is a bigger worry, Carr said. The Army gives bonuses to 68 percent of its recruits. But this month, any bonus agreement that a recruit signs includes an addendum warning that a bonus will only paid if Congress authorizes payment retroactive to Jan. 1. The same document also advises recruits that their own contractual obligation to serve is “valid and enforceable” regardless of whether a bonus is paid.

“It’s legally necessary to say that,” Carr said. “But we all believe the Congress will ultimately give us those authorities and, if they follow history, will give them in a way that the person is not affected by the delay.”

Army officials said using the addendum had not discouraged recruits from enlisting through the first week of January. Carr worries that it could happen. Unlike current servicemembers who have seen these delayed budget drills before, he said, recruits have no basis in experience to be confident Congress will restore promised bonuses back to January.

“Therefore it might cause them to be reluctant to [enlist on] a soft guarantee about a future incentive,” Carr said.

He noted that January is the biggest month for recruiting outside of summer with the Army alone hoping to ship roughly 7,500 recruits. The Navy and Air Force also will need to offer recruit bonuses on certain critical skills, and therefore are selectively attaching the addendum to some contracts.

The Marine Corps doesn’t need the addendum. Its contract, said Carr, already gives recruits some options if the bonus they are signing up for isn’t authorized. A recruit at that point can choose to stay in without a bonus, reduce the length of their contract or simply end their tour in the Corps.

If the other services begin to see a chilling effect on recruiting from the conditional bonus language being used, Carr said, the department is preparing a more reassuring contract addendum that, like the Marine contract, would offer recruits options if Congress fails to approve their bonus.

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