Military update: White House: Planned pay gains too costly
May 19, 2007
As the House of Representatives prepared to pass its fiscal 2008 defense authorization bill, the White House urged lawmakers to reconsider a host of costly personnel initiatives added by the Armed Services Committee.
Initiatives opposed by the White House included:
Bigger pay raisesThe House was set to vote for a 3.5 percent basic pay increase for January 2008. That’s 0.5 percent higher than proposed by the Bush administration. The House would continue a string of annual raises set 0.5 percent higher than private sector wage growth through at least 2012.
A 3 percent raise next January would be enough to keep military pay competitive, said the White House’s Office of Management and Budget in a “Statement of Administration Policy” on the bill, HR 1585, released May 16.
The “unnecessary” extra half-percentage bump in pay would cost $265 million in 2008 and $7.3 billion over six years, budget officials complained.
“When combined with the overall military benefit package, the President’s proposal provides a good quality of life for servicemembers and their families,” said the OMB letter to committee leaders.
Both House Republicans and Democrats disagreed. Rep. Thelma Drake, R-Va., offered the amendment, adopted by the armed services committees, to stretch the string of bigger raises out to 2012.
The Senate Armed Services Committee will mark up its version of the defense authorization bill next week. That committee is said to be more supportive of the administration’s view that military pay is competitive now and will stay competitive with a 3 percent raise in January.
Higher Tricare feesThe White House is disappointed that the House bill does not allow Defense officials to raise Tricare fees and co-payments for retired military beneficiaries under 65 or allow implementation of some new set of cost-containment actions expected to be recommended soon by the DOD-appointed Task Force on the Future of Military Health Care.
The administration says fee increases are needed to sustain a high-quality health care benefit “by largely capturing the inflation increases that have occurred since cost sharing was first established in 1996.” Blocking any such initiatives this year will add $1.86 billion to military health costs in 2008 and more than $19 billion through 2013.
The House bill also would restore $200 million in health care spending that Defense officials sought to remove through unspecified “efficiency wedges” imposed on service medical budgets.
‘Fair pricing’The administration “strongly opposes” a provision in the House bill to require drug manufacturers to give the Defense Department the same price discounts on drugs dispensed through the Tricare retail network that they provide to base pharmacies, the Tricare mail order pharmacy and VA clinics and hospitals.
The White House says “market competition,” not government price control, “is the most effective way to promote discounts.” Rep. Steve Buyer, R-Ind., reiterated that argument on the House floor. He said price-setting in Tricare retail pharmacies will eliminate retail competition and, in time, endanger drug discounts for veterans using VA health care.
Reserve GI BillThe administration also opposes a provision that would transfer oversight for the Reserve Montgomery GI Bill from the Department of Defense to the Department of Veterans Affairs. Proponents say it’s a first step toward raising reserve GI bill benefits and increasing them in future years in concert with VA-provided active duty GI Bill benefits.
The White House says the change would mean DOD loses control of a critical incentive program for reserve recruiting and retention.
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