Commissary funds restored; base tobacco prices rising
By TOM PHILPOTT | | Published: December 11, 2014
House and Senate conferees negotiating a package to fund the Department of Defense through September 2015 have protected commissary operations by restoring 90 percent of a planned $100 million cut.
Once again lawmakers thwarted a cost-saving initiative targeting military compensation and endorsed by the Joint Chiefs as a way to dampen personnel costs so more dollars can be spent on training, weapon buys and other readiness accounts being victimized by arbitrary “sequestration” cuts.
Only last week House and Senate conferees on a different bill, the 2015 defense authorization act, unveiled a deal to lower the Defense Commissary Agency annual $1.3 billion budget to $1.2 billion. DeCA said it could absorb the knock without impacting customer savings or services.
The military resale industry challenged that notion, saying a cut of more than seven percent inevitably would impact staffing and store hours.
This week conferees shaping a final defense appropriations bill that is part of a massive spending package for the entire federal government restored $90 million of the commissary budget cut in the authorization bill.
“This essential funding ensures that DeCA…will continue delivering a core benefit of military compensation,” said Patrick Nixon, president of the American Logistics Association. ALA represents manufacturers and vendors of products sold in military stores.
In rejecting almost every Defense Department proposal this year to hold down personnel costs, lawmakers said time after time that these changes should await the final report of the Military Compensation and Retirement Modernization Commission, due in February. Appropriators echoed that point in restoring commissary funding.
COLA minus 1 percent
The plea to “wait for the commission” was used again in the authorization bill to delay adoption of a COLA-minus-1 percent formula aimed at dampening retirement costs of future members.
Congress last year replaced the pearl of full cost-of-living adjustments in retirement for members who entered service on or after Jan. 1, 2014. Their COLAs, 20 years hence, were to be set a percentage point below annual inflation. The new bill moves the date of that change to impact only members entering on or after Jan. 1, 2016, giving Congress time to meld this idea with commission recommendations for reshaping future retirement.
Thousands of career-minded personnel who first entered service after Jan. 1 last year just dodged a bullet that would have devalued their retirement benefit significantly.
Tobacco prices rising
The authorization bill also blocks any attempt to ban sale of tobacco products on base but also narrows the price discounts. Cigarettes, cigars and chewing tobacco are not to be sold on base at prices lower than the most competitive prices in the local community.
Impacted will be Army and Air Force exchanges and commissaries where tobacco products still can be sold five percent below the most competitive price off base. In 2012 the Navy Department ordered Navy and Marine Corps stores to raise tobacco prices to match competitive local prices.
Navy Secretary Ray Mabus earlier this year floated the idea of pulling all tobacco products from exchanges, commissaries and ship stores. That led House Republicans to insert bill language to block such a move. But in a deal cut with Senate conferees last week, the bill also declares that on-base tobacco prices cannot be set lower than the most competitive price off base.
About 25 percent of military folks say they smoke, a rate higher than found among civilian peers. Studies blame this in part on tobacco discounts. Critics also find the 5-percent rule ineffective, arguing that discounts at Army and Air Force stores actually average about 20 percent when price comparisons include all retail tobacco outlets.
The Defense Department estimates it spends $1.6 billion a year on tobacco-related medical care. It is committed to lowering tobacco usage sharply by 2024. On-base tobacco sales, however, totaled $711.4 million in 2012 and generated profits of $125.7 million. That’s money the military plows back into its morale, welfare and recreation programs.
Child custody protection
The new defense policy bill also amends the Servicemembers’ Civil Relief Act (SCRA) to help protect service members from losing custody of children due solely to military deployment.
Rep. Mike Turner (R-Ohio) has fought for this for almost a decade, facing stiff opposition from family advocates, lawyers and Defense officials who say his bill is a solution in search of a problem. They argue it won’t help anyone and could confuse military families and drive up their litigation costs.
The bill modifies SCRA to say unequivocally that state courts must not use current or future deployments as a sole reason to deny members child custody. It also says length of temporary custody orders when a custodial parent deploys should be for a period justified by deployment, not longer.
Attorney Mark E. Sullivan, an Army retiree and family law expert who wrote the military child-custody law for North Carolina, said neither he nor Turner nor the Department of Defense could identify a single case where a member in a child custody fight would be protected by this change to SCRA.
So, Sullivan asked, “why put a law on the books that isn’t needed and can only cause problems?”
Past defense secretaries opposed the bill on advice family law experts who said it needlessly would create a right of federal court review in custody cases, driving up legal costs for families, bringing custody disputes before judges having little family law experience and tipping outcomes in favor of service members over the interests of children.
But after Turner briefed current secretary Chuck Hagel, the department dropped its opposition. The language also was modified to make clear that federal courts still have no right of action in child custody matters.
“We think this is still unnecessary and potentially harmful,” said Joyce Wessel Raezer, executive director of National Military Family Association, with language added that could “confuse both service members and judges.”
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