Defense authorization bill unveiled amid opposition from Democrats
By TRAVIS J. TRITTEN | STARS AND STRIPES Published: September 29, 2015
WASHINGTON — Congressional leaders on Tuesday unveiled an annual defense authorization bill that calls for reforming troop benefits, but it faces stiff opposition from Democrats and a possible White House veto over spending.
The legislation comprises $515 billion for national defense and more than $89 billion in an overseas war fund. It pushes ahead with an historic overhaul of the military’s 20-year retirement system, reductions in headquarters staffing, and hikes in Tricare prescription fees.
Members of the House and Senate armed services committees who crafted the bill said it contains historic reforms and should be passed as soon as possible, with a possible House vote Thursday. But Democrats on the panels — aligning with an earlier veto threat by President Barack Obama — refused to back the bill because it sidesteps a defense spending cap by pumping an extra $38.3 billion into the overseas war fund, called Overseas Contingency Operations.
“They are the most sweeping reforms in years and years in this bill, whether it be in retirement, whether it be in changing the makeup of the Pentagon,” said Sen. John McCain, R-Ariz., chairman of the Armed Service Committee, who took a lead role in writing the legislation and unveiled it Wednesday.
If passed, the proposed National Defense Authorization Act would overhaul the retirement system that pays out after 20 years of service into a blended system with a 401(k)-style savings plan, which troops could take whenever they separate. All new servicemembers would automatically have 3 percent of their pay placed into a Thrift Savings Plan account with a Defense Department match equal to 1 percent of their pay.
The 20-year pensions would remain but reduced to 80 percent of the current value for anybody joining the military after passage of the NDAA. Meanwhile, those now serving could choose to opt out of the changes.
The overhaul would save about $8.1 billion over a decade, according to congressional estimates.
The NDAA also presses the Defense Department to chop its headquarters, administrative and support staff by 20 percent — wringing $10 billion from those areas by 2019.
The initiative would balance “top-heavy” headquarters staffs with the forces in the field and is already part of department goals, lawmakers said in a summary. It would require DOD to report progress to Congress.
The bill also seeks savings in the military insurance provider Tricare by increasing prescription copay fees. However, lawmakers agreed to only a single year of increases and rejected a decade-long schedule of increases proposed earlier.
“It has one year of copay increases and, as I say, a strong commitment by all of us to pursue greater Tricare reform in the future,” said Rep. Mac Thornberry, R-Texas, chairman of the House Armed Services Committee.
Beneficiaries who buy up to 30-day prescriptions through the Tricare retail pharmacy program would see copays for generic drugs increase from $8 to $10, and copays on name-brand drugs go from $20 to $24. Those who buy through the mail still will get generics for free, but will see name-brand copays increase from $16 to $20 and those for non-formulary drugs go from $46 to $49.
Thornberry appealed to Democrats for support, saying deepening instability around the world has made quick passage of the defense policy bill critical.
“I know the president has expressed concerns about the categories that some of this spending falls in,” he said. “There are obviously appropriations issues that have yet to be resolved, but I don’t think we can wait until December to pass a defense authorization bill and resolve all of those other issues.”
Key Democratic leaders quickly fell in behind White House opposition to use of the overseas war fund and refused to put their names on the draft bill.
“It is really the OCO funding that is the fly in the ointment,” said Rep. Adam Smith, D-Wash., ranking member on the House Armed Services Committee. “I did not sign the [NDAA] conference report and most Democrats did not.”
Obama and the Defense Department warned repeatedly of a veto if Congress fully finances the military by using the OCO fund but does not lift spending limits imposed by fiscal hawks that remain on other parts of the federal government.
The OCO fund was created to quickly fill combat needs during the Iraq and Afghanistan ground wars and is not subject to the 2011 Budget Control Act, which was backed by Tea Party conservatives to reduce public debt and has been forcing the federal government to tighten its belt for the past four years.
If Congress breaks the cap on the base defense budget, it would trigger deeper across-the-board federal spending cuts under the 2011 act called sequestration — widely viewed by Congress to be a damaging and unacceptable outcome for the military.
But a so-called “grand bargain” to remove sequestration has been elusive this year.
Sen. Jack Reed, D-R.I., ranking member on the Senate Armed Services Committee, said the Republican use of OCO funds to skirt the cap and put off a decision on sequestration is a fundamental reason that he opposes the NDAA bill.
“I’m afraid that not only is this sort of circumventing funding limits but it also could be accused by some members … to say we don’t have to deal with sequestration because we’ve taken care of the Department of Defense,” he said.