Pentagon 2016 Budget Includes Pay Raise, More BAH Cuts, Tricare Merger

Caption: Capt. Philip Gunn performs a flyover of the Pentagon. (Air Force photo)
Caption: Capt. Philip Gunn performs a flyover of the Pentagon. (Air Force photo)

The Pentagon's proposed fiscal 2016 budget calls for a modest pay raise but more cuts to housing allowances for troops, while consolidating Tricare health care plans for military families.

The spending plan to begin Oct. 1 would give troops and civilian employees a 1.3 percent raise, slightly more than the 1 percent bump they received the past two years. The increase is well below the 2.3 percent estimated increase in private-sector wage growth, which it's supposed to match by law.

The budget also includes previously proposed efforts to reduce personnel costs in part by having troops pay for a small share of their housing costs, having families rely on a more simplified Tricare program for their health care, and having retirees pay slightly higher medical fees and co-pays.

"Given the long-term fiscal realities faced within defense budget funding levels, the Department must continue to explore proposals that promote slower growth in pay and benefits costs," an overview document states.


The push to curb military benefits is driven by rising personnel costs, which are budgeted at $179 billion in fiscal 2016, or a third of the department's non-war budget of $534 billion. Including civilian personnel, the percentage rises to almost half of the spending plan.

The Defense Department proposed limited pay raises for troops over the next five years, even though Congress sets the rate each year as part of the budget process. The spending plan calls for a raise of 1.3 percent in fiscal 2016 and 2017, 1.5 percent in fiscal 2018 and 2019, and 1.8 percent in 2020.

It would slow the growth of basic allowances for housing (BAH) by another 4 percent over the next two to three years, in addition to the 1 percent approved for this year. Therefore, service members would eventually pay an average of 5 percent of the costs. The spending plan would also consolidate the three Tricare options into a single plan with slightly higher deductibles and co-pays, and increase pharmacy co-pays and add an annual enrollment fee for Medicare-eligible retirees in Tricare for Life.

The budget would again seek to decrease commissary subsidies, by $100 million to $1.2 billion, in part by reducing the number of days and hours the stores operate, though most are expected to remain open five or more days a week.

The Pentagon said its budget proposal wouldn't conflict with recent recommendations from the congressionally mandated Military Compensation and Retirement Modernization Commission and vowed to make more changes on "key areas of the current military compensation system."

Shrinking Military

The Obama administration's budget request is the first salvo in what's likely to be a long and hotly debated fight on Capitol Hill. Republicans are already objecting to paying for it in part by raising taxes. The spending plan also doesn't take into account automatic spending cuts, known as sequestration, set to take effect unless Congress and the White House agree to an alternative deficit-reduction plan.

"We believe that stating what we think we need has been useful and productive, and it's the right place to start," Comptroller Mike McCord said during a briefing Monday at the Pentagon in defense of the budget proposal, which doesn't adhere to spending caps mandated by existing law.

The Pentagon requested an overall defense budget of $585 billion, including a $534 base budget and a $51 billion war budget. That's an increase of about $25 billion, or 4 percent, in funding from this year.

Even so, the active-duty military would actually shrink by about 12,000 troops to 1.3 million. The Army alone would lose 15,000 soldiers, dropping its end-strength to 475,000, while the size of the Marine Corps would stay relatively flat at about 184,000 Marines. The Air Force would add about 1,700 airmen, increasing its size to 317,000 and the Navy would add 1,500 sailors, swelling its ranks to 329,000.

War Budget

The war budget, or funding for overseas contingency operations (OCO), projects an average of almost 5,900 U.S. troops serving in Afghanistan next year, a figure that's slated to fall to an embassy security presence of about 1,000 troops by the end of 2016. There are currently more than 9,000 American service members in the country.

The Pentagon acknowledged that the cost of maintaining forces in Afghanistan "will fall more slowly than forces themselves due to expenses (including contractor costs) associated with closing bases, returning equipment, and resetting the force," according to the budget document.

It also projects an average of almost 4,100 troops serving in Iraq next year. That's more than the nearly 3,000 service members President Obama has authorized so far to deploy to the country in support of Iraqi and Kurdish forces battling militants affiliated with the Islamic State in Iraq and Syria (ISIS).

The war funding would support training allied forces in the Ukraine, where pro-Russian rebels are trying to push government forces out of the eastern regions of Donetsk and Luhansk, and in Syria and Iraq, where ISIS and al-Qaeda militants have overtaken large parts of both countries.

Weapons, Equipment

The Air Force would again seek to retire the aging A-10 attack aircraft, a controversial proposal that met significant resistance in Congress last year.

Lawmakers in the fiscal 2015 budget rejected the service's requests to begin the process of divesting the aircraft currently flying close-air support missions in Iraq -- and included about $337 million to keep it in the inventory. While they did allow the service to move as many as three dozen of the planes to back-up status, they blocked the service from sending any of them to the bone yard.

For new equipment, the Defense Department would spend $11 billion to buy 57 F-35 Joint Strike Fighters next year, up from $8.6 billion to purchase 38 of the fifth-generation stealth fighters, made by Lockheed Martin Corp., this year.

Other acquisition programs slated to receive a significant boost in funding include aircraft such as the Air Force's C-130J Hercules cargo aircraft and the Navy's P-8A Poseidon maritime-patrol aircraft; ships including the Navy's DDG 51 Aegis destroyer; and ground vehicles such as the Army's Joint Light Tactical Vehicle Humvee replacement.

-- Brendan McGarry can be reached at

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