Lawmakers Negotiate 2.1% Troop Raise, Drop BAH Cut

Stacks of coins and pile of bills.

U.S. lawmakers have negotiated a defense bill that calls for a 2.1 percent pay raise for troops next year and scrapping a proposal to reduce housing allowances for military couples, among other personnel changes.

The provisions were finalized this week as part of a compromise version of the fiscal 2017 National Defense Authorization Act, or NDAA, which sets policy and spending targets for the fiscal year that began Oct. 1.

The massive $619 billion defense bill would provide "the full 2.1% pay raise for our troops, as required by law," states a summary document posted Wednesday to the House Armed Services Committee website. The panel is headed by Rep. William "Mac" Thornberry, a Republican from Texas.

The legislation, which still must pass both chambers of Congress and be signed by President Barack Obama before becoming law, also calls for "no changes to housing allowance, including for dual military families." The bill also would drop a proposal requiring women to register for the draft and include a compromise to forgive the debt of Guardsmen ordered to pay back bonuses.

The House of Representatives is expected to vote on the legislation Friday, and the Senate expected to follow suit next week. It wasn't immediately clear whether the president plans to veto the bill. Obama and members of his cabinet, including Defense Secretary Ashton Carter, have previously threatened to reject the measure over the level of war funding, among other areas of disagreements.

Pay Raise

House negotiators successfully convinced their Senate counterparts to agree to a higher pay raise for service members in 2017.

The Senate had agreed with the White House to increase troop pay next year by 1.6 percent, which supporters of the proposal noted was the highest level in four years.

The House, however, pushed for a 2.1 percent increase in pay in keeping with private-sector wage growth. Lawmakers in the lower chamber noted the alternative would have marked the fourth straight year troops would have seen a lower-than-expected raise.

By law, military pay hikes are supposed to track wage growth in the private sector as measured by the government's Employment Cost Index (ECI). The basic pay hike in 2016 was capped at 1.3 percent, a full percentage point below the level pegged by the ECI; and in both 2014 and 2015 at 1 percent when 1.8 percent was needed to match wage hikes nationwide.

For an E-5 with four years of service, the higher raise next year would translate into an extra $48 a month, for a total of $2,315 in basic pay; for an O-3, it would mean another $117 a month, for a total of $5,683 in monthly pay, according to a basic calculation using 2016 pay tables from the Pentagon's Defense Finance and Accounting Services.

Housing Allowances

House negotiators also persuaded their Senate colleagues to keep intact the housing allowance benefit.

The Senate's version of the bill would have curbed the Basic Allowance for Housing for new entrants beginning in 2018 by covering only what they actually pay in rent. In addition, it would have reduced the combined value of the benefit received by military couples or roommates.

Some senators have called BAH "bloated and ripe for abuse."

The upper chamber's previous language called for the allowance to be set at "the actual monthly cost of housing" or an amount "based on the costs of adequate housing" for each military housing area, and for two or more service members occupying the same housing to split the benefit.

But lawmakers were ultimately convinced to retain the current form of the benefit, which advocates argue is part of regular military compensation designed to retain and recruit talented people into the military.

In addition, Congress is already supporting a Pentagon plan to slow the growth of Basic Allowance for Housing over five years so service members on average pay 2 percent of their housing costs this year, 3 percent in 2017, 4 percent in 2018 and 5 percent in 2019 and thereafter. Troops won't see a modification in the allowance until they change duty stations.

-- Brendan McGarry can be reached at Follow him on Twitter at @Brendan_McGarry.

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