Military Pay and TRICARE Under Fire


The first shots over the bow were fired earlier this spring when Sen. Webb (D-Va.) floated the idea that military pay and benefits were unsustainable. A DoD advisory panel later recommended increasing TRICARE premiums and ending the trend of annual across-the-board military pay raises which outpace the civilian sector pay increases.

Webb recently called for reducing troops and replacing the across-the-board raises with targeted bonuses and raises based on combat assignments and/or job specialties. Webb’s recommendations drew heavy fire from military communities. But that is nothing compared to the battle that is likely to come based on the recommendations made by the Presidential “blue ribbon” debt panel. (see previous post, Military Pay Debate – Cut Pay or Troops?)

Tasked with making suggestions on how the U.S. could avoid further financial crisis, the debt panel released its initial plan - call it a trial balloon. The panel approached their plan without regard to any politically sacred cows, including military pay and benefits.

The President’s National Commission on Fiscal Responsibility and Reform co-chairs, former Sen. Alan Simpson (R-Wyo.) and former chief of staff to President Clinton, Erskine Bowles, released a 58 page initial plan which includes the following military pay and benefit related proposals:

A Federal Pay Freeze – The plan’s most volatile suggestions is a three-year military and federal civilian employee pay freeze. In general, the freeze would affect basic pay and basic allowance for housing (BAH).

Eliminate the 20 Year Military Retirement – The plan calls for replacing the current 20-year retirement system with a plan that would allow retirement at 10 years but delay payment until age 60. This would presumably affect future military entrants.

Reform COLA – The panel suggests making the military retirement/annuitant and disability compensation annual cost-of-living adjustments formula reflect consumer shopping options – essentially reducing the annual increase.

Increase TRICARE Premiums and Co-pays - Premiums and fees would climb for working-age military retirees, enrollment fees and co-pays would be applied to all three TRICARE options, including fee-for-service coverage under TRICARE Standard and the preferred provider network using TRICARE Extra.

In addition, employers would have to reimburse the government for any military retiree who opts to use TRICARE over employer offered programs.

The DoD is not the only agency facing drastic cuts, the panel made unpopular cost cutting recommendations for virtually every sector of government. Sen. Alan Simpson suggested that he and his co-chair, Erskine Bowles, may “need to go into witness protection” before this process is completed.

Read the full article:  ‘Debt Panel Eyes TRICARE Hikes, Pay Freeze.’

Let the DoD and your elected officials know how you feel about these proposals.

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