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Commissary Changes: The Only Update You Need

We've come to that special time of year where lawmakers have had their individual says about our collective military benefit fate -- and things are about to get real.

Early every year the President releases his budget request for the year following. He asks Congress to give him money, or close programs, or start new programs. And then Congress laughs at him uproariously and does pretty much whatever it wants.

For the Defense Department, the House and Senate work on their own versions of the funding known as the annual "National Defense Authorization Act" (NDAA). After each group passes their own often wildly different takes on what should happen to our paychecks and weapons systems, and then they go "to conference" and merge the two documents, haggling over what to keep and what not to keep. I'm told there are no fist fights or cage matches during that negotiation, although I think that would be pretty entertaining and not particularly surprising.

Want to know about the status of commissary changes? We have the only update you need.

The final agreement then becomes law if the President chooses to sign it (what normally happens), or it could be sent back to lawmakers for more work (or a veto override).

What does that have to do with the commissary? Everything.

Right now lawmakers are working on the NDAA for 2016. That may seem like they just like living in the future, but technically 2016 is supposed to start with the new fiscal year -- in October. That's pretty soon, and this stuff can move at a truly glacial pace.

The House already signed, sealed and delivered their version of our funding -- and the changes and new rules they want to see for the commissary. The men and women who do the grunt work on this - the Armed Services committee -- just gave it final approval in the Senate. And once the Senate as a whole votes to pass it, they'll be done with their version as well.

That means we have a better than before now idea of what might end up in law for 2016.

What's the big news here?

The House and Senate have very different ideas on what we should do with the commissary.

The House totally ignored the DoD's request to make big cuts, and instead asked for a bunch of new studies and reports on what the commissary could do to trim their costs (reports = lawmakers' favorite delay tactic).

The Senate, on the other hand, wants price increases.

How's that? They want Defense Commissary Agency (DeCA) to slash their budget by about $140 million. That's a lot of money when you're already lauded as one of the most efficient agencies the government has.

So they plan to find that cash two ways.

First, by killing the funding to ship groceries overseas and to those pokey bases that are expensive to get to (I'm looking at you, 29 Palms!). Instead the Senate wants consumers (that's you!) to carry that cost burden.

Right now, by law, groceries at the commissary cost per unit what the commissary pays for them with a one percent markup to cover loss and spoilage. They take home no pay off that stuff whatsoever. Under the new plan groceries would cost what the commissary pays for them plus the annual shipping budget divided by grocery items sold. According to a leaked DeCA document, $100 million could be saved by DeCA this way, but paid for by shoppers (again, that's you).

The rest of the cash could be found in a second Senate approved idea -- letting DeCA spend the money they get from that 5 percent surcharge (DeCA officials always say "it's not a tax." But, it FEELS like a tax) on every purchase for operating supplies. Right now that money only funds construction and upkeep of stores, not supplies. Spending $39 million of it a year (again, per that leaked document) on operating supplies would make a major dent in the amount of upkeep and construction DeCA could do -- especially if their revenue went down because you stopped shopping there thanks to a price increase.

But wait, there's more.

The second big news item in the Senate version is an order for the commissary to try its hand at running a handful of stores like real grocery stores (aka "privatized") instead of taxpayer funded ones.

What does that mean? More price increases, but only in certain places.

First, the Senate wants DeCA to come up with a plan for privatizing at least five stores in major markets (the stores on Joint Base Lewis-McChord would fit the bill, for example). Then they want the folks who deal with the money for the government, the Comptroller General, to do a report on the plan. Then they want the commissary to put the plan into action for a little while. And then, finally, they want a report on how it all went.

(I warned you already about how much they love reports in D.C.)

What's the difference between a real grocery store and the commissary? Mostly the way groceries are priced. Real grocery stores, like Walmart, price their items so they can make some cash. If cereal is $3.50 a box, and Walmart only paid $2.50 a box for it, they are making $1. The commissary, on the other hand, (thanks to current law) sells that same box for $2.50 because that's what they paid for it. Under the Senate's pilot program idea, you would pay $3.50 for the box and both the commissary test stores and Walmart.

(In case you really, really care, there are a variety of other commissary measures in both the House and Senate bills. The House version asks for - wait for it! - several additional reports and reviews and the Senate version asks for a bonus report on privatization to be added to the report they asked for last time that is supposed to come out in September).

By the way, what happened with combining the commissary and exchange?

Ignored. A commission put together by Congress -- the Military Compensation and Retirement Modernization Commission (MCRMC) -- had suggested that the commissary and exchange systems combine. Congress as a whole pretty much pretended that didn't happen. The House version has a measure banning the DoD from doing anything about the idea until after they produce that report due in September. (Again with the reports!)

So what happens now?

Like everything in Congress, until the President puts his pen to the final legislation, nothing is set in stone. And we won't know for sure what is going to be in the law until the Senate officially passes their version and then two version get combined in conference (aka NOT a cage match).

We'll keep you updated!

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