DoD plans smaller pay raises, benefits cuts - Marine Corps News | News from Afghanistan & Iraq - Marine Corps Times

DoD plans smaller pay raises, benefits cuts

Pay caps, reduced retirement benefits and higher out-of-pocket costs for retiree health care are in the military’s future under the Defense Department’s new strategy that will be announced this afternoon.

For 2013 and 2014, the Defense Department is budgeting for military raises that fully match the average increase in private-sector wages, according to congressional aides who have been briefed on the Pentagon’s plans.

That means the Jan. 1, 2013 raise would be 1.7 percent, under the Obama administration plan. The 2014 raise will not be known until next year because it would be calculated to follow the pay formula in law to match the Employment Cost Index of private-sector raises.

But things would change in 2015, when long-discussed pay raise reform could lead to smaller raises for people who are in noncritical or overmanned occupational specialties, congressional aides said.

To force a controversial overhaul of military retired pay, the Defense Department will seek to create an independent commission under a process that would force an up-or-down vote in Congress on the changes, with no ability to alter the recommendations.

Increased health care premiums and fees for working-age retirees also are part of the plan, as the Defense Department is refusing to accept a congressional mandate included in the 2012 defense authorization act that limited future fee hikes to no more than the cost-of-living adjustment in retired pay.

Defense officials will renew their call for fee hikes that match medical inflation, which runs 7 percent a year or higher, rather than being limited to COLAs that, over time, average around 3 percent. The most recent retiree COLA was 3.6 percent.

Senior military officials know that such cuts are a bitter pill to swallow, according to congressional sources. The Joint Chiefs of Staff and their senior enlisted advisors, aware that hostile reaction in the ranks could make it less likely for Congress to go along, are urging their subordinates to support the benefits reductions as being in the best long-term interest of the military, sources said.