Another Year of Pay Caps

February 5, 2016

The Pentagon has proposed capping the 2017 military pay raise below the average American's for the fourth year in a row. 

Based on the Employment Cost Index (ECI, the statutory standard for the average American's pay raise), the military should receive a 2.1 percent pay raise next year. Instead, the Pentagon is proposing a 1.6 percent capped pay raise in its budget proposal, which will be submitted to Congress next week.

That may not seem like a significant cut, but it adds up to hundreds of dollars out of pocket for servicemembers over the course of a year.

The proposed 0.5 percent reduction in pay further expands the pay gap between the military and the private sector. The pay gap now stands at 2.6 percent. If Congress passes the Pentagon raise proposal, it will increase to 3.1 percent.

History Repeating

When military pay raises started being capped in past times of budget constraints, they continued until retention and readiness suffered. This unwise process generated retention crises in the 1970s and the 1990s.

Congress responded over the course of the first decade of this century by gradually plussing up military raises to close the pay gap. But the restoration of pay comparability lasted only a few years before budget stresses caused a return to capping raises, and current budgets assume this trend of undoing Congress' pay comparability work will continue.

MOAA believes the government should learn from history rather than repeat it. Congress should reject the Pentagon's proposal for a fourth consecutive year of pay caps, and provide servicemembers the full 2.1 percent pay raise.


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