Putting the FY2018 All Together

Putting the FY2018 All Together

December 15, 2017

President Donald Trump signed the FY 2018 National Defense Authorization Act (NDAA) this past Tuesday afternoon in a ceremony in the White House. The final bill authorizes a defense budget of $700 billion for DoD. Total authorized funding in the legislation calls for $634 billion in the base budget with an additional $66 billion approved in Overseas Contingency Operations (OCO) funding.

Congress approved the legislation in November, but congressional leadership did not send the bill on to the president until December in hopes Congress would be able to reach consensus and vote to raise the defense spending caps imposed by the Budget Control Act of 2011, which the FY 2018 NDAA exceeds, and pass a defense appropriations bill. 

This still remains an issue even though the president has signed the NDAA. His signing serves to put further pressure on Congress to pass a defense budget, but Congress needs to act now if the NDAA is to serve its intended purpose.

Instead of passing a budget, Congress has, at this point, passed a continuing resolution (CR) to fund the government only through Dec. 22 and is in the process of negotiating another CR that basically “kicks the can” down the road into January or February.

This state of play does nothing to serve the nation and the troops and their families. Further, stopgap strategies do not allow DoD to manage their readiness requirements or plan ahead for the next mission in this challenging and dynamic security environment. 

Congress' most important responsibility under the Constitution is to provide for the common defense of the nation - with that in mind, the nation needs Congress to pass a defense budget that fully funds the FY 2018 NDAA. Doing so will enable the necessary programs that support both the troops and readiness. However, without a budget, support again will be marginalized, leaving our nation short of the requirements called for in the NDAA.

MOAA has put out recent calls to action and supporting “On Watch” columns to our membership asking them to contact their congressional representatives to urge them to pass a defense budget, not a CR. We need you to do this again, before another CR is passed.

5 key policy decisions in the FY 2018 NDAA that affect you - but won't happen without a budget

A 2.4-percent active duty pay raise: This pay raise, equal to the Employment Cost Index (ECI), helps keep troops' pay competitive with private-sector wages. The administration originally requested a 2.1-percent raise - MOAA influenced Congress through a very effective and successful campaign to fully support the higher pay increase. This is the highest pay increase for troops since 2010. Even with this pay increase, a 2.6-percent pay gap remains because of capped pay raises in FYs 2014, 2015, and 2016. MOAA is focused on maintaining active duty military pay at the ECI and eliminating this pay gap over the next few years.

Unchanged Basic Allowance for Housing (BAH) calculation: The Senate tried for the second year in a row to tweak the calculation for BAH in a way that would have negatively impacted servicemembers, particularly dual military families. BAH is a component of each individual servicemember's earned compensation, so MOAA worked this issue hard with Congress to maintain the calculation as it currently is in law and will continue to do so on behalf of troops and their families.

TRICARE: Despite yearlong efforts to prevent TRICARE fee increases, the final NDAA included progressive year-over-year increases in pharmacy copayments. Beneficiaries will see steady increases in their cost shares across all medication tiers, which will save DoD more than $2.1 billion by 2022 and fund improvements in military readiness and the Special Survivor Indemnity Allowance (SSIA). Most of the increases will be through the retail pharmacy sector, but beneficiaries still can obtain medications at military pharmacies for free. The new fees will include mail-order generic prescriptions as well. By 2026, costs are projected to top off at $14 for a 30-day supply of a generic medication at a retail pharmacy and a 90-day supply by mail. Further, a 30-day supply of a nongeneric medication at a retail pharmacy will be $48, and a 90-day supply by mail will hit $44.

Additionally, outside of the NDAA provision, the Defense Health Agency has introduced a new TRICARE fee structure that will be applied to the new TRICARE Select option. Increased fees also will apply to the existing TRICARE Prime option. Beneficiaries can view these changes at https://tricare.mil/About/Changes/Costs.

These changes to the TRICARE fees and program options will take effect Jan. 1, 2018.

More troops authorized: The FY 2018 NDAA authorizes an additional 20,000 troops - much needed by the services in the current and projected national security environment. The Army will increase by 7,500, the Navy by 4,000, the Marine Corps by 1,000, and the Air Force by approximately 4,100. Reserve forces across-the-board will grow by about 3,400. MOAA strongly supported in our advocacy efforts on the Hill these much-needed increases by DoD.

Lessens the “widows tax”: Congress included a provision in the FY 2018 NDAA that provides a permanent extension to the SSIA. Without congressional action, 67,000 military survivors would lose $2,100 in 2018 if the allowance expired in May, as it was set to, and over $3,700 a year after that. By extending the SSIA and indexing future increases to COLA, Congress shows it is making a good-faith effort to address the widows' tax. Next year, MOAA will go back to Congress and ask it increase SSIA above COLA to further reduce the widows tax.

MOAA follows the NDAA throughout the year as the main vehicle for many of our legislative priorities. If you're interested in other provisions in the bill, you can view the conference report summary here.


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