July 2, 2014
administration unveiled its FY 2015 defense budget request on March 4. The
proposal calls for a $495.6 billion budget, a top line that is virtually
unchanged from the past two years.
Faced with a somewhat fixed topline and the full impact of
sequestration still looming for 2016, the Pentagon’s budget is looking at all
accounts, and includes shifting personnel costs onto the backs of servicemembers
to free up funding for other programs.
The budget includes cuts to
military compensation and healthcare benefits, a 20 percent cut in headquarters
operating budgets, a Base Realignment and Closure (BRAC) round in FY 2017, and
$159.3 billion in modernization and recapitalization of equipment and
Specific cuts include:
pay cap:the proposal caps the 2015 military pay raise at 1 percent – 0.8 percent below
private sector wage growth. This follows an identical pay cap in 2014. The
Pentagon plan extends the 1 percent pay cap through 2017, rising to 1.5 percent
in 2018, and 1.8 percent in 2019.
enacted these caps would create a significant pay gap between the military and
the private sector. A 13.5 percent military pay gap in the late 1990s led to
major retention problems.
TRICARE: the proposal
calls for sweeping changes for TRICARE beneficiaries of all ages. The proposal
the existing TRICARE Prime, Standard, and Extra options for retirees under age
65 and military families. These options would be replaced by a single
consolidated health care plan most similar to the existing TRICARE
Standard/Extra. The fee-for-service plan would require all beneficiaries to pay
copays and a deductible, and retirees would be required to pay an annual
participation fee. Access would not be guaranteed under this proposal.
an annual TRICARE For Life (TFL) enrollment fee. The fee would be a percentage
of retired pay, rising to 2 percent of pay per year in 2018. Current TFL
beneficiaries would be exempt from the fee.
increase pharmacy copays, and require all beneficiaries to obtain their
maintenance medication refills through either an MTF or the mail-order
created a table to provide a deeper analysis of the proposed health care
Housing: For the first
time in over a decade the Pentagon proposed increases in housing cost-shares
for military families. The proposal slowly increases Basic Allowance for
Housing (BAH) out-of-pocket costs until servicemember pays 5 percent of the
cost. If enacted, the BAH cuts would become effective upon a servicemembers
next PCS move.
Commissary: The proposal
cuts the commissary subsidy by $1 billion over the next three years. Domestic
commissaries will see a 66 percent reduction in savings. Overseas commissaries would
not be affected, and no commissaries would close due to the cuts.
In total, the annual loss of purchasing power for active duty personnel would
The FY 2015 budget proposal regurgitates many of the cuts proposed by DoD in
the past, but new cuts to housing and the commissary add to the threat. MOAA is
gearing up to fight off these short sighted, budget-driven proposals and to
ensure the nation does not repeat the errors that were made in the past.
We need your help. Send a MOAA-suggested
message to your elected officials, and stay up to date on the latest
developments on MOAA’s new budget