The Bush administration has dropped its call for rolling back the increases in Family Separation Allowance (FSA) and Imminent Danger Pay (IDP) that Congress approved last year as U.S. forces went to war in Iraq.

Defense officials had viewed the FSA and IDP increases as too broadly applied and proposed instead raising another special pay, perhaps Hardship Duty Pay (HDP), but only for personnel deployed to Iraq and Afghanistan. That not only would hold down costs, they argued, but would be fairer to unmarried servicemembers who are ineligible for FSA.

With the election year now in full swing, and Democrats criticizing the administration for seeking to reduce FSA and IDP for tens of thousands of deployed troops including reserve component members mobilized for the war on terror, the Defense Department has reconsidered that earlier stand.

The likely course now, officials say, is to design both a short-term and long-term solution to war-related military compensation.
In the short term, Defense officials likely will ask the White House and Congress to make permanent the $75 a month increase in IDP, to accept as permanent at least part of the $150 a month increase in FSA, and to raise the ceiling on HDP for flexible use within war zones.

For the long term, officials want an independent panel of experts to study military compensation issues in-depth and recommend reforms by early next year. A seven-member commission of outside experts will examine the sometimes confusing mix of pay, allowances, bonuses, special pays, and non-cash benefits that evolved during the Cold War era of large standing forces. The commission will look to make the pay system more flexible to reward forces battling terrorists and protecting the homeland.

It will assess whether current pay and benefits are right for attracting and retaining a quality force in an era of fighting terrorism. It also will examine whether current compensation strikes the right “balance” between cash and non-cash benefits and, between current pay and deferred compensation, such as retirement. Finally, it will judge the adequacy of Reserve and National Guard compensation given the nation’s greater reliance today on those components.

Last spring, Congress decided the best way to boost pay quickly for deployed forces and mobilized reservists was to raise FSA from $100 to $250 and IDP from $150 to $225. Lawmakers made the increases retroactive to October 2002. They were to expire by October 2003.

When Defense officials failed to come up with a replacement pay plan that would focus more precisely on war zone forces, Congress extended the FSA/IDP increases through December 2004. The president’s fiscal 2005 defense budget request assumes the higher FSA and IDP rates will return to pre-Iraq war levels next January. But Defense officials are drafting a replacement special pay package in hopes now of avoiding that roll back.

Last year’s FSA increase went to tens of thousands of members not assigned to combat areas, including personnel on routine sea deployments and away from home longer than 30 days for training. The IDP raise went to service members in scores of designated danger areas around the world, not just those in Iraq and Afghanistan. Another problem with FSA, say Defense officials, is that it doesn’t benefit unmarried troops even in Iraq.

The department now is expected to recommend to Congress that it make permanent last April’s $75 a month increase in IDP. On FSA, the department is eyeing only a partial rollback. The old FSA rate of $100 a month had not been adjusted since 1991 and officials have decided it deserved to be raised, though probably not by as much as $150.

The department likely will recommend that current FSA recipients in Iraq and Afghanistan as of Dec. 31, 2004, be protected from any cut and so would see the higher FSA through their time there.

Overall the services want more flexibility to reward troops in combat areas. Defense officials will seek authority from Congress this year to pay up to $1,000 a month in HDP, raising the current $300 ceiling. Long term, HDP could provide the kind of targeted pay flexibility Congress and the department lacked last April.

Tom Philpott is a freelance writer and syndicated news columnist. His column, "Military Update," appears in 48 daily newspapers throughout the United States and overseas. His book, Glory Denied: The Saga of Jim Thompson, America's Longest-Held POW (W.W. Norton & Co., 2001), now is available in paperback (Plume, 2002).