What the FY 2025 Biden Budget Plan Could Mean for Military Pay, TRICARE, and More

What the FY 2025 Biden Budget Plan Could Mean for Military Pay, TRICARE, and More
Sailors aboard USS Somerset (LPD-25), an amphibious transport dock ship, heave a line during a replenishment-at-sea Feb. 28 in the Gulf of Thailand. Servicemembers would be in line for a 4.5% pay raise under the proposed FY 2025 budget. (Photo by Mass Communication Specialist 2nd Class Evan Diaz/Navy)

By MOAA Government Relations Staff


Two major efforts are underway at the same time impacting the federal budget and appropriations – what should be sequential instead will overlap for months, or maybe the rest of the year.


Be prepared to trip over terminologies between the FY 2024 appropriations to fund our government now (six months late and counting) and the idealistic FY 2025 budget request from President Joe Biden (five weeks late) intended for execution in October of this year.


[TAKE ACTION: Ask Your Legislators to Pass Appropriations on Time]


First thing’s first: Congress must energize the lagging FY 2024 appropriations. Unfortunately, lawmakers’ go-to solution is to use continuing resolutions to extend the ongoing debates between parties and chambers. Funding our government remains the priority to avert a government shutdown.



Looking Ahead

While we watch the FY 2024 appropriations, we need to start breaking down the FY 2025 budget released March 11 by the White House.


Here are some of the issues addressed by the annual request:


Pay Raise: A 4.5% increase for the uniformed services, in line with the statutory Employment Cost Index, for implementation in January 2025. Given the president’s inclusion of this important compensation measure, it is now more likely to take effect either on its own or through the National Defense Authorization Act (NDAA) later this year.


Housing Allowance: No request to increase the Basic Allowance for Housing (BAH) rate beyond the 95% floor required by statute. While disappointing, when MOAA had the opportunity to question senior DoD officials about this decision, they cited the limitations placed upon them by the Fiscal Responsibility Act, which only authorized a 1% increase in DoD funding for FY 2025.


[TAKE ACTION: Urge Your Legislators to Pay Full Housing Costs for Servicemembers]


Basic Needs Allowance (BNA): Enhancement to the existing BNA, boosting the eligibility threshold from 150% to 200% of the federal poverty guideline based on family size.


Health Care: No TRICARE fee increases proposed. The Defense Health Program (DHP) FY 2025 funding request is $40.3 billion, up 4.9% from the FY 2024 request. Approximately $20.6 billion, or 51% of the DHP budget, is for private sector care supporting the provision of the TRICARE benefit.


Family Support: A $10.6 billion investment in military family support programs, covering things such as child care; morale, welfare and recreation; commissary benefits; and DoD schools.


[RELATED: ‘Encouragement’ Won’t Solve the Military Spouse Employment Crisis]


Military Housing: Funding is requested for continued oversight of the Military Housing Privatization Initiative program and the construction and maintenance of unaccompanied housing facilities  -- recognizing the environment in which servicemembers and their families lives directly impacts readiness. Unfortunately, these investments won’t make a dent in the $134 billion deferred maintenance backlog.


Currently Serving: An increased Dislocation Allowance for E-1s through E-6s to assist with the stresses of relocation, continuing previous years’ efforts, and additional funding to support the 40% increase in days allowed for temporary lodging, when needed. To avoid PCS disruptions, DoD is proposing the PCS funding be available for two years, given many PCS moves cross fiscal years.


DoD: Focused on Our Pacing Threat

“This request will bolster our ability to defend our country, paced to the challenge posed by an increasingly aggressive People's Republic of China,” Secretary of Defense Lloyd Austin wrote in a statement on the FY 2025 budget request. “It will better posture us to deter aggression against the United States, or our allies and partners, while also preparing us to prevail in conflict if necessary.”


The department remains committed to the National Defense Strategy, with a focus on modernization.


Those priorities outcompete with the quality of life challenges facing servicemembers and their families. 


“People are our most important resource,” said one senior defense official at a meeting with military and veterans’ advocates about the budget request. DoD wants to improve the value proposition for service and invest in quality of life initiatives as our nation faces a national recruiting crisis impacted by housing scandals and a 4% unemployment rate.


[TAKE ACTION: Ask Your Legislators to Improve the Quality of Life of Our Servicemembers]


The widening funding gap between our defense strategy and growing demands for addressing quality of life problems requires intervention from Congress. Lawmakers from the House Armed Services Readiness Subcommittee noted that DoD did not request all the funds required to address its maintenance backlog and the poor quality of housing.


[RELATED: Senior Enlisted Leaders Sound Alarms at House Quality of Life Hearing]


How You Can Help

As MOAA begins preparations for Advocacy in Action, we will rely on grassroots advocacy from our members, who can engage their lawmakers on the Hill, in their home districts, and on the campaign trail during this election year to improve housing for our servicemembers and their families.


Engage with our Legislative Action Center and recruit your network of friends and family to do the same – MOAA membership is not required.


Encourage members of your network to contact their representatives at 866-272-MOAA (6622), MOAA’s toll-free line to the U.S. Capitol switchboard. Ask to speak with the military legislative assistant (MLA) in the office; if that staffer is not available, consider scheduling a follow-up call to make a personal connection with legislative staff.


Keep up with the latest on MOAA’s legislative initiatives at MOAA’s Advocacy News Page.


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