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Special pays reductions hit troops' bottom lines

Mar. 26, 2014 - 06:00AM   |  
(Staff)
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With no fanfare or controversy, the Pentagon has quietly shaved several billion dollars from troops’ total compensation in recent years as the flow of cash benefits known as special pays and incentive pays has slowed dramatically.

That decline, which amounts to a collective cut in disposable income for the force, is not the result of a Pentagon policy change or a new law from Congress, but rather is driven by broader changes affecting the military community.

For example, fewer wartime deployments mean less hostile fire pay, while a slow economy translates into fewer, and smaller, retention bonuses.

And with all four services facing force cuts, many troops are willing to take whatever job they’re offered, dampening the need for assignment incentive pays.

The budget for special and incentive pays, which include nearly all forms of non-basic pay, is on track to reach its lowest point in at least 15 years. The Pentagon is seeking about $3.4 billion next year, down from an inflation-adjusted peak of $7.3 billion in 2009, according to data compiled by VisualDoD, an information technology firm that tracks defense spending.

The drop in incentive pays is compounding the anxiety many troops feel about their financial futures. It comes at a time when the Defense Department is seeking for the first time to roll back some of the most basic aspects of the military compensation package that Congress expanded during the wars in Iraq and Afghanistan.

The Pentagon says personnel costs are growing too fast. Officials recently unveiled a slate of proposals that include holding down the size of basic pay raises for the next several years; reducing housing allowances by about 6 percent; increasing health care co-pays for some military families; and eliminating the commissary subsidy at most domestic installations.

Taken together with the decline in special and incentive pays that has already taken hold, the bottom line would be significantly diminished spending power for most military families.

“Families aren’t going to be getting as many bonuses and if you add that up along with all the other things, that’s a huge hit to the wallets of our service members,” said Joyce Raezer, executive director of the National Military Family Association.

“We don’t feel that the Defense Department looked at this holistically. ... They looked at special pays in a stovepipe. They looked at the commissary in a stovepipe. They looked at health care in a stovepipe,” Raezer said. “They didn’t bother to add up across all of those things, what the actual monetary impact would be on average military families.”

The ground forces, which have had by far the largest presence in the post-9/11 war zones and thus have qualified for vastly more combat pay, have taken the biggest hit in special and incentive pays.

The Marine Corps’ special and incentive pay budget request for 2015 would be down about 82 percent from 2009, according to VisualDoD. Similarly, Army special and incentive pays for soldiers next year would be down 70 percent from 2009.

The Air Force’s total for special and incentive pays for 2015 would represent a 30 percent drop from 2009, according to VisualDoD.

The Navy is faring the best; it’s budget request for special and incentive pays next year would be only 21 percent less than was spent in 2009.

In large part, that’s because the Navy continually dispenses large amounts of sea pay to sailors on sea rotations. In fact, the service recently announced an increase in sea pay for career sailors who spend long periods at sea.

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