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Pentagon to recommend 1% pay raise in 2014

7:44 PM, Feb 6, 2013   |    comments
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(NAVY TIMES) -- The Pentagon will formally recommend that troops next year should receive a 1 percent increase in basic pay, which would be the smallest pay bump in the 40-year history of the all-volunteer force.

A defense official said the proposed raise is intended as a cost-cutting measure, the latest sign that the considerable budget pressures facing the Pentagon will trickle down to troops across the force.

The defense official, who spoke on condition of anonymity because the 2014 budget proposal has not been formally submitted to Capitol Hill, emphasized that military paychecks will continue to rise, albeit at a lower rate than previously expected.

"Everyone's pay will go up next year," the official said.

The pay raise will require approval from Congress.

For much of the Iraq and Afghanistan era, lawmakers deliberately set military pay raises at a level slightly above average wage growth in the private sector as measured by the Employment Cost Index, or ECI, a Labor Department tool.

The intent was to close a perceived "gap" in the value of military pay that had grown over time and peaked in the late 1990s, at the tail end of the post-Cold War drawdown. Since 2011, however, military pay raises have been trimmed so they keep pace with private-sector wage growth but don't exceed it.

Annual pay raises were 1.4 percent in 2011, 1.6 percent in 2012 and 1.7 percent this year - the only years since 1973 in which military pay raises were less than 2 percent.

A 1 percent pay raise would most likely fall below the ECI - and mark a change in course for the Pentagon, which had planned to continue proposing military raises that match the ECI through 2014 and that look to go below the ECI starting with a proposed raise for 2015 of just 0.5 percent.

But defense officials say they had to reconsider that after Congress last year failed to authorize an array of budget-cutting measures the Pentagon proposed in its 2013 budget plan, including retiring several Navy ships, standing down several Air Force squadrons and raising Tricare health insurance fees on working-age retirees.

"When went to Congress last year with a balanced-budget approach, we indicated that we need to do some things to reduce costs," the defense official said. "We weren't able to do those things, so when we looked at 2014, we had to go back and look at changes to all of our calculations."

By comparison, federal civilian employees have not had a standard pay raise in several years, and Pentagon officials warn that unpaid furloughs may be necessary this year.

 

By Andrew Tilghman

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