weekly electronic newsletter, and is published every Monday when Congress is in session.   In this issue:

• Pentagon Spending Bill Advances
• Retirement Commision: "Our People Are The Strength Of Our Uniformed Services"

 ★★★ PENTAGON SPENDING BILL ADVANCESThe Pentagon’s spending bill which provides $489.6 billion for the base budget and $59.7 billion for Overseas Contingency Operations (OCO) for fiscal 2015 has been approved by the Defense Appropriations subcommittee and is now headed to the full committee for passage.  It is unclear if it will make it before the full Senate before lawmakers depart for a five-week August recess.Defense Appropriations Subcommittee Chairman Dick Durbin, D-Ill., said, “Today’s bill makes targeted investments in support of the Defense Department’s most valuable resource - the three million active duty, reserve and civilian employees.  It sets clear priorities, removes $11.7 billion in unnecessary funding and reinvests those funds where they are needed the most.  It also sets out to maintain the U.S. defense industrial base for the long term.”The measure provides:§  $128.4 billion for military personnel which fully supports the needed end strength and includes a one percent pay raise;§  An additional $507.5 million to fully fund Congress’ reversal of the cost-of-living adjustment (COLA) reduction;§  An additional $25 million for continuation and expansion of the Special Victims’ Counsel Program to provide victims of sexual assault with legal assistance and support;§  $3.6 million for Health Artifacts and Imaging Management Systems to support ongoing efforts between DoD and the Department of Veterans Affairs to better manage veterans’ health information and improve care;§  $3 million for the Healthy Base Initiative, which promotes wellness practices for troops and their families living on base;§  $200 million to maintain operations at commissaries, pending the commission on compensation report due next year;§  $789 million to increase DoD’s core medical research budget as well as Congressionally-directed medical research funding;§  $257 million to basic (non-medical) research for the Army, Navy, Air Force, and the Defense Advanced Research Projects Agency;§  $1.9 billion for readiness shortfalls, including $1 billion for facility sustainment;§  An additional $360 million for depot maintenance;§  $37 million for the Bradley Fighting Vehicle, $120 million for the Abrams tank and $61 million for Stryker vehicle development and production, and,§  Full funding for the Army’s Armored Multi-Purpose Vehicle (AMPV) program.  The bill also dedicates $4 million within Army studies to analyze whether the Stryker, or any other vehicle, can compete in a follow-on to the AMPV program.The subcommittee outlined 517 specific cuts to programs and redirects some of the approximately $11.7 billion in savings to higher priorities.  A summary released by the subcommittee said that 57 percent of the cuts ($6.6 billion) are due to excess prior year unobligated funding and forward financing; 23 percent ($2.7 billion) are due to schedule delays, unit cost growth, troubled acquisition strategies, concurrency or poor contractor performance; 11 percent of the cuts ($1.3 billion) will eliminate unnecessary growth in programs; while nine percent ($1.1 billion) are for duplication of programs, deficient budget documentation or terminated programs.The information technology (IT) budget request would be slashed by $500 million while $20 million would be cut from the headquarters for the Office of the Secretary of Defense.  The bill would also eliminate the five percent discount for tobacco and tobacco-related products sold at military exchanges; save $443 million in fiscal year 2015 due to overestimation of civilian workforce targets; freeze pay for general and flag officers; slow the growth of the basic allowance for housing (BAH); and, direct the Government Accountability Office (GAO) to conduct a new review of how DoD issues award fees to contractors on programs that are behind schedule or over budget.The bill provides $58.3 billion for DoD Overseas Contingency Operations including $1 billion for the National Guard and Reserve Equipment Account; and, $2.9 billion for cooperative counterterrorism programs, to include expanded engagement with countries such as Jordan, Yemen and Libya over the next two years.  It also authorizes a DoD-led program to train and equip vetted elements of the Syrian opposition; provides $4.1 billion for the training and sustainment of Afghanistan’s security forces; and provides $250 million to dispose of unexploded ordinance on U.S. bases in Afghanistan over the next two years.RETIREMENT COMMISSION:  “OUR PEOPLE ARE THE STRENGTH OF OUR UNIFORMED SERVICES”The fiscal 2013 National Defense Authorization Act directed the formation of a commission whose mission is to conduct an independent, comprehensive review of military compensation and benefit programs and to make recommendations to Congress and the Administration for their modernization.The Military Compensation and Retirement Modernization Commission has released an interim report that they say “documents our understanding of the military compensation and benefit programs; relevant laws, regulations, and policies; associated appropriated Federal funding; and historical and contextual background for the uniformed services' compensation and benefit programs across the Federal Government.  This effort sets the stage for the detailed analysis that will fuel our recommendations for compensation modernization, due to the President and the Congress on February 1, 2015.”AUSA President Gen. Gordon R. Sullivan, USA, Ret., and Vice President for Education, Lt. Gen. Guy Swan met with the commission on separate occasions.  Both men offered their informed opinions on the current state of the Army and addressed some of the more popular misconceptions swirling around such as those related to “out-of-control” compensation costs, the “unaffordable and unfair” military retirement system, and the health care costs that are “eating DoD alive.”In the report, the Commission recognized the value of the input provided by AUSA’s leadership and other military and veterans’ service organizations and acknowledged the assistance provided by these groups by “facilitating its understanding of the breadth of current military compensation and benefit programs.”AUSA was particularly gratified that the Commission’s efforts “have reinforced what it always has known:  Our people are the strength of our uniformed services.The Commission found several trends in the Force’s composition with potential implications for the design of a future compensation system including a sustained increase in the overall education of Service members which has created a far more professional and technologically fluent force; a steady rise in the number of women in the uniformed services in all branches; an increase in the number of Service members who are married and/or have dependents; and, a marked rise in the operational use of Reserve and National Guard Service members, especially due to declining active-duty force structure and the requirements of 13 years of war.“To protect and defend our Nation, the uniformed services must be able to continue to recruit and retain high-quality Service members.  The Commission recognizes this need can be best met by implementing modern and relevant compensation tools and flexible personnel management systems.  Doing so will also improve the cost effectiveness of compensation programs, while continuing to provide benefits that meet the needs of those who serve.  Toward these ends, this interim report details current benefit programs and provides a foundation for the Commission’s recommendations for modernization.” Here are the Commission’s observations on three of our high priority issues:Pays and Retirement. The Commission reviewed nearly 100 distinct compensation benefits administered by DoD and the U.S. Treasury that cover military pay, retired pay, survivor benefits, and unemployment compensation.  This review included 65 special and incentive pays that DoD is consolidating into eight overarching pay categories.  Additionally, the Commission reviewed the Dependency and Indemnity Compensation program, a Department of Veterans Affairs program that affects Survivor Benefit Program payments.  These pay and retirement programs are funded in a number of ways: fully funded by appropriated funds, partially funded (subsidized with Federal dollars), accrual funded, or pay-as-you-go programs.  The Commission also reviewed programs that result in a loss of Federal tax revenue, including tax-exempt allowances.Health Benefits. The Commission reviewed more than 40 health benefit programs administered by DoD, the Department of Veterans Affairs, and the Department of Health and Human Services for active-duty Service members; members of the Reserve Component; and retirees, veterans, and family members of the uniformed services.  This review not only assessed the health care benefit itself, but also examined the ways the health care benefit is delivered.  Health benefit programs reviewed range from TRICARE Prime, which is paid for entirely by the Government for active-duty Service members and eligible dependents, to fully-funded programs like TRICARE Young Adult, which is paid for by the annual premiums collected from beneficiaries.Quality of Life Benefits. The Commission reviewed more than 200 distinct programs and benefits administered by eight separate Federal agencies in support of military, veteran, retiree, and family member quality of life.  The Commission found a widely varied, but deeply interdependent, set of programs, often tied to key life events, such as marriage, childbirth, divorce, injury, health challenges, and deployment.  These programs, as a whole, are used throughout the entire military lifecycle, from accession through retirement and post separation, by all military and dependent populations.  The Commission identified costs in the quality of life area that range from self-sustaining programs (fully funded by self-generated nonappropriated funds), such as the military Exchange system, to the $10.2 billion of funds appropriated in FY 2013 for the Post-9/11 GI Bill.