Fiscal Year 2014 Defense Budget: Little to celebrate; a lot to fight

Saturday, June 01, 2013

The president’s Fiscal Year 2014 budget was released two months late and landed with a thud on the desk of those on the Hill and those of us at the Association.

In fact, unlike past years, we found very little to celebrate and a lot that we intend to fight.

The budget request provides $526.6 billion in discretionary funding for the DoD base budget, $3.9 billion below the 2012 enacted level.

However, it exceeds spending caps by approximately $52 billion.

If the administration and congressional leaders fail to agree on a plan to reduce the deficit, then either $52 billion will have to be cut from the budget proposal or DoD will face another round of sequestration to get the budget below the spending caps. Neither scenario is promising.

Of the $526.6 billion, the Army’s share is $129.7 billion for the base budget.

About 44 percent, or $56.6 billion, is for military personnel; about 18 percent, or $23.9 billion, is for procurement research, development, testing and engineering; and about 35 percent, or $45.5 billion, is for operations and maintenance.

The request does not include funding for overseas contingency operations (OCO). OCO, separate from the base budget request, supports the warfighting effort overseas and is usually presented at the same time as the regular budget.

However, Army budget officials said that it has not been completed and that it would be submitted later in the year.

Here is a breakdown of the low lights and our take:

One percent pay raise for military personnel.

According to the Army Times, the proposed 1 percent pay raise is the smallest since 1958 and the first time since 1999 that it did not meet or exceed average private sector wage growth.

Congress has worked diligently for the past 12 years to fix the 13.5 percent pay gap (and resulting retention problems) caused by repeatedly capping military raises below private sector growth in the 80s and 90s.

AUSA will not back off in its quest to maintain pay parity between the private sector and the military.

In response to the budget request, AUSA President Gen. Gordon R. Sullivan, USA, Ret., said that it is important that "soldiers, NCOs, warrant officers and commissioned officers are paid for the level of responsibility" they have while serving their country.

"What they are doing is not without a lot of sacrifice," Sullivan added.


Get used to hearing this term because it is not going away any time soon. Chained-CPI is a proposed change in how annual cost of living adjustments are calculated and would result in annual increases that are 0.3 percent less than the current formula. It would affect military retirees and disabled veterans.

The 0.3 percent doesn’t sound like much? Here are some sobering facts.

Information provided by the Defense Department’s Office of the Actuary shows that the average enlisted retiree would see a lifetime reduction in retired pay of 8.5 percent or almost $171,000.

For the average officer, the reduction would be 7.2 percent, less than enlisted retirees, but higher in dollars – $246,000 – because the average officer’s pay starts out at a higher level.

White House Press Secretary Jay Carney called the change a "technical adjustment." We strongly disagree.

AUSA Director of Government Affairs Bill Loper attended a press conference hosted by the Chairman of the Veterans’ Affairs Committee Sen. Bernie Sanders, I-Vt., who pledged to do "everything possible" to block the change.

In a statement issued after the president’s budget request was released, Sanders said, "At a time when millions of working families are struggling economically, I am deeply disappointed that the president’s budget includes a chained consumer price index which would mean significant cuts for Social Security and veterans."

The Association also joined with other military service and veteran groups and sent a letter to the president outlining the reasons we oppose chained-CPI.

We will say it once again: Trying to balance the budget and reduce the deficit on the backs of military retirees, disabled veterans and the other most-vulnerable members of our society is wrong on many levels. We support Sanders in his efforts.

Military health care program.

It’s like a broken record, except that each year it breaks a little more. The budget proposes to:

Increase TRICARE Prime enrollment fees, based on a percentage of retired pay. Working-age retired flag and general officers would pay more than others.

Impose new enrollment fees and higher annual deductibles for TRICARE Standard and Extra. These fees would be increased by percentage amounts over five years while subsequent increases would be indexed to growth in annual COLA adjustments.

Raise TRICARE Prime office visit co-pays to $16 from the current $12 for appointments not related to mental health.

Impose new enrollment fees for TRICARE For Life beneficiaries also based on a percentage of retired pay. Fees will be phased in over five years then indexed to the COLA.

All retirees already using TRICARE FOR Life at the time of the change would be exempt from the new fees.

Increase co-pays for generic prescription drugs purchased through retail pharmacies and brand-name drugs purchased through retail and mail order.

Impose a new $9 co-pay for generic drugs purchased through mail order; currently those drugs have no co-pay.

Raise the "catastrophic cap" – the maximum TRICARE cost that an individual or family has to pay in any one fiscal year. The cap, $3000 per year, would be indexed to the annual retiree COLA.

Once again the DoD is warning that health care costs are "exploding."

However, their own documents and actions show that they are not exploding. In fact, between fiscal years 2010 and 2012, they diverted $2.5 billion in surplus funds to other "higher priority" items.

AUSA and its partners in The Military Coalition strongly believe that Defense Department leaders should be held accountable to fix program inefficiencies. Studies show that consolidation of budget oversight would save billions vs. having three separate service programs and multiple contractors.

AUSA and The Military Coalition will continue to fight to maintain this earned benefit and not allow it to be eroded.

It’s important to remember that the budget request is just that – a request.

It’s also important that the Congress and the president hear from those who are affected by their actions at the "grassroots" level – the people whose lives are dramatically affected by changes that to some seem reasonable, but which are, in reality, simply an easy target on a constituency that is trained to serve and sacrifice rather than complain.

Now is the time to complain and to do so loudly. Please go to our website and find the prepared letters on the issue of retiree health care and retirement benefits and send them to your members of Congress and the president.(See below)

You are not confined to what we have said in the letters, you may add your personal comments, and we urge you to do so.

Let those who have the power to reduce your benefits know how such action would affect you.

After all, soldiers are the essence of the Army.

As Sullivan has said time and again: "Military personnel are not a faceless group – they are the 1 percent of this nation’s population who are willing to carry our colors into battle and to offer up their lives in the process. When they retire from the front line, they should be given the respect and dignity of a reliable benefits package that will not be changed."

To send a letter, go to www.ausa.org, click on "Legislative Action Center" at the bottom of the page, then click on the "Contact Congress" button.

Put your zip code in the box titled "Elected Officials," and then click on the prepared letters concerning health care and retirement benefits.

We here at AUSA Headquarters will also do our part.

Not only will we let Congress know where we stand on the budget request, we will join forces with our partners in The Military Coalition, who collectively represent more than 5.5 million members of the uniformed services.