weekly electronic newsletter, and is published every Thursday when Congress is in session.    ★★★ PROGRESS ON THE DEFENSE POLICY BILL To say that we are disappointed with the news coming out of the Senate Armed Services Committee’s markup of the fiscal 2016 defense policy bill is an understatement. While the complete details are still emerging, we have been told that the Personnel Subcommittee has followed the House lead and has voted to adopt a recommendation made by the congressionally-chartered Military Compensation and Retirement Modernization Commission (MCRMC) that would overhaul the military’s current retirement system from a defined plan to one that follows the civilian 401(k) model. The House plan would allow servicemembers not eligible for military retirement to contribute to a portable Thrift Savings Plan with matching contributions from the Defense Department.  Those currently serving would have the option of remaining grandfathered into the old system or choosing the new TSP option.  The retirement modifications would be effective for individuals who join the military on or after Oct. 1, 2017. Our position:  AUSA wanted to wait until the Pentagon finished their comprehensive review of the MCRMC’s proposal.  We are not convinced by the conclusions reached by the MCRMC and remain concerned that converting to a 401(k) style retirement would hurt retention down the line.Where the Senate panel broke with the House bill is also very concerning.  If passed, the Senate bill would:1.     -- Provide servicemembers with a 1.3 percent pay raise instead of the 2.3 percent mandated by law.  By remaining silent on the issue, the House bill approved the 2.3 percent.2.      --Increase the amount of out-of-pocket expenses servicemembers will pay for housing.  The House bill did not approve a Pentagon plan that would increase out-of-pocket expenses for those living off-base by capping growth in housing allowances.  House lawmakers said the idea needs more study.  It appears that the Senate does not agree.3.    -- Increase TRICARE fees.  We won’t have any details about TRICARE fee increases until the full Armed Services Committee finishes its mark up.  The only thing Personnel Subcommittee Chairman Lindsay Graham, R-S.C., would say is that his panel’s bill would modify payments made by participants in the TRICARE network.  Needless to say, we are very interested in the details.Meanwhile, over on the House side, floor debate on amendments to their version of the defense policy bill is underway.  Last night, the House Rules Committee voted to allow 135 amendments to be offered to the bill. However, the House action is not without drama. House Armed Services Committee Ranking Member Adam Smith announced Wednesday he will oppose the bill. The measure includes a war fund with nearly $40 billion added that essentially are base-budget funds.  But since Republican congressional leaders are opposed to equal domestic-spending hikes, Smith and other House Democrats say they will vote no on the measure.  Even if Smith and all of the House Democrats vote no, the GOP would still have enough votes to pass the measure. In a statement, Smith said, "Both Democrats and Republicans agree that the [2011] Budget Control Act caps are extremely damaging and as long as Congress fails to enact a solution, a variety of key national priorities will continue to suffer.  I understand that finding a compromise to remove the caps has been elusive, but that does not justify the use of gimmicks to protect one part of the budget, and shortchange other portions that are vitally important to the future of our country."Even worse, this short-term work-around does not enable the Department of Defense to undertake long term planning or provide the certainty that they can count on such funding in the future," Smith added. "I have great respect for Chairman [Mac] Thornberry, but I cannot vote for this bill under these circumstances.”Look for more details on all of this in next week’s legislative update. AUSA ON THE HILL  AUSA President Gen. Gordon R. Sullivan, USA, Ret., met with Sen. Tom Cotton, R-Ark., last week.  Cotton, a former Army officer, served in Iraq and Afghanistan. Sullivan and Cotton discussed their shared concern about the direction of the Army.  Both men are alarmed that the steep cuts in Army end strength will leave the service ill-prepared to fight its many missions.  Sullivan also provided AUSA’s position on other issues important to AUSA and its members.