2 April 2014 Legislative News Update

Association of the United States Army Logo - Eagle with Shield, Torch, Olive Branch
Wednesday, April 02, 2014

Legislative News is AUSA Government Affairs Directorate's 
weekly electronic newsletter, and is published 
every Monday when Congress is in session.


In this issue:

  • AUSA President: "Sequestration Biggest Threat to Future Army Readiness"
  • Medicare Patch & the TRICARE Program





Two recent hearings on Capitol Hill focused on pay and compensation proposals outlined in the fiscal 2015 defense budget request.  Statements made by lawmakers would lead one to believe that Congress is not 100 percent on-board with some of the provisions contained in the DoD’s plan. 

The budget includes provisions that would:

§  Reduce the Army’s end strength from 520,000 active duty soldiers down to a range of 440,000-450,000; the Army National Guard from 355,000 to 335,000; and the Army Reserve 205,000 to 185,000.

§  Provide one percent pay raise for military personnel and cap raises in the out years. 

§  Cut housing allowances and abolish the reimbursement of renter’s insurance.  

§  Reduce by $1 billion over three years, the annual direct subsidy provided to military commissaries.  

§  Consolidate TRICARE health plans and adjust deductibles and co-pays. 

§  Request another round of Base Realignment and Closure in 2017.

In a hearing of the House Armed Services Personnel Subcommittee, Chairman Joe Wilson, R-S.C., told the assembled group that his subcommittee’s goal is to “better understand how the Department of Defense will balance the budgetary realities of today and the future with the readiness and morale and continued success of the all-volunteer force.”  Wilson also noted that while defense officials insist the changes would not hurt troops’ quality of life, “there’s no doubt it will cut purchasing power” of troops and “affect their day-to-day financial decisions.”

Ranking Member Rep. Susan Davis, D-Calif., said that she is “sympathetic to the challenges that we are facing under sequestration” but that the subcommittee wants to “better understand reasoning and business case analysis that went into these proposals and the actual impact that they are going to have on our families.”

Over on the Senate side, Armed Services Personnel Subcommittee Chairwoman Kirsten Gillibrand, D-N.Y., said that DoD’s plans to change the compensation package amounts to “changing the deal” promised to troops and their families.

Ranking Member Sen. Lindsey Graham, R-S.C., said that while he sympathizes with military officials struggling with the budget restrictions of sequestration, he worries the proposed changes demand too much sacrifice from troops and families.

Sequestration.  Mention sequestration and your audience’s eyes glaze over.  However, the impact sequestration is having on the military is devastating because of the automatic, mindless cuts it imposes.  It has created successive years of defense budgetary instability that has caused program cuts, civilian employee furloughs, compromised military training and readiness and a reduced ability to retain highly-qualified military personnel.

In recent testimony, AUSA President Gen. Gordon R. Sullivan, USA, Ret., said, “AUSA believes that the primary source of the budget challenges that face the Department of Defense is the devastating effect of the sequestration provision of the Budget Control Act of 2011.  Sequestration is having a profoundly adverse effect on the defense of the Nation – and it will do so well into the next decade.”

Sullivan added, “Requiring that 50 percent of mandatory budget cuts come from defense – even though the defense budget is only 17 percent of the federal budget – is patently misguided.  How in such a dynamic and dangerous world can we be so shortsighted?”

Please add your voice to Gen. Sullivan’s and contact your elected officials and urge them to end sequestration permanently.  Go to our website, www.ausa.org, click on the Contact Congress link, enter your zip code and click on the AUSA-prepared letter to Congress titled “End Sequestration Permanently.”


In 1997, Congress created the Sustainable Growth Rate (SGR) in order to control Medicare spending by tying it to the rest of the economy’s growth.  It worked fine for the first few years; however, as health care costs started outpacing the economy, it failed and left the entitlement with a multi-billion dollar shortfall.

Finding a permanent solution to the annual cuts in reimbursement rates for physicians who treat Medicare patients has proven to be next to impossible.  Because payment rates in the TRICARE program are tied to Medicare rates, this affects many military beneficiaries.  Each year, Congress implements short-term patches that merely make the problem worse.  This year, doctors were facing a 24 percent reduction.

Unable to agree on how to pay for a permanent fix, Speaker of the House John Boehner, R-Ohio and Senate Majority Leader Harry Reid, D-Nev., reached an agreement on another one-year patch.  Part of the bill would be paid for by moving about $4.9 billion savings from Medicare sequester cuts into fiscal 2024. 

The House passed the “doc fix” legislation by a voice vote after Republican leaders spent hours trying to round up enough votes.  In order for the bill to pass with a roll-call vote, two-thirds of the 432-seat House would have to vote for it, meaning more than 50 of the 199 Democrats would have had to go along, even if all Republicans had supported it.  Faced with push-back from his own caucus and the stated opposition of Democrats, Boehner discarded the roll-call vote.

The Senate passed the measure soon after. 

We are disappointed that once again Congress was unable to reach a compromise on a permanent solution.  Our frustration was shared by American College of Physicians President Molly Cooke who, in a letter to House and Senate leadership, said, “Now is the time for Congress to resolve the remaining differences over how to address the budget impact of the bipartisan and bicameral SGR repeal and Medicare payment reform policies that both chambers and parties say that they support.  There will never be a better time.”