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The Honolulu Advertiser
Posted on: Monday, June 26, 2006

Pay plans running up a hefty tab

By Tom Philpott

The Bush administration continues to sound the alarm over rising military personnel costs as a result of continued pay and benefit increases backed by Congress.

But Congress shows no sign of heeding the alarm, not while U.S. forces "stay the course" in Iraq and Afghanistan.

The latest administration criticisms of personnel costs appear in letters to the armed services committees from the White House's Office of Management and Budget. The administration, says OMB, "strongly opposes" several new initiatives for personnel in the defense authorization bills nearing a final vote.

The House wants to add an "unnecessary" half percentage point to the 2.2 percent military pay raise planned for January, and to make a premium-paid Tricare health plan available to all drilling reservists. Also creating concern is a Senate initiative that would repeal a reduction in survivor benefits that occurs when surviving spouses draw tax-free Dependency and Indemnity Compensation.

What drives Congress to ignore these warnings? We asked two pay experts.

Cindy Williams, a researcher with the Center for International Studies at the Massachusetts Institute of Technology, has criticized rising military personnel costs. Steve Strobridge, who is with the Military Officers Association of America and the Military Coalition, an umbrella group of three dozen service associations and veterans' groups, supports improved pay and benefits.

Military compensation costs have been climbing since September 1998 when the Joint Chiefs testified to shortfalls in recruiting and retention, said Williams. They blamed inadequate pay, a discounted retirement plan for those entering service since 1986, and broken promises of lifetime healthcare for older generations of retirees.

Congress responded by repealing the so-called Redux retirement plan, committing to six years of annual pay raises above private sector wages, special increases in housing allowances to match off-base rental costs, and establishing Tricare for Life and the Tricare Senior Pharmacy Programs.

Since Sept. 11, lawmakers have increased military death gratuities and life insurance, improved combat-zone tax breaks, raised danger and separation pays, ended a ban on concurrent receipt of retired pay and disability compensation for seriously-disabled retirees, voted to phase out a drop in survivor benefits at age 62, and expanded healthcare and other benefits for mobilized Reserve and National Guard members.

Williams said she and other analysts expected the trend to stop when the Joint Chiefs finally decided that rising personnel costs were soaking up too many dollars needed for weapons and other readiness requirements.

Strobridge, however, said lawmakers in Congress remain receptive to new pay initiatives "because they share our belief that the administration has been almost unbelievably insensitive to the sacrifices of today's troops and (of those in) previous periods of conflict."

He added: "Today's active duty forces look at the way the wounded are treated, the way disabled retirees are treated, the way survivors are treated and say ... that may be me."