The house tried to sever the link between military and federal civilian pay raises, which, by law, are set at .5% behind nationwide wage growth as measured by the Bureau of Labor Statistics' Employment Cost Index (ECI). For example, the most recent ECI data show paychecks of U.S. workers rose 3.3% in the last year. Consequently, the military and, on average, federal civilians will get a 2.8% pay raise on I January 1998.
Opponents of this automatic pay cap process say it inevitably widens the gap between military and private sector pay levels, now estimated at 13%. It also keeps a political fig leaf in place that allows the Clinton administration to continue to cap pay raises while telling the troops they are getting the "maximum pay raise allowed by law."
This year's push to sever the link with federal civilians was, to a large extent, gamesmanship. House Republicans were no more prepared than the White House to back full ECI pay hikes for the military. Withholding .5% of the raise will hold down defense spending by about $300 million in 1998.
Senate negotiators rejected the House plan for two reasons, a Capitol Hill staffer explained. First, severing the tie with federal civilians would create an equity issue among federal workers. Second, neither Congress nor the administration is convinced that there is a "pay gap," regardless of what ECI data show.
"The military pays substantially over the median, in fact, close to the 75th percentile, of pay for a comparable group of U.S. workers," said a Defense pay official. That conclusion is reached, he said, by comparing enlisted pay to wages of equalage males with high school diplomas in the private sector. The pay of officers was matched with that of same-age males with college degrees.
"This doesn't mean the military is overpaid," the official cautioned, "because they're probably better educated and more capable than the general population."
But Congress and the Clinton administration see the military today attracting and keeping the people it needs. And military exit surveys indicate those who leave-with the possible exception of pilots-aren't complaining about being underpaid.
"Even if there is a pay gap, it doesn't seem to be effecting [enlistment] behavior," said the Senate staffer. "It gets into the realm of `So what?' . . . Ask a Soldier, Sailor, Airman, or Marine, `Do you need more money?,' we know what the answer will be. But talk to those who leave about why, and 'I can't afford this life' is not what comes out."
Frederick Pang, Assistant Secretary of Defense for Force Management Policy, said a guaranteed pay raise each year to match the percentage rise in ECI minus .5% is better than no guarantee, which is what the military had before 1991 and what the House of Representatives now proposes.
"The linkage was put in to ensure that the military gets at least the raise civilians receive," Pang said. Congress always can suspend the relationship in any given year to give the military a higher raise, and did so a few years back. "So you don't need to permanently de-link the military . . . unless you're willing to mandate something else," Pang said.
"If you're in the military, what would you prefer," Pang countered, "a floor that says you're going to get what civilians get, keeping the onus on economists? Or no linkage at all?"
An argument can be made for adopting full ECI as a military pay raise standard, Pang ceded. But it also can be argued that full ECI is too generous.
A Defense pay official expanded on this point, noting that the ECI reflects all pay increases in a given year for private sector employees, but military pay rises each year for many service members by more than the January adjustment. More than a third of the force each year also see pay increases tied to time-in-service and promotion.
"I'm not saying that if I had the opportunity to close the pay gap I wouldn't," Pang said. "We'd love to do it. But the reality is that there are costs." And the military, he said, can't ignore what U.S. workers of comparable age earn.
"When you look at the age-earnings profile, and take out all the emotions sometimes wrapped around discussions on this issue, you find our people are not bad off," Pang said.
That view is unlikely to change until service members begin once again to vote with their feet.