Points of Interest: Closing the Pay Gap?

By Tom Philpott

At the 15-year mark, members would be given the option of upgrading retirement benefits or staying under Redux and pocketing a $30,000 bonus. Officials estimate that more than 50% of members would elect to stay under Redux and either spend the bonus or deposit it into a new tax-deferred TSP.

To impress service people, Republicans put S-4 on a fast track, hoping to clear it through the Senate as early as mid-February. It would break a long tradition of dealing with military pay as part of the defense authorization bill.

Senator John Warner (R-VA), the new chairman of the armed services committee, proposed a fast track for pay reform during a January readiness hearing with the Joint Chiefs. Afterward, Republican Senators Trent Lott (R-MS), John McCain (R-AZ), and Pat Roberts (R-KS) told Warner about an ambitious pay plan their staffs had been working on since October. Warner got the committee staff involved. The resulting Republican plan outshone what the administration had suggested for 2000 and beyond. But it would cost billions of dollars less than the Lott-McCain-Roberts plan.

Republicans and Democrats on the committee went behind closed doors on 27 January to mark up S-4. They emerged hours later not only endorsing every initiative but embracing Georgia Democrat Max Cleland's plan to boost Montgomery GI Bill benefits and give the services authority to allow transfer of unused education benefits to family members. As sent to the Senate floor, S-4 would provide:

  • A 4.8% pay raise on 1 January 2000, and annual pay raises in 2001 and beyond set 0.5% higher than wage growth in the private sector.
  • A "targeted" special 1 July 2000 raise to "reform" the military pay table. That raise would vary from nothing to 5.5% depending upon rank and experience. Only a half percent of members would get the maximum, but 75% would see at least some kind of mid-year increase.
  • An attractive option to members who entered service for the first time after 31 July 1986 (and therefore fall under Redux): At the 15-year mark, these members could choose to switch to the pre-Redux retirement plan, or they could remain under Redux and accept a $30,000 cash bonus in return for a promise to stay until retirement eligibility at 20 years.
  • A Thrift Savings Plan so members could set aside up to 5% of basic pay each month in a tax-deferred investment account. They also could deposit all enlistment or reenlistment bonuses, including the $30,000 Redux payment.
  • Authority for the services to offer government matching of TSP contributions of up to 5% of basic pay for up to six years. This would be used to fill select specialties and would carry a six-year service commitment.
  • A special subsistence allowance of $180 a month for members who qualify for food stamps. The program would begin six months after enactment and end 30 September 2004.
  • Increases in Montgomery GI Bill benefits, from $528 a month to $600 for those who serve at least three years, and from $429 to $488 for members who serve less.
  • An end to the $1,200 mandatory contribution to participate in the GI Bill.
  • Service authority to permit members to transfer part or all of their education benefits to family members.
  • Authority to receive GI Bill benefits in a lump sum to cover the cost of an entire term, semester, or quarter, or even for courses not leading to a degree.

Defense officials said the President's pay package—unveiled on 1 February—would have added $34.7 billion to defense spending through 2005. Ten billion of that would go for defense civilian raises to keep pace with the military. The Republican plan would add an additional $7 billion over six years and reach roughly $41.7 billion, not including the GI Bill enhancements. The House was studying the Senate plan but had not introduced any companion "fast track" bill by early February. Senators are off to such a fast start in part because they were all in town early for the impeachment trial.

Will these proposals be embraced by Congress? Do not bet against anything in 1999. It is one of those years.


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