ANNUAL BUDGET PLAN RELEASED
Projected defense spending in President Obama’s $4 trillion fiscal year 2016 budget, which was released on Monday, is nearly $35 billion over topline levels established by the Budget Control Act of 2011 ($499 billion).
Another $58 billion is dedicated toward wartime operations; $50.9 billion of it at the Pentagon, but Congress is expected to increase that amount.
As it stands right now, the president’s request is the least amount of U.S. money dedicated toward combat operations since 9/11.
Looking at the document a little closer we see the Air Force would receive $122.2 billion in controlled funding, which would allow the service to protect the KC-46A Pegasus, F-35A Lightning II and the Long Range Strike-Bomber, the Air Forces top modernization priorities.
The proposed budget also supports a total force end strength of 492,000 personnel (up from 483,000 in current year).
For the second year the president’s budget calls for the end of the A-10 Thunderbolt II as well as another Base Realignment and Closure (BRAC) round. The latter request was considered to be a “non-starter” even before the president’s plan was released.
A couple other observations of interest to our members: the president’s proposal sets aside $10.6 billion for 57 F-35 Joint Strike Fighters; 44 of them for the Air Force, and fully funds the services’ Flying Hours Program. Both are critical elements as far as readiness is concerned (modernization and training).
As it relates to benefit programs, the president’s budget proposal is a “mirror image” of his FY 2015 package, with just a handful of modifications. We are still reviewing the package, but the next few paragraphs provide a quick overview in key areas.
- It Caps the Annual Military Pay Raise: The president’s FY 2016 budget proposes a 1.3 percent increase in military basic pay. This, is of course, a full percentage point less than the 2.3 percent increase required under current law. Limited pay raises will continue through FY 2020, with increases of 1.3 percent in FY 2017, 1.5 percent in FY 2018 and FY 2019, and 1.8 percent in FY 2020.
- It Reduces Housing Allowances: The FY16 proposal slows the annual BAH increases by an additional 4 percent over the next two to three years, until rates cover 95 percent of housing rental and utilities costs. Rate protection features will remain in effect. In other words: no one who is currently living in a particular area will see their BAH decrease. If the survey data in an area indicates that the BAH rate should decrease, only members moving into the area will receive the lower rate, consistent with the current rules. Finally, DoD expects that the out-of-pocket target of 5 percent will take several years to achieve, since the department is just slowing the growth of future increases.
- It Cuts Commissary Subsidy: Once again, the president’s administration is requesting cuts in DeCA’s operating cost subsidy. Unlike last year, much of the reductions will come in the form of efficiencies and reduced operating hours. The most visible impact to commissary patrons will be a reduction in operating days and hours with most stores remaining open five or more days a week.
However, DoD is also seeking a number of changes which would allow them to reduce the subsidy even further in future years. These changes include initiatives to expand the types of goods that can be bought and sold by the commissaries, and to allow the variable pricing of goods (a scheme AFSA helped block from use in military stores a few years back). Make no mistake about it, shifting the “burden” of operating commissaries to the military patron-the inescapable consequence of variable pricing-would impact the quality of life for all patrons by reducing their disposable income.
- It Consolidates TRICARE Health Plans; Raises Out-of-Pocket Costs: Punxsutawney Phil saw his shadow on Monday while we saw lots of “ugly” stuff here. The FY 2016 budget proposal merges TRICARE Prime, Standard, and Extra into a single program with higher deductibles and co-pays.
Active duty members remain exempt from co-pays or fees, and a modification to this year’s proposal ensures that active duty family members have a “no cost” option for care, no matter of their location or availability/access to an MTF.
However, in an effort to encourage beneficiaries to seek care in the most appropriate setting and improve the overall continuity of care, the FY 2016 proposal includes fees for active duty family members that misuse emergency department care.
Like last year, the new proposal implements an enrollment fee for new TRICARE-for-Life beneficiaries, raises pharmacy co-pays dramatically and does nothing to improve the military and retiree dental plans.
The president’s annual budget proposal is a non-binding document whose contents will be largely ignored by lawmakers. Still, there is always a fair level of danger that proposals like these could gain traction on Capitol Hill, so The Military Coalition (TMC), which EANGUS is a member of, will be working with our champions in Congress to see to it that doesn’t happen.
We will need your help to do that, so take some time in the coming weeks and learn more about the proposal and its contents.
The entire FY 2016 budget proposal is available here.