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MilitaryPay:KeyQuestionsandAnswersUpdatedJuly17,2020CongressionalResearchServicehttps://crsreports.
congress.
govRL33446MilitaryPay:KeyQuestionsandAnswersCongressionalResearchServiceSummaryFromtheearliestdaysoftherepublic,thefederalgovernmenthascompensatedmembersoftheArmedForcesfortheirservices.
Whiletheoriginalpaystructurewasfairlysimple,overtimeamorecomplexsystemofcompensationhasevolved.
Thecurrentmilitarycompensationsystemincludescashpaymentssuchasbasicpay,specialandincentivepays,andvariousallowances.
Servicemembersalsoreceivenoncashbenefitssuchashealthcareandaccesstocommissariesandrecreationalfacilities,andmayqualifyfordeferredcompensationintheformofretiredpayandotherretirementbenefits.
Thisreportprovidesanoverviewofmilitarycompensationgenerally,butfocusesoncashcompensationforcurrentservicemembers.
Sincetheadventoftheall-volunteerforcein1973,Congresshasusedmilitarycompensationtoimproverecruiting,retention,andtheoverallqualityoftheforce.
Congressionalinterestinsustainingtheall-volunteerforceduringatimeofsustainedcombatoperationsledtosubstantialincreasesincompensationinthedecadefollowingtheattacksofSeptember11,2001.
Subsequently,intheearlierpartofthe2010s,concernsovergovernmentspendinggeneratedcongressionalandexecutivebranchinterestinslowingtherateofgrowthinmilitarycompensation.
InitiativestoslowcompensationgrowthincludedpresidentiallydirectedincreasesinbasicpaybelowtherateofincreasefortheEmploymentCostIndex(ECI)for2014-2016andstatutoryauthorityfortheDepartmentofDefense(DOD)toreduceBasicAllowanceforHousing(BAH)paymentsby1%ofthenationalaveragemonthlyhousingcostperyearfrom2015to2019(foramaximumreductionof5%belowthenationalmonthlyaveragehousingcost).
Somehaveraisedconcernsabouttheimpactofpersonnelcostsontheoveralldefensebudget,arguingthattheydecreasetheamountoffundsavailableformodernizingequipmentandsustainingreadiness.
Othersarguethatrobustcompensationisessentialtomaintainingahigh-qualityforcethatisvigorous,well-trained,experienced,andabletofunctioneffectivelyinaustereandvolatileenvironments.
TheavailabilityoffundingtoprosecutecontingencyoperationsinIraqandAfghanistanmitigatedthepressuretotradeoffpersonnel,readiness,andequipmentcosts,butthecurrentbudgetaryenvironmentappearstohavebroughtthesetrade-offstotheforeagain.
DODspendsabout$100,000-$110,000peryeartocompensatetheaverageactivedutyservicemember—toincludecash,benefits,andcontributionstoretirementprograms—althoughsomeestimatesofcompensationcostsaresubstantiallyhigher.
However,grosscompensationfiguresdonottellthefullstory,asmilitarycompensationrelativetociviliancompensationisakeyfactorinanindividual'sdecisiontojoinorstayinthemilitary.
Thus,theissueofcomparabilitybetweenmilitaryandcivilianpayisanoften-discussedtopic.
Someanalystsandadvocacygroupshavearguedthatasubstantial"paygap"hasexistedfordecades—withmilitarypersonnelearninglessthantheirciviliancounterparts—althoughtheygenerallyconcedethatthisgapisfairlysmalltoday.
Othersarguethatthemethodologybehindthis"paygap"isflawedanddoesnotprovideasuitableestimateofpaycomparability.
Stillothersbelievethatmilitarypersonnel,ingeneral,arebettercompensatedthantheirciviliancounterparts.
TheDepartmentofDefensetakesadifferentapproachtopaycomparability.
The9thQuadrennialReviewofMilitaryCompensation(QRMC),publishedin2002,arguedthatcompensationforservicemembersshouldbearoundthe70thpercentileofwagesforcivilianemployeeswithsimilareducationandexperience.
Accordingtothe11thQRMC,publishedin2012,regularmilitarycompensationforofficerswasatthe83rdpercentileofwagesforcivilianemployeeswithsimilareducationandexperience,andatthe90thpercentileforenlistedpersonnel.
A2018RANDreportconcludedthattheseoverallpercentileswerenearlythesamein2016.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchServiceContentsIntroduction1KeyQuestionsandAnswers.
11.
HowAreMilitaryPersonnelCompensated12.
WhatIsRegularMilitaryCompensation(RMC)HowMuchDoServicemembersReceiveinRMC2RegularMilitaryCompensation(RMC)23.
HowAreEachYear'sIncreasesinBasicPay,BAH,andBASComputed9BasicPay:IncreasesAreLinkedtoIncreasesintheEmploymentCostIndex(ECI)9BasicAllowanceforHousing:IncreasesAreLinkedtoIncreasesinHousingCosts11BasicAllowanceforSubsistence:IncreasesAreLinkedtoIncreasesinFoodCosts124.
WhatHaveBeentheAnnualPercentageIncreasesinBasicPayOverthePast20YearsWhatWereEachYear'sMajorExecutiveandLegislativeBranchProposalsandActionsontheAnnualPercentageIncreaseinMilitaryBasicPay125.
WhatIsan"Adequate"LevelofMilitaryPay166.
IsTherea"PayGap"BetweenMilitaryandCivilianPayDoMilitaryPersonnelMakeMoreorLessThanTheirCivilianCounterparts17MeasuringandConfirminga"Gap"17EstimatesofaMilitary-CivilianPayGap.
18IfThereIsaPayGap,DoesItMatter207.
WhatAdditionalBenefitsAreAvailableforMilitaryPersonnelServinginIraqandAfghanistan21HostileFire/ImminentDangerPay21HardshipDutyPay.
22FamilySeparationAllowance.
22PerDiemforIncidentalExpenses.
22CombatZoneTaxExclusion.
22SavingsDepositProgram.
238.
WhatBenefitsAreAvailabletotheSurvivorsofMilitaryPersonnelKilledinIraqorAfghanistan23FiguresFigure1.
HowIncreasesinBasicPayareCalculatedundertheStatutoryFormula.
10TablesTable1.
MajorCompensationElementsProvidedtoAllActiveDutyPersonnel3Table2.
AverageRegularMilitaryCompensationforSelectedPaygrades.
8MilitaryPay:KeyQuestionsandAnswersCongressionalResearchServiceContactsAuthorInformation.
24MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService1IntroductionThemilitarycompensationsystemiscomplexandincludesanarrayofcashcompensationelements,noncashcompensation(benefits),deferredcompensation(retirementpay,ThriftSavingsPlan,retireehealthcare,andotherretirementbenefits),andtaxadvantages.
ThisreportfocusesprimarilyonthecashcompensationprovidedtomembersoftheactivecomponentArmedForces.
1OtherCRSreportscovermilitaryretirementandhealthcare.
2Thisreportusesaquestionandanswerformattohighlightkeyaspectsofthemilitarycompensationsystemandtoaddresstopicsofrecurringcongressionalinterest,includingthefollowing:Compensationelementsandrates.
Statutoryformulasforincreasingcompensationelements.
Historicalincreasesinbasicpay.
Comparabilitywithcivilianpay.
AdditionalcompensationforthoseservinginIraqorAfghanistan.
KeyQuestionsandAnswers1.
HowAreMilitaryPersonnelCompensatedTherearethreemainwaysinwhichmilitarypersonnelarecompensated:cashcompensation,noncashcompensation,anddeferredcompensation.
Cashcompensationtakesavarietyofformsandincludesbasicpay,housingandsubsistenceallowances,enlistmentbonuses,skillproficiencypay,andadditionalpayforparticularlydemandingordangerousduty.
Noncashcompensationincludesvariousbenefitssuchasmedicalanddentalcare,government-providedhousing,educationalbenefits,space-availabletravelonmilitaryaircraft,andaccesstosubsidizedgrocerystores(commissaries),retailstores(exchanges),andchildcarecenters.
3Themainelementsofdeferredcompensationareretiredpayandretireehealthcare,butcommissaryandexchangeaccess,space-availabletravel,andotherbenefitsarealsopartofthis.
ServicemembersmayalsoparticipateintheThrift1Unlessotherwisespecified,theterms"memberoftheArmedForces"or"servicemember"inthisreportrefertomembersoftheactivecomponent.
Membersofthereservecomponentreceivenearlyidenticalcompensationwhentheyareorderedtoactivedutyforover30days,butarecompensatedsomewhatdifferentlywhenonactivedutyfor30daysorless,andmuchdifferentlywhennotonactiveduty.
FormoreinformationonreservecomponentcompensationseeCRSReportRL30802,ReserveComponentPersonnelIssues:QuestionsandAnswers,byLawrenceKappandBarbaraSalazarTorreon.
2SeeCRSReportRL34751,MilitaryRetirement:BackgroundandRecentDevelopments,byKristyN.
Kamarck,andCRSReportR45399,MilitaryMedicalCare:FrequentlyAskedQuestions,byBryceH.
P.
Mendez3Thesubsidiesvaryintypeandamount.
Forexample,thecommissarysystemreceived$1.
3billioninappropriatedfundsinFY2019,$1.
0billioninFY2020,andrequested$1.
1billionforFY2021.
Exchangesdonotreceiveappropriatedfunds,butDODdoesprovideexchangeswithcertainfreeservices,includingbuildingmaintenance,transportationofgoodsoverseas,andutilitiesatoverseasstores.
SeeCRSInFocusIF11089,DefensePrimer:MilitaryCommissariesandExchanges,byKristyN.
KamarckandBarbaraSalazarTorreonMilitaryPay:KeyQuestionsandAnswersCongressionalResearchService2SavingsPlan(TSP),4althoughuntil2018theygenerallydidnotreceivematchingcontributionsfromthegovernment.
5However,recentchangestothemilitaryretirementsystemmadematchingcontributionstotheThriftSavingsPlanakeycomponentofmanyservicemembers'deferredcompensationstartingin2018.
6Thebasiccompensationpackageprovidedtoallservicemembersincludesbasicpay,ahousingallowance(orgovernment-providedhousing),asubsistenceallowance(orgovernment-providedmeals),freemedicalanddentalcareforservicemembers,freeorlow-costmedicalanddentalcarefordependents,paidannualleave,andcertainotherbenefits.
Table1summarizesthemainelementsofcompensationprovidedtoallservicemembers.
Servicemembersmayalsoreceiveadditionalcashcompensationbasedontheiroccupationalspecialty,dutyassignment,andotherfactors.
2.
WhatIsRegularMilitaryCompensation(RMC)HowMuchDoServicemembersReceiveinRMCWhenpeopletalkaboutmilitarypay,theyareoftenonlyreferringtobasicpay.
Althoughbasicpayisusuallythelargestcomponentofcashcompensationthataservicememberreceives,thereareothertypesofmilitarypaythatincreaseitsignificantly.
Therearetaxbenefitsaswell.
RegularMilitaryCompensationisastatutorilydefinedmeasureofthecashorin-kindcompensationelementsthatallservicemembersreceiveeverypayday.
Itiswidelyusedasabasicmeasureofmilitarycashcompensationlevelsandforcomparisonswithciviliansalarylevels.
RegularMilitaryCompensation(RMC)RMC,asdefinedinlaw,is"thetotalofthefollowingelementsthatamemberoftheuniformedservicesaccruesorreceives,directlyorindirectly,incashorinkindeverypayday:basicpay,basicallowanceforhousing,basicallowanceforsubsistence,andFederaltaxadvantageaccruingtotheaforementionedallowancesbecausetheyarenotsubjecttoFederalincometax.
"7Thoughmilitarycompensationisstructuredmuchdifferentlythanciviliancompensation,makingcomparisondifficult,RMCprovidesamorecompleteunderstandingofthecashcompensationprovidedtoallservicemembers.
Therefore,itisusuallypreferredoversimplebasicpaywhencomparingmilitarywithciviliancompensation,analyzingthestandardsoflivingofmilitarypersonnel,orstudyingmilitarycompensationtrendsovertime.
4TheTSPisadefinedcontributionretirementplansimilartothe401(k)plansprovidedbymanyemployersintheprivatesector.
537U.
S.
C.
§211(d)hasauthorizedTSPmatchingcontributionsasaretentionincentivesince1999,andasarecruitingincentivesince2006.
6Formoreinformationonthesechanges,seeCRSReportRL34751,MilitaryRetirement:BackgroundandRecentDevelopments,byKristyN.
Kamarck.
7Statutorydefinitioncontainedin37U.
S.
C.
§101(25).
CRS-3Table1.
MajorCompensationElementsProvidedtoAllActiveDutyPersonnelNameStatutoryAuthorityPurposeaDescriptionBasicPay37U.
S.
C.
203-205,1009"Basicpayistheprimarymeansofcompensatingmembersofthearmedforcesfortheirservicetothecountry.
Exceptduringperiodsofunauthorizedabsence,excessleave,andconfinementafteranenlistmenthasexpired,everymemberisentitledtobasicpaywhileonactiveduty.
Basicpayispaidtoindividualmembersonaregularbasis;theamountofbasicpaytowhichaparticularmemberisentitleddependsonthemember'spaygradeandlengthofservice.
"Providedtoallservicemembers.
Rateofpaymentvariesbasedonrankandyearsofservice.
SeeBasicPayRates:https://www.
dfas.
mil/militarymembers/payentitlements/Pay-Tables.
html.
Government-providedhousingorBasicAllowanceforHousing(BAH)orOverseasHousingAllowance(OHA)37U.
S.
C.
403BAHandOHA"provideacashallowancetomilitarypersonnelnotprovidedwithgovernmentquartersadequateforthemselvesandtheirdependentstoenablesuchpersonneltoobtaincivilianhousingasasubstitute.
"Thegovernmentprovideshousingtomanyservicemembersandtheirfamilies,butthelargemajorityliveincivilianhousingorinprivatizedmilitaryhousingandreceiveBAHorOHA.
ServicemembersbasedintheUnitedStatesandnotprovidedwithgovernmenthousingreceiveBAH;thosebasedoutsidetheUnitedStatesreceiveOHA.
Ratesvarybasedonservicemember'srank,location,andwhetherornottheservicememberhasdependents(seefootnote9forthedefinitionof"dependent").
SeeBasicAllowanceforHousingRates:http://www.
defensetravel.
dod.
mil/site/bahCalc.
cfm.
SeeOverseasHousingAllowanceRates:http://www.
defensetravel.
dod.
mil/site/ohaCalc.
cfm.
Government-providedmealsorBasicAllowanceforSubsistence(BAS)37U.
S.
C.
402"Toprovideacashallowancetomembersofthearmedforcestodefrayaportionofthecostofsubsistence,suchallowancebeingpayabletoallenlistedandofficerpersonnel,withvariationstoaccountfortheunavailabilityofadequatemessingfacilitiesatsomedutystations.
"AllservicemembersreceiveBASexceptinlimitedcircumstanceswhentheyarerequiredtoeatgovernment-providedmeals(e.
g.
,enlistedpersonnelinbasictraining).
TheBASratevariesbasedonofficerorenlistedstatus;enlistedreceivehigherBASthandoofficers.
For2020,theBASrateis$256.
68permonthforofficersand$372.
71forenlisted.
CRS-4NameStatutoryAuthorityPurposeaDescriptionMedicalandDentalCare10U.
S.
C.
1071-1110"Tomakemedicalcareavailabletomembersoftheuniformedservicesandtheirdependentsinordertohelpensuretheavailabilityofphysicallyacceptableandexperiencedpersonnelintimeofnationalemergency;toprovideincentivesforarmedforcespersonneltoundertakemilitaryserviceandremaininthatserviceforafullcareer;andtoprovidemilitaryphysiciansanddentistsexposuretothetotalspectrumofdemographicallydiversemorbiditynecessarytosupportprofessionaltrainingprogramsandensureprofessionalsatisfactionforamedicalservicecareer.
"AllservicemembersandtheirfamilymembersareeligibleformedicalcareundertheTRICAREsystem.
Thissystemprovidesfreemedicalanddentalcaretotheservicemember,andfreeorlow-costmedicalanddentalcaretotheservicemember'sdependents.
Formoreinformationonthisbenefit,seeCRSReportR45399,MilitaryMedicalCare:FrequentlyAskedQuestions,byBryceH.
P.
Mendez.
AnnualLeave10U.
S.
C.
701,704;37U.
S.
C.
501"Toauthorizemembersoftheuniformedservicestotakeaspecifiednumberofdaysofleaveofabsence,orvacation,forrestandrelaxationawayfromtheirrespectivedutystations;toallowtheaccumulationforlateruseofearnedleavethatcannotbecurrentlyusedbecauseofmilitary,orother,exigencies;andtoauthorizecashpaymentsasreimbursementforaccruedleaveremainingunusedattheexpirationofamember'stermofservice.
"Allservicemembersareentitledto30daysofannualleaveperyear(includesleavetakenonweekends,holidays,orotherregulardaysoff).
Typically,amaximumof60daysmaybeaccrued,althoughundercertaincircumstancesupto120daysmaybeaccrued.
Leaveinexcessoftheallowablelimitisforfeitedattheendofthefiscalyear.
Underlimitedcircumstances,servicemembersmayreceiveacashpaymentinlieuoftheirunusedleave(see37U.
S.
C.
501).
LifeInsurance38U.
S.
C.
1965-1980"Tomakelifeinsuranceavailabletomembersoftheuniformedservicesatareasonablecost.
"Servicemembers'GroupLifeInsurance(SGLI)isavailabletoallservicemembers,thoughtheymayopttonotpurchaseit.
Providesupto$400,000inlifeinsurancecoverageand$100,000traumaticinjurycoveragefortheservicemember;upto$100,000incoverageforspouseisalsoavailable.
Servicemembersnormallypaythecostsforthiscoverage,butthegovernmentreimbursesthepremiumsforthoseservinginanassignmentoutsidetheUnitedStatesoritspossessionsinsupportofacontingencyoperationinanareathat"hasbeendesignatedacombatzone"or"isindirectsupportofanareathathasbeendesignatedacombatzone"(37U.
S.
C.
437).
SeecurrentSGLIrates:http://benefits.
va.
gov/insurance/sgli.
asp.
CRS-5NameStatutoryAuthorityPurposeaDescriptionCommissary10U.
S.
C.
2481-85;10U.
S.
C.
1061-64"Toallowitemsofconvenienceandnecessity—especiallyitemsofsubsistence—tobemadeavailableforpurchasebymilitarypersonnelatconvenientlocationsandreasonableprices.
"Subsidizedgrocerystoresonmilitarybasesaroundtheworld.
TheDefenseCommissaryAgencyestimatesaveragesavingsofabout26%comparedtocommercialstores,thoughthesavingswouldbelessifcomparedonlytodiscountchains.
Formoreinformationoncostsavings,seehttps://commissaries.
com/rewards-and-savings/patron-savings.
Exchange10U.
S.
C.
2481"AsamilitaryresaleandcategoryCrevenue-producingmorale,welfare,andreaction[sic](MWR)activity,thearmedservicesexchangeshavethedualmissionofprovidingauthorizedpatronswitharticlesofmerchandiseandservicesandgeneratingnonappropriatedfund(NAF)earnings.
"Retailstores(furniture,electronics,clothing,jewelry,etc.
)onmilitarybasesaroundtheworld.
Theydonotreceivedirectsubsidieslikecommissaries,butdoreceivesomeindirectsubsidiesintheformofwaivedorreducedcostsforutilities,rent,andbaseservices.
Source:CongressionalResearchServicecompilationfromstatutoryauthorities,MilitaryCompensationBackgroundPapers,governmentwebsites,andotherdata.
a.
Allentriesinthe"Purpose"columnaretakenverbatimfromMilitaryCompensationBackgroundPapers,8thEdition,2018,https://www.
loc.
gov/rr/frd/pdf-files/Military_Comp-2018.
pdf.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService6BasicPayFormostservicemembers,basicpayisthelargestelementofthecompensationtheyreceiveintheirpaycheckandtypicallyaccountsforabouttwo-thirdsofanindividual'sRMC.
AllmembersoftheArmedForcesreceivebasicpay,althoughtheamountvariesbypaygrade(rank)andyearsofservice(alsocalledlongevity).
Table2providesillustrativeexamplesofbasicpayrates.
HousingAllservicemembersareentitledtoeithergovernment-providedhousingorahousingallowance,knownasbasicallowanceforhousing(BAH)forthoselivingwithintheUnitedStatesorOverseasHousingAllowance(OHA)forthoselivingoutsideoftheUnitedStates.
Roughlyone-thirdofservicemembersreceivegovernment-providedhousing(intheformofbarracks,dormitories,shipberthing,orgovernment-ownedfamilyhousing),withtheremainderreceivingBAHorOHAtooffsetthecostsofthehousingtheyrentorpurchaseinthecivilianeconomyortheprivatizedhousingtheyrentonornearmilitarybases.
8Theproportionofhousingcostscoveredbyhousingallowanceshasvariedovertime.
Seethesectionentitled"BasicAllowanceforHousing:IncreasesAreLinkedtoIncreasesinHousingCosts"laterinthisreportformoreinformationonthistopic.
TheamountofBAHaservicememberreceivesisbasedonthreefactors:paygrade(rank),geographiclocation,andwhethertheservicememberhasdependents.
9Paygradeanddependencystatusareusedtodeterminethetypeofaccommodation—or"housingprofile"—thatwouldbeappropriatefortheservicemember(forexample,one-bedroomapartment,two-bedroomtownhouse,orthree-bedroomsinglefamilyhome).
Geographiclocationisusedtodeterminethemediancosts10associatedwitheachofthesehousingprofiles.
ThemediancostsofthesehousingprofilesarethebasisforBAHrates,withsomeadditionaladjustmentsmadeonthebasisofpaygrade(thatis,anE-7withoutdependentswillreceivemorethananE-6withoutdependents,eventhoughtheappropriatehousingprofileforbothofthemis"twobedroomapartment").
Asaresultofthismethodology,BAHratesaremuchhigherinsomeareasthanothers,but8Inmid-1990s,theDepartmentofDefense(DOD)wasconcernedthatthepoorqualityofgovernmentprovidedhousingonitsbaseswasnegativelyaffectingservicemembers'moraleandreadiness.
Accordingtoa2018reportfromtheGovernmentAccountabilityOffice(GAO),"theDODestimatedthatitwouldneedabout$20billioninappropriatedfundsandupto40yearstoeliminatethepoorqualityhousingthroughnewconstructionorrenovationusingthetraditionalmilitaryconstructionapproach.
"SeeU.
S.
GovernmentAccountabilityOffice,DODShouldTakeStepstoImproveMonitoring,Reporting,andRiskAssessment,GAO-18-218,March2018,p.
1.
TheFY1996NationalDefenseAuthorizationActestablishedtheMilitaryHousingPrivatizationInitiative(MHPI).
TheMHPIallowstheDODtoenterintoagreementswithprivate-sectordeveloperstobuildandrenovatemilitaryhousing,inpartthroughleasingortransferringlandand/orhousingunitstodevelopers.
Thedevelopersrenovatetheseunits,andinsomecasesbuildnewhouses,whichtheysubsequentlymanage.
RentalratesforprivatizedhousingaretiedtotheamountofBAHaservicememberisauthorized.
Servicememberstypicallysignaleaseforaprivatizedhousingunitthatincludesanauthorizationforthepropertyownertoreceiverentviaadirectallotmentfromservicememberpay.
TheAssistantSecretaryofDefenseforSustainmentmaintainsalistoffrequentlyaskedquestionsaboutMHPIhere:https://www.
acq.
osd.
mil/EIE/FIM/Housing/Housing_FAQs.
html.
9Forthepurposeofhousingallowances,adependentisdefinedtoincludeaspouse,unmarriedchildrenunder21(orolderinsomecircumstances),certainparentsdependentontheservicemembers,andcertainindividualsplacedinthelegalcustodyoftheservicemember.
See37U.
S.
C.
§401forthecompletedefinition.
Nodistinctionismadebetweenaservicememberwithonedependentandaservicememberwithmultipledependents.
Theonlydistinctioniswhetherornottheservicememberhasdependents.
10Priorto2015,BAHratesfactoredintheaveragecostsofrentalhousingrates,utilities,andrenter'sinsuranceinawidearrayofhousingmarkets.
DODeliminatedthecostofrenter'sinsurancefromthecalculationin2015.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService7servicemembersofsimilarpaygradeanddependentsstatusshouldbeabletopayforroughlycomparablehousingregardlessoftheirdutylocation.
11BAHratesarepaidtotheservicememberatthespecifiedrate,regardlessoftheactualhousingexpensesincurred.
Table2providesillustrativeexamplesofhowmuchBAHservicemembersreceiveannually.
OHAisalsobasedonpaygrade,geographiclocation,andwhethertheservicememberhasdependents,butthemannerinwhichitiscalculatedissignificantlydifferentthanBAH.
12OHAispaidbasedontheservicemember'sreportedactualhousingexpenses,uptoamaximumamountthatvariesbylocation,plusanallowanceforutilities.
Theamountisreducediftheservicememberresideswithoneormore"sharers.
"13Thereisalsoafixedone-timeallowancetocovercertainmove-inexpenses(suchasrealestateagents'fees,phoneandutilityconnections,andsecurityimprovements).
FoodNearlyallservicemembersreceiveamonthlypaymenttodefraytheirpersonalfoodcosts.
14Thisisknownasbasicallowanceforsubsistence(BAS).
BASisprovidedataflatrate:In2020,enlistedpersonnelreceive$372.
71amonth,whileofficersreceive$256.
68amonth.
15TherehavebeencallsinthepasttomergeBASwithbasicpaytoreducethecomplexityofmilitarycompensationandtheneedforBAScomputationseachyear.
11ForamoredetaileddescriptionofhowBAHratesarecalculated,seetheDepartmentofDefense'sBAHPrimer,athttp://www.
defensetravel.
dod.
mil/Docs/perdiem/BAH-Primer.
pdf.
ForacompletelistingofBAHrates,seethesetables:http://www.
defensetravel.
dod.
mil/site/pdcFiles.
cfmdir=/Allowances/BAH/PDF/.
12AccordingtotheDepartmentofDefenseFinancialManagementRegulation(DODFMR),BAHis"[p]aidforhousingintheUnitedStates.
TheBAHrateisbasedonmedianhousingcostsandispaidindependentlyofaServicemember'sactualhousingcosts.
"OHAis"[p]aidmonthlytohelpoffsethousingexpensesforaServicememberordependentauthorizedtoliveinprivate-sectorleasedorownedhousingatanassignedoverseaslocationoutsidetheUnitedStates.
OHAisbasedoncostreimbursement.
TheamountofOHApaidconsidersfactors,suchaswhetherthehousingisshared,theappropriateutilities…andwhethertheServicememberownsorrentsthehousing.
"DODFMR,Volume7A,Chapter26,Table26-1,http://comptroller.
defense.
gov/Portals/45/documents/fmr/current/07a/07a_26.
pdf.
13"Sharers"includeotherservicemembersauthorizedOHA,federalcivilianemployeesauthorizedaLivingQuartersAllowanceorCostofLivingAllowance,andotherpersons(excludingtheservicemembersdependents)whocontributetowardsthepaymentofrent,mortgage,and/orutilities.
Thoseinvolvedinasharingarrangementhavetheirproportionalrentsharesdeterminedbydividingthetotalrentforthedwellingbythenumberofsharers.
SeeDODFMR,Volume7A,Chapter26,pages26-7and26-41,http://comptroller.
defense.
gov/Portals/45/documents/fmr/current/07a/07a_26.
pdf.
14ThosewhodonotreceiveBAS—forexample,enlistedpersonnelinbasictraining—receivegovernment-providedmeals.
Historically,enlistedpersonneldidnotreceiveBASexceptinspecificcircumstances;rather,theywerenormallyprovidedfreemealsingovernmentdiningfacilities.
Thischangedin2002.
EnlistedpersonnelnowreceiveBASexceptinlimitedcircumstances.
However,ifaservicememberreceivingBASelectstoeatinagovernmentdiningfacility,heorshemustpayforthemeal.
Therearealsocircumstances,suchasseadutyandfieldduty,inwhichaservicemembermayberequiredtoreceivegovernmentmealsandpayforthem(essentiallyforfeitingtheirBASinexchangeforgovernmentprovidedmeals).
Formoreinformationonthistopic,seetheDODFMR,Volume7A,Chapter25,athttp://comptroller.
defense.
gov/Portals/45/documents/fmr/current/07a/07a_25.
pdf.
15EnlistedpersonnelreceiveahigherBASthanofficers.
Historically,thefederalgovernmentalwaysprovidedenlistedpersonnelwithmealsoracashallowancetopurchasesuitablemeals,butitdidnotalwaystakethatpositionwithofficers;sometimestheyweregivenasubsistenceallowance,sometimestheywereexpectedtopayfortheirownmealsoutoftheirregularpay.
EnlistedBAS,then,hashistoricallybeenintendedtocoverthefullcostofmealsfortheservicemember;officerBAShasnot.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService8Table2.
AverageRegularMilitaryCompensationforSelectedPaygrades(2020Data;assumesBAHandBASinsteadofgovernmentquartersandmeals)PayGradeRankAverageAnnualBasicPayAverageAnnualHousingAllowanceAverageAnnualSubsistenceAllowanceEstimatedAverageAnnualFederalTaxAdvantageAverageAnnualRMCE-1Private(ArmyandMarineCorps)SeamanRecruit(Navy)AirmanBasic(AirForce)$19,910$15,249$4,473$2,719$42,350E-5Sergeant(ArmyandMarineCorps)PettyOfficerSecondClass(Navy)StaffSergeant(AirForce)$37,157$21,111$4,473$5,108$67,848E-8MasterSergeantorFirstSergeant(ArmyandMarineCorps)SeniorChiefPettyOfficer(Navy)SeniorMasterSergeantorFirstSergeant(AirForce)$66,273$25,912$4,473$4,501$101,159O-1SecondLieutenant(Army,AirForceandMarineCorps)Ensign(Navy)$40,711$19,238$3,080$4,526$67,555O-4Major(Army,AirForceandMarineCorps)LieutenantCommander(Navy)$94,918$29,903$3,080$8,339$136,240O-6Colonel(Army,AirForceandMarineCorps)Captain(Navy)$139,441$34,107$3,080$10,617$187,244Source:DepartmentofDefense,SelectedMilitaryCompensationTables,January1,2020,B3,https://militarypay.
defense.
gov/Portals/3/Documents/Reports/GreenBook%202020.
pdfver=2020-05-06-170512-543.
FortheE-1dataabove,CRSusedthe"ALLE-1"rowofthereferencedtable;fortheO-1data,CRSusedthe"O-1"row,whichexcludesthehigherratesforthoseinpaygradeO-1whoformerlyservedasenlistedpersonnel.
Thetaxadvantageiscomputed"usingthestandarddeductionand2018taxrates,includingtheearnedincometaxcredit.
"Actualannualtaxadvantageofservicememberswillvarybasedontheiruniquetaxsituation.
RowsmaynotsumperfectlyintheAnnualRMCcolumnduetorounding.
Notes:BAH=BasicAllowanceforHousing;BAS=BasicAllowanceforSubsistence;RMC=RegularMilitaryCompensation.
FederalTaxAdvantageCertaintypesofmilitarycompensationarenotsubjecttofederalincometax,thusgeneratingataxbenefitforservicemembers.
Thevarioustypesofmilitarypay—basicpay,specialpay,andincentivepay—areconsideredpartofgrossincomeandareusuallysubjecttofederalincometax.
16Militaryallowances,ontheotherhand,aregenerallynotconsideredpartofgrossincome16ThesetypesofpayareexemptfromfederaltaxationifearnedinacombatzonebyenlistedpersonnelandwarrantMilitaryPay:KeyQuestionsandAnswersCongressionalResearchService9andarenotsubjecttofederalincometax;norarethevariousin-kindbenefitsofthemilitary—forexample,governmenthousing,healthcare,fitnesscenters,andsubsidizedgrocerystores.
17,18RMCconsidersonlythefederalincometaxadvantageprovidedbytheexemptionofBAHandBASfromgrossincome.
Theprecisevalueofthefederaltaxadvantageforanindividualservicememberwillvarydependingonhisorheruniquetaxsituation.
CompensationElementsNotIncludedinRMCRMCdoesnotincludethefullarrayofcompensationelements(e.
g.
,specialpaysandbonuses,reimbursements,educationalassistance,deferredcompensation,oranyestimateofthecashvalueofnonmonetarybenefitssuchashealthcare,childcare,recreationalfacilities,commissaries,andexchanges).
Asthevalueoftheseformsofcompensationcanbeverysubstantial,RMCshouldnotbeconsideredameasureoftotalmilitarycompensation.
3.
HowAreEachYear'sIncreasesinBasicPay,BAH,andBASComputedMentionsofthe"militarypayraise"arealmostalwaysreferencestotheannualincreaseinbasicpay.
Thestatutoryformulaforcalculatingeachyear'spayraiseisdiscussedbelow,butbasicpayisonlyoneelementofRMC.
BAHandBASarealsosubjecttoperiodicadjustment,althoughtheytypicallydonotreceiveasmuchattentionasincreasesinbasicpay.
BasicPay:IncreasesAreLinkedtoIncreasesintheEmploymentCostIndex(ECI)Section1009ofTitle37providesapermanentformulaforanautomaticannualincreaseinbasicpaythatisindexedtotheannualincreaseintheEmploymentCostIndex(ECI)for"wagesandsalaries,privateindustryworkers.
"For2000-2006,thestatuterequiredthemilitaryraisetobeequaltotheECIincreaseplusanadditionalonehalfpercentagepoint(i.
e.
,iftheECIannualincreaseweretobe3.
0%,themilitaryraisewouldbe3.
5%).
For2007andonward,thestatuteofficers;forofficers,thesetypesofpayareexemptfromfederaltaxationuptothemaximumamountofenlistedbasicpayplustheamountofimminentdangerpay.
17Thisexemption,whichreflectsthelong-standingexclusionofcertainmilitarybenefitsfromgrossincome,wascodifiedintheInternalRevenueCode(26U.
S.
C.
§134)bytheTaxReformActof1986(P.
L.
99-514).
Foradetaileddiscussiononthesetopics,seetheMilitaryCompensationBackgroundPapers,8thedition,pages169-182and873-883,https://www.
loc.
gov/rr/frd/pdf-files/Military_Comp-2018.
pdf.
Table2ofthisIRSpublicationisalsohelpful:http://www.
irs.
gov/pub/irs-pdf/p3.
pdf.
TheexceptiontothegeneralnontaxabilityofallowancesistheCONUSCostofLivingAllowance(COLA),sinceitwascreatedafterthe1986TaxReformAct.
1826U.
S.
C.
§134reads,inpart,asfollows:§134.
Certainmilitarybenefits.
(a)Generalrule.
Grossincomeshallnotincludeanyqualifiedmilitarybenefit.
(b)Qualifiedmilitarybenefit.
Forpurposesofthissection—(1)Ingeneral.
Theterm"qualifiedmilitarybenefit"meansanyallowanceorin-kindbenefit(otherthanpersonaluseofavehicle)which—(A)isreceivedbyanymemberorformermemberoftheuniformedservicesoftheUnitedStatesoranydependentofsuchmemberbyreasonofsuchmember'sstatusorserviceasamemberofsuchuniformedservices,and(B)wasexcludablefromgrossincomeonSeptember9,1986,underanyprovisionoflaw,regulation,oradministrativepracticewhichwasineffectonsuchdate(otherthanaprovisionofthistitle).
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService10requiredtheraisebeequaltotheECI,althoughCongresscontinuedtoenactincreasesabovetheECIthrough2010.
Undersubsection(e)ofthisstatute,thePresidentcanspecifyanalternativepayadjustmentthatsupersedestheautomaticadjustment.
PresidentObamainvokedthisoptionwithregardtothe2014-2016payraises.
Additionally,Congresscanpasslegislationtospecifytheannualpayraisewhich,ifenacted,wouldsupersedetheautomaticadjustmentand/oranyproposedpresidentialadjustment.
Thefrequencyofsuchcongressionalactionisdiscussedbelow.
Theautomaticadjustmentunder37U.
S.
C.
1009istiedtotheincreaseintheECIfromthethirdquarterofthethirdprecedingyeartothethirdquarterofthesecondprecedingyear.
Forexample,inthe12-monthperiodbetweenthequarterwhichendedinSeptember2015andthequarterwhichendedinSeptember2016,theECIincreasedby2.
4%.
Hencethepayraisefor2018,ascalculatedbythestatutoryformula,was2.
4%.
AnillustrationofhowtheformulaoperatesisprovidedinFigure1.
ThismethodologyresultsinasubstantiallagbetweenincreasesintheECIandincreasesinbasicpay;thelagappearstoberelatedtothestagesofthefederalbudgetprocess.
19Figure1.
HowIncreasesinBasicPayareCalculatedundertheStatutoryFormulaInaccordancewith37U.
S.
C.
1009(c)(1)Source:CongressionalResearchService.
CongressHasFrequentlyWaivedtheAutomaticAdjustmentandSpecifiedtheAmountoftheMilitaryPayRaise,AlthoughThisHasBecomeLessCommonInRecentYearsDespitethestatutoryformula,whichcouldoperateeachyearwithoutanyfurtheraction,Congresshasfrequentlywaivedtheautomaticadjustmentandlegislatedparticularpercentageincreases.
Forthepayraiseseffectiveinfiscalyears1981and1982andcalendaryears1984-2010,2013,2017-2018,and202020Congressspecifiedtheincreasethatwastotakeeffectintheannualdefenseauthorizationact.
Congressspecifiednopercentageincreasefor1983,2011,2012,2014-2016,21or2019,therebyallowingthestatutoryformulaorthepresidentialalternativeadjustment19Inotherwords,the2.
4%increasedescribedaboveinformedtheFY2018budgetrequest,whichwasbeingdevelopedinthefallof2016andsubmittedtoCongressinFebruaryof2017.
TheFY2018NationalDefenseAuthorizationActwasenactedDecember12,2017,shortlybeforetheday(January1,2018)thatthe2018payraisewouldgointoeffect.
20Increasesinbasicpaybecameeffectiveatthestartofthecalendaryear,ratherthanthefiscalyear,in1984.
21Whilenotspecifyingaspecificincreasefor2015and2016,Congressdidstipulateinlawthatforthoseyearstherewouldbenoincreaseforgeneralandflagofficers(thoseinpaygradesO-7andabove)Foralistingofincreasesinbasicpaysince1994,seethelatersectionofthisreportentitled"4.
WhatHaveBeentheAnnualPercentageIncreasesinBasicPayOverthePast20YearsWhatWereEachYear'sMajorExecutiveandLegislativeBranchProposalsandActionsontheAnnualPercentageIncreaseinMilitaryBasicPay"MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService11togointoeffect.
Thestatutoryformulaisimportantevenwhenitdoesnotgointoeffect,asitprovidesabenchmarkaroundwhichalternativesaredevelopedanddebated.
BasicAllowanceforHousing:IncreasesAreLinkedtoIncreasesinHousingCostsBasicAllowanceforHousingispaidtoservicememberslivingintheUnitedStateswhodonotchooseorarenotprovidedgovernmentquarters.
22Bylaw,theSecretaryofDefensesetstheBAHratesforlocalities,knownasmilitaryhousingareas(MHAs),throughouttheUnitedStates.
However,thelawrequirestheSecretarytosettherates"basedonthecostsofadequatehousingdeterminedforthearea"andtiesthisdeterminationto"thecostsofadequatehousingforcivilianswithcomparableincomelevelsinthesamearea.
"23AsincreasesinBAHaretiedtoincreasesinlocalhousingcosts,theyarenotaffectedbytheannualpercentageincreaseintheECI.
Thus,theaverageincreaseinBAHalmostalwaysdiffersfromtheincreaseinbasicpay.
Todeterminethecostofadequatehousing,DODconductsanannualsurveyofrentalcostsineachoftheMHAs.
24DODemploysacontractortocollectrentalcostsforvarioustypesofhousing,includingapartments,townhouses,andsingle‐familyunitsofvaryingbedroomsizes.
Costsforutilitiesarealsocollected.
25DODusestheseannualsurveystodeterminehowmuchhousingcostshaveincreasedordecreasedineachMHA.
IfcostsinagivenMHAincrease,itadjustsBAHratesforthatlocalityupwardaccordinglyatthestartofthenextcalendaryear.
IfcostsinagivenMHAdecrease,itadjuststheBAHratesdownward.
However,inthecaseofadownwardadjustment,a"savepay"provisionontheBAHstatutepreventsthedecreasefromapplyingtoindividualscurrentlyassignedtothatlocality:"SolongasamemberofauniformedserviceretainsuninterruptedeligibilitytoreceiveabasicallowanceforhousingwithinanareaoftheUnitedStates,themonthlyamountoftheallowanceforthemembermaynotbereducedasaresultofchangesinhousingcostsintheareaorthepromotionofthemember.
"26Thus,onlypersonnelnewlyassignedtotheareareceivethelowerpayment.
CongresshasperiodicallychangedthelawwithregardtotheproportionofhousingcostscoveredbyBAHoritspredecessor,knownasBasicAllowanceforQuarters(BAQ)andVariableHousingAllowance(VHA).
27DODestimatedthatBAQ+VHAcoveredabout80%ofhousingcostsin22ManyservicemembersprefertoliveoffpostandelecttoreceiveBAHinsteadofgovernmentquarters;inothercases,theremaynotbeasufficientsupplyofgovernmentquarterstohouseallinterestedpersonnel.
ThoseservicememberslivingoverseasandnotprovidedwithgovernmentquartersreceiveOHA.
TheadjustmentmechanismforOHAissimilartothatofBAH.
2337U.
S.
C.
§403(b).
24Formoreinformationonthisprocess,seetheDefenseTravelManagementOffice's"APrimerontheBasicAllowanceforHousing(BAH),"athttp://www.
defensetravel.
dod.
mil/Docs/perdiem/BAH-Primer.
pdf.
25DODeliminatedthecostofrenter'sinsurancefromthecalculationin2015.
2637U.
S.
C.
§403(b)(6).
AnanalogousprovisionforOHAisprovidedin37U.
S.
C.
§403(c)(2).
27From1980to1997,servicemembersnotassignedtogovernmentquartersreceivedBAQand,dependingonlocation,VHA.
CongressrevisedthisBAQ+VHAsystemin1984tosetBAQat65%ofthenationalmedianhousingcost,withVHAprovidedwhenthelocalmedianhousingcostinagivenlocalityexceeded80%ofthenationalmedianhousingcost.
Exceptforthoselivinginlowercostareaswherethelocalmedianhousingcostwasbelow80%ofthenationalmedianhousingcost—whothereforeonlyreceivedBAQ—servicememberswereexpectedtopay15%ofanticipatedhousingcosts(thisratewasalsoknownasabsorptionorout-of-pocket).
However,insubsequentyears,congressionallyapprovedincreasestoBAQandVHAdidnotkeepupwithincreasesincivilianhousingcosts.
DissatisfactionwiththeBAQ+VHAsystem,includingthepersistentdisparitybetweenintendedandactualout-of-pocketexpenses,ledCongresstoreplaceitwithBAHin1997.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService121996.
28In1997,CongressreplacedBAQ+VHAwithBAH,andsubsequentlyraisedBAHratessothattheycovered100%ofthecostofadequatehousingby2005.
29Morerecently,theFY2015NationalDefenseAuthorizationActallowedtheSecretaryofDefensetoreduceBAHpaymentsby1%ofthenationalaveragemonthlyhousingcost,30andtheFY2016NationalDefenseAuthorizationActextendedthisauthority,authorizinganadditional1%reductionperyearthrough2019(foramaximumreductionof5%underthenationalmonthlyaveragehousingcost).
31DODhasindicatedthatasavepayprovision,discussedabove,willapplytothesechanges.
32BasicAllowanceforSubsistence:IncreasesAreLinkedtoIncreasesinFoodCostsBASispaidatauniformratetoalleligibleenlistedpersonnel,andatauniformbutlowerrateforalleligibleofficers.
Bylaw,BASisadjustedeachyearaccordingtoaformulathatislinkedtochangesinfoodprices.
Theincreaseisidenticalto"thepercentageincreaseinthemonthlycostofaliberalfoodplanforamaleintheUnitedStateswhoisbetween20and50yearsofageovertheprecedingfiscalyear,asdeterminedbytheSecretaryofAgricultureeachOctober1.
"334.
WhatHaveBeentheAnnualPercentageIncreasesinBasicPayOverthePast20YearsWhatWereEachYear'sMajorExecutiveandLegislativeBranchProposalsandActionsontheAnnualPercentageIncreaseinMilitaryBasicPayThefollowingsubsectionsitemizeactiononthebasicpayincreasegoingbackto1997.
Unlessotherwisenoted,allincreaseswereproposedtobeeffectiveonJanuary1oftheyearindicatedinbold.
Thepubliclawnumberforeachyear'sNationalDefenseAuthorizationActisincludedattheendofeachsectionbelow,evenforthoseyearsinwhichtherewasnostatutorylanguagerelevanttothepayraise.
28"IncreatingtheBAQandtheVariableHousingAllowance(VHA)[thepredecessorstoBAH],Congressintendedtocover85percentofservicemembers'housingcosts.
Inrealitythough,housingallowancesonlycoveredapproximately80percentofservicemembers'totalhousingexpensesin1996.
Inanefforttoclosethatgap,theDepartmentfundeda3.
0percentincreaseinhousingallowancesin1997,andCongressaddedanadditional1.
6percent.
Thiswilllowerout-of-pockethousingcoststoapproximately19%percentofaservicemember'stotalcosts,thelowestpercentagesincebefore1987.
"TestimonyofFredPang,AssistantSecretaryofDefenseforForceManagementPolicy,beforetheHouseNationalSecurityCommittee,MilitaryPersonnelSubcommittee,March14,1997.
29Formoreinformationonthistopic,seeDepartmentofDefense,MilitaryCompensationBackgroundPapers,EighthEdition,Washington,DC,July2018,p.
136-139,https://www.
loc.
gov/rr/frd/pdf-files/Military_Comp-2018.
pdf.
30Also,startingin2015,theDepartmentofDefensedecideditwouldnolongerconsiderrenter'sinsuranceinBAHcalculations.
ThischangeeffectivelyreducedBAHratesbyanadditional1%.
31P.
L.
113-291,§604andP.
L.
114-92,§603.
32"AnintegralpartoftheBasicAllowanceforHousingprogramistheprovisionofindividualrateprotectiontoallmembers.
Nomatterwhathappenstomeasuredhousingcosts—includingtheout-of-pocketcostsharingadjustmentnotedabove,anindividualmemberwhomaintainsuninterruptedBasicAllowanceforHousingeligibilityinagivenlocationwillnotseehis/herBasicAllowanceforHousingratedecrease.
Thisensuresthatmemberswhohavemadelong-termcommitmentsintheformofaleaseorcontractarenotpenalizedifthearea'shousingcostsdecrease.
"DODNewsRelease,"DoDReleases2016BasicAllowanceforHousingRates,"http://www.
defense.
gov/News/News-Releases/News-Release-View/Article/636341/dod-releases-2016-basic-allowance-for-housing-rates.

3337U.
S.
C.
§402(b)(1)(B).
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService13Foratablethatsummarizesrecentincreasesinbasicpay,seeCRSInFocusIF10260,DefensePrimer:MilitaryPayRaise,byLawrenceKapp.
2020.
StatutoryFormula:3.
1%.
Administrationrequest:3.
1%.
Section606oftheHouse-passedversionoftheNationalDefenseAuthorizationAct(NDAA)forFY2020,H.
R.
2500,supporteda3.
1%increaseinbasicpay.
Section607oftheHousebillwouldhavedirectedthatthestatutoryformulaof37U.
S.
C.
§1009takeeffect,alsoresultingina3.
1%increaseinbasicpay.
TheSenate-passedversionoftheFY2020NDAAcontainednoprovisiontospecifytherateofincreaseinbasicpay.
Section609oftheenactedversionoftheNationalDefenseAuthorizationActforFiscalYear2020(P.
L.
116-92)specifieda3.
1%increaseinbasicpayeffectiveJanuary1,2020.
Finalincrease:3.
1%across-the-board.
2019.
StatutoryFormula:2.
6%.
Administrationrequest:2.
6%.
TheHouse-passedversionoftheFY2019NDAAcontainednoprovisiontospecifytherateofincreaseinbasicpay.
Section601oftheSenate-passedversionoftheFY2019NDAAwouldhavewaivedtheautomaticincreaseinbasicpayunderthestatutoryformulaof37U.
S.
C.
§1009,andsetthepayraiseat2.
6%.
TheJohnS.
McCainNationalDefenseAuthorizationActforFY2019(P.
L.
115-232)containednoprovisionrelatingtoageneralincreaseinbasicpay,therebyleavingtheautomaticadjustmentof37U.
S.
C.
1009inplace.
Finalincrease:2.
6%across-the-board.
2018.
StatutoryFormula:2.
4%.
Administrationrequest:2.
1%.
Section601oftheHouse-passedversionoftheFY2018NDAAwouldhaverequiredthestatutoryformulaincrease(2.
4%)togointoeffect,"notwithstandinganydeterminationmadebythePresidentundersubsection(e)ofsuchsectionwithrespecttoanalternativepayadjustment.
.
.
.
"Section601oftheSenate-passedversionoftheFY2018NDAAwouldhavewaivedtheautomaticincreaseinbasicpayunderthestatutoryformulaof37U.
S.
C.
§1009,andsetthepayraiseat2.
1%.
OnAugust31,2017,PresidentTrumpsentalettertocongressionalleadersinvokinghisauthorityunder37U.
S.
C.
1009(e)tosetthepayraiseat2.
1%.
However,Section601oftheenactedversionoftheFY2018NDAA(P.
L.
115-91)specifiedthestatutoryformulaincrease(2.
4%)wouldgointoeffect,supersedingthePresident'salternativeadjustment.
Therefore,basicpayforallservicemembersincreasedby2.
4%onJanuary1,2018.
Finalincrease:2.
4%across-the-board(P.
L.
115-91).
2017.
StatutoryFormula:2.
1%.
Administrationrequest:1.
6%.
Section601oftheHouseversionoftheFY2017NDAA(H.
R.
4909)wouldhaverequiredthestatutoryformulaincrease(2.
1%)togointoeffect,"notwithstandinganydeterminationmadebythePresidentundersubsection(e)ofsuchsectionwithrespecttoanalternativepayadjustment.
.
.
.
"Section601oftheSenateversionoftheFY2017NDAA(S.
2943)wouldhavewaivedtheautomaticincreaseinbasicpayunderthestatutoryformulaof37U.
S.
C.
§1009,andsetthepayraiseat1.
6%.
OnAugust31,2016,thePresidentsentalettertocongressionalleadersinvokinghisauthorityunder37U.
S.
C.
1009(e)tosetthepayraiseat1.
6%.
However,Section601ofthefinalversionoftheFY2017NDAAsetthepayraiseat2.
1%,andPresidentObamasignedthisbillintolawonDecember23,2016.
ThisstatutoryadjustmentsupplantedthePresident'salternativepayadjustment.
Therefore,basicpayforallservicemembersincreasedby2.
1%onJanuary1,2017.
Finalincrease:2.
1%across-the-board(P.
L.
114-328).
2016.
StatutoryFormula:2.
3%.
Administrationrequest:1.
3%.
TheHouseversionoftheFY2016NDAA(H.
R.
1735)containednoprovisiontospecifytherateofincreaseinbasicpay,althoughthereportaccompanyingitstatedthatthecommitteesupporteda2.
3%increase.
TheSenateversion(H.
R.
1735)containedaprovisionthatwouldhavewaivedtheautomaticadjustmentof37U.
S.
C.
§1009andsetthepayincreaseat1.
3%,butexcludedgeneralsandadmirals.
OnAugust28,thePresidentexercisedhisauthoritytospecifyanalternativeadjustment,settingtheincreaseat1.
3%.
NogeneralpayraiseprovisionwasincludedinthefinalversionoftheNDAA,therebyleavinginplacethe1.
3%increasespecifiedbyPresidentObama.
However,Section601oftheMilitaryPay:KeyQuestionsandAnswersCongressionalResearchService14FY2016NDAApreventedthepayincreasefromapplyingtogeneralsandadmirals.
Finalincrease:1.
3%across-the-board,excludinggeneralsandadmirals(P.
L.
114-92).
2015.
StatutoryFormula:1.
8%.
Administrationrequest:1.
0%.
TheHouseversionoftheFY2015NDAAcontainednostatutoryprovisiontospecifytherateofincreaseinbasicpay,althoughthereportaccompanyingitstatedthatthecommitteesupporteda1.
8%increase;italsoincludedaprovisiontopreventgeneralandflagofficersfromreceivinganyincreaseinbasicpayin2015.
TheSenatecommittee-reportedversioncontainedaprovisionthatwouldhavewaivedtheautomaticadjustmentof37U.
S.
C.
1009andsettingthepayincreaseat1.
0%forservicemembers,butexcludedgeneralsandadmirals.
OnAugust29,PresidentObamasentalettertoCongressinvoking37U.
S.
C.
1009(e)tosetthepayraisefor2015at1.
0%.
NogeneralpayraiseprovisionwasincludedinthefinalversionoftheNDAA,therebyleavinginplacethe1.
0%increasespecifiedbyPresidentObama.
However,Section601oftheFY2015NDAApreventedthepayincreasefromapplyingtogeneralsandadmirals.
Finalincrease:1%across-the-board,excludinggeneralsandadmirals(P.
L.
113-291).
2014.
StatutoryFormula:1.
8%.
Administrationrequest:1.
0%.
TheHouseversionoftheFY2014NDAAcontainednoprovisiontospecifytherateofincreaseinbasicpay,whiletheSenatecommittee-reportedbillspecifiedanincreaseof1.
0%.
OnAugust30,PresidentObamasentalettertoCongressinvoking37U.
S.
C.
1009(e)tosetthepayraisefor2014at1.
0%.
NoprovisionwasincludedinthefinalversionoftheNDAA,therebyleavinginplacethe1.
0%increasespecifiedbythePresident.
Finalincrease:1%across-the-board(P.
L.
113-66).
2013.
StatutoryFormula:1.
7%.
Administrationrequest:1.
7%.
TheHouseversionoftheFY2013NDAAsupporteda1.
7%across-the-boardpayraise.
TheSenatebillcontainednostatutorylanguage.
Thefinalbillspecifieda1.
7%increase.
Finalincrease:1.
7%across-the-board(P.
L.
112-239).
2012.
StatutoryFormula:1.
6%.
Administrationrequest:1.
6%.
TheHouseversionoftheFY2012NDAAsupporteda1.
6%across-the-boardpayraise,equaltotheECI.
BoththeSenate-reportedbillandthefinalversionweresilentonthepayraiseissue.
Asaresult,thestatutoryformulabecameoperativewithanautomaticJanuary1,2012,across-the-boardraiseequalto1.
6%.
Finalincrease:1.
6%across-the-board(P.
L.
112-81).
2011.
Statutoryformula:1.
4%.
Administrationrequest:1.
4%.
TheHouseversionoftheFY2011NDAAsupporteda1.
9%across-the-boardpayraise,0.
5%abovetheECI.
BoththeSenate-reportedbillandthefinalbillweresilentonthepayraiseissue.
Asaresult,thestatutoryformulabecameoperativewithanautomaticacross-the-boardraiseof1.
4%;equaltotheECI.
Finalincrease:1.
4%across-the-board(P.
L.
111-383).
2010.
Statutoryformula:2.
9%.
Administrationrequest:2.
9%.
TheFY2010NDAAspecifieda3.
4%increase.
Finalincrease:3.
4%across-the-board(P.
L.
111-84).
2009.
Statutoryformula:3.
4%.
Administrationrequest:3.
4%.
TheFY2009NDAAspecifieda3.
9%increase.
Finalincrease:3.
9%across-the-board(P.
L.
110-417).
2008.
Statutoryformula:3.
0%.
Administrationrequest:3.
0%across-the-board.
ThepresidentialvetooftheinitialFY2008NDAAresultedina3.
0%payraisetakingeffectonJanuary1,2008(statutoryformula).
ThefinalversionoftheNDAA,signedintolawonJanuary28,specifiedthatbasicpaybeincreasedby3.
5%retroactivetoJanuary1.
Finalincrease:3.
5%across-the-board(P.
L.
110-181).
2007.
Statutoryformula:2.
2%.
Thestatutoryformulafor2007wasbasedsolelyontheECIandnotarate0.
5%higherthantheECIthathadbeenspecifiedfor2000-2006.
Administrationrequest:2.
2%.
TheNDAAspecifiedaminimum2.
2%increase,withgreaterincreasesforcertainMilitaryPay:KeyQuestionsandAnswersCongressionalResearchService15paycells.
34Finalincrease:2.
2%across-the-boardbutwithanadditionalApril1,2007,targetedpayraisethatwouldbeashighas8.
3%forsomewarrantofficersandrangefrom2.
5%forE-5sto5.
5%forE-9s35(P.
L.
109-364).
2006.
Statutoryformula:3.
1%.
Administrationrequest:3.
1%across-the-board.
TheNDAAspecifieda3.
1%increase.
Finalincrease:3.
1%across-the-board(P.
L.
109-163).
2005.
Statutoryformula:3.
5%.
Administrationrequest:3.
5%.
TheNDAAspecifieda3.
5%increase.
Finalincrease:3.
5%across-the-board(P.
L.
108-375).
2004.
Statutoryformula:3.
7%.
Administrationrequest:Average4.
1%;minimum2.
0%;maximumof6.
5%.
TheNDAAspecifieda3.
7%minimumincrease,withgreaterincreasesforcertainpaycells.
Finalincrease:3.
7%minimum,4.
15%average,6.
25%maximumforsomeseniorNCOs(P.
L.
108-136).
2003.
Statutoryformula:4.
1%.
Administrationrequest:minimum4.
1%;average4.
8%;between5.
0%and6.
5%forsomemid-levelandseniornoncommissionedofficers,warrantofficers,andmid-levelcommissionedofficers.
TheNDAAspecifiedincreasesidenticaltotheAdministrationrequest.
Finalincrease:IdenticaltotheAdministrationrequest(P.
L.
107-314).
2002.
Statutoryformula:4.
6%.
Administrationrequest:numerousfiguresforthe"Administrationrequest"werementionedinthepayraisedebate,dependingonwhenandwhichagencyproducedthefigures.
Ingeneral,however,theyallproposedincreasesofatleast5%andnomorethan15%(thelatterapplyingonlytoaveryfewindividuals),dependingonpaygradeandyearsofservice;theaverageincreasewas6.
9%.
TheNDAAspecifieda5%minimumincrease,withgreaterincreasesforcertainpaycells.
Finalincrease:Between5and10%,dependingonpaygradeandyearsofservice(P.
L.
107-107).
362001.
Statutoryformula:3.
7%.
Administrationrequest:3.
7%.
TheFY2001NDAAspecifieda3.
7%minimumincreaseof3.
7%,withgreaterincreasesforcertainpaycells.
TheNDAAspecifieda3.
7%minimumincrease,withgreaterincreasesforcertainpaycells.
Finalincrease:3.
7%across-the-board,effectiveJanuary1,2001,plusadditionalraisesofbetween1.
0and5.
5%formid-gradeofficerandenlistedpersonnel,tobeeffectiveJuly1,2001(P.
L.
106-398).
2000.
Statutoryformula:4.
8%(basedonthechangetothestatutoryformula;theoriginalstatutoryformulawouldhaveledtoaproposedraiseof3.
8%).
Administrationrequest:4.
4%onJanuary1,2000,plusincreasesaveraginganadditional1.
4%formid-gradeofficerandenlistedpersonnel,effectiveJuly1,2000.
TheNDAAspecifieda4.
8%minimumincrease,withgreaterincreasesforcertainpaycells.
Finalincrease:4.
8%onJanuary1,2000,plusincreasesaveraginganadditional1.
4%formid-gradeofficerandenlistedpersonnel,effectiveJuly1,2000(P.
L.
106-65).
1999.
Statutoryformula:3.
1%.
Administrationrequest:3.
6%.
TheHouseapproved3.
6%,orwhateverpercentageincreasewasapprovedforfederalGScivilians,whicheverwashigher.
TheSenateapproved3.
6%.
ThefinalversionacceptedtheHouseprovision.
Finalincrease:3.
6%,asGSciviliansalsoreceived3.
6%(P.
L.
105-261).
34Thebasicpaytableismadeupofvariouspaycellsforspecifiedcombinationsofpaygradeandyearsofservice.
35Maze,Rick,"DoDseekstargetedraisesofupto8.
3percent,"ArmyTimes,March20,2005.
36The2002increaseremainsthelargestacross-the-boardpercentageraisessincethatofFY1982,whichtookeffectonOctober1,1981.
Thelatterwasa14.
3%across-the-boardraise,whichfollowedan11.
7%raisethepreviousyear,FY1981,resultinginatwo-yearraiseofalmost28%.
Thiswasprincipallyinresponsetothehighinflationofthelate1970s.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService165.
WhatIsan"Adequate"LevelofMilitaryPaySincetheendofthedraftin1973,the"adequacy"ofmilitarypayhastendedtobecomeanissueforCongressifitappearsthatthemilitaryservicesarehavingtroublerecruitingenoughnewpersonnel,orkeepingsufficientcareerpersonnel,ofrequisitequality;orthestandardoflivingofcareerpersonnelisperceivedtobelessfairorequitablethanthatofdemographicallycomparablecivilians(intermsofage,education,skills,responsibilities,andsimilarcriteria).
Thefirstissueisaneconomicinevitabilityinsomeperiods.
Intheabsenceofadraft,theservicesmustcompeteinthelabormarketfornewmilitarypersonnel,and—afactoftenoverlooked—havealwayshadtocompeteinthelabormarkettoretainthemoreexperiencedindividualswhomakeupthecareerforce.
37Whenunemploymentislow,employmentopportunitiesinthecivilianworldaboundandmilitaryrecruitingismoredifficult.
Whenunemploymentishigh,militaryservicebecomesamoreattractivealternative,andmilitaryrecruitingiseasier.
From2010to2017,recruitingandretentionintheArmedForceswerequitestrong,henceweakeningthecaseforcompensationincreasesbasedoncompetitionwiththecivilianeconomyandgeneratingdiscussionofpossiblecompensationcutsand/orrestructuring.
However,thestrongrecruitingandretentionresultsinthoseyearsweredueinparttoacivilianeconomystillrecoveringfromrecessionandtoforcereductionsintheAirForce,MarineCorps,andArmy,whichgeneratedlowerrecruitingandretentiongoals.
Congressapprovedactivedutyend-strengthincreasesforallfourServicesinFY2018.
Subsequently,theArmydidnotmeetitsFY2018recruitinggoal38andseniordefenseofficialshavetestifiedthatastrongeconomyhadmadeitmorechallengingforthemtorecruitnewpersonnel.
39Ifrecruitingproblemsweretobecome37Unlikecivilianenterprises,themilitaryservicesgenerallydonotrecruitmid-orsenior-levelpersonnelfromoutsidetheexistingmilitaryworkforce.
Rather,theyrelyonpromotionsfromwithintofillthesepositions.
38TheFY2018NDAAapprovedanactivedutyend-strengthof483,500fortheArmy.
TheArmyfellshortofthisobjective,endingFY2018withastrengthof476,179(nearlythesameasitsFY2017end-strengthof476,245).
TheArmyattributesitsinabilitytomeettheend-strengthobjectiveprimarilytoashortfallinenlistedrecruits:theArmysetagoalof76,500newenlistedrecruits(alsoreferredtoasnon-priorserviceaccessions)butbroughtin69,972.
TheFY2019NDAAauthorizedanactivedutyend-strengthof487,000fortheArmy,butinitsFY2020budgetrequest(submittedinMarch2019),theArmyproposedarevisedend-strengthgoal:"GiventheFY2018endstrengthoutcomeandachallenginglabormarketformilitaryrecruiting,theArmyActiveComponenthasdecidedtopursueanewendstrengthgrowthramp.
TheArmyhasshiftedtoamoremodestendstrengthgrowthrampof2,000Soldiersperyear,withendstrengthtargetsof478,000inFY2019and480,000inFY2020.
"Despiteasimilarlychallenginglabormarket,theAirForcewasabletoincreaseitsactivedutystrengthinFY2018byabout3,000(322,787onSeptember30,2017vs.
325,880onSeptember30,2018)andtheNavyincreasedbyabout6,000(323,933onSeptember30,2017vs.
329,851onSeptember30,2018).
39Seeforexample,U.
S.
Congress,HouseCommitteeonAppropriations,SubcommitteeonDefense,ArmyFiscal2020BudgetRequest,116thCong.
,April9,2019,testimonyoftheHonorableMarkEsper,SecretaryoftheArmy("…wefaceadifficultrecruitingenvironment…you'redoingitinacountrythatisfacingoneofthelowestunemploymentratesindecadesandAmericanpopulationisincreasinglyisolatedformtheArmythatservesit.
")andU.
S.
Congress,SenateCommitteeonArmedServices,SubcommitteeonPersonnel,MilitaryPersonnelPoliciesandMilitaryFamilyReadiness,116thCong.
,1stsess.
,February27,2019,StatementofViceAdmiralRobertP.
Burke,ChiefofNavalPersonnel("Undergoodeconomicconditions,America'syouthhavemoreoptionsattheirdisposal,challengingNavy'sabilitytomeetrecruitingrequirementsaspotentialcandidatesexplorealternativeemploymentopportunities.
Thispastyear,theU.
S.
economyexperienceditsstrongestgrowthsincetherecessionof2008,resultinginsignificantexpansionofemploymentopportunityinanever-tighteninglabormarket.
")Otherfactorsthatcanaffectrecruitingandretentionincludethelevelofresourcesallocatedtorecruitingandretentionandattitudesaboutmilitarycareerprospectsandjobsatisfaction.
Formoreinformationontherecruitingandretentionissuesofthe1990s,seeCRSReportRL31297,MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService17morewidespread,increasedadvocacyforcompensationincreasescouldwelloccur.
AlloftheServicesmettheirFY2019enlistedrecruitinggoals.
40Thesecondsituationisfrequentlystatedinmoralorethicalterms.
Proponentsofthisviewpointarguethat,evenifquantitativeindexesofrecruitingandretentionappeartobesatisfactory,thecrucialcharacterofthemilitary'smissionofnationaldefense,anditsacceptanceoftheprofessionalethicthatplacesmissionaccomplishmentabovesurvival,demandscertainenhancedlevelsofcompensation.
However,thecompensationincreasesthatoccurredinthe2000shaveledmanyanalyststoconcludethatmilitarycompensationiscurrentlyquiterobustincomparisontociviliancounterparts.
6.
IsTherea"PayGap"BetweenMilitaryandCivilianPayDoMilitaryPersonnelMakeMoreorLessThanTheirCivilianCounterpartsTheissueofamilitary-civilian"paygap"raisesseveraladditionalquestions:HowcantheexistenceofagapbedeterminedandthegapbemeasuredIsthereagapand,ifso,areciviliansormilitarypersonnelbeingpaidmoreHowmuchmoreIfthereisagap,doesthatinitselfrequireactionAwiderangeofstudiesoverthepastseveraldecadeshaveattemptedtocomparemilitaryandcivilian(bothfederalcivilserviceandprivatesector)compensation.
Ingeneral,themarkedlydifferentwaysinwhichcivilianpublicandprivatesectorcompensationandbenefitsystemsarestructured,comparedtothoseoftheArmedForces,makeitdifficulttovalidateanygeneralizationsaboutwhetherthereisa"gap"betweenmilitaryandcivilianpay.
41MeasuringandConfirminga"Gap"Itisdifficulttofindacommonindexorindicatortocomparethedollarvaluesofmilitaryandciviliancompensation.
First,militarycompensationincludesnumerousseparatecomponents,whosereceivingpopulationandtaxabilityvarywidely.
Whichofthese,ifany,shouldbeincludedinamilitary-civilianpaycomparisonFurthermore,totalmilitarycompensationincludesawiderangeofnoncashbenefits—healthcare,commissaryaccess,recreationalfacilities—aswellasauniquedeferredcompensationpackage.
Fewciviliansworkinorganizationswhereanalogousbenefitsareprovided.
Attemptstofacilitateacomparisonbyassigningacashvaluetononcashbenefitsalmostalwaysfounderonthelargenumberofdebatableassumptionsthatmustbemadetogeneratesuchanestimate.
RecruitingandRetentionintheActiveComponentMilitary:AreThereProblems,byLawrenceKapp.
40However,theArmy'sFY2019goalwassubstantiallylowerthanitsFY2018goal.
Formoreinformationonenlistedrecruitingrates,seeCRSInFocusIF11147,DefensePrimer:ActiveDutyEnlistedRecruiting,byLawrenceKapp.
41Someadvocatesforfederalcivilservantsarguethatfederalcivilianpaylagsbehindprivatesectorpay,whichinturnleadssomepeopletoinferthatmilitarypaylagsbehindprivatesectorpay(giventhepastlinkagebetweencivilserviceandmilitarybasicpaypercentageincreases).
Aseparatedebate,morecommonaboutadecadeago,wasover"payparity"betweenthepercentageincreasesinmilitarybasicpayandfederalcivilservicepay.
Theissuehasbeenwhetherthecivilserviceshouldgetapercentageraiseidenticaltothatofthemilitary,orwhetherthemilitaryshouldgetahigherraisebecauseof(1)themuchgreaterdegreeofdangerandhardshipmilitaryserviceentails,comparedtomostcivilianemployment,especiallyintimeofwar,and(2)theneedtocopewithactual,orforestallpotential,militaryrecruitingandretentionproblems.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService18Second,itisalsodifficulttoestablishacomparisonbetweenmilitaryranksandpaygradesontheonehandandcivilianjobsontheother.
Therangeofknowledge,supervision,andprofessionaljudgmentrequiredofmilitarypersonnelandciviliansperformingsimilardutiesinastandardpeacetimeindustrialorofficemilieumayberoughlyequivalent.
However,whenthesamemilitarymember'sjobinthefieldandincombatisconcerned,comparisonsbecomedifficult.
Third,generallyspeaking,theconditionsofmilitaryservicearefrequentlymuchmorearduousthanthoseofcivilianemployment,eveninpeacetime,forfamiliesaswellasmilitarypersonnelthemselves.
Thisaspectofmilitaryserviceissometimescitedasarationaleformilitarycompensationbeingatahigherlevelthanitotherwisemightbe.
Ontheotherhand,themilitaryservicesmentiontravelandadventureinexoticplacesasapositivereasonforenlistmentand/oramilitarycareer,soitmaybemisleadingtoautomaticallyassumethatthisisalwaysaliability.
Thus,itcanbedifficulttomakedirectcomparisonsbetweenmilitaryandcivilianoccupations.
AsnotedbytheCongressionalBudgetOffice:42Comparingcompensationinthemilitaryandciviliansectorscanbeproblematic.
Oneobviouslimitationisthatsuchcomparisonscannoteasilyaccountfordifferentjobcharacteristics.
Manymilitaryjobsaremorehazardous,requirefrequentmoves,andarelessflexiblethancivilianjobsinthesamefield.
Membersofthearmedforcesaresubjecttomilitarydiscipline,areconsideredtobeondutyatalltimes,andareunabletoresign,changejobsatwillornegotiatepay.
Militarypersonnelalsoreceiveextensivetraining,paidforbythegovernment.
Familysupportprogramsaregenerallymoreavailableinthemilitarycomparedwithcivilianemployers.
Intangiblerewards,suchasasharedsenseofpurpose,maybehigheramongmilitarypersonnelaswell.
Quantifyingthoseelementsamongmilitaryandcivilianpersonnelisextremelydifficult.
Fourth,differingmethodologiesforcalculatingcompensationcanyielddifferentresults.
Forexample,comparingthepercentageincreaseinpayoverdifferenttimeperiodscanproducewidelyvaryingratesofincrease.
Likewise,whenindexesofcompensationincludedifferentelements(forexample,basicpayversusRMC),theresultswilltypicallydivergeaswell.
Finally,thelevelofspecificityusedinapaycomparisoncanleadtodifferingresults,especiallywhenthecomparisonisbetweenprivatesectorandfederalpay,bothcivilserviceandmilitary.
Forinstance,Armycolonelsmay,accordingtosomeindexes,bepaidroughlyasmuchasfederalcivilserviceGS-15s,orasmuchasprivatesectormanagerswithcertainresponsibilities.
However,ifthepaycomparisonsfocusonthoseoccupationalspecialtiesthatarehighlypaidintheprivatesector—healthcare,informationtechnology,andsomeotherscientificandengineeringskillsareexamples—thecomparisonmaynotbeasfavorable.
Othercommonsubcategoriesforcomparison—suchasage,gender,yearsinthelaborforce,andeducationallevels—canalsoproducedifferingresults.
EstimatesofaMilitary-CivilianPayGapVariouscomparisonsofmilitaryandciviliancompensationexistwhichillustrateagapthatfavorscivilianpaylevels,refutetheexistenceofsuchagap,orshowthatthepaygapfavorsthemilitary.
Someofthesereportslackprecisioninidentifyingwhataspectsofmilitarypaywerecomparedwithcivilianpay,whichindexeswereusedtomakethecomparison,orthelengthoftimecoveredbythecomparison.
Onemethodofestimation,whichindicatesthereisapaygapinfavorofcivilians,assertsthatroughpayparityexistedbetweencivilianandmilitarypersonnelin1982,butthatincreasessince42"EvaluatingMilitaryCompensation",CongressionalBudgetOffice,June,2007,p.
2.
MilitaryPay:KeyQuestionsandAnswersCongressionalResearchService19theninmilitarybasicpayhavegenerallynotkeptupwithincreasesincivilianpay(asmeasuredbytheECI).
43Asaresult,apaygapofabout13%in1999wasgraduallyeliminatedby2011duetoabove-ECIincreasesinbasicpay.
Itreappearedin2014withmilitarypayestimatedtobe2.
6%lowerthancivilianpayin2020.
44However,usingthesamestartingdate(1982)butconsideringRMCratherthanjustbasicpay,theCongressionalBudgetOffice(CBO)cametoamuchdifferentconclusionin2010.
Incongressionaltestimony,aCBOanalystansweredthequestion"Istherea'gap'betweencivilianandmilitarypayraisesoverthepastfewdecades,"asfollows:Theanswerdependsonhownarrowlymilitarycashpayisdefined.
Onecommonmethodofcomparisonistocalculatethecumulativedifferencebetweenincreasesinmilitaryandcivilianpayusingmilitarybasicpay,anarrowmeasureofcashcompensationthatdoesnotinclude,forexample,tax-freeallowancesforhousingandfood.
Applyingthatmethodwouldindicatethatcumulatively,civilianpayrosebyabout2percentmorethanmilitarypaybetween1982andthebeginningof2010.
Butthatmeasuredoesnotencompassthefullscopeofmilitarycashcompensation.
Usingabroadermeasurethatincludescashallowancesforhousingandfoodindicatesthatthecumulativeincreaseinmilitarycompensationhasexceededthecumulativeincreaseinprivate-sectorwagesandsalariesby11percentsince1982.
Thatcomparisonexcludesthevalueofnoncashanddeferredbenefits,whichwouldprobablyaddtothecumulativedifference,becausebenefitssuchasmilitaryhealthcarehaveexpandedmorerapidlythancorrespondingbenefitsintheprivatesector.
45Anotherapproachtoestimatingapaygapattemptstocompareactualcompensationlevelsofmilitarypersonneltocivilianswithsimilareducationandexperience,ratherthancomparingratesofcompensationincreaseovertime.
Forexample,the9thQuadrennialReviewofMilitaryCompensation(QRMC),publishedin2002,comparedtheRMCofjuniorenlistedpersonneltotheearningsofcivilianhighschoolgraduates,middlegradeNCOswithcivilianswithsomecollegeeducation,andseniorenlistedpersonnelwithcivilianswhoarecollegegraduates.
ItcomparedtheRMCofofficerstotheearningsofcivilianswithbachelorsoradvanceddegreesinprofessionalormanagerialoccupations.
Basedonaseparatebodyofresearch,itarguedthat"payataroundthe70thpercentileofcomparablyeducatedcivilianshasbeennecessarytoenablethemilitarytorecruitandretainthequantityandqualityofpersonnelitrequires"46andpointedoutthosegroupsofmilitarypersonnelthatfellshortofthiscompensationgoal.
Congressapprovedseveralroundsofpaytablereformtoaddresssituationswhereservicemembersfellbelowthe70%mark.
Additionally,generalincreasesinbasicpayhigherthantherateofincreaseintheECI(2000-2010)andtheeliminationof"out-of-pocket"housingexpensesby2005pushed43See,forexample,MilitaryOfficersAssociationofAmerica(MOAA),"MilitaryPayComparability,"http://takeaction.
moaa.
org/military_pay44MOAAestimatedthepaygapusingthismethodologytobe2.
6%in2018.
See"MOAA's2019KeyGoals:KeepPacewithPrivate-SectorPay,"MilitaryOfficer'sAssociation,December20,2018,https://www.
moaa.
org/content/publications-and-media/news-articles/2018-news-articles/advocacy/MOAA-s-2019-Key-Goals--Keep-Pace-with-Private-Sector-Pay/.
In2019and2020,theincreaseinbasicpaymatchedtheincreaseinECI,thusleavingthisestimateunchanged.
45StatementofCarlaTigheMurray,SeniorAnalystforMilitaryCompensationandHealthCare,beforetheSubcommitteeonPersonnelCommitteeonArmedServices,U.
S.
Senate,"EvaluatingMilitaryCompensation,"April28,2010,p.
2,http://www.
cbo.
gov/sites/default/files/04-28-MilitaryPay.
pdf.
46DepartmentofDefense,9thQuadrennialReviewofMilitaryCompensation,March2002,p.
xxiii,http://militarypay.
defense.
gov/Portals/3/Documents/Reports/9th_QRMC_Report_Volumes_I_-_V.
pdf.