2016 Military Pay Raise

While we won’t know which way Congress is going to go with the 2016 military pay raise until Congress returns next month, indications are that it will be a 1.3 percent raise.  We hope those indications are wrong.

By law, military pay raises are intended to keep up with the economy by paralleling the growth in private sector wages (as measured by an index called the Employment Cost Index (ECI).  Interestingly, the measurement that points toward what the 2016 military pay raise should be was taken in October of 2014.  Yes, about 15 months before the actual pay raise itself.  When that measurement was taken, the ECI for September 2014 was compared to the ECI for 2013.  The difference was 2.3 percent.  If the law is followed, that should be the military pay raise this upcoming January.

However, in his FY 2016 Budget Plan, as he has done for the past two years, President Obama called for a pay raise lower than called for in law, in this case 1.3 percent.  Simply put, his budget plan is non-binding, and his preference for a military pay raise that does not keep up with the economy is meaningless unless Congress allows that to happen.  Unfortunately, Congress is divided on the issue.

In its version of the FY 2016 National Defense Authorization Act (NDAA), the Senate has gone along with the President’s request, calling for a 1.3 percent raise.  The House, however, was silent on the issue and didn’t address it in its version of the NDAA.  Because the military pay raise is “different” between the two versions of the defense bill, when the House and Senate meet in conference to iron out their differences, the pay raise will be on the table.  Unfortunately, the Senate will go into that conference with the stronger position, so it doesn’t look good for the 2.3 percent pay raise.  Again, we hope the matter is resolved in favor of military members.

Also, while the White House and the Senate refers to this reduced military pay raise as “modest,” it is anything but that.  Keep in mind that every pay raise thereafter will compound that difference, and future military pay will be accordingly lower.  In the future, for those serving a full career, any military pay raise reduction along the way will lead to considerably less pay during military retirement.  That is why AFSA fights so hard to protect every tenth of a percentage that should be included in each military pay raise.