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Experts to Troops: Don't Sweat Report on Scrapping Allowances, For Now

(Photo: U.S. Air Force/Tech. Sgt. Christopher A. Campbell.)

A pair of congressionally mandated reports on dramatically changing the military's pay structure have some troops worried about compensation. But military policy experts say service members and their families don't need to worry just yet.

Buried in the 2017 National Defense Authorization Act, which sets policy and spending goals for the fiscal year that began Oct. 1, is language requiring the Pentagon to study the transition to a new salary-based pay structure that would do away with Basic Allowance for Housing and Basic Allowance for Subsistence. The new compensation would focus on salary "compatibility" with the civilian sector, but must cost the Pentagon no more than the current system, the law states.

The two reports -- one on transitioning to the news system and the other on how the system would work -- were due to Congress by March 1 and by January. But it's common for such documents to be delayed, and the initial report hasn't been submitted yet, Pentagon officials confirmed.

The language caught some troops off guard and spurred them to take action.

Air Force Capt. Chris James said he was alerted to the issue by his chain of command and that he has since contacted his congressional representatives to express his concern over what they suggest.

James said the proposed pay structure would lead to significant disparities between service members depending on their home of records and duty stations because the new salary system would eliminate the income-tax exempt allowances and instead roll them into a taxable salary payment, he said.

"This will cause enormous inequities amongst active duty members who are subject to the state tax withholdings that reflect their home of record," he said in an email to Military.com. "In general, this change will cost all active duty members tens of thousands of dollars in take home pay over the course of a career, making it that much harder to provide for their families."

Even so, military pay experts said troops and advocates should hold off for now on raising the alarm over the measure. The change suggested by the report isn't a serious pay threat -- yet, they said.

"We're not going to man the ramparts yet," said Mike Barron, a director for policy and advocacy at the Military Officers Association of America, an advocacy organization based in Alexandria, Virginia. "And we're not going to make a lot of noise because we've not seen a report."

Barron said his calm over the potential change is based in part in how the language made it into the bill to start with. Section 604, where the orders are located, had previously contained a measure to drastically change the amount of BAH permitted to dual military couples and single service members sharing housing with other troops. When that proposal was removed, the report order was inserted instead as a concession, he said.

When the reports are submitted, he said, advocates will move forward from there. If an actual proposal to change the pay structure to a salary system comes on the table, he said, MOAA will lobby against it.

"Congress asks DoD to do reports all the time," he said. "This is wait-and-see what they come out with. Even if they come out with a report it's a long way to changing the law and the entire system."

Although James said that while background information on why the reports were ordered is important, the fact that they were asked for at all is still concerning.

"Yeah, a report is just a report -- until they want to make it actionable," he said.

-- Amy Bushatz can be reached at amy.bushatz@military.com. Follow her on Twitter at @amybushatz.

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Amy Bushatz Headlines Military Pay Congress

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