Administration should be serious about cutting military costs

The Obama administration has come out against the Senate Armed Services Committee’s cost saving changes to the Basic Allowance for Housing (BAH) that would allow military couples who live together off-base to use the housing allowance of the spouse with a higher pay-grade or military rank at future assignments.

The White House opposition to the proposed changes in the Senate bill demonstrates that the administration is not serious about thwarting the escalating costs of military compensation and benefits. Furthermore, by antagonizing Congress in its attempts to rein in costs, the president jeopardizes his own proposals to reduce the ballooning personnel costs that are already squeezing out much needed funding for training and equipment.

{mosads}According to the administration, the proposed changes to the BAH would impose a “marriage penalty” on the 40,000 military couples and have a disproportionate impact on women servicemembers.

This line of thinking of the White House is misguided and the administration has not explained how the proposed changes would affect women disproportionately. If anything, the current legislation puts single servicemembers, men and women, at a disadvantage compared to married couples. Using the Obama administration’s logic, married couples should be entitled to two on-base houses. Moreover, since the BAH is tax-free, the tax-free money can also be used to make a tax-deductible mortgage payment.  This doubling of tax-exempt benefits would normally be illegal, but the Congress has given military personnel an exception.

In an example given by Andrew Tilghman in the Military Times, a married Navy couple living in Maryland receives a total of $3300 a month in BAH and makes a $1900 monthly mortgage payment. Assuming that $1500 of that payment is tax-deductible interest, the couple receives a tax break of $18,000, worth about $4000 to them.  Even people who do not buy a home would not be hurt by the change.  For example, an E-6 and E-5 couple with a child living off base in San Diego currently receive $4326 in housing allowances.  Under the Senate bill, that will drop to $2430 per month – still $400 more than the average San Diego rent.

Is the proposal of the Senate Armed Services Committee unfair to some? Sure, but in reality, the whole military compensation system is unfair, because it gives more benefits to married people than to those that are unmarried. Let me give a couple of examples from my own experience. When I was on active duty with VP-1, I was the only officer in my crew who was not married. Therefore, I lived in the bachelor officers’ quarters in a room without any bathroom, while my fellow crew members had nice three bedroom family housing with at least two bathrooms. Similarly when I was transferred to CTF-72, an afloat staff homeported in Okinawa, I shared a room with another officer.  But when we came back to Okinawa, most of my fellow officers, who were married, went home to their government-furnished housing while I had to go back to the ship. 

Similarly, since I took my meals on the ship or at the bachelor officers’ quarters, I never made use of the savings at the commissary. But none of the people I served with ever complained about a “singles penalty” and did not begrudge the extra benefits our married colleagues received. Yet, the change in BAH has already made the military lobby unhappy, no changes will please them. According to these groups, pay and benefits can only go up and any attempt to change them is harmful and troubling and breaks faith with the troops, but this was not the case for me and my fellow servicemembers.

The proposed changes to the BAH will not harm servicemen and women or break faith with the troops. The changes will, however, provide much needed relief to the defense budget. Over the last decade, personnel costs have doubled and the Joint Chiefs of Staff project that in ten years these expenses will take over 80 percent of the defense budget. Given the current budget cap, spending on military preparedness and weapons will suffer putting national security at risk. The White House and military lobby’s position is unsubstantiated and only undercuts efforts to mitigate rising costs.

Over the past five years, the Obama administration has proposed several small changes to military compensation that the Congress has refused to enact into law. The president’s opposition to the proposed changes, which will save at least $500 million a year, is counter to his own attempts to rein in costs, and therefore, Obama and Secretary Carter ought to embrace this Congressionally-advanced change with open arms, and use it as a first step to begin returning military pay and benefits to their appropriate level.

Korb is a senior fellow at the Center for American Progress and a senior adviser to the Center for Defense Information.