September 5, 2014

On August 29, President Obama sent a letter notifying Congress that he is using his authority under law to cap the active duty military pay raise at 1 percent in 2015.  

Typically the active duty pay raise is determined by private sector wage growth, measured by the Bureau of Labor Statistics’ Employment Cost Index (ECI). The ECI calls for a 1.8 percent pay raise in 2015.  

However, the President has executive authority to make an alternative pay adjustment if he considers it necessary due to national emergency or economic concerns.   

This is the second consecutive year the President used his authority to implement a lower pay raise.  

From 2000 to 2012, Congress worked hard to eliminate a 13.5 percent military pay gap with the private sector caused by repeatedly capping military raises in the 1980s and ‘90s.   

But the restoration of military pay comparability with the private sector is under threat. Pay has been capped for two years, and the administration’s FY 2015 budget proposes to continue caps for a total of six years.  

Earlier this year, the House rejected the administration’s pay cap and authorized a 1.8 percent raise in its version of the FY 2015 defense authorization bill and appropriated funding to pay for it. The Senate Armed Services Committee supported the administration’s 1.0 percent cap.  

To reverse the President’s decision to cap pay in 2015, Congress would need to override the President’s authority to alter the pay raise from the ECI.  

MOAA President Vice Adm. Norb Ryan, USN (Ret) responded to the President’s announcement, saying “Pay raises for the military, just like those of average Americans, are important for retention. It’s a fundamental principle of sustaining the all-volunteer force… History has shown that once Congress starts accepting proposals to cap military pay below private sector growth, those caps continue until retention and readiness are compromised.”  

Comparability can’t work unless it’s sustained through both good and bad budget times.