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Tom Philpott: Pentagon expected to launch pay review

By: Tom Philpott
May 13, 2017 Updated: May 15, 2017 at 10:41 am
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By year's end, the Department of Defense expects to launch its 13th Quadrennial Review of Military Compensation, which will assess the pros and cons of converting service members from traditional basic pay and tax-free allowances to a single, civilian-like salary system.

That's a slower pace of study than Congress wanted last December when it ordered the department to prepare a plan to begin to transition to a salary system no later than Jan. 1, 2018, and in the interim to provide "an initial assessment and progress report" on the effort by March 1 this year.

The understaffed department delivered that initial report April 17, as a two-page letter to Sen. John McCain and Rep. Mac Thornberry, chairmen of the Senate and House armed services committees. The letter advised that assessing the ramifications of moving to military salaries is an enormous task, and "necessarily and most appropriately" performed by the next pay review.

The department takes "very seriously" that order from Congress, wrote senior defense executive A. M. Kurta. However, he explained, transitioning to a salary system "would be a change of historic proportions" requiring "significant additional study [of] second and third order effects, the potential risk to readiness, if any, and the effects on DoD's ability to recruit and retain" a volunteer force.

By law, the president every four years must direct a review of the principles and concepts of military compensation. Lawmakers agreed that the work of the Military Compensation and Retirement Modernization Commission in 2015-16, which resulted in enactments of a new Blended Retirement System to take effect in 2018, satisfied the legal requirement for conducting the pay review.

The next pay review will be chartered by President Trump, perhaps in the next several months, said Jeri Busch, the department's director of military compensation policy, in an interview Wednesday. A draft charter is being prepared. A director and staff could be named and begin its review by December.

"For something like this," she said, "the work might take two years or more."

Meanwhile, the Trump administration soon will unveil its first defense budget request, for fiscal 2018. Busch said she couldn't discuss what the pay raise request will be for Jan. 1, 2018, until the budget is unveiled. A 2018 raise to match private sector wage growth would be 2.4 percent.

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