*Legislative Update 17 June 2016: Cola Climbs out of the Hole

We have 1 Action Item today at Issue 3 below

Summary of Issues

At Issue 1. we see DEFENSE BILL PASSES SENATE, FACES VETO THREAT White House has many objections to the defense bill. Despite a veto threat, Congress moves forward. See Issue 1 below for the details. GF)


At Issue 2. we see COLA CLIMBS OUT OF THE HOLE  (See Issue 2 below for the details. GF)

At Issue 3. we see WHY WHACK MILITARY HOUSING ALLOWANCES?. Servicemembers living together could see very significant cuts. In his June As I See It column, MOAA Director of Government Relations Col. Steve Strobridge, USAF (Ret), explains how the Senate’s controversial housing allowance plan could cost many servicemembers thousands of dollars a year. (See Issue 3 below for the details and send a message to our Legislators. GF)

At Issue 4. we see THE FUTURE OF SOCIAL SECURITY Chained-CPI COLA cut rears its head again. Commission proposes 50 recommendations to curb social security spending. (See Issue 4 below for the details. GF)

Collectively We Can and Are Making a Difference


FOR ALL, Please feel free to pass these Weekly Legislative Updates on to your group of Veteran Friends –

don’t be concerned with possible duplications – if your friends are as concerned as we are with Veteran issues, they probably won’t mind getting this from two or more friendly sources




June 17, 2016

The Senate passed the FY17 Defense Authorization Bill (S. 2943) on Tuesday after hundreds of amendments fell victim to a Senate rule that lets one senator hold up all amendment action.

When Sen. Mike Lee (R-Utah) found his amendment (to prevent unlimited detention of US citizens with links to terrorism suspects) blocked, he raised objections to every other amendment, effectively stymying any further amendment action. That killed the chances for MOAA-supported amendments to upgrade force levels and the 2017 pay raise, delete proposed housing allowance cuts, expand concurrent receipt eligibility and more.

Armed Services Committee Chair Sen. John McCain (R-Ariz.) fumed on the Senate floor that one senator could kill much-needed amendments – including some he said were literally a matter of life and death – and called it a “shameful chapter” in Senate history.

Compounding the defense bill’s rocky road to enactment, the White House issued a statement last week citing a litany of objections it has to the Senate-passed bill, including provisions on pay and benefits.

TFL fees. In calling for changes to TRICARE, the statement said, “The Administration is disappointed that the legislation does not include a modest enrollment fee for TRICARE for Life.” In its budget request earlier in the year, the administration wanted to impose a fee up to 2 percent of retired pay for TFL beneficiaries.

Housing Allowances. The administration also objected to controversial changes to the basic allowance for housing (BAH) system, saying the changes would “return the allowance to its distorted state from the mid-1990s, and reinstitute a burdensome and inefficient administrative-authorization process.” The administration rightly noted changes to the structure of BAH “would disproportionately affect female service members and those military families in which both military members have chosen to serve their country.” (See MOAA’s views on this topic in this month’s “ As I See It” column.)

Military Health System Reform. The statement objected to plans in both the House and Senate bills that would place responsibility for military health care under the Defense Health Agency rather than leaving the services to manage their separate systems.

Commissary Privatization. The administration took issue with a proposal by the Senate Armed Services Committee to conduct a test of privatizing commissaries at up to five locations. That provision has since been dropped from the bill.

This is the eighth time the administration has threatened to veto the annual defense bill. But President Obama actually followed through on the threat only once.


So what comes next? Senate lawmakers now must work with their House counterparts to iron out hundreds of differences in their respective bills, including dramatically different provisions on TRICARE fee changes and housing allowance rates.

The timeline for completion of that considerable task could be anywhere from the end of July to the end of October…or later.



June 17, 2016

The May CPI is 234.444, and .1 percent above the FY 2014 COLA baseline. Because there was not a positive COLA in FY 2015, the FY 2014 baseline is used.

The CPI for June 2016 is scheduled to be released on July 15, 2016.

Note: Military retiree COLA is calculated based on the CPI for Urban Wage Earners and Clerical Workers (CPI-W), not the overall CPI. Monthly changes in the index may differ from national figures reported elsewhere.


Related content: Retired Pay vs Active Duty Pay Adjustments

(Click on Retired Pay vs Active Duty Pay Adjustments here or above to see the detailsGF)


June 17, 2016

One of the most underreported but most significant changes in the Senate-passed version of the FY 2017 Defense Authorization Act (S. 2943) is the proposal to reform military housing allowances.

In justifying the proposal, Senate Armed Services Committee leaders called the current basic allowance for housing (BAH) system “bloated and ripe for abuse.”

This took MOAA by surprise, as the BAH system is the result of years of review, and the recent Military Compensation and Retirement Modernization Commission recommended keeping it as is.

It seems the committee’s perspective on abuse focuses on situations where multiple servicemembers share housing costs, including married dual-military couples and other cohabitation or roommate arrangements.

The committee’s view is the BAH amount shouldn’t exceed the amount each individual servicemember actually spends on housing (mainly rent and utilities), and sharing housing while drawing the full BAH is abusing the system.

The committee’s solution is to require dividing each servicemember’s BAH rate by the number of servicemembers occupying the housing. For a married couple, both allowances would be halved. For four roommates of different grades, each would receive one-fourth of the grade-applicable BAH rate.

MOAA doesn’t agree with defining cohabitation as allowance abuse, and neither does DoD.

DoD’s March 2016 report to Congress on this topic reiterated the long-held Pentagon stance that BAH is an essential element of Regular Military Compensation (RMC), which is the military equivalent of a civilian salary.

“While some service members qualify for bonuses and special programs and some don’t, members’ RMC is standardized based on pay grade, length of service, and dependency status,” the report stated. “The Department believes it would be inappropriate to limit a member’s compensation by tying that compensation to actual expenses incurred for members stationed in the United States.”

When locality-based housing allowances first began in the 1980s, servicemembers did have to provide proof of their housing costs, and allowances were adjusted accordingly.

But DoD stopped that practice, in part because of the paperwork nightmare and in part because the reported costs couldn’t be independently validated but mostly in recognition of the above-stated belief it’s the servicemember’s business how he or she spends the allowance set for that location.

The Senate proposal to change that raises a number of important issues and would cut some servicemembers’ compensation so dramatically as to make all other pay changes pale in comparison.

For two majors married to each other stationed at Fort Bliss, Texas, the proposal would cut the couple’s combined housing allowance by more than $17,000 a year. If they have one or more children, the loss would increase to almost $19,000. For higher-cost locations, the loss would be proportionally greater.

As Maj. (and MOAA member) Jessica Grassetti, USA, wrote us, “The insinuation that [she and her military spouse] are somehow a ‘two for one’ deal for the nation and that this should allow the government to discount our individually earned compensation is ridiculous. The proposed legislation’s message is, in effect, that my service is worth less than my unmarried counterpart’s of the same rank, simply because I happen to be married to another servicemember.”

If the servicemembers are of different grades, a new issue arises. An E-8 married to an E-5 with one child at Fort Bliss would lose a combined $15,000 a year. Further, their combined monthly BAH under this system would be $2,400 a year less than the rate payable to an E-8 with a civilian spouse.

The system would particularly penalize junior servicemembers who often room together to save money. Do we really want to penalize efforts to become more financially independent?

Let’s keep in mind, Congress just changed the military retirement system for new service entrants in a way that will depend far more on servicemembers’ own savings. Young troops don’t make that much, and one way they can save for retirement is to share housing.

The combination of the new retirement system and the Senate-proposed BAH system would require young troops to save more — and then penalize them for trying to do that.

Now let’s consider homeowners. The BAH system is based on locality rental costs and doesn’t account for homeownership. But homeowners still would have to report their actual housing costs.

Servicemembers who made large down payments or who kept a home from a previous assignment at the same locality would be penalized for having lower mortgage payments.

If a senior servicemember has managed to pay off a 15-year mortgage on a home, the new plan apparently would cut his or her BAH to a utilities-only amount. Is paying off a home really the kind of behavior we want to discourage? MOAA thinks not. And neither do DoD and service leaders.

It’s bad enough DoD and Congress already are three years into a five-year plan to cut all BAH rates by 5 percent, on top of a fourth consecutive year of capping the military pay raise below private-sector pay growth.

Adding a new proposal that would penalize large numbers of servicemembers an additional $10,000 a year or more is going several steps too far.

If you agree, please send your legislators a MOAA-suggested message  urging them to drop the Senate BAH reform proposal from the final FY 2017 Defense Authorization Act.


(Click on MOAA-suggested message here  or above, or go to the “Here is the Process” section at the end of this Email to send messages to our Legislators. GF



June 17, 2016

On June 9, the Bipartisan Policy Center (BPC), a Washington think tank, released the recommendations of its chartered Commission on Retirement and Personal Savings, which examined whether Americans are meeting the financial retirement goals.

Former Sen. Kent Conrad (D-ND), a member of the 2010 Bowles-Simpson Commission that proposed a variety of dramatic cuts, and Mr. James Lockhart III, a former Director of the Federal Housing Agency, co-chaired the commission composed of 17 former public officials and experts in savings and retirement policy.

The commission was tasked to make recommendations on how to increase national savings, improve income security during retirement (including Social Security reforms), and guard against the potential costs of long-term care and the loss of income due to disability.

Fifty recommendations came out of the commission, including regulations harmonizing early-withdrawal rules for IRAs and 401(k)-type plans, ending subsidies that encourage the use of home equity for pre-retirement consumption, increasing the Social Security retirement age to reflect increases in life expectancy, and increasing the amount of income subject to Social Security taxes.

The commission also recommended linking Social Security cost of living adjustments to the chained Consumer Price Index (CPI) beginning in 2017.Many of the proposals make sense, but MOAA and virtually all other associations representing retirees have long opposed the chained CPI, which would depress annual COLAs to retired pay, Social Security, VA disability compensation, and other federal annuities by about 0.3 percent per year – which would compound to impose significant payment cuts over time.

Click here to see the commission’s full public report.


(Click on Click here here or above to see the report. GF

Here is the Process I recommend that you review all of the steps below and then you might want to copy this process by high lighting all of the steps below.  Then click on “File” at the top of your screen, select “Print“, then click on “Selection” at the next display and then hit “Print“; or print the selected portion as you usually do this kind of task.


  1. Click here onhttp://www.capwiz.com/moaa/issues/ or copy and paste it in your browser to put you at the  “Legislative Action Center” screen.
  2. Scroll downunder “Current Action Alerts” and below Congress click onPrevent Steep Cuts in Military Housing Allowances
  3. 3.If applicable, at the next screen scroll down to the TAKE ACTION NOW! lineand enter or confirm your Zip code and /or hit “Go!”
  4. 4. Orat that next screen under“COMPOSE MESSAGE” leave the “Message Recipients Delivery Method” as “Email” at your discretion, and then scroll down to “Issue Area” and select an appropriate issue; e.g. ‘Veteran affairs’
  5. Scroll down to the  “Editable text” areaand edit/modify the text of the message if desired,
  6. Insert “Your Closing” (I show ‘Respectfully), and “Your Name” and fill in the rest of the mandatory {asterisked} SENDER INFORMATION.
  7. Fill in the “Guest Type“, “Service“, “Rank“, “Component“, and “Status” if you want that information to show in your message (recommended).  You may be prompted to include a phone numberif you try to send the message without entering your phone number. Don’t be concerned about entering a phone number. I haven’t  received return calls except on rare occasions to thank me for my interest in a particular piece of Legislation, at which time you can comment (pro or con) to the staff member on how the Senator stands on the issue.
  8. Check “Remember Me” (recommended) if you don’t want to have to re-enter all of your Sender Information the next time you send a message. You can always change your information or uncheck ‘Remember Me’ anytime in the future.
  9. Hit “Send Message”
  10. If Printed Letter was selected at Step 4 above, at the screen after hitting “Send Message” leave “Plain Paper Style” and “Word Processor (RTF)” checked unless you have another preference. Then left click on “Print Letter(s)” at the end of the “PRINT LETTER” screen. At the File Download” alert that appears next, click on “Open”. You can then edit and print or save the letter for editing, printing, signing and mailing.



That’s it for today- Thanks for your continuing help!