The 2018 Defense Budget has been approved by the Senate and sent to President Trump for approval. The NDAA quickly passed approval in both houses after the House and Senate Armed Services committees came to agreement on a budget. The defense budget authorizes just under $700 billion in defense spending and a 2.4% increase in military pay.
The president is expected to sign the $700 billion plan but there is still one hurdle left. The $700 billion plan exceeds the budget cap of $549 billion as established Budget and Control Act (BCA) of 2011. House and Senate will be need to amend this Act in order to remove this cap and fund the NDAA.
House & Senate Version of NDAA;
- 2.4% pay increase for military members. In line with private sector wage growth
- BAH for dual military couples unchanged. The senate proposed changing married servicememebers BAH payments to the “without dependents” rate
- 20,300 more troops (16,600 active duty, 1,400 National Guard, 2,300 Reserves).
- The committee passed on the creation of a Space Corps, a new arm of the Air Force
- President Trump signs NDAA into law. The 2017 version was signed into law on Dec. 23, 2016.
- Congress must resolve how to fund the plan since it is over budget cap.
Until then anything can change with the NDAA as it is negotiated.
Original Proposed NDAA Details:
According to the U.S. Department of Defense (DoD), the President had requested $639.1 billion, $574.5 billion “in the base budget” and $64.6 billion “in the Overseas Contingency Operations (OCO) budget.”
Pay Raises, Manning Levels
- 2.1% pay increase for military members. This is less than the 2.4% under the formula in current law
- 1.9% pay raise for civilian employees
- 2.9% average increase in Basic Allowance for Housing Rates with 96% coverage of housing costs
- 3.4% increase in Basic Allowance for Subsistence
- Sustainment of FY 2017 National Defense Authorization Act increased manning levels
- Modification of the military’s retirement system, “to allow enlisted members beyond 26 years to receive government contributions under the Thrift Savings Plan” according to
Housing Allowances, Healthcare, Retirement
Under the section “Military Compensation Proposals-Going Forward”, there is no individual dollar-for-dollar comparison of 2017/2018 BAH, BAS, hazardous duty pay, or other compensation. However, specific mentions of TRICARE and military retirement plans included the following:
- Streamlining of the current TRICARE system, with a proposed Military Treatment Facility “in-network” and “out-of-network” cost sharing
- “Modestly higher” deductibles and co-pays
- Increased pharmacy co-pays and fees for working-age retirees and families
- “Proposed legislative changes” that would permit enlisted members serving more than 26 years to continue receiving Thrift Savings Plan matching contributions
- Slight decrease in child care funding
A New Military Retirement System
The 2018 Defense Budget request includes a proposal for new “blended military retirement” which includes “a defined retirement pay system” that employs a 2.0% multiplier rather than 2.5%. The new retirement plan would also include a 1% government contribution to military Thrift Savings Plan (TSP) accounts, and matching government contributions to military TSP that are identical to the system used by civilian federal employees. There is also a proposed bonus paid to military members between year eight and year 12 of military service.
The new blended military retirement system would affect those who join the military after 1 January 2018, and currently serving military members who have less than 12 years of military service and choose to opt-in to the new plan.
Base Realignment And Closure
According to the 2018 Defense Budget Request Overview book published by Defense.gov, the Defense Department has approximately “20 percent more infrastructure capacity than required for its operations” and a request for a new Base Realignment and Closure round is part of the 2018 request.
At the time of this writing, that round is requested for the year 2021, but as BRAC has potentially major effects on assignments, family housing, and related issues, this is a topic to watch.
Defense Budget Approximate Approval Timeline:
Next Steps – Presidential approval; Congress must resolve how to fund the plan since it is over budget cap.
November 16, 2017 – Both houses pass the NDAA and send to President Trump for Approval.
November 14, 2017 – US House and Senate committee come to agreement on 2018 NDAA.
May 23, 2017 – DoD Releases Fiscal Year 2018 Budget Proposal
Summer 2017 – Congressional committees submit “views and estimates” of spending and revenues.
Summer/Fall 2017 – House & Senate Armed Appropriations Committees work on the FY2017 defense bill.
Summer/Fall 2017 – House of Representatives and Senate pass their versions of the defense bill and negotiat differences.
November/December 2017 – The House of Representatives and Senate pass the final version of the defense bill.
December 2017 – President Trump signs the defense bill into law.
If the budget is enacted the changes would go into effect on January 1, 2018.