Budget Deal Includes 1% Troop Pay Raise, More Funding for Weapons

U.S. lawmakers late Tuesday unveiled a $1 trillion federal budget deal that includes a smaller pay raise and housing allowance for troops, but more funding for commissaries and weapons.

The massive spending bill, called the Omnibus Appropriations Act, would avert a government shutdown this week and fund most federal agencies for the rest of the year.

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The legislation adopts some of the provisions affecting troops and their families detailed last week as part of a compromise version of the defense policy bill, known as the National Defense Authorization Act, including a 1 percent military pay raise and 1 percent housing allowance reduction.

But it also includes additional funding for commissaries, as well as such weapons systems as the F-35 Joint Strike Fighter jet, A-10 Warthog attack plane, EA-18G Growler electronic surveillance aircraft, the M1 Abrams tank, the Littoral Combat Ship, and even Israel's Iron Dome missile defense system.

"This agreement means no government shutdown and no government on autopilot," Sen. Barbara Mikulski, a Democrat from Maryland and chairwoman of the Senate Appropriations Committee, said in a statement.

"The bill will fund important Department of Defense programs and projects, a pay raise for our troops, and the advancement of our military operations to protect the nation from current and future threats," states a release from the House Appropriations Committee, headed by Rep. Hal Rogers, a Republican from Kentucky.

The Republican-led House of Representatives and the Democrat-led Senate are pushing to vote on the measure by late Thursday, when the continuing resolution funding most federal agencies expires. The only department exempted from the agreement is Homeland Security, which includes the Coast Guard, reportedly over disagreement with the White House's immigration policy.

The bill provides $554 billion for the Defense Department, including a base budget of $490 billion and a war budget – funding for so-called overseas contingency operations (OCO) – of $64 billion to support military operations in Afghanistan, Iraq and Syria.

The base budget is $3.3 billion, or less than 1 percent, more than the 2014 level. It's in line with the Obama administration's request, as well as spending caps that Congress and the White House agreed to last year. Meanwhile, the war budget is $21.2 billion, or 25 percent, less than the previous year's amount, primarily due to the drawdown of forces in Afghanistan.

The U.S. plans to delay the withdrawal of about 1,000 troops from Afghanistan in 2015. The drawdown scheduled now calls for 10,800 service members to stay in the country next year, up from a previous figure of 9,800. The number of troops is set to drop to 5,500 in 2016 and to a small contingent to maintain an embassy presence in 2017.

President Obama authorized the deployment of as many as 2,900 troops to Iraq to support forces battling militants affiliated with the Islamic State in Iraq and Syria, or ISIS. Congress agreed with the White House's request for an additional $5 billion for the campaign against the al-Qaeda-inspired group, including $3.4 billion to continue U.S.-led air strikes in both Iraq and Syria and $1.6 billion to train and equip Iraqi forces.

The compromise version of the 2015 defense authorization bill – which Congress is also expected to vote on this week – included a 1 percent military pay raise, 1 percent basic allowance for housing (BAH) reduction, and changes to pharmacy fees and policies in the military's TRICARE health care system.

By law, troop pay raises are supposed to keep pace with private-sector wage growth, measured at 1.8 percent in 2015. The compromise legislation omitted this provision, allowing the president to exercise his executive authority and set it at 1 percent.

But lawmakers disagreed with the Pentagon's request to reduce basic allowances for housing, or BAH, by an average of 5 percent over three years and instead approved a smaller reduction of 1 percent, with no planned decrease to the allowance in future years.

Appropriators also rejected plans to cut commissary funding. They added $190 million to the Pentagon's request of $1.1 billion, for a total of $1.3 billion for the Defense Commissary Agency, or DeCA, "to maintain operations at commissaries, pending the commission on compensation report due next year," according to a summary released by the Senate Appropriations Committee.

It wasn't immediately clear whether the lawmakers joined with their counterparts on the armed services panels in agreeing to a $3 increase in co-pays for prescriptions filled at off-phase pharmacies. The amount, which translates to a monthly rate of $8 for generic prescriptions, is less than what the Pentagon proposed, which troop advocates said would have doubled or tripled rates over a decade.

Mike Hayden, director of government relations for the Military Officers Association of America, based in Alexandria, Virginia, said there appears to be congressional support for the Tricare pharmacy changes, including a Pentagon proposal to require military family members and retirees beginning Oct. 1 to refill maintenance medications at base pharmacies or by mail rather than retail outlets.

"It is a better deal for them, it just takes some choice away," he said in a telephone interview. "We haven't seen how well the program works."

Meanwhile, the spending package includes more money for some of the Pentagon's biggest weapons systems.

Appropriators included funding for four more F-35 fighter jets than the Pentagon requested, for a total of 38 of the fifth-generation stealth aircraft; three Littoral Combat Ships, even though the House wanted to decrease the number to two; 15 EA-18G Growlers (the Navy didn't ask for any, but included 22 of the aircraft on its so-called unfunded priorities list); M1 Abrams tank upgrades, even though the Army says it has enough tanks; and the A-10 Warthog, even after the Air Force pushed to retire the aircraft.

Lawmakers also included $273 million for Israeli missile-defense programs. That includes an additional $175 million for the so-called Iron Dome system, which was used extensively this summer to intercept rockets fired from Palestinian fighters in Gaza. The funding brings the total U.S. investment in the system to $1.2 billion since 2011.

But the latest round of funding comes with strings attached.  The agreement would withhold the added Iron Dome money until the Israel Missile Defense Organization provides additional documentation to the Pentagon's Missile Defense Agency, including "a report … documenting full and complete delivery by Israeli industry and acceptance by U.S. industry suppliers of all technical data packages required for U.S. co-production of Iron Dome components," according to the text of the legislation.

-- Brendan McGarry can be reached at brendan.mcgarry@military.com