Increase in Military Housing Stipend Pushed in Congress as Inflation Continues to Rise

Amid the rising inflation rates, house lawmakers are pushing for a 4.6% pay raise for service members for the 2023 defense authorization bill. This will be the most significant pay raise the military personnel will get in the past 20 years.

4.6% Pay Increase Proposal

Members of the House Appropriations Committee included the pay increase in its initial draft of the defense budget proposal for fiscal 2023, siding with the Biden administration’s proposal back in March.

In 2022, the average pay increase for federal employees will be 2.7%. The 2023 proposal almost doubled that figure and was a much more significant increase than the 1% pay increase in fiscal 2021. The White House Wrote,

These efforts will help agencies retain qualified employees, empower workers to make their agencies better, create a pipeline of qualified leaders, and provide better services to the public. The budget supports these objectives by ensuring that all those in federal jobs earn at least $15 per hour and providing a pay increase of 4.6% for civilian and military personnel.

The increase is part of next year’s $802.4 billion defense spending plan.

Keeping Up With the Inflation

While this is good news, this has not taken into account the rapid inflation spikes yet, which result in higher prices for groceries, imported goods, and especially gas. The Congressional Budget Office predicted that high inflation will continue, expecting the consumer price index to “rise 6.1% this year and 3.1% in 2023.” This means that while the prediction is lower than the current annual level of 8.3%, it is still way above the 2.3% baseline. Suppose Vice President for Government Relations at the Military Officers Association of America Dan Merry is to be asked. In that case, the pay raise might not be sufficient anymore when the extra 4.6% appears in the troops’ paychecks.

I believe that we should be able to get more flexibility and agility with military pay. This pay raise [proposal] is going to be woefully short of the inflation rate. And if we just address it in the annual authorization bill, it may not be enough.

Tony Reardon, National Treasury Employees Union National President, thinks the proposed amount is a good starting point. However, his union is still for Rep. Gerry Connolly, D-Va., and Sen. Brian Schatz, D-Hawaii’s 5.1% pay raise legislation. Reardon said,

The White House proposal to give federal employees an average 4.6% pay increase in 2023 makes clear that this administration understands that improving salaries will help attract and retain highly skilled workers around the country, a sentiment that NTEU strongly supports. That said, NTEU has already endorsed the Federal Adjustment of Income Rates Act calling for an average 5.1% pay adjustment for federal workers next year.

He further said that the pay increases are almost not keeping up with the inflation rate and that the last report of the Federal Salary Council shows that the average gap between the federal government and the private sector is 23.11%.

Reports said that the authorization bill also includes an extra housing stipend that would increase the basic allowance for housing rates from 95% to 96% coverage of housing and renting costs.

On the other hand, the president of the National Active and Retired Federal Employees Association, Ken Thomas, thinks that the pay increase of 4.6% tracks the pay that the private sector is offering. This is enough for “the federal government’s ability to recruit and retain a highly qualified and effective workforce.”

With the 4.6% average federal pay increase proposed for 2023, Biden demonstrates appreciation for the millions of hardworking public servants who keep the government running day after day. If enacted, the 4.6% average pay increase would be the largest since 2002.”

Lower Commissary Cost

Last month, Rep. Marc Veasey, D-Texas, and Rep. Steven Horsford, D-Nevada, led the effort to urge Secretary of Defense Lloyd Austin to help control the increase in the prices of military commissaries to help military families manage the ever-rising grocery costs, which are a result of inflation. As Rep. Veasey wrote in his letter,

Families across the country — including those at our military bases — are struggling with the rising costs of basic everyday needs.

Their suggestion is to remove the requirement for commissaries to make a profit which would give customers an additional saving of about 3% to 5%, according to the president of the Armed Forces Marketing Council, Tom Gordy. The fiscal 2023 budget includes $128 million in profits that would be used to cover costs and allow the commissary agency to keep consumer prices low.

The higher military stipends and lower commissary costs proposal will have to pass through a series of congressional debates first before they take effect in fiscal 2023.