National Defense Authorization Act For Fiscal Year 2017

Floor Speech

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Ms. MURKOWSKI. Mr. President, I rise today to speak about an amendment that I have filed to the National Defense Authorization Act. This is amendment No. 4222, and it addresses an issue of great interest to military families not only in my State, where we are proud to host a strong contingent of military that defend our Nation, but this is an issue that really stretches across the country What we propose in amendment No. 4222 is to strike section 604 of the NDAA, which represents a paradigm shift in the way the basic allowance for housing is paid to our Active-Duty members.

The Department of Defense and our military families have long believed that BAH is part of a total compensation. Effectively, it is part of your paycheck. It is part of what you earn. It is something that you can count on based on where you are posted, what your rank is, and whether you have any dependents. We have seen the BAH be subject to arbitrary and somewhat unfair reductions in recent years. It has unfortunately become the bill payer for other priorities.

BAH is regarded by the Defense Department as a component of a servicemember's total compensation. It is a compensation program. Section 604 turns the BAH into a reimbursement program. So instead of having BAH in your bank account to spend on living expenses as you deem fit, Section 604 essentially requires servicemembers to turn their receipts in to an accounting office and basically plead your entitlement to that reimbursement for the cost of your housing as well as utilities. I suppose alternatively you could take your entitlement and accept the risk that some audit or verification process will require you to pay something back, perhaps a lot back. Section 604 does not explain how this whole verification process will work.

Believe me, when I had an opportunity to visit with military spouses at Fort Wainwright just last week about this, they asked me: How does this reimbursement work? How do I get these utilities statements in for reimbursement? Already there are not enough people to process the basic paperwork that goes on for reimbursement of other expenses like permanent change of station moves. Tell me how this is going to be a better system.

Our military families are very familiar with deep bureaucracy and endure a fair amount of hassle to get what they are already entitled to.

I heard loud and clear from these military spouses the concerns they had about a proposal. They are looking at this as a one-size-fits-all solution; perhaps it is not a well-formed solution and it could have extreme consequences for those who serve in highly rural places, like in Alaska.

The BAH doesn't pay only for housing, it pays for the utilities. BAH pays for lights and heat, but keep in mind what it means to be in a very remote, very rural place. In places like Fairbanks, you are limited in terms of your options for energy, for power. Your costs are high. You could be looking at a home heating fuel bill on a monthly basis that could actually exceed the cost of your mortgage. Think about what that means. You may be in the enviable position of having found a home in a community that you think is affordable. The monthly rent is affordable, the mortgage might be affordable, but if it is an older house, if it is not fully weatherized, if you are on home heating fuel, you may be looking at a situation where you are paying more in utilities than for the cost of your housing.

Another cost you might use your BAH to pay is snow removal. It is not an option to not have your snow removed, and if your spouse is deployed, you need a way to get out of a long driveway. Who is going to be paying for the snow removal? Oftentimes, BAH pays to pump out the septic system, which has to be done on a somewhat quarterly basis because there are so many homes that are not on water and sewer. By the way, when we talk about water, is the cost of hauling water recoverable under this new reimbursement program? When you are not on a water system, you have to get your water from somewhere. Some military families at Fort Wainwright are paying to have water hauled to their homes either by a truck or they go out to the community tap to fill up their tank, but there is a cost associated with that. These spouses are asking me: How is that going to be accommodated under the new BAH plan? Will this be considered part of these allowable reimbursements?

This is all very troubling to me. It was certainly very troubling to the military families I spent time with. It is not like our military families don't have enough to worry about.

One military spouse told me of the situation in her family. She is a licensed attorney in another State. She hasn't been able to get waived in to practice in the State of Alaska. Her husband is an E7 soldier and has been in for 19 years, so effectively two professionals. They have three children. She says she spends about $1,500 a month for food, formula, and diapers for the three small children. She pays $38,000 a year for childcare. Childcare in and around the Fort Wainwright area is very expensive, and she is not able to get reimbursement for childcare because she is not working. She is trying to get a job. But recognizing that they have all these other costs on top of it all, this military spouse--two professionals in the household, three children--tells me her family is WIC eligible.

The stories I hear about our military families who are accessing our community food banks--our military families are worried. They are worried about what is happening at home, the financial issues they are faced with.

This was one concern I heard specifically: If this is a reimbursement system and I have to submit receipts for expenses--expenses that may exceed the cost of housing, exceed the cost of a mortgage, and it takes a long while to get this reimbursement--what happens if I can't pay my bills on time? My job requires a security clearance? And that security clearance requires that your credit record be absolutely impeccable. How is all this going to work?

There is so much stress, so much anxiety that I heard from these spouses as we were discussing these issues.

When we think about what our military families are worried about, they are focused on the stress that comes with force structure reductions, frequent PCS moves, needing to understand the latest and greatest TRICARE complexity, figuring out whether the old retirement paradigm or the new retirement paradigm is better. And then they have this--yet another layer of complexity with section 604 that just adds to the stress and adds to the anxiety.

We have to be honest with one another. We have to be honest with our military families. The bill before us does not afford those who serve a pay increase that is commensurate with the value of their service. Thankfully, we are working on a fix, and I greatly appreciate the leadership of Senator McCain and his willingness to work with so many of us on these issues that are a concern to our families.

When we look at what is going on now with BAH, I think we are messing with a very significant component of total compensation. That is simply not an appropriate way to thank families who have already suffered through multiple deployments to Iraq and Afghanistan, and now they have to contend with a host of uncertainties created by the rise of ISIL, the tensions on the Korean Peninsula, a resurgent Russia, and an ambitious China. This is not right for our military families.

The Pentagon has issued a Statement of Administration Policy. They are quite clear about where they are on this. They believe section 604 is damaging to the force, and that is why they oppose section 604. It is burdensome to move from a compensation approach to a reimbursement approach. It is inefficient. It appears to completely eliminate the BAH increment presently paid to families with children. It penalizes dual military couples. It disproportionately impacts female servicemembers. Think about it. About 20 percent of women on Active Duty are in a dual military marriage, compared to about 3.8 percent of Active-Duty men. So women on Active Duty are effectively taking a harder hit. And if we think this is not going to have an impact on recruitment and retention--I think we are going to be looking at some second-order consequences with respect to that and also as it relates to administration of the GI bill education benefit.

I mentioned the effective penalty on dual military couples. I know a dual-career military couple. I am very pleased to know that their military career has taken them to some pretty good places and the better news is that they have moved together. One spouse has been selected for promotion to lieutenant colonel 2 years below the zone, which is a very big deal. This week, his wife learned that she, too, has been selected for promotion to lieutenant colonel 1 year below the zone. So we can see that both of these individuals are very high performers, really rock stars when it comes to a competitive promotion environment. They are doing great, but they are looking at the impact section 604 will have on their specific situation as a dual military couple. They estimate that if their next assignment is here in the lower 48, they will lose about $20,000 from their compensation. If we are fortunate that they should both get assigned to Alaska on the next rotation, that hit to them will rise to $29,000--an almost $30,000 reduction in total compensation from what they as a military couple would receive under the current system. That is significant. They are exactly the kinds of people the private sector wants to recruit but our military wants to retain, and I am not the only person who appreciates this fact.

When I was in Fort Wainwright, one dual military spouse said: Who I am married to should not affect my BAH entitlement. That summed it up in a pretty neat and tidy way.

Over this past week since I have been back here, I have heard from senior military leaders and senior enlisted advisers to those leaders, all of one voice. They are saying that this brings down the morale in the volunteer force. I will relay to my colleagues the comments from one of the commanders in Fort Wainwright when I was there last week. He had been sitting in the back of the room listening to all of the military spouses weigh in and voice their concerns and their anxiety about what was going on. He said to me: This is a clear reminder of how morale affects the overall mission. I have been on assignment. I have been deployed to Afghanistan. I have broken down doors. I have been on patrol looking for IEDs.

When you are on these missions, your head has to be 100 percent in the game. You can't be thinking about what is happening at home. You cannot be thinking about whether or not there are financial struggles that your spouse is dealing with. You cannot be distracted from where you are in the here and now. We are not just talking about ``quality of life'' issues; we are talking about ``matter of life and death'' issues.

He said: If my head is not 100 percent in the game, then somebody's life potentially is on the line.

It was a clear reminder to me of how morale affects the mission and how we need to ensure that our men and women whom we have tasked to take on the most difficult of tasks are able to focus on where they are right then. And making sure all is well at home is a responsibility we also have.

There has been a lot of discussion about the BAH over the years. Some of us think that it is in need of reform or that perhaps right-sizing the BAH will mean more money for readiness and modernization. I certainly get that argument. I may not agree with all of that, but I do know there are some very hard choices that have to be made in a difficult budget environment. I respect the work the chairman has done, along with the ranking member, in trying to deal with all of that. But I do feel very certain about one thing: Those who believe that BAH should be reformed need to make that case openly and directly and transparently to our military families. I think putting a game-changing provision like section 604 in the NDAA without that consultation misses the mark.

The changes we are considering in BAH would not be effective until 2018. We have some time here, and we can get this right. My amendment, which is a bipartisan amendment, simply says: Take a timeout. Let's take a step back.

To those who think the BAH is in need of reform, make the case to military families if you choose, but let's not rush this through. This is not what we should be doing.

Hon. Lisa Murkowski (R-AK), Hart Senate Office Building, Washington, DC.

Dear Senator Murkowski: I am writing to thank you for your continued strong support for our men and women in uniform and their families, as most recently demonstrated by your introduction of amendment #4222, which would remove Sec. 604 from S. 2943, the Senate's FY17 defense policy legislation.

Section 604 aims to recoup more than $200 million annually from the Regular Military Compensation (RMA), earned by servicemembers through reductions to the Basic Allowance for Housing (BAH), a main component of RMA of which they are entitled to under law. These reductions would begin in January 2018 for new entrants into military service and after the next Permanent Change of Station (PCS), for those already serving.

The reductions to BAH, as called for in 604, undoes the diligent work done by Congress over the past 15 years to rectify the out of pocket housing costs long borne by servicemembers and clearly sends the wrong message to them and their families--that their service and sacrifice is not important.

At a time when we have asked servicemembers to contribute more to their retirement savings, more to their housing, and possibly more to their healthcare, this proposal is wrongly conceived, unfair, and would do harm to the retention of our currently serving men and women and their families.

The Military Officers Association of America (MOAA) strongly supports amendment #4222 to remove Sec. 604 and urges other members of the Senate to support the amendment as well.

Thank you for your leadership and for your continued strong support for our men and women in uniform and their families. Sincerely, Dana T. Atkins. ____ Air Force Sergeants Association, Suitland, MD, June 1, 2016. Hon. Lisa Murkowski, Hart Senate Office Building, Washington DC.

Dear Senator Murkowski: on behalf of the 100,000 members of the Air Force Sergeants Association I want to thank you for introducing amendment #4222 to S. 2943. Removing Sec. 604 from the Senate's FY17 NDAA, as articulated in your amendment, is absolutely the right call!

To propose BAH reductions while servicemembers are already concurrently contributing more to their retirement and potentially to their healthcare clearly sends the wrong message. Keeping in mind that vast numbers of military families funnel their children into similar service, retention of those now serving in uniform as well as recruitment of future talent both stand to suffer.

AFSA strongly supports amendment #4222 to remove Sec. 604 from S.2943 and urges other members of the Senate to also support this amendment. Respectfully, Robert L. Frank, Chief Executive Officer.
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