February 22, 1999
The Administration is pleased that S. 4 promptly endorses the key elements
of the President's plan to improve military compensation, including: (1)
an across-the-board pay increase for military service members; (2)
substantial increases in retirement benefits; and (3) reform of the
military pay tables, including increased raises for promotions. These
items are fully funded in the President's Budget. However, the bill's
larger pay raise, higher cost-of-living adjustments, and other items
(including other mandatory spending proposals explained below) would
increase total spending above the President's budget request by $11.6
billion. This is composed of an estimated discretionary spending increase
of $7.0 billion and a mandatory spending increase of $4.6 billion through
FY 2005. Additionally, the 4.8 percent pay raise proposed in the bill for
military members in FY 2000 is inconsistent with the 4.4 percent increase
for civilian employees included in the President's budget.
Accordingly, the Administration does not support S. 4 in its current form. S. 4 would potentially drain critical resources from other defense programs. The President's defense budget ensures that critical readiness needs are met and allows for weapons modernization in addition to proposing an appropriately generous military compensation plan.
S. 4 also contains expanded education benefits for veterans and their dependents. These proposals stem in part from the just-released Report of the Congressional Commission on Service Members and Veterans Transition Assistance. The Administration has had only a limited opportunity to review and comment on the commission's recommendations and believes that the significant policy changes and spending recommended by the commission warrant additional study.
The President's plan for a sustained budget increase for the Defense Department is proposed for consideration following adoption of measures to ensure the long-term solvency of Social Security. Consideration of S. 4, prior to deliberations on a comprehensive budget framework which addresses Social Security, Medicare and all discretionary spending, is premature. The Administration looks forward to working closely with the Congress to enact legislation that provides for adequate, equitable compensation for service members and secure retirement futures for all Americans.
S. 4's provisions related to expanded education benefits would affect direct spending; therefore, it is subject to the pay-as-you-go requirements of the Omnibus Budget and Reconciliation Act of 1990. OMB's preliminary scoring estimate of this bill is a net cost of $3.8 billion over five years and $4.6 billion over six years.