Senate plan to overhaul military housing pay faces pushback

May 27, 2016: U.S. and Japan Self-Defence Force's soldiers listen to a speech by President Obama during his visit at Iwakuni Marine Corps Air Station, Japan. (Reuters)

America’s troops – who haven’t seen a raise over 2 percent in years – could soon see their monthly pay actually go down in some cases if a Senate plan to overhaul the military housing allowance goes through.

Right now, the Defense Department pays service members a set housing stipend based on several factors including rank and zip code. These rules allow bargain-hunting soldiers who find less expensive housing to pocket the difference -- and use it for groceries, utilities or other expenses.

Under the new Senate proposal, members of the Army, Navy and Air Force would get only the exact amount they spend on rent and utilities. It’s part of a plan to make sure rent and utilities are covered for everyone while curbing abuses in the system – while likely saving the government millions in the process, according to one estimate.

But the rule tweak is facing strong resistance from military advocates, including some in Congress who are now fighting the proposal.

“This is a benefit every service member earns,” retired Col. Michael Barron, of the Military Officers Association of America advocacy group, told FoxNews.com. “We don’t agree [with the proposed change].”

The proposal to change the so-called Basic Allowance for Housing is included in the Senate Armed Services Committee's 2017 National Defense Authorization Act.

If approved by Congress and signed into law, the proposed change would go into effect in 2018 and make the tax-free benefit more like the military’s overseas housing allowance, as first reported by The Military Times.

The proposal, part of the 1,666-page Senate bill, has received relatively little attention, in part because Americans may be more concerned about spending recommendations for defense projects and servicemembers’ health care.

“This is a reform bill. … And all of this was achieved while upholding the committee’s commitments to servicemembers, retirees and their families,” Committee Chairman Sen. John McCain, R-Ariz., said in May of the $602 billion, bipartisan proposal.

A Capitol Hill source said the proposed change is supposed to help service members by precisely covering their rent and utilities -- instead of the existing program which may give some troops extra money but can leave others paying as much as 5 percent out-of-pocket on those costs. The changes also reportedly are meant to cut down on abuse of the system.

However, Barron suggested the military is trying to cut costs “on the backs of military members.”

He also said a second proposed change in the legislation, which would reduce the housing allowance for military couples and military roommates, would “penalize” service members.

His group, service members and others have gotten help from Republican Sens. Susan Collins, of Maine, and Lisa Murkowski, of Alaska, who each have an amendment to “strike” those changes from the Senate proposal.

The related House bill does not appear to include such changes, and the Defense Department did not return a call Wednesday seeking comment.

In a supplemental report to the bill, committee members raised “concerns” about service members seeing the allowance as an “entitlement,” when it was in fact created 20 years ago to deal with the transient nature of military service, including frequently unemployed civilian spouses.

“This disconnect … is exacerbated by the significant increases in the benefit over the past 16 years,” concludes the report, which cites Army audits that found the housing benefit now “far exceeds” the cost of housing for some service members and such costs for married service members in fiscal 2014 exceeded local housing costs by more than $200 million.

Barron praised Congress for its work over the past two decades in reducing service members’ out-of-pocket housing expenses, which had been about 15 percent of their paycheck.

However, he said the proposed changes “come at a bad time,” considering looming hikes in health-care costs and the amount service members have to contribute to their retirement funds.