Pentagon review recommends combat pay changes

[June 22, 2012]  WASHINGTON (AP) -- A Pentagon review recommends ridding the combat pay system of inequities that have allowed officers thousands of miles from battle to get better benefits proportionally than troops on the front lines in Afghanistan.

The recommendations in a review released Thursday are likely to anger service members. But the director of the review said they're aimed at paying more to troops who are in the gravest danger and giving the best tax benefits to those who are paid the least.

Military officers who are not near the fight can sometimes get more in combat pay and tax benefits than troops who are getting shot at on the front lines, said Thomas Bush, who directed the review. He said the main goal was to make combat pay more equitable.

The report doesn't recommend any specific rates of combat pay or say that certain troops should get less. But, Bush said, "we suggest there be some meaningful distinction" between troops who are getting shot at and those who are simply deployed to one of many countries designated as combat zones.

Under the military's current system, there are two types of combat pay. One, called "hostile fire pay," gives troops $225 a month if they are in an area where they could be exposed to enemy fire.

The second, called "imminent danger pay," gives up to $225 per month to those who are in a combat zone, and it is pro-rated at $7.50 a day, based on how long they are there.

Bush said the report recommends that hostile fire pay be more than the danger pay and that there be levels of imminent danger pay based on where service members are. Currently they can get the danger pay for being in more than two dozen places, including Bahrain, Saudi Arabia, Kyrgyzstan, the Philippines and Jordan -- as well as in Afghanistan, Yemen and Somalia.

"We want to target compensation to people who are at the greatest risk," Bush said.

In December 2009, President Barack Obama directed the department to examine four specific areas: combat pay, benefits and pay for the National Guard and Reserve, compensation for wounded service members and their survivors and pay incentives for key defense jobs, such as drone operators, special operations forces, linguists and mental health professionals.

Under the current system, service members up to the top level senior enlisted rank do not pay taxes on their pay when they are in a war zone. Higher level officers would not pay taxes on the portion of their salary equal to the top senior enlisted members' amount.

When they go to a combat zone, the taxes are no longer taken out of their pay, giving them an automatic raise for their deployment time.

The proposed change would make the combat pay a refundable tax credit that service members would file for at the end of the tax year.

But Bush said that because of the federal tax code, the benefits for higher level officers clearly outweigh the tax benefits for low-ranking troops, because much of their pay would already be at a very low tax rate.

The panel was struck by that disparity, Bush said, adding that a senior officer could get as much as a $15,000 tax benefit, while an Army private might get a $1,000 tax benefit.

And yet, the private serving at a combat outpost in Kandahar or Khost in Afghanistan has a much higher chance of getting killed or injured than a senior officer serving in a headquarters unit or in Bahrain.

Congress members have been loath to do anything that appears to cut combat pay and have often tried to increase pay raises for the military. Bush acknowledged that it's not clear how open they would be to the changes recommended by the report, but he said he hoped lawmakers would be open to making the system more equal.

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Online:

Military compensation review:
http://militarypay.defense.gov/REPORTS/
QRMC/11th_QRMC_Main_Report_
(290pp)_Linked.pdf

[Associated Press; By LOLITA C. BALDOR]

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