OnWatch is a quarterly newsletter of the Fleet Reserve Association

OnWatch June 24,2024

Active Duty Pay Increase in the NDAA

The House passed its version of the National Defense Authorization Act (NDAA), and the Senate Armed Services Committee has approved its version of the bill. Once the Senate approves its bill, a conference committee will be appointed to resolve the differences between the two bills. This final bill will be submitted to the House and Senate for approval. If approved, the bill will be sent to President Biden to be signed into law or vetoed.

Much of the focus this year has been on active duty benefits. Both House and Senate versions of the NDAA provide a 4.5% pay raise, which keeps pace with the Employment Cost Index. However, the House NDAA calls for servicemembers E-1 to E-4 to receive an additional 15% pay raise beyond the 4.5% for all active duty members. This proposal is opposed by the White House. The Senate bill has a much less robust increase, calling for an additional 1% increase for servicemembers E-1 to E-3 (beyond the 4.5% raise). Furthermore, the House version would restore BAH to 100% just for FY 2025. The FRA has strongly opposed cuts in BAH benefits and has been working to restore BAH benefits to 100% of housing permanently. The Senate version does not address the issue and leaves BAH at 95% of housing costs.

In addition, the House bill increases the threshold for the Basic Needs Allowance (BNA) to 200% from 150% of federal poverty guidelines and enhances funding ($766 million over the budget request) for barracks renovations. The House bill also provides members of the Guard and Reserve access to the TRICARE dental program at no cost.

Earlier, the FRA submitted a statement for the record to the House and Senate personnel subcommittees in conjunction with the markup of their version of the NDAA, asking for, among other items, improvements in active duty pay and housing, restoration of BAH to 100%, concurrent receipt reform, opposition to the proposed CBO TRICARE fee increases, and USFSPA reform. The House bill now goes to the Senate for further consideration, and the Senate bill will be debated on the Senate floor.

FRA has argued that as inflation surges, there is an urgent need to prioritize support for service members and their families. In this critical endeavor, the Fleet Reserve Association's (FRA) unwavering dedication to military personnel issues becomes increasingly paramount.

The Association has played a pivotal role in advocating for policies that directly impact service members, such as securing annual active duty pay increases that are at least equivalent to the Employment Cost Index (ECI). The ECI measures the costs of labor for businesses in the U.S. economy. Under current law, military pay raises are, by default, set to equal the percentage change in the ECI. The ECI is prepared by the Bureau of Labor Statistics (BLS) in the U.S. Department of Labor. The recent 5.2 percent pay raise for all service members in the House and Senate FY24 National Defense Authorization Act (NDAA) is the current ECI. The next ECI raise will be 4.5%. FRA noted in recent testimony that there is no more critical morale issue for active-duty warriors than adequate pay. It should be remembered that the Obama administration supported and obtained an annual pay increase 0.5 percent below the ECI four times in eight years. That is why the FRA supports annual active duty pay increases that are at least equal to the ECI. However, ECI annual pay increases have not kept pace with the recent spikes in inflation. FRA is thankful that the Biden Administration’s budget provides for a pay increase that keeps pace with civilian pay increases (4.5%). However, these increases have been woefully inadequate due to inflation.

Active-duty basic pay is determined by a person’s rank and length of service, with automatic raises when troops meet certain time and promotion markers. Congress also determines how large a pay raise all troops should receive each year. The figure is tied by law to the anticipated increase in private sector pay, known as the Employment Cost Index (ECI), but lawmakers in the past have approved bigger raises to help with recruitment and retention, or smaller raises to save money for other military priorities.

Members are strongly urged to use the FRA Action Center to ask their Senators to support these critical House provisions in the final bill.




 is a quarterly news update for active duty and Reserve personnel, written by Theo Lawson. He served 8 years total reserve and active duty in the United States Marine Corps and has a personal interest in these matters. As the assistant director of Legislative Programs for the Fleet Reserve Association (FRA), he’s also committed to FRA’s mission to maintain and improve the quality of life for Navy, Marine Corps and Coast Guard personnel and their families. He looks forward to keeping you up to date on FRA’s legislative efforts to protect and enhance your earned military and veterans’ benefits.