Navy’s FY15 Budget–More Than Just Numbers

By Vice Adm. Bill Moran
Chief of Naval Personnel

Earlier this week the President’s proposed Defense budget for fiscal year 2015 was unveiled during a number of press events here in DC. The Navy’s portion of the proposal prioritizes deployed operations, seeks to maintain Sailor Quality of Service and provides for building our future Fleet.

There has already been much written and discussed about ship numbers, types of aircraft, and new capabilities funded, along with the difference in money proposed this year compared to years past.

My goal here is to help put Navy budget decisions affecting manpower and personnel in context, discuss issues that affect your monthly LES and hopefully answer some of the questions that may be on your mind.

First off, the size of our Navy will remain stable between 323K and 324K Sailors for the foreseeable future. This stability means that we can continue our efforts to fill gaps at sea, focus on retaining Sailors with needed skills and maintain advancement rates at or slightly above historic norms.

Chief of Naval Personnel (CNP) Vice Adm. William F. Moran speaks with Sailors and civilians during an all-hands call at Naval Support Activity Mid-South.

Chief of Naval Personnel (CNP) Vice Adm. William F. Moran speaks with Sailors and civilians during an all-hands call at Naval Support Activity Mid-South.

 

That said, as our Navy continues to modernize and transitions to new ships and aircraft, information dominance and other capabilities, natural shifting in advancement opportunities will occur in some ratings. However, because of the stability we forecast in the total size of our force, Sailors who find themselves in overmanned ratings and want to stay Navy will have opportunities to transition to undermanned ratings.

Beyond manning, central to Navy’s calculus in the development of this year’s budget was the belief that we must strike the right balance between adequate pay and compensation (what we refer to as Quality of Life) and providing adequate funding for tools, parts, training and equipment (Quality of Work) in order to maintain a high Quality of Service for our Sailors.

Over the last twelve years, pays (including base pay, BAH and BAS) have gone up by about 60% for a typical Sailor, which has been significantly faster than the private sector during the same time. BAH out-of-pocket costs, which were 20% in 2000 are currently zero in 2013. Sailors and families have earned and deserved those bumps in pay and compensation. However, the rate of those increases is difficult to sustain over the long haul if we are to also modernize our fleet and keep Sailors ready for operations around the globe.

Sailors prepare to launch an MH-60S Sea Hawk helicopter from the flight deck of U.S. 7th Fleet flagship USS Blue Ridge (LCC 19).

Sailors prepare to launch an MH-60S Sea Hawk helicopter from the flight deck of U.S. 7th Fleet flagship USS Blue Ridge (LCC 19).

 

With only a finite amount of money available and with many competing interests, tough choices had to be made.

Here is a look at some of those decisions:

–A 1% base pay increase has been recommended for all service members, except general and flag officers who will not see an increase.

–This Budget does not propose to cut the pay or benefits for any active duty personnel. However, over the next five years the growth rates of base pay, BAH and other allowances will slow down. BAH while not being nominally cut, will slow in inflationary terms until it covers 95% of the average service members housing costs in 2017 and this will have the effect of reducing your purchasing power.

–Despite rumors over the last few months, no plans are in place to close a single commissary.  Locations overseas will continue to receive direct subsidies, and all commissaries will continue to operate rent free, paying no taxes and therefore providing tax-free groceries to customers.  A reduction in the subsidy may cause price increases at locations in metropolitan areas, but still result in savings of roughly 15% compared to shopping in other grocery establishments.

–In regards to TRICARE costs, all active duty personnel will still have access to free health care and remain exempt from any fee increases. Those who wish to opt for private care will still be able to choose between military treatment facilities, in-network, or out-of-network care. They will however be asked to pay a little bit more in their deductibles and co-pays, but their benefits will still stay affordable and generous.

The savings from these proposals will fund initiatives to ensure you are well-equipped, well-trained and compensated for future sea going challenges.  Put another way-this money will go back into Quality of Life and Work initiatives to help maintain our current Quality of Service.

Sailors aboard the guided-missile cruiser USS Gettysburg (CG 64) secure a line around a bollard while mooring the ship.

Sailors aboard the guided-missile cruiser USS Gettysburg (CG 64) secure a line around a bollard while mooring the ship.

 

In our planning for post-war deployment practices, it was clear we needed to address sea duty incentives and compensation. Since 2001, Career Sea Pay has lost significant purchasing power, despite its importance to Sailors when deciding to stay Navy or take orders back to sea. To ensure we maintain the right skills in rigorous sea-going billets, we updated our sea pay tables beginning this year (FY14) and included money in next year’s budget to up Sea Pay and Sea Pay Premium, for eligible personnel:

-A 25% increase in Career Sea Pay for all pay grades with at least 3 years of cumulative sea duty–in recognition of the greater than normal rigors of assignment to a ship.

- Sea Pay Premium will double to $200 per month for Sailors who serve more than 36 months of continuous sea duty.

Also in this budget is money to fund Fleet Quality of Work initiatives. This includes funding for upgrades to berthing and barracks, additional funding for training, and money for purchase of tools and parts to improve readiness, reduce maintenance time, and decrease the necessity to cross-deck spares from one deploying unit to the next.

In short, the President’s Budget Proposal for Fiscal Year 2015 capitalizes on efforts to stabilize personnel costs while providing you the incentives and resources necessary to serve with a high level of success and satisfaction.

Please keep your questions coming-see you in the Fleet.