Alternative Approaches to Adjusting Military Cash Pay

Congressional Budget Office

No 57192, Reports from Congressional Budget Office

Abstract: Each year, the Department of Defense (DoD) adjusts its regular military compensation to attract and retain high-quality personnel. That compensation includes basic pay, housing and food allowances, and the tax advantage that arises because those allowances are not subject to federal income tax. Unless the Congress passes legislation directing otherwise, the law requires DoD to use the employment cost index (ECI) to make annual adjustments to basic pay, the largest component of regular military compensation. The department uses other methods to adjust the housing and food allowances.

JEL-codes: C43 H56 J31 J33 J38 J45 M52 N32 N42 (search for similar items in EconPapers)
Date: 2021-09-09
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