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Defense Act Increases Pay, Provides Benefits

By Jim Garamone
American Forces Press Service

WASHINGTON, Nov. 1, 2004 – President Bush signed the $420.6 billion National Defense Authorization Act Oct. 28.

The bill makes up 19.9 percent of the total fiscal 2005 federal budget and 3.6 percent of the gross domestic product. Last year, the percentages were 20.2 percent and 3.8 percent, respectively.

The authorization act is the second of two bills that had to become law for the Defense Department to operate. The first is the Defense Appropriations Act, which the president signed into law Aug. 5. The appropriations act provides the money; the authorization act gives DoD the OK to spend it.

The bill raises the end-strength level of the Army and Marine Corps by 20,000 and 3,000, respectively. Army end-strength will be set at 502,000; Marines, 178,000.

In addition, the bill funds a 3.5 percent across-the-board pay raise for servicemembers and eliminates out-of-pocket expenses for housing by increasing the basic allowance for housing. The bill also makes permanent increases in hostile fire/imminent danger pay to $225 per month and in family separation pay to $250 per month.

The bill also allows the base realignment and closure process to move forward. The House version of the bill would have delayed the process for two years.

The bill authorizes a number of programs for reserve-component servicemembers.

On the medical side, it provides for up to 90 days of Tricare coverage for reservists and their families who are mobilized. It also authorizes 180 days of transitional Tricare health benefits for reservists, active-duty members and their families after separation from active duty.

In addition, members of the selected reserve earn a year's eligibility for Tricare for each 90 days of service in a contingency. "If a Guardsman or reservist has served for at least 30 days called up on a contingency operation, then had 90 days of service," said Dr. William Winkenwerder in an Oct. 29 interview, "for each 90 days of service, they're eligible for a full year of Tricare coverage if they sign up for another year of reserve service." Winkenwerder is assistant secretary of defense for health affairs.

The bill authorizes a new reserve-component educational assistance program tied to the Montgomery GI Bill. The provision has different rates, depending on the length of active-duty service. It is 40 percent for service of 90 days to one year, 60 percent for one year to two years, and 80 percent for more than two consecutive years.

The bill also speeds up concurrent-receipt payments for retirees rated 100 percent disabled. In the past, retirees had their pay docked dollar for dollar by the amount of disability payments the Department of Veterans Affairs paid them. Last year, Congress authorized a phase-in process that would eliminate the concurrent-receipt prohibition over a decade.

On the family- and bachelor-housing front, the bill eliminates a statutory ceiling on the privatization of housing. In the program, which allows DoD to leverage public money with private contractors, the services can build and renovate family and bachelor housing.

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