Slowing increases to housing and food allowances for service members by switching a crucial benchmark could save the Pentagon billions, the Congressional Budget Office reported Thursday.
The idea proposed in the report involves tying those allowances to the same benchmark used for basic military pay raises.
The Defense Department is required to use the Bureau of Labor Statistics' employment cost index, or ECI, to adjust basic pay, which makes up 70% of the military's regular pay expenses. The only exception is when Congress approves a bigger pay raise.
But housing allowance rates are set annually by the defense secretary, using data on rental housing vacancies in each location. Food allowances are set annually based on the Agriculture Department's index for food prices.
These methods combined have resulted in troops' compensation growing beyond what the DoD envisioned, according to the CBO report released Thursday.
The Pentagon's goal was for troops to be paid at the 70th percentile of earnings for comparable civilians, meaning 30% of civilians in similar jobs would earn more than troops.