Categories of Federal Civil Service Employment: A Snapshot

Summary: According to the Office of Personnel Management (OPM), the federal workforce consists of an estimated two million civilian employees. Federal law categorizes these employees into three types of service—the competitive service, the excepted service, and the Senior Executive Service (SES)—that may be distinguished by different selection, compensation, and other standards. Title 5 of the U.S. Code (Title 5) contains most of the standards governing federal employment, and OPM is generally responsible for implementing these requirements.

Summary: The competitive service largely consists of all civil service positions in the executive branch, other than (1) positions excepted from the competitive service by statute; (2) positions appointed by the President and confirmed by the Senate; and (3) the SES. Traditionally, OPM has administered examinations for entrance into the competitive service. These examinations are meant to be "practical in character" and relate to "matters that fairly test the relative capacity and fitness of the applicants for the appointment sought." Title 5 also authorizes OPM to prescribe rules allowing agencies to hire candidates directly under specified circumstances.

Summary: The excepted service includes designated civil service positions that are not in the competitive service or the SES and are not subject to competitive examination. OPM maintains authority to exempt a position from the competitive service when it determines that an appointment through competitive examination is not practicable, or the recruitment of students or recent graduates would be better achieved through alternate recruitment and assessment processes.

Summary: The pay structure for the competitive service and the excepted service is similar. Both services are typically paid in accordance with the General Schedule, a schedule of annual basic pay rates that consists of 15 grades, designated "GS-1" through "GS-15." This fixed pay scale is generally designed to reflect, among other things, equal pay for substantially equal work within a local pay area. Additionally, the competitive service and the excepted service generally have similar notice and appeal rights for adverse personnel actions. For example, before a removal, a suspension for more than 14 days, a reduction in grade or pay, or a furlough of 30 days or less, the agency must provide at least 30 days' advance written notice to the affected employee. The employee must also be given a reasonable time to respond to the notice and provide affidavits and other evidence to support the answer. Some adverse actions may also be appealed to the Merit Systems Protection Board (MSPB or Board), an independent, quasi-judicial agency that reviews and adjudicates specified personnel actions taken against qualifying federal employees.

Summary: The SES is a corps of some 7,000 high-level government administrators who manage major programs and projects within most federal agencies. In these leadership roles, SES members may serve as a link between top-level political appointees of an agency and career civil servants within the agency. The SES is governed by a regulatory structure separate from the competitive and excepted services. While SES members are primarily career appointees chosen through a merit-based competitive hiring process, others are noncareer, limited term or limited emergency appointees (commonly political appointees) selected by agency leadership. To shield certain SES roles from political influence, some SES positions (career reserved positions) must be filled with career appointees, and Title 5 limits the number of noncareer and limited term appointees that may serve in SES positions.

Summary: The SES pay structure is distinct from the rest of the civil service. Title 5 specifies that SES members are paid within a particular range based on an executive's individual performance or contribution to agency performance (or both), as measured under a performance appraisal system. In addition, Title 5 articulates special conditions and procedures for removing, suspending, or taking other adverse actions against a member of the SES. For example, career SES appointees who have successfully completed a one-year probationary period may be removed or subject to adverse action only for specified reasons, including misconduct and substandard performance. Career appointees must receive advance written notice of these actions, and an opportunity to appeal the action. In comparison, noncareer, limited term, and limited emergency appointees are generally not subject to the same protections and may be removed from the SES at any time.

The federal government is the nation's largest employer, with over two million workers employed in the United States, U.S. Territories, and foreign countries. A majority of these employees work in the competitive service of the executive branch. Applicants for competitive service positions compete with other applicants and are evaluated according to objective standards. The executive branch includes two other service classifications—the excepted service and the Senior Executive Service (SES)—with hiring and removal standards that diverge from those prescribed for the competitive service. Positions in the excepted service are specifically excepted from the competitive service by statute, by the President, or by the Office of Personnel Management (OPM). SES positions are also not in the competitive service. The SES includes senior managerial, supervisory, and policy positions that are subject to a different pay scale, as well as different hiring and removal standards. This report examines the three service classifications, and reviews some of the central features and notable differences among these classifications.

The competitive service consists of all civil service positions in the executive branch, except the following:

positions that are specifically excepted from the competitive service by or under statute; positions to which appointments are made by presidential nomination for confirmation by the Senate, unless the Senate otherwise directs; and positions in the SES.

The competitive service also includes non-executive branch positions and positions in the District of Columbia government that are specifically included in the competitive service by statute.

OPM administers examinations for entrance into the competitive service. These examinations are meant to be "practical in character" and relate to "matters that fairly test the relative capacity and fitness of the applicants for the appointment sought[.]" OPM identifies the relative weights for the subjects in an examination, and assigns numerical ratings on a 100-point scale. Applicants who meet the minimum requirements for entrance to an examination, such as citizenship and residence requirements, and are rated 70 or more in the examination are eligible for appointment in the competitive service. These individuals are placed on registers or lists of eligibles. When an agency seeks to fill a competitive service position, it requests a certificate of eligibles from OPM. This certificate is to include enough names from the top of the relevant register to allow an agency appointing official to consider at least three individuals for every position to be filled.

The competitive service includes several types of appointments. An individual selected for a continuing position is generally appointed as a career-conditional employee subject to an initial one-year probationary period. After three continuous years of service in a career-conditional appointment, an employee will be converted to a career appointment. A term appointment is a nonpermanent appointment for a period of more than one year, but less than four years. An agency may make a term appointment when the need for an employee's services is not permanent, but involves a special project, extraordinary workload, or reorganization. A temporary appointment is a time-limited appointment for a period not to exceed one year. An agency may make a temporary appointment to fill a short-term position or meet an employment need that is scheduled to end within a specified timeframe.

Employees in the competitive service are generally paid in accordance with the General Schedule, a schedule of annual basic pay rates that consists of 15 grades, designated "GS-1" through "GS-15." The grades include 10 steps that provide for increasing rates of pay. An employee who has not reached the maximum pay rate for his or her position is generally advanced to the next step at specified intervals. General Schedule salaries are based on the principles that there is equal pay for substantially equal work within a local pay area, that any pay distinctions are based on work and performance, that federal pay rates are comparable with non-federal pay rates for the same level of work, and that any pay disparities between federal and non-federal employees should be eliminated.

Adverse Action Protections and Procedures

Employees in the competitive service who are not serving a probationary or trial period, or have completed one year of current continuous service in a position other than a temporary appointment limited to one year or less, maintain specified notice and appeal rights for adverse personnel actions. Before an agency may suspend such a qualifying employee for 14 days or less, the employee must be given an advance written notice that identifies the specific reasons for the suspension. The employee must also be provided a reasonable time to answer the notice and furnish affidavits and other evidence to support the answer.

Similar notice is required before an agency may subject a qualifying employee to other adverse personnel actions. Before a removal, a suspension for more than 14 days, a reduction in grade or pay, or a furlough of 30 days or less, the agency must provide at least 30 days' advance written notice to the employee. The employee must also be given a reasonable time to respond to the notice and provide affidavits and other evidence to support the answer. Unlike suspensions for 14 days or less, these adverse actions may be appealed to the Merit Systems Protection Board (MSPB or Board), an independent, quasi-judicial agency that reviews and adjudicates specified personnel actions taken against qualifying federal employees.

In general, an agency must establish three factors to withstand an individual's challenge of his or her adverse personnel action. First, the agency must prove, by a preponderance of the evidence, that the charged conduct occurred. Second, it must establish a nexus between that conduct and the efficiency of the civil service. Finally, the agency must show that the penalty imposed on the employee is reasonable. An agency's action may not be sustained if the appellant shows: (1) harmful error in applying the agency's procedures in arriving at its decision; (2) that the decision was based on a prohibited personnel practice; or (3) that the decision was not in accordance with law.

About one-third of all federal workers are employed in the excepted service. The excepted service consists of those civil service positions that are not in the competitive service or the SES. Positions in the excepted service may be designated by statute or by OPM, and are not subject to competitive examination. OPM will exempt a position from the competitive service when it determines that an appointment through competitive examination is not practicable, or the recruitment of certain students or recent graduates would be better achieved through alternate recruitment and assessment processes. For example, OPM may determine that a position should be excepted from the competitive service because it is impracticable to examine the knowledge, skills, and abilities required for a position.

Positions in the excepted service are categorized into four schedules. Schedule A includes positions that are not of a confidential or policy-determining character for which it is not practicable to examine applicants. Attorneys, chaplains, and short-term positions for which there is a critical hiring need are examples of schedule A positions.

Schedule B also includes positions that are not of a confidential or policy-determining character for which it is not practicable to examine applicants. Unlike Schedule A positions, however, these positions require an applicant to satisfy basic qualification standards established by OPM for the relevant occupation and grade level. Individuals appointed to schedule B positions engage in a variety of activities, including policy analysis, teaching, and technical assistance.

Positions in schedule C are policy-determining or involve a close and confidential working relationship with the head of an agency or other key appointed officials. These positions include most political appointees below the cabinet and subcabinet levels. An agency's senior advisor and special assistant positions are typically in schedule C.

Finally, schedule D includes positions that are not of a confidential or policy-determining character for which competitive examination makes it difficult to recruit a sufficient number of certain students or recent graduates. Examples of schedule D positions include those involving science, technology, engineering, or mathematics (STEM) occupations and positions in the Presidential Management Fellows Program. Schedule D positions generally require an applicant to satisfy basic qualification standards established by OPM for the relevant occupation and grade level.

Like employees in the competitive service, excepted service employees are generally paid in accordance with the General Schedule.

In addition, excepted service employees maintain the same notice and appeal rights for adverse personnel actions. Some employees in the excepted service, however, must satisfy different durational requirements before these rights become available. So-called "preference eligibles" in an executive agency, the Postal Service, or the Postal Rate Commission must complete one year of current continuous service to avail themselves of the relevant notice and appeal rights. The term "preference eligible" refers to specified military veterans and some of their family members, such as an unmarried widow, and the wife or husband of a service-connected disabled veteran. Employees in the excepted service who are not preference eligibles and (1) are not serving a probationary or trial period under an initial appointment pending conversion to the competitive service, or (2) have completed two years of current or continuous service in the same or similar position, have the same notice and appeal rights as qualifying employees in the competitive service.

The SES is a cadre of high-level government administrators who manage major programs and projects within most federal agencies. While they are considered federal employees within the civil service system, the SES is governed by a regulatory structure separate from the competitive and excepted services. As defined in statute, SES positions are generally managerial or supervisory positions that are classified above the GS-15 grade (or certain equivalent positions) and need not be appointed by the President and confirmed by the Senate. In these leadership roles, SES members may serve as intermediaries between top-level political appointees of an agency who seek to carry out the objectives of a particular President and career civil servants with institutional experience relating to relevant issues. According to a 2018 report, there are currently more than 7,000 permanent SES positions.

There are two types of SES positions: (1) career reserved and (2) general. Career reserved positions must be filled with career appointees to shield certain SES roles from political influence. Generally, agency heads are to determine whether a particular SES position warrants a career reserved designation, to "ensure impartiality, or the public's confidence in the impartiality, of the Government." OPM regulations reflect the types of SES roles in which this designation is appropriate, including those involving adjudication and appeals, auditing, and law enforcement duties. General positions may be filled by career appointees, as well as other noncareer and limited term (i.e., political) appointees.

There are four types of SES appointments: career, noncareer, limited term, and limited emergency appointees. The SES mainly consists of "career appointees" chosen through a merit-based competitive hiring process. As part of this process, each agency must maintain a recruitment program for career appointees, as well as at least one executive board that reviews qualifications and makes recommendations regarding SES candidates. An OPM-convened Qualification Review Board (QRB) must certify the executive and managerial qualifications of a selected candidate before a career appointment may be made to an SES position.

Unlike career appointees, noncareer appointees are not subject to the competitive selection process, but agency heads must determine that these appointees meet the qualifications of the SES position. While noncareer appointees are not QRB-certified, OPM must approve these appointees. Limited term and limited emergency appointees make up a small subset of the SES, and their terms are non-renewable. These appointments are used when a position is needed for a specified period (such as to manage a special project), or a position is established to meet a "bona fide, unanticipated, urgent need." Limited term and limited emergency appointments are also subject to OPM approval. To restrict the politicization of the SES, Title 5 of the U.S. Code (Title 5) limits the number of noncareer and limited term appointees who may serve in SES positions.

The SES pay structure is also distinct from the rest of the civil service. Title 5 specifies that the pay rate of each senior executive is based on the executive's individual performance or contribution to agency performance (or both), as measured under a "rigorous" performance appraisal system. Each federal agency must maintain at least one of these appraisal systems, subject to OPM standards, review, and approval. Performance appraisals of SES members may consider factors such as improvements in efficiency, productivity, and quality of work or service, cost efficiency, and performance timeliness. In response to earlier concerns that SES appraisal systems were flawed because most executives received the highest rating, Title 5 tasks OPM, in collaboration with the Office of Management and Budget, with the establishment and maintenance of a government-wide performance appraisal system certification process, in an effort to ensure that an agency's appraisal systems for SES employees make "meaningful distinctions based on relative performance."

Title 5 also sets out different pay rates for the SES, with a minimum rate of basic pay equal to 120 percent of the rate for GS-15, step 1, and a maximum rate of basic pay equal to the rate for Level III of the Executive Schedule. But SES members' annual aggregate pay (that includes additional compensation such as bonuses, awards, and other payments in addition to basic pay) is capped at the rate for Level I of the Executive Schedule. If a senior executive's total compensation exceeds the aggregate limitation, the executive receives the overage in the following calendar year. To encourage federal agencies to establish and maintain an OPM-certified performance appraisal system, Title 5 allows for a higher range of SES pay for agencies that have these certified systems.

Title 5 also articulates conditions and procedures for removing, suspending, or taking other adverse actions against a member of the SES. Career SES appointees who have successfully completed a one-year probationary period may be removed or subject to adverse action only for specified reasons. For example, an SES career appointee may be removed from the civil service or suspended for more than 14 days only for misconduct, neglect of duty, malfeasance, or failure to accept a directed reassignment or to accompany a position in a transfer of function. SES members must receive advance written notice about the action and opportunity to provide an answer or receive hearing, subject to exception. The senior executive may also appeal the employment action to the MSPB.

A career appointee receiving a single unsatisfactory performance rating may be reassigned or transferred within the SES or removed from the SES. A career SES member who receives two unsatisfactory ratings in any period of five consecutive years, or twice in any period of three consecutive years receives less than fully successful ratings, must be removed from the SES. Affected SES career appointees must receive advance written notice of these actions. While these appointees may not appeal these actions to the MSPB, they may request an informal hearing before the Board. SES career appointees are also generally entitled to be placed in a civil service position at GS-15 or above (or an equivalent position).

In comparison, noncareer, limited term, and limited emergency appointees are generally not subject to the same removal protections and may be removed from the SES at any time. The procedures for removal of noncareer and limited term appointees are largely not addressed in federal statute, and the terms and procedures for their removal are mainly at the discretion of the agency head.

In response to concerns about performance and accountability of SES members employed by the Department of Veterans Affairs (VA), Congress recently created special removal requirements that apply to these positions. In 2017, Congress passed the Department of Veterans Affairs Accountability and Whistleblower Protection Act, which amended an existing provision concerning removal procedures for these covered senior executives. Under the 2017 Act, the VA Secretary has discretion to suspend, demote, remove, or take other actions against SES career appointees or other high-level executives if the Secretary determines that the individual's misconduct or performance warrants such action. To address SES job performance issues more expeditiously, SES employees at the VA Department are entitled to abbreviated notice and appeals rights, as compared to the removal procedures in place in other federal agencies.


Military Pay: Key Questions and Answers

Summary: From the earliest days of the republic, the federal government has compensated members of the Armed Forces for their services. While the original pay structure was fairly simple, over time a more complex system of compensation has evolved. The current military compensation system includes cash payments such as basic pay, special and incentive pays, and various allowances. Servicemembers also receive noncash benefits such as health care and access to commissaries and recreational facilities, and may qualify for deferred compensation in the form of retired pay and other retirement benefits. This report provides an overview of military compensation generally, but focuses on cash compensation for current servicemembers.

Summary: Since the advent of the all-volunteer force in 1973, Congress has used military compensation to improve recruiting, retention, and the overall quality of the force. Congressional interest in sustaining the all-volunteer force during a time of sustained combat operations led to substantial increases in compensation in the decade following the attacks of September 11, 2001. Subsequently, in the earlier part of the 2010s, concerns over government spending generated congressional and executive branch interest in slowing the rate of growth in military compensation. Initiatives to slow compensation growth included presidentially directed increases in basic pay below the rate of increase for the Employment Cost Index (ECI) for 2014-2016 and statutory authority for the Department of Defense (DOD) to reduce Basic Allowance for Housing (BAH) payments by 1% of the national average monthly housing cost per year from 2015 to 2019 (for a maximum reduction of 5% under the national monthly average housing cost).

Summary: Some have raised concerns about the impact of personnel costs on the overall defense budget, arguing that they decrease the amount of funds available for modernizing equipment and sustaining readiness. Others argue that robust compensation is essential to maintaining a high-quality force that is vigorous, well-trained, experienced, and able to function effectively in austere and volatile environments. The availability of funding to prosecute contingency operations in Iraq and Afghanistan mitigated the pressure to trade off personnel, readiness, and equipment costs, but the current budgetary environment appears to have brought these trade-offs to the fore again.

Summary: DOD spends about $100,000-$110,000 per year to compensate the average active duty servicemember—to include cash, benefits, and contributions to retirement programs—although some estimates of compensation costs are substantially higher. However, gross compensation figures do not tell the full story, as military compensation relative to civilian compensation is a key factor in an individual's decision to join or stay in the military. Thus, the issue of comparability between military and civilian pay is an often-discussed topic. Some analysts and advocacy groups have argued that a substantial "pay gap" has existed for decades—with military personnel earning less than their civilian counterparts—although they generally concede that this gap is fairly small today. Others argue that the methodology behind this "pay gap" is flawed and does not provide a suitable estimate of pay comparability. Still others believe that military personnel, in general, are better compensated than their civilian counterparts. The Department of Defense takes a different approach to pay comparability. The 9th Quadrennial Review of Military Compensation (QRMC), published in 2002, argued that compensation for servicemembers should be around the 70th percentile of wages for civilian employees with similar education and experience. According to the 11th QRMC, published in 2012, regular military compensation for officers was at the 83rd percentile of wages for civilian employees with similar education and experience, and at the 90th percentile for enlisted personnel. A 2018 RAND report concluded that these overall percentiles were nearly the same in 2016.

The military compensation system is complex and includes an array of cash compensation elements, noncash compensation (benefits), deferred compensation (retirement pay, Thrift Savings Plan, retiree health care, and other retirement benefits), and tax advantages. This report focuses primarily on the cash compensation provided to members of the active component Armed Forces. Other CRS reports cover military retirement and health care.

This report uses a question and answer format to highlight key aspects of the military compensation system and to address topics of recurring congressional interest, including the following:

Compensation elements and rates. Statutory formulas for increasing compensation elements. Historical increases in basic pay. Comparability with civilian pay. Additional compensation for those serving in Iraq or Afghanistan.

1. How Are Military Personnel Compensated?

There are three main ways in which military personnel are compensated: cash compensation, noncash compensation, and deferred compensation.

Cash compensation takes a variety of forms and includes basic pay, housing and subsistence allowances, enlistment bonuses, skill proficiency pay, and additional pay for particularly demanding or dangerous duty. Non cash compensation includes various benefits such as medical and dental care, government-provided housing, educational benefits, space-available travel on military aircraft, and access to subsidized grocery stores (commissaries), retail stores (exchanges), and child care centers. The main elements of deferred compensation are retired pay and retiree health care, but commissary and exchange access, space-available travel, and other benefits are also part of this. Servicemembers may also participate in the Thrift Savings Plan (TSP), although until 2018 they generally did not receive matching contributions from the government. However, recent changes to the military retirement system made matching contributions to the Thrift Savings Plan a key component of many servicemembers' deferred compensation starting in 2018.

The basic compensation package provided to all servicemembers includes basic pay, a housing allowance (or government-provided housing), a subsistence allowance (or government-provided meals), free medical and dental care for servicemembers, free or low-cost medical and dental care for dependents, paid annual leave, and certain other benefits. Table 1 summarizes the main elements of compensation provided to all servicemembers. Servicemembers may also receive additional cash compensation based on their occupational specialty, duty assignment, and other factors.

2. What Is Regular Military Compensation (RMC)? How Much Do Servicemembers Receive in RMC?

When people talk about military pay, they are often only referring to basic pay . Although basic pay is usually the largest component of cash compensation that a servicemember receives, there are other types of military pay that increase it significantly. There are tax benefits as well. Regular Military Compensation is a statutorily defined measure of the cash or in-kind compensation elements that all servicemembers receive every payday. It is widely used as a basic measure of military cash compensation levels and for comparisons with civilian salary levels.

RMC, as defined in law, is "the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and federal tax advantage accruing to the aforementioned allowances because they are not subject to federal income tax." Though military compensation is structured much differently than civilian compensation, making comparison difficult, RMC provides a more complete understanding of the cash compensation provided to all servicemembers. Therefore, it is usually preferred over simple basic pay when comparing military with civilian compensation, analyzing the standards of living of military personnel, or studying military compensation trends over time.

For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about two-thirds of an individual's RMC. All members of the Armed Forces receive basic pay, although the amount varies by pay grade (rank) and years of service (also called longevity). Table 2 provides illustrative examples of basic pay rates.

All servicemembers are entitled to either government-provided housing or a housing allowance, known as basic allowance for housing (BAH) for those living within the United States or Overseas Housing Allowance (OHA) for those living outside of the United States. Roughly one-third of servicemembers receive government-provided housing (in the form of barracks, dormitories, ship berthing, or government-owned family housing), with the remainder receiving BAH or OHA to offset the costs of the housing they rent or purchase in the civilian economy or the privatized housing they rent on or near military bases.

The proportion of housing costs covered by housing allowances has varied over time. See the section entitled " Basic Allowance for Housing: Increases Are Linked to Increases in Housing Costs " later in this report for more information on this topic.

The amount of BAH a servicemember receives is based on three factors: paygrade (rank), geographic location, and whether the servicemember has dependents. Paygrade and dependency status are used to determine the type of accommodation—or "housing profile"—that would be appropriate for the servicemember (for example, one-bedroom apartment, two-bedroom townhouse, or three-bedroom single family home). Geographic location is used to determine the median costs associated with each of these housing profiles. The median costs of these housing profiles are the basis for BAH rates, with some additional adjustments made on the basis of paygrade (that is, an E-7 without dependents will receive more than an E-6 without dependents, even though the appropriate housing profile for both of them is "two bedroom apartment"). As a result of this methodology, BAH rates are much higher in some areas than others, but servicemembers of similar paygrade and dependents status should be able to pay for roughly comparable housing regardless of their duty location. BAH rates are paid to the servicemember at the specified rate, regardless of the actual housing expenses incurred. Table 2 provides illustrative examples of how much BAH servicemembers receive annually.

OHA is also based on paygrade, geographic location, and whether the servicemember has dependents, but the manner in which it is calculated is significantly different than BAH. OHA is paid based on the servicemember's reported actual housing expenses, up to a maximum amount that varies by location, plus an allowance for utilities. The amount is reduced if the servicemember resides with one or more "sharers." There is also a fixed one-time allowance to cover certain move-in expenses (such as real estate agents' fees, phone and utility connections, and security improvements).

Nearly all servicemembers receive a monthly payment to defray their personal food costs. This is known as basic allowance for subsistence (BAS). BAS is provided at a flat rate: In 2019, enlisted personnel receive $369.39 a month, while officers receive $254.39 a month. There have been calls in the past to merge BAS with basic pay to reduce the complexity of military compensation and the need for BAS computations each year.

Certain types of military compensation are not subject to federal income tax, thus generating a tax benefit for servicemembers. The various types of military pay—basic pay, special pay, and incentive pay—are considered part of gross income and are usually subject to federal income tax. Military allowances, on the other hand, are generally not considered part of gross income and are not subject to federal income tax; nor are the various in-kind benefits of the military—for example, government housing, health care, fitness centers, and subsidized grocery stores. , RMC considers only the federal income tax advantage provided by the exemption of BAH and BAS from gross income. The precise value of the federal tax advantage for an individual servicemember will vary depending on his or her unique tax situation.

Compensation Elements Not Included in RMC

RMC does not include the full array of compensation elements (e.g., special pays and bonuses, reimbursements, educational assistance, deferred compensation, or any estimate of the cash value of nonmonetary benefits such as health care, child care, recreational facilities, commissaries, and exchanges). As the value of these forms of compensation can be very substantial, RMC should not be considered a measure of total military compensation.

3. How Are Each Year's Increases in Basic Pay, BAH, and BAS Computed?

Mentions of the "military pay raise" are almost always references to the annual increase in basic pay. The statutory formula for calculating each year's pay raise is discussed below, but b asic pay is only one element of RMC. BAH and BAS are also subject to periodic adjustment, although they typically do not receive as much attention as increases in basic pay.

Basic Pay: Increases Are Linked to Increases in the Employment Cost Index (ECI)

Section 1009 of Title 37 provides a permanent formula for an automatic annual increase in basic pay that is indexed to the annual increase in the Employment Cost Index (ECI) for "wages and salaries, private industry workers." For 2000-2006, the statute required the military raise to be equal to the ECI increase plus an additional one half percentage point (i.e., if the ECI annual increase were to be 3.0%, the military raise would be 3.5%). For 2007 and onward, the statute required the raise be equal to the ECI, although Congress continued to enact increases above the ECI through 2010.

Under subsection (e) of this statute, the President can specify an alternative pay adjustment that supersedes the automatic adjustment. President Obama invoked this option with regard to the 2014-2016 pay raises. Additionally, Congress can pass legislation to specify the annual pay raise which, if enacted, would supersede the automatic adjustment and/or any proposed presidential adjustment. The frequency of such congressional action is discussed below.

The automatic adjustment under 37 U.S.C. 1009 is tied to the increase in the ECI from the third quarter of the third preceding year to the third quarter of the second preceding year. For example, in the 12-month period between the quarter which ended in September 2015 and the quarter which ended in September 2016, the ECI increased by 2.4%. Hence the pay raise for 2018, as calculated by the statutory formula, was 2.4%. An illustration of how the formula operates is provided in Figure 1 . This methodology results in a substantial lag between increases in the ECI and increases in basic pay; the lag appears to be related to the stages of the federal budget process.

Congress Has Frequently Waived the Automatic Adjustment and Specified the Amount of the Military Pay Raise, Although This Has Become Less Common In Recent Years

Despite the statutory formula, which could operate each year without any further action, Congress has frequently waived the automatic adjustment and legislated particular percentage increases. For the pay raises effective in fiscal years 1981 and1982 and calendar years 1984-2010, 2013, and 2017-2018 Congress specified the increase that was to take effect in the annual defense authorization act. Congress specified no percentage increase for 1983, 2011, 2012, 2014-2016, or 2019, thereby allowing the statutory formula or the presidential alternative adjustment to go into effect. The statutory formula is important even when it does not go into effect, as it provides a benchmark around which alternatives are developed and debated.

Basic Allowance for Housing: Increases Are Linked to Increases in Housing Costs

Basic Allowance for Housing is paid to servicemembers living in the United States who do not choose or are not provided government quarters. By law, the Secretary of Defense sets the BAH rates for localities, known as military housing areas (MHAs), throughout the United States. However, the law requires the Secretary to set the rates "based on the costs of adequate housing determined for the area" and ties this determination to "the costs of adequate housing for civilians with comparable income levels in the same area." As increases in BAH are tied to increases in local housing costs, they are not affected by the annual percentage increase in the ECI. Thus, the average increase in BAH almost always differs from the increase in basic pay.

To determine the cost of adequate housing, DOD conducts an annual survey of rental costs in each of the MHAs. DOD employs a contractor to collect rental costs for various types of housing, including apartments, townhouses, and single‐family units of varying bedroom sizes. Costs for utilities are also collected. DOD uses these annual surveys to determine how much housing costs have increased or decreased in each MHA. If costs in a given MHA increase, it adjusts BAH rates for that locality upward accordingly at the start of the next calendar year. If costs in a given MHA decrease, it adjusts the BAH rates downward. However, in the case of a downward adjustment, a "save pay" provision on the BAH statute prevents the decrease from applying to individuals currently assigned to that locality: "So long as a member of a uniformed service retains uninterrupted eligibility to receive a basic allowance for housing within an area of the United States, the monthly amount of the allowance for the member may not be reduced as a result of changes in housing costs in the area or the promotion of the member." Thus, only personnel newly assigned to the area receive the lower payment.

Congress has periodically changed the law with regard to the proportion of housing costs covered by BAH or its predecessor, known as Basic Allowance for Quarters (BAQ) and Variable Housing Allowance (VHA). DOD estimated that BAQ+VHA covered about 80% of housing costs in 1996. In 1997, Congress replaced BAQ+VHA with BAH, and subsequently raised BAH rates so that they covered 100% of the cost of adequate housing by 2005.

More recently, the FY2015 National Defense Authorization Act allowed the Secretary of Defense to reduce BAH payments by 1% of the national average monthly housing cost, and the FY2016 National Defense Authorization Act extended this authority, authorizing an additional 1% reduction per year through 2019 (for a maximum reduction of 5% under the national monthly average housing cost). DOD has indicated that a save pay provision, discussed above, will apply to these changes.

Basic Allowance for Subsistence: Increases Are Linked to Increases in Food Costs

BAS is paid at a uniform rate to all eligible enlisted personnel, and at a uniform but lower rate for all eligible officers. By law, BAS is adjusted each year according to a formula that is linked to changes in food prices. The increase is identical to "the percentage increase in the monthly cost of a liberal food plan for a male in the United States who is between 20 and 50 years of age over the preceding fiscal year, as determined by the Secretary of Agriculture each October 1."

4. What Have Been the Annual Percentage Increases in Basic Pay Over the Past 20 Years? What Were Each Year's Major Executive and Legislative Branch Proposals and Actions on the Annual Percentage Increase in Military Basic Pay?

The following subsections itemize action on the basic pay increase going back to 1997. Unless otherwise noted, all increases were proposed to be effective on January 1 of the year indicated in bold. The public law number for each year's National Defense Authorization Act is included at the end of each section below, even for those years in which there was no statutory language relevant to the pay raise.

For a table that summarizes recent increases in basic pay, see CRS In Focus IF10260, Defense Primer: Military Pay Raise , by Lawrence Kapp.

2019 . Statutory Formula: 2.6 %. Administration request: 2.6 %. The House-passed version of the FY2019 National Defense Authorization Act (NDAA) contained no provision to specify the rate of increase in basic pay. Section 601 of the Senate-passed version of the FY2019 NDAA waived the automatic increase in basic pay under the statutory formula of 37 U.S.C. §1009, and set the pay raise at 2.6%. The John S. McCain National Defense Authorization Act for FY 2019 ( P.L. 115-232 ) contained no provision relating to a general increase in basic pay, thereby leaving the automatic adjustment of 37 U.S.C. 1009 in place. Final increase: 2. 6 % across-the-board .

2018. Statutory Formula: 2.4 %. Administration request: 2.1 %. Section 601 of the House-passed version of the FY2018 National Defense Authorization Act (NDAA) required the statutory formula increase (2.4%) to go into effect, "notwithstanding any determination made by the President under subsection (e) of such section with respect to an alternative pay adjustment.... " Section 601 of the Senate-passed version of the FY2018 NDAA waived the automatic increase in basic pay under the statutory formula of 37 U.S.C. §1009, and set the pay raise at 2.1%. On August 31, 2017, President Trump sent a letter to congressional leaders invoking his authority under 37 U.S.C. 1009(e) to set the pay raise at 2.1%. However, Section 601 of the enacted version of the FY2018 NDAA ( P.L. 115-91 ) specified the statutory formula increase (2.4%) would go into effect, superseding the President's alternative adjustment. Therefore, basic pay for all servicemembers increased by 2.4% on January 1, 2018. Final increase : 2. 4 % across-the-board ( P.L. 115-91 ) .

2017. Statutory Formula: 2.1 %. Administration request: 1 .6 %. Section 601 of the House version of the FY2017 NDAA ( H.R. 4909 ) required the statutory formula increase (2.1%) to go into effect, "notwithstanding any determination made by the President under subsection (e) of such section with respect to an alternative pay adjustment.... " Section 601 of the Senate version of the FY2017 NDAA ( S. 2943 ) waived the automatic increase in basic pay under the statutory formula of 37 U.S.C. §1009, and set the pay raise at 1.6%. On August 31, 2016, the President sent a letter to congressional leaders invoking his authority under 37 U.S.C. 1009(e) to set the pay raise at 1.6%. However, Section 601 of the final version of the FY2017 NDAA set the pay raise at 2.1%, and President Obama signed this bill into law on December 23, 2016. This statutory adjustment supplanted the President's alternative pay adjustment. Therefore, basic pay for all servicemembers increased by 2.1% on January 1, 2017. Final increase : 2.1% across-the-board ( P.L. 114-328 ) .

2016. Statutory Formula: 2.3 %. Administration request: 1 .3 %. The House version of the FY2016 NDAA ( H.R. 1735 ) contained no provision to specify the rate of increase in basic pay, although the report accompanying it stated that the committee supported a 2.3% increase. The Senate version ( H.R. 1735 ) contained a provision that waived the automatic adjustment of 37 U.S.C. §1009 and set the pay increase at 1.3%, but excluded generals and admirals. On August 28, the President exercised his authority to specify an alternative adjustment, setting the increase at 1.3%. No general pay raise provision was included in the final version of the NDAA, thereby leaving in place the 1.3% increase specified by President Obama. However, Section 601 of the FY2016 NDAA prevented the pay increase from applying to generals and admirals. Final increase : 1.3% across-the-board, excluding generals and admirals ( P.L. 114-92 ).

2015. Statutory Formula: 1.8 %. Administration request: 1 .0 %. The House version of the FY2015 NDAA contained no statutory provision to specify the rate of increase in basic pay, although the report accompanying it stated that the committee supported a 1.8% increase; it also included a provision to prevent general and flag officers from receiving any increase in basic pay in 2015. The Senate committee-reported version contained a provision waiving the automatic adjustment of 37 U.S.C. 1009 and setting the pay increase at 1.0% for servicemembers, but excluded generals and admirals. On August 29, President Obama sent a letter to Congress invoking 37 U.S.C. 1009(e) to set the pay raise for 2015 at 1.0%. No general pay raise provision was included in the final version of the NDAA, thereby leaving in place the 1.0% increase specified by President Obama. However, Section 601 of the FY2015 NDAA prevented the pay increase from applying to generals and admirals. Final increase : 1% across-the-board, excluding generals and admirals ( P.L. 113-291 ).

2014. Statutory Formula: 1. 8 %. Administration request: 1. 0 %. The House version of the FY2014 NDAA contained no provision to specify the rate of increase in basic pay, while the Senate committee-reported bill specified an increase of 1.0%. On August 30, President Obama sent a letter to Congress invoking 37 U.S.C. 1009(e) to set the pay raise for 2014 at 1.0%. No provision was included in the final version of the NDAA, thereby leaving in place the 1.0% increase specified by the President. Final increase : 1% across-the-board ( P.L. 113-66 ).

2013. Statutory Formula: 1. 7 %. Administration request: 1. 7 %. The House version of the FY2013 NDAA supported a 1.7% across-the-board pay raise. The Senate bill contained no statutory language. The final bill specified a 1.7% increase. Final increase : 1 .7 % across-the-board ( P.L. 112-239 ).

2012. Statutory Formula: 1.6%. Administration request: 1.6%. The House version of the FY2012 NDAA supported a 1.6% across-the-board pay raise, equal to the ECI. Both the Senate-reported bill and the final version were silent on the pay raise issue. As a result, the statutory formula became operative with an automatic January 1, 2012, across-the-board raise equal to 1.6%. Final increase : 1.6% across-the-board ( P.L. 112-81 ).

2011. Statutory formula: 1.4%. Administration request : 1.4%. The House version of the FY2011 NDAA supported a 1.9% across-the-board pay raise, 0.5% above the ECI. Both the Senate-reported bill and the final bill were silent on the pay raise issue. As a result, the statutory formula became operative with an automatic across-the-board raise of 1.4%; equal to the ECI. Final increase : 1.4% across-the-board ( P.L. 111-383 ).

2010. Statutory formula: 2.9%. Administration request: 2.9%. The FY2010 NDAA specified a 3.4% increase. Final increase : 3.4% across-the- board ( P.L. 111-84 ).

2009. Statutory formula: 3.4%. Administration request: 3.4%. The FY2009 NDAA specified a 3.9% increase. Final increase : 3.9% across -the-board ( P.L. 110-417 ).

2008. Statutory formula: 3.0%. Administration request: 3.0% across-the-board. The presidential veto of the initial FY2008 NDAA resulted in a 3.0% pay raise taking effect on January 1, 2008 (statutory formula). The final version of the NDAA, signed into law on January 28, specified that basic pay be increased by 3.5% retroactive to January 1. Final increase : 3.5 % across -the-board ( P.L. 110-181 ).

2007. Statutory formula: 2.2%. The statutory formula for 2007 was based solely on the ECI and not a rate 0.5% higher than the ECI that had been specified for 2000-2006. Administration request: 2.2%. The NDAA specified a minimum 2.2% increase, with greater increases for certain pay cells. Final increase : 2.2% across-the- board but with an additional April 1, 2007 , targeted pay raise that would be as high as 8.3% for some warrant officers and range from 2.5 % for E-5s to 5.5 % for E-9s ( P.L. 109-364 ).

2006. Statutory formula: 3.1%. Administration request: 3.1% across-the-board. The NDAA specified a 3.1% increase. Final increase : 3.1% across-the- board ( P.L. 109-163 ).

2005. Statutory formula: 3.5%. Administration request: 3.5%. The NDAA specified a 3.5% increase. Final increase : 3.5% across-the-board ( P.L. 108-375 ).

2004. Statutory formula: 3.7%. Administration request: Average 4.1%; minimum 2.0%; maximum of 6.5%. The NDAA specified a 3.7% minimum increase, with greater increases for certain pay cells. Final increase : 3.7% minimum, 4.15% average, 6.25% maximum for some senior NCOs ( P.L. 108-136 ).

2003. Statutory formula: 4.1%. Administration request: minimum 4.1%; average 4.8%; between 5.0% and 6.5% for some mid-level and senior noncommissioned officers, warrant officers, and mid-level commissioned officers. The NDAA specified increases identical to the Administration request. Final increase: I dentical to the Administration request ( P.L. 107-314 ).

2002. Statutory formula: 4.6%. Administration request: numerous figures for the "Administration request" were mentioned in the pay raise debate, depending on when and which agency produced the figures. In general, however, they all proposed increases of at least 5% and no more than 15% (the latter applying only to a very few individuals), depending on pay grade and years of service; the average increase was 6.9%. The NDAA specified a 5% minimum increase, with greater increases for certain pay cells. Final increase: Between 5 and 10%, depending on pay grade and years of service ( P.L. 107-107 ).

2001. Statutory formula: 3.7%. Administration request : 3.7%. The FY2001 NDAA specified a 3.7% minimum increase of 3.7%, with greater increases for certain pay cells . The NDAA specified a 3.7% minimum increase, with greater increases for certain pay cells. Final increase: 3.7% across-the-board, effective January 1, 2001, plus additional raises of between 1.0 and 5.5% for mid -grade officer and enlisted personnel , to be effective July 1, 2001 ( P.L. 106-398 ).

2000. Statutory formula: 4.8% (based on the change to the statutory formula; the original statutory formula would have led to a proposed raise of 3.8%). Administration request: 4.4% on January 1, 2000, plus increases averaging an additional 1.4% for mid-grade officer and enlisted personnel, effective July 1, 2000. The NDAA specified a 4.8% minimum increase, with greater increases for certain pay cells. Final increase: 4.8% on January 1, 2000, plus increases averaging an additional 1.4% for mid-grade officer and enlisted personnel, effective July 1, 2000 ( P.L. 106-65 ).

1999. Statutory formula : 3.1%. Administration request : 3.6%. The House approved 3.6%, or whatever percentage increase was approved for federal GS civilians, whichever was higher. The Senate approved 3.6%. The final version accepted the House provision. Final increase : 3.6%, as GS civilians also received 3.6% ( P.L. 105-261 ).

5. What Is an "Adequate" Level of Military Pay?

Since the end of the draft in 1973, the "adequacy" of military pay has tended to become an issue for Congress if it appears that

the military services are having trouble recruiting enough new personnel, or keeping sufficient career personnel, of requisite quality; or the standard of living of career personnel is perceived to be less fair or equitable than that of demographically comparable civilians (in terms of age, education, skills, responsibilities, and similar criteria).

The first issue is an economic inevitability in some periods. In the absence of a draft, the services must compete in the labor market for new military personnel, and—a fact often overlooked—have always had to compete in the labor market to retain the more experienced individuals who make up the career force. When unemployment is low, employment opportunities in the civilian world abound and military recruiting is more difficult. When unemployment is high, military service becomes a more attractive alternative, and military recruiting is easier.

From 2010 to 2017, recruiting and retention in the Armed Forces were quite strong, hence weakening the case for compensation increases based on competition with the civilian economy and generating discussion of possible compensation cuts and/or restructuring. However, the strong recruiting and retention results in those years were due in part to a civilian economy still recovering from recession and to force reductions in the Air Force, Marine Corps, and Army, which generated lower recruiting and retention goals. Congress approved active duty end-strength increases for all four Services in FY2018. Subsequently, the Army did not meet its FY2018 recruiting goal and senior defense officials have testified that a strong economy has made it more challenging for them to recruit new personnel. If recruiting problems were to become more widespread, increased advocacy for compensation increases could well occur.

The second situation is frequently stated in moral or ethical terms. Proponents of this viewpoint argue that, even if quantitative indexes of recruiting and retention appear to be satisfactory, the crucial character of the military's mission of national defense, and its acceptance of the professional ethic that places mission accomplishment above survival, demands certain enhanced levels of compensation. However, the compensation increases that occurred in the 2000s have led many analysts to conclude that military compensation is currently quite robust in comparison to civilian counterparts.

6. Is There a "Pay Gap" Between Military and Civilian Pay? Do Military Personnel Make More or Less Than Their Civilian Counterparts?

The issue of a military-civilian "pay gap" raises several additional questions:

How can the existence of a gap be determined and the gap be measured? Is there a gap and, if so, are civilians or military personnel being paid more? How much more? If there is a gap, does that in itself require action?

A wide range of studies over the past several decades have attempted to compare military and civilian (both federal civil service and private sector) compensation. In general, the markedly different ways in which civilian public and private sector compensation and benefit systems are structured, compared to those of the Armed Forces, make it difficult to validate any generalizations about whether there is a "gap" between military and civilian pay.

It is difficult to find a common index or indicator to compare the dollar values of military and civilian compensation. First, military compensation includes numerous separate components, whose receiving population and taxability vary widely. Which of these, if any, should be included in a military-civilian pay comparison? Furthermore, total military compensation includes a wide range of noncash benefits—health care, commissary access, recreational facilities—as well as a unique deferred compensation package. Few civilians work in organizations where analogous benefits are provided. Attempts to facilitate a comparison by assigning a cash value to noncash benefits almost always founder on the large number of debatable assumptions that must be made to generate such an estimate.

Second, it is also difficult to establish a comparison between military ranks and pay grades on the one hand and civilian jobs on the other. The range of knowledge, supervision, and professional judgment required of military personnel and civilians performing similar duties in a standard peacetime industrial or office milieu may be roughly equivalent. However, when the same military member's job in the field and in combat is concerned, comparisons become difficult.

Third, generally speaking, the conditions of military service are frequently much more arduous than those of civilian employment, even in peacetime, for families as well as military personnel themselves. This aspect of military service is sometimes cited as a rationale for military compensation being at a higher level than it otherwise might be. On the other hand, the military services all mention travel and adventure in exotic places as a positive reason for enlistment and/or a military career, so it may be misleading to automatically assume that this is always a liability. Thus, it can be difficult to make direct comparisons between military and civilian occupations. As noted by the Congressional Budget Office:

Comparing compensation in the military and civilian sectors can be problematic. One obvious limitation is that such comparisons cannot easily account for different job characteristics. Many military jobs are more hazardous, require frequent moves, and are less flexible than civilian jobs in the same field. Members of the armed forces are subject to military discipline, are considered to be on duty at all times, and are unable to resign, change jobs at will or negotiate pay. Military personnel also receive extensive training, paid for by the government. Family support programs are generally more available in the military compared with civilian employers. Intangible rewards, such as a shared sense of purpose, may be higher among military personnel as well. Quantifying those elements among military and civilian personnel is extremely difficult.

Fourth, differing methodologies for calculating compensation can yield different results. For example, comparing the percentage increase in pay over different time periods can produce widely varying rates of increase. Likewise, when indexes of compensation include different elements (for example, basic pay versus RMC), the results will typically diverge as well.

Finally, the level of specificity used in a pay comparison can lead to differing results, especially when the comparison is between private sector and federal pay, both civil service and military. For instance, Army colonels may, according to some indexes, be paid roughly as much as federal civil service GS-15s, or as much as private sector managers with certain responsibilities. However, if the pay comparisons focus on those occupational specialties that are highly paid in the private sector—health care, information technology, and some other scientific and engineering skills are examples—the comparison may not be as favorable. Other common subcategories for comparison—such as age, gender, years in the labor force, and educational levels—can also produce differing results.

Estimates of a Military-Civilian Pay Gap

Various comparisons of military and civilian compensation exist which illustrate a gap that favors civilian pay levels, refute the existence of such a gap, or show that the pay gap favors the military. Some of these reports lack precision in identifying what aspects of military pay were compared with civilian pay, which indexes were used to make the comparison, or the length of time covered by the comparison.

One method of estimation, which indicates there is a pay gap in favor of civilians, asserts that rough pay parity existed between civilian and military personnel in 1982, but that increases since then in military basic pay have generally not kept up with increases in civilian pay (as measured by the ECI). As a result, a pay gap of about 13% in 1999 was gradually eliminated by 2011 due to above-ECI increases in basic pay. It reappeared in 2014 with military pay estimated to be 2.6% lower than civilian pay in 2018.

However, using the same starting date (1982) but considering RMC rather than just basic pay, the Congressional Budget Office (CBO) came to a much different conclusion in 2010. In congressional testimony, a CBO analyst answered the question "Is there a 'gap' between civilian and military pay raises over the past few decades," as follows:

The answer depends on how narrowly military cash pay is defined. One common method of comparison is to calculate the cumulative difference between increases in military and civilian pay using military basic pay, a narrow measure of cash compensation that does not include, for example, tax-free allowances for housing and food. Applying that method would indicate that cumulatively, civilian pay rose by about 2 percent more than military pay between 1982 and the beginning of 2010. But that measure does not encompass the full scope of military cash compensation. Using a broader measure that includes cash allowances for housing and food indicates that the cumulative increase in military compensation has exceeded the cumulative increase in private-sector wages and salaries by 11 percent since 1982. That comparison excludes the value of noncash and deferred benefits, which would probably add to the cumulative difference, because benefits such as military health care have expanded more rapidly than corresponding benefits in the private sector.

Another approach to estimating a pay gap attempts to compare actual compensation levels of military personnel to civilians with similar education and experience, rather than comparing rates of compensation increase over time. For example, the 9 th Quadrennial Review of Military Compensation (QRMC), published in 2002, compared the RMC of junior enlisted personnel to the earnings of civilian high school graduates, middle grade NCOs with civilians with some college education, and senior enlisted personnel with civilians who are college graduates. It compared the RMC of officers to the earnings of civilians with bachelors or advanced degrees in professional or managerial occupations. Based on a separate body of research, it argued that "pay at around the 70 th percentile of comparably educated civilians has been necessary to enable the military to recruit and retain the quantity and quality of personnel it requires" and pointed out those groups of military personnel that fell short of this compensation goal. Congress approved several rounds of pay table reform to address situations where servicemembers fell below the 70% mark. Additionally, general increases in basic pay higher than the rate of increase in the ECI (2000-2010) and the elimination of "out-of-pocket" housing expenses by 2005 pushed servicemember RMC up substantially in relation to civilian compensation. According to the 11 th QRMC, by 2009 military compensation had substantially exceeded this goal:

In 2009, average RMC for enlisted members exceeded the median wage for civilians in each relevant comparison group—those with a high school diploma, those with some college, and those with an associate's degree. Average RMC for the enlisted force corresponded to the 90 th percentile of wages for civilians from the combined comparison groups. For officers, average RMC exceeded wages for civilians with a bachelor's or graduate-level degree. Average RMC for the officer force corresponded to the 83 rd percentile of wages for the combined civilian comparison groups.

Since that time, Congress and the executive branch have made efforts to slow the growth of military compensation. Recent initiatives have included presidentially directed increases in basic pay below the ECI for 2014-2016 and statutory authority for DOD to reduce BAH payments by 1% of the national average monthly housing cost per year from 2015 to 2019 (for a maximum reduction of 5% of the national monthly average housing cost).

In 2018, RAND published a report that compared RMC in 2016 to civilian pay levels, and compared those results to those generated by the 11 th QRMC in 2009. Using a similar, though not identical, methodology the RAND report found that RMC had remained well above the 70 th percentile of comparability educated civilians:

The 11 th QRMC, using 2009 data, placed RMC at the 90 th percentile of civilian pay for enlisted and the 83 rd for officers. Our percentiles for 2016—the 84 th for enlisted and 77 th for officers—are somewhat lower than those of the 11 th QRMC. Although the estimates differ, both estimates show relatively high percentiles, yet methodological differences contribute to the discrepancy.

Taking into account the somewhat different methodology used by RAND in 2018, its authors conclude "overall RMC percentiles for 2016 for enlisted personnel and officers were virtually the same as for 2009."

Some have suggested that the emphasis on a pay gap, whether real or not, is an inappropriate guide to arriving at sound policy. They argue that the key issue is, or should be, not comparability of military and civilian compensation, but the competitiveness of the former. Absent a draft, the Armed Forces must compete in the labor market for new enlisted and officer personnel. The career force by definition has always been a "volunteer force," and thus has always had to compete with civilian opportunities, real or perceived. Given these facts, some ask what difference it makes whether military pay is much lower, the same, or higher than that of civilians? If the services are having recruiting difficulties, then pay increases might be appropriate, even if the existing "gap" favors the military. Conversely, if military compensation is lower than equivalent civilian pay, and if the services are doing well in recruiting and retaining sufficient numbers of qualified personnel, then there might be no reason to raise military pay.

The 11 th QRMC voiced similar sentiments when it argued the following:

A comparison between military and civilian wages does not, by itself, determine if military pay is at the optimal level. As previously noted, other factors are also at play including: recruiting and retention experiences and outlook; unemployment in the civilian economy; political factors, such as a wartime environment or risk of war; and the expected frequency and duration of overseas deployments. But the relative standing of military compensation provides context to help make decisions about RMC and other elements of the compensation system, such as those studied by the QRMC.

7. What Additional Benefits Are Available for Military Personnel Serving in Iraq and Afghanistan?

Members of the Armed Forces serving in Iraq or Afghanistan are entitled to various additional forms of compensation, described below. Those serving in nearby countries are often eligible as well.

Military personnel serving in Iraq or Afghanistan are eligible for Hostile Fire Pay (HFP) or Imminent Danger Pay (IDP). HFP is paid at the rate of $225 per month; IDP is paid at an equivalent rate, but on a daily basis ($7.50 per day). The purpose of this pay is to compensate servicemembers for physical danger. An individual can collect either Hostile Fire Pay or Imminent Danger Pay, not both simultaneously. Iraq and Afghanistan are designated imminent danger locations; any servicemember in these locations is entitled to IDP by virtue of their presence. Certain areas surrounding these countries were formerly designated as imminent danger locations, but DOD revoked this designation in 2014. For a list of all imminent danger locations, see the DOD Financial Management Regulations.

Military personnel serving for over 30 days in Iraq, Afghanistan, and certain surrounding countries are eligible for Hardship Duty Pay (HDP). HDP is compensation for the exceptional demands of certain duty. In the case of Iraq and Afghanistan, it is compensation for the austere living conditions of the location. The rate for HDP in Iraq and Afghanistan is $100 per month.

Military personnel serving in Iraq, Afghanistan, and surrounding areas may be eligible for Family Separation Allowance (FSA). FSA provides a special pay for those servicemembers with dependents who are separated from their families for more than 30 days. The purpose of this pay is to "partially reimburse, on average, members of the uniformed services involuntarily separated from their dependents for the reasonable amount of extra expenses that result from such separation, and to reimburse members who must maintain a home in the United States for their dependents and another home overseas for themselves for the average expenses of maintaining the overseas home." To be eligible for this allowance, U.S. military personnel must be separated from their dependents for 30 continuous days or more; but once the 30-day threshold has been reached, the allowance is applied retroactively to the first day of separation. The authorizing statute for FSA sets the rate at $250 per month.

Military personnel using military facilities and serving in Iraq and Afghanistan receive per diem equivalent to $105 per month to cover incidental expenses. The rate is the same for all personnel.

One of the more generous benefits for many of those serving in Iraq or Afghanistan, and certain surrounding areas, is the "combat zone tax exclusion." Military personnel serving in direct support of operations in these combat zones are also eligible for the combat zone tax exclusion, as are those "hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone." For enlisted personnel and warrant officers, this means that all compensation for active military service in a combat zone is free of federal income tax. For commissioned officers, their compensation is free of federal income tax up to the maximum amount of enlisted basic pay plus any imminent danger pay received. While this benefit applies only to federal income tax, almost all states have provisions extending the benefit to their state income tax as well.

In addition, military personnel who qualify for a reenlistment or retention bonus while stationed in a combat zone do not have to pay federal income tax on the bonus (though commissioned officers are still subject to the cap mentioned above). The amounts involved can be substantial, often in the tens of thousands of dollars, and occasionally over $100,000.

Another benefit available to those deployed to a combat zone is eligibility for the Savings Deposit Program. This program allows servicemembers to earn a guaranteed rate of 10% interest on deposits of up to $10,000, which must have been earned in the designated areas. The deposit is normally returned to the servicemember, with interest, within 90 days after he or she leaves the eligible region, although earlier withdrawals can sometimes be made for emergency reasons.

8. What Benefits Are Available to the Survivors of Military Personnel Killed in Iraq or Afghanistan?

Currently, the survivors (typically, spouses and children) of military personnel who die on active duty, whether serving in combat zones or not, are eligible for a number of monetary and other benefits. These generally include the following:

A death gratuity of $100,000, payable within a few days of the death to assist families in dealing with immediate expenses. Servicemembers' Group Life Insurance (SGLI) of up to $400,000. Disbursement of unpaid pay and allowances. One year of government housing or BAH. Three years of TRICARE coverage at the active duty dependent rate, followed by coverage at the retiree dependent rate (children remain covered as active duty family members until age 21, or until age 23 if enrolled in school full-time). Commissary and Exchange access. Burial expenses. One or more survivor benefit annuities (Social Security Survivor Benefits, DOD Survivor Benefit Plan , and/or Veterans Affairs Dependency and Indemnity Compensation; receipt of more than one annuity may require offsets between the annuities).

Note, however, that each type of benefit described above has its own eligibility criteria. Survivors may, or may not, qualify for a given benefit based on their unique circumstances. For more detailed information on who qualifies for a given benefit, see the Department of Defense's A Survivor's Guide to Benefits .