To amend title 37, United States Code, to ensure that military pay increases are comparable to private sector pay growth, as measured by the Employment Cost Index.

April 30, 2003

Mrs. DAVIS of California (for herself and Mr. SKELTON) introduced the following bill; which was referred to the Committee on Armed Services

To amend title 37, United States Code, to ensure that military pay increases are comparable to private sector pay growth, as measured by the Employment Cost Index.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Military Pay Comparability Act of 2003'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) One of the underlying principles of the all-volunteer Armed Forces is the principle that military pay increases must remain comparable to private sector pay growth, as measured by the Employment Cost Index.

(2) The capping of military pay raises below private sector pay growth for extended periods during the past 30 years has led to significant retention problems among second-term and career members of the Armed Forces.

(3) Such retention problems cost the United States more in terms of lost military experience, decreased readiness, and increased training costs than maintaining the principle of pay comparability.

(4) Since military pay was last deemed reasonably comparable with private sector pay in 1982, military pay raises have lagged a cumulative 6.4 percent behind private sector wage growth, although recent efforts of the President and Congress have reduced the gap significantly from its peak of 13.5 percent in 1999.

(5) Under existing law, while military pay increases must exceed growth in the Employment Cost Index through fiscal year 2006, increases in subsequent years will be capped one-half percentage point below the Employment Cost Index, to the detriment of retention and readiness over the long term.

(6) The remaining so-called pay comparability gap should be eliminated as quickly as possible, and military pay increases must sustain full comparability with increases in the Employment Cost Index.

SEC. 3. ANNUAL ADJUSTMENTS IN MONTHLY BASIC PAY FOR MEMBERS OF THE UNIFORMED SERVICES.

(a) ANNUAL ADJUSTMENT REQUIRED- Section 1009 of title 37, United States Code, is amended by striking subsections (a), (b), and (c) and inserting the following new subsections:

`(a) REQUIREMENT FOR ANNUAL ADJUSTMENT- Effective on January 1 of each year, the rates of basic pay for members of the uniformed services under section 203(a) of this title shall be increased under this section.

`(b) EFFECTIVENESS OF ADJUSTMENT- An adjustment under this section shall have the force and effect of law.

`(c) EQUAL PERCENTAGE INCREASE FOR ALL MEMBERS- (1) Subject to subsection (d), an adjustment made under this section in a year shall provide all eligible members with an increase in the monthly basic pay that is the percentage (rounded to the nearest one-tenth of 1 percent) by which the Employment Cost Index for the base quarter of the year before the preceding year exceeds the Employment Cost Index for the base quarter of the second year before the preceding calendar year (if at all).

`(2) Notwithstanding paragraph (1), but subject to subsection (d), the percentage of the adjustment taking effect under this section during each of fiscal years 2004, 2005, and 2006, shall be one-half of one percentage point higher than the percentage that would otherwise be applicable under such paragraph.'.

(b) PUBLICATION OF ADJUSTED RATES- Subsection (e) of such section is amended--

(1) by striking `(e) NOTICE OF ALLOCATIONS- ' and inserting `(e) NOTIFICATION AND PUBLICATION REQUIREMENTS- (1)'; and

(2) by adding at the end the following new paragraph:

`(2) The rates of basic pay that take effect under this section shall be printed in the Federal Register and the Code of Federal Regulations.'.

(c) PRESIDENTIAL DETERMINATION OF NEED FOR ALTERNATIVE PAY ADJUSTMENT- Such section is further amended--

(1) by redesignating subsection (g) as subsection (h); and

(2) by inserting after subsection (f) the following new subsection (g):

`(g) EFFECT OF NATIONAL EMERGENCY OR SERIOUS ECONOMIC CONDITIONS- (1) If, because of national emergency or serious economic conditions affecting the general welfare, the President determines that the pay adjustment otherwise required by this section for a year is inappropriate, the President may prepare a plan proposing such alternative pay adjustments as the President considers appropriate. The President shall submit the plan, together with the reasons for the alternative pay adjustments, to Congress before March 1 of the preceding year.

`(2) In evaluating an economic condition affecting the general welfare under this subsection, the President shall consider pertinent economic measures including the Indexes of Leading Economic Indicators, the Gross National Product, the unemployment rate, the budget deficit, the Consumer Price Index, the Producer Price Index, the Employment Cost Index, and the Implicit Price Deflator for Personal Consumption Expenditures.

`(3) The President shall include in the plan submitted under paragraph (1) an assessment of the impact that the alternative pay adjustments proposed in the plan will have on the ability to recruit and retain well-qualified members of the uniformed services.

(d) DEFINITIONS- Such section, as amended by subsection (c), is further amended by adding at the end the following new subsection:

`(i) DEFINITIONS- In this section:

`(1) The term `Employment Cost Index' means the Employment Cost Index (wages and salaries, private industry workers) published quarterly by the Bureau of Labor Statistics.

`(2) The term `base quarter' for any year is the three-month period ending on September 30 of such year.'.

(e) CONFORMING AMENDMENT- Subsection (d)(2) of such section is amended by striking `in the General Schedule rates of basic pay for civilian employees.' and inserting `in the rates of monthly basic pay under this section.'.

END