5 Ways the Defense Budget Matters to You

By Katie Lange
DoD News, Defense Media Activity

Defense Secretary Ash Carter has laid out his budget plan for fiscal year 2017, and it includes lots of reforms that will help maintain the health and well-being of service members and their families. It also includes initiatives that will help recruit and attract the best and brightest minds in the U.S. to the Department of Defense.

Sifting through a huge budget can be time-consuming and confusing, though, so we did the reading for you and outlined only what’s important.

Here are the top five ways the budget matters to you:

1) It protects military retirement

A new, blended retirement system will take effect on Jan. 1, 2018, offering any service member who has completed at least two years of service some form of retirement benefit. It’s a big change from the current system, where you walk away with nothing unless you served a full 20 years.

U.S. Air Force Lt. Gen. William Etter presents Col. “BJ” Marshall with her Certificate of Service from the state of New York during her retirement ceremony March 27, 2015, after a 34-year career. Air Force photo by Airman 1st Class Sergio Gamboa

U.S. Air Force Lt. Gen. William Etter presents Col. “BJ” Marshall with her Certificate of Service from the state of New York during her retirement ceremony March 27, 2015, after a 34-year career. Air Force photo by Airman 1st Class Sergio Gamboa

While details of the new system have been hashed out, the 2017 budget would make a few changes that, if approved by Congress, would make it even better. Here’s the breakdown:

To contributions:
In the blended system, the DoD will automatically contribute 1 percent of a service member’s basic pay to a Thrift Savings Plan (kind of like a private-sector 401k) after 60 days of service.
Under the original plan: The DoD will match up to 4 percent of what a service member contributes once their third year of service starts.
Proposed changes: The match rate would increase from 4 percent up to 5 percent; however, instead of the DoD matching contributions beginning at the third year, they would start at the fifth year of service. Officials believe this will promote retention after the first term of service.
Under the original plan: The DoD’s matching contributions would end after 26 years of service.
Proposed changes: There will be no time cap – matching contributions will continue until the end of your service.

To continuation pay:
Continuation pay is when you can get a cash payment at the midpoint of your career in exchange for additional service.
Under the original plan: It defined that career midpoint at 12 years of service and set a minimum payment amount.
Proposed changes: As a retention tool, continuation pay could be paid at any point between eight and 16 years of service and would be aimed at members in select, critical skills.

2) The budget strengthens the TRICARE program

Graphic: TRICARE logo


The proposals are aimed at modernizing the Military Health System by improving access to care, improving customer service and simplifying the TRICARE program for beneficiaries.

The budget simplifies the department’s health care system with two options: TRICARE Select, which would be managed and encourage those with the plan to use Military Treatment Facilities; and TRICARE Choice, which would be self-managed and offers families access to civilian providers.

The DoD will also implement operation improvements to the program:

  • Access will be improved, offering easier means to connect with providers in person, by phone, by secure email or even by video; referrals will be streamlined, and requests for appointments will get managed on the first call.
  • Programs for special-needs children and other vulnerable beneficiaries will be enhanced, like the Special Needs Trust, which supplements but doesn’t replace public benefits.

Health care services will still be free for active-duty service members, and there is a no-cost option for their family members. Other beneficiaries may see modest increases to their out-of-pocket costs.

3) The budget fully funds family-focused reforms

Defense Secretary Carter recently announced big changes that will help military families maintain a better work-life balance. Maternity leave was recently expanded to 12 weeks, and Secretary Carter is seeking legislation to expand paternity leave from 10 to 14 days. In addition, the DoD is expanding child care hours. For more details on those changes, check out this blog we recently posted.

4) There’s an upward trend in basic pay

marines play money

The budget includes a 1.6 percent increase in pay for calendar year 2017. That’s the largest increase in four years.

5) Collaborations will increase the military’s talent pool and promote diversity

The DoD, other government agencies and the private sector will have an easier time collaborating to bring more talent and technology to the forces. Some of the ways the budget is making that happen is by:

  • Establishing a Defense Digital Service: A small team of private-sector engineers and digital experts brought in to the DoD temporarily to help senior leaders improve technological agility and solve the DoD’s most complex IT problems.
  • Expanding Secretary Carter’s Corporate Fellows Program to expose talented military officers to new ways of doing business.
  • Expanding in-service civil schooling opportunities, including establishing an enlisted pilot program.
  • Improving the way we monitor and place interns and fellows throughout the DoD to make sure every agency has the broadest possible talent pool from which to draw.

There’s a lot more going on with the budget, but those are the items that might affect you most. To read about other defense reforms covered in the proposal, check out our fact sheet or our special section on defense.gov.

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