Restricting Housing Allowance Would Have Unintended Consequences Analyst Says

first_imgA Senate plan to reduce service members’ basic allowance for housing (BAH) payments in many cases, including for dual-service military families and single members living together, is misguided as it targets a benefit that service members consider part of their cash compensation, according to a top defense analyst.The change also could upset the housing market in defense communities, Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies, writes in an editorial in Politico.The proposal, included in the Senate version of the fiscal 2017 defense authorization bill, would limit BAH payments to actual expenses for rent and utilities, preventing personnel from pocketing extra payments if they find less expensive housing. The plan would cut the BAH for dual-military couples in half and slash housing stipends for personnel who choose to share housing. The existing system offers military members a flat payment based on their rank and location.While the change “sounds perfectly reasonable on the surface,” Harrison said, it would encourage families to spend more on housing costs and discourage military members from rooming together.The proposal potentially could distort housing costs in defense communities, according to Harrison. With no incentive for service members to find inexpensive housing so they can pocket the difference between their rent and BAH, the price of housing outside military installations likely will rise. As a result, housing will become less affordable for lower- and middle-income civilian families, Harrison said.“That could have far reaching effects in these communities and is something the Senate bill does not address,” he said.Lawmakers should leave the BAH alone since employees value cash compensation more than non-cash forms such as health care and deferred benefits such as retirement pensions.“If Congress wants to control costs, it should focus on cutting the forms of compensation that are less valued by service members and leave cash compensation alone. There are tremendous savings that could be achieved by tweaking benefits many service members don’t even know they have and therefore do not value,” Harrison said.The proposal is unlikely to be included in the final version of the authorization bill as many lawmakers don’t support it and the House-Senate conference committee attempting to hash out a compromise measure has other higher-priority reforms to tackle, he told Military Times. Dan Cohen AUTHORlast_img