Group wants lawmakers to cap military housing stipends to curb costs

WASHINGTON — A conservative think tank with ties to the Trump administration is reviving plans to drastically cut military housing allowance payouts, calling them overly generous and ripe for abuse.

Instead, officials at the Heritage Foundation want to see lawmakers adopt a plan to award troops a Basic Allowance for Housing only for their rent or mortgage expenses, to ensure that excess funds aren’t being used to pay for other unrelated costs.

"Congress should restore BAH’s place as an allowance, versus an entitlement, by requiring married military couples to share a single BAH, and all servicemembers to document their housing expenditures in order to receive BAH," the group wrote in its new budgetary report titled "Preventing a Defense Crisis."

The proposed changes mirror plans unveiled by Senate planners in their 2017 defense authorization bill that were ultimately struck down by House lawmakers last fall. The idea caused an uproar among military family advocates, who called it a stealth pay cut that could significantly harm troops’ finances.

But foundation officials framed the change as a way to reign in an out-of-control benefit. By their estimates, matching BAH payouts with actual housing costs will save $116 million a year.

The current housing stipend system assigns flat-rate payouts for zip codes across the country based on troops’ rank and family status. If troops find less expensive housing, they can pocket the difference.

Also, dual-military couples can receive two BAH payouts for their shared housing costs, a situation critics have long decried as unfair and fiscally unwise for the government.

But Pentagon officials have defended the current system as part of a broader compensation package for troops, and that the housing stipend flexibility makes up for shortfalls in other areas like lower-than-civilian pay raises and frequent family moves.

Military advocates have also argued that tying the stipend just to rent costs could encourage landlords to hike up their prices, and ignores other living expenses like utilities and homeowner association fees.

The Defense Department paid out about $5.8 billion in housing stipends last year, meaning even small changes could have significant budgetary impacts.

President Donald Trump has repeatedly promised to increase military funding and readiness, but has not yet weighed in on specifics like troops' housing stipends. Republicans in the Senate showed support for the idea last year, but Republicans in the House were firmly against the BAH changes in budget negotiations. 

Lawmakers last year mandated a new study on the feasibility of a single-salary pay system for the military, eliminating a host of separate stipends in favor of a single payout covering all troops’ needs. Heritage officials also backed that idea.

The foundation report highlights the housing stipend as part of a series of "systemic changes" needed "to begin the rebuilding of the country’s armed forces" by increasing efficiency and cutting waste within the military.