Defense budget would cut benefits

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House and Senate negotiators on Tuesday agreed to cut benefits to military families, though not by as much as the Pentagon had demanded.

The lawmakers released a new Defense authorization bill that increases families' co-pays for prescription drugs under the Tricare health program. The bill would also reduce the planned rate of growth in the housing allowance provided to military families.

The cuts are deeper than what the House had included in its initial funding bill, but do not go as far as what the Pentagon has proposed and what the Senate had backed in its own bill.

Military families had lobbied furiously against the cuts, which the Pentagon says are needed to bring its long-term finances under control. Groups representing soldiers and their families argued the Pentagon should not balance its budget on the backs of those who have fought wars for the country for more than a decade.

Senior aides said the changes will only apply for a year, and that they did not want to make any future changes ahead of the results of a commission appointed to review military benefits and compensation in February.

"This will take us into next year when we get the commission on compensation and benefits to inform us on how to take the longer view on how to [get the necessary reforms]," a senior House aide said.

But, he added, "We had to do something now, so that was the compromise."

Lawmakers had proposed a $30 increase in co-pays over 10 years and a 5 percent reduction in housing allowances' rate of growth over three years, but the current proposal opts for a $3 co-pay hike for 2015 and a 1 percent housing rate cut.

Military raises would increase by 1 percent, instead of 1.8 percent, staffers added.

"This is the second Christmas in a row that national leaders have tried to cut military pay benefits," said Lori Falkner Volkman, a former prosecutor and spokesperson for the Keep Your Promise Alliance, an online coalition of military families and organizations.

"The president and Congress promised not to balance the budget on the backs of service members and this is a knee-jerk reaction to the lie that we're in a ‘bullets or benefits’ scenario," she said.

"Earned benefits shouldn't even be on the table while entitlement budgets soar and appropriation budgets are billions over budget."

The bill would allocate $521 billion for 2015. $17.9 billion of that will go to defense programs at the Department of Energy, and $63.7 billion for overseas contingency operations funds.

The bill, if passed, would provide two years of authority for the Pentagon's program to train and equip moderate Syrian rebels, and for the plan to send 1,500 troops to train, advise and assist Iraqi forces.

The bill also rejects a Pentagon proposal to retire the A-10 fighter jets in order to save $4 billion over the next five years. Lawmakers, however, included some reductions in flight hours and maintenance for the aircraft next year.

Lawmakers also blocked plans to retire Army National Guard Apache helicopters.

The defense bill was jointly crafted by the Senate and House Armed Services committees, a departure from normal procedure.

The House passed their version in May, but as time ran down for Senate to pass their version, the committees agreed to informally craft a joint version to send to both chambers for a vote.

Talks between the committees had stalled over the proposed cuts, which were opposed by the House, and supported by the Senate. The adoption of cuts for one year was a compromise for the House.

Senators agreed to drop a provision that would have allowed the transfer of Guantanamo Bay detainees to the U.S. if Congress approved a comprehensive plan to shut down the facility.

Lawmakers also included protections for military sexual assault victims, but there are no plans to prevent military commanders from handling the cases.

The budget will be introduced in the House this week and sent over to the Senate if approved. There will not be a chance for amendments to the bill, said a senior Senate staffer.

"I would imagine it would be more like next week," said the staffer. "We will be asking people to pass the bill without amendments.

"We think we have enough votes to pass it, but life in the Senate is always difficult," the staffer said.

— This story was last updated at 3:12 p.m.