Bidenflation Cutting Into Military Salaries

Written By BlabberBuzz | Saturday, 01 January 2022 10:50
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American service members will probably be in a poorer financial situation next year because of growing inflation, despite President Joe Biden authorizing a Pentagon-wide press increase earlier this week, a former Army Major General announced on Wednesday.

John G. Ferrari, now a senior fellow at the American Enterprise Institute, explained to Fix that "for Troops at the lowest part of the pay scale, the cost of gas and food may drive some deeper into debt, or they may rely more on food banks."

On Monday, Biden signed the National Defense Authorization Act, an annual must-pass piece of legislation that fixes the next year's Pentagon budget.

This year's spending bill covered a 2.7 percent pay growth across both military and civilian Defense Department employees.

Though Ferrari feared it may not negate the growing prices at the pump and the grocery store.

"The situation is serious now because we have not seen this level of inflation in decades," he announced.

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Earlier this month the Labor Department released data that inflation had increased 6.8 percent in November from the past year, a 40-year record high.

Increasing prices are hitting Americans hard in essential categories, with groceries overall up 6.2 percent in the 12-month window ending in November. Steak increased 25.6 percent, bread grew 4 percent, and fresh fruit prices increased 5.8 percent.

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Regular unleaded gasoline skyrocketed 60.1 percent from 2020, and new cars and trucks were 11.1 percent more expensive. The cost of used cars increased 31.4 percent.

Besides the volatile food and energy components, the CPI rose 0.5 percent last month after gaining 0.6 percent in October. The so-called core CPI jumped 4.9 percent on a year-on-year basis after rising 4.6 percent in October.

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It's unclear to what extent inflation projections were factored into the latest defense budget, though Ferrari thinks that Biden's previously stated goal for a 2023 budget even smaller than the one that recently passed won't do enough.

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"The President will need to increase 2023 defense spending from his previously announced level of $756B to about $806B to account for inflation overall or else readiness of the force will suffer," the former General announced.

Military wages are usually set based on last year's Employment Cost Index, which tracks yearly salaries against private sector rates.

Unless specifically mandated otherwise by Congress, that means every year's military pay growth is tied back by the last year's economy -- and that this pay raise didn't account for the high prices seen under President Joe Biden.

Their pay raise will go into effect only weeks after the Defense Department declared that service members in 15 metropolitan areas and 21 nonmetropolitan counties will have their cost-of-living allowance cut off at the start of 2022.

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