Post on 25-Feb-2016
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ALA Public Policy Advocacy
ALA is a full partner in protecting benefitEducate major public policy makers on importance of
benefitIndustry has huge stake in resale viabilityAuthorizing and appropriations committees House and Senate
Challenges
Deficit Reduction CommissionDoD Overhead ReductionsOMB Budget GuidanceCongressional Budget Reviews
Defense FundingDefense requested $733B in Feb 2010Without wars--$18B higher than year before1.4 percent pay increase to $139 B$210,000 in O & M per troop compared to $95,000 in FY
2000Non-cash and deferred compensation consume 52 percent
of total compensationPersonnel costs up 46 percent from 2001, adjusted for
inflation and not including warsMore DoD civilians than Wal-Mart and USPS combined$2.7B to fund BRAC
Health care costs $51 billion or up 3.4 %Veterans funding up 14 percent House and Senate authorized $725BHAC and SAC reduced $7 to $8B TechAmerica report$545B 2013, $488B 2016Low real growth followed by decline Accelerated competition between O&S and R&D &
AcquisitionUK Defense Cuts10% MILPERS, 40% equipment, withdraw troops from
Germany, cut 25,000 civilians, scrap only carrier
Budget Timetable
April 22—House Budget ResolutionMay 19—HASC Reports Defense BillMay 28—House Passes Defense BillMay 28—SASC Reports Defense Bill July 1—Senate Budget ResolutionSeptember 16—Senate Appropriations Committee Reports
BillOctober 1—Continuing resolution passes to fund
Government until December 3 November 2—ElectionNovember 15—Lame duck session convenesNovember 22—Lame duck recess
November 29—Lame duck session reconvenesDefense Authorization, Extension of unemployment,
Physician pay hike for Medicare, Wage discrimination, Natural gas vehicles, food safety—and mouse through the snake or pig through the boa—Tax Cuts
Senate has approved 11 of 12 appropriations bills and could do Omnibus Appropriations Bill—Dems want it
Republicans don’t want it until new Congress convenesDecember 1—Deficit Reduction Commission reportsDecember 3—Continuing Resolution Expires—December 15—2012 Defense budget wrapRepublicans want new CR until next Congress—Dems
want Omnibus
Budget Timetable
January 3, 2011—New Congress convenesNow it gets complicatedPresident’s Budget submission traditionally 1 week before
SOTUSOTU Originally planned for January 26May be February 2 because final episode of “Lost” airs
January 26Statutory deadline to submit budget February 1They could delay budget release because no penalty for
latenessFebruary—Hearings begin on 2012 budgetApril—ALA Congressional and Public Policy Forum
MWR & Resale Budget HASC Personnel S/C Hearings postponed twice Issues—Exchange consolidation, SDT, MWR
approps, construction funding, competition for unofficial information services, credit card competition with banks, Guard and reserve support, Air Force food transformation, TIPRA, credit card interchange fees, ASER, operations at closure sites, disabled vet privileges, base access
HASC Bill—funds DeCA, SDT, MWR operationsDeCA designated to manage construction at joint
surcharge/NAF sites
2011 Administration cost-cutting initiativesEarmarks/line item vetoReduce reliance on contractorsTechnologyConsolidate data centers/cloud computingFY 2012 across the board non-security cutsReduce energy 30 percentDispose of unwanted real estateImprove payment accuracyDo not pay list (TIPRA implications)Gates Defense cut initiatives—eat what you killCivilian agency administrative reductions—eat what you kill
DoD Budget Review and Overhead Reductions
Assessments by Cost Assessment and Program Evaluation (CAPE)
2012-2017 – One percent real growthNeed 2-3 percent to maintain force structure, combat capabilityDBB says 40 % of DoD is overheadTake out $100 billion in overheadMore efficiency in $400 billion of goods and services purchased
each yearReaching out to industry to support cost reductionsWork with industry to bring down costs
$8 billion in 2012 ($2B per Service)$3 B then $4 B then $7 BAgencies $1 billion$2 B then $3 B then $7 BServices keep savingsPBD/budget wrap December 15
How are decisions/cuts manifested?Salami slicingMilitary Department cuts tumble down on
systemOutsourcingIncremental benefit reductionsNavy MILCON Freeze
Market-based resale has cost-cutting in its DNACost cutting is not new to resaleEfficiencies mean savings to patrons and increased
earnings Took out major costs:
DeCA 1991 Consolidation—hundreds of millionsCommercial distribution--$600 million back to DoD for
Stock FundsOngoing cost saving measures Normal trajectory would have taken it to over $2 billionLean and mean
Resale has constantly been in cost cutting or no growth mode
Other QoL areas realizing 30, 40, and often 100 & 200 percent increases
Talking about health care co-pays: We’ve always had co-pays—it’s called mark-ups and surcharge
Resale Benefit—Huge ROI to DoD$8 billion in savings at cash registerHundreds of millions in cost avoidance to DoD COLAs$600 million annually in improvements to DoD’s
physical plantNon-pay compensation30,000 family members employed adding $900 million
to their households20,000 family members employed by industry adding
another $600 million to household income$400 million in MWR contributions
Underpins of DoD’s overseas transportation system
$150,000 to $200,000 to train a troop and $1 million for pilots, doctors, specialists
70 percent increase in food stamp redemptionSunk costs – buying the car but not putting gas
in itSales imperative—increase share of AD who
use benefitDon’t buy the car and not put gas in it
Surveys show citizens losing faith in institutionsGSEs such as Fannie Mae and Freddie Mac failingDeCA is shining example of a Private Sector/public
sector partnership that worksTop of the heap in Federal AccountabilityPatron satisfaction at all time highs
Consistent with FLOTUS goalsSupport Military Quality of LifeSupport Health life style Support reducing child obesity
Ingrained in the OSD fabricNot inextricable without a major costAdapts for force structure
Brigade re-stationingBRAC
Traffic driver for ExchangesUnderpins transportation systemMaintains ties with installations
System’s Constitution is Title 10—our foundation -Sets out who can shop-Sets out pricing (cost plus 5)-Guidance on what can be soldDon’t tamper with the Constitution
What would the world look like if resale didn’t exist?Thousands of family members out of workHundreds of millions in increased COLAs and
military paySale of foreign products overseas—impact U.S.
manufacturing$5 billion patron surcharge investment wastedMilitary forced to make household tradeoffs MWR dividends evaporate
ALA PrioritiesSupport adequate budget levelsSupport shipment of American productsSupport funding for BRAC affected sitesSupport immunitiesAffordable, one-card accessSupport Guard and ReserveSupport familiar war zone offeringsExpand benefit to more vets
Repeal 3 % withholding or resale exemption1099 ACA requirementRegulation, i.e., (Executive pay reporting—(FAR)Cover Coast Guard and VA resale in beneficial
statutory changesReduce interchange feesLift restrictions on offerings to patronsCooperate not consolidate exchanges
ALA Congressional and Public Policy ForumSpring 2011House and SenateIssues based—2011 impact and 2012 Budget
DeliberationsHouse and Senate leadersAdministration officials
ALA & Resale
Protecting the Benefit