B-161180, DEC 30, 1969

B-161180, DEC 30, 1969

PRECIS-UNAVAILABLE

L. MENDEL RIVERS, HOUSE OF REPRESENTATIVES:

YOUR LETTER OF DECEMBER 16, 1969, REFERS TO OUR DECISION OF NOVEMBER 13, 1969, B-161180, TO THE SECRETARY OF DEFENSE, CONCERNING THE METHOD CURRENTLY BEING USED TO DETERMINE OVERSEAS HOUSING AND COST-OF-LIVING ALLOWANCES FOR MEMBERS OF THE UNIFORMED SERVICES.

BY LETTER DATED NOVEMBER 13, 1969, B-161180, WE FURNISHED YOU A COPY OF THE DECISION OF THAT DATE, TOGETHER WITH COPIES OF OUR EARLIER RELATED DECISIONS, B-161180, DATED DECEMBER 11, 1967, AND SEPTEMBER 8, 1969, AND A CHRONOLOGICAL BRIEF OF ACTIONS THERETOFORE TAKEN BEARING UPON THIS MATTER.

BRIEFLY STATED WE CONCLUDED IN THE DECISION OF DECEMBER 11, 1967, THAT THE EXISTING PRACTICE OF AUTHORIZING SEPARATE COST-OF-LIVING AND HOUSING ALLOWANCES COMPUTED INDEPENDENTLY OF EACH WAS NOT IN ACCORD WITH THE STATUTORY AUTHORITY (37 U.S.C. 405) TO AUTHORIZE A PER DIEM CONSIDERING ALL ELEMENTS OF COST OF LIVING. ALSO, WE CONCLUDED THAT THE FORMULA USED IN COMPUTING THE HOUSING ALLOWANCE, WHICH COMPARED THE OVERSEAS HOUSING COSTS WITH THE BASIC ALLOWANCE FOR QUARTERS INSTEAD OF HOUSING COSTS IN THE UNITED STATES AS CONTEMPLATED BY THE STATUTE, RESULTED IN OVERPAYMENTS TO THE MEMBERS CONCERNED BECAUSE IT OPERATED TO PAY THEM THE DIFFERENCE BETWEEN THE BASIC ALLOWANCE FOR QUARTERS AND HOUSING COSTS IN THE UNITED STATES IN ADDITION TO THE DIFFERENCE BETWEEN THE COST OF HOUSING IN THE OVERSEAS AREA AND THE COST OF COMPARABLE HOUSING IN THE UNITED STATES.

IN SO CONCLUDING WE WERE CONVINCED THAT THE USE OF THE PRESENT FORMULA HAS THE EFFECT OF PAYING MEMBERS SERVING IN CERTAIN OVERSEAS AREAS A SPECIAL PAY OR BONUS IN ADDITION TO THE EXCESS COST OF OVERSEAS HOUSING ACTUALLY CONTEMPLATED BY 37 U.S.C. 405. THIS SPECIAL PAY OR BONUS HAS NOT, OF COURSE, BEEN PAID TO ANY MEMBER SERVING IN THE UNITED STATES AND IT HAS NOT BEEN PAID TO ANY MEMBER SERVING OVERSEAS IN A PLACE FOR WHICH NO HOUSING ALLOWANCE HAS BEEN AUTHORIZED BY THE JOINT TRAVEL REGULATIONS. FOR EXAMPLE, NO MEMBER SERVING IN VIETNAM IS BEING PAID THIS SPECIAL PAY OR BONUS AS IT HAS BEEN MANY MONTHS SINCE AN OVERSEAS HOUSING ALLOWANCE HAS BEEN AUTHORIZED FOR MEMBERS SERVING THERE.

HAVING IN MIND, HOWEVER, THAT THE PRESENT METHOD OF COMPUTING THE ALLOWANCES HAD BEEN IN EFFECT FOR A NUMBER OF YEARS AND THAT A REASONABLE PERIOD OF TIME PROBABLY WOULD BE NEEDED TO EFFECT THE INDICATED CHANGES IN THAT METHOD, WE SAID THAT UNTIL SUCH TIME AS THE FORMULA FOR COMPUTING THE ALLOWANCES COULD BE REVISED AND ALLOWANCES COMPUTED ON THE BASIS OF THE REVISED FORMULA PROMULGATED FOR EACH OVERSEAS LOCATION ON AN ORDERLY BASIS, WE WOULD NOT OBJECT TO COMPUTATION AND PAYMENT OF THE HOUSING AND COST-OF-LIVING ALLOWANCES BY THE PRESENT METHOD.

BASED UPON CONVERSATIONS AND CONFERENCES HELD AND CORRESPONDENCE RECEIVED IN 1968 AND THE FIRST SIX MONTHS OF 1969, WE WERE SATISFIED THAT THE OFFICIALS OF THE DEPARTMENT OF DEFENSE AND OF THE MILITARY SERVICES AGREED WITH OUR CONCLUSIONS AND THAT APPROPRIATE STEPS WERE BEING TAKEN TO PUT INTO EFFECT A NEW, LEGALLY ACCEPTABLE, FORMULA FOR COMPUTING THE ALLOWANCES. IN FACT, BY LETTER DATED MARCH 10, 1969, THE CHAIRMAN OF THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE (HONORABLE WILLIAM K. BREHM) ADVISED US AS FOLLOWS:

"WITH RESPECT TO IMPLEMENTATION, THE COMMITTEE EXPECTS TO HAVE THE NEW ALLOWANCES PROPOSED TO THE SECRETARY OF DEFENSE FOR APPROVAL WITH A VIEW TOWARDS ISSUANCE CONCURRENTLY WITH THE EFFECTIVE DATE OF THE PAY RAISE SCHEDULED TO BECOME EFFECTIVE ON 1 JULY 1969. YOUR PATIENCE IN PERMITTING THE COMMITTEE TIME TO PRODUCE A PROPER SYSTEM IS APPRECIATED."

BUT BY LETTER DATED JULY 31, 1969, FROM THE COMMITTEE (SIGNED BY HONORABLE CURTIS W. TARR, AS CHAIRMAN) WE WERE ADVISED THAT IF ANTICIPATED MORALE PROBLEMS ARE TO BE AVOIDED, THE NEW RATES CAN NOT BE PLACED IN EFFECT BEFORE JANUARY 1, 1970, AND PERHAPS NOT THEN. BY DECISION OF SEPTEMBER 8, 1969, WE ADVISED THE OFFICIALS CONCERNED THAT WE COULD NOT JUSTIFY ANY FURTHER DELAY IN PLACING A PROPER SYSTEM INTO EFFECT.

BY LETTER OF OCTOBER 20, 1969, THE ACTING ASSISTANT SECRETARY OF DEFENSE REQUESTED APPROVAL FOR AN INDEFINITE POSTPONEMENT OF THE REVISION OF RATES ON THE BASIS OF THE ANTICIPATED ADVERSE EFFECT ON THE MORALE OF THE MEMBERS CONCERNED AND THE FACT THAT A BILL, H. R. 14322, HAD BEEN INTRODUCED BY YOU TO AUTHORIZE COMPUTATION OF THE ALLOWANCES BY THE PRESENT METHOD.

IN THE DECISION OF NOVEMBER 13, 1969, TO WHICH YOU REFER, WE SAID THAT WE COULD NOT AGREE TO THE ACTING ASSISTANT SECRETARY'S REQUEST AND THAT THE NEW RATES SHOULD BE PLACED IN EFFECT NO LATER THAN DECEMBER 31, 1969, UNLESS CONGRESS IN THE MEANTIME HAD TAKEN SOME AFFIRMATIVE ACTION INDICATING A STRONG LIKELIHOOD THAT DURING THE CURRENT SESSION LEGISLATION WOULD BE ENACTED TO LEGALIZE THE PRESENT METHOD OF COMPUTING THE ALLOWANCES.

IN YOUR LETTER OF DECEMBER 16, 1969, YOU SAY THAT BECAUSE OF PRESS OF COMMITTEE BUSINESS AND THE FAILURE OF THE DEPARTMENT OF DEFENSE TO SUBMIT A REPORT ON THE MERITS OF H. R. 14322, NO ACTION HAS BEEN TAKEN BY CONGRESS ON THE MATTER. YOU SAY FURTHER THAT THE DEPARTMENT OF DEFENSE AGREES WITH OUR DECISIONS IN THIS MATTER BUT HAS EXPRESSED THE VIEW THAT "SIMPLE EQUITY REQUIRES THAT BEFORE THE PRESENT SYSTEM OF COMPUTING OVERSEAS ALLOWANCES IS CHANGED FOR REASONS BEYOND THE CONTROL OF OUR SERVICE MEMBERS, THE PROBLEM, AND ITS MORALE IMPLICATIONS, SHOULD BE CONSIDERED BY THE APPROPRIATE COMMITTEES OF THE CONGRESS."

YOU STATE THAT DUE TO THE EXPRESSED CONCERN OF THE DEPARTMENT OF DEFENSE YOU INTEND TO SCHEDULE HEARINGS ON THE PROBLEM AND H. R. 14322 EARLY IN THE NEXT SESSION OF CONGRESS AND REQUEST THAT THE DEPARTMENT OF DEFENSE BE PERMITTED TO CONTINUE THE CURRENT METHOD OF COMPUTING THE ALLOWANCES PENDING FINAL RESOLUTION OF THE QUESTION BY THE 91ST CONGRESS.

IN VIEW OF YOUR REQUEST AND YOUR STATEMENT THAT YOU INTEND TO SCHEDULE HEARINGS ON THE PROBLEM AND THE BILL EARLY IN THE NEXT SESSION OF CONGRESS WE WILL NOT QUESTION OVERSEAS ALLOWANCE PAYMENTS MADE PRIOR TO APRIL 1, 1970, ON THE BASIS PRESENTLY BEING USED FOR SUCH PAYMENTS.