[Congressional Record Volume 149, Number 62 (Tuesday, April 29, 2003)]
[Senate]
[Pages S5492-S5493]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 945. A bill to amend title 37, United States Code, to improve the 
process for adjusting the rates of pay for members of the uniformed 
services; to the Committee on Armed Services.

[[Page S5493]]

  Mr. McCAIN. Mr. President, I am proud to sponsor the Military Pay 
Comparability Act of 2003. In 1999, the Committee on Armed Services 
passed landmark legislation providing significant benefits to the 
entire Total Force. I believe we must improve upon this legislation so 
that we not only eliminate ``pay comparability gap,'' but ensure that 
we do not recreate one in the future.
  Under the 1999 legislation, military raises will exceed growth in the 
ECI by one-half percent per year through fiscal year 2006. However, 
starting in 2007, military raises will revert to being capped one-half 
percentage point below the ECI.
  As a former ranking member and long-time member on the Personnel 
Subcommittee when Senator John Glenn was the chairman, my experience 
with capping military raises below ECI during the last three decades 
shows that such caps inevitably lead to significant retention problems 
among second-term and career service members.
  Those retention problems cost our Nation more in the long run in 
terms of lost military experience, decreased readiness, and increased 
training costs. Since military pay was last comparable with private 
sector pay in 1982, military pay raises have lagged a cumulative 6.4 
percent behind private sector wage growth--although recent efforts of 
the executive and legislative branches have reduced the gap 
significantly from its peak of 13.5 percent in 1999. Our efforts in 
1999 increased pay raises, reformed the pay tables, took nearly 12,000 
service members off of food stamps, and established a military Thrift 
Savings Plan.
  We have to improve upon the 1999 law to ensure future raises track to 
civilian pay growth so we don't fall back into pay caps that will get 
us back in the negative retention/readiness cycle. Subsequent raises 
after 2006 must sustain full comparability with increases in the ECI. A 
key principal of the all volunteer force, AVF, is that military pay 
raises must match private sector pay growth, as measured by ECI. Our 
action in this area will send a strong message of support to our 
service men and women and their families that will continue to promote 
high morale, better quality-of-life, and a more ready military force.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 945

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REVISED ANNUAL PAY ADJUSTMENT PROCESS.

       (a) Requirement for Annual Adjustment.--Subsection (a) of 
     section 1009 of title 37, United States Code, is amended to 
     read as follows:
       ``(a) Requirement for Annual Adjustment.--Effective on 
     January 1 of each year, the rates of basic pay for members of 
     the uniformed services under section 203(a) of this title 
     shall be increased under this section.''.
       (b) Effectiveness of Adjustment.--Subsection (b) of such 
     section is amended by striking ``shall--'' and all that 
     follows and inserting ``shall have the force and effect of 
     law.''.
       (c) Percentage of Adjustment.--Subsection (c) of such 
     section is amended to read as follow:
       ``(c) Equal Percentage Increase for All Members.--(1) 
     Subject to subsection (d), an adjustment made under this 
     section in a year shall provide all eligible members with an 
     increase in the monthly basic pay that is the percentage 
     (rounded to the nearest one-tenth of 1 percent) by which the 
     ECI for the base quarter of the year before the preceding 
     year exceeds the ECI for the base quarter of the second year 
     before the preceding calendar year (if at all).
       ``(2) Notwithstanding paragraph (1), but subject to 
     subsection (d), the percentage of the adjustment taking 
     effect under this section during each of fiscal years 2004, 
     2005, and 2006, shall be one-half of 1 percentage point 
     higher than the percentage that would otherwise be applicable 
     under such paragraph.''.
       (d) Publication of Adjusted Rates.--Subsection (e) of such 
     section is amended--
       (1) by striking ``(e) Notice of Allocations.--'' and 
     inserting ``(e) Notification and Publication Requirements.--
     (1)''; and
       (2) by adding at the end the following new paragraph:
       ``(2) The rates of basic pay that take effect under this 
     section shall be printed in the Federal Register and the Code 
     of Federal Regulations.''.
       (e) Presidential Determination of Need for Alternative Pay 
     Adjustment.--Such section is further amended--
       (1) by redesignating subsection (g) as subsection (h); and
       (2) by inserting after subsection (f) the following new 
     subsection (g):
       ``(g) Presidential Determination of Need for Alternative 
     Pay Adjustment.--(1) If, because of national emergency or 
     serious economic conditions affecting the general welfare, 
     the President considers the pay adjustment which would 
     otherwise be required by this section in any year to be 
     inappropriate, the President shall prepare and transmit to 
     Congress before September 1 of the preceding year a plan for 
     such alternative pay adjustments as the President considers 
     appropriate, together with the reasons therefor.
       ``(2) In evaluating an economic condition affecting the 
     general welfare under this subsection, the President shall 
     consider pertinent economic measures including the Indexes of 
     Leading Economic Indicators, the Gross National Product, the 
     unemployment rate, the budget deficit, the Consumer Price 
     Index, the Producer Price Index, the Employment Cost Index, 
     and the Implicit Price Deflator for Personal Consumption 
     Expenditures.
       ``(3) The President shall include in the plan submitted to 
     Congress under paragraph (1) an assessment of the impact that 
     the alternative pay adjustments proposed in the plan would 
     have on the Government's ability to recruit and retain well-
     qualified persons for the uniformed services.''.
       (f) Definitions.--Such section, as amended by subsection 
     (e), is further amended by adding at the end the following:
       ``(i) Definitions.--In this section:
       ``(1) The term `ECI' means the Employment Cost Index (wages 
     and salaries, private industry workers) published quarterly 
     by the Bureau of Labor Statistics.
       ``(2) The term `base quarter' for any year is the 3-month 
     period ending on September 30 of such year.''.
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