DoD Looking at Reducing BAH

One of the most popular benefits of serving in the military, the Basic Allowance for Housing (BAH), may be one of the next programs that suffers at the hands of sequestration.

Deputy Defense Secretary Ash Carter headed the Pentagon's Strategic Choices and Management Review group, which looked at the myriad of ways the DoD could scale back spending if sequestration went into effect, which it did in March of this year. BAH covers the full housing costs of around one million soldiers - costing the Pentagon about $20 billion per year. Preliminary information shows that if soldiers paid around 5% to 10% of their housing, around $10 to $20 billion could be saved over the coming decade.

Part of the problem is the numerous ways in which BAH total payout could potentially be reduced, according to Carter. "There can be reductions in rates...We can look at the rates of growth and try to find ways of slowing growth. We can look at inequalities in the system depending on where you live.”

No matter which way they decide to reduce the overall payout, the ripple effects will be felt throughout the service. The competition for on-base housing (already in short supply on many installations) would likely increase, as would the appeal for some assignments in areas which have a lower cost-of-living. The reduction in BAH rates is not set in stone, however. Defense Secretary Chuck Hagel has told the Joint Chiefs of Staff to consult with enlisted leaders about a variety of proposed compensation and benefit cuts and find out the "most palatable" way to reduce costs.