Authorization Bill Calls for Moderate Cut to Commissary Subsidy

The compromise version of the fiscal 2015 defense authorization bill supports trimming the federal subsidy for military grocery stores by $100 million for one year, significantly scaling back the Pentagon’s cost-cutting proposal.

The Defense Department asked for a $200 million cut in the annual direct subsidy for commissaries in FY 2015 as part of a plan to reduce the government’s annual subsidy for commissaries from $1.4 billion to $400 million over three years. Fully imposing the proposal would slash the average savings on groceries from 30 percent to 10 percent.

A $100 million cut would represent a 7.5 percent of the federal subsidy in FY 2015, a reduction the Defense Commissary Agency indicated it could absorb without being forced to lower shoppers’ discounts, reported the Progress-Index.

The final legislation adopts the recommendation in the House version of the annual policy bill; the measure passed by the Senate Armed Services Committee rejected the department’s proposal.

The authorization bill also calls for DOD to hire an independent organization to assess the impact on beneficiaries — military personnel, their families and veterans — of further reductions in the subsidy for commissaries, including eliminating the federal subsidy. The study would look at the impact of changes to commissary operations on:

  • junior enlisted members and officers of reducing or eliminating subsidies, increased prices and introducing private-label products;
  • military exchanges and other morale, welfare and recreation programs for service members; and
  • industry support, such as vendor stockings, promotions and discounts.

The report would be due Sept. 1, 2015.

The Senate is expected to take a final vote on the bill later this week. On Tuesday, Senate Majority Leader Harry Reid (D-Nev.) filed cloture to limit debate on the measure the House passed last week. The final vote could occur on Thursday, as Reid’s motion requires a 30-hour wait before the chamber can take up the bill.

The bill text and joint explanatory statement are available online. The provision calling for the study is section 634.

Dan Cohen
Dan Cohen
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