First, there are several types of incentive pay that can get confused here. Hostile fire pay/imminent danger pay (which used to be two separate incentives but are now combined as the same) is paid to servicemembers who are:
- Subject to hostile fire or mine explosions
- In an area near hostile fire or mine explosions which endanger the member
- Killed, injured, or wounded by hostile fire, mines, or any hostile action
HFP/IDP is $225 per month, and carries with it the added bonus of the Combat Zone Tax Exclusion, which stipulates that all of your income earned while in a combat zone is non-taxable for IRS purposes. So depending on your income, Hostile Fire Pay can be a significant addition to your income, in some cases even a 25-30% boost in take home pay.
So why is the Pentagon cutting this incentive pay? Put simply, hostile fire pay is being cut in areas that are no longer hostile.
The determination of what areas of the globe are hostile fire areas is a serious political decision. With such a big swing in pay for soldiers, airmen and sailors on the line, no senior commander wants to lose out on extra pay for hi/her troops. Also, with the prevalence of National Guard/Reserve unit deployments overseas, members of Congress have a vested political interest in pressuring the Pentagon to keep paying hostile fire pay for their hometown soldiers. I pointed this out during repeated MN National Guard deployments to the former Serbian province of Kosovo, which hadn't been a dangerous place since late 2000, but for which the Pentagon kept paying about 2,500 soldiers hostile fire pay (along with the tax advantages) through 2009.
Under the change announced today, troops in dangerous places where you have a fair chance of being shot at will still be paid hostile fire pay.
Under the plans being discussed, troops would still receive the extra money if they serve in Afghanistan, Iraq, Iran, Lebanon, Pakistan, Syria, Yemen and in Egypt’s Sinai Peninsula. The U.S. does not have any military members now serving in Iran.
So what is being cut from the list of hostile fire pay?
Some of the countries that could likely be dropped from the list include Bahrain, where the Navy’s 5th Fleet is located; Jordan, Saudi Arabia, Liberia, Haiti and several former Soviet republics.These are counties that, while dangerous in the sense that any Middle East country can be a dangerous place for an American, don't pose a significant risk to servicemembers of being shot at or attacked by the enemy. In fact, all of these countries being de-listed are significantly safer than the streets of Chicago.
And not to rag on my friends in the Navy, but the swabbies have been the biggest benefactors of loose hostile fire pay rules. Simply serving on a ship that sails past dangerous countries has been enough to put extra money in the pockets of tens of thousands of sailors, even though troops facing daily combat in Iraq or Afghanistan are paid exactly the same.
The official cost savings for this cut is listed at $120,000 per year for the Department of Defense, which is nothing to sneeze at. But keep in mind that for every $225 monthly payment from the DOD, an average of $3000 is not subject to state or federal income tax. So less hostile fire pay will also mean more tax revenue for the feds and state governments.
A similar conservative uproar occurred on the subject of hostile fire pay in 2012 when the Pentagon started pro-rating hostile fire pay. Again, this was misplaced outrage, as paying troops a full month of hostile fire pay for a day in theater was a perpetual outrage among the troops.
There are plenty of good and effective ways for the Pentagon to trim its budget. If politicians will allow the service branches to cut what they don't need , rather than playing politics over troop pay and battleships we don't need, than we can save taxpayer dollars and still maintain security.
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