How the Air Force ran short of money for personnel

The Air Force has suspended reenlistment and retention bonuses and delayed permanent change of station moves because its personnel budget is running out of money.

“The funding shortfall resulted from higher than expected PCS [permanent change of station] costs as a result of inflation and the addition of recruiting and retention bonuses,” Air Force spokeswoman Ann Stefanek told Task & Purpose.

The Air Force has suspended its selective reenlistment bonus program for Fiscal Year 2023 as of July 11, an Air Force news release says. Airmen who are eligible for the bonus but are scheduled to leave the service before Oct. 1 are encouraged to extend their time in the Air Force so that they can collect the bonus next fiscal year.

In another move, the Air Force has also suspended its Legacy Aviation Bonus Program, which increased the maximum amount of money offered to retain eligible pilots from $35,000 to $50,000.

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The Air Force is taking time to restructure the bonus program, which is expected to be offered again within the next two weeks, the news release says. Pilots will still be able to receive a bonus as long as the service has money for the program.

The shortfall in the Air Force’s personnel budget could also delay PCS moves for airmen who do not yet have orders, according to a July 11 Air Force Personnel Center memo posted on the unofficial Air Force amn/nco/snco Facebook page.

PCS moves within the continental United States on or after Aug. 1 may be delayed for airmen without orders, and overseas moves have been paused with arrivals and return dates moved to January or later, the memo says.

One reason why the Air Force is facing a money crunch is that the costs of PCS moves have been climbing, especially under a Defense Department policy change enacted in September, under which service members receive an allowance one month prior to moving to cover expenses, said Katherine Kuzminski, director of the military, veterans, and society program at the Center for a New American Security think tank in Washington, D.C.

That means this summer’s PCS season marks the first time the policy has truly gone into effect for all service members, Kuzminski told Task & Purpose. Previously, service members paid certain moving expenses out of pocket and then submitted claims for reimbursement.

The rising costs of PCS moves provide the Defense Department an opportunity to reexamine how often it moves service members and their families, Kuzminski said.

“It’s largely a holdover of the Cold War, where a third of troops were stationed overseas at any given time and there was this belief in equity in making sure that they could come back to the States,” Kuzminski said. “That’s led to this churn that we see every year that costs a lot of money to the services, and also is pretty disruptive to service members and their families.”

Another factor driving increases in personnel costs is the increase in military pay, she said. Congress is looking to give troops a 5.2% pay raise in Fiscal Year 2024. That comes after lawmakers gave service members a 4.6% raise for this fiscal year – the largest pay raise in 20 years but still below the inflation rate.

While such pay raises may be appropriate, especially given how many military families are facing food insecurity and problems finding affordable housing, the costs of pay compound over time, and military budgets are not keeping pace, Kuzminski said.

The Air Force has also offered generous retention bonuses – such as Legacy Aviation Bonus Program –and it has offered financial incentives for recruits, causing personnel costs to creep up, Kuzminski said.

“There may be some non-monetary ways to actually go about military recruiting that doesn’t cost quite as much on the bonus side but that meets the needs of future airmen who’d be interested in serving,” Kuzminski said. “Thinking about choice of AFSC [Air Force Specialty Code], or choice of location: Those don’t cost the service anything and may help them fill the numbers.”

But the Air Force has also been drawn into a war among lawmakers about whether U.S. Space Command’s headquarters should be located in Alabama or Colorado, and that is exacerbating its money problems, as NBC News first reported on July 10.

The Department of the Air Force has been conducting an assessment looking at the viability of moving U.S. Space Command’s headquarters from Colorado Springs to Huntsville, Alabama, Task & Purpose has learned. One key question is whether such a move would affect readiness.

Sen. John Hickenlooper (D-Colo.) has criticized House Armed Services Committee Chairman Rep. Mike Rogers (R-Ala.) for blocking the Defense Department’s requests to reallocate money to the Air Force.

Hickenlooper has accused Rogers and other Alabama lawmakers of trying to force the Air Force to put Space Command’s new headquarters in their state.

“The Alabama delegation is holding our military service members hostage.  They are risking our national security to get what they want,” Hickenlooper said in a July 11 statement.  “This is not how our nation should make basing decisions. Period. It is, however, how you penalize our troops for the sake of narrow political interests.”
Rogers countered Hickenlooper’s accusation by claiming the senator is mischaracterizing how the House Armed Services Committee is treating the Defense Department’s requests for additional funding for the Air Force.

“It’s unfortunate that the Junior Senator from Colorado chose to release a partisan, parochial, and untrue misrepresentation of HASC [House Armed Services Committee] processes,” Rogers said in a statement to Task & Purpose. “The Committee is continuing to review reprogramming requests from the Department of Defense.” 

With lawmakers divided over Air Force funding, it appears that the service’s rank and file will continue to bear the brunt of the cash crunch for the foreseeable future.

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