Report on the Calculation of the Basic Allowance for Housing, Basic Allowance for Subsistence, and Cost-of-Living Allowances

This report for the 14th Quadrennial Review of Military Compensation (QRMC) focuses on three allowances: the Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), and Cost-of-Living Allowances (COLAs). A companion report focuses exclusively on BAH, responding to congressional questions posed about it in the Fiscal Year 2023 National Defense Authorization Act. This report summarizes key findings from that report, analyzes the data and methodologies used to calculate BAS and COLAs, and recommends possible courses of action (COAs) for reforming BAH.

The QRMC director asked CNA to review the statutory requirements and methodologies used to calculate BAH, BAS, and COLAs to ensure military members can procure suitable housing and food. We answered six questions about BAS:

1. How is BAS currently computed?
2. What purchasing power should BAS provide?
3. How often should BAS be calculated?
4. Should BAS vary by geographic area?
5. How do other measures of food prices compare with the US Department of Agriculture’s (USDA) liberal food plan?
6. How much would it cost to extend BAS to servicemembers’ dependents?

The QRMC director also asked us to examine the data and methodology used to calculate both contiguous United States (CONUS) COLA and overseas COLA (OCOLA). This request included tracking the history of COLA rates in some locations, determining the drivers of changes in the rates over time, and considering ways to stabilize COLA rates. Finally, the QRMC director asked us to develop recommendations to reform BAH based on our analyses, including implementation and messaging plans.