COLA likely to drop amid U.S. economy problems

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COLA likely to drop amid U.S. economy problems
By Matt Millham, Stars and Stripes
European edition, Monday, September 22, 2008

For the second year in a row, the amount of money the average American has left after paying for housing, taxes, life insurance and gifts has shrunk, leaving consumers with less spendable income than they had in 2000.

American troops stationed overseas should be worried by the news, and by the latest U.S. inflation data, which shows stateside prices continue to rise at a faster rate than those in Europe.

"COLA (cost-of-living allowance) is intended to provide you economic parity with the States," said Stephen Westbrook, director of the Per Diem, Travel and Transportation Allowance Committee. "I force you to go overseas; I cannot expect you to suffer financially from being assigned there.

"So what I owe you is additional compensation to make you whole — the same as your counterpart in the 48. No better and no worse. It’s the ‘no better’ part that folks get confused over."

New data collected by the U.S. Bureau of Labor Statistics shows that the average American family is spending less money — and has less money to spend — on things like food, recreation, clothing, alcohol, tobacco and other items that make up spendable income. That’s the portion of total income left over after paying for housing, taxes, life insurance and contributions to such things as retirement plans and savings accounts. Families that make more money generally have more spendable income.


Rest of article at: http://www.stripes.com/article.asp?section=104&article=57573