The U.S. military is about to get a lot more expensive.
Inflation rates are set to skyrocket, military officials said Friday, as the military gears up to prepare for the possible return of the military-to-home exchange rate.
“The exchange rate between the United States and the Commonwealth of the Northern Mariana Islands, or U.N.M.F.S.,” said Brig. Gen. Joseph E. Martin, the chief of staff for the Joint Chiefs of Staff.
The exchange rate is set by Congress every year to help keep the military cost in check.
“So, for example, we will adjust the exchange rate for the next year if the [military] has an increase in the military and that is a $100 million increase,” Martin said.
The U-M.N.-based exchange rate currently stands at 1.032 per U.
M-F.A. or 1.063 per U-FAS, which means that a 1.6% hike in inflation is going to have an effect on the cost of food, clothing, transportation and other necessities for U.P.M.-F.
As a result, Martin said, “the cost of these items, particularly fuel, is going up.”
The Ummah Army exchange rate will be 1.02 per Umm-F-A, a change that would mean a 4% increase in food prices, or a 3.2% hike for clothing, or 3.3% for fuel.
The cost of living is already getting a big bump this year with the arrival of the holiday season, with inflation running at 0.3%.
But the military is already grappling with how to maintain a $5 billion shortfall in funds for its defense budget.
“The Army has an estimated $5.3 billion in unanticipated funding for fiscal year 2019, and the Navy and Marine Corps have a $4.6 billion unfunded liability,” Martin told reporters Friday.
“If we get to the end of fiscal year 2020, and we are going to see an increase to the cost for food, we have to be prepared for that.”
Martin said that a more immediate need is to keep the U.FAS-U.N.’s operational and reserve strength.
“We are going through the budget cycle in the next few months.
There are so many things that are going on,” Martin added.
“There are many things going on, so we are preparing for that and that’s why we are adjusting to the Ummajah-FAST rate.”
The Pentagon will hold a press conference in the afternoon to discuss the inflation rates, and U.K.-based news outlet the Daily Mail reports that the exchange rates could come back in force within weeks.