Exchange MWR Payout Up 5 Percent as Military Retail Debate Continues

Exchange MWR funds helped to provide a free concert at Fort Benning, Ga., in March 2015 that featured the Grammy-nominated Eli Young Band. (DoD photo/Julie Mitchell)

The Army and Air Force Exchange Service in 2015 paid $237 million to service recreation programs, a 5-percent increase from the previous year, officials announced this week, even as the debate continued in Congress over the fate of the military retail systems.

The services’ morale, welfare and recreation programs rely on the annual dividend to fund the bulk of their expenses. But how the Exchanges operate — and the funds they contribute to the programs as a result — have been caught up in the ongoing debate over the military commissary system.

Unlike the Exchanges, the bulk of the Defense Commissary Agency’s operating budget is funded by a $1.4 billion taxpayer subsidy, while the Exchange largely pays for itself.

Some lawmakers want to eliminate the commissary subsidy and instead make the system self-sustaining. But doing so would likely result in price increases at commissary stores, where goods are sold at cost, plus a 5-percent surcharge.

Commissary supporters as well as Defense Department officials say any increase to prices could result in a decrease in shoppers at the Exchange system, since those are generally located next to a commissary.

A report last year by the Boston Consulting Group, cited in a new Pentagon study released this…

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