Diplopundit has a very illustrative example of the effects of the lack of overseas compatibility pay for Foreign Service Officers.
I haven't written much on this issue (I did discuss it some here, here and here) but it is a pretty hot one for the Foreign Service. I have shied away from it largely because it gets played up in the media as FSOs being greedy.
I have mentioned how the situation is even more dire for those with same-sex members of household because MOHs are not allowed to compete for even the nominal jobs available to spouses unless there is no qualified Eligible Family Member (EFM). But even those in the best of circumstances have trouble with the impact of the pay cut. For example, my partner and I need both of our salaries to pay our mortgage. Going overseas, we will both see a 23% cut in pay. The amount we make renting out our place will only lessen but not cover the loss. And we still have to make the payments.
And while we serve side-by-side in embassies with employees of a number of other federal agencies, we are the only ones who take that pay cut to do it.
The fair thing to do is to close the gap. But who knows when (or if) that will happen, especially when Congress thinks we live high on the hog when we are overseas. One alternative solution I have a considered, but no one else seems to have addressed, is to have all of our allowances and differentials included in the calculations of our retirement pay or death benefits. That might encourage folks to go overseas to some high differential hardship posts at the end of their careers, when their experience could be extremely useful, rather than spending the last few years of their career in DC so that their retirement is based on locality pay.
And just my two cents, but if State used PR like many other agencies do, working with the media and Hollywood to show the realities of FS life (the tv show "American Embassy" back in 2002 was killed by the Department while there have been tv shows about the CIA, the military and most recently, DHS) vs the "glamorous image" that persists in the public's (and Congress's) imagination, we'd have a better shot at getting all of our budgetary needs met, including overseas compatability pay.
I discovered this link this morning (January 10), where you can track the status of H.R. 370, a bill "to amend the Foreign Service Act of 1980 to extend comparability pay adjustments to members of the Foreign Service assigned to posts abroad, and to amend the provision relating to the death gratuity payable to surviving dependents of Foreign Service employees who die as a result of injuries sustained in the performance of duty abroad."