A bill to amend title 337 of the United States Code in order to convert the existing basic pay and allowance system for the uniformed services to a salary system, and for other purposes.

Revises the pay scales for members of the uniformed services. Directs the Secretary concerned to deduct from such compensation any charges for housing, medical care, and food established pursuant to this Act. Stipulates that: (1) such housing charge shall be determined on the basis of the fair market value of the Government quarters or housing facilities used for such purpose; (2) such medical charge shall be equal to the lowest monthly subscription charge for low-option family health insurance currently available to Government employees; and (3) such food charge shall be based on the costs incident to operating a messing facility.

Abolishes the current yearly clothing issue or payment in lieu thereof for members of the Armed Forces and National Guard. Repeals the present subsistence allowance, quarters allowance, and personal money allowance payable to members of the uniformed services.

Directs the Secretary of Defense to prescribe modifications with respect to any other form of compensation payable to members or former members of the uniformed services which is computed on the basis of basic pay or basic allowance for quarters in order to adjust such compensation so that the resulting payments are equivalent to the cash payments payable under this Act.

Declares it the sense of Congress that a retirement system for members of the Armed Forces should be established that is based upon contributions by the members with matching contributions by the Federal government.