It is commonly thought that federal inmates can earn 15% off of their sentence for each year served. This is the so-called "good-time credit."
The Sentencing Commission in 1987 created baseline sentences by surveying what actual sentences were for a broad array of crimes. It then divided by 0.85 to make the sentence about 15% longer so that the good-time credit would bring the sentence back down to the standard amount. In other words, the base guideline sentences actually contain a built-in 15% "bad-time" penalty which "good-time" simply erases.
However, instead of simply multiplying the guideline sentence by 85% to get back to the base level sentence, the BOP came up with a different, more-convoluted interpretation of the statute. Courts appear to have acknowledged some ambiguity in the language of the statute and that BOP's interpretation is one viable interpretation. Since it is up to BOP to calculate setences, their interpretation is deferred to as long as it is deemed "reasonable."
The result of the BOP's interpretation is that an inmate only gets 12.8% good-time credit rather than 15% -- 47 days per year instead of 54 days.
Why is this?
The short explanation -- read the NACDL link below for full explanation -- is that BOP only gives you credit based on "term of incarceration" not "term of sentence." According to BOP, good-time credit must be 15% of actual prison time, not sentenced time. What this means is that if BOP were to give an inmate 15% of 365 days (that is, 54 days -- actually 54.75 but I guess they round down), then the inmate would only serve 311 days. Since 311 is the actual "term of imprisonment" then BOP claims that the inmate is actually getting a 17.3% credit (54/311). In other words, BOP calculates the good-time percentage using adjusted time as the denominator, not the sentenced time. Therefore, they determined that 47, not 54, days credit would actually result in 15% because term of imprisonment would then be 318 days (365-47) and 47/318 = 14.78%, which I guess is as close as they could get to 15% (although if they gave 48 days credit, 48/317=15.14%, which is actually closer to 15% -- whatever). The bottom line is that BOP claims they are giving 15% credit but to most people it appears as 12.8% because 47/365=12.8%.
Only sentences greater than 1 year are eligible for good-time (and halfway house for that matter). That is why you see so many sentences at one year and a day. If the judge gave a sentence of exactly one year (365 days), the inmate would not qualify for the 47 days (or the halfway house). However, with a sentence of one year and a day (366 days), the inmates will actually serve 319 days... about 10½ months. The final 32 days (10% of 319) would be spent in a halfway house.
Thus, a one year sentence turns into 287 days in prison (9½ months) and 32 days in a halfway house.
As I understand it, the good-time credit is given at the end of each year served. Where I am not clear is what this means if, say, your sentence is 23 months. At the end of the first year, you get 47 days credit. But you never complete the second year since it is only partial. Does this mean that you only get the 47 days for the first year but no credit for the significant part of the second year. Most people would simply multiply 15% by 23 months (let's call it 690 days) and come up with 103 days believing that is their good time credit. But it is possible that you may only get 47 for completing the first year and none for the rest. [UPDATE: I found the answer. The statute specifically says "credit for the last year or portion of a year of the term of imprisonment shall be prorated and credited within the last six weeks of the sentence." I guess you do get credit for the last partial year, which of course makes sense.]
Furthermore, if your sentence is, like Jim Black's, 63 months, then with his good time credit for the early years of the sentence, he will end up serving less than 60 months (credit = 47 days x 4 anniversaries = 188 days) and will not get credit for the 5th year of his sentence (let alone the extra 3 months after 5 years) because he never actually got to the end of the 5th year. [UPDATE: As I indicated above, Jim Black should get credit for the portion of the 5th year that he will actually serve.]
What is the difference? Well, by my calculations:
Original sentence: 1916 days (5 years x 365 days plus 91 days for the 3 months)
15% Good Time Calculation: 287 days
Actual Good Time Calculation for First 4 years: 4 years x 47 days/year = 188 days
Actual Good Time Calculation for Partial 5th year: 268 days/365 days x 47 days/year = 34 days
Actual Total Good Time : 212 days
Difference: 75 days (2½ months)
As I stated at the beginning this is unfortunately more complicated than it should be.
For more details, I refer you to the following links:
http://circuit9.blogspot.com/2006/11/bop-update-mass-overincarceration-and.html
http://www.nacdl.org/public.nsf/championarticles/l0208p12/$File/pg12.pdf