Government Shutdown and Impact to Military, Veterans

Updated: February 19, 2021

Table of Contents

    When the national debt surpasses the debt ceiling, and Congress fails to raise the ceiling or pass a budget, the government can shut down.

    Here’s what that means for military members and veterans.

    Government Agencies That Can Be Affected By A Prolonged Government Shutdown

    How a government shutdown will impact military, veterans and retirees

    More than 400 thousand federal employees typically continue to work without getting their scheduled paychecks, including more than 40 thousand federal law enforcement officers working for:

    • Federal Bureau of Investigation
    • Federal Bureau of Prisons
    • Drug Enforcement Agency
    • Bureau of Alcohol, Tobacco, And Firearms
    • Department of Homeland Security
    • Customs And Border Protection
    • Transportation Security Administration

    Nine Federal Agencies That Are Typically Closed During a Shutdown

    • Department of the Treasury
    • Department of Agriculture
    • Homeland Security Department
    • Department of the Interior
    • Department of State
    • Department of Housing and Urban Development
    • Department of Transportation
    • Department of Commerce
    • Department of Justice

    How Much Does A Government Shutdown Cost?

    During the Obama administration, there was a government shutdown in 2013 lasting 16 days. The resulting furloughs and lost productivity was estimated to cost taxpayers $2 billion. The 2019 shutdown lasted longer than the 2013 government shutdown.

    Is the Department of Veterans Affairs Affected By The Government Shutdown?

    The VA Contingency Plan for the shutdown states that nearly all of it’s employees-approximately 96 percent-are ordered to report to work as usual. According to the VA Contingency Plan, “Federal activities that are authorized to continue, during a funding lapse, are excepted activities” which include the safety and protection of human life, and the protection of property. VA medical facilities remain open and appointments are still being kept at VA hospitals and clinics.

    Find out more about VA resources for furloughed veterans and their families.

    Banks Offer Help To Account Holders Affected By The Shutdown

    A variety of financial institutions often offer to help to those who are hurt financially by a government shutdown, but one common thread can be found among all the corporations offering such help; it is not automatic and much depends on the prior relationship the customer has had with the lender.

    That means that those in good standing with their lenders will likely find much-needed help during the days and weeks without a federal paycheck. But all accounts in this situation are reviewed on a case-by-case basis as public statements by companies like Bank of America and Wells Fargo are any indication.

    Those who need financial assistance must reach out to their banks to make arrangements for the programs or special help that may be available at this time-no account holder should assume there will be personal loans, loan forbearance, or foreclosure avoidance help until they have made proper arrangements with the creditor(s).




    How a Budget Impasse Impacts the Military Community


    Military Pay

    Military compensation increases can be delayed.


    No New Programs or Spending Streams

    In situations where the Defense Department is required to operate without a budget (the DoD may be required to operate under a continuing resolution) there may be no new programs or new spending. “This means training continues reasonably unabated as long as there is money, but you can’t refresh any of the equipment that is used up in training, and you can’t buy new” said Air Force Gen. Paul J. Selva.

    Such circumstances may affect the implementation of new programs or revisions to older ones. If a rollout of a new GI Bill feature happens to clash with a budget impasse, such new benefits could be delayed. How existing programs or employment can be affected may depend on the individual program or agency and whether or not the money supporting it is via non-appropriated funds.


    Continuing Resolutions (CR) Impact Readiness, Planning

    A continuing resolution makes long-term planning nearly impossible and any program that was supposed to start in the affected fiscal year is not authorized to start. The fiscal year budget supposed to be in place at the start of said year would, in its’ absence would likely result in one or more continuing resolutions and bring serious potential for a government shutdown. In such circumstances, when a budget is passed all the acquisition programs could be crammed into the remainder of the fiscal year.


    Problem for Service Members and Industry

    Service members don’t get the equipment or capabilities they need during a budget fight. Over 10,000 guardsmen and reservists scheduled to drill during one fiscal year’s brief shutdown were sent home. Their lost drill time is unrecoverable.




    How a Government Shutdown Impacts the Military Community


    Military Pay

    Salaries for 1.3 million services members of the Army, Navy, Air Force, Marine Corps and Space Force could be affected by a government shutdown. There are times where the Department of Defense will have its full fiscal year funding approved prior to a shutdown and thus not impact military pay.

    Banks

    Although not affected during a government shutdown many financial institutions that support current and former servicemembers will offer advanced pay or assistance.

    Military friendly banks will often offer a no-interest, 0% Annual Percentage Rate (APR) payroll advance to military personnel with existing direct deposits. Banks can provide a onetime payroll advance loan to cover pay or benefits to the following groups, as long as those payments are direct deposited at the bank:

    • Active duty
    • Guard and Reserve
    • Military retirees

    Policies vary by bank so always check with your bank to see if they have any special contingencies or offers for government shutdown occurrences.


    Retired & Survivor Benefit Plan Pay

    Military Retirees and Survivor Benefit Plan recipients would, during a shutdown, still receive their pension checks as the funding for these benefits is NOT tied to Congress’s funding bill. After previous shutdowns, Veteran Affairs lobbied Congress to fund the VA on a two-year budget cycle which exempts the department.

    “The VA is in a fortunate situation in that we have what’s called an advanced appropriations so we get our money a year ahead of time because I think Congress understands that the VA can’t shut down, that we are there for the safety of our veterans.” said former VA Secretary David Shulkin.


    VA Disability Pay, GI Bill Benefits, SGLI Payments

    Similar to retiree pay VA disability, GI Bill benefits and SGLI payments will continue. However support for claims and assistance may be limited.


    My Career Advancement Accounts

    Financial assistance requests typically continue to be approved. In addition, Spouse Education and Career Opportunities career coaches typically continue to be available to provide comprehensive education and career counseling services.




    Thrift Savings Plan

    The TSP continues its normal daily operations during a federal government shutdown.


    Death Gratuities

    Families for troops killed in action would not receive the $100,000 death benefit during the shutdown or military funded travel for funeral or memorial services.


    U.S. Coast Guard

    During the last government shutdown, The Coast Guard — 41,000 active duty, 6,200 reservists and 8,500 civilian personnel — was the only branch of the military service not to be kept on the payroll during the shutdown. It was the first time in more than 140 years that a member of the U.S. Armed Services was not paid during such a lapse in government appropriations.

    There is pending legislation, The Pay Our Coast Guard Parity Act, which would provide for on-time and full pay and allowances for active duty and reserve members, civilian workers, contractors and retirees.


    Military Reservist/National Guard

    U.S. military reservists and the National Guard drill training typically continues as scheduled. Complications may arise from delays in air travel due to the shutdown but the drills are not cancelled.


    DoD Civilians

    “Civilian employees paid for lapsed appropriations and who are not necessary to carry out or support excepted activities will be furloughed, i.e., placed in a nonwork, nonpay status” according to the DoD. The Department of Defense employs approximately 750,000 civilian personnel. Employees being furloughed and not receiving back pay include military spouses, retirees and other veterans.


    Contracted Personnel

    Existing personnel contracts signed and appropriated would continue, but new contracts would not be executed.


    PCS & TDY

    Permanent change-of-station moves and temporary duty travel is subject to cancellation except for activities determined to be essential to national security.


    Healthcare

    Military treatment facilities, pharmacies, laboratories and on-base healthcare will remain open and treatment will continue. However, routine appoints and elective surgery appointments will be cancelled and need to be rescheduled. Private sector Tricare will not be impacted by the shutdown nor would medical care for wounded servicemembers. The VA healthcare system including hundreds of hospitals and outpatient clinics will remain fully operational.


    Care Packages, Armed Forces Network

    During the last shutdown care packages were held back in some regions as well as Armed Forces Network Channels due to reduced staffing. These services and other comfort services may be reduced or cutoff again.




    Commissaries, Exchanges, MWR

    Military exchanges will be open worldwide.

    Morale, Welfare and Recreation programs, non-appropriated fund activities and other operations necessary to support those activities not affected by a shutdown would continue. Examples of these excepted activities are operation of dining facilities, physical training and child care activities required to support readiness.

    Stateside commissaries will follow an orderly shutdown to reduce the amount of perishables on hand and properly safeguard equipment and facilities. Overseas commissaries will remain open, including two stores in Guam and one in Puerto Rico. Commissaries in five remote stateside locations also remain open: Marine Corps Mountain Warfare Training Center Bridgeport and Fort Irwin in California; Coast Guard Station Kodiak and Fort Greely in Alaska; and Dugway Proving Ground, Utah.


    DoD & On-base Schools

    DODEA schools and district offices worldwide will remain open. Headquarters and regional offices will be affected by the shutdown. On-base schools will remain open as well.


    On-base Child Care

    Child Development Centers: Contact your local CDC or installation for details and guidance.


    Family Centers & Programs

    The Military and Family Life Counseling program will continue uninterrupted. The MFLCs will perform routine functions.  If an MFLC is unable to access the installation during a shutdown, officials said, they will work offsite until they are able to access the installation.

    Family Support Centers: Staffing will be determined by installation commanders.

    Family Advocacy Program: Each service will determine staffing at each installation.


    Military OneSource

    The Military OneSource website and call center will remain fully operational.




    Other Benefits & Services


    Social Security

    “Funding for the programs under Titles II, XVI, and XVIII of the Social Security Act will continue, even in the event of a lapse in appropriations,” according to SSA’s contingency plans announced in past budget impasse situations.


    TSA, Air Traffic Control and Mail Services

    These services and other services considered essential will continue although some employees of those agencies may still be furloughed.


    National Parks & Museums

    These facilities will be closed during a government shutdown.


    Other Services

    Consular operations, including visa and passport services, domestically and abroad will remain open as long as there are sufficient fees to support operations. The embassies and consulates overseas will also continue to provide routine and emergency U.S. citizen services. If a domestic passport agency is located in a U.S. government building affected by a lapse in appropriations, the facility may become unsupported and therefore unavailable to the public. We refer you to GSA for questions about domestic facilities. Up to date information on passport operations may be found at Travel.State.Gov.

    Gun permits from the ATF and other national permits will be unavailable.


    Tips for Making it Through a Government Shutdown

    • Apply for a no interest loan or payroll advance from your bank. Many banks, especially military affiliated banks offer this during a shutdown.
    • Avoid taking out a payday loan which often includes a very high interest rate.
    • Check with your creditors to see if they will freeze payments during a shutdown.
    • Be frugal, purchase only “need” not “want” items.
    • Utilize military discounts and coupons.

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    Written by MilitaryBenefits