Government Shutdown and Impact to Military, Veterans

Update: Over the weekend, Congress passed a continuing resolution that prevented the government from shutting down on October 1. The resolution keeps spending levels the same as the previous budget. However, it only lasts until November 17, 2023. So the concerns about whether the government shutdown are silenced, for at least for another month and a half.

Because the deal Congress agreed upon was a temporary one, as well as one that continued spending levels from the 2023 fiscal year, that means military personnel and their families still didn’t get an official update on things like pay increases, BAH increases, and other benefits. Those will be laid out in the spending bill for 2024, which currently has not been signed into law.

So what could all of this mean? Well, a “Government Shutdown” occurs when the national debt surpasses the debt ceiling, and Congress fails to raise the ceiling or pass a budget. A shutdown affects funding to government agencies. While once a rarity, since 2000, the U.S. Government has seen three federal shutdowns. The most recent spanning from December 2018 through January 2019.

We’re continuing to follow this budget fight, but for now, everyone is stuck waiting to see what happens next. So, to help give you a better idea of what could happen, this article will aim to answer the following:

• Why the possible shutdown this year could be worse than the previous one
• How it affects the military community
• What happens to federal agencies and their employees
• What aspect of the government isn’t affected
• Options for military members and civilians during a shutdown

This Possible Shutdown vs. The Previous Shutdown

In 2018, a budget disagreement in Congress led to a government shutdown. While federal employees faced furloughs and some government buildings shut down, partial funding deals kept some government agencies running. 

However, in the upcoming potential shutdown, no prior funding deals are in place. Because no funding deals are currently signed, there could be more widespread agency closures and employee furloughs. 
Lawmakers have until September 30 to get either a budget passed or agree to what’s known as a continuing resolution, which extends previous budgeting allocations on a short-term basis.

How A Shutdown Affects The Military Community

Since a significant portion of the federal government’s annual budget goes to the military and defense, one could worry that the military would be affected if a spending bill isn’t passed. While that is true, it also isn’t. 

Military Pay

If no defense bill is passed, a few issues come up. First, active-duty military members will still be required to work since they’re often deemed essential. However, they could likely see a delay in their paychecks. Meaning they would receive back pay once a budget bill is passed. If Congress passes a continuing resolution, it’s likely they will get paid at the rate they made in the previous defense budget. 

Military compensation increases can also be delayed. That doesn’t mean pay doesn’t continue. It just means the annual increase for active-duty service members doesn’t take effect.

Important to note: The last complete government shutdown occurred in 2013. However, before that shutdown, lawmakers passed a law to ensure service members would continue to get paid despite any spending bill. No such bill has been signed as of the writing of this article. Meaning some military members could go without a paycheck.

The U.S. Coast Guard

Essential U.S. Coast Guardsmen will continue to work during a government shutdown. However, they won’t receive paychecks since the Department of Homeland Security funds that military branch.  

During the last government shutdown, The U.S. 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.

Civilian Defense Employees

According to planning documents from the Pentagon, there are a little more than 800,000 civilian defense employees. About 166,000 are unaffected by congressional funding and would continue to work during a shutdown. Almost 200,000 would keep working without pay because they’re considered “necessary to protect life and property.” All others deemed to be non-essential would likely face a furlough. 

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 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 new GI Bill feature rollout clashes 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.

Problem For Service Members And Industry

During a budget fight, service members don’t get the necessary equipment or capabilities. 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.

Department of Veterans Affairs

The VA Contingency Plan for the shutdown states that nearly all of its 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 remain at VA hospitals and clinics.

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

Retired & Survivor Benefit Plan Pay

During a shutdown, Military Retirees and Survivor Benefit Plan recipients would 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 that exempts the department.

“The VA is in a fortunate situation in that we have what’s called 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

Retiree pay, VA disability, GI Bill benefits, and SGLI payments will continue. However, in some cases, there could be a disturbance to things like Basic Allowance for Housing. To learn more, you would need to contact your parent government organization for further clarification. 

Also, support for claims and assistance may be limited. Meaning if you need to call an agency or department, the people who work there may be furloughed, and you may not get the information needed or the request processed. 

PCS & TDY

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

Healthcare

Military treatment facilities, pharmacies, laboratories, and on-base healthcare will remain open, and treatment will continue. However, routine appointments and elective surgery appointments will be canceled and need to be rescheduled. 

The shutdown will not impact private sector Tricare nor medical care for wounded service members. The VA healthcare system, including hundreds of hospitals and outpatient clinics, will remain fully operational.

Banks

Although not affected during a government shutdown many financial institutions that support current and former service members 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 one-time payroll advance loan to cover pay or benefits to the following groups, as long as those payments are directly 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.

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

Military Reservist/National Guard

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

Contracted Personnel

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

Care Packages, Armed Forces Network

During the last shutdown, care packages were held back in some regions and Armed Forces Network Channels due to reduced staffing. These services and other comfort services may be reduced or cut off 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 the operation of dining facilities, physical training, and childcare activities required to support readiness.

Stateside commissaries will follow an orderly shutdown to reduce the number 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 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 cannot access the installation during a shutdown, officials said, they will work offsite until they can 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.

Government Agencies That Can Be Affected By A Prolonged Government Shutdown

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

Banks Offer Help To Account Holders Affected By The Shutdown

Various financial institutions often offer to help 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 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; account holders should assume there will be personal loans, loan forbearance, or foreclosure avoidance help until they have made proper arrangements with the creditor(s).

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 sufficient fees support operations. The embassies and consulates overseas will continue providing 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.

---