Sequestration Cuts and the Impact on the Military Community

Updated March 13th, 2013

Sequestration answers  to common questions related to military pay and benefits exemptions for military families and veterans.  The new fiscal cliff of March 1st is fast approaching and once again the U.S. government is at stalemate with how to deal with sequestration.  The military is facing  $55 billion in cuts from the 2013 budget instead of the 1 percent increase they proposed for 2013.

What are Sequestration Cuts?

Sequestration refers to a mechanism built into the 2011 Budget Control Act that triggers a $500 billion reduction in defense spending over the next 10 years.  If Congress does not act the cuts are scheduled to go into effect on March 1, 2013.  Originally the date was Jan. 2, 2013 but Congress delayed sequestration by 2 months.

What is Exempt from Sequestration?

• All Department of Veteran Affairs programs and services are exempt.  This includes programs such as disabiility compensation, pensions, and education and healthcare benefits.
• Military pay and allowances are exempt.
• Retired military pay is exempt.

Paychecks, allowances, payments and annuities will continue to be paid on time and without interruption.  

What Types of Military Benefits are not Exempt and at Risk to Sequester Cuts?

• Health Care Services – Access may be reduced and wait times increased as a significant portion of the health care workforce is comprised of DOD civilian employees who would be furloughed.
• Community Support Services – Much like health care a negative impact to access and wait times should be expected including child development centers, after school programs and commissaries.
• Education – DOD officials have said DOD schools will not be impacted however many federal financial aid programs that benefit military children in public schools are set to be cut.
• Tuition Assistance (TA) – All military branches have announced that Tuition Assistance will be suspended.  Those currently enrolled in classes will not be impacted but new applications will be accepted.
• Military Spouse Career Advancement Accounts (MYCAA) – The DoD has not suspended MYCAA yet but many sources believe this is being strongly considered.  We’ll keep you updated.

This is a partial list of major military benefits that are not exempt and face potential sequester cuts.  

What Other Ways will Veterans be impacted?

Over 300,000 veterans work for the DoD and will be furloughed resulting in a 20% decrease in pay.  Additionally, many more veterans work for federal, state and local agencies and face the same possibility.  The federal job market and industries that support the federal government will also need to cut back on hiring.  Resulting in unemployment for veterans and service members transition out of the military may find job prospects that much more difficult.  Housing vouchers and and rental assistance is also expected to be reduced at the same time.

Why is This Happening?

The government formed a “Super Committee” that was supposed to come up with a plan to strategically cut $1.2 trillion in spending by the end of the year.  They failed.

Is Military Pay Impacted by Sequestration?

Military personnel programs are exempt which includes military pay, benefits and change of station travel.  However, by exempting military pay this just means that the DoD would need to cut more from other areas such as laying off or furloughing civilian workers and contractors.  This would also most likely only provide a short-term reprieve to military pay cuts.

What is the Department of Defense Doing About This?

The White House Office of Management and Budget recently issued guidance to the DoD on how to apply these cuts.  The DoD is currently in the planning stages for these cuts.

Will the Sequestration Cuts Happen?

No one knows at this point.  Everyone is hoping the Democrats and Republicans can agree before the deadline aka “fiscal cliff.”  Most are hoping for at least a delay of the deadline for a couple of months.  Even both parties have said they want to stop sequestration but can’t agree on many points.

What Can You Do?

Contact your Member of Congress and address your concerns at every opportunity.  Ask them what they’re doing to prevent sequestration and let them know the impact it will have on yourself and your family.

Quotes from Leaders of our Military and Government

“It will not happen,” President Barrack Obama – Referring to sequestration cuts

“Cuts of this magnitude would be catastrophic to the military,” – General Raymond Odierno, Chief of Staff of the U.S. Army

“Sequester is not a real crisis, it’s an artificial crisis,…I know of no Republican, no Democrat, who believes that should happen,” – Secretary of Defense Leon Panetta

“But in the longer run, over the course of the next 10 years, particularly as we absorb the $487 billion [in reduced growth] we’ve already absorbed, [military personnel] will be taken into consideration,” Carter acknowledged.” – Deputy Secretary of Defense Ashton Carter

“My job is to stop sequestration,” Senator John McCain

“We understand that in getting to an agreement that drives down the debt … that there are going to be cuts,… Making cuts strategically makes sense. Doing it through sequestration does not make sense.” – Rep. Austin Scott, R-Ga