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Major Defense Budget Cuts A Possibility…or Are They?

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As you may be aware, the Congressional “Super Committee” recently failed to meet their deadline to come up with a plan to cut the Federal budget. Congress has until the end of December to come up with and pass the committee’s plan, otherwise $1.2 trillion in automatic cuts (“sequestration cuts”) are triggered. More bad news: half of the cuts are scheduled to come from the Department of Defense (DOD).

What does this mean for military members and their families? Well, surprising as it might seem at this point, not much.

There you go again. This guy is loony, you’re saying. The DOD is getting hit with $600 million dollars in budget cuts and he’s telling me it doesn’t mean anything to me? Well, yes, that is what I’m saying, and let me explain.

In the first place, the budget cuts don’t go into effect until 2013. What this means is that Congress actually has until then to come up with alternative plans. Given that the Secretary of Defense and many influential Senators and Congressmen have vehemently opposed the sequestration cuts in the defense budget, some sort of remedy seems to have a good chance of success.

Secondly, according to Undersecretary of Defense Mike McCord, the budget process is such a long one that there isn’t time to incorporate sequestration cuts into the budget. As late as December 2, the Obama Administration had submitted a budget proposal that didn’t include sequestration cuts. Fortunately or not, plans mean nothing if or when Congress cuts off the money spigot. But if the President and the planners at the DOD aren’t at “general quarters” yet, should anybody else be? Clearly, there is a lot of wiggle room here.

When I say there isn’t much to worry about, those points are what I had in mind. Of course, no one without “butter bars” or silver stars on their collar believes in the best-case scenario, so it bears looking at where cuts might come.

Secretary of Defense Leon Panetta

According to Secretary of Defense Leon Panetta, military personnel would be exempt from the cuts if the President agrees (my emphasis). Ultimately personnel would suffer, the Secretary added, since after 10 years of the cuts “we would have the smallest ground force since 1940, the smallest number of ships since 1915, and the smallest Air Force in its history.” This is worrisome.

The Congressional Budget Office (CBO), Congress’ bean counters, have also published a list of places they believe budget cuts could be made. Among their options (all are direct quotes from CBO sources

  • Introduce minimum out-of-pocket requirements for “TRICARE For Life”
  • Cap increases in military basic pay
  • Increase medical cost sharing for military retirees who are not yet eligible for Medicare
  • Limit the TRICARE benefit for military retirees and their dependents
  • Increase cost sharing for pharmaceuticals under TRICARE
  • Consolidate the Department of Defense’s retail activities and provide a grocery allowance to service members

Note that these options (the CBO is explicit: they are not “recommendations”) are not binding and they are not anyone’s plan; they are the considered opinion of financial professionals as to where cuts could be made. Should these cuts come, however, they would be another reason for worry.

What can you do about all this?  Well, first and foremost Don’t Panic!  Congressional law making is akin to hot dog making: you don’t want to watch it, and the results may not be very palatable. The proposed sequestration cuts are still a long way in the future. Save your panic for then, or for the unlikely event that “Tebowmania” is discovered to be contagious.

Secondly, write your Senators and your Congressman and tell them how you feel. Make sure your letter is respectful in every case, and make sure they understand how cuts will affect your family. Remember, “I think this is a bad idea” is a much less compelling argument than “These proposed cuts will cost our family an additional x dollars per year.”

Thirdly, stay informed. Believe it or not, Sergeant Jones’ wife overhearing at the PX that so-and-so told somebody that such-and-such was going to happen is NOT reliable information. Defense News has good coverage, as does The Washington Post.  Better yet, stay tuned to Militaryfamily.com where your friendly correspondent will be happy to keep you up to date!

The Budget Sequestration Saga is as much about politics as it is the Defense Budget, and perhaps more so. This does not make it any easier for military families, who, speaking as a biased member of the club, have enough to deal with already. The drama will unfold without our help, so with apologies to our British cousins, keep calm and carry on.  It is what military families do better than anyone else.