Blog post

DoD Budget Cuts: How They Could Impact You
Posted by Michelle McCarthy on January 26

IAVA released the following statement in response to new budget guidelines outlined by the Department of Defense (DoD) on Thursday:

“America must serve our troops as well as they have served us. The President hammered home this message in his State of the Union—and our country has an obligation to carry it forward. As these wars end, our military is at a strategic turning point, but we cannot balance the budget on the backs of our nation’s warriors and their families,” said IAVA Executive Director and Founder Paul Rieckhoff.

“The Defense guidance outlined today focused heavily on downsizing to a smaller, leaner force after these wars end. But it did not provide concrete specifics on the true, long-term impact on military pay, healthcare costs and retirement benefits for this generation. Our community is already facing daunting unemployment rates and a suicide epidemic here at home. It’s absolutely critical that this final plan protects and bolsters the programs, services and benefits our troops need to transition home and support their families long-term.

IAVA is committed to supporting and preserving our status as the best military in the world. As the President prepares his final budget for Congress, we will continue to monitor the impact these budget decisions will have on service members’ and veterans’ long-term health and financial stability. In the coming weeks, we hope the White House and Department of Defense will reach out to our members and their families for feedback and insight. Our troops are taught never to leave anyone behind. That ethos is true in combat and America needs to uphold it here at home.”

The Department of Defense announced today that it will request $525 billion in funding for the Fiscal Year 2013. However, DoD is required to reduce $487 billion in planned spending over the next 10 years. To achieve this objective, Defense Secretary Leon Panetta addressed several defense priorities that could impact the IAVA community including:

Force reduction. DoD plans to reduce the size of the active Army from a post-9/11 peace of about 570,000 in 2010 to 490,000. The Army plans to remove at least eight Brigade Combat Teams from its existing structure. DoD will reduce the active Marine Corps from a peak of roughly 202,000 to 182,000. In addition, the President will request that Congress authorize use of the Base Realignment and Closure (BRAC) process to further reduce costs.

Military Pay. Instead of reducing military pay, DoD will allow full pay raises in 2013 and 2014 to keep pace with increases in private sector pay. DoD will limit pay raises beginning in 2015 to achieve cost savings.

Wounded Warriors, Families and Transitioning Vets. The DoD budget plan recommends sustaining key support programs while reforming and reorganizing others to respond to the needs of troops of their families including:

Wounded Warriors – Provide extra funding for the base and OCO budgets to enhance the Integrated Disability Evaluation System.

Transition Assistance - Reform the Transition Assistance Program and transition process for all service members through a collaborative DoD-VA initiative that improves career opportunities and readiness focusing on education, technical training, job placement and entrepreneurship preparation.

Family Support - Sustain, expand or improve effective programs for non-clinical counselors, marriage support, new patient support, and stress-reducing recreation for returning troops.

Psychological Health - Sustain effective programs that address Traumatic Brain Injury and Post-Traumatic Stress Disorder.

Reserve Component Support - DoD’s Yellow Ribbon Integration Program, which provides services and referrals to reservists guardsmen, their families, and their employers through each state of the mobilization cycle.

DoD Schools - facilities being restored and modernized.

Health Care. DoD indicates changes in the budget will not affect active duty personnel or their families. Medically retired and survivors of those who died on active duty are exempt from health care changes. Working-age retirees under the age of 65 who are still likely to be employed in the civilian sector will feel the most impact. Proposed changes include:

Increasing and adding new enrollment fees for retirees under age 65 in the TRICARE program, using a tiered approach based on retired pay that requires senior-grade retirees to pay more and junior-grade retirees less.

Establishing a new enrollment fee for the TRICARE-for-Life program for retirees 65 and older using a tiered approach.

Increasing pharmacy co-pays to incentivize use of generics and mail order.

Retirement. DoD will ask Congress to establish a commission with BRAC-like authority to conduct a comprehensive review of military retirement in the context of total military compensation. To protect the retirement benefits of those who currently serve, the commission would assess grandfathering benefits, so reforms only impact future recruits.

Download the full blueprint of Defense Budget Priorities here. Are you a veteran of Iraq or Afghanistan? Join the conversation and share your reactions on this issue inside Community of Veterans.