How Sequestration Will Affect Your Life

Military families should know how sequestration will affect their lives, when and if it occurs.  Thankfully, pay is secure, but many other benefits are not.

Pay Is Safe

Military pay is specifically exempt from sequestration cuts, including retired pay.  All VA programs, including disability benefits and care, are also exempt from sequestration cuts.  However, please do not become complacent.  It is very likely that next year’s raise will be small or non-existent, and cuts to other programs could increase your family’s spending needs.

Defense Health Cuts

While Tricare can not be eliminated or seriously changed without Congressional action, you will still see cuts in health care.  Fewer civilian jobs will mean fewer providers and more difficulty getting an appointment.  Pharmacies will stock fewer medications, forcing beneficiaries to utilize the mail order pharmacy or purchase their prescriptions at civilian drug stores.  Hours may be cut, and “extra” services such as nutrition counseling may be curtailed or eliminated.

Commissary Budget Cuts

DeCA has issued guidance:

  • Hiring freeze, regardless of sequestration
  • May overseas case lot sales cancelled, regardless of sequestration
  • If sequestration occurs, commissaries will close on Wednesday in all state-side locations, and most overseas locations.

Commissaries could see reduced staffing and hours.  Worst possible scenario:  some commissaries could be closed.

DoDDS Schools

Schools run by the Department of Defense, both domestically and overseas, will see an immediate decrease in their funding.  As part of the Operations and Maintenance budget, they should theoretically have the same cuts as 9.4% cuts as the rest of that budget.  According to the Federal Education Association, DoDEA teachers may be furloughed for as many as 22 days between 23 April and 30 September 2013.  Not only is this a nightmare as far as our children’s education, but it also will create child care and other issues.  Plus it just makes me mad, since I’m not allowed to take my child out of school to go on an educational family trip but apparently it is OK if the government decides to withhold education.  (Sorry, I’ll stop ranting now.)

Local Schools

Federal education funding will be cut by 8.2%.  This will impact local schools in numerous ways, most importantly by the decrease in Federal Impact Aid.  Federal Impact Aid are funds given to local school districts to offset the costs of educating children who reside on federal property and therefore do not contribute to local real estate and school taxes.  For some school districts, this represents a large portion of their budget and just the threat of sequestration has reduced their services.  More than 1/3 of surveyed school districts built these cuts into their 2012-2013 school year budgets, and this resulted in fewer teachers, less curriculum purchased, and deferred building and maintenance.   Other federal education cuts will include decreased spending on special education, student financial aid, and programs for disadvantaged youth.

Social Services

Programs such as the family readiness centers (Fleet and Family Support Center, Soldier and Family Assistance Center, and Airman and Family Readiness Center, Marine Corps Community Service Centers), sexual assault prevention and response programs, and substance abuse programs will all be impacted.  Civilian employees may be subject to furloughs, and new hires will be unlikely.

Spouse Employment:  Civilian, Contractor and Local Community

Civilian employment by the Department of Defense will decrease, as will the number of contractor jobs.  Many of these positions are held by military spouses.  Off-base, the fiscal cliff is expected to decrease jobs and increase unemployment.  Faced with fewer jobs and more applicants, the bias against hiring military spouses will mean that fewer military spouses will be able to find employment anywhere.

Tuition Assistance, MyCAA and Education Centers

Tuition Assistance is part of training, which falls under the 9.4% cut Operations and Maintenance budget.  I’m not sure how this is going to be implemented, but I would recommend using your tuition assistance now.  MyCAA will see reduced funding, and base education centers will be impacted by the decrease in civilian employees.


Many military families are already reporting decreased maintenance on their military housing, and that isn’t likely to improve.  While Public-PrivateVenture (PPV) housing has removed much housing from the military budget, there are still many bases with military- owned housing, especially overseas.

Women, Infants and Children

The WIC program provides vouchers for specific, nutritious foods to small children and expectant or breastfeeding mothers.  The WIC program will sustain cuts of 8.2%, meaning fewer recipients and lower benefits.  It also means that the WIC staff will be cut, decreasing the education and counseling given along with the benefits.

Fewer Civilians On Base Means Reduced Services

Civilian employees on bases will be reduced.  The nice librarian who always renews your books and doesn’t yell at your children?  Might not be there in the future.  The person who processes your travel claims will be busier, because there won’t be as many of them.  Need a new ID?  Be prepared to wait longer, as fewer staff means longer lines.

Child Care

As part of the Operations and Maintenance Budget, child care will be impacted.  Expect fewer employees, meaning fewer slots at the child care center.  Also, expect the reduction or elimination of any free child care that is offered, such as care for families with deployed servicemembers.  Maintenance and supply budgets will also be reduced.

There are still a lot of grey areas, and everything is not clear.  Sequestration may happen immediately, or Congress may vote to delay it for a period of time.  Heck, maybe they’ll even figure out a magic fix and nothing will happen at all.  Regardless, these are the types of programs and services that you can expect to see be decreased and cut at some point in time.  As our country deals with unprecedented financial crises, lots of things will happen.  Let’s be knowledgeable and prepared.


Many thanks to the National Military Family Association (NMFA) and their The View From The Ledge:  The Fiscal Cliff and How It Affects Military Families.  The NMFA is a great organization and their information is always top-notch.  I used this article to jump-start my thinking and research.

This post was originally published on 1 January 2012.  I started to write a new post, but realized that it would say exactly the same things.  I’ve made a few small changes to clarify some items, and include more information.  It will remain near the top of the blog for longer than usual, as it is a serious issue.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • spc

    good advice take the paychek and the tricare that’s it.and the tsp and sgli
    my gen must save for retirement

  • Daniel

    So you’re purposely spending more money than you need to? How ridiculous is that? How about budgeting for that circumstance and then saving the money left over for when you need it? According to your method, I should have been finding the most expensive gas station in town in the 90’s so I would be ready to start paying more for gas today. Get real. One of the biggest reasons for joining the military is job security and the benefits such as housing and commissary. Let me ask you this, are you including all your military allowances in your taxable income so you will be ready to pay more taxes too? I’m not advocating for being a financial idiot and not planning for your financial future in these economical turbulent times. However, as long as I honorably serve my country and go where they send me every 3-4 years and I put my command mission first and rely on my amazing wife to take care of our home and children when I can’t be there, I will gladly take advantage of the benefits our government has set forth to us for doing that job.

  • Corrie

    Do you have other sources for your information, or is it all from the NFMA article (don’t get me wrong, it was a good source)? Finding sources on how the sequester will directly affect military families is like pulling teeth.

    • KateKashman

      Corrie, I’ve used a wide variety of sources, including documents published by the various branches of the service, tons of different newspapers, the federal teacher’s union website, and the federal government employees union website. I’m sure there is more, but I can’t remember every place right now. Did you have a specific question? I’d be glad to search out the answer for you.

  • Guest

    NAF will not be impacted. The budget cuts only impact activities funded by appropriated funds.

  • Rebecca

    This article totally forgets the military family with the spouse employed by the DoD as in our case. I know a LOT of military spouses who are DoD employees because once you’re in the system it’s a lot easier to get a new job every few years when you PCS than trying to explain the military lifestyle to an outside company and expect them to be willing to pay you the same as they would someone they aren’t pretty darn sure they’re going to have to replace in 3 years. A 20% pay cut for me is going to be a big hit, and we still have all the same expenses as before. We do NOT have the option to live on base and it isn’t practical for us to shop at the commissary because of the distance, so we are already “living on the economy” but we’ll still have to make some pretty significant changes. For us the only place we have room to make adjustments to accomodate the reduction in pay is in debt reduction and savings.

    • guest

      what about picking up a second or weekend job? Even if it doesn’t pay as well as your federal one it can fill that pay gap. Downsize stuff around the house and sell it on ebay, if you are living on the economy start using coupons for food and only shop whats on sale (we feed a family of 4 and 4 pets for under 300/month that way). Once spring starts grow your own food and can it for the winter (we save a fortune doing that, even when we can only grow in containers). Deliver pizza’s at night when your husband is home a couple of nights a week or on your sequester day. A lot of restaurant owners that I’ve worked for in the past have been more then willing to work around my schedule. There are other options, they might not be options you like, but there are other temporary (and the key word is temporary) options.

      • Dena

        You can cutt out cable, stop eating out, shop at Goodwill, forego hair and nail appointments and make up for that lost 20%. Too many people have lost sight of the difference between needs and wants.

        • justme

          So we as soldiers, airmen , etc deserve to live with no cable, shop at Goodwill and not be able to eat out.. Really?? You guys are ridiculous. For all the people that dont risk their lives down range for this country, maybe that doesn’t bother you but we shouldn’t want for anything when we come home. Nor should we live like vagabonds or peasants. PERIOD..!!

          • guest

            She’s a civilian, facing sequestrian and furlough…NOT a soldier that was complaining. And are you old enough to remember the 70’s when there was no cable, cell phones, the average house was like 1k sq ft? We’ve supersized our lives, soldier or not it’s time to cut back.

      • KateKashman

        Also, how far away is your commissary? Depending on your car’s gas mileage and the distance, it might be worthwhile for you to take one of your newly found free days to trek to the commissary and stock up on essentials. I know plenty of folks who only go to the commissary every month or two, but still save tons of money.

    • KateKashman

      Rebecca, I guess I’ll have to rewrite that paragraph. Thank you for letting me know that I wasn’t clear. I thought I’d addressed the issue of military spouse DoD civilians, but I guess it wasn’t as thorough as necessary. This will definitely be a challenge for your family, but it will be a great opportunity to get your budget closer to one-income, which of course is always the idea goal. Let us know how it goes for you.


    Has anyone thought about our already overworked-reduced force having to step up and fill the shoes of the furloughed civilian jobs in their absense? Just because the civilians are not at work, does not mean that their jobs do not get done. What next?

  • Marie

    As a NAF employee, I can tell you we are not exempt from the effects of sequestration. My NAF employer just cut all tuition assistance effective immediately. Reduction of hours and other cuts are still on the table. I am facing losing my assistant in an environment where we are both constantly busy. The duties of my two-person department will be next to impossible to maintain without an assistant to share the load.

    Although we are largely a self supported NAF entity, we also receive some APF funding for specific programs. Loss of that APF source means NAF funds will be used to fill the gap. NAF are definitely not exempt. We’re all facing tough times.

    • KateKashman

      Marie, I’m curious what you mean by “NAF employer.” If you are employed by a company who has a contract with NAF, then you are a contractor, not an NAF employee. Or am I confused?

      While NAF activities may feel the trickle-down effects of sequestration, NAF activities themselves are not subject to direct cuts. They are called “Non-appropriated funds” activities because they are not paid for by appropriated funds.

  • Ginger

    My husband just left the military last year, we moved back home and I got a job but he was not able to find anything but temp jobs because the civilian companies did not see the value in his military experience. So he had to take a DOD-Civilian job 3 hours away. This position was going to be a 75% pay cut but we put together a budget and found ways to cut 25% of what we were spending by couponing, eliminating cable, and getting rid of our smart phones. We made many cuts so we could live on his income while I searched for a job in the area. With an extra 20% cut we had to put all our student loans on forebearance and I am not able to leave my job. After paying a second rent, utilities, and paying childcare expenses I am only making around $500/mo but we can not afford to lose that $500. We can not afford the gas to visit each other because we are saving all we can to prepare for the sequester. It is not just a matter of cutting expenses for some people. There are people who have cut expenses and are being frugal and then are asked to cut their spending even more. My family will make it through this and we will be fine, we will have food on the table, but this is going to be difficult and we are making a lot of sacrifices because of it.

  • Cindy

    It says that pay will not be affected, but what about BAH? Can they lower BAH within a calendar year, or only on Jan1? I know about rate protection, but what if you PCS in the middle of the year and sign a lease prior to officially checking in? Then what if you have really bad luck and they lower the BAH rates in between the time you sign the lease and officially check-in to your command? Will you have rate protection because you signed the lease prior to when they lowered BAH rates?

  • ter

    If you want an eye opener, take a look at OPM listing of budgets and you will laugh and cry at the same time. Pacific Coast Salmon Recovery with a $1B budget??? This is what our Gov (both Rep & Dem) think is important. And that listing of budgets only had to take a 5% cut while protecting our country is cut 9% or more? The pork has to be really eliminated and I don’t think that we would have to sequester or furlough or anything.

  • Hours may be cut, and “extra” services such as nutrition counseling may be curtailed or eliminated.