Military families wary of potential fallout from fiscal cliff
Tyndall Air Force Base Flightline is seen in this aerial photo from 2005.
News Herald file photo
Published: Saturday, December 29, 2012 at 01:59 AM.
PANAMA CITY — Military families are bracing for fallout from the fiscal cliff looming next week, according to a First Command Financial behavioral index survey.
First Command Financial, which provides financial services for military families, reported a large majority of military families believe the government will fail to come to a budget agreement, and more military personnel already are preparing for the fall.
“The fiscal cliff is a major concern for service members and their families,” Scott Spiker, CEO of First Command Financial Services, said in a statement released Christmas Eve. “Roughly seven in 10 believe that a failure to resolve the fiscal cliff stalemate will mean an increase in their taxes and a slowdown in job growth. Two-thirds of survey respondents fear the U.S. economy might slip back into recession.”
Concerns also are high over the federal budget cuts known as sequestration, with men and women in uniform expecting to see their family finances impacted in a number of ways.
The sequestration cuts, which resulted from the lack of a budget deal, are expected to be more than $500 billion, according to the Congressional Budget Office. A Department of Defense (DoD) spokesman said earlier this year that sequestration would more than double the $487 billion in cuts already planned for the military over the next 10 years, according to the National Military Family Association.
The First Command Financial survey found half of households anticipate a reduction in their military retirement benefits and increased responsibility for healthcare costs.
Planning for the effects of an across-the-board cut in defense spending “is only prudent,” according to DoD officials. Under the law, the reductions are due to take place Wednesday if no deal has been reached.
When asked about when budget cuts would be implemented, Tyndall Air Force Base officials pointed to a memorandum released by Defense Secretary Leon Panetta.
In the memo, Panetta said it is too early to assess what effects sequestration will have. He did say sequestration would not affect the number of authorized military personnel, and President Barack Obama announced last summer his intent to exempt from sequestration accounts used to pay for military personnel.
The secretary did clarify the potential implications of sequestration in his memo.
“If it occurs, sequestration will reduce our budgetary resources for the remainder of the fiscal year,” the memo says. “These cuts, while significant and harmful to our collective mission as an agency, would not necessarily require immediate reductions in spending.”
According to the survey, military personnel are expecting a 40 percent cut in a combination of housing, clothing and food allocations. The survey also noted that personnel are expecting about a 32 percent cut in educational benefits and a 31 percent cut in discretionary spending.
Almost three out of 10 military families believe sequestration will mean they are less likely to be promoted and more likely to experience early separation, the survey notes.
An early forced exit from the armed forces is seen as a serious financial threat, with almost nine out of 10 survey respondents hoping to qualify for a traditional military retirement by completing at least 20 years of service, the survey notes.
- Anyone at Tyndall Air Force Base is asked to checkwww.defensetravel.dod.mil/Docs/Fact_Sheet_BAH.pdf for information on housing allowances.
More fiscal cliff information for military families