How A Federal Debt Default Would Impact Military Members
About Ryan Guina
Ryan Guina is The Military Wallet’s founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.
Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.
Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.
Featured In: Ryan’s writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine , Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.
Help From An Indiana Social Security Disability Lawyer
Even if the government shuts down tonight, Hensley Legal Group wont. Our disability attorneys, case managers, legal assistants, and intake specialists will be hard at work filing disability claims on behalf of Hoosiers. Well continue to request reconsiderations and request hearings if our clients applications or appeals are denied, and well continue building solid cases in anticipation of our clients scheduled hearings.
If you have any questions about how a government shutdown may affect your claim, or if youre interested in filing an application or receiving representation for a hearing, Hensley Legal Group can help. Call us today or contact us online for a free consultation.
Is The Department Of Veterans Affairs Affected By The Government Shutdown
The VA Contingency Plan for the shutdown states that nearly all of its employees-approximately 96 percent-are ordered to report to work as usual. According to the VA Contingency Plan, Federal activities that are authorized to continue, during a funding lapse, are excepted activities which include the safety and protection of human life, and the protection of property. VA medical facilities remain open and appointments are still being kept at VA hospitals and clinics.
Find out more about VA resources for furloughed veterans and their families.
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Concern Over Long Term Sustainability
While the Social Security Administration is designed to be able to weather the storm that is the 2013 government shutdown, some lawmakers are less optimistic about what state the agency will be in a few years from now.
During a recent appearance on 60 Minutes, Sen. Tom Coburn, R-Okla., alleged that almost half of SSDI recipients either should not have qualified for benefits or had highly questionable applications.
CBS has even created a landing page for its SSDI coverage called Disability, USA.
The lawmaker and a CBS investigative team noted the programs $135 billion budget to serve 12 million people up 20% in the last six years. The program is expected to run out of funding in the next two to three years.
Then, a 60 Minutes producer said, lawmakers and their constituents will face a tough decision: When the trust fund runs out, the truly disabled will either see their benefits cut or every working American will have to pay more in taxes.
Veterans’ Benefits Will Be Disrupted By Extended Shutdown
Veterans groups have reacted angrily to news that an extended government shutdown will leave the Department of Veterans Affairs unable to make disability compensation and pension payments to veterans.
Losing the payments could have a devastating impact, particularly on severely wounded veterans who are unable to work and depend on VA checks, said Tom Tarantino, chief policy officer for Iraq and Afghanistan Veterans of America.
Congress and the White House, theyre playing chicken with peoples lives, Tarantino said. Thats where this becomes scary.
Joe Davis, spokesman for Veterans of Foreign Wars, said, We have to be hopeful that Congress will reach some sort of compromise before millions of disabled veterans and survivors are financially devastated.
Sen. Bernie Sanders , chairman of the Senate Committee on Veterans Affairs, was planning to introduce legislation Monday evening that would provide funding allowing the Department of Veterans Affairs to continue issuing checks to veterans, a spokesman for his office said.
On Friday, VA issued a veterans field guide stating that compensation and pension claims processing and payments would not be affected by a shutdown.
The Washington Post reported Friday evening that notwithstanding the field guide, department officials had briefed leaders of the House and Senate veterans affairs committees Friday afternoon that they would run out of money for the payments in two to three weeks.
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Hope For Veterans During The Shutdown
There is hope, for it seems that shortchanging our veterans may be the one thing that gets politicians from both sides of the aisle to come together to avoid. Last week there was huge public outcry over the fact that the shutdown prevented a $100,000 death gratuity benefit from being paid to the families of five soldiers killed in Afghanistan since the shutdown started. Thankfully this atrocity ended when the House passed an emergency bill, followed by the Senate and then the President signed it. It is this type of public outcry in support of our fallen heroes and disabled veterans that hopefully will put pressure on Washington to act.
If you are not one of the 5.2 million veterans that are receiving benefits, or if you are but not satisfied with what you are receiving, please contact a veterans disability attorney at Bosley & Bratch to see if we may be of service to you. You certainly did a service for us.
What Should I Do During A Government Shutdown To Protect My Claim
The best thing you can do to protect your claim during a government shutdown is to continue as if the government is still open. That means continuing to go to your doctors appointments and calling your Social Security disability attorney if there are any changes to your contact information or medical condition. That also means meeting all normal deadlines for applications, requests for reconsideration, and requests for hearings.
Even if the government shuts down, your Social Security disability attorney and your case manager will be hard at work on your claim. Theyll make sure any paperwork is submitted before any deadlines and continue preparing for your hearing under the assumption that it wont be delayed.
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Social Security Funds Are Separate
Even if the debt ceiling does not get raised, funds from payroll taxes would still continue to come into the government, Altman said.
Those contributions go toward the program’s trust funds and are used to pay benefits.
Social Security’s combined trust funds for retirement and disability can continue to pay full benefits until 2034, according to the recently released Social Security trustees report for 2021. At that point, 78% of promised benefits will be payable.
“If the debt ceiling doesn’t get raised for a decade, which nobody thinks is going to happen, then there’s not going to be a problem,” Altman said.
How Do You Turn Off Your Feelings
Here are some pointers to get you started. Take a look at the impact of your emotions. Intense emotions arent all bad. Aim for regulation, not repression. Identify what youre feeling. Accept your emotions all of them. Keep a mood journal. Take a deep breath. Know when to express yourself. Give yourself some space.
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Working Overtime To Process And Pay Va Education Benefits
The VA acknowledges that January and February are high-demand months for the GI Bill and other VA education benefits.
This can coincide with government shutdowns. For instance, the last federal government shutdown was the longest in U.S. history, lasting 35 days from Dec. 22, 2018, to Jan. 25, 2019, during the Trump administration. During that shutdown, the VA said it had over 1,100 employees processing GI Bill benefits.
Anyone experiencing financial hardships during a furlough, experiencing delayed GI Bill payments or needing other GI Bill-related assistance can call 1-888-442-4551 for advice and help.
What Happens When Government Shuts Down
A government shutdown occurs when Congress fails to fund the government. During a government shutdown, the government stops all non-essential services, while essential services, such as the armed forces, border protection, air traffic controllers, and police and fire departments, will continue to operate.
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Retired & Survivor Benefit Plan Pay
Military Retirees and Survivor Benefit Plan recipients would, during a shutdown, still receive their pension checks as the funding for these benefits is NOT tied to Congresss funding bill. After previous shutdowns, Veteran Affairs lobbied Congress to fund the VA on a two-year budget cycle which exempts the department.
The VA is in a fortunate situation in that we have whats called an advanced appropriations so we get our money a year ahead of time because I think Congress understands that the VA cant shut down, that we are there for the safety of our veterans. said former VA Secretary David Shulkin.
What Shuts Down When The Government Shuts Down
A government shutdown occurs when Congress fails to fund the government. During a government shutdown, the government stops all non-essential services, while essential services, such as the armed forces, border protection, air traffic controllers, and police and fire departments, will continue to operate.
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Effects On Federal Courts
One potential effect could be seen by those veterans with appeals pending in the federal courts. Despite the shutdown, the federal judiciary has remained open for business by using court fee balances and other funds on hand. However, those funds run out on January 11.
If that happens, nonessential federal court workers will be furloughed while a skeleton crew of workers will remain on duty without pay. The courts would then handle only those matters deemed essential under U.S. law. Individual courts will be left to decide which matters are essential.
Since the U.S. Court of Appeals for Veterans Claims is a part of the federal judiciary, it will also be impacted by the January 11 funding shortage. Thus, appeals regarding veterans benefits could be delayed due to worker furloughs.
Dod Va Officials Prep For A Possible Government Shutdown Later This Week
In anticipation of a possible government shutdown later this week, leaders from the Departments of Defense and Veterans Affairs have begun warning employees of possible office closures, program interruptions and potential furloughs that will result from a budget lapse.
The moves wont mean any work stoppage for active-duty service members, but it could mean a disruption in their pay until the federal financial issues are resolved.
On Monday evening, Senate Republicans blocked a bid by Democrats to push through legislation to extend the current federal budget past Oct. 1 and raise the countrys borrowing limit. Unless lawmakers can find a compromise plan on the issues by the end of the week, many government agencies will run out of funding and be forced to shutter temporarily.
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Last week, Veterans Affairs officials released their shutdown contingency plan, which will be less severe than other departments because of advance appropriations approved by Congress in last years budget agreement.
As a result, 96 percent of VA employees will not have to worry about furloughs if a shutdown occurs, and most VA programs including medical care, benefits processing and burials at department cemeteries will continue uninterrupted.
Some staff in the office of the VA Secretary could face work stoppages, and some department call centers and job assistance programs would temporarily close.
The effects at the Defense Department would be more severe.
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What About Disability Pay Gi Bill Benefits And Sgli Payments
Like military retiree pay, Veterans Affairs disability payments and GI Bill payments are funded with different legislation that is not a part of the current budget battle. Those who receive disability or GI bill payments will continue receiving those payments without interruption.Servicemembers Group Life Insurance payments will not be affected, either.
Will Military Members Get Paid During A Government Shutdown
The most recent government shutdown in 2018 2019 did not cause members of the Department of Defense to miss a paycheck. This means that all military members, military retirees, military annuitants , and DoD civilian employees that fall under the DoD received their normal paychecks.
However, other members of the Uniformed Services that do not fall under the DoD were not funded under those government spending bills. That means members of the following organizations went without pay until the government shutdown was over:
- The US Coast Guard , which falls under the Department of Homeland Security,
- The National Oceanic and Atmospheric Administration , which falls under the United States Department of Commerce, and
- The Commissioned Corps of the US Public Health Service which is a division of the Department of Health and Human Services concerned with public health.
However, military members have missed paychecks in some previous government shutdowns.
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National Parks And Monuments Could Close
National parks have proven to be a very popular refuge during the pandemicin 2021, Yellowstone set monthly visitation records.
However, a government shutdown could put the kibosh on many Americans holiday plans. During the government shutdown of 2013, more than 300 parks, national monuments and other sites were closed .
If another shutdown occurs, it may affect whether national parks and monuments remain open, especially given that were still in a global pandemic.
What Happens To Other Federal Benefits During A Government Shutdown
Note: The following types of payments are generally safe during a government shutdown:
- Military Retirement Pay
- VA Disability Compensation & VA Health Care
- Social Security benefits
- Medicare and Medicaid
The government shut down will only affect paychecks for government spending which must be approved on an annual basis. Some military-related payments are made from a separate pot of money and likely wont be affected. The following payments are expected to continue without interruption during a government shutdown:
- Veterans receiving monthly disability and compensation payments
What about Social Security Benefits, Veterans Health benefits, Medicare, Medicaid, etc.?
Certain mandatory, non-discretionary, and entitlement payments are unaffected. This means the government will continue sending Social Security Benefits to recipients. Medicare, Medicaid, and VA health care benefits would continue during a shutdown, but payments for the care may be later than normal. So be aware of this when planning any non-emergency or low-priority medical care. Also, note that many non-emergency veteran health care services were curtailed during previous government shutdowns.
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Build An Emergency Fund
An emergency fund is nothing more than a savings account you set up for a rainy day. You dont touch it unless you absolutely need to. There is no magic number for how much money you need in your emergency fund, but a recommended starting point is $1,000 . That is a lot of money, but you dont have to put it all in right away. Start saving $25 a week, or $50 a paycheck, or whatever you can afford to put away. The money in your emergency fund will help you deal with any unexpected expenses that pop up, such as a flight home, a car accident, or a government shutdown. Your emergency fund will help you avoid relying upon credit cards or other loans in an emergency.
How The Budget Process Works: Appropriation Vs Authorization
Our federal government spending is organized by a two-part process. The two parts are called appropriations and authorizations. Theyre entirely separate but they work together. Like peanut butter and jelly.
To relate them to your personal budget: Appropriations are like deciding how much you will spend on travel this year, and you move that into your travel account. Youre appropriating the money for that purpose. Authorization is like deciding where you are going to go, how you are going to get there, and whether you are sleeping in a tent or a five-star hotel. You already had the money with the appropriation, but authorization is the plan for spending it.
As far as the military is concerned, authorization is passed in the form of the National Defense Authorization Act, or NDAA. Thankfully, there is a provision whereby spending automatically remains at the previous years level until the new NDAA is passed. So thats not the big concern here. Our big problem is:
Appropriations, often called the budget, is when the federal government sets a broad spending plan for the fiscal year. Our constitution requires that all money spent by the federal government be pre-approved:
No money shall be drawn from the treasury, but in consequence of appropriations made by law and a regular statement and account of receipts and expenditures of all public money shall be published from time to time. Article one, Section nine, Clause seven of the U.S. Constitution
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What Happens To My Scheduled Social Security Disability Hearing In A Government Shutdown
Most likely hearing officers will continue to hold social security disability and SSI hearings if a shutdown occurs. During the 2013 government, the Office of Disability Adjudication and Review still held previously scheduled hearings, but staffing was limited to administrative law judges, medical experts, vocational experts, and security personnel. New hearings were not scheduled. Lack of support personnel caused delays in exhibiting files and decisions were not written during the shutdown. So, if a claimant was waiting for an already scheduled hearing, it in most cases proceeded and was decided. But, the writing of the decision did not take place so if benefits were granted there was a further delay before benefits were paid since the decisions was not actually formally written until the shutdown ended.