Veterans’ health care funding may be exempt from automatic, across-the-board budget cuts that are due to begin in January, but military health care is not — and a new think-tank report says Congress would have to reprogram $3 billion from other Defense Department budget accounts to fully pay for military health care should the cuts occur.
DoD personnel programs are exempt from the 10 percent cuts under sequestration, including basic pay, allowances for housing and subsistence, retirement pay, and bonuses.
And the Budget Control Act of 2011, which set up the mechanism for cutting federal programs if a deficit spending agreement isn’t reached, also exempted veterans’ benefits. In April, the White House announced veterans medical care expenses also are exempt.
But health care for military personnel and families, including Tricare, fall under DoD’s operations and maintenance programs and consequently could suffer as a result of the cuts, known as sequestration.
Total personnel costs in the Pentagon’s proposed fiscal 2013 budget are $168 billion, including funding for the defense health program.
In that budget, Defense Department planners included several initiatives aimed at reducing personnel costs, including increased fees for military retirees receiving health care. But Congress has not supported the Tricare fee proposals or the Pentagon’s other personnel-related budget reduction measures in the fiscal 2013 legislative budget process.
And that could affect readiness, said the new report from the Center for Strategic and Budgetary Assessments.
DoD “will have little choice but to reduce the number of personnel by more than is already planned or take deeper cuts in modernization or readiness,” wrote CSBA analyst Todd Harrison. “Over time this will limit the range of military options available and if left unchecked would eventually result in military too small or unprepared for even the most basic missions.”
DoD Comptroller Robert Hale said Aug. 2 the department has “looked at impact assessments on Tricare … and they would be seriously hurt.” But he insisted the Pentagon is not making plans for sequestration.
Defense Secretary Leon Panetta held a closed-door meeting July 23 to detail four possible scenarios facing the department regarding sequestration. The meeting was one of a series of high-level gatherings on sequestration by DoD officials and industry leaders.
According to a source who attended, the scenarios the Pentagon is considering include:
• Congress does not act and sequestration happens.
• During the lame-duck session of Congress, a plan is constructed to thwart sequestration.
• Congress comes up with a $1.2 trillion plan to avert sequestration between now and the November election.
• Congress inserts language into a continuing resolution to stave off sequestration for a year or two, but the government still implements cuts, sometimes referred to as a “mini-sequester.”