What ‘sequestration’ defense cuts mean for you

Posted at 7:12 PM, Dec 31, 2012
and last updated 2012-12-31 20:05:52-05

As the clock runs out on 2012, Capitol Hill has been abuzz with rumors of a potential “Fiscal Cliff” deal.

As things stand right now, both sides have agreed to end the Bush tax cuts for individuals making over $400,000, and families making over $450,000.

The deal would also increase the estate tax to 40%, from the current 35% level, and cap itemized deductions for those individuals making over $250,000, and families making $300,000.

In addition, the payroll tax cut would expire for everyone - that means for a person making $50,000 a year, they would lose $83 each month from their paycheck.

Leaders on both sides have come to a tentative agreement on taxes, but not on sequestration, which includes $500 billion in cuts to the military.

Here in Hampton Roads, it could impact hundreds of thousands of people whose livelihoods depend on the Pentagon.

Military veterans, federal employees and defense contractors will each be affected by sequestration cuts in different ways.

“The impacts to us and families all over the country are devastating,” said Donna Cannon, who retired from the Navy and now works as a defense contractor.

First and foremost: Active duty pay and benefits, as well as retirement pay, will not be affected.

Another thing that won't be touched is the Veterans’ Affairs department - anybody who receives services from the VA will still continue to be taken care of.

That is the end of the good news. When it comes to day-to-day life in the military, base budgets will be slashed.

That means you will see less maintenance to buildings and fewer free services, as family programs and support offices lose almost half a billion dollars.

“It’s scary because we already have so little as military families,” said Melissa Detovar, whose husband is an active duty Navy sailor.

The impacts could be seen at commissaries nationwide, where locations could be closed, hours could be cut and products taken off the shelves.

Even the NEX could be affected, since many exchanges depend on morale and welfare recreation money, and under sequestration, that budget will be cut.

“Reduced services, longer lines, and more money out of our pockets… that’s tough,” said Cannon.

Sequestration will also mean big changes to your healthcare, with $3.5 billion set to be slashed from Tricare.

If you are on Tricare Prime, there could be longer waits for doctors at military hospitals and less choice for medications.

For those on Tricare Standard, delayed payments to private doctors may lead to denials of coverage.

“Thinking they are going to cut it even more, I can't even imagine,” said Detovar, who is already struggling with Tricare hospital bills from her pregnancy.

When it comes to active-duty members, training and equipment for deployments will be majorly affected.

Numbers of flight hours for pilots will be cut, the number of live fire exercises will be reduced, and maintenance of ships and ground vehicles will be pushed back.

Pentagon officials already went public, saying sequestration will reduce overall military readiness.

“You need safe, well-maintained ships to be effective in conducting your missions,” said Cannon.

When it comes to loss of pay, federal workers will see the biggest hit over time.

Government employees will report to work after the New Year, but DOD leaders have told their civilian force to be ready for furloughs as early as February.

The only ones that might not see the immediate impact would be defense contractors.

All current contracts will continue, since they have already been paid for, but future contracts could run into problems.

If no deal is reached, pink slips in the defense industry could be coming as early as April.