AFSA Alert: Details of Presidents FY 2013 Budget Proposal Released

Yesterday afternoon, Defense Secretary Leon Panetta released details about the Administration’s plan for defense spending in fiscal year 2013.  Defense funding will be slightly higher than expected—$525 billion for fiscal 2013 with an additional $88.4 billion for overseas contingency operations primarily inAfghanistan.  This is however, down from $531 billion and $115 billion, respectively, in the current fiscal year.  These cuts in defense spending are part of a plan announced by the President earlier this month to reduce defense spending by more than $480 billion over the next ten years. 

According to documents released by DoD, the F-35 is going to be retained but procurement related to the program will be slowed.  The Global Hawk program (drones used for surveillance and reconnaissance) will be terminated, along with 27 C-5s, 65 C-130s, and 28 C-27s.  Six of the Air Force’s current tactical air squadrons and one training squadron will be eliminated and funding for missile defense reduced.   Cuts in active duty Air Force personnel were not identified, but given the above, some reductions may eventually be required.  The number of Air Force bases could be reduced as well; the President will ask Congress to authorize use of the Base Realignment and Closure (BRAC) process to identify additional savings that can be attained by closing bases or realigning units. 

Annual pay increases for active duty service members will be unaffected in FY 2013 and FY 2014, but limited in FY 2015 and beyond.  Military retired pay will not be immediately affected, but the President will ask Congress to establish a BRAC-like commission to conduct a comprehensive view of military retirement and recommend changes that meets the personnel needs of DoD in a cost-effective manner (In plain English; DoD would like to reduce military retired pay).  Secretary Panetta said he and the President “Have made clear that the retirement benefits of those who currently serve will be protected by grandfathering their benefits.” 

As AFSA predicted, several changes in TRICARE fees will be proposed by the President in his budget submission.  They include: 

  • Further increasing and adding new enrollment fees for retirees under age 65 in the TRICARE program, using a tiered approach based on retired pay that requires senior–grade retirees to pay more and junior-grade retirees less; the resulting fees remain below comparable civilian equivalents 
  • Establishing a new enrollment fee for the TRICARE for Life program for retirees 65and older, again using a tiered approach; the resulting fees will be well below comparable civilian equivalents 
  • Implementing additional increases in pharmacy copays in a manner that increases incentives for use of generics and mail order 

Many key support programs will be sustained, enhanced, or reorganized to better meet the needs of military personnel and their families.  These include extra funding to enhance the Integrated Disability Evaluation system, reform the Transition Assistant Program, sustain family support and mental health programs, restore and modernize DoD schools and maintain the current number of stores in the military commissary system. 

Speaking to reporters, Panetta said the budget represents the “tough budget choices” needed to reach $487 billion in cuts over 10 years.  Panetta also said the plan entails risk, but that U.S. forces will remain capable of beating “any adversary, anytime, anywhere…  Ultimately we will need the support and the partnership of Congress to implement this vision of the future military.  Make no mistake, the savings we are proposing will impact all 50 states and many districts across America.  This will be a test of whether reducing the deficit is about talk or action.  My hope is that when members understand the sacrifice involved in reducing the defense budget by half a trillion dollars, it will convince Congress to avoid sequestration, a further round of cuts that would inflict severe damage to our national defense for generations.” 

As previously reported, the President intends to present his full budget proposal to Congress on or about February 13 and additional details will be available at that time.  The preliminary report provided yesterday can be found here.  Many of the proposed changes are disturbing, but expected.  Now it is time to act and AFSA will work with members of Congress to mitigate or eliminate the adverse effects these proposed changes will have on enlisted Air Force members and their families.  But to be clear, we remain opposed to any effort that tries to shift the cost of earned healthcare onto the backs of retirees and their families.  Using healthcare provided to retirees as a “cash cow” to generate savings for the nation is patently wrong, and inconsistent with many previous pledges to “not balance the budget on the backs of veterans.”

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