12-26-2013 10:04 PM
Both the House of Representatives and Senate have approved a federal budget deal, and President Barack Obama has signed it. The package is designed to reduce the chances of another government shutdown in 2014 and to provide relief from the “sequestration” budget cuts.
What does the deal mean for you?
With funding for the government more secure, the package is designed to reduce the threat of government shutdowns that could interrupt your federal payments or salary. At the same time, it aims to ease budget pressure that could add stress for federal workers or squeeze programs. But one provision of the package would reduce cost-of-living adjustments for military retirees, which USAA has urged Congress to change.
“While we are pleased that Congress has approved the Bipartisan Budget Act of 2013 to provide certainty in the marketplace and help to avert a potential government shutdown, we are concerned about the provision impacting military retirees,” said Brian Conklin, vice president of USAA federal government and industry relations, in a letter to congressional leaders. “Reducing retirement benefits for those who have served their country for over 20 years could negatively impact uniformed service career retention, and ultimately, national security.” The letter urges Congress to find alternate sources of funding when it returns from recess.
With the budget agreement in place, both houses of Congress will return to Washington after the holiday recess and consider appropriations legislation to maintain funding for government operations.
However, one major federal fiscal challenge remains: the debt ceiling. The nation’s debt ceiling, or limit on federal borrowing, will be reinstated Feb. 7. “Extraordinary measures” are expected to prevent a U.S. default until spring, when lawmakers must take action again.
Because the budget deal has prevented the need for immediate cuts and produced compromise spending levels, federal payments and salaries are more likely to continue without interruption. You may want to use this time to build your emergency fund and update your financial plan. As always, you can get free financial advice by calling 1-800-527-8722 (USAA).
No Department of Defense or government agency endorsement.
You must be a registered user to add a comment here. If you've already registered, please log in. If you haven't registered yet, please register and log in.