Armed Forces Compensation During a Lapse in Appropriations

Armed Forces Compensation During a Lapse in Appropriations

INSIGHTi

Armed Forces Compensation During a Lapse
in Appropriations
Updated September 27, 2023
Compensation for members of the Armed Forces (i.e., Army, Navy, Marine Corps, Air Force, Space
Force, and Coast Guard) is funded through annual appropriations to personnel-related line items in
accounts of the U.S. Department of Defense (DOD) and the U.S. Department of Homeland Security
(DHS). These accounts include funding for pay and allowances of active and reserve component
members, along with travel-related expenses.
In anticipation of or during previous lapses in appropriations, Congress has considered actions to ensure
that certain members of the Armed Forces continue to receive pay and benefits. In the past decade, two
lapses in appropriations affecting DOD and DHS generated particular congressional interest in Armed
Forces compensation. In FY2014, a lapse in appropriations resulted in a shutdown of numerous
government operations for 16 days, affecting both DOD and DHS. In FY2019, while DOD was not
affected by a partial government shutdown, DHS—and thus the Coast Guard—was among the entities
affected by a 35-day lapse in appropriations.
Although military retirement is funded through annual appropriations, retired pay and survivor benefits
are distributed from the Military Retirement Fund. As such, retirees and survivor benefit plan
beneficiaries generally continue to receive disbursements during a lapse in appropriations.
Selected Lapses in Appropriations
FY2014
Immediately preceding the FY2014 shutdown that affected DOD, on September 30, 2013, then-President
Barack Obama signed the Pay Our Military Act (POMA; P.L. 113-39). This legislation provided an
automatic continuing resolution (ACR) to cover FY2014 pay and allowances for members of the Armed
Forces on active duty, including reservists on federal active duty, as well as certain DOD and DHS
civilian personnel and contractors supporting military personnel. Section 3 of the POMA contained a
termination provision, and the law is no longer in effect. In subsequent years, some Members have
introduced similar legislation, such as the Pay Our Military Act of 2018 (H.R. 4871; S. 2328).
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In 2013, Congress debated the Obama Administration’s interpretation of language in POMA. Some
Members questioned the DOD’s determination that POMA did not provide for expenses related to
military personnel death gratuities and funeral expenses. On October 10, 2013, President Obama signed
the Department of Defense Survivor Benefits Continuing Appropriations Resolution, 2014 (P.L. 113-44),
which provided for the payment of such expenses.
On January 17, 2014, President Obama signed the Consolidated Appropriations Act, 2014 (P.L. 113-76),
which included the Department of Defense Appropriations Act, 2014 (Division C) providing full-year
appropriations for pay and allowances of members of the Army, Navy, Marine Corps, and Air Force; and
the Department of Homeland Security Appropriations Act, 2014 (Division F) providing full-year
appropriations for pay and allowances of members of the Coast Guard.
FY2019
On September 28, 2018, then-President Trump signed the Department of Defense and Labor, Health and
Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 (P.L.
115-245), which included the Department of Defense Appropriations Act, 2019 (Division A) providing
full-year appropriations for pay and allowances of members of the Army, Navy, Marine Corps, and Air
Force. DHS was funded under continuing resolutions (Division C of P.L. 115-245; and P.L. 115-298) for a
period through December 21, 2018. When neither full-year appropriations acts nor another continuing
resolution were enacted after the expiration of the continuing resolution, a 35-day funding gap occurred
affecting DHS, as well as certain other departments and agencies.
On December 27, 2018, the Coast Guard published a document stating Coast Guard members would not
be paid “until we have an appropriation, continuing resolution (CR), or passage of an alternative
measure.” In January 2019, legislation was introduced to provide Coast Guard pay and allowances during
a lapse in appropriations (e.g., H.R. 350, H.R. 367). On January 15, then-Coast Guard Commandant
Admiral Karl L. Schultz said, “To the best of my knowledge, this marks the first time in our Nation’s
history that servicemembers in a U.S. Armed Force have not been paid during a lapse in government
appropriations.” On January 25, President Trump signed the Further Additional Continuing
Appropriations Act, 2019 (P.L. 116-5), ending the partial shutdown. On February 15, President Trump
signed the Consolidated Appropriations Act, 2019 (P.L. 116-6), which included the Department of
Homeland Security Appropriations Act, 2019 (Division A) providing full-year appropriations for pay and
allowances of members of the Coast Guard.
Selected Guidance Documents
DOD Guidance
On September 12, 2023, DOD released contingency plan guidance for a lapse in appropriations. The
document states, “Military personnel on active duty, including reserve component personnel on Federal
active duty, will continue to report for duty and carry out assigned duties.” In the past, DOD has released
information stating that active-duty military personnel would continue to serve but not be paid in the
event of a government shutdown. In a September 2021 memorandum to senior Pentagon leaders
accompanying the department’s biennial planning guidance for a lapse in appropriations, Deputy Defense
Secretary Kathleen Hicks stated, “All military personnel performing active duty will continue in their
normal duty status regardless of their affiliation with excepted or non-excepted activities. Military
personnel will not be paid until such time as Congress appropriates funds available to compensate them
for this period of service.”

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The latest guidance also states that if no appropriation for military personnel accounts is available for
obligation of death gratuity payments under 10 U.S.C. Ch. 75, such payments may be charged to
unobligated, unexpired Defense Health Program appropriations, pursuant to the Department of Defense
Appropriations Act, 2019 (P.L. 115-245, Division A, §8136). The guidance document states, “Operations
conducted to make such payments are excepted as a ‘necessarily implied’ activity.”
DHS Guidance
On September 26, 2023, DHS published procedures relating to a lapse in appropriations. The document
states that employees “excepted” from a lapse in appropriations—including those to carry out activities
“authorized under law to continue even without funding,” who are almost exclusively Coast Guard
servicemembers—“will not be paid their salary until an appropriation is passed.”

Author Information

Kristy N. Kamarck
Brendan W. McGarry
Specialist in Military Manpower
Specialist in U.S. Defense Budget

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