For U.S. troops stationed in high-cost areas overseas, life is about to get more expensive. Monthly allowances meant to help with living costs will be cut soon. The impact is going to be vast, affecting over 230,000 troops, and could disrupt the lives of service members and their families.
The Timing of Cuts
The Defense Department is preparing for the second round of cuts to the Overseas Cost-of-Living Allowances (OCOLA).
These will take effect on December 1, hitting the wallets of service members right in time for the holiday season.
Who’s Affected?
Troops stationed in expensive duty assignments are the most impacted.
This also includes locations outside the continental U.S. like Alaska and Hawaii, which already have high living costs.
Past Restrictions
Last year, lawmakers tried to slow down these cuts. They made a rule that decreases in the allowance can only happen once every six months.
The Numbers Game
For a mid-level soldier with one dependent in Alaska, the cut could be about $129 a month. For a major with a family of four, it’s even higher at roughly $465 a month.
Widespread Impact
The cuts will affect over 230,000 troops. This isn’t just a small segment of the military but a significant portion of our service members overseas.
Inflation’s Role
Inflation has been rising in the U.S., making goods and services more expensive. This has shrunk the gap between the living costs for troops in expensive locations and those in the continental U.S.
Justification for Cuts
The Department of Defense states that the cuts are necessary due to this shrinking gap and currency fluctuations. They calculate the allowance based on these factors.
Room for Protest
Commanders at overseas locations can protest these changes. However, they need to provide evidence that the cuts do not align with the actual living costs that troops face.
Senior Officials Weigh In
Senior defense officials point to a 4.6% pay raise in basic pay for troops this year. They argue that this increase should help to offset the allowance cuts.
2023 vs 2022 Pay
A senior defense official noted that even after the OCOLA reductions, the take-home pay for most service members in 2023 will still be higher than in 2022.
Pentagon’s Silence
The Pentagon did not respond to requests for comment on this issue, leaving many questions unanswered.
Morale and Effectiveness
These financial strains could affect the morale and effectiveness of troops. If service members are worried about making ends meet, their focus may shift from their duties.
Financial Planning for Troops
Troops may need to revisit their budgets and financial plans. Every dollar counts, and the cuts will force them to tighten their belts.
Family Concerns
Families of service members will also have to adjust. Reduced allowances could affect decisions like schooling for kids, where families live, and even their quality of life.
The Larger Picture
This isn’t just about allowances or pay. It’s about the well-being of people who risk their lives for their country. Financial instability could have broader implications for both service members and national security.
“America only has ONE NATIONAL ANTHEM”: Fans Outraged After Black National Anthem Is Sung at Super Bowl LVII Instead of American National Anthem
The NFL’s decision to include the performance of “Lift Every Voice and Sing,” often referred to as the “Black National Anthem,” at the opening of Super Bowl LVII has sparked severe online controversy. Here’s the full story. “America only has ONE NATIONAL ANTHEM”: Fans Outraged After Black National Anthem Is Sung at Super Bowl LVII Instead of American National Anthem
“Karma Strikes Back” – Russia Faces Its Largest Attack on Home Soil Since the War Began
Reports of drone attacks on Russian soil by the Ukrainian forces have escalated to the largest cross-border attack since the war started, with the important airport in Pskov becoming the latest victim. “Karma Strikes Back” – Russia Faces Its Largest Attack on Home Soil Since the War Began
“Texas Is Doomed” – Federal Judge Delivers a Controversial Verdict, Gov. Greg Abbott Accused of Breaking the Law in Latest Legal Showdown
A federal judge has ruled that Texas governor Greg Abbott violated federal laws in his fight to keep Mexicans out. Now, the Republican may be up a creek without a paddle. “Texas Is Doomed” – Federal Judge Delivers a Controversial Verdict, Gov. Greg Abbott Accused of Breaking the Law in Latest Legal Showdown
They “Boxed All of the Black Children Together” – Florida Principal Threatens High-Achieving Black Student With Jail Time if Test Scores Don’t Improve
Bunnell Elementary School’s new principal, Donelle Evensen, attempted a unique strategy to address academic performance concerns, but it backfired spectacularly, sparking outrage and accusations of racial insensitivity. They “Boxed All of the Black Children Together” – Florida Principal Threatens High-Achieving Black Student With Jail Time if Test Scores Don’t Improve
Florida’s COVID Hospitalizations Soar as DeSantis Administration Urges People Under 65 Not to Get Newly Approved Boosters
Florida’s Covid-19 hospitalizations have surged to a post-pandemic record. Amid this crisis, Governor Ron DeSantis and his surgeon general’s controversial warning against COVID-19 booster shots has sparked intense debate and concern within the medical community. Florida’s COVID Hospitalizations Soar as DeSantis Administration Urges People Under 65 Not to Get Newly Approved Boosters
The post 230,000 U.S. Troops Facing Pay Cut As Cost-of-Living Cuts Hit Overseas Service Members – Sacrificing More Than Just Paychecks for Our Country first appeared on Mama Say What?!
Featured Image Credit: Shutterstock / LightField Studios. The people shown in the images are for illustrative purposes only, not the actual people featured in the story.
Mark Garro is an Aussie former CPA and corporate finance manager turned research writer. After more than two decades simplifying complex analyses for leading companies, including Goldman Sachs, Marks & Spencer, and Tabcorp, he packed up and moved to the Italian Riviera. Now he covers all things related to finance and equity research for a diverse range of publishers and syndicators around the world.