• Treasury Secretary Scott Bessent confirms military pay will be prioritized using reallocated funds during the ongoing shutdown
  • The move comes at the expense of other federal employees and services, including Smithsonian museums and the National Zoo
  • Financial institutions are stepping in with emergency loans as military families face cash flow disruptions

Treasury Secretary Scott Bessent announced Tuesday that the government has identified a pathway to ensure military personnel receive their paychecks during the ongoing federal shutdown, though the solution requires diverting funds from other federal operations and has left many civilian employees in limbo.

With Congress failing to pass appropriations legislation by the October 13 deadline and Speaker Mike Johnson refusing to reconvene the House for a vote, the administration has been scrambling to prevent pay disruptions for the nation's 1.1 million active service members. President Trump earlier ordered the Secretary of Defense to use "all available resources" to ensure troops would be paid by the October 15 payday.

According to people familiar with the matter, the Treasury is now prioritizing military payroll by reallocating funds originally designated for other federal functions, including operations at Smithsonian museums and the National Zoo. The move effectively delays payments to thousands of non-military federal workers while the shutdown persists.

"We will be able to make paychecks for military personnel," Bessent told reporters, though he acknowledged the solution was temporary and came with significant trade-offs. The funds are being mobilized from unspent research and development allocations within the Defense Department.

Financial institutions are already seeing the impact. USAA and other lenders have reported increased demand for no-interest loans from service members concerned about cash flow disruptions. In military-heavy regions like Colorado Springs, local utility companies are offering payment extensions, and community organizations are providing food aid to struggling families.

One Army spouse, who asked not to be named while her husband is deployed, described the situation as "incredibly stressful" and said many military families were living paycheck-to-paycheck. "We're watching every dollar, wondering if we'll have to choose between rent and groceries," she said.

The Department of Defense declined to comment on specific contingency plans beyond confirming that efforts were underway to meet payroll obligations. A spokesperson for the Smithsonian Institutions confirmed that some staff had been furloughed as resources were redirected.

This marks the first federal payday missed for many troops since the shutdown began, breaking with historical precedent where Congress typically passed measures to secure uninterrupted military pay during previous funding crises. The political stalemate shows no signs of immediate resolution, with bipartisan support for a pending 3.8% military pay increase remaining stalled in committee.

While military families will receive their pay, the broader economic impact of the shutdown continues to ripple through federal-dependent communities and threatens to undermine financial stability for thousands of government workers who lack similar protections.