DoD pushes for 2011 spending increase

Wednesday - 3/2/2011, 7:16am EST

WFED's Jason Miller

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By Jason Miller
Executive Editor
Federal News Radio

Defense Department officials Tuesday made their case to Senate lawmakers to push through a spending bill for fiscal 2011.

Defense Deputy Secretary William Lynn detailed to members of the Senate Appropriations Subcommittee on Defense the snowball effect a year-long continuing resolution would have on the military.

Lynn said DoD would end up "robbing Peter to pay Paul."

"Moving funds in this way is detrimental to our readiness, our modernization and to efficient business practices. For example, funding would likely be reduced for some or all of the three brigade combat teams that will be returning Iraq and Afghanistan soon. The Navy would likely be forced to reduce flying hours and steaming days, and to cancel exercises and training events. The Air Force would face a 10 percent cut in its flying hours. Equipment maintenance would also have to be deferred. All of these cuts would impact on readiness."

If Congress passes a bill to fund agencies at the 2010 levels through Sept. 30, DoD's budget would be $23 billion less than President Obama's request, Lynn said. The House's version of a full-year CR currently would give DoD a bump in spending, but still about $9 billion below the President's request. Without any increase from 2010 levels, Lynn said DoD would be short about $23 billion.

Former federal officials say DoD could live with the cuts. Gordon Adams, a professor of international relations at American University who used to handle Defense programs in the Office of Management and Budget in the 1990s, said military officials are overstating the financial problems. He said DoD has faced these challenges before and came out in good shape.

But Lynn said if DoD had to continue spending at 2010 levels, it would have about $8 billion in unpaid bills, including meeting payroll and ensuring they have enough to pay for healthcare costs.

Lynn reassured lawmakers that DoD would pay its military and civilian employees, and healthcare would continue to be a top priority.

"We'd be short at least $2.5 billion in DoD personnel accounts," said Robert Hale, DoD comptroller and chief financial officer. "Since they are essentially entitlements for the workforce-we will pay you-we would be forced into some really fairly brutal reprogramming actions to try to move that money into personnel in order to meet paydays."

President Obama requested a 1.6 percent pay raise for servicemen and women and Congress is expected to approval the proposal, but not give DoD any more money.

Hale says many services already have frozen civilian hiring so if a person who repairs tanks leaves, they are not replacing them. This leads to delays in getting things done across the board, he said.

Lynn says DoD also would have to transfer money from other accounts to meet the $1.3 billion it needs for healthcare.

"The impact of the CR would more be on the accounts we transferred from rather than the medical accounts themselves," Lynn said. "A billion dollars in a $530 billion budget seems like a small amount of money. But in fact even with a budget that size all of the money is spoken for. All of the money is dedicated to a particular mission, whether it is a readiness mission, an acquisition mission or medical mission. We would have to deprive one of those readiness or acquisition missions of a $1.3 billion in order to make sure we paid our military medical bills."

Lawmakers offered support for DoD. Sen. Susan Collins said the Senate should be considering the military spending bill for 2011 instead of the patent reform legislation currently on the floor for debate.

But none of the members promised to aggressive push for DoD's 2011 spending bill to the floor and get it passed.

In the meantime, Lynn said DoD already is making changes. It has stopped work on 75 military construction projects, and stopped or delayed the purchase of new weapons systems.

And Lynn said acquisition may take the biggest hit.

"We would have to move resources from areas in contracts," he said. "We would have to defer and cancel some contracts. Surely some of those would be small and disabled businesses. That would be inevitable. In order to pay those personnel and medical bills, it would require decisions at multiple levels to decide exactly which contracts you are going to defer and which contracts you are not."

Additionally, Lynn said program managers will delay contracting actions and then have to make up time and contract out too quickly, which in the end could cost DoD more money. He said other contracting officers will have to use short term contracts that also adds more cost to the government and brings instability to the vendors.