Defense

September 25, 2012

Comptroller outlines continuing resolution, sequestration

Karen Parrish
American Forces Press Service

The continuing resolution the Senate approved Sept. 22 and the president is expected to sign this week will affect short- and long-term Defense Department spending in coming months, a senior defense official said Sept. 25.

Pentagon Comptroller Robert F. Hale spoke on ìFinancing Defense: Strategies for Leaner Timesî at a Government Executive defense briefing series event here this morning.

The departmentís financial managers are accomplishing their mission of meeting war fightersí needs and can continue to do so under the six-month continuing resolution, Hale said.

The resolution will keep most DOD spending at fiscal 2012 levels, which are slightly higher than in the fiscal 2013 defense budget request, he noted. Overseas contingency operations funding, the ìwar fightingî dollars, will be at the fiscal 2013 level requested, he added.

But because itís not a full fiscal-year budget, the stop-gap measure causes ìserious problems,î Hale said; for example, it doesnít authorize the assistance mission in Iraq or allow for needed aircraft carrier overhaul.

ìWeíre looking at workarounds, but theyíre challenging,î the comptroller added.

The resolution also hinders contracting and production processes, he said. Bottom line, itís hard to manage under a [continuing resolution], he said. It puts another stress on the defense financial workforce and all of DOD. Itís inefficient and unfortunate. We need the Congress to return to an orderly budget process.
DODís strategy facing the resolution is to ìlook at workarounds until December,î the Pentagonís chief financial officer said. ìThen we need an authorization bill to give us legal authority, [or] the workarounds will fail.

While the continuing resolution will challenge department financial managers, Hale said, he has far more serious concerns about DODís health if sequestrationís automatic budget cuts take effect beginning Jan. 2.

A provision of the Budget Control Act, sequestration would trigger an additional $500 billion in across-the-board defense spending cuts over the next decade, on top of $487 billion in cuts already programmed, unless Congress identifies equivalent savings by January.

ìI definitely hope sequestration wonít happen, and I still believe thereís a reasonable chance it will not, Hale said.

ìItís clear what sequester does to defense in dollar terms,î he added. ìIt would cut around $52 billion [in fiscal 2013], and the cuts continue.

Equivalent cuts would recur every year through fiscal 2021, Hale said. He noted President Barack Obama has said he would exempt service member pay and benefits from sequestration cuts. But the rest of the defense budget would take about a 9.5-percent cut, Hale said, which would lead to ìserious adverse consequences.

We would see cuts in our wartime, or [overseas contingency operations] budget,î he said, noting that protecting warfightersí operating budgets is a high priority, so department managers would seek to offset such cuts.

But protecting wartime budgets will lead to cuts in training budgets, he said, and could, in the event of a future contingency, delay the militaryís ability to respond.

Civilian personnel spending also would face cuts, which likely would involve a hiring freeze, unpaid furloughs ìand probably more,î the comptroller said. ìIt would leave us with fewer civilians to do important jobs, he said.

Military families and retirees also will be affected if sequestration takes effect, Hale said: funding would drop for services from family housing and maintenance to TRICARE, the health care program for service members, retirees and their eligible family members.

Sequestration would also force officials to reconsider the defense strategy that had taken into account the $487 billion in spending cuts over the next decade already programmed.

ìWe believe the strategy is the right one for the times, Hale said. The strategy and the Pentagonís fiscal 2013 spending request are consistent with the national security challenges the United States faces, he added, listing Iran, Syria, North Korea and ìlonger-term threats in the Pacificî as significant concerns.

Hale noted that both the president and Defense Secretary Leon E. Panetta have said sequestration would have ìdevastating effectsî not just on DOD, but across government agencies. And it never was meant to be implemented, Hale told the audience.

It was meant as a prod to the Congress to enact deficit reduction, he said. ìAnd we need Congress to do just that: enact a balanced plan of deficit reduction Ö that halts sequestration.




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