Defense

May 13, 2013

DOD Comptroller: Sequestration devastates U.S. military readiness

WASHINGTON, D.C. - During a Senate hearing May 9 on President Barack Obama’s $9.5 billion military construction budget request for fiscal 2014, Defense Department Comptroller Robert F. Hale said the severe and abrupt budget cuts imposed by sequestration are devastating the U.S. armed forces.

Hale and John Conger, acting deputy undersecretary of defense for installations and environment, testified on military construction and family housing before the Senate Appropriations subcommittee on military construction, veterans affairs and related agencies.

The officials described for the panel the impact of sequestration on military construction, facilities sustainment and restoration, and on the services in the current year.

“While sequestration and related problems do not affect most military construction projects, they are devastating military readiness,” Hale told the senators, adding, “I just can’t believe what we’re doing to the military right now.”

Summarizing the defense budget as a whole, Hale said, “We’re requesting $526.6 billion in discretionary budget authority. It’s about the same as our 2013 request but about 8 percent higher than we’re executing right now in 2013 under sequestration.”

Beyond 2014, he said, “If we’re able to carry out the president’s plan, we anticipate increases of about 2 percent a year, roughly enough to keep up with inflation.”

The overall budget request represents the amount the president and Defense Secretary Chuck Hagel believe is needed to support national security interests in a time of very complex challenges, Hale said.

“Our request does not take into account a possible $52 billion reduction if sequester becomes an annual event,” the comptroller said. “But the president has submitted a budget with a balanced deficit reduction plan of $1.8 trillion over 10 years – more than enough to meet the targets of the Budget Control Act.”

Hale added, “We strongly hope that Congress will pass this plan or another plan that the president will sign, and then repeal sequestration.”

For fiscal 2014 the department is seeking $9.5 billion for military construction, an amount that’s roughly equal to the president’s request of $9.6 billion in fiscal 2013, and $11 billion for family housing, he said.

On the military construction side, DOD is seeking $3.3 billion for operational training facilities, as well as $0.9 billion for modernizing medical facilities, 17 dependent school projects and many others; and $1.5 billion for the family-housing program to provide quality, affordable housing for military families.

In terms of sequestration’s effects on military construction, the comptroller said, most accounts won’t experience sequester-related cuts in 2013 because of special crediting provisions in the current law that apply when Congress enacts major cuts in an appropriation.

“The law says, ‘Cuts are big enough, there’s no further sequestration,’” Hale said.

But facilities sustainment and restoration and modernization projects already have been cut severely in fiscal 2013, Hale said, adding, “We’re essentially down to pretty much safety-of-life and -property projects for the rest of the year.”

In his remarks to the panel, Conger underscored the negative effects of sequestration on facilities’ sustainment and restoration accounts.

Because operation and maintenance dollars are more discretionary and thus more flexible, he said, facilities’ sustainment was cut more deeply to make up the difference.

“In fiscal 2013 we are deferring all but the most critical repairs,” the deputy undersecretary added. “We’re deferring routine maintenance. We’re holding off on major purchases and accepting risk by looking for building equipment to hold out longer.”

Frankly, he said, “we can accommodate this for a short period of time but facilities will break if we short-change these accounts for multiple years. Building systems will begin to fail. The cost to repair broken systems is much higher than that to maintain them, just like changing the oil in your car” prevents expensive auto repairs or system failures.

Keep in mind, he added, “that this ‘car’ is actually a real-property portfolio of more than 500,000 facilities and a plant-replacement value of more than $800 billion. If we don’t invest in keeping it up, it will deteriorate and we will end up with a steady increase in failing or unusable facilities.”

Hale said the department is still researching specific impacts of sequestration on military construction, but for those that so far are affected, “mainly Navy and defense-wide, we believe we can absorb most of the sequestration reductions with available … savings. We don’t intend to reduce the scope of any construction projects. At least (right) now we don’t believe that will be necessary.”

The department also plans to minimize the number of projects deferred or cancelled as a result of sequestration, Hale told the panel, but “we will have to do a larger-than-normal number of reprogrammings, which will add to our work load and also to yours.”

The proposed DOD base budget was built on several guiding principles, Hale said, in particular the need to continue to serve as good stewards of taxpayer dollars.

In that effort, he added, proposed initiatives range from health care and energy efficiency to weapon terminations, and include a new round of base realignment and closure, called BRAC.

“To cut long-term costs we need to consolidate infrastructure and reduce it,” the comptroller said. “The only effective way to do that is for Congress to authorize a new round of base realignment and closure, so we asked for a round in 2015.

“BRAC does save money … We’re saving $12 billion a year from the past BRAC rounds,” he said, adding, “I hate to think what I’d be doing right now as comptroller of the Department of Defense if, especially in this environment, I had to find another $12 billion of savings in the fiscal 14 budget.”

The department needs congressional support, Hale said, “so we can make further cuts in infrastructure in 2015 and hold down the dollars the American taxpayers have to give us to meet their national security needs.”

In addition to being good stewards of public funds, he added, “We … are seeking to strengthen our alignment to the president’s defense strategy that was announced last year. We also seek a ready force and try to put emphasis on people. But frankly, sequestration is seriously undermining both of those goals.”

 




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