By Emelie Rutherford
As the House sent the Senate yesterday a temporary budget funding the government for two more weeks, Pentagon leaders warned weapon systems will be harmed if Congress does not pass a full-blown defense appropriations bill.
Deputy Defense Secretary William Lynn told the Senate Appropriations Defense subcommittee (SAC-D) that if the Pentagon continues to be funded for all of fiscal year 2011 at FY ’10 levels, as it has been since FY ’11 began last October, it will have to take money out of acquisition programs to pay “must-pay” bills. Also, planned contracts for ships and helicopters will remain stalled, because the Pentagon lacks the congressional authority to proceed with them.
“Simply put, (a full-year) CR would provide inadequate resources, it would put funding in the wrong places…we wouldn’t have the money to pay must-pay bills in the medical and personnel area,” Lynn testified. “And it would not allow for the management flexibility, particularly new-start authority and the ability to start new military-construction projects.”
The House passed yesterday a continuing resolution extending by two more weeks the current FY ’11 federal budget at FY ’10 levels until lawmakers can agree on an actual spending plan for FY ’11. Senate Majority Leader Harry Reid (D-Nev.) told reporters yesterday his chamber will pass this latest CR, which will prevent a government shutdown when the current one expires on Friday. The CR includes $4 billion in cuts compared to the FY ’10 budget, though none of the targeted items are directly related to weapon systems.
Lawmakers including SAC-D member Sen. Susan Collins (R-Maine) called yesterday for the Senate to pass a standalone FY ’11 defense appropriations bill. The House passed a year- long CR on Feb. 19 that had full-blown Pentagon appropriations legislation attached to it, but that full-year legislation is not expected to pass the Senate as is because of substantial budget cuts in it.
Lynn and Pentagon Comptroller Robert Hale told the SAC-D that “must-pay” bills tied to military pay raises and the increased cost of medical care, fuel, and inflation cannot be avoided.
If the Pentagon is forced to operate under a full-year CR with FY ’10 funding levels, Lynn said, it will “be forced to play a shell game” and reprogram funding within its coffers.
“Moving funds in this way is detrimental to our readiness, our modernization, and to efficient business practices,” Lynn said.
The makeup for shortfalls in medical and personnel accounts, he said, readiness or acquisition accounts could be reduced.
“In the unfortunate event, I would call it a tragic event, that we find ourselves under a year-long CR, we will have to reprogram extensively,” Hale said.
“We will have to look through…probably acquisition programs and terminate them or at least cut back significantly on them, and that’s always very painful because we’re affecting jobs and commitments that were made by the Congress,” he added.
“We’re going to defer some contracts, we’re going to cancel some contracts, then we’re going to reengage with contractors later on to do that…same work,” Hale said. “The charges are going to go up, we’re going to lose options, we’re going to lose the bids that we have. We’re going to pay more.”
Under a full-year CR, contracts for new weapons programs slated to start in FY ’11 would remain stalled. Those include purchases of DDG-51 destroyer equipment, a second Virginia-class submarine, Chinook helicopters, and Humvee refurbishments.
Lynn also warned of “management consequences” resulting if the Pentagon operates under a CR with FY ’10 levels for the rest of FY ’11.
“The program managers will delay contracting actions out of necessity, only to be required at a later date to be hastily made up for that by contracting too quickly without the appropriate safeguards,” he said. “In the face of uncertainty, other managers will resort to short-term contracts that add expense for the taxpayer and instability to the industry base.”