Bloomberg News

Pentagon Operations Would Get $10 Billion Under Proposal

March 04, 2013

House Republicans sought to ease the Pentagon’s pain from across-the-board spending cuts, proposing legislation that would shift $10 billion to train troops, maintain weapons and pay for operations.

The stopgap measure proposed yesterday to prevent a threatened government shutdown after March 27 would fund government programs at last year’s level minus the automatic cuts that took effect on March 1. Exceptions would be made to reorder funds for the Defense Department and free up money for the Veterans Affairs Department. Military pay is already exempt.

“This legislation will avoid a government shutdown on March 27th, prioritize DoD and veterans programs, and allow the Pentagon some leeway to do its best with the funding it has,” U.S. Representative Hal Rogers, a Kentucky Republican who leads the House Appropriations Committee, said in a statement.

While Republicans who control the House plan to pass the legislative package this week, Democrats said they will push for similar concessions to help domestic programs. That risks making the measure another casualty in the partisan fighting over budget-cutting. The process called sequestration imposes $85 billion in reductions on domestic and defense programs in the seven months remaining in the current fiscal year.

Representative Nita Lowey of New York, the top Appropriations Committee Democrat, said she was disappointed that Rogers’s proposal “would lock most of the federal government into outdated plans and spending levels.”

Senate Prospects

Senate Democratic leaders were still deciding whether to accept the House bill without changes and turn to the appropriations process for fiscal 2014, which begins in October, or add provisions for domestic programs, an option favored by Senator Barbara Mikulski, a Maryland Democrat who leads the Senate Appropriations Committee.

Under the Republican proposal, the Pentagon would get $10 billion more for “operations and maintenance” than it otherwise would have under sequestration. The 7.8 percent cut required for that category would be taken from the $173.5 billion in a House-Senate compromise plan for this fiscal year that never became law, rather than from the $163.1 billion appropriated in fiscal 2012.

Service Contracts

The operations and maintenance accounts -- typically used to pay for services from contractors such as Booz Allen Hamilton Holding Corp. (BAH:US) or Dyncorp International Inc. -- will be among the first to be affected under sequestration, according to Gordon Adams, who teaches foreign policy at American University in Washington and was an associate budget director under President Bill Clinton.

The added money for operations and maintenance would be freed up partly by reclaiming unused funds from prior years, “excess” spare parts and “unjustified Army growth funding,” according to a summary provided by Rogers.

The House Republican proposal also would restore to the Pentagon the ability to transfer as much as $4 billion between accounts for purposes such as “unforeseen military requirements,” with advance notification to Congress. Such reprogramming authority isn’t provided under sequestration.

Pentagon officials have said such leeway won’t help much.

“We’re so far into the fiscal year, five months into it, that if -- even if we were given wide flexibility, we still would have to go after almost everything that’s unobligated,” Pentagon Comptroller Robert Hale told Peter Cook on Bloomberg Television’s March 3 “Capitol Gains” show. “So I don’t think that it would materially change the problem.”

The Republican measure would provide a combined $72 billion in discretionary funding for military construction and Veterans Affairs, according to Rogers. He said cutbacks in military construction would offset increases for veterans programs. The proposal also would add $2 billion for embassy security in response to the Sept. 11 attacks on the U.S. mission in Benghazi, Libya, where four Americans were killed.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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