DOD CFO POINTS OUT POST-SEQUESTOR PROBLEMS

FROM: U.S. DEPARTMENT OF DEFENSE

Comptroller Offers Glimpse of Post-sequester Options

By Karen Parrish
American Forces Press Service

WASHINGTON, June 13, 2013 - The budget storms assailing the Pentagon are unprecedented, the Defense Department's chief financial officer said here today.


"I've never seen anything like this," Pentagon Comptroller Robert F. Hale told an audience attending the 2013 Defense Communities National Summit, "and I hope we never see it again."

Hale asked attendees how many of them had seen serious effects from sequestration defense spending cuts at their home installations, and dozens of hands went up around the room.

Hale said the across-the-board cuts, costs for the war in Afghanistan that were higher than expected, and continuing resolutions that have in recent years replaced approved budgets have left Pentagon planners unable to make long-term course corrections.

Remaining shortfalls in fiscal year 2013 clearly show "we haven't fully landed this plane," Hale acknowledged, and he warned that 2014 and 2015 could be just as bad.

Cuts to training and maintenance this year will result in future "get-well" costs as the services clear backlogs and retrain members, Hale noted. If Congress passes a budget this year, he added, he's confident defense programs will be funded near the levels President Barack Obama requested. If a continuing resolution again takes the place of an approved budget, however, "we would face the get-well costs without the resources to get well," the comptroller said.

Defense officials, including Hale, have maintained repeatedly that they can save greatly in the long term if Congress allows them to close excess facilities, and the budget request this year again asks for a round of base realignments and closures, Hale noted.

Studies have shown DOD has 25 percent too much infrastructure, all of which is expensive to maintain and operate, the comptroller said. He added that while it's a "significant understatement" to say Congress is reluctant to approve base closures, previous BRAC rounds resulted in ongoing savings of $12 billion per year. Consolidating or closing underused military facilities will be essential to the department's future financial health, he added.

"We need the help of the United States Congress. BRAC is an obvious example," he said, but it's not the only area in which the Pentagon needs Congress to act.

"We need their permission to retire lower-priority weapons ... [and] slow the growth in military pay and benefits," he said, noting "uniform agreement" among the Joint Chiefs of Staff that the department must contain personnel costs.

Hale said results from Defense Secretary Chuck Hagel's strategic choices in management review -- which has been completed and is now being studied at the Pentagon's highest levels -- will guide spending decisions in the coming years.

Sequestration has been and remains a painful experience, Hale said, but he added that defense managers are learning to identify lower-priority initiatives as cuts increase.

"Some of those decisions shouldn't be reversed. ... As we recover from this long disease called sequestration, I hope we can benefit just a little bit from the cure," he said.