Sequestration treadmill picking up steam across DoD

The automatic budget cuts set to occur under sequestration will go into effect as a matter of law on Friday. But their full impact won't be felt until late this...

Barring an 11th-hour budget agreement that’s eluded the legislative and executive branches for nearly a year-and-a-half, sequestration officially will take place Friday, and the military departments will take additional steps to cut back on spending to try to cope with a sudden slice to each of their programs.

But while the punitive spending cutbacks, which were never supposed to happen, will occur immediately and automatically on paper, their impacts to the Defense Department will not be obvious to the public or to lawmakers for weeks or months, long after even the next in a series of pre-arranged budget crises: the expiration of the short-term continuing resolution which funds the federal government through Mar. 27.

“It’s not going to be a big, explosive event on the first of March,” said Maj. Gen. Karen Dyson, the director of the Army’s budget office. “It’s more like getting on a treadmill that continues to pick up steam. We’ve been on that treadmill since December when we started planning for this.”

When the Office of Management and Budget issues its sequestration order to federal agencies, the military will begin to take additional actions to conserve cash for the rest of the year, particularly in its operation and maintenance accounts. The steps include preparation for wide-ranging civilian furloughs, more curtailment of military training and a close examination of contracts for possible terminations or modifications.

But for most of those steps, the impacts will show up this spring and summer as lagging indicators of steps the military already will have taken.

“It’s going to really start to impact most widely by April,” Dyson said. “That’s when we’re looking at the furlough of our civilian workforce, which we very much don’t want to happen. But by about Memorial Day, you’ll see that workforce furloughed, and we’ll have a pretty good sense of which training cannot happen for soldiers.”

Huge cuts to O&M accounts expected

Training and civilian salaries are just two of the areas covered by the Army’s operation and maintenance (O&M) accounts. Those funding lines are particularly vulnerable to damage by sequestration, because the dollars are spent in the same year they’re appropriated, unlike large weapons programs that can continue to carry on if they were funded with contracts from prior years.

Because of a perfect storm of budget pressure on those O&M funding lines in 2013, including sequestration, a stopgap budget that was copied and pasted by Congress from the year before and now is mismatched with real-time needs, and unexpected costs in Afghanistan, the Army will have $18 billion less in O&M budget authority by the end of this year than it expected when 2013 started in October.

The service intends to protect the war effort in Afghanistan from cuts and will endeavor to do the same with wounded warrior programs and its most critical family and soldier programs, officials said. That leaves only about half the O&M budget open for the reductions that sequestration and a full-year continuing resolution would require.

“So when you hear that sequestration impacts everyone evenly across the budget, that’s not true when it comes to our operation and maintenance account,” Dyson said. “The compounding effect of this is really about 52 percent against our unprotected amounts for operation and maintenance. And that’s if we spread it across the entire year. But we’re going to be starting this on Friday, which means we only have seven months left to execute that reduction, and we only have $20 billion left in our unprotected accounts. So now we’re taking an $18 billion reduction against $20 billion. This is why this is a devastating environment to operate within.”

With only $1 billion-to-$2 billion O&M dollars to spread around for the remainder of the year, the Army will start making additional cutbacks when it gets the sequestration order.

Most training, repairs on chopping block

For example, the Army will cut back training for approximately 78 percent of all soldiers, and only the next group set to depart for Afghanistan will have their training fully funded.

Additionally, the service will cut funding for domestic military facilities immediately by 30 percent for the remainder of the year, said Brig. Gen. Curt Rauhut, the director of resource management for the Army’s Installation Management Command, which manages stateside bases. He said the Army doesn’t believe it will be able to fully pay for even the most critical safety of life programs on installations, and it will be able to support only 37 percent of the facility sustainment and repairs needed.

“As we speak right now, there is no funding for any restoration or modernization on facilities. That means if a soldier living in a barracks has a leaky roof, we may have to just throw a tarp over it. If a window is broken, we may have to just provide a piece of plywood,” he said. “It is a concern. Not only can we not do the facility modernization we wanted to, we won’t even have enough funding this year to sustain the facilities we currently have out there.”

Under sequestration, military personnel accounts, which pay the salaries of uniformed service members, are exempt from cuts. But besides leaky roofs and training shortfalls, the Army says there will be other significant impacts to military members under sequestration.

The changes, Rauhut said, might extend to the jobs many of them do every day. With DoD’s civilian employees being furloughed for one day a week and the department’s contractor workforce almost certain to take a big hit, uniformed members may well have to fill those labor gaps.

Reviewing millions in service contracts

He said the Army is in the process of reviewing about $400 million in service contracts for potential cancellation.

“What services can soldiers really do? Do we want them do be doing refuse removal, trying to find tactical vehicles to haul dumpsters off to a landfill? Do we want them riding around on lawn mowers or doing custodial services? I think we’d rather have them flying helicopters and doing live-fire exercises,” he said. “Every dollar we don’t put toward service contracts means we’re having soldiers doing that type of work, and it’s a real impact to readiness.”

While the Army says it will protect soldier and family programs as much as possible, services such as child care centers and commissaries are likely to see reduced operating hours. The other military services are predicting similar outcomes.

Gen. Mark Welsh, the Air Force Chief of Staff, told Congress earlier this week that’s not just because funding for military base operations will be cut. The other contributor is the planned one-day-a-week furlough for almost all of DoD’s 780,000 civilians.

“At every installation, our commanders are looking at how we mitigate the impact of these things and how we preserve the programs that are so important to our people. The problem is that 31.5 million man hours from our furloughed civilian workforce is awfully tough to mitigate. That’s where we need help. We can’t control that,” he said. “That workforce that we’re furloughing is someone else we should be keeping faith with. They haven’t had a pay raise in three years, and now we’re taking away 20 percent of their pay for the rest of this year. For the Air Force, they are a pretty incredibly important part of what we do.”

Welsh said there are also plenty of areas in which the civilian cutbacks will impair day-to-day military capability.

“Forty percent of our cyber workforce is civilian. The furloughs will affect our capability in that area on the first day,” Welsh told the House Appropriations Committee Tuesday.

Spiritual problem in the Marines

Welsh and each of his fellow members of the Joint Chiefs of Staff told the panel that in many areas of the military budget, the deficit-cutting method sequestration employs would have precisely the opposite effect: Acquisition programs that took years to bargain for with industry would have to be abruptly changed, leading to higher unit costs. Deferred maintenance, they said, will lead to more costly emergency repairs on ships, buildings and airplanes next year and beyond.

“Our combat air forces will slow down their training, and just maintain their basic proficiency starting in March. They’ll train on just takeoffs and landings as long as we can stretch the money out. But all the things they do to be ready for conflict will erode beginning in March. By July, all of the pilots in a given unit will be non-mission-ready,” Welsh said. “To recover from that, when we start the next fiscal year, even assuming we have what we need to keep pilots ready in a normal year, that’s not going to be enough. So we’ll need even more flying hours next year to get them back up to speed even above what we have in the program for next year.”

Gen. Jim Amos, the commandant of the Marine Corps, said the shortfall in training and readiness funds also is the biggest concern for his service at the moment. But a close second, he said, is a “spiritual” problem inside the Marines as a result seemingly constant preparation for short-term federal budget crises at the expense of long-term planning.

“It’s the uncertainty among my civilian marines. I have 20,000 of them who come to work every single day, they’re faithful employees. They might be OK with this if they knew that it was going to end at the end of this year, but they don’t have any idea what’s going to happen next year,” Amos said. “But it’s not just them. My young enlisted marines ask me, ‘Hey sir, is there going to be a Marine Corps for me to be a part of?’ My officer corps is the same way. They want to know if they’re going to be competitive, whether they’re going to be able to stay in an organization that they’ve dedicated two or three combat deployments to. Uncertainty is the spiritual thing that runs through the corps that is probably my greatest problem.”


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