Defense Secretary Chuck Hagel announced Tuesday that furlough days for more than 650,000 civilian workers had been cut from 11 to six following decisions to shift funds between military accounts and slow down the removal of equipment from Afghanistan.
The result will be that furloughs for most DoD civilian personnel will end next week, and planned furloughs of five days for teachers and support personnel at Defense Department schools will be cancelled, senior Pentagon officials said.
"Schools will start on time" at the end of August, a senior official said, and "we will go back to normal on overtime rules" for all other civilian personnel.
The Pentagon initially projected that the $37 billion in defense spending cuts in Fiscal Year 2013 mandated by the sequester process would require 22 days of furlough from DOD civilian personnel. However, Hagel said on May 14 the number had been reduced to 11 through cutbacks in training and maintenance.
The shortfall in operating budgets was about $11 billion in early May, Hagel said, and the savings from 11 furlough days would amount to about $2 billion.
In a statement released Tuesday, Hagel said Congress has approved most of a "large reprogramming request that we submitted in mid-May, giving us flexibility to move funds across accounts." He also attributed the additional savings to lower than expected costs to remove equipment from Afghanistan.
"We are also experiencing less than expected costs in some areas, such as transportation of equipment out of Afghanistan," Hagel said.
A senior Pentagon official said about $1 billion in savings had come from putting off the shipment of containerized equipment from Afghanistan back to the U.S. until next year.
"Where necessary, we have taken aggressive action to transfer funds among services and agencies. And the furloughs have saved us money," Hagel said.
The vast majority of DoD civilian personnel, who began their furlough days during the week of July 8, will have met the requirement for six furlough days by Aug. 17, Hagel said.
However, he noted that all civilian employees must complete six days of furlough and "if they have not accomplished this by Aug. 17, they must do so in a timely manner and before the end of this fiscal year" in October.
Hagel warned that DoD still faces major fiscal challenges that have been exacerbated by the impasse between Congress and the White House on budgetary and deficit-reduction issues.
"If Congress does not change the Budget Control Act, DoD will be forced to cut an additional $52 billion in FY 2014, starting on October 1," Hagel said in the statement. "This represents 40 percent more than this year's sequester-mandated cuts of $37 billion. Facing this uncertainty, I cannot be sure what will happen next year, but I want to assure our civilian employees that we will do everything possible to avoid more furloughs."
At a later background briefing, two senior Defense officials warned that the coming fiscal year posed budgetary uncertainties that can't be resolved within the Defense Department.
"I suspect that we've largely come to the end of the road" on shifting funds between accounts to achieve savings, one official said. "There are always changes going on" and "we don't really have any idea what's going to be appropriated" by Congress for defense spending next year, the official said.
A second defense official said that the department would try to avoid furloughs next year "but there are no guarantees" on reductions in force and layoffs.