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Army Sees Budget Crunch Looming

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From a story we posted on Military.com this morning...

It's like calling the auto parts store and ordering a new battery that you're not sure you can pay for two months from now.

That's the situation in which the Army finds itself given the funding delays imposed by Congress for the 2008 fiscal year that begins Monday.

Army Secretary Pete Geren said Sept. 27 he's frustrated that Congress is continuing to dither on approving the money he needs to run the service, with some reports indicating lawmakers might not be able to approve a defense budget until January.

Instead, lawmakers plan to use a budgeting tool called a "continuing resolution" that will fund the overall government, including the Pentagon, at 2007 levels for only 45 days. That ambiguity hurts the Army's ability to purchase needed equipment, such as vehicle repair parts.

"If we were to find ourselves in a situation where we had multiple 45-day [continuing resolutions], we can't run an organization like the Army with that kind of predictability," Geren told a group of defense reports at a breakfast meeting in Washington, D.C.

"We've got to be able to plan months out and years out," he added.

The Senate has yet to agree to a Pentagon authorization bill or its version of the DoD appropriations bill. That could happen by mid-October but the House and Senate version have to be reconciled then agreed to before the cash can start flowing.

The clock is ticking, though, with the House set to recess for the year in late October and the Senate scheduled to recess in mid-November.

Geren explained that the funding uncertainty makes it nearly impossible to plan for upgrades and other initiatives that need some lead time. For example, it's difficult to commit to payments for new Bradley Fighting Vehicle transmissions if the Army is uncertain whether it will have the funds to pay for them a couple months down the road.

"To have uncertainty hanging over the head of an organization that 'will the next tranche of money come 45 days from now, 60 days from now?' That's hard to plan, it's hard to invest," Geren explained.

With the Army spending about $18 billion per month just to run the service, the lack of funding stability makes life hard for Army planners to pay the bills.

"If we do find ourselves in a 45-day type of a funding approach, that will make things hard for the Army that will make things expensive for the Army," Geren said. "Much of our support force requires longer-term investments that you can't turn on and turn off."

-- Christian

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