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U.S. Navy Secretary: Another CR Means $4B Readiness Shortfall

Jan. 14, 2013 - 11:44AM   |  
By CHRISTOPHER P. CAVAS   |   Comments
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While much of the discussion in Washington centers on a second threat of sequestration, another deadline looms at the end of March: the end of the six-month continuing resolution (CR) now funding the government. Between the sequestration debates and the very real possibility of another CR — possibly for the rest of fiscal 2013 — the Pentagon and the individual military services are urgently concerned about the immediate and long-term effects of the continuing funding disruptions.

“Should Congress decide to extend the CR through the end of FY 13, the Navy and Marine Corps would not have enough money to meet FY 13 requirements,” Navy Secretary Ray Mabus flatly stated in a fleet-wide message issued late Friday, Jan. 11.

In particular, base operations and maintenance accounts face a projected shortfall of over $4 billion — money, Mabus said, “which funds Navy and Marine Corps readiness.”

Mabus described the negative effects of another CR and revealed a series of cost-cutting measures being considered for the Navy and Marine Corps. The moves include terminating temporary employees, implementing a civilian hiring freeze, reducing spending on facilities and base operating support, reducing information technology and administrative budgets; delaying ship and unit inactivations, cancellation of planned facilities demolitions, and travel reductions.

“These steps will not solve the problem completely,” Mabus said in the message. “We will only be able to sustain current fleet operations. We will not be able to sufficiently maintain and reset our forces for future operations.”

A yearlong CR has the potential to incur civilian furloughs, Mabus said in the message, “but all decisions in that regard will be made at the DoD level.”

More cost-reduction details are forthcoming, Mabus said in the message, which is copied here in full:

DTG 112146Z Jan 13

UNCLASSIFIED/

FM SECNAVWASHINGTONDC

TO ALNAV

INFO SECNAVWASHINGTONDC

CNOWASHINGTONDC

CMCWASHINGTONDC

BT

UNCLAS

ALNAV 006/13

MSGID/GENADMIN/SECNAVWASHINGTONDC/-/JAN//

SUBJ/RISK MITIGATION FISCAL PLANNING//

RMKS/1. THIS IS AN UPDATE OF THE CURRENT FISCAL SITUATION FACING THE NAVY AND MARINE CORPS AS CONGRESS CONTINUES TO WORK TOWARD A DEFICIT REDUCTION PLAN TO AVOID THE DAMAGING EFFECTS OF SEQUESTRATION AND TO PASS A BUDGET TO END THE EQUALLY DELETERIOUS EFFECTS OF THE CONTINUING RESOLUTION (CR) UNDER WHICH WE HAVE OPERATED SINCE THE FISCAL YEAR BEGAN OCTOBER 1, 2012.

2. SEQUESTRATION WAS DELAYED FOR TWO MONTHS IN THE AMERICAN TAXPAYER RELIEF ACT (ATRA) PASSED BY CONGRESS ON 1 JANUARY, CREATING MORE TIME TO AGREE ON DEFICIT REDUCTION, BUT GIVING THE DEPARTMENT OF DEFENSE LESS TIME TO MITIGATE SPENDING CUTS IF NO AGREEMENT CAN BE REACHED.

3. BUT DON [Department of the Navy] (AND ALL OF DOD) FACE AN EQUAL BUT MORE IMMEDIATE FISCAL CHALLENGE BECAUSE OF THE LACK OF AN FY-13 APPROPRIATIONS BILL, WHICH HAS LEFT US OPERATING UNDER THE CR, WHICH LOCKS OUR BUDGET INTO LOWER FY-12 LEVELS FOR OUR OPERATIONS AND MAINTENANCE ACCOUNTS DESPITE INCREASING RESPONSIBILITIES WHICH DEMAND INCREASED RESOURCES.

4. BECAUSE SEQUESTRATION WAS DELAYED, OUR FOCUS MUST NOW SHIFT TO THE IMPACTS OF THE CR, WHICH CREATES SIGNIFICANT SHORTFALLS IN OPERATION & MAINTENANCE, NAVY (OMN) AND MARINE CORPS (OMMC) ACCOUNTS AND THE RESULTANT STEPS WE MUST TAKE TO MAINTAIN A MINIMUM LEVEL OF PRESENCE. UNLESS A SPENDING BILL IS PASSED QUICKLY BY THE NEW CONGRESS, WE MAY BE FORCES TO OPERATE UNDER THE SAME CR THAT HAS BEEN SUSTAINING US SINCE THE BEGINNING OF THIS FISCAL YEAR. THIS CR IS SET TO EXPIRE AT THE END OF MARCH. SHOULD CONGRESS DECIDE TO EXTEND THE CR THROUGH THE END OF FY-13, THE NAVY AND MARINE CORPS WOULD NOT HAVE ENOUGH MONEY TO MEET FY-13 REQUIREMENTS IN THESE ACCOUNTS.

5. WE EXPECT TO RECEIVE FY-13 OVERSEAS CONTINGENCY OPERATIONS (OCO) FUNDING; HOWEVER, THOSE FUNDS ARE EARMARKED FOR SUPPORT OF CRITICAL WARFIGHTING REQUIREMENTS AND WOULD NOT PROVIDE ANY SIGNIFICANT RELIEF TO OUR BASELINE OPERATING ACCOUNTS. WE PROJECT A SHORTFALL OF OVER $4 BILLION IN OUR BASE O&M ACCOUNTS WHICH FUNDS NAVY AND MARINE CORPS READINESS.

6. GIVEN THE GREAT UNCERTAINTY WE FACE, WE MUST ENACT PRUDENT, BUT STRINGENT BELT-TIGHTENING MEASURES NOW THAT WILL PERMIT US TO OPERATE THE NAVY AND MARINE CORPS THROUGH THE REST OF THIS FISCAL YEAR IF THE CR IS EXTENDED. EACH OF THESE STEPS ARE DESIGNED TO BE REVERSIBLE, AT LEAST TO SOME EXTENT, SHOULDCONGRESSPASSAN FY-13 BUDGET. ACCORDINGLY, NAVY AND MARINE CORPS LEADERSHIP HAS ADVISED THE SECRETARY OF DEFENSE THAT THEY ARE CONSIDERING A SERIES OF ACTIONS. EACH SUBJECT TO EXCEPTIONS FORMISSION-CRITICAL ACTIVITIES. ACTIONS INDLUDE BUT ARE NOT LIMITED TO:

- CURTAIL ADMINISTRATIVE CONTRACTING SUPPORT SERVICES;

- REDUCE TRAVEL;

- DELAY ALL DECOMMISSIONINGS AND ANY DISPOSALS OR LAY-UPS;

- REDUCE INFORMATION TECHNOLOGY AND ADMINISTRATIVE BUDGETS;

- CURTAIL REMAINING FACILITY SUSTAINMENT RESTORATION AND MODERNIZATION PROGRAMS;

- CUT FACILITIES SUSTAINMENT, EXCEPT FOR SAFETY OF LIFE;

- REDUCE SPENDING ON BASE OPERATING SUPPORT;

- CANCEL ANY PLANNED FACILITIES DEMOLITION;

- TERMINATE TEMPORARY EMPLOYEES, EXCEPT THOSE SUPPORTING MISSION-CRITICAL ACTIVITIES SUPPORTING THE WARFIGHTER;

- IMPLEMENT A CIVILIAN HIRING FREEZE.

7. THESE STEPS WILL NOT SOLVE THE PROBLEM COMPLETELY. WE WILL ONLY BE ABLE TO SUSTAIN CURRENT FLEET OPERATIONS. WE WILL NOT BE ABLE TO SUFFICIENTLY MAINTAIN AND RESET OUR FORCES FOR FUTURE OPERATIONS.

8. WITH A YEARLONG CR, THE POTENTIAL FOR CIVILIAN FURLOUGHS EXISTS, BUT ALL DECISIONS IN THAT REGARD WILL BE MADE AT THE DOD LEVEL. WE WILL FOLLOW WHATEVER GUIDANCE WE RECEIVE.

9. THIS GUIDANCE IS PROVIDED FOR YOUR INFORMATION. SHORTLY, YOU WILL BE HEARING SPECIFICS FROM SERVICE LEADERSHIP ABOUT THEIR PLANS FOR THE AMOUNT OF THESE ADJUSTMENTS AND WHAT ACTIONS ARE BEING TAKEN TO LIMIT THE IMPACT ON OUR MILITARY PERSONNEL, CIVILIANS, AND FAMILIEIS.

10. RELEASED BY RAY MABUS, SECRETARY OF THE NAVY//

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