Pentagon prepares funding contingencies

Pentagon number-crunchers are developing an "emergency plan" in the event Congress fails to pass the fiscal 2010 supplemental spending bill by the August recess, Defense Department spokesman Geoff Morrell said Wednesday.

The plan, which will be presented to Defense Secretary Robert Gates, will include options on how to continue to pay for overseas operations until lawmakers reach agreement on the supplemental, which includes $33.5 billion for the military to cover war-related costs, counterterrorism efforts and the response to the January earthquake in Haiti.

"We urgently need Congress to pass the supplemental before members leave town for the next break in August," Morrell said during a Pentagon news conference. He added that defense officials "hope and expect" Congress will pass the bill soon, but they must plan for the possibility lawmakers will fail to reach an agreement on a final spending measure.

Delays in passing the supplemental are "disruptive" to the Pentagon, which is "sadly getting used to this fire drill," Morrell said.

The Pentagon can use fourth-quarter dollars to pay for operations overseas until the war spending bill is enacted. But Morrell said this year's outlook for shifting late-in-the-year dollars to pay for war operations looks bleak, considering the fiscal year ends Sept. 30.

"Most of the department's accounts are on their last legs already, so we are left with far fewer options in terms of cash flowing," he said.

Gates told Senate appropriators last month that without a supplemental by August, the Defense Department could be forced to furlough civilians and not pay active-duty military personnel.

"It may involve asking a lot of hard-working people in this department to report to duty without the ability to pay them," Morrell said.

Gates traveled to Capitol Hill Tuesday to meet with Senate Republicans, when he expressed his disappointment that the supplemental was not enacted before the July 4 recess, Morrell said. "He is very concerned about the predicament that puts us in," he added.

The Senate approved a $59 billion supplemental spending bill in May. In late June, the House passed a bill that added $16 billion to the Senate's measure, including $10 billion to local school districts to avert teacher layoffs.

The additional spending was offset, but lawmakers still are wrangling over an $800 rescission that would affect education programs. That rescission has drawn a White House veto threat.

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