Lacking needed funds, Army begins to cut back spending

With House and Senate negotiations on the fiscal 2006 emergency supplemental spending bill still unresolved, the Army has started pinching pennies to make its funding for operations in Iraq and Afghanistan last until at least early July.

The plan, according to an internal e-mail from Army Vice Chief of Staff Richard Cody, is to gradually restrict spending over the next few weeks, with options growing as dire as suspending recruitment efforts and postponing promotions if Congress does not send the supplemental to President Bush for signing before the July 4 congressional recess.

"These are painful actions but they are absolutely necessary in order to continue operations during the month of June," Cody wrote in an e-mail circulated last week, a copy of which was obtained by CongressDaily. "This measured response will provide appropriate controls on our spending of [operations and maintenance] resources and will minimize the impact on our mission."

Resources, he said, should be spent on the "highest priority missions." The service's operations and maintenance accounts for fiscal 2006 now stand at $5.6 billion, not including any budgetary reprogramming efforts. The Army expects to receive more than $36 billion out of the $92 billion-plus spending package for military operations and hurricane recovery efforts.

This week, Army leaders have been ordered to hold orders of any "non-critical" supply parts and postpone or cancel all non-essential travel, training and conferences. By Tuesday, the Army intends to put a freeze on all civilian hires.

"You may continue recruiting efforts but cease all final offers of employment," Cody's e-mail said. If Congress does not pass the supplemental by June 15, the Army plans to release all temporary civilian employees performing operations and maintenance work, including depot workers. The service also will freeze all contract awards and suspend the use of government purchase cards.

The longer the time before the supplemental is approved, the more ominous Cody's instructions become. Beginning June 26, the Army will have to release contract employees, including recruiters, "if doing so will not carry penalties or termination costs equal to or in excess of the cost of continuing the contract," according to the e-mail.

The service, Cody wrote, may retain "a minimum number of personnel performing mission-essential services." That week, Cody said he will demand a list of actions the Army would have to take in July to trim military personnel accounts. Those options should include delaying recruitments, deferring re-enlistments and freezing promotions.

"We are realists on the supplemental passing in June. [The] next backstop where Congress has to try to finish up is 4th [of] July," a senior military official said. "We hope it's in early June, but can't count on that."

Last week, House Appropriations Chairman Jerry Lewis, R-Calif., said the Pentagon would accept delaying passage of the supplemental to early June. House and Senate appropriators still have not scheduled a formal conference meeting amid concerns in the House over Gulf Coast rebuilding and agriculture disaster aid sought by senators.