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Gates: Defense needs supplemental by July 4

Pentagon chief says military would have to begin curtailing defense operations if Congress does not pass bill by deadline.

Defense Secretary Robert Gates on Wednesday urged Congress to approve the fiscal 2010 supplemental spending bill by the Fourth of July recess, saying that failure to do so would be disruptive at a time of war.

Testifying before the Senate Appropriations Committee, Gates said he is becoming "increasingly concerned" about the House's lack of progress on the supplemental, much of which would cover the cost of military operations in Afghanistan and Iraq. The Senate approved its version late last month.

Defense officials had requested the money for war-related expenses by Memorial Day, although the military can use some fourth-quarter dollars to pay urgent war bills.

But Gates warned Wednesday that the military would soon begin feeling the budgetary impact of Congress's failure to pass a supplemental by the deadline set by the Pentagon.

"If the supplemental is not enacted by the July 4 congressional recess, we will have to begin planning to curtail defense operations," Gates said. "Such planning is disruptive, can be costly -- especially in a time of war."

Specifically, the Navy and Marine Corps' portion of war funding will begin to run out in July, forcing the service to begin tapping operations and maintenance dollars from the base budget. The Army would also soon run out of money in its war accounts, Gates said.

The situation, he said, would become more severe in August.

"We could reach a point in early- to mid-August where we actually could be in a position where the money we have available to us in the base budget begins to run out and we could have a situation where we are furloughing civilians and where we have active-duty military we cannot pay," Gates told the committee.

House Democrats are still debating how to deal with the supplemental, with more leadership meetings scheduled for Wednesday, a House leadership source said.

Among the legislative options still on the table is having the House take up the Senate-passed version of the spending bill and substituting its contents with a version crafted by House Appropriations Committee Chairman Rep. David Obey, D-Wis., several sources have said.

In this manner, the House would bypass a markup and the two chambers could skip a formal conference to resolve differences between their two versions. Instead, they would send disputed sections of the bill back and forth informally between the two chambers to work out a compromise.

The Defense Department's portion of the supplemental totals $33.5 billion to cover war-related costs, counterterrorism efforts and the military's response to the January earthquake in Haiti.

Billy House contributed to this report.