Defense seeks to reprogram funds to cover Army shortfalls

The Pentagon on Wednesday asked Congress for approval to transfer nearly $10 billion from the Navy and Air Force budgets to pay soldiers in Iraq and Afghanistan before the Army budget runs dry next month.

Defense officials said the emergency action was necessary because Congress thus far has failed to pass the Bush administration's request for $102 billion in supplemental war funding.

Under the reprogramming request, the department would transfer $5.7 billion from the other services' personnel accounts to the Army's, and $4 billion from the other services' operation and maintenance accounts and Defense's working capital fund to Army and Special Operations Command operation and maintenance accounts.

The reprogramming request is only a stopgap measure in Defense's fiscal woes. Without supplemental funding by mid-July, "the department will have exhausted all military personnel and operations funding and will, at a minimum, be unable to make payroll for both military and civilian personnel throughout the department," according to a Pentagon statement.

Defense Secretary Robert Gates told the Senate Appropriations Committee on May 20 that Defense already was tapping fourth-quarter funds from the base budget to cover war costs.

"Shortly two critical accounts will run dry," Gates said. "First, Army military personnel: After June 15, we will run out of funds in this account to pay soldiers, including those in Iraq and Afghanistan. Second, operations and maintenance accounts: Around July 5, [operation and maintenance] funds across the services will run out, starting with the Army. This may result in civilian furloughs, limits on training and curbing family support activities."

Gates said funding transfers from the Navy and Air Force to the Army would only take Defense through late July, when the whole department runs out of critical funds. "Doing so, however, is a shell game which will disrupt existing programs and push the services' [operation and maintenance] accounts to the edge of fiscal viability," he said.

Other programs that will be affected soon without supplemental funding include the Commanders Emergency Response Program. That account has provided battlefield commanders with a pool of money to spend on urgent necessities for Iraqi and Afghani residents and has been widely used to provide jobs for locals who might otherwise join insurgent groups. The Pentagon had requested $1.7 billion for the program in 2008, but Congress approved only $500 million. The supplemental budget request contains the balance of $1.2 billion.

Without additional funding very soon, "this vital program will come to a standstill," Gates told lawmakers.

Defense has asked Congress to approve the reprogramming action no later than June 9.