For the last two weeks, like most Americans, our Sailors and Marines anxiously waited to see if the country would go over the fiscal cliff.
Thankfully, the automatic spending cuts required by sequestration were delayed while Congress continues to work toward a deficit reduction plan. While this renewed effort to find a healthy way forward is encouraging, we need to address a different, but more immediate, fiscal potentiality — the absence of an FY-13 appropriations bill — forcing the Navy and Marine Corps to operate under a year-long continuing resolution (CR).
It is important to note our focus does not address the potential impact of sequestration, since the recent passage of the America Taxpayer Relief Act delays sequestration for the next two months.
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 forced 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 FY13, the Navy and Marine Corps would not have enough money to meet FY-13 requirements in these accounts.
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 $4.6 billion in our O&M accounts which funds Navy and Marine Corps readiness.
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.
This problem is not unique to the DoN. Each of the services are facing cuts to their operating accounts, albeit at different rates and in different areas. We realize the actions we are taking are not ideal, but we must slow the “burn-rate” of our operating dollars now.
Each of these steps are designed to be reversible, at least to some extent, should Congress pass an FY-13 budget.
Accordingly, Navy leadership has advised the Secretary of Defense of — and has been permitted by him to execute immediately — the following actions:
— Curtail administrative contracting support services
— Reduce travel
— Delay all decommissionings and 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
With a yearlong CR the potential for furloughs exists, but all decisions in that regard will be made at the DOD level. We will follow whatever guidance we receive.
None of these decisions are easy to make, but make them we must if we are to continue to meet – this year alone – the demand for naval forces. Of course, should Congress pass an appropriations bill, we will adjust our spending accordingly. We will make reductions in a prudent way that is reversible and protects funding for our forces operating forward.
The ripple effects of these actions will be neither small nor short. The fiscal uncertainty created by not having an appropriations bill — and the measures we are forced to take as a result — not only place significant stress on an already strained force, it undermines the stability of a very fragile industrial base as well.
As Secretary Mabus told Congress back in March of 2011, when faced with a similar prospect, “the disruption to our fleet and to our shore maintenance and modernization schedules may take years to recover from and will come at a much greater cost.”
We therefore urgently appeal to the new Congress to move quickly to pass an appropriations bill that fully funds the FY-13 National Defense Authorization Act signed by the President last month.
The Navy’s readiness to defend this nation, now and in the future, depends upon it.