Army Chief of Staff Gen. Raymond Odierno, speaking yesterday at an AUSA breakfast, touched on the "perfect storm" of looming budget challenges the Army faces -- a possible a yearlong continuing resolution, sequestration cuts, and more. As InsideDefense.com reported:
Odierno said a yearlong CR for FY-13 would create a shortfall of $6 billion in the Army's operations and maintenance accounts. "It's because we're not able to move money around in a continuing resolution," he said. "We're over-prescribed in one part of the budget and we're under-prescribed in another part."
The across-the-board cuts from sequestration would create an additional $6 billion shortfall in Army O&M for FY-13, he said. On top of that, the Army's wartime operations funding faces a potential $4 billion O&M shortfall in FY-13, he said.
"The Army's facing about $17 billion worth of shortfalls that we're going to have to figure how to deal with if we don't come to some conclusion by the first of March," he said.
The Army and the other services have issued guidance to commanders to begin planning for sequestration should the cuts be triggered, as InsideDefense.com reported last week.
"We've now given guidance to our major subordinate commands to come back with the details," he said. "We expect to have those details within the next week, which will define the actions we'll have to take. The situation is serious."
Odierno and Army Secretary John McHugh signed a memo on Jan. 16 on how to reduce spending to mitigate "significant budgetary uncertainty in the coming months.".
"While we are hopeful the current budgetary uncertainty will be resolved in a manner that avoids significant reductions to the Army's budget, we must begin to slow spending now and plan for the worst," the memo stated. Further:
"Our funding is in doubt as we support forward-deployed troops, those training to deploy and wounded warriors," the memo adds. "The uncertain Fiscal Year (FY) 2013 funding caused by the combined effects of a possible yearlong continuing resolution (CR) and sequestration, along with the need to protect wartime operations, may result in particularly severe reductions to operation and maintenance spending. . . . Given the magnitude of our budgetary uncertainty, the Army must act now to reduce our expenditure rate and mitigate budget execution risks in order to avoid even more serious future fiscal shortfalls."
Defense Department officials have said the Pentagon will have to cut $45 billion from its FY-13 budget in the event of sequestration. The other services have recently issued similar guidance.
McHugh and Odierno note that the near-term steps listed in their guidance memo "will only achieve a small portion of the savings required should sequestration and a yearlong continuing resolution occur."
While funding for wartime operations and the care of wounded warriors will be "protected," a plan to institute much larger cuts is in the works and a directive will be issued by the Army comptroller's office "no later than 16 January," according to the memo. It was unclear at press time if the comptroller planned to issue that guidance later today.
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