Dollar Blues

By Thomas Duffy / July 14, 2010 at 9:16 PM

Defense Secretary Robert Gates visited with Senate Republicans yesterday and took the opportunity to ask them to help pass a supplemental appropriations bill that includes about $39 billion for Afghanistan operations. Over the past few months, Gates has warned that if the supplemental was not passed and signed into law by July 4 the Pentagon would have to make some drastic accounting moves to support troops in combat.

During a press briefing today, Gates' spokesman, Geoff Morrell, laid out where the department stands:

I think the secretary expressed to the Senate Republicans that he is disappointed that the Congress did not pass the defense supplemental before the July 4th break. He's very concerned about the predicament that puts us in. And in order to assure that war operations are not interrupted, the services will now have to begin cash-flowing operating costs for war activities using their base budgets.

But because of where we are in the fiscal calendar, this option won't last very long. So absent more drastic action, we project that certain Army and Marine Corps accounts will run dry in August. So we urgently need Congress to pass the supplemental before members leave town for the next break in August.

While we hope and expect the Congress will get this done, we also are obligated now to begin seriously planning for the possibility that they don't. The budget team and others are now developing an emergency plan should this happen, but it's not appropriate for me to discuss the details of that before the secretary has a -- has had a chance to consider the options they've put forth.

Needless to say, all of this is extraordinarily disruptive to the department.

But we've had some practice at this over the last few years. We're sadly getting used to this fire drill. And, while we have faced this circumstance in years past, the situation we find ourselves in this year is much more difficult because it comes so late in the fiscal year. So most of the department's accounts are on their last legs already, so we are left with far fewer options in terms of cash flowing.