Inflation bites

By Jason Sherman / January 12, 2022 at 2:15 PM

The Defense Department is feeling the squeeze of rising prices and has had to shift funds around internally in recent weeks to cover $1.5 billion in must-pay bills, the Pentagon's chief financial officer told Congress today.

Mike McCord, under secretary of defense (comptroller), in written testimony prepared for a hearing of the House Appropriations defense subcommittee today on the impacts of an extended continuing resolution, revealed the Pentagon is feeling the adverse effects of higher fuel prices.

“I have had to approve two increases in our [fiscal year] 2022 fuel prices -- a first increase on Oct. 1, 2021 and a second on Jan. 1, 2022 -- to keep our working capital fund solvent in response to higher fuel prices,” McCord said in his written testimony. “This has created a bill of $1.5 billion for the services in FY 2022, in addition to the [operations and maintenance account] reductions that flow directly from the CR.”

The testimony does not indicate which accounts were raided in order to pay the higher fuel costs.