FAQ: The Potential Impact of Delayed Enactment of Emergency Supplemental Funding on U.S. Forces and Military Operations

For several weeks President George W. Bush, Defense Secretary Robert Gates, and other administration and Pentagon officials have been making dire predictions about the impact on U.S. forces in Iraq if Congress fails to enact immediately emergency spending legislation to fund U.S. military operations. Secretary Gates warned Congress that if funding legislation were not passed by April 15, the military would have to reduce training for units preparing to deploy or halt necessary equipment repairs.

How serious is the problem? -- While a prolonged delay in enacting an emergency spending package for the Pentagon could have negative consequences for our armed forces, the situation is not so dire as to demand precipitous or ill-considered action by Congress.

Are all branches of the military affected in the same way? – No. Concerns center on the Army, which is conducting the vast majority of operations in Iraq. These are funded primarily through the Army’s Operations and Maintenance (O&M) account. Thus far the Army has received a total of $52.6 billion in Fiscal Year 2007 funding for its O&M accounts -- $24.2 billion from its annual “baseline” operating budget, and $28.4 billion in the so-called Title IX “bridge” fund approved by Congress last fall to support military operations during the first part of FY’07.

How long does the Army have before a lack of additional funding begins to have a serious impact? -- Many analysts believe that critical decisions by the Pentagon won’t be necessary until June. This is based on last year’s experience, when $94.5 billion in Fiscal Year 2006 emergency funding for the military wasn’t enacted until June 15. Rep. John Murtha, chairman of the House Defense Appropriations Subcommittee, has said the real deadline facing Congress is June 1. [“Real Deadline for Iraq War Money Weeks Beyond Bush’s Deadline,” Associated Press, April 1, 2007.]

Does the Pentagon have additional resources already available? – Yes. A recent analysis by the Congressional Research Service (CRS) indicates that by reprogramming funds from the FY’07 defense appropriations act and the $70 billion “bridge fund” the Army can fund operations at current levels until through most of July 2007. According to CRS, by utilizing existing authority included in the FY’07 defense appropriations act to transfer funds among its various accounts, the Defense Department could, with Congressional approval, shift as much as $7.5 billion into the Army’s O&M accounts, an increase of roughly 14 percent. This would be done with the expectation that these accounts would be reimbursed once Congress enacts a supplemental spending package. [CRS memorandum to the Senate Budget Committee, “How long can the Army finance its operational needs in FY2007 in advance of supplemental appropriations?” March 28, 2007.]

Is this a viable option? – Yes. The Defense Department is already preparing to transfer additional funds into the Army's O&M accounts. In an April 11 letter to Senate Appropriations Chairman Robert Byrd, Secretary Gates stated that "the department shortly will be presenting to the Congress a $1.6 billion reprogramming request that proposes to shift $0.8 billion from both the Navy and Air Force military personnel accounts to the Army Operation and Maintenance accounts." ["Gates Plans To Use Air Force, Navy Funds To Cover Army Costs In Iraq, Afghanistan," National Journal's CongressDailyAM, April 12, 2007.]

What are the potential drawbacks of this kind of borrowing? -- While such action would permit the Army to continue through most of July, the CRS report acknowledges that to do so could have an impact on other Defense Department activities. According to CRS, “in order to ensure that funding is available for the later months of the year, the Army may very well decide that it must slow down its non-war-related operations before money would run out by, for example, limiting facility maintenance and repairs, delaying equipment overhauls, restricting travel and meetings, and perhaps, slow down training.”

Are there other realistic funding options? – Yes. Rather than relying solely on the Defense Department’s authority to transfer funds, Congress has another option that would avoid creating even temporary shortfalls in other Pentagon accounts. Congress could enact a smaller, “clean” supplemental, similar to the Title IX “bridge” fund, that would fully fund continued military operations while the other issues related to the current supplemental are resolved.

What does it all mean? – While long-term delays in enacting additional funding legislation could have a negative impact on the U.S. military, there are short-term options available. Congress need not rush to action without further addressing the many other important issues related to the supplemental – determining the future of military operations in Iraq, agricultural disaster relief and hurricane assistance, to name a few.

Prepared by:

Lt. General Robert G. Gard, Jr. (USA, ret.)
Senior Military Fellow rgard@armscontrolcenter.org
(202) 546-0795 Ext. 110 Direct

and

Christopher Hellman
Military Policy Analyst
chellman@armscontrolcenter.org
(202) 546-0795 Ext. 197 Direct