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Pentagon Faces its own Debt Ceiling Crisis

Pentagon comptroller Robert Hale

Pentagon comptroller Robert Hale

If the debt ceiling is not raised there would be delays in paying salaries even to the military and recalled Pentagon employees, as well as meeting obligations to contractors—from shipyards to health care providers, the Pentagon comptroller warned Thursday.

Although the hearing of the House Armed Services Readiness Subcommittee had been called primarily to learn why the Department of Defense (DoD) did not recall all its workers, Robert Hale said the debt ceiling problem “is a very different kind of situation” from the one faced during the shutdown.

Payments “won’t be on time” and will come later and later if the ceiling is not raised, he said.

Committee members did not follow up on this question-and-answer moment. They returned to the original topic of the hearing and were given the department’s rationale not only as to who was not recalled but discovering other gaps in the Pay Our Military Act (POMA) as it affects workers back on the job, those waiting for the call, and large and small contractors who, for now, are accepting federal IOUs.

The House author of the act said it was “a deliberate decision” not to call back 7,000 DOD civilian employees and potentially add another 23,000—primarily in the Army Corps of Engineers civil works area—to the list of those furloughed.

Rep. Mike Coffman (R-Col.) said the law was clear and was passed before the partial shutdown that sent between 350,000 and 400,000 workers home on furlough, so the Pentagon had no reason to do what it did.

“We thought this was what you were going to do,” Rep. Randy Forbes (R-Va.) said about recalling the federal workers. “We gave you flexibility.” More than 95 percent of the civilian workforce is back on the job.

Hale said that after consulting with lawyers in the Pentagon and Justice Department “we concluded POMA did not say recall all civilians”—so workers in some areas of public affairs, legislative affairs and information staff remain on furlough.

Another group somewhat in that category—depending on the states’ agreements with the federal government and the decision of the adjutants general—is that of the dual-status technicians. In many cases, 75 percent of their pay comes from the federal government and 25 percent from the states, said Jessica Wright, a former Pennsylvania adjutant general who is awaiting Senate confirmation as assistant secretary for manpower and reserve affairs. She added that 90 percent of those dual-status employees are working. But “the federal government can only give the states an IOU” to pay the workers who maintain ranges, family support centers, and other programs.

Robert Taylor, the DOD’s principal deputy general counsel, said, “It’s hard to see how [civil works, such as bridges and dams] they are providing support to the military.”

The other workers facing furlough as the shutdown continues fall into that same category.

“It’s been difficult, time-consuming and hurtful,” Hale said. “At the moment, we don’t have plans to bring them back until the [shutdown] ends.”

Terming the bill “loosely worded,” he said it allowed the Pentagon to cover only its contractors’ pay and allowances, but not their profit margins or overhead. That includes the Fisher House Foundation, which has agreed to be the mechanism to pay the $100,000 death benefit to families of service members who have died since 1 October.

“We’re not sure how long our vendors are going to take our IOUs.” Right now, they are being compensated with Fiscal Year 2013 funds and will be paid after a spending bill is signed into law for excepted activities being conducted now, particularly in support of operations in Afghanistan. Hale said he was particularly concerned about smaller vendors.

Rep. Joe Courtney, (D-CT) said, “We’re running around with a garden hose” trying to put out thousands of fires. He said in his case he has been told about National Guard helicopters that have been repaired but cannot fly because fuel can’t be purchased, as well as more mundane issues such as toilet paper shortages at the Coast Guard Academy.

Hale said, “We might be able to keep the people” in depots, but “they may not be able to get parts.”

Wright said the department has about $300 million to cover contracted medical care and that will last about a week. Then those providers, too, will be asked to provide services and accept a federal IOU until a spending bill is passed.

Wright said as far she knew the services were not using military personnel to do jobs of furloughed civilians.

Hale and Wright said repeatedly that the morale of civilian employees had taken a beating this year—with the sequester furlough, the shutdown, and three years of pay freezes.

As to how those now back would be paid in mid-month, Hale said it would cover the days they were on the job. Like the workers still on furlough, they will not be paid for that time unless Congress approves that spending and the shutdown ends.

The payment could also come in a lump sum, meaning higher than routine withholding for federal and state taxes. “We haven’t focused yet on this yet,” Hale said.

Wright said the government is covering the furloughed employees’ health-care costs, as long as the money lasts.

Drill for guardsmen and reservists has been canceled unless tied to Afghanistan operations—for the most part. Similar restraints on training exist in the active component as well.

One Afghanistan program—Commanders Emergency Response Program—is on hold. The program allowed commanders to reimburse Afghans for deaths and damages. “This is a unique authority that expired after the appropriations bill lapsed,” Hale said.