Unobligated Balances in the FY12 National Defense Authorization Bill

Winslow Wheeler. Guest Post, 24 May 2011.

The National Defense Authorization bill, H.R. 1540, will be debated by the House of Representatives this week. The bill is the work product of the House Armed Services Committee (HASC), Chaired by Congressman Buck McKeon, R. – Calif..

The Operation and Maintenance section (Title XLIII) of the bill is one of its largest and most important. “O&M” deals with the support, logistics, maintenance, training and much else needed to enable our armed forces to function effectively. $170.8 billion was requested by President Obama; the committee increased that by $361 million to $171.1 billion. However, to get there the Committee took some detours.

Sprinkled throughout the O&M title the HASC added various earmarks (one minor example: $4.0 million for “Simulation Training Systems for the Army” [p. 430 of the Committee Report]). All of these came to a lot more than the $361 million net add to the bill. The Committee and its staff had to find offsets to help pay for these earmark goodies and other additions.

In past years, the HASC (and the Senate Armed Services Committee and the Defense Subcommittees of both the House and Senate Appropriations Committees) has listed strange sounding reductions in the O&M sections of their bills – “unobligated balances.” These should be technical alterations for money previously appropriated to the various military services for various programs; they become “unobligated” when the planned expenditure does not occur, and they presumably become available for offsets for new spending, or – if the Committee were to be more forthcoming to the taxpayer – return to the Treasury.

For example, on p. 432 of the HASC Committee Report, the tables for Army O&M show a reduction of $384.6 million labeled “Army unobligated balances estimate.” That amount happens to be 1.1% of the president’s request for total Army O&M ($34.735 billion).

The Navy section on O&M in the HASC bill shows a $435.9 million reduction for “Navy unobligated balances estimate.” For some strange reason, that amount also calculates to 1.1% of the President’s request for Navy O&M ($39.365 billion).

Stranger even, the Marine Corps O&M reduction for unobligated balances as also 1.1% ($66 million of a $5.960 billion request).

Same thing for the Air Force; the same 1.1% ($400.8 million from a $36.195 billion request).

None of these are discussed or explained in the text of the committee report; the only “explanation” we get is that they are “Army [or Navy, or Air Force, etc.] unobligated balances estimate.”

That all of these “estimates,” which should be technical in their nature, come to 1.1% reeks of gaming the system. Two relevant questions: Who did it? And Why?

First, I seriously question if these conveniently similar estimates did indeed come from the military services. That would require a rather strange (and specious) amount of coordination by them all to all come to 1.1% of their respective O&M budget requests.

Secondly, why are there no “unobligated balances” in the procurement and R&D titles, which are heavy with the kind of spending that can end up “unobligated”?

Third, why isn’t this money being returned to the Treasury, from whence it came and now belongs if indeed the money is no longer needed by the Defense Department?

There are lots of other questions, but hopefully you get my drift. The offsets the HASC took, calling them “unobligated balances,” are nothing but across the board whacks at one of the most importance accounts in the DOD budget – the one that makes for a well trained and supported military. Why is the HASC doing these across the board cuts, and why are they doing it in O&M?

There are some other “unobligated balance” issues in the bill. The defense wide part of O&M also took a $456.8 million hit from a request of $30.940 billion. This comes to 1.47%. Why does the part that supports the special forces and others take a bigger proportional hit than the other military services?

Also, the Defense Health Program takes a $225 million hit which is “explained” as a “GAO estimate,” but no GAO analysis or other explanation is offered.

The Military Personnel budget that pays military salaries takes a $693 million hit from a $142.828 billion request (.48%). I found no explanation.

Finally, section 2107 permits the Secretary of the Army to use $115 million in previously “unobligated” spending to fund a water treatment facility at Fort Irwin California. Perhaps the House representative from the Fort Irwin area can explain how all this works and how he or she got to fund some spending in the district from these ubiquitous funds.

In my judgment, the HASC, which is charged with oversight of DOD, could use a little oversight itself.

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