U.S. Rep. Colleen Hanabusa has introduced a bill she says will help avert defense cuts that are due to the continuing resolution and avoid the need for layoffs at Pearl Harbor Naval Shipyard.
The Department of Defense Budget Transparency and Transfer Act would allow the military to transfer excess "investment account" funds to the operations and maintenance budget, which can be used for civilian staff salaries and permitted contracts, according to Hanabusa’s office.
"The services have more funds in so-called investment accounts than they need, but much less in operations and maintenance funding than required," Hanabusa, a member of the House Armed Services Committee, said in a release.
The ongoing continuing resolution — which may be in place for the remainder of the fiscal year in the absence of an appropriations bill — locks 2013 funding at lower 2012 levels.
Pentagon officials have said that creates an $11 billion shortfall. Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said earlier this month that the Defense Department would have to absorb $52 billion in cuts this fiscal year with the continuing resolution problem and effects of sequestration budget cuts.
Hanabusa said Deputy Secretary of Defense Ashton Carter confirmed that if the Defense Department is granted transfer authority, it would be able to avoid furloughs of civilian defense workers, including those at Pearl Harbor Naval Shipyard.
More than 350 Pearl Harbor shipyard workers could be laid off as the Navy faces a funding shortfall because of the budget stalemate, officials have said.
The potential layoffs would be the result of the Navy canceling ship repairs this fiscal year, including $35 million in work on the destroyer USS Chafee at Pearl Harbor.
Todd Harrison, a senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, said giving the Pentagon greater flexibility to move money among accounts "would help avoid some of the most ridiculous effects of sequestration."
"It would help ensure defense dollars are being put to their most effective use and that cuts are targeted at low-priority programs and activities," Harrison said. "This is a smart thing to do from a strategic and policy perspective, but politically it will be a hard sell."
Congress would be giving up the control it has over the executive branch in directing how funding is spent, he said. Harrison noted this is something that powerful politicians, including Arizona Republican U.S. Sen. John McCain, have said they would not agree to do.
If Congress did grant such flexibility, "it would put the Obama administration in the position of having to pick winners and losers — which weapon systems to cut and which ones to keep," Harrison added. "So the administration may not want this, either, for political reasons."
Hanabusa, D-Hawaii, said her bill "has proper safeguards in place." Fund transfers could not exceed the amount authorized by provisions of the National Defense Authorization Act of 2013, and the authority would be void in the event an appropriations bill is enacted for the remainder of the fiscal year.
