[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 113-61]
THE INTERPRETATION OF H.R. 3210: PAY OUR MILITARY ACT
__________
HEARING
BEFORE THE
SUBCOMMITTEE ON READINESS
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
OCTOBER 10, 2013
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SUBCOMMITTEE ON READINESS
ROBERT J. WITTMAN, Virginia, Chairman
ROB BISHOP, Utah MADELEINE Z. BORDALLO, Guam
VICKY HARTZLER, Missouri JOE COURTNEY, Connecticut
AUSTIN SCOTT, Georgia DAVID LOEBSACK, Iowa
KRISTI L. NOEM, South Dakota COLLEEN W. HANABUSA, Hawaii
J. RANDY FORBES, Virginia JACKIE SPEIER, California
FRANK A. LoBIONDO, New Jersey RON BARBER, Arizona
MIKE ROGERS, Alabama CAROL SHEA-PORTER, New Hampshire
DOUG LAMBORN, Colorado WILLIAM L. ENYART, Illinois
E. SCOTT RIGELL, Virginia PETE P. GALLEGO, Texas
STEVEN M. PALAZZO, Mississippi
Michele Pearce, Counsel
Vickie Plunkett, Professional Staff Member
Nicholas Rodman, Clerk
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2013
Page
Hearing:
Thursday, October 10, 2013, The Interpretation of H.R. 3210: Pay
Our Military Act............................................... 1
Appendix:
Thursday, October 10, 2013....................................... 37
----------
THURSDAY, OCTOBER 10, 2013
THE INTERPRETATION OF H.R. 3210: PAY OUR MILITARY ACT
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking
Member, Subcommittee on Readiness.............................. 3
Wittman, Hon. Robert J., a Representative from Virginia,
Chairman, Subcommittee on Readiness............................ 1
WITNESSES
Hale, Hon. Robert F., Under Secretary of Defense (Comptroller),
U.S. Department of Defense; Robert S. Taylor, Acting General
Counsel of the Department of Defense, U.S. Department of
Defense; and Hon. Jessica L. (Garfola) Wright, Acting Under
Secretary of Defense for Personnel and Readiness, U.S.
Department of Defense.......................................... 5
APPENDIX
Prepared Statements:
Wittman, Hon. Robert J....................................... 41
[Editor's Note: The witnesses did not provide written
statements of the proposed testimony in advance of the
hearing. The Chairman, in concurrence with the Ranking
Minority Member, agreed to waive Committee Rule 13 for this
hearing.]
Documents Submitted for the Record:
H.R. 3210, the Pay Our Military Act.......................... 47
Letter from Mr. McKeon to Secretary Hagel, dated October 1,
2013....................................................... 50
Letter from Mr. McKeon to Secretary Hagel, dated October 4,
2013....................................................... 51
``Guidance for Implementation of Pay Our Military Act,''
October 5, 2013, Secretary of Defense memorandum........... 52
Pay and Leave During the Fiscal Year 2014 Shutdown Furlough,
Department of Defense Defense Civilian Personnel Advisory
Service.................................................... 56
Payroll Calendar, 2013....................................... 58
Secretary Hale letter and documents responding to Mr.
Wilson's October 4, 2013, letter to Secretary Hagel........ 59
Witness Responses to Questions Asked During the Hearing:
Mrs. Davis................................................... 73
Mr. Turner................................................... 73
Mr. Wilson................................................... 73
Questions Submitted by Members Post Hearing:
Ms. Bordallo................................................. 77
Ms. Duckworth................................................ 78
Ms. Shea-Porter.............................................. 78
THE INTERPRETATION OF H.R. 3210: PAY OUR MILITARY ACT
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Readiness,
Washington, DC, Thursday, October 10, 2013.
The subcommittee met, pursuant to call, at 11:32 a.m., in
room 2118, Rayburn House Office Building, Hon. Robert J.
Wittman (chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. ROBERT J. WITTMAN, A REPRESENTATIVE
FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON READINESS
Mr. Wittman. I would like to call to order the House Armed
Services Committee Subcommittee on Readiness. I want to welcome
everyone to today's hearing that is focused on the
implementation of the Pay Our Military Act.
While the Department of Defense has ordered a significant
number of people back to work this week, many remain furloughed
and it is important for this committee to understand the short-
and long-term implications for our Nation's readiness and, most
importantly, current operations in Afghanistan.
I would like to welcome our distinguished panel today: the
Honorable Robert Hale, Under Secretary of Defense
(Comptroller); the Honorable Jessica Wright, Acting Under
Secretary for Personnel and Readiness; and Mr. Robert Taylor,
Acting General Counsel. This hearing is focused on the
Department's implementation guidance on the Pay Our Military
Act which Secretary Hagel issued over the weekend and the
questions regarding how decisions were made, who made them and
why.
While many Department of Defense [DOD] civilians and
contractor personnel are back at work, others, like a number of
my constituents in the First District, are at home struggling
to pay their bills, manage their households and feed their
families.
These dedicated folks are worried and anxious about the
very uncertain future they face, asking hard questions about
how the decision was made to recall roughly 90 percent of the
workforce, but not them.
Secretary Hale, please, when you have a chance, shed light
on this decisionmaking process.
If you read the press reports, the initial DOD position was
to recall all personnel to duty, which would have been
consistent with congressional intent. The legislation states,
and I quote, that, ``The Secretary concerned determines who
provides support to members of the Armed Forces.''
This language, in my view, is clear on its face and gave
Secretary Hagel the authority he needed to recall the entire
workforce. While common sense doesn't always apply here in
Washington, it seems to me that every person who works in the
Department of Defense supports members of the armed services.
Even if, however, you don't share my view and there is room
for disagreement on this point, the language provides broad
latitude to interpret it in a manner that ensures minimal
disruption of the Department's mission, and, most importantly,
continuity of operations at a time when our military members
are engaged in operations on the battlefields of Afghanistan.
Our All-Volunteer Force is still at war and their families are
experiencing the harsh consequences of this decision each and
every day.
As we discuss how, according to press reports, lawyers at
the Department of Justice interpreted the Pay Our Military Act,
our soldiers, sailors, airmen and Marines are out on patrols,
training Afghan soldiers and accomplishing the high-risk
missions we have asked them to do.
This is why every year for over 50 years the Armed Services
Committee has worked in a bipartisan manner to get the
authorization bill done. Our troops and our national security
depend on it. This year is no different.
Three months ago, the House passed the Fiscal Year 2014
National Defense Authorization Act with the overwhelming
support of Members from both parties and, yet we continue to
wait for the Senate to take action on it. Two months ago, the
House passed the Fiscal Year 2014 Defense Appropriations bill
with overwhelming bipartisan support and 315 Members voting in
favor. Unfortunately, that piece of legislation also has yet to
be taken up by the Senate.
If the Senate chose to go back to work to regular order and
actually vote on bills and go to conference with the House to
resolve differences in the legislation, as we used to do at one
time, ironically enough we wouldn't be at this hearing and
Active Duty, Reservists, Guard, civilians and contractors
wouldn't be suffering from these self-inflicted stresses.
However, no one is suffering more than the families who
lost loved ones recently in Afghanistan during this unnecessary
and preventable government shutdown. I was shocked and angered
when I learned that five of our Nation's heroes died in
Afghanistan over the weekend and their families were informed
that benefits could not be paid.
These benefits, which fall in the category of military
member pay and allowances authorized by the legislation,
provide a small amount of financial support as families grieve
so that during the most harrowing of times they can focus on
what matters most.
They allow families to travel to Dover Air Force Base to
receive their fallen loved ones. They also ensure we bury our
heroes, those who have paid the ultimate price, in a dignified
manner that recognizes their extraordinary service and
sacrifice.
And while I applaud the organizations who have stepped in
to fill this senseless void created by government lawyers
narrowly interpreting the law, it is Secretary Hagel's
responsibility to make the hard policy judgment and to do the
right thing. That is to find a way to treat our families with
the respect and dignity they have earned.
Every leader in the military, from the squad leader to the
combatant commander, is charged with the task of taking care of
their people. It is an absolute embarrassment to this
government and to this Nation that we are failing in our duties
to those who take care of us and protect us every day. Our
soldiers, sailors, airmen, Marines and their families deserve
better, and we owe them answers.
Before we proceed, I would like to highlight that while the
Readiness Subcommittee is hosting this hearing, we have invited
the full committee to participate. And if there are any other
members of the full committee leadership that would like to
comment later, we will allow them so to do.
And with that, I will now go to our ranking member, my good
friend Madeleine Bordallo. Madeleine.
[The prepared statement of Mr. Wittman can be found in the
Appendix on page 41.]
STATEMENT OF HON. MADELEINE Z. BORDALLO, A DELEGATE FROM GUAM,
RANKING MEMBER, SUBCOMMITTEE ON READINESS
Ms. Bordallo. Thank you very much, Mr. Chairman. And I want
to thank you for calling this hearing. I would like to also
welcome Secretary Hale, Secretary Wright and Mr. Taylor for
testifying before us today.
While we are discussing the important issues of how the
Department of Defense implements H.R. 3210, I find that this is
a futile effort. We should never, never have had to worry about
this situation. If we could just vote on a clean continuing
resolution [CR].
If we pass a clean CR, then appoint conferees to meet on a
budget resolution, that would be a step in the right direction
for fixing many of the challenges that face the Department of
Defense today and other agencies and departments.
I appreciate the Department of Defense has fully
implemented H.R. 3210, and most workers are back to work at the
Department. In a time where we remain a country at war, it is
important that we continue to support our men and women in
uniform even during a preventable government shutdown.
However, we cannot continue to cherry-pick departments and
agencies that we want to keep open. That is not the way to
operate. Let's solve the problem by passing a clean CR and
moving into a conference committee on the budget resolution so
that we can end this sequestration.
And I would also like to add that we cannot continue to
hold the debt ceiling hostage to unrelated matters. We are
rapidly approaching the date in which the Treasury Department
will exhaust its ability to use extraordinary measures to keep
paying America's bills.
If we don't increase the debt ceiling, the impact on our
military will be unprecedented. It is unlikely whether payments
could be prioritized, and I am concerned that our service
members won't be paid. Contracts won't be paid. We will truly
hollow out our government, and that is just plain dangerous.
Ladies and gentlemen, we have the votes to pass a clean CR.
We have to muster the political will to pass a clean CR and
clean debt ceiling increase. So I again thank you, Mr.
Chairman, and I look forward to our witnesses' testimony and
our question and our answer period. Thank you, and I yield
back.
Mr. Wittman. Very good. Thank you, Madeleine. I would like
to at this time yield 3 minutes of my time to the sponsor of
the Pay Our Military Act, Representative Mike Coffman from the
great State of Colorado. Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman. I appreciate the time
you have given me today to tell the American people and those
gathered here today about H.R. 3210, the Pay Our Military Act,
which I introduced in response to a possible shutdown of the
Federal Government.
I will discuss the intent of the bill, as well as the
harmful impact of the Department of Defense failure to follow
the spirit of the law. During the last few weeks of September,
Congress was consumed with the impending shutdown of the
Federal Government.
Failure to reach an agreement on the issues would have a
severe negative impact on the millions of Americans who either
serve in the Armed Forces or whose work supports the military.
This was something we needed to avoid at all cost. Less than 3
days before the shutdown of the Federal Government, I
introduced H.R. 3210, the Pay Our Military Act. Specifically,
the bill provides funds for the Department of Defense to pay
members of the armed services, including Reserve Components who
perform active service, as well as the civilian employees and
contractors who support the military.
My bill passed the House of Representatives by a unanimous
vote of 423 to zero. On the day before the shutdown, the Senate
passed this bill by unanimous consent. Hours later, the bill
was signed into law by President Obama.
The broad bipartisan consensus behind this bill exemplifies
the deep respect the American people have for our military.
Unfortunately, the Department of Defense took it upon itself to
disregard the will of the American people and violate a law
that had unanimous support of Congress and the signature of the
Commander in Chief.
Just hours after my bill was signed into law, Robert Hale,
the Pentagon's Comptroller, sent all Department of Defense
civilian employees a letter stating, ``Non-excepted civilians
will begin a process of orderly shutdown. That will include
acknowledging receipt of a furlough letter.''
I believe the guidance issued by Comptroller Hale was based
on a deliberate decision by the Department of Defense to
misinterpret the Pay Our Military Act for political purposes.
H.R. 3210 makes absolutely no mention of excepted or non-
excepted personnel.
My bill casts a wide net, a wide a net as possible to
ensure that the Department's civilian personnel, all of whom
were necessary to support military operations, can report to
work. On day one of the government shutdown, the Pentagon
furloughed the vast majority of its civilian workforce in
violation of the law.
I would again like to thank my good friend from Virginia
for yielding me the additional time from his own personal time
to discuss this very important matter. With that, I yield back.
Mr. Wittman. Thank you, Mr. Coffman. And now we go to
Secretary Hale. I think you are going to make an opening
statement for the panel. Is that correct?
Secretary Hale. I am. Thank you.
Mr. Wittman. Okay. Thank you, Mr. Secretary. You are
recognized.
STATEMENT OF HON. ROBERT F. HALE, UNDER SECRETARY OF DEFENSE
(COMPTROLLER), U.S. DEPARTMENT OF DEFENSE; ROBERT S. TAYLOR,
ACTING GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE, U.S.
DEPARTMENT OF DEFENSE; AND HON. JESSICA L. (GARFOLA) WRIGHT,
ACTING UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS,
U.S. DEPARTMENT OF DEFENSE
STATEMENT OF HON. ROBERT F. HALE
Secretary Hale. Well, thank you, Mr. Chairman, ranking
member and members of the committee. Let me start by saying
that we all wish this lapse of appropriations hadn't happened.
It is a tragedy. And DOD strongly urges the Congress to pass
either an appropriation or a continuing resolution that the
President can sign that ends the lapse for all Federal
agencies.
But we are where we are. The lapse is in effect. So my goal
today is to explain how DOD is implementing the lapse of
appropriation with a focus on the Pay Our Military Act [POMA]
and the associated partial shutdown. And I will give you some
idea also of impacts of that shutdown.
Throughout my briefing, I will focus only on the Department
of Defense, but I want to note that the lapse of appropriations
is having far-reaching effects in most agencies of government,
not just in DOD. Indeed, because of the legislation that you
enacted, the effects in other agencies are sometimes
significantly more severe.
So let me start with the initial implementation of the
lapse of appropriations. On September 25, 2013, as the date for
lapse approached, the deputy secretary issued guidance for
implementing a lapse of appropriations. The guidance provided
information to the services and agencies for identifying
excepted activities. And you will hear my word. I am going to
use that word repeatedly, and all of us, throughout this
discussion.
Excepted activities under the law are those related to
military operations and to safety of life and protection of
property. Once the lapse occurred, we have no authority prior
to POMA to do anything other than follow this guidance. We
provided examples to the services to help in implementation.
So what were the initial results of this implementation,
again, before the POMA legislation when the lapse occurred on
October 1? All Active Duty military personnel continued in
their normal status because of the nature of their employment.
They are paid unless they are separated from the services, and
so we directed them to continue in normal duty status.
Commanders and managers identified civilians who worked
primarily on excepted activities. Again, activities related to
military operations and to safety of life and property are the
only things that qualify. And these so-called excepted
civilians continued working after the lapse. All others were
placed on emergency no-notice furloughs.
Reserves on inactive duty were allowed to drill their
weekend drills only if the drills were in support of excepted
activities, primarily preparing for deployment to Afghanistan.
All other drills were canceled.
So what was the effect of the lapse prior to POMA? About
400,000 DOD civilians were placed on unpaid furloughs. They
will be paid for furlough days only if Congress passes separate
legislation, which the House has done.
Military personnel and excepted civilians continue to work,
and they are guaranteed to be paid eventually, but prior to
POMA that payment would have only occurred after the end of the
lapse. And Reserves allowed to conduct inactive duty for
training, those few that are working on excepted activities,
they are guaranteed eventual payment, but that can't be paid
until after the lapse ends.
So that was the status before the POMA legislation. The Pay
Our Military Act was enacted on September 30 and it greatly
changed the picture in DOD. First, for military personnel, it
provided an appropriation--it is an appropriations act--for pay
and allowances for those on active service.
DOD can now pay Active Duty military personnel on time and
in full, even if--and I hope this doesn't happen--the lapse
continues beyond the October 15th pay date. And we have indeed
already run that payroll, so it will be on time and in full.
POMA also enacted an appropriation for pay and allowances
of civilians who provide support to members of the Armed
Forces, which permitted us to recall many civilians from
furloughs. There were a number of steps that DOD had to take to
implement POMA for civilians. Throughout the process, DOD
worked closely with the Department of Justice on
implementation.
We concluded that POMA did not provide legal authority for
a blanket recall of all DOD civilians. And I know that differs
from what you have just heard, so let me explain why.
First, had the Congress intended, or had the law been
intended, to provide recall for all, it should have said,
``Recall all civilians.'' It did not. And perhaps more
problematic, it required that the Secretary of Defense make a
determination of who would be recalled, which our lawyers
concluded clearly implied that a blanket recall was not
supported.
Instead, DOD was required to conduct a review to identify
those civilians who most directly serve members of the Armed
Forces. That review focused on the degree to which civilians
aided the morale, well-being, capabilities and readiness of
members of the Armed Forces.
Based on this review, DOD identified several categories of
civilian personnel. First, there were the excepted civilian
personnel, the ones who are directly supporting military
operations and safety of life and property.
They had continued to work, even during the lapse of
appropriations. They are now covered under POMA.
Civilians providing ongoing support to members of the Armed
Forces, they were recalled from furlough. It includes day-to-
day support, like health care providers, family support, some
repair and maintenance, commissary workers, payroll activities.
Then there was another category of civilians providing
support that affected military members in the longer run, and
they also were recalled from furlough on the grounds that their
not working during the lapse period would have longer-term
effects; that include acquisition oversight, financial
management, logistics, and a number of others.
Finally, a category of civilians was identified whose work
is highly valuable and necessary. I want to underscore that
point. But it provides less direct support to military members.
These civilians were not covered by POMA, and some remain on
furlough.
These included things like CIO [Chief Information Officer]
staff functions, public affairs, to the extent they are not
performing internal communications, leg [legislative] affairs,
deputy chief management officer, auditors, and related
functions, and personnel providing support to non-DOD
personnel, which we felt were not covered by the law. On
Saturday, October 5th, Secretary Hagel, based on this review,
issued a determination regarding civilians in POMA. And then we
began to implement that determination as quickly as we could.
More than 95 percent of our civilians who were on furlough
were recalled. It is actually more like 98 percent. But the
number is going to vary, so I prefer the more-than-95. And most
were back to work by Monday, October 7th.
Looked at another way, who isn't covered by POMA? About--or
slightly more than 40,000 DOD employees were not covered by
POMA under this law.
About 35,000 of those are DOD employees in the Army Corps
of Engineers. Most of them are working today because they are
funded with prior-year appropriations, and under the law, they
can continue to work.
Excuse me. But those prior-year funds will soon run out.
And because these DOD employees in the Corps of Engineers are
not covered by POMA, some of those individuals would begin to
be furloughed if this lapse continues.
And another roughly 7,000 DOD employees remain on furlough.
These are the CIO, public affairs, leg affairs, auditors, and
related functions.
Let me say one more thing about POMA and our civilians, and
that is these civilians not on--POMA will allow the civilians
not on furlough to be paid on time and in full during non-
furlough periods.
So we will be able to--the pay date is Friday for non-
furlough periods, will be on time and in full. And future
paydays, if the lapse continues--and again, I very much hope it
won't--will be on time and in full for those who don't remain
on furlough.
I want to emphasize that DOD followed the law and the
guidance in implementing POMA. And we consulted closely with
our lawyers and with the lawyers in the Department of Justice.
However, this process of categorizing civilians was
difficult, it was time-consuming, and it was hurtful to those
who remain on furlough. And let me emphasize again that being
selected to remain on furlough has nothing to do with the value
of an individual's work to national security or the DOD, and
everything to do with the way the POMA legislation was written,
as interpreted by DOD, based on advice from the Department of
Justice.
Now, POMA not only permitted DOD to provide pay and
allowances to military members, and to recall many of our
civilians from furloughs, it also permitted the Department to
provide ``pay and allowances,'' and that was its word, to
contractors who support members of the Armed Forces.
This provision of POMA was especially difficult to
interpret, because almost all contracts are designed to buy
goods or services. And almost all of them contain more than pay
and allowances. They contain profit, overhead, materiel and
supplies.
So we are having to try to separate these out in a manner
that is extremely difficult to do. We are still working on a
determination of how to apply POMA to contracts using fiscal
year 2014 funds.
So over the past 14--past 10 days, we experienced a lapse
of appropriations, and we implemented POMA. Where does all this
leave the Department today? We, of course, still under a lapse
of appropriations and partially shut down.
POMA has substantially reduced the adverse effects. They
would be much worse if we didn't have that legislation. We
could pay our military on time and in full because of POMA.
Most of our civilian workers are back at work, and can be paid
on time and in full, except those on furlough, also because of
POMA.
We have the personnel we now need to process vouchers,
which we didn't have prior to POMA. So for contracts with
prior-year money, and that is most of them these days, we are
going to be able to start paying our vendors as well.
However, while POMA mitigated adverse effects, the lapse of
appropriations is still having serious adverse effects on the
Department of Defense. And let me just list some of them for
you so you get a sense of what is happening.
Despite our very best efforts, there are already some
limited adverse effects on the war in Afghanistan, and a great
concern. Afghan, and other military operations, are clearly
excepted activities under the law, which means we can generally
obligate funds and carry out activities. But sometimes we
cannot.
Notably, we can no longer have authority to make CERP
payments, the Commander Emergency Response Program. It is cash,
so it represents an outlay.
We have no authority to do that under the law until we get
beyond this lapse. This is a unique authority that expired
after the appropriation bill lapsed.
These payments are made to Afghans as compensation for
deaths or damage, or for other events. And they are key to
continuing a responsible drawdown in Afghanistan.
General Dunford has expressed strong concern, but we have
not yet identified a legal way to make these payments during a
lapse of appropriations. We are trying our best.
The lapse is harming the training and readiness of Reserves
not on active duty. Weekend drills have been halted, unless in
support of an excepted activity, such as preparing for
deployment to Afghanistan. The Guard has canceled around
100,000 drills in the first weekend; the Reserves, around
75,000. And even for those who drill, we can't pay them until
the lapse ends.
The lapse is also reducing the training and readiness of
Active Duty personnel. Services have curtailed training in
later-deploying units. They are focusing on being sure that
units near deploying are ready.
I can't give you specifics right now, because of POMA, they
are reviewing their plans. But there will likely be some
continued curtailment of training for later-deploying units.
The lapse has forced us to waste a good deal of the
public's money. About 400,000 DOD civilian personnel on
furlough did not work for 4 days. That is roughly $600 million
in services that we lost in support of national security
objectives.
And many other actions are forcing us to waste resources.
We had to close training schools and require people to travel
home. Once POMA was implemented, they had to--they could
return. We had to pay for that, too.
We had to cancel training events, even though we had
already incurred many of the costs. We will suffer interest
penalty payments, because we are being forced to pay bills
late.
The lapse has further harmed the morale of our civilian
workforce, and a great deal of concern, a great deal of concern
to me. Recall from furlough certainly helped most of our
civilians. Retroactive pay, if it is enacted, will help.
But in recent years, we have been regularly taking actions
that undermine civilian morale; pay freezes, the sequester
furloughs--lest we forget, it was only a couple months ago that
we furloughed most of our civilians, or many of them, for 6
days--and now the shutdown furloughs.
In the first days of the lapse, commanders repeatedly told
me that civilian workers were frustrated and angry. And I can't
imagine they would be any other way.
And many say they will retire or seek other jobs. And low
morale means low productivity at most DOD support activities.
And another problem, during the lapse, DOD has no legal
authority to pay death gratuities. We have been through this
with the Justice Department, with the OMB General Counsel, with
our own general counsel. It is in another section of the law,
separate from pay and allowances.
We just don't have the legal authority, and I don't think
you want us to start going around the law. So that $100,000 in
death gratuity payments is usually made shortly after an active
duty death. As of yesterday, 29 military members had died on
active duty since October 1st.
A little more than a day ago, the Fisher House Foundation
offered to pay these benefits to our fallen during lapse of
appropriations. And DOD, in return, or in turn, offered to
enter into a contract with the Fisher House to reimburse the
foundation after the lapse ends. We can enter into the
contract, because we view it as an excepted activity. We can't
disperse any money, because it is not a pay and allowance. And
I think that is just very clear.
So that is the arrangement we have reached with the Fisher
House. They will begin making payments soon, and we will
reimburse them as soon as the lapse ends.
Also, yesterday, the House passed legislation that would
provide us authority to make these and other payments. And so
in some fashion, we will do what we need to do.
And I couldn't agree with the committee more, and the
chairman, and all of you more. We will ensure that survivors of
our fallen will receive these benefits.
Let me finish by looking just a bit ahead, because I don't
want to look too far ahead. I want this to end, and I hope we
all do.
POMA gave us the ability to provide pay and allowances to
the military and most civilians. And most of our military and
civilians are back at work.
But we don't have the legal authority to enter into
contracts for supplies, for fuel, for materiel, using fiscal
2014 funds, unless those contracts are in direct support of an
excepted activity; again, a military operation, safety, life
and property. We are watching closely to see how this absence
of authority affects future operations if the lapse continues.
Moreover, even if we can enter into contracts for excepted
activities, we can't pay the vendors using fiscal 2014 funds.
Again, we have no legal authority to do that. And we are not
sure how long our vendors are going to accept IOUs.
So even with POMA, my bottom line, even with POMA, DOD is
experiencing disruption in its mission due to a lapse of
appropriations. And I note again that many other Federal
agencies are experiencing even greater disruption.
The lapse is also consuming large amounts of time at all
levels of the Department. I think it can be fairly called a
colossal waste of time.
We very much hope Congress will act very soon to end the
lapse of appropriations for DOD and for all Federal agencies.
Mr. Chairman, that completes my prepared remarks, or my oral
remarks, and I would be glad, joined by my colleagues, to try
to answer your questions.
[Editor's Note: The witnesses did not provide written
statements of the proposed testimony in advance of the hearing.
The Chairman, in concurrence with the Ranking Minority Member,
agreed to waive Committee Rule 13 for this hearing.]
Mr. Wittman. Thank you, Mr. Secretary. We appreciate your
perspective on things and we look forward to posing some
questions to you and other members of the panel.
I want to begin by going to a letter that was written by
myself and my colleague, Mr. Connolly from Virginia, on October
the 7th to Secretary Hagel. And, essentially, we asked
Secretary Hagel about the status of contractors.
As you know, contractors do a tremendously valuable job in
making sure that our men and women in uniform have what they
need, and they are a critical part of this element providing
for this Nation's defenses.
I wanted to get from you--can you explain the criteria that
you have to determine which contracts get paid, which ones do
not? How do we maintain certainty for those folks that are out
there providing these services?
As you know, there are many small contractors that cannot
sustain long-term times without being paid. How are we making
sure that that segment of the workforce is taken care of? They
are critical.
And how are we going to make sure we stay in touch with
them about what is happening, when they will get paid, when
they will be brought back in as far as doing that work?
Can you provide some definition to us about how those
decisions are made and the criteria to determine what does and
what does not get paid as far as contracts?
Secretary Hale. I can try to help. Let me say, overall our
goal here is to obey the law, which I know you want us to do
and we obviously must do. But to minimize the adverse affects
on our mission wherever we can so long as we are obeying the
law.
So, what the law says is that for contractors who are
working now based on contracts funded with money in fiscal year
2013 or before, they can go ahead and work as long as
supervision is available and now that most of our civilians and
military are back, it will be.
So, they can go ahead and work. And we are allowed to pay
them. We stopped paying them because prior to the
implementation of POMA we didn't have available to us the
people we needed to process acceptance of the goods and
services and their vouchers.
Those people are back and for contracts with money funded
fiscal 2013 and before, I think payments will get started
fairly quickly.
Fiscal 2014 is a very different story. There, we only have
the authority to enter into contracts for excepted activities
and we will do that where we can. And even there we have no
authority, and I am going to leave POMA aside for a moment, to
pay those contracts; and for nonexcepted activities, we can't
enter into contracts.
Now, POMA said we could pay the pay and allowances of
contractors serving members of the Armed Forces. So, for those
who work and enter into a contract excepted activities, if the
vendor has an approved cost-accounting system and they can
separate out pays and allowances, we will make every effort to
pay it.
But I think it may be limited in their ability to do it and
it will be very difficult to carry out. I think there will be
hardly any contracts in the nonexcepted area that contractors
are going to be willing to engage in a contract with us only
for pay and allowances.
They can't have any profit. They can't have any overhead in
those contracts. I think that will be very limited. I know that
is confusing. It is confusing to us, too, but we are working
hard to sort it out.
The big thing you need to know is most of our contracts
today are funded with 2013 and before money and we are going to
get that money flowing again to our contractors soon, as soon
as we have time to do the acceptance testing and process the
vouchers.
Mr. Wittman. Secretary Hale, you talked about the 40,000 or
so people that have not returned. Can you give us some
perspective on the civilians that haven't returned, the
contractors that will not be paid and how it relates to unit
readiness?
As you know, many of our units rely upon those DOD
civilians and contractors to make sure they maintain that
readiness, especially what is happening now with elements of
activities in Afghanistan.
Also, both the retrograde from Afghanistan, the equipment
that is coming back or the equipment that needs to be repaired.
Can you give us an assessment about what the impact will be on
unit readiness?
Secretary Hale. Well, not with much precision at this
point. Most of our civilians are back, more than 95 percent and
so I think that the majority of that work is going to get done
including the reset operations. Almost all of our depot workers
never left because they are funded with working capital funds.
Those under the law can accumulate cash and they did based on
prior year fiscal 2013 and before appropriations. So, those
workers could continue until that cash runs out.
And we are probably at least a week or two from that and
longer for many of our depots. So I think that they will
continue. I don't see any immediate adverse effects on
readiness in Afghanistan. I mentioned the CERP payments which
are of great concern, but other than that.
If this goes on, there may be some additional ones that
would occur. There are excepted activities so we can enter into
contracts. The question is whether vendors are going to be
willing to supply the goods and services if we can't give--
guarantee to pay them.
But, at the moment, I actually was in contact with General
Dunford over the weekend and leaving aside the problems in
CERP, he didn't see any issues at the moment. They are going to
get worse.
I feel kind of like a wind-up doll. You know, I mean we are
wound up right now and we are kind of going like this. We are
going to start to----
Mr. Wittman. Yes.
Secretary Hale [continuing]. Bend over as we can no longer
buy supplies and fuel for nonexcepted activities or because
vendors won't provide the goods and services. So, please, we
need to end this lapse.
Mr. Wittman. Got you. Very good. Thank you, Secretary Hale.
I am now going to go to our ranking member, Madeline
Bordallo.
Ms. Bordallo. Thank you very much, Mr. Chairman.
My first question is for Mr. Taylor. You are with the
General Counsel's Office, correct?
Mr. Taylor. That is correct.
Ms. Bordallo. Did the drafting of H.R. 3210 impact how the
Department interpreted and implemented the bill and, in other
words, what challenges did the manner in which H.R. 3210 was
drafted present to the Department in clearly understanding
congressional intent?
Mr. Taylor. Well, we are obligated to interpret the
language as it is presented to us as we receive it from the
Congress and there are clearly several issues with respect to
how it was drafted that has caused us to interpret it in the
way we have which may differ from the views of the author of
the legislation and the views of others.
For example, Section 2(a)(1) is the provision that
authorizes us to pay all the members of the Armed Forces who
perform active service. It is a blanket provision.
It clearly applies to all who are in active service and it
doesn't call for any choosing and any exercise of discretion of
who is in and who is out. Everybody is in.
So, thank you very much for that. That was very, very
helpful and allows us to pay our military members on time and
in full. [Section] 2(a)(2) is drafted a little bit differently.
It calls--in contrast to (1), it isn't a blanket recall.
It calls for exercising of discretion based on what appears
to be a criterion in the language which is ``are providing
support to members of the Armed Forces described in paragraph
(1);'' that is members of the Armed Forces who perform active
service.
So, the challenge was to try to figure out what that means.
It clearly calls for the exercise of discretion. What is to
guide the exercise of discretion?
Is it unbounded and complete absolute discretion in the
Secretary? We don't think so. We think the exercise of
discretion has to aim at determining who is providing support
to members of the Armed Forces.
A simple example, people who are doing wonderful and
important work, the civil works element of the Army Corps of
Engineers. The work they do is very valuable to the Nation.
But, in general, it is providing support. It is providing
services to individuals, to communities outside the Department
of Defense. It is hard to see how all of those employees are
providing support to members of the Armed Forces.
The work is important. It serves the Nation to do that
work. I wish we could recall them. I wish we could put them
fully back to work, but it appears, from the language, to be
outside the scope.
Ms. Bordallo. Thank you, very much. You have answered my
question. I am sure there were other issues as well. Am I
correct?
All right. Secretary Wright, I have a question for you. I
am concerned that the Department of Defense is increasingly
using military personnel to do the work of the civilian because
of caps and constraints and furloughs and sequestrations and
shutdowns.
So, I have a concern about this approach from a readiness
and cost perspective as well as these actions seem inconsistent
with guidance from the Department.
As we know, some nonessential employees are furloughed
because they are performing functions that aren't considered
essential. However, is DOD circumventing the law by using
military personnel for functions outside their core military
operational specialties?
Could you comment on this?
Mrs. Wright. Yes, ma'am. Thank you for the question.
Frankly, we support the fact that we don't use, what is the
term, borrowed military manpower.
I do know that the services based upon the predicament that
we are in without a budget have grave concern that some of
these activities that they are responsible for should continue
and sometimes the training of these personnel are not
happening.
And so we have, at times, we could potentially have an idle
soldier or military member. The services are not yet using
borrowed military manpower to my knowledge. They must come in
and ask to do this, to OSD [Office of the Secretary of Defense]
Personnel and Readiness.
I know that they are talking about it at this point, ma'am.
But, right now, they are not, to my knowledge, they are not
doing it.
Ms. Bordallo. All right. So, your answer to that question
is you are not using military personnel?
Mrs. Wright. To my knowledge, ma'am----
Ms. Bordallo. Yes.
Mrs. Wright [continuing]. They are not using it.
Ms. Bordallo. Thank you. And my next question----
Secretary Hale. May I issue a plea? Please don't use the
word nonessential as regards our civilians.
The folks that are still on furlough are essential. We
can't operate without them in the longer term.
Ms. Bordallo. Well, my question----
Secretary Hale. It is very harmful to morale. Call them
nonexempt or nonexcepted, but please don't use that phrase----
Ms. Bordallo. I----
Secretary Hale. It comes from the 1995 one and it cost--I
can't tell you how long--it was Air Force FM [financial
management] in 1995--it was years after that, I had people
saying, ``Well, I wasn't essential.'' So, I----
Ms. Bordallo. I totally agree with you, Mr. Hale; I think
it is the wrong word to use. And certainly they wouldn't be on
the job if they weren't essential to begin with.
My last question, Mr. Chairman, is, and this is for any
witness, as you know, there was a concern and confusion about
the treatment of members of the National Guard when the
government shutdown began last week.
National Guardsmen on title 10 orders and in direct support
of the Federal mission were spared any potential furloughs.
However, there was initial confusion about whether soldiers and
airmen on title 32 orders were covered.
In particular, dual status technicians were not initially
included as essential. I raise this point because I am
concerned there is a lack of appreciation and understanding of
the importance of title 32 to the National Guard's role in
homeland defense.
Although the Governor retains control over the National
Guard in that status, they can be put on those orders to
support national contingencies.
If Tropical Storm Karen had been more powerful, it would
have been customary for the National Guard to be put on title
32 orders to support storm recovery. But under the initial
guidance, I am not sure it would have been possible.
So, can the Department more clearly articulate the thinking
on this particular point?
Mrs. Wright. Ma'am, if I can take that question, please.
Ms. Bordallo. Yes, surely.
Mrs. Wright. First, a little bit about my history; I was a
guardsman for 35 years. So, I----
Ms. Bordallo. Oh, well thank you. You are certainly
experienced then to answer.
Mrs. Wright. So I truly understand the viability of the
Guard and Reserve and the need for them. The title 32 active
Guard Reserve soldiers were considered the same as a title 10
Active Component soldier and they were not furloughed, if you
will.
They were paid for; they were kept on duty. The dual status
technician is really a government employee--a civilian
government employee, and the term dual status means they must
hold a position within the National Guard and drill as a
guardsperson but they also remain in--they get paid as a GS--
General Schedule or wage grade, Monday through Friday.
And so, they are considered a civilian DOD employee. So,
once the act was passed--well first, before the act was passed,
they were in the same category as all the other civilian
employees, and if they were in the excepted or exempt category,
they were kept on duty.
Once the act was passed, we passed down guidance through
the chief of the National Guard Bureau to the Adjutants
General; they followed the rules as written by the Secretary of
Defense and about 90 percent of those dual status and also non-
dual status technicians are back to work.
There was a request from the Governors of the hurricane
States--when the hurricane was coming up towards Texas and
Florida and the Gulf States--to bring on, as a special
exemption, more dual status technicians because they were in
need to protect the civilians of those great States, and the
Secretary immediately granted that exemption because they were
needed for duty to protect those great States.
Ms. Bordallo. Well, thank you very much, and thank you for
your long service with the National Guard. I represent the U.S.
Territory of Guam and we have a very strong Guard, Air Guard
and Reservist----
Mrs. Wright. Yes, ma'am, you do.
Ms. Bordallo [continuing]. Program.
Mrs. Wright. Thank you.
Ms. Bordallo. So, thank you very much, and I yield back,
Mr. Chairman.
Mr. Wittman. Very good. Thank you, Ms. Bordallo.
We now go to Mr. Forbes.
Mr. Forbes. Mr. Chairman, first of all, thank you and the
ranking member for holding this hearing, and to each of you, I
want to thank you for being here.
We don't always agree on things, but I just really want to
thank you, Secretary Hale, for your efforts and each of you for
trying to get our men and women back to work.
Thank the Secretary for his efforts in trying to do that. I
know that these are trying times for you, very difficult times.
And I know probably each one of the three of you would
rather probably have had a root canal than have to come over
here and deal with Members of Congress today, but it is a
tribute to you that you are willing to do that and to talk with
us.
And regardless of how we got here, I just hope that maybe
that will, by osmosis, travel up to our leadership and we will
see the President and the Senate and the House all be willing
to sit down and negotiate and talk, because I think that is
important.
Second thing is, Congressman Turner and I were talking
about before we came and started this hearing that the one
thing that is not being discussed a lot, in all of these
discussions, is the enormous impact that the President's
sequestration, that ultimately Congress signed off and agreed
to, is going to have on us if we don't turn those numbers
around.
And as we are trying to change those numbers, it is
somewhat hurtful. Because as I look at this legislation, when
we look at DOD, many of us thought it was Armed Forces, members
of the Armed Forces, and the people that were supporting them.
And I think it kind of takes us back to realize that there
are a number of people in DOD and civilians that aren't
supporting members of the Armed Forces.
So, Mr. Chairman, it might be helpful for us at some point
in time to get a complete breakdown----
Mr. Wittman. Yes.
Mr. Forbes [continuing]. As to what part of these civilians
and individuals are not supporting our Armed Forces members so
that we can at least clarify that as we go forward in these
discussions further.
Mr. Wittman. Absolutely----
Mr. Forbes. And then the question that you have elaborated
on and Secretary Hale, you indicated this, about the private
yards and the private companies, and we have had a lot of
people contact us about that.
During the shutdown, are we asking our private shipyards to
undertake work such as maintenance or new construction that is
supposed to be funded by fiscal year 2014 dollars without being
compensated at this time?
And if so, how would you estimate the risk these yards are
taking on? What do you believe will be the impact on suppliers
and small businesses that support these efforts from what we
see taking place now?
Secretary Hale. Can I go back to your first statement? We
believe strongly that all of our civilians support members;
because of the discussion we had before about the requirement
for a Secretarial determination, and the way the law was
written, we felt we had to identify those whose support was
less direct or longer term.
Mr. Forbes. Mr. Secretary, if I could just stop you there.
I grant you, we need to be more clear. Because oftentimes, we
hear people coming over from the Department saying, ``We need
more discretion, we need more discretion.'' When we try to get
you that, it is no good deed goes unpunished.
The second thing is----
Secretary Hale. Touche.
Mr. Forbes. If we read this language in here, it doesn't
say ``direct support.'' It says ``support.'' And just being,
you know, the country lawyer that I am, that means to me what
it says.
And so, it looks like somebody has added the phraseology
``direct'' as opposed to ``support.'' And so, we need to be a
little clearer, maybe not give discretion, like we thought we
were doing here.
But secondly, I don't know how much clearer we can be when
we use the word ``support'' and somebody outside adds the word
``direct.''
So, maybe you could tell me how the interpretation
``direct'' was added in there.
Secretary Hale. Well, I think the thing that would be
helpful would be to drop the Secretarial determination. If we
have----
Mr. Forbes. And, listen, we will take that. I am going to
argue that 'til the cows come home----
Secretary Hale [continuing]. Just say all----
Mr. Forbes. From now and we are not going to get----
Secretary Hale. Let's hope we never do this again. Let me
go to your private sector question.
Mr. Forbes. Okay.
Secretary Hale. I am concerned, yes. We are asking all of
our vendors right now with whom we are entering into contracts
using fiscal 2014 funds to essentially take an IOU.
You ask me when? It ends when the lapse does. We will pay
them as soon as it ends or as soon thereafter as we can. Your
judgment is better than that. I am praying for soon.
But, yes, we are, and I don't know how they will react. I
assume maybe some of the larger ones will have more ability and
perhaps willingness to stay with us. I am more concerned about
some of our smaller vendors.
But we are trying to watch--I didn't answer an earlier
question, but let me take this opportunity to answer it--our
communications. We are trying through industry associations and
other means to stay in contact with our vendors.
Frank Kendall, my colleague who is the Under Secretary [of
Defense] for Acquisition, Technology and Logistics is heading
that effort, and to tell them what we know and what we can do
under the law.
Mr. Forbes. Mr. Secretary, thank you for that.
And can you maybe revisit the question you posited to me a
little bit earlier about the word ``direct.'' Where did that
come from and who brought the word ``direct'' into----
Secretary Hale. Let me ask our acting general counselor.
Mr. Forbes. Oh, I am sorry, yes, sir. I am sorry. Mr.
Taylor, I didn't mean to leave you out.
Mr. Taylor. If I may, I am afraid ``direct'' is not in the
statute and it is not in our implementation of the statute.
So----
Mr. Forbes. Maybe I misunderstood. I thought somebody said
that word----
Mr. Taylor. Well, he did say that word----
Secretary Hale. I was trying to summarize.
Mr. Forbes. Okay.
Mr. Taylor. He did say the word and, frankly, it reflects
some of the course of consideration, but the ultimate judgment
was the statute says ``support'' and that is how we should
implement it; support, not direct support.
So, that opened up the aperture quite a bit, and we have
seen the results of that with about 95 percent or so of people
back in. There are some functions that even with--understanding
that the support need not be direct, that seem to be outside
the scope of----
Mr. Forbes. Mr. Taylor, I only got a few more seconds left,
and I respect all three of you, but did I misunderstand? I
thought that Secretary Hale said, just a few moments ago, that
everyone at DOD, they believed, did support our members.
Are you saying that that might--maybe I didn't hear that
correctly or that wasn't accurate? Or, help me with that.
Mr. Taylor. Yes, I am afraid that that was a bit of an
overstatement. They support the Armed Forces, perhaps, but not
necessarily members of the Armed Forces. So, looking at, is
there a distinction----
Mr. Forbes. And let me just say, this is what ``is'' means,
all these kinds of things----
Mr. Taylor. Yes.
Mr. Forbes. And I am going to just tell you, the American
people don't understand that. We don't understand that. We
thought when we were saying we are giving you discretion, we
are doing a good thing. We realize we were doing a bad thing.
But secondly, when we use the common English word
``support,'' we thought that is what you were going to do, and
I think Secretary Hale believed the same thing and it is just
unfortunate that a lot of people got caught in this vice
because somebody started bringing in extraneous verbiage in
there.
With that, Mr. Chairman, I yield back.
Mr. Wittman. Thank you, Mr. Forbes.
We will now go to Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman.
Secretary Hale, just so I am clear, for those civilian
employees who were recalled on Tuesday of this week and who are
today working, when October 15th arrives, my understanding of
your testimony is that they will receive a paycheck. Is that
correct?
Secretary Hale. Yes. I think it is not October 15. The pay
day is tomorrow, and then it will be 2 weeks from tomorrow for
most of them. Yes, if they were working, POMA, we can pay them
on time and in full. The ones who may not get paid are those
that remain on furlough.
Mr. Courtney. Right. I understand that.
Secretary Hale. There it would take special legislation
that you have passed.
Mr. Courtney. Right. So--but for those who have returned on
Tuesday who will be paid, will they be paid from October 1
through the end of the----
Secretary Hale. Okay. For the pay day Friday, it is going--
for those who were on furlough, the answer to that is no. They
will be paid for the 6 days that occurred prior to the lapse of
appropriations, but we don't have legal authority to pay them
for the 4 days when they were on furlough unless that
legislation is enacted. Then we could pay retroactively after
the lapse ends.
Mr. Courtney. Okay. I would appreciate it if your office
could put that in writing.
Secretary Hale. It is in writing. It is actually on the
DFAS [Defense Finance and Accounting Services] Web site now,
and I don't know where else. Is it on your Web site, too? Yes,
it is at least on the Defense Finance and Accounting Service
Web site, an explanation for each--a number of categories.
Mr. Courtney. All right. I appreciate that. When you
itemize sort of, you know, the gaps that, you know, the bill
and POMA still leave within the Department of Defense, again,
you talked about Afghanistan, CERPs, other issues. In my
conversations with folks, some of whom have returned this week,
what I am hearing is that consumables are also not being paid
for right now.
And so for example, I talked to one of those dual status
technicians this morning from Lebanon, Connecticut, Tim Broder,
who is a helicopter mechanic at the TASMG [Theater Aviation
Sustainment Maintenance Group] facility in Niantic,
Connecticut.
He said they don't have any fuel to fly the helicopters
that they are repairing. So they are at work. They are
repairing, but because the fuel consumable account isn't
provided for, which obviously this bill and POMA can't touch
because it is a totally separate item, that consumable is not
provided for.
In addition, I also spoke to some folks at the Coast Guard
Academy in New London who, again, a number of their staff
returned on Tuesday, but I was told that consumables such as
toilet paper and coffee filters are also now close to being
depleted.
I mean, I never thought going to Congress I would ever ask
a question about this, but I mean the fact of the matter is
that this really shows we are just running around with a garden
hose here in terms of trying to sort of run the Department.
We need a comprehensive bill that funds the entire
government so that we are not again just sort of constantly
seeing something else pop up that is not provided for. And
again, for the record, H.R. 372, which is the clean CR that
cleared the Senate and the President has said he has signed,
will be available for Members to sign a discharge petition
starting on Saturday morning.
Again, seven times in the last 30 years the discharge
petition process has been used to bring a bill up for
consideration. We have an opportunity on our side of the table
here today to bring this to an end and get a comprehensive
measure through that will fund all of the government and make
sure that everything from coffee filters to helicopter fuel is
going to be funded and that everybody can go back to work.
I mean, and that is really what--again, despite your best
efforts to interpret POMA, again, issues like consumables are
still left out as we sit here this morning. Isn't that correct?
Secretary Hale. Yes. Absolutely. We need this lapse to end
because, as you just said, we can't enter into contracts for
fuel or supplies unless it is an excepted activity. And even
then, we can't pay the vendors and it will become increasingly
a problem. And it probably already is to a limited extent, but
it is going to get significantly worse.
Mr. Courtney. Thank you. I yield back.
Mr. Wittman. Thank you, Mr. Courtney. We will now go to Mr.
Wilson.
Mr. Wilson. Thank you, Mr. Chairman. And thank you for
being here today. Although I have to tell you, I--it may be a
root canal for you, but additionally, I don't feel like you
should have to be here. I am very grateful that I had the
privilege of serving as an Army National Guard JAG [Judge
Advocate General] officer for 28 years.
And we had to come up with tough decisions, but we always
made the decisions in the interest of our military members, our
military service members, our family members. We made
determinations in the interest of achieving the mission of
protecting the American people. And I am very, very concerned
that what I see is politicization.
In fact, it was indicated that in addition to working with
attorneys of the Pentagon, the attorneys of the Justice
Department were contacted. To me, the Justice Department is
truly totally politicized. It is a political arm promoting the
policies of the President of the United States. It is not
unbiased.
Additionally, I understand that OPM, Office of Personnel
Management, attorneys, Office of Management and Budget
attorneys may have been contacted. Again, these are political
appointees, largely, who are making political decisions. And
the decisions to me are wrong. What they are doing is trying to
create pain for the American people.
And I just--I just find it outrageous, and in particular
the denial of the death benefit, $100,000, to American heroes
who are making it possible we can even be here today, to deny
the $10,500 burial benefit for persons who have served our
country.
And then the reports yesterday were I think outrageous. And
that is that the family members of the grieving deceased who
were returned to Dover were denied the travel benefits. But at
the same time, the Secretary of Defense had his benefits. I
just think this should be addressed.
And that is why--and hey, the law is clear. It says ``Pay
Our Military Act.'' It is quite short and it is very clear. It
says to provide pay and allowances to members of the Armed
Forces. It is right here. It is hardly more than a page. The
Pay Our Military Act, that is it. And that is what should have
been done.
In fact, last Friday I sent a letter to Secretary Hagel:
``As you are well aware, the Pay Our Military Act, H.R.
3210, was signed into law and provides an appropriation for the
pay and allowances of members of our Armed Forces, our defense
civilians and contractors, who sacrifice so much for the
defense of our country.
``I know that you have made the legal review of the
legislation a top priority, but I am very concerned that
further delays may interrupt essential pays and allowances. For
example, it has come to my attention [that] the Department of
Defense is not currently paying several critical allowances
earned by members of the Armed Forces who have made the
ultimate sacrifice. These include the Death Gratuity, which is
payable to a designated beneficiary, in a lump sum of $100,000,
for a death on active duty or inactive duty training and Burial
Benefits which provide up to $10,500 to survivors to cover
expenses related to the burial of service members. It cannot in
good conscience be denied, these benefits to survivors of
deceased members.''
These you will find--they are a summary of pay and
allowances I ask taken from November 2011, seventh edition of
the military background papers published by the Under Secretary
of Defense for Personnel and Readiness.
And Mr. Hale, could you provide me--and I have asked this--
a summary of which of the pay and allowances on that list will
not be paid and the rationale for not payment? If there are
other pays and allowances which are not on the attached list,
if you could identify them for your response, I would like to
know.
Secretary Hale. We will provide that. Let me tell you,
until Monday we had about 10 percent of our staff and they were
by law only allowed to work on excepted activities. So we are
working on your letter.
[The information referred to can be found in the Appendix
on page 73.]
Secretary Hale. Let me correct some facts though. We are
paying the travel for all of those people. We did it through
various means, used the government purchase card, in some cases
legal use of gifts. All of them got their travel taken care of.
Burial benefits were taken care of. And in the manner I
described or through law, one of the ways we will pay those
death gratuities.
We have that set. We will either do it through the Fisher
Foundation and reimburse them or through the law if that is
enacted--passed by the Senate and enacted. So we are going to
take care of those people. We feel just as strongly as you, Mr.
Wilson, and they will be taken care of.
Mr. Wilson. But it proves my point. There should have not
been a delay. There should have not been a denial. And we
should----
Secretary Hale. There shouldn't have been a lapse. That is
what we shouldn't have had.
Mr. Wilson. We should be showing respect to our service
members and military families. I yield the balance of my time.
Mr. Wittman. Thank you, Mr. Wilson. We will now go to Mr.
Loebsack.
Mr. Loebsack. Thank you, Mr. Chair. Thanks to all of you
for being here today. Appreciate what you are attempting to do
during this lapse. I couldn't agree more. The lapse shouldn't
have happened in the first place.
I am talking to folks in Iowa in my congressional district.
And if they hear any of this--if they hear this hearing on--or
watch it on C-SPAN over the weekend, I think they are going to
just sort of throw up their arms the way they are now and
wonder when the hell this is going to get over.
And that is up to us here on this panel to figure that out,
along with the President of the United States. And they are
telling me that they are sick and tired of all the
grandstanding going on here in Washington, DC. They just want
us to work together and get this thing done. And I think that
is the sentiment probably out there of the vast majority of the
Americans.
And certainly you folks want to see it. I appreciate, Mr.
Hale, what you are saying about the lapse. You know, it should
never happen. There is no question about that. But now here we
are. So I think a lot of legitimate questions are being asked
today, and I appreciate my colleagues asking those questions.
I just have a couple I would like to address--couple of
topics I would like to address. The first one is has guidance
been given to the adjutants general and the Governors regarding
how POMA affects the status of Federal-State cooperative
agreements and the State workforces that support them?
Because as you know, the cooperative agreements that I am
talking about here, they are very important for the National
Guard, for providing facilities management, range and training
land management, family support, and other functions that
support the National Guard in preparing for Federal missions.
So many of these functions are performed by State
employees, as many of you know--as all of you on the panel
know. And the current status of those State employees appears
to remain clear as well. So is there guidance at this point
that has been issued? And if not, when will it be issued?
Mrs. Wright. Sir, General Frank Grass has conference calls
with the adjutants general twice a day where he puts out
guidance that comes through the Department. You are right.
Every State has an MCA, or a Master Cooperative Agreement.
Every State's Master Cooperative Agreement is different based
upon their individual State.
Employees that work there are funded at times 25 percent
from the State, 75 percent from the Federal Government. The
facilities, the different armories--now we call them readiness
centers--are also funded. Some of them are funded with that 25/
75 percent balance. Some are funded 100 percent Federal.
But that Master Cooperative Agreement is so very important.
And as you know, our State budgets aren't as robust as they
used to be years ago.
And so what we are seeing now, is because these employees
can certainly work, but the Federal Government can only give
the State an IOU, because we cannot provide the funding. We can
only obligate the funds, but we can't pay them hard, cold cash,
if you will, that the States can't pick up that balance and pay
them.
So at times, there will be furloughed employees throughout
individual States that add those very important jobs and
responsibilities to the National Guard for readiness, and for
training, and for family support.
Mr. Loebsack. Thank you. Okay, I appreciate that. And we
will stay on top of that. Either of you want to mention
anything? Okay, thanks.
I got a question about the working capital fund facilities.
You know, those folks that are being funded out of the working
capital fund essentially were largely able to avoid furloughs,
to date at least.
Is there a concern at the moment that the working capital
fund accounts will run low, or that entities funded through
these accounts be required to cease operations, especially
because of diminished orders that might be caused by reduced
operations that have resulted from the shutdown? In other
words, effects that were unintended that were unforeseen?
Secretary Hale. Well, they did--most of them continued
working, because under the law, they were being paid by
appropriations in fiscal 2013, made in fiscal 2013 and before.
So they went into that cash, and they are being paid with that.
We think we are at least a couple weeks out for all of our
working capital funds, before we run out of cash. And longer,
for some of them.
If we get that far and run out of cash--and I certainly
hope we don't, but if we do--then we will have to identify
those workers in the working capital funds who were excepted,
or who qualify under POMA. And they could continue working.
I think most of them, maybe all of them, would qualify
under POMA. And therefore, they would continue working.
Mr. Loebsack. I had a number of personal concerns expressed
by folks at the Joint Manufacturing----
Secretary Hale. I don't blame them.
Mr. Loebsack [continuing]. Technology Center that are short
on money----
Secretary Hale. Let me go back to a point that has been
made several times. We might be able to keep the people, but we
are not going to have authority, unless it is an excepted
activity, to buy parts and supplies for them. And therefore, I
think their work would certainly be degraded in its
effectiveness, perhaps significantly.
And even if it is an excepted activity, again, we have said
before, we can't tell the vendors when they are going to get
paid. And I don't think any of us know exactly how long they
will stay with us.
Mr. Loebsack. Thank you. Thanks for being here. Thank you,
Mr. Chair.
Mr. Wittman. Thank you, Mr. Loebsack. We will now go to Mr.
Turner.
Mr. Turner. Thank you. Mr. Hale, I do appreciate the
difficulty of trying to thread through the weaving process that
we are currently in as a result of failure of the President to
negotiate, failure of the Senate to pass appropriation bills,
and the failure of a dialogue to go forward.
I opposed the President's sequestration. It resulted in
12,000 people being furloughed in my community. I am opposed to
the shutdown, which has resulted in 8,700 people being
furloughed from my community.
But Mr. Hale, I want to walk you through some of the timing
for this. The Pay Our Military Act, passed by the House, passed
by the Senate, signed by the President, you indicated in your
testimony was effective September 30th.
You also say that the people who were furloughed were
furloughed because of a lapse of appropriations. As you know,
the lapse of appropriations for the rest of the government
occurred on October 1st. Pay Our Military Act was effected
September 30th.
So of the people who were covered under Pay Our Military
Act, and based upon the DOD's interpretation, Mr. Hale, based
upon the DOD's interpretation, as we now know from that
interpretation, the fact that they are back to work, we know
who those people are. They are knowable as to who DOD says fall
under Pay Our Military Act.
I believe our version and view is broader. But there is
some difficulty with the language as I understand. But we know
who these people are who are back to work.
If they were covered by appropriations that occurred on
September 30th, and they were furloughed for the week, they
were not furloughed as a result of a lapse of appropriations. I
mean, the President signed this bill. But yet, the President
furloughed them anyway, and the Department of Defense
furloughed them anyway.
So I am very concerned by the language of use of, ``They
were furloughed by the lapse of appropriations.''
Mr. Hale, you did say that the Pay Our Military Act was
effective September 30th, prior to the lapse of appropriations,
did you not?
My second concern, Mr. Taylor, is the issue that you have
on the interpretation I have, Secretary's interpretation of the
Pay Our Military Act. And we are all very concerned about it.
They have inserted the word ``active'' service. Mr. Hale, I
appreciate--you had said that it would have been a lot simpler
if we had not given the Secretary authority, it certainly would
have been a lot simpler if we had said ``all.''
But nonetheless, the Secretary's determination inserts
words that are not in this. I have the bill in front of me, the
Pay Our Military Act. And it says, ``allowances to members of
Armed Forces,'' as defined in a section. It has got a
definitional section, which I understand goes to the issue of
Army, Navies, Marines, like.
Mr. Taylor, why did they insert the word ``active''?
Mr. Taylor. Sir, if you refer back to paragraph 1----
Mr. Turner. I have it in front of me.
Mr. Taylor. Okay. ``--to provide pay and allowances to
members of the Armed Forces as defined in Section 101(a)(4),
including reserve components thereof, who perform active
service during such period.''
Mr. Turner. Is that where you get the word ``active''?
Mr. Taylor. Yes.
Mr. Turner. Okay. Well, you know, Mr. Taylor, I think we
all understand that a word that says ``including'' means that a
larger subset of the prior sentence is what it is taking from.
It doesn't say, ``limited to.'' It says, ``including.''
You don't use the word ``including'' unless there is a
broader category that you are taking it from. So Mr. Hale, I
appreciate, you told us all of the difficulty of--that the
Secretary had to certify something, and so he thought he should
take a subset less. But don't you agree that he could have
taken a broader version of this, especially since Mr. Taylor
just agreed the language is inconclusive?
Secretary Hale. I will quote the Secretary, that he was
acting on advice of the Department of Justice. And he made that
statement in his remarks----
Mr. Turner [continuing]. And that is what I based part of
my question on----
Secretary Hale [continuing]. And we also accepted the
Department of Justice's opinion.
Mr. Turner. Mr. Hale, just a second. That is what I was
actually getting to. I appreciate that was your answer.
Who in the administration was in touch concerning the
interpretation of this language?
Secretary Hale. I mean, we are not going to get----
Mr. Turner. I mean, I do want you to get into it, because
this is the hearing, and we are on interpretation. I would like
to know who--not agencies--who told the Secretary that he was
to interpret this more narrowly than Mr. Taylor and I just
discussed, is obviously broader?
Secretary Hale. The Department of Justice was the person,
or the organization. And we are not going to discuss the
internal discussions----
Mr. Turner. Mr. Hale, this is Congress. We have the ability
to ask you the question of who. And you can't just say some
nameless faceless bureaucrat, you know, made the determination
of the interpretation of our law. You were in touch with
people. Who was it?
Secretary Hale. I am not going to discuss the internal
discussions with the Secretary of Defense, or of the Attorney
General.
Mr. Turner. Well, I am very concerned also, Mr. Chairman,
about the fact that the Secretary's communication also
indicates that there could be additional furloughs. And I am
concerned as to who may be at the table in determining whether
additional furloughs occur. Thank you, Mr. Chairman.
Mr. Wittman. Thank you, Mr. Turner. Secretary, if you
could, if you could finish those questions of Mr. Turner for
the record. I know that would be very, very helpful.
[The information referred to can be found in the Appendix
on page 73.]
Mr. Wittman. We will now go to Mrs. Davis.
Mrs. Davis. Thank you, Mr. Chairman. And thank you all for
being here. I have got to say that sitting here has been
infuriating, frankly, not because of what you are saying, but I
think, you know, it really brings up the notions for many of
the questions that my colleagues have had, particularly on the
other side of the aisle, that they didn't have the answers
before some of the decisions to go ahead and shut down the
government were made. And I think that is too bad.
I wanted to ask Mr. Hale, and perhaps this is to Mr.
Taylor, as well, there are a number of times that it is
appropriate for Members of Congress that are writing
legislation to consult, to ask, to collaborate a little bit
about what the intent here is. And in this case, was that done?
Secretary Hale. I am not aware of any, but I can't know
that for sure. I don't believe there was any with my office.
Mr. Taylor. I am not aware of any either. But you are
right, it is a frequent practice to have consultation and
clarification. And it is very helpful to have that interchange.
Mrs. Davis. So in this case, one could surmise, then, there
was no interest in being helpful, in terms of what you
eventually had to do. That is discouraging, because this is
something that is very important.
Is there anything also that you think we are likely to see
that is similar to the bill that we passed yesterday that would
come up that we might not be aware of? Is there anything that--
any area that----
Secretary Hale. To the one on benefits for fallen?
Mrs. Davis. Yes.
Secretary Hale. We haven't had a chance to go through that
thoroughly, frankly. So I think I would like to answer that for
the record.
[The information referred to can be found in the Appendix
on page 73.]
Mrs. Davis. Okay, thank you. I want to turn then to medical
care that our members of the military, and also civilians,
might be facing. Now, in terms of Active Duty, I am assuming
that, because they are being paid, their benefits were being
paid as well, and maybe as well for families.
Secretary Hale. Yes.
Mrs. Davis. But for those who have been furloughed, how
will those health care premiums be paid?
Mrs. Wright. Thank you, ma'am, for the question. They will
continue the health care premiums. Frankly, I will have to take
it for the record of exactly how they will be paid. But I do
know that those civilian employees that are furloughed will
continue their health care benefits during the period of time
that they are furloughed.
Mrs. Davis. And their contribution will be coming as well?
Mrs. Wright. Their contribution will--we will work that----
Mrs. Davis. Personal and the government?
Mrs. Wright. Correct. Their government contribution will
come as if we discontinued the lapse, and we start, you know,
paying the furloughed individuals. And then when the employee
gets back, they will in turn give to the government their
contribution.
So I need to--I can get back to you on the very specifics,
and take it for the record.
[The information referred to can be found in the Appendix
on page 73.]
Mrs. Davis. Okay. Obviously, that would cause some anxiety,
I think, on the part of many of the men and women.
Mrs. Wright. Yes, ma'am, but I think the key is that they
do, right now, have medical benefits.
Mrs. Davis. Now, what about the medical care contracts, the
managed care contractors as well, because many of these
contractors, I understand, are paying some of the medical bills
and they are not being reimbursed, so at some point, I suspect
they expect that they are going to be paid, but many of the
contractors are already holding perhaps, I think about $100
million in due bills. So, what is the DOD doing to make sure
that they don't stop paying the medical bills?
Mrs. Wright. So, ma'am, right now with the managed care
contractors, we have been in touch with all of them. We have
money, about $300 million I want to say, that we can continue
to pay them for about a week. That is why it is critically
important that we really do end the lapse.
After that, we have been, as I said, we have been in
contact with them because the thing that we don't want to have
happen is for that contractor to be in touch with their
provider, and an individual, a family member, or a retiree to
go to that provider and be told that they can't be seen.
So we are working diligently with a public affairs campaign
to stop that. But frankly, if they can't assume the bills that
they are incurring, you know, they are in need of the money.
And that is why to discontinue the lapse is critically
important to the health and well-being of these members.
Mrs. Davis. Thank you very much. Thank you, Mr. Chairman.
This is obviously a lot more complicated than people thought.
Mr. Wittman. Yes. Thanks, Mrs. Davis. Just to let the
committee members know, subcommittee members know, the Senate
just passed by unanimous consent the death benefits bill that
the House sent to them yesterday, so it is on its way to the
President's desk, so we are on the way, at least partially, to
getting it, a portion of what we have been talking about today
done. And now we will go to Mr. Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman, and thanks for
holding this hearing. Secretary Hale, on September 30th, the
President signed into law H.R. 3210, the Pay Our Military Act.
This act provided full funding to pay all of our military, all
of our defense civilian employees and designated contractors.
The intent of this law was crystal clear. Pay our military and
their civilian counterparts and keep them at work. And yet, the
Department of Defense kept these defense civilians from working
for a week.
I am pleased that 90 percent of DOD civilians were
eventually called back, but I think it should have been 100
percent, and it should not have taken so long. Why did this
take a week? Who made this decision? Was it the Pentagon? Was
it the Department of Justice? Was it the White House? Who made
the decision that took so long?
Secretary Hale. The law required a Secretarial
determination, and we had to go through a process of
determining compliance with the law, and that is what required
the time, so that is the reason. We did it just as quickly as
we could, but we also had to do it in a way that we could
defend legally. Bob, do you want to add to that?
Mr. Lamborn. Okay, I am not really getting an answer. What
I am wondering, among other things, is was it a political
decision?
Secretary Hale. No.
Mr. Lamborn [continuing]. As opposed to a legal decision?
Secretary Hale. It was a legal decision. I mean, the law
says the Secretary will make a determination and in order to
comply with the law, we needed a process that led to that
determination, and that is the process that went on during
those days.
Mr. Lamborn. Here is why I am questioning. A few blocks
from here on the National Mall, we have World War II veterans
who come here on honor flight, they are barricaded out of the
memorial that they had paid for. We see immigration activists
permitted to have a rally on the National Mall. I think it is
outrageous that our veterans were not allowed. Some of them--I
met one man in a wheelchair, 97 years old, and he fought at
Guadalcanal. He wasn't allowed, had we not moved the
barricades, he was not allowed into the World War II Memorial.
It is blatant gamesmanship, and that is why I have to ask
the question. Was this decision political as opposed to legal?
Secretary Hale. And I am giving the answer. It was not
political. We were required to do a determination, and we felt
we had to go through a process to support that determination,
and it wasn't very easy because of the difficulty of
determining who should stay off furlough. And incidentally, it
was more like--it is more than 95 percent back. I mean, we got
most of them back, so----
Mr. Lamborn. You are right----
Secretary Hale. That is the reason. No, it was not
political.
Mr. Lamborn. You are right. Ninety-five percent of the
total population, 90 percent of the----
Secretary Hale. More, actually.
Mr. Lamborn [continuing]. Of the civilian side, yes, okay.
Secretary Hale. We have about 7,000 DOD paid civilians
remaining on furlough as of today, out of around 750,000, so,
now that number is going to change some as----
Mr. Lamborn. Okay, so that was my next question. Changing
the subject to those seven or so thousand. Will some of them be
brought back, and if so, how soon?
Secretary Hale. At the moment, we don't have any plans to
bring them back, but we are evaluating constantly. What I
really hope is that we bring them all back, because this lapse
of appropriation ends. That is the way to fix this, but at the
moment, unless some circumstances change, we don't have plans
to bring them back until the lapse ends.
Mr. Lamborn. Okay. Thank you, very much. Mr. Chairman, I
yield back.
Mr. Wittman. Thank you, Mr. Lamborn, I go to Mr. Enyart.
Mr. Enyart. Thank you, Mr. Chairman. Mr. Hale, you know,
Secretary Wright and I served together as two-stars, and I know
that she and I had to make some tough decisions in those
positions. Probably, a whole lot like some of the tough
decisions that you have had to make. I appreciate that. Having
had to make tough decisions, I know what it is like.
Now you know, some of the questioning that I have heard
sounds to me a whole lot like that old law school joke, the
question you ask on cross-examination: ``Well, Mr. Hale, when
did you stop beating your wife?''
Well, you know, Mr. Hale, it is obvious to me that there is
a conspiracy between the Secretary of the Defense and the
Attorney General to make it as painful as possible on the
civilian employees of the Department of Defense, and isn't it
true, Mr. Hale, that you were involved in that conspiracy?
Secretary Hale. Is this the ``stop beating your wife''
question?
Mr. Enyart. Yes, it is, Mr. Hale.
Secretary Hale. I think I will pass.
Mr. Enyart. Thank you. Well, Mr. Hale, is there a
conspiracy to make it as painful as possible on the American
public?
Secretary Hale. No. I think if you read Secretary Hagel's
statement, you will see we value all of our civilians. This is
one of the more painful acts, maybe worse than sequestration
when we had to furlough people then that I have gone through.
But we read the law to say there had to be a Secretarial
determination and we went through a process and we would have
preferred not to, but we felt that was what the law required,
and we did it.
Mr. Enyart. Mr. Hale, would you tell me please, what the
Department of Defense has to do when the appropriations
authority for that Department lapses?
Secretary Hale. We, at that point, only have authority
under exceptions in the law, essentially for safety of life and
property, which are interpreted to mean the excepted activities
I have discussed before, military operations, police, fire,
that kind of thing.
Now POMA did change that. It is an appropriation, so for
pay and allowances of military and pay and allowances of
civilians as determined by the Secretary, and contractors as
determined by the Secretary, we do have some additional
authority beyond what I just said. But had we not had POMA, we
would have only been able to do excepted activities, and we
wouldn't have been able to pay in time and on full.
Mr. Enyart. Now Mr. Hale, can you tell me please, if
Congress--Congress--Republicans and Democrats, if Congress does
not lift the debt ceiling, will our uniform military personnel
receive their paychecks on November 1st?
Secretary Hale. Yes, they will, because of the Pay Our
Military Act.
Mr. Enyart. November 15th?
Secretary Hale. October 15th, they will, on time and in
full.
Mr. Enyart. No, no, November 15th.
Mr. Taylor. This is after the debt ceiling.
Secretary Hale. Oh, I am sorry. After the debt ceiling.
Mr. Enyart. After the debt ceiling.
Secretary Hale. Well the debt ceiling, which I think is
October 17th, so as Secretary Lew has said, is a very different
kind of situation. Let's leave aside, if we have a continuing
resolution or appropriation, we will all be back to work, the
debt ceiling for the Department of Defense would mean some late
payments, progressively later, potentially, depending on what
decisions are made about who to pay and when. So it is possible
that there could be a delay in that pay date, and the ones that
occurred after a debt ceiling.
I might add that the consequences for the Nation as a whole
are potentially much more far-reaching in terms of default, but
I think that is beyond what I should be talking about.
Mr. Enyart. So what you are telling me then, sir, is that
once the full faith and credit of the United States of America
is breached, there may well be payments not made to soldiers,
soldiers in combat zones. There may not be defense contractors
paid. We are not going to be able to buy the gas to fly the
planes, is that what you are telling me, potentially?
Secretary Hale. They wouldn't be--potentially, they
wouldn't be on time. They could be delayed. Yes, all of that is
possible.
Mr. Enyart. Thank you. I yield back.
Mr. Wittman. Thank you, Mr. Enyart. We will now go to Mr.
Nugent.
Mr. Nugent. Just one clarification in regards to the last
question. Who makes, and maybe this is outside your purview,
but who makes the determination of the dollars that are coming
into the treasury, if that were to occur, worst case scenario,
on October 17th? Who makes the determination as to who gets
paid?
Secretary Hale. I think that is out of my purview.
Mr. Nugent. I would suggest to you, though, that it is the
President. So if, and I have three sons that currently serve,
so if there was a decision to be made, I would suggest to you
that it would be the President.
I would also suggest that, you know, this body passed an
appropriations act quite awhile ago, and had the Senate,
correct me if I am wrong, had the Senate passed an
appropriations act, gone to conference if we couldn't agree
with the language, the President could have signed it, this
would be a moot point, we wouldn't even be talking about it. Am
I correct?
Secretary Hale. Yes. I mean, assuming that whatever was
signed provided----
Mr. Nugent. Well, I mean, that is an appropriations act, so
I would suggest to you that it would fund something within DOD.
And, not lastly, but the Federal Cooperative Agreement for
Employees, and I know each State is different, but in the State
of Florida, you know, 78 firefighters that, up in the
Jacksonville area, that would protect those crews when they
refuel an airplane, because they have fuel, they are not
included.
And so my question is, why not?
Mrs. Wright. Sir, they are not included in the Master
Cooperative Agreement, is that your question?
Mr. Nugent. Right. Well, they are included in that
agreement, but they are not getting paid. And they support a
direct function of the Department of Defense in regards to
things that are classified that I can't talk about, but they
directly affect that.
Mrs. Wright. But they are classified as State employees of
the State of Florida, I believe.
Mr. Nugent. Okay.
Mrs. Wright. And so based upon that, they don't fall in the
categories that were delineated in our Pay Our Military Act.
And I would have to read the Master Cooperative Agreement
for Florida. But I would assume, like every other State, there
was a formula that they are paid somewhat by the State, and
somewhat by the Federal Government.
Mr. Nugent. Okay. If you would get back to me on that.
[The information referred to was not available at the time
of printing.]
Mr. Nugent. You had made a statement earlier, though, as
related to the dual certified technicians. And I want to make
sure that I was clear on that.
You indicated that those dual certified technicians were
not furloughed initially, during the time that the storm was
out in the Gulf of Mexico, even after the September 30th
reauthorization, at least from the standpoint of the Pay Our
Troops. Was I correct in your interpretation that you said that
those technicians were not furloughed?
Mrs. Wright. No. Sir, I think what I said for the dual
status technicians is that they were considered, they are
civilian employees. They were furloughed.
If they were in the categories of safety of life, or
health, they were in the excepted category, and not furloughed.
Mr. Nugent. Would you--I understand, I hear there is safety
and health. So dual certified technicians that certify and keep
our helicopters flying in a State like Florida, which is
obviously very important, particularly when you have a weather
system out in the Gulf of Mexico. They were furloughed.
Mrs. Wright. Yes, sir. And the decision--I am sorry, go
ahead.
Mr. Nugent. I am sorry. They were furloughed, am I not
correct?
Mrs. Wright. I would have to go back and look to see if the
adjutant general made the determination to furlough them. But
at the beginning, we followed the rules of safety of life, and
health.
And so if the adjutant general felt that they were in those
categories as a DOD civilian employee, as a dual status
technician, then they would be in the excepted category.
Mr. Nugent. Are you saying the adjutant general of Florida?
Or whom are you referring to?
Mrs. Wright. Yes, sir. If we are discussing the State of
Florida----
Mr. Nugent. So the adjutant general of Florida would make
the determination that the continued safety of flight crews on
helicopters and that, they would have made a determination of
furlough?
Mrs. Wright. Sir, I don't know what Buddy Titshaw did. I
would have to go back and talk to General Titshaw to find out
whether or not, during the beginning of this----
Mr. Nugent. Well, who would he have gotten direction from
in regards to doing that?
Mrs. Wright. He would have gotten direction from the
Department of Defense through the chief of the National Guard
Bureau, who holds conference calls with the adjutants general
twice a day.
Mr. Nugent. So that would have come from DC [District of
Columbia], though, correct?
Mrs. Wright. It would have come from the Department of
Defense, sir. But we would not have told him exactly who to
pick. We would have told him the rules, and allowed at his
discretion.
Now, I will tell you that when POMA was passed, the rules
broadened, and the majority of the dual status technicians are
back to work, should they fall into----
Mr. Nugent. Well, I know they are now. But they were not on
the 30th or October 1st, or October 3rd. They didn't come back
until October 7th. And with that, I yield.
Mr. Wittman. Thank you, Mr. Nugent. We will now go to Ms.
Bordallo.
Ms. Bordallo. Thank you very much, Mr. Chairman. I just
have a couple of questions, first with Secretary Wright. What
impact have you seen on military and civilian personnel,
recruiting and retention, as a result of this shutdown?
Mrs. Wright. Ma'am, frankly, it is a little too early to
tell exactly what the impact is. But I will tell you that is a
very important part of my portfolio as the acting personnel and
readiness. And we are monitoring that with the services on a
daily basis.
Ms. Bordallo. Thank you. You know, before I go to my last
question, I just want to mention, I was reading her biography,
and Mrs. Wright--or Secretary Wright--is a retired major
general in the National Guard. You have an exemplary career--
commanding general at the Pennsylvania National Guard, and the
first woman, female helicopter pilot in the entire Guard. So
what a wonderful background you have, Secretary.
Mrs. Wright. Thank you.
Ms. Bordallo. My last question is for Secretary Hale. How
will the Department implement back pay once it is provided by
law? Will it be in a lump sum, or will it be spread out to
avoid tax consequences to the individual employer?
Secretary Hale. You know, I think I will have to give you
the details for the record. It says retroactive, the law, as it
was passed by the House states, ``retroactive pay as soon as
possible,'' and therefore, I think we would do it in a lump
sum.
But it will be certainly during this taxable year. So I
don't know the exact time of payment will affect taxes. But let
me take the detail. We haven't gotten to that one yet.
I mean, we are in triage mode, frankly. We are trying to
get day to day, and survive this madness. So we haven't focused
yet on that act. For one thing, it is not passed yet. So
potentially, I suppose, could be changed.
Ms. Bordallo. Yes. Well, thank you, Mr. Secretary. And once
you have a little information, I would appreciate receiving it.
And I want to thank all three witnesses for their testimonies
today. It has been difficult. But you have done a good job.
Mr. Wittman. Thank you, Ms. Bordallo. I would urge
Secretary Hale, if there is a question about that, to certainly
consult with Congress. I think you will probably get some
direct feedback on that.
Secretary Hale. Well, again, the words in the law the House
passed seem pretty clear, ``retroactive as soon as possible.''
So I think we would pay it as soon as possible. But it may take
us a while. We have twisted our civilian personnel system like
a pretzel, and then tried to straighten it out again.
And I think this payday is going to be with only a small
number of errors, and that is a great testimony to a lot of
work, hard work by people.
Mr. Wittman. Absolutely.
Secretary Hale. We will have to figure out how to do the
retroactive pay, assuming it passes.
Mr. Wittman. Thank you, Mr. Secretary. Going down the list,
Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman. Mr. Hale, I think as
Under Secretary for the Department of Defense, you have really
compromised your responsibilities.
And I think you have a tremendous conflict of interest. And
the conflict of interest is this, that you really, I think,
subordinated your responsibilities, I think, to achieve a
political objective.
And the political objective was to inflict as much harm as
you possibly could in your own Department. And when you said
earlier, I mean, I saw the message you sent to your employees.
At 11:55 they received it, an e-mail from you on the 30th
of September, hours after the President had signed the bill,
saying that you were going into a shutdown for all civilians,
and that you were basically going on prior law, and ignoring
the current law that just overrode that whole process.
And here you said, in testimony earlier, that it is very
difficult to determine what level of support, because it says
in the bill, it says in the bill, ``whom the Secretary''--``the
Secretary concerned determines, or providing support to members
of the Armed Forces described in paragraph, subparagraph one.''
It doesn't say you have to categorize them as greater
support or lesser support. That is not in the law.
And let me tell you historically how things work between
the Congress of the United States and the executive branch, and
that is when the intent is clear, and the intent was clear. In
fact, I talked to your deputy on the phone the following day
after I got that e-mail, where you weren't following the law,
and had a conversation with him.
And he said, ``Well, we are really not sure. We have got to
talk with attorneys,'' and things like that. And he said,
``Yes,'' you know, ``you were clear on the House floor.''
And in fact, there were three speakers that spoke on the
House floor, and passed by unanimous consent in the Senate as
to what the intent was. ``But we still want to go through these
attorneys.''
Historically, when the executive branch follows the intent
of Congress, there is no conflict. Who was going to complain
that you were laying off civilian employees? Nobody was in the
Congress because that was not our intent.
And you went out of your way at every possible turn to make
this as ugly as possible, to inflict as much pain as possible
on this Department. And I just think it is absolutely
extraordinary.
And even we have a legal opinion from Congressional
Research Service. And it clearly states that, yes, you could
have paid the death benefit based on existing--based on even
law prior to POMA.
And yet, you chose to do an interpretation to just maximize
pain--just maximize pain. And I think not only do you have a
conflict of interest, by subordinating your professionalism to
that of a political agenda, but I think you have also
compromised the national security of this country by creating
such a disruption by trying to achieve that objective.
And I just think it is absolutely extraordinary what you
tried to do. And I think it is just such an embarrassment to
this country. And, yes, there is gridlock. I am embarrassed
about that, too.
But you have compounded the problem by your conduct in how
you have misinterpreted, intentionally, this law. And Mr.
Chairman, I yield back.
Secretary Hale. I would like the chance to respond. I
resent your remarks, and let the record show that. I acted on
the advice of attorneys, and our best reading of a loosely-
worded law. Did our best.
Mr. Coffman. Mr. Chairman, if I could----
Secretary Hale. And it was not--let me finish, please. It
was not a political judgment. We were trying to do what we
thought the law said, that is, a determination was required.
And as I said, I resent your remarks.
Mr. Wittman. Mr. Coffman, your time is expired. If you have
a question, we can take it for the record. Mr. Cook.
Mr. Cook. Thank you, Mr. Chair. I know it has been a long
hearing. I have got a couple of comments, and then questions.
And when this all happened, you know, this thing that, you
know, it is never going to happen, or what have you, I am
sorry, it is like this deja vu all over again, because it
happened to me many years ago.
And the impact on the military is just horrendous. So the
one clarifying bill I thought was a great step in the first
direction. I tried to craft a second bill, which addressed some
of the concerns about the Reserves, the inactive duty, those
gaps.
And of course, it is not appropriation bill, so the chances
for that are dubious at best. I would hope that we kind of
learn from this a little bit, and that we have clear parameters
of exactly what happens.
And, God, I hope I am wrong, if we ever go through this
again, as to what is covered, what is not covered, so we don't
have to have the legalese. I am not a lawyer, I never want to
be. I am just a dumb Marine who was an infantryman that is
worried about the troops.
And my bill--everybody has got a bill, I guess--3210, it is
not an appropriations bill. It is a readiness bill to correct
some of those problems, because I think you are absolutely
right about some of the comments where, you know, when you
start saying some civilians are not needed or what, we are
getting away from that.
What we tried to do with the total force picture, and when
we start saying non-essential personnel, I agree with you 100
percent on that.
When I was sworn, when I retired, we always used to have
Civilian Recognition Day, because they were so much a part of
everything that is going into this complex, large DOD force.
And it includes Afghanistan.
And the reason I ran my bill was not to make a political
statement or anything like that, or embarrass DOD or anything
else. It is to address readiness.
When the Secretaries come in here and they say, ``We have a
problem,'' I am hearing, ``C-4, not combat-ready.''
And now it is going to be compounded after being compounded
by the sequester. You know, I am not going to moan and groan,
and attack you guys and gals. You know, I am just going to say
I am always looking for solutions so we don't go through this
drill again.
I am running out of time. But I did want to see whether
the--part of the fix that I had talked to the Guard and
Reserve, they said the original fix didn't go far enough. And
some of the adjutants generals were concerned about that, you
know, that gray area during--from drill, to drill, to drill in
my bill.
Mrs. Wright, do you have any comment on that? Whether you
think--I don't know if you had a chance to see this bill that I
have.
Mrs. Wright. Sir, unfortunately, I have not had a chance to
see your----
Mr. Cook. Oh, it is great reading. It is a fantastic bill.
You have heard that before, right?
Mrs. Wright. But I will tell you that the Guard and Reserve
was not in the POMA, and particularly--and only for the
inactive duty for training, when they weren't training for a
current or soon-to-be-deployed. And that will affect their
readiness. It will affect their morale.
Mr. Cook. I don't mean to cut you off. But that is the
point I am trying to make. You know, the Reserves has been
probably used more than--50 years ago, they weren't used like
this.
I mean, some of the Active Duty troops are doing rotations.
But some of these Reserve units, it is unbelievable.
And by saying--I don't think a lot of people understand the
total force concept, in terms of it is not just the military,
it is not just the civilian component, it is the contractors--a
lot of these civilian billets used to be done by the military.
They have been--the militaries, they have been
civilianized. But they are still essential. They are still
important.
So I think we have got to be very, very careful next time
we do that. That is one of the attempts to get it forward. You
know, I know it has been a long day. And everybody's tempers
are short, and everything else.
I am coming at it from a standpoint that at least on my
watch, I cannot accept a DOD or a military that is not combat-
ready. And I will do everything in my power to make sure we are
ready to go to war if we have to.
And right now, unfortunately, we are still at war with
60,000 troops. And we have got to take care of our troops that
are there. Thank you.
Mr. Wittman. Thank you, Mr. Cook. Secretary Hale, I wanted
to get just one clarification. We had talked about the death
gratuities.
Can you tell me that for the families of the wounded that
go to visit their loved ones in the hospital, will they
continue to receive--it is not a reimbursement, I understand.
It is a debit card. Will they continue to receive that in order
to visit their loved ones at the hospital?
Secretary Hale. May I ask Mrs. Wright to answer?
Mr. Wittman. Yes.
Mrs. Wright. Sir, we met with the services last night. And
everything is continuing as if this lapse was not in place.
They are receiving, there are specific rules to who can travel
when.
Whatever was happening before is happening exactly the same
now. They are going to see their wounded, should they fall in
that particular category. And they are getting everything that
they are required to get to see their wounded.
We consider that critically important, to take care of not
only the wounded, but to take care of the family member. And it
is proven that wounded heal faster when their family members
are there.
Mr. Wittman. Absolutely. Well, that is great to hear that
there is no change prior to the place we are now.
Before we adjourn, I wanted to take a moment to say thank
you to two of our professional staff members who are leaving
the committee this week.
They are fantastic folks: Roger Zakheim, who served as
general counsel and deputy staff director. Roger has done a
fantastic job. We will miss him, and we wish him well. Paul
Lewis, who served as minority counsel most recently, but also
as general counsel during previous terms. Paul has done a
wonderful job here. And we are going to miss Paul.
And I have had opportunity to travel and work with both of
these gentlemen. You won't find anybody finer up on Capitol
Hill. As you know, they are both widely respected across the
defense industry, in both branches of government, for their in-
depth knowledge of the budget, and public policy, and legal
issues facing the defense industry, and also, the issues that
we face here as part of the House Armed Services Committee.
While they couldn't be here today, we want to applaud their
service to our men and women in uniform, and wish them Godspeed
as they start off in their new careers.
Secretary Hale. May I add to that?
Mr. Wittman. Please do.
Secretary Hale. I served a long time with Roger's father,
Dov Zakheim, and got to know Roger well here. I knew Paul as
well, I am sure. But I want to thank Roger, too. It was a
pleasure working with him.
Mr. Wittman. Thank you.
Mr. Taylor. And sir, as a lawyer, I have worked with both
Paul and Roger, and they are outstanding individuals. And we
are delighted in the Department of Defense to have Paul coming
back to us.
Mr. Wittman. Both of them are extraordinary individuals.
And I know that they will continue to serve with distinction in
their next step in their career. So we wish them all well.
And there is nothing else to come before the Subcommittee
on Readiness of the House Armed Services Committee. We are
hereby adjourned.
[Whereupon, at 1:20 p.m., the subcommittee was adjourned.]
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A P P E N D I X
October 10, 2013
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
October 10, 2013
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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DOCUMENTS SUBMITTED FOR THE RECORD
October 10, 2013
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
October 10, 2013
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RESPONSE TO QUESTION SUBMITTED BY MR. WILSON
Secretary Hale. [The information can be found in the Appendix
beginning on page 59.] [See page 21.]
______
RESPONSE TO QUESTIONS SUBMITTED BY MR. TURNER
Secretary Hale. The interpretation of the Pay Our Military Act
language was made collaboratively within the Department of Justice.
That opinion was communicated to the Secretary of Defense and the
Department acted upon it accordingly. [See page 25.]
______
RESPONSES TO QUESTIONS SUBMITTED BY MRS. DAVIS
Secretary Hale. The Department has reviewed the DOD Survivor
Benefits Continuing Appropriations Resolution, 2014 (P.L. 113-44) and
believes it provides the necessary appropriations to pay the death
gratuities and related benefits for survivors of deceased military
service members during this lapse in normal or continuing
appropriations. [See page 25.]
Ms. Wright. Both government and employee contributions for health
care stop during furlough.
The Defense Finance and Accounting Service (DFAS) tracks the
government contributions owed, and when funds become available, those
contributions are paid to the health carrier.
The employee's contributions are also tracked by DFAS. When the
employee returns to a pay status, collection of the owed premiums are
made through salary offsets, which may not exceed more than 15 percent
of an employee's disposable pay. In situations where the debt owed is
for 4 pay periods or less, or $50.00 or less, the payroll office may
notify the employee by placing a remark on the Leave and Earnings
Statement (LES). When the debt extends beyond 4 pay periods, the
employee must be provided a written notice of indebtedness and an
opportunity to review and arrange to repay the debt. The DFAS debt
repayment process is found in the DOD Financial Management Regulation
(FMR), Volume 8, Chapter 8. [See page 26.]
?
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QUESTIONS SUBMITTED BY MEMBERS POST HEARING
October 10, 2013
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QUESTIONS SUBMITTED BY MS. BORDALLO
Ms. Bordallo. As you mentioned, in implementing POMA it is
particularly challenging to separate out pay and allowances for
contractors from their profit, overhead, material and supplies. Nearly
three years ago the Congress directed the Department to use the Army's
Contract Manpower Reporting Application to collect direct labor hours
and associated costs from all contractors providing services to the
Department. This is statutorily required on an annual basis. It is
clear that the challenge you face in implementing this provision of
POMA would not exist if the Department were compliant with these
requirements. What has been the delay and what is the current status of
compliance? When does the Department anticipate having this system in
place?
Secretary Hale. The Department has made significant progress over
the past two years implementing the Army's Contract Manpower Reporting
Application to collect direct labor hours and associated costs from
contactors. Each of the Military Services and the Defense-wide
community has implemented the Enterprise-wide Contractor Manpower
Reporting Application (ECMRA). Beginning in November 2012, all new
contracts, and modifications to existing contracts for services have
language requiring reporting of all contractor labor hours to the
ECMRA. The first reporting period based on the November 2012 guidance
was originally scheduled to end October 31, 2013, but was extended to
December 31, 2013, to accommodate delays associated with the Government
shutdown.
As we move forward, we are taking action to consolidate each
individual Component version of ECMRA into a single Department-wide
ECMRA with a single program manager. The benefits of a single system
include the ability to more efficiently consolidate data for the
Department, provide consistent reporting support from a single program
office and help desk, and reduce the data entry for the contractor
community. In addition, performance measures have been developed to
ensure that by FY 2018 95% of the Department's purchases for services
are reporting direct labor hours and associated costs in ECMRA. This
data will be used to prepare the Inventory of Contracts for Services
and inform the programming and budget process.
Ms. Bordallo. You mentioned in your opening remarks that in recent
years there have been regular actions taken that undermine civilian
morale. With the exception of the pay freeze, these are all choices the
Department is guilty of making. The Department unilaterally implemented
and has maintained a cap on its civilian workforce since 2010, despite
repeated concerns from the Congress that this cap violates multiple
statutory provisions. The Department took the unilateral action to
release term and temp civilians and implement an across the board
hiring freeze this past February in response to the sequester. The
Department made the choice to furlough its civilian workforce this
summer. And the Department's FY14 budget had projected reductions in
the civilian workforce of nearly 5%. That said, what specific actions
have you taken, consistent with 10 USC 2330a, to review and reduce
contract support services, in many areas continue to grow despite
budgetary pressures?
Secretary Hale. Many of the actions the Department was forced to
take in FY 2013 were directly as a result of sequestration. We were
forced to reduce $20 billion in the Operation and Maintenance (O&M)
accounts that pay our civilian workers. In addition, because our
wartime budget was also subject to sequestration, we were forced to
realign funding from our base operations to provide our troops at war
with every resource they needed. Taken together, these factors led to a
shortfall in our O&M accounts of more than $30 billion.
The Department had to take action to reduce O&M costs. These
actions were not limited to the actions we took to reduce civilian
labor costs, we also took action to reduce travel costs by curtailing
participation in international events, conferences and support to non-
DOD special events. Many of the DOD Components also took action to
reduce the scope of support for those contract support services that
were scheduled to be renewed after the sequester took effect. All of
these actions were taken to prevent further degradation to readiness.
The Department remains committed to managing the total force.
Section 955 of the FY 2013 NDAA requires the Department to manage
reductions to the civilian workforce and contractor workforce in
accordance with the reductions to the military workforce. As we build
our FY 2015 budget, we will ensure all elements of the total force are
considered for reduction in accordance with the force structure
reductions and Defense priorities.
______
QUESTIONS SUBMITTED BY MS. SHEA-PORTER
Ms. Shea-Porter. Comptroller Hale, at a House Armed Services
Committee hearing last month, General Odierno echoed the
acknowledgement you made before the Senate Defense Appropriations
Subcommittee in June that contractors cost significantly more than
civilian employees. According to the transcript, you told Senate
Defense Appropriators that this was particularly true for functions
performed over a long term. With defense dollars so precious, what
steps is the Department taking to substitute cheaper civilian employees
for contractors for functions performed over a long term? Based on what
you said--that contractors are significantly more expensive in such
instances--there would obviously be great savings. If steps aren't
being taken, why? Is it necessary for the Congress to pass new law?
Secretary Hale. There are already many laws, that direct the
Department in how it manages the total force of military, civilians and
contracts for services. Specifically, section 808 of the FY 2012 NDAA
and section 955 of the FY 2014 NDAA limit what the Department can spend
on contracts for services. Compliance with the requirements of section
808 and section 955 are part of the OSD budget review process.
In addition to the actions we take during the programming and
budgeting process to limit the amount of funding allocated to
contractor services, the Department continues to review each year what
the Department actually spent on contractor services as part of the
process that develops the annual Inventory of Contracts for Services.
We have made significant strides over the past two years to improve our
visibility of the labor hours associated our contracts for services.
Each of the Military Services and the Defense-wide community has
implemented the Enterprise-wide Contractor Manpower Reporting
Application (ECMRA). Beginning in November 2012, all new contracts for
services have language requiring reporting of all contractor labor
hours and associated costs to the ECMRA. The first reporting period
based on the November 2012 guidance was originally scheduled to end
October 31, 2013, but was extended to December 31, 2013 to accommodate
delays associated with the Government shutdown.
______
QUESTIONS SUBMITTED BY MS. DUCKWORTH
Ms. Duckworth. I have heard recent concerns that the non-medical
attendant pay (NMA) that is given to the caregivers of the newly
injured at Walter Reed may be suspended. I am disturbed by the thought
that our caregivers--mothers, fathers, spouses, daughters, sons staying
up with and helping our Wounded Warriors recover--will NOT have this
critical funding to be able to pay their bills back home. In addition,
I've heard that Special Compensation for Assistance with Activities of
Daily Living (SCAADL) for Wounded Warriors that are discharged may also
be suspended.
This is yet another example of why we need to open our government
back up and why a piecemeal approach to fund our government is not
working. However, I do not want our service members, much less those
that are recovering for the wounds they so honorably incurred serving
and protecting us, to suffer because we cannot pass a clean Continuing
Resolution.
In Secretary Hagel's memo dated 5 October 2013, he stated that
civilian personnel, who provide support to service members in health
care activities and providers, as well as family support programs and
activities, would be included in H.R. 3210 and thus, be paid. Yet
rumors are circulating in the wards of Walter Reed. Secretary Hale,
could you please clarify whether or not H.R. 3210 will cover payout of
the NMA and SCAADL benefits our Wounded Warriors need?
Secretary Hale. Based on a review of the Pay Our Military Act (P.L.
113-39), the Department of Defense determined that both the travel and
transportation allowances for non-medical attendants authorized by 37
U.S.C. 481k and the Special Compensation for Assistance with Activities
of Daily Living authorized by 37 U.S.C. 439 were payable under the Act
to members who performed active service during the lapse period.
Unfortunately, the Act did not provide appropriations for payment of
SCAADL to individuals who had been discharged and were, therefore, no
longer on active service.