Army extends spending restrictions into 2007

The Army is extending through 2007 severe spending restrictions imposed in May because of current and future account shortfalls. The service said the measures were needed because of fear of shrinking budgets amid the high costs of war.

In May, the Army placed broad restrictions on the use of all Operations and Maintenance, Army (OMA) accounts in anticipation of the stalled emergency supplemental bill.

The Army announced July 19 that despite the passage of the supplemental funding bill, the service will keep the restrictions in place until the end of the fiscal year and beyond.

The Army said it was retaining the cuts to ensure that fiscal 2006 ends without an Anti-Deficiency Act violation and to prepare for anticipated cuts to the fiscal 2007 base budget, according to a press release.

The restrictions include limiting supply purchases to critical wartime needs, canceling nonmission-essential travel, stopping nonwar-related shipments of goods, freezing hiring of civilians, releasing temporary employees, freezing all new contract awards and task orders, and restricting the use of government purchase cards.

“We need to take action now to control spending in the OMA appropriation and stay within the law…pending the receipt of the supplemental,” Army Vice Chief of Staff Gen. Richard Cody said in a May 26 memo.

President Bush signed the emergency supplemental bill June 15. The bill appropriated a total of $94.5 billion, with $65.8 billion going toward operations in Iraq and Afghanistan. Now, the Army is realizing that the restrictions serve its longer-term savings needs.

According to the Army, belt tightening has produced a downward trend in spending. Monthly obligations for travel and transportation are down 10 percent, contract obligations have decreased by 11 percent, supply obligations by 10 percent, and government credit card use by 5 percent, according to the press release.

The Senate Appropriations Committee approved a markup of the fiscal 2007 Defense budget bill July 20. The committee’s report gives $24 billion to OMA, more than $900 million less than the president’s request. The total Senate bill would give $453.5 billion to defense, which is $9 billion less than the Bush administration’s estimate.

The bill could be brought to the Senate floor as early as next week, a committee spokesperson said.

The House passed its version of the defense budget June 20. It gives $24.1 billion to OMA. The total House appropriation is $4 billion less than the administration wanted. The White House has threatened to veto the bill.