    [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

                                  ----------

                         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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                       DOCUMENTS SUBMITTED FOR THE RECORD

                                October 10, 2013

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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

    =======================================================================

                      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.