[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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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                            October 10, 2013

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              RESPONSE TO QUESTION SUBMITTED BY MR. WILSON

    Secretary Hale. [The information can be found in the Appendix 
beginning on page 59.]   [See page 21.]
                                 ______
                                 
             RESPONSE TO QUESTIONS SUBMITTED BY MR. TURNER
    Secretary Hale. The interpretation of the Pay Our Military Act 
language was made collaboratively within the Department of Justice. 
That opinion was communicated to the Secretary of Defense and the 
Department acted upon it accordingly.   [See page 25.]
                                 ______
                                 
             RESPONSES TO QUESTIONS SUBMITTED BY MRS. DAVIS
    Secretary Hale. The Department has reviewed the DOD Survivor 
Benefits Continuing Appropriations Resolution, 2014 (P.L. 113-44) and 
believes it provides the necessary appropriations to pay the death 
gratuities and related benefits for survivors of deceased military 
service members during this lapse in normal or continuing 
appropriations.   [See page 25.]
    Ms. Wright. Both government and employee contributions for health 
care stop during furlough.
    The Defense Finance and Accounting Service (DFAS) tracks the 
government contributions owed, and when funds become available, those 
contributions are paid to the health carrier.
    The employee's contributions are also tracked by DFAS. When the 
employee returns to a pay status, collection of the owed premiums are 
made through salary offsets, which may not exceed more than 15 percent 
of an employee's disposable pay. In situations where the debt owed is 
for 4 pay periods or less, or $50.00 or less, the payroll office may 
notify the employee by placing a remark on the Leave and Earnings 
Statement (LES). When the debt extends beyond 4 pay periods, the 
employee must be provided a written notice of indebtedness and an 
opportunity to review and arrange to repay the debt. The DFAS debt 
repayment process is found in the DOD Financial Management Regulation 
(FMR), Volume 8, Chapter 8.   [See page 26.]
?

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


              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.

                                  
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