[Congressional Record Volume 141, Number 184 (Saturday, November 18, 1995)]
[Senate]
[Pages S17460-S17463]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE FUNDING GAP

  Mr. STEVENS. Mr. President, I have been researching today also what 
is happening here with regard to this funding gap, as it is called in 
Government circles. I find there have been 15 such funding gaps in a 
19-year period since 1977. One went 17 days. And I am becoming 
disturbed because of the two functions I perform here in the Senate. 
One is chairman of the Governmental Affairs Committee with regard to 
the general civil service and Government employees, per se; and the 
other is pertaining to the Department of Defense.
  At this time I want to speak primarily on the Department of Defense. 
If we are in session later today I do intend to speak about Government 
employees per se, because I think there is a strong feeling building 
here, for some reason, that those people who have been declared 
nonessential and are not reporting for work are somehow at fault in 
this, and they are not going to be paid when we finally reach a 
conclusion, which we must reach at some point.
  But, Mr. President, I want to talk now about the Department of 
Defense bill because I had urged that bill be held up and not sent to 
the President because I did not want it caught in this current, very 
deep controversy. But it has now been sent to the President for his 
signature.

  There is every indication the President will veto that bill, for 
several reasons. He, of course, has the prerogative to reach the 
conclusion that he has reached with regard to the funding levels in our 
defense bill. I am here right now to urge the Department of Defense to 
confer with the President and do their utmost to get this bill signed. 
As I noted during the debate here on the floor of the Senate on that 
bill, this is a bill that I think is of immediate concern to the 
Department of Defense and one that I believe the President must sign.
  If he does not sign it, under the current hiatus in terms of this 
funding, we are going to be in real difficulty. Today 300,000 civilian 
employees in the Department of Defense have been furloughed. The 
Department of Defense depots, supply centers, training ranges, and 
people who are currently on route in personal moves have been stopped. 
They can no longer spend money.
  Now, we have U.S. troops deployed abroad. I spoke at length on the 
floor the other night about that also. And 240,000 or more American 
citizens are deployed abroad as members of our armed services. They are 
in Macedonia, Haiti, Cuba, Southwest Asia, all over the world, and 
there are many afloat. We cannot afford any further interruption in 
defense fundings and programs if we are to maintain our 
responsibilities throughout the world as the world's last superpower.
  I think this would be a sad time for Saddam Hussein or the North 
Koreans to misunderstand the will of the United States to provide the 
people and the material and money to fund the commitments we have made 
throughout the world. 

[[Page S 17461]]

  As I said, I believe the President must sign this bill in the 
interests of our national security. We have a very strange situation 
facing the Department of Defense right now. Remember, there is no 
defense bill until he signs it. If he vetoes it, there is still no 
defense bill. There should have been a new defense bill on October 1. 
We were prepared to go to a defense bill, but we have been held up by 
an extraneous issue for a long period of time this year.
  But today the Department of Defense responded as follows: With regard 
to civilian payroll, there are 780,000 workers that must be paid by 
November 24. There are no funds to make that payroll. On the military 
payroll, there are 1,600,000 people who must be paid by November 28. 
There are no funds to make that payroll.
  Many people believe that the food and forage concept will allow the 
Department of Defense to meet those obligations. That is not true. The 
food and forage statute, which is an ancient statute, gives the 
Department the authority to write IOU's for food for people in the 
field. It does not impact payroll. There will be no money to meet the 
payroll under food and forage.

  As I stated, with regard to the transportation of troops, there are 
troops in training centers that cannot return to their units. There are 
people en route home for the holidays that will not be able to return. 
There are no funds available for discretionary travel. All fuel--all 
fuel--for Department of Defense expenditure will expire on November 24.
  For vehicles, aircraft, and ships, they are procured through the 
defense logistics agency, and we are informed that that agency will 
have no cash to procure fuel after November 24. The military services 
will have to draw down from existing supplies at bases or at sea, if 
necessary, in an emergency. And I assume they will be reserved for 
emergencies.
  With regard to spare parts, we get spare parts under the defense 
business operations fund. That fund also is in the situation where it 
is critical already. There is money in the bill that was presented to 
the President. If it is not there, there is going to be a critical 
situation with regard to our stockpile of spare parts worldwide.
  For those people who have States that are involved in the industrial 
production--my State is not--but just remember that all procurement is 
subject to appropriated funds. If this bill is vetoed and there is no 
continuing resolution covering defense, all of those contracts for 
production and procurement will have to cease because the inspector 
generals will have to notify all of those contractors that the 
Department of Defense cannot meet the payroll, cannot pay those 
contracts because of the clause in each of them that says they are 
subject to available funds.
  With regard to overseas operations, Mr. President, we have many 
people out there in many dangerous jobs in counternarcotics operations, 
from those flying the so-called cap, the oversight function in Iraq, 
the no-fly zone in Bosnia, the naval blockade in the Adriatic, all of 
the work we are doing in Cuba, all of the containment operations on 
North Korea. All of them--all of them--are at risk if this bill is not 
signed.
  Now, I urge the President to sign this bill, but in any event I urge 
the Senate and the House to recognize the problem if he does not. If 
the President does not meet his responsibility, that does not mean that 
I am going to shirk mine. I intend to object to the passage of this 
resolution unless it is amended to cover the Department of Defense. And 
furthermore, I intend to find some way to get before the Senate a 
resolution which will, in fact, cover the full spectrum of the problem 
that exists now.
  We are coming close now to the record as far as the time that we will 
have people furloughed, sent home, people that want to work, and then 
later we will pay them. Now that is another matter I want to cover. I 
have had several Members of the Senate tell me, ``Well, this time we're 
not going to pay them.'' Never in the history of the United States have 
we failed to pay the workers who have been sent home because of any 
hiatus in the availability of cash to pay them for their jobs.
  Furthermore, Mr. President, we hire people by the year. Most 
employees of the Federal Government are hired under contract for a full 
year. Their salaries are stated by the year. There are very few that 
are under hourly or under temporary hiring contracts, which are short 
of that.

  It is my position that the failure of the Congress and the President 
to come together to make available the funds does not amount to a 
cancellation of that contract. If it does, I think they could all sue 
us for breach of contract.
  I heard today both in Maryland and in Colorado, Federal civilian 
employees are going to the State unemployment office to get money to 
live. I do not know about the rest of the Members of the Senate, but 
raising five children since I have been here, I have seen many days, I 
tell you, if my paycheck had been interrupted, there would have been 
severe trouble in my financial circumstance. People have car payments 
due, they have rent payments due, they have all sorts of problems that 
have to be met.
  Mr. President, they cannot exist without this money. It is our job to 
stay in session until we get the job done. I am going to object to an 
adjournment resolution. I am going to object to any recess. I want the 
Senate to stay in session until we find a way to pay the people we have 
hired to do the work that we consider to be necessary. Having been 
temporarily determined to be nonessential does not mean they are not 
still employees of the United States. They deserve to be paid and paid 
when their money is due.
  Thank you, Mr. President.
  Mr. WARNER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, I pose a question to my distinguished 
colleague on my time. Senator Stevens and I have met this afternoon on 
these questions.
  First, I wish to join the Senator in the amendment, as we discussed 
earlier, to such measures that may be coming through here which can 
hopefully forestall this very serious list of DOD activities that would 
be curtailed as a consequence of the current funding problems.
  But I address the first one to the Senator. We discussed that DOD, 
which faces a civilian payroll of 780,000 workers that must be 
processed on November 24, currently has no cash and likewise the 
military payroll of 1.6 million currently has no cash.
  I hope that the Secretary of Defense will learn now, if he does not 
already know, about these problems and will immediately contact the 
Senator from Alaska this afternoon, because this message that the 
Senator from Alaska sends this afternoon, and in which I join, is going 
to cause incredible alarm not only in the United States but in our 
farflung military installations where our troops are serving throughout 
the world.

  I think this requires immediate response from the Secretary of 
Defense. I congratulate my distinguished colleague for bringing that 
up.
  Mr. STEVENS. Mr. President, I thank my friend from Virginia. I might 
say, I have conferred with the Secretary in the past. I believe he 
shares the opinion that the bill could be signed. I cannot speak for 
him. But it is my opinion that if the President decided he did not like 
the level of funding, he could send up rescissions to the Congress.
  But again, that is all within the prerogative of the President. I 
think we have our prerogatives, too. I have reached the determination 
we must do everything we can to see to it that this funding continues 
in some way. If the President exercises his right to veto this bill, 
then we still have the duty to come forward with another bill. I 
remember one time when the Congress sent to one President about 21 
different bills in the process of about a week trying to solve this 
problem. Today, we are holding them up. I do not criticize the 
leadership for that, but we have a bill still here that we can amend 
and try to find a common ground with the President.
  The main thing is, in my opinion, the Nation's security is at 
jeopardy if we do not pay these people. The Nation's security is at 
jeopardy if we are going to run out of fuel, not have flying time, 
steaming time and the ability to move our forces by using fuel.
  I thank the Senator. 

[[Page S 17462]]

  Mr. WARNER. Mr. President, I join with my distinguished colleague. He 
is chairman of the Defense Subcommittee of the Appropriations 
Committee, as the Presiding Officer knows well. This is a subject he 
has dealt with in his distinguished career in the U.S. Senate. When we 
met this afternoon to go over these items I thought it imperative we 
bring it to the attention of the Senate indeed. I do not want to cause 
undue alarm to 780,000 workers on the civilian payroll and 1.6 million 
in uniform. Please, we say, Mr. Secretary of Defense, take this message 
immediately and provide us with such response or solution as the 
Secretary of Defense and the President may have.
  I should also like to add, Mr. President, that the contractors who do 
work with the Department of Defense are likewise faced with the lack of 
funding. The Defense Contract Audit Agency apparently is going to shut 
down and thereby terminate the payment of contractors all across 
America that are performing defense work.

  What happens at that point? What happens at that point is that there 
is a ripple effect. Their employees cannot be paid, and with the 
800,000 now in the Federal Government not receiving pay, there could be 
another 800,000 of those employees not receiving their compensation 
through the Department of Defense as a consequence of the Defense 
Contract Audit Agency.
  So I join with Senator Stevens in calling on the Secretary of Defense 
to give us a specific reply to that problem, because this is becoming 
increasingly serious, for a lot of innocent--and I underline, Mr. 
President, ``innocent''--people who are being caught up in this 
controversy between the President and the Congress.
  I feel ever so strongly about the need for a 7-year balanced budget. 
I came to the Senate with my distinguished colleague, the acting 
minority leader, Senator Exon, some many years ago. I have great 
respect for him. But I say to my distinguished colleague, I think there 
should be unanimity of viewpoints that we can achieve a balanced budget 
in 7 years. That should not be a subject of disagreement. I just hope 
that we can, in the words of the acting majority leader, use ``honest'' 
economic assumptions which the Senator from Nebraska understands very 
clearly, having served on the Budget Committee throughout his career, 
use that type of data to bring about this balanced budget.
  So I return to the question on the Defense Department and, 
incidentally, so far as I can determine, the Defense Contract Audit 
Agency is still dealing with 1995 fiscal year funds which are available 
and not subject to the current impasse on the budget. But if this 
report is true, that is very disturbing.
  Further, Mr. President, I would like to have printed in today's 
Record an article that appeared in the Virginian-Pilot newspaper in my 
State which chronicles the impact of a defense contractor. I will read 
a few lines of that:
  ``The Navy is unable to pay new bills from local shipyards because of 
the Federal shutdown and, as a result, many yards may soon be cutting 
back operations . . .'' in the Tidewater region of the Commonwealth of 
Virginia.
  We have the largest naval base in the world and a tremendous 
infrastructure of contractors which support those naval and maritime 
activities. This article depicts in a very colorful way, in an accurate 
way, the impact on the individual shipyard workers.
  So I close my remarks, again, by saying that I continue to be 
concerned about these employees. We will achieve this 7-year balanced 
budget--I am confident of that--one way or another. But in the 
meantime, let us not bring further injury and further concern and 
emotional stress on so many innocent people who have offered to devote 
their careers either to Federal service as public servants or those who 
are performing the contracts for the Federal Government.

  I was heartened by the meetings I had with the Speaker of the House 
and others earlier today that there is the assurance that eventually 
the Federal employees will be justly compensated for that period in 
time in which they were furloughed, but we cannot give that assurance, 
indeed, it is not the responsibility of Congress, to the employees of 
the contractors of the Federal Government. Their pay remains uncertain.
  I should also like to have printed in this Record of today a letter 
to the Honorable Tom Davis, a Member of Congress from the Commonwealth 
of Virginia. A similar letter went to the Hon. Frank Wolf, a Member of 
Congress from the Commonwealth of Virginia. The three of us are 
talking, on the average, three or four times a day about this problem 
and working together. It reflects the assurance of the leadership and 
the Congress, both the House and the Senate, to take care of the 
Federal employees.

  I ask unanimous consent that this letter and this article from the 
Virginian-Pilot be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                Congress of the United States,

                                Washington, DC, November 10, 1995.
     Hon. Thomas Davis,
     Cannon House Office Building, Washington, DC.
       Dear Tom: We will be sending soon to President Clinton a 
     bill to continue funding for the federal government through 
     December 1, 1995. Besides providing for government services, 
     this bill also funds federal workers' salaries.
       If the President decides to veto this legislation to keep 
     government operating, the possibility exists that some 
     federal workers may be furloughed. In the event that this 
     takes place, it is our commitment that federal employees will 
     not be punished as a direct result of the President's 
     decision to veto funding for their salaries. Should this 
     happen, we are committed to restoring any lost wages in a 
     subsequent funding bill.
       Again, we want to reassure you that if the President vetoes 
     the continuing resolution and requires federal workers to be 
     furloughed, we are committed to restoring any lost wages 
     retroactively.
           Sincerely,
     Newt Gingrich,
                                             Speaker of the House.
     Bob Dole,
     . Senate Majority Leader.
                                                                    ____


 [From the Virginian-Pilot and the Ledger-Star, Norfolk, VA, Nov. 17, 
                                 1995]

       As Navy Stops Making Payments, Local Shipyards May Suffer

                       (By Christopher Dinsmore)

       The Navy is unable to pay new bills from local shipyards 
     because of the federal shutdown and, as a result, many yards 
     may soon begin cutting back operations.
       One small Norfolk yard has started laying off workers. 
     Norshipco, the largest private shipyard in South Hampton 
     Roads, may also have to furlough ``hundreds'' of workers soon 
     if the shutdown isn't resolved, shipyard executives said 
     Thursday.
       ``It could be a grim Christmas if this stuff keeps up,'' 
     said Jerry Miller, president of Earl Industries Inc., a 
     Portsmouth-based ship repair firm that employs about 400 
     people.
       As Washington politicians hunker down for a drawn-out 
     budget battle that some threaten could last 90 days, 
     executives at local shipyards fret that the shutdown could 
     sink their businesses.
       ``What we're talking about is something that could happen 
     if the government doesn't get its act together,'' said Jack 
     L. Roper IV, executive vice president of operations for 
     Norshipco, which employs 2,200 full-time workers at its two 
     yards in Norfolk and 600 people part-time. ``There's a lot of 
     ifs here.''
       The Navy is paying pending bills that have been processed 
     by the Navy's local contracting office, the Supervisor of 
     Shipbuilding, Repair and Conversion in Portsmouth. Officers 
     running that office are looking for a way to resume 
     processing new bills so payments to the yards won't be 
     interrupted.
       ``Obviously there is national security that comes into play 
     at some point . . .,'' said Cmdr. David S. Hattich, the 
     officer in charge of contracting in the Portsmouth office. 
     ``It's not in the government's interest to see (the 
     shipyards) get to the point where their cash flow is so 
     impacted that they can't perform.''
       Nearly 700 civilian workers were furloughed from the Navy's 
     contracting offices in Portsmouth and Newport News. Without 
     those workers, the Navy can't process bills from local 
     shipyards.
       ``At some point I presume we'll have to bring some skeleton 
     staff back in to work,'' Hattich said.
       The contracts office also won't be awarding any new 
     contracts for the duration of the shutdown.
       The Norfolk Naval Shipyard in Portsmouth is not being 
     affected by the shutdown.
       Marine Hydraulics International Inc., which emerged from a 
     bankruptcy reorganization in October, was determining 
     Thursday how many of its 248 employees it would have to lay 
     off immediately, said Vice President Gary Brandt.
       The yard suspended activity on some recently negotiated, 
     but not finalized, add-ons to its contract to repair the 
     guided-missile frigate Clark at its Norfolk facility, Brandt 
     said. MHI will continue already contracted work on the Clark 
     as long as its financing holds out, Brandt said.
       The extent of the impact depends a lot on how long 
     government operations are suspended without some form of 
     relief for the shipyards.

[[Page S 17463]]

       ``If it's just a day or two, then it's no big deal,'' 
     Hattich said. ``If it lasts 90 days like some people are 
     saying, then we have a problem.''
       ``Thirty days is probably longer than we can stand,'' 
     Norshipco's Roper said Thursday. ``I'm not sure I can 
     guarantee my work force can continue beyond tomorrow.''
       Norshipco does have some commercial jobs, but not nearly 
     enough to sustain its work force, he said.
       Moon Engineering Co. Inc. expects it could feel the 
     pressure in two to four weeks, said James Thomas, the 
     Portsmouth shipyard's executive vice president and general 
     manager. ``I really can't say when right now,'' Thomas said.
       ``We have a lot of government receivables out now,'' he 
     said. ``How soon (we're hurt) depends on whether they get 
     paid.''
       Moon started a contract on the destroyer Peterson three 
     weeks ago. The cruiser Ticonderoga arrived at the yard 
     Thursday for repairs and maintenance.
       ``We've got about 250 to 300 employees here now and we're 
     still working, but if push really came to shove, we're going 
     to have to send people home,'' Thomas said.
       Metro Machine Corp. has the resources to keep operating for 
     now, said its president, Richard Goldbach. ``I don't see it 
     affecting us unless it lasts past a week or two,'' he said. 
     ``We'll worry about it then, but I think we'll have the 
     resources even then to keep operating.''
       Other shipyards also could be unaffected by the shutdown. 
     Newport News Shipbuilding doesn't expect any impact on its 
     work force because of its financial condition, a spokeswoman 
     said.
       The giant Peninsula shipyard, which builds aircraft 
     carriers for the Navy and employs nearly 19,000 people, is 
     owned by a multi-billion dollar conglomerate that probably 
     has the financial wherewithal to sustain the yard's 
     operations.
       Colonna's Shipyard Inc., a small Norfolk shipyard, expects 
     to survive on its usual diet of commercial work, said Vice 
     President Doug Forrest. ``We don't have any Navy work in the 
     yard now,'' he said.

     

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