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Underestimated Personnel Costs Force Changes to Obama DOD Supplemental Budget June 2, 2009

Posted by Stephen Abott in Analysis, News.
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The Obama administration has pledged to present a federal budget to Congress that is clear, transparent, and represents “a new era of fiscal responsibly.”  However, the Obama administration misjudged FY 2009 Army personnel funding levels, which some feel have cast doubt on these efforts.

The economic recession and incentive signing bonuses have encouraged more individuals to enlist into the military.  Personnel costs for FY2009 will be $2.35 billion higher than the White House previously expected. The military has known for months that active and guard troop recruitment levels have exceeded authorized levels, yet the Obama administration did not request the necessary additional funding in its April 9th FY 2009 supplemental budget request.

Percent of Recruitment Goal by Month

December 2008-April 2009

Dec Jan Feb Mar Apr
Branch
Active
Army

115

107

105

102

102

Navy

100

100

100

100

100

Marines

113

109

136

143

164

Air Force

100

100

100

100

100

Reserve
Army, NG

143

88

109

126

111

Army, R

112

103

115

138

103

Navy, R

100

100

100

100

100

MC, R

100

155

100

102

100

Air, NG

111

127

110

111

101

AF, R

102

100

100

100

100

The Administration claims that the numbers submitted on April 9th were the best numbers. Yet, according to the Department of Defense website, the military has been well over 100% recruitment since November 2008.  The White House should have known about the increase in personnel before they released their supplemental budget request. The result of this miscalculation is that the required funding levels for the FY2009 supplemental personnel budget are approximately $1 billion more than both the Senate and House-passed bills. Such a sizable increase in personnel costs leave less funding for other Defense requests in the supplemental bill, such as operations and maintenance (O&M) and procurement.

The underestimation of personnel costs will be dealt with this week as the Senate and House conference to produce a supplemental budget. On that front, congressional conferees reportedly have come to a tentative deal on the Obama supplemental bill. The conference bill includes funding for the above-mentioned C-17 transport planes, an item left out of the Senate version of the bill and a program Secretary Gates wants to end. However, it is still unknown how the supplemental appropriations will deal with the increase in personnel costs.  For that we’ll have to wait for the published conference report, likely due later this week.

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