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Pentagon revises unpaid leave plan for civilian workers

By David Alexander

WASHINGTON (Reuters) - Defense Secretary Chuck Hagel said on Thursday that most of the Pentagon's 800,000 civilian employees would be placed on unpaid leave for only 14 days this year instead of 22 after Congress approved a measure easing pressure on the department's budget.

"We are going to be able to reduce and delay ... but not eliminate furloughs," Hagel told a Pentagon news conference. "Right now it looks as though we'll be able to go from an original estimate of 22 days to 14."

Under the current plan, workers would be notified of their unpaid leave in early May. Following an appeals and notice period, workers would be put on unpaid leave in mid- to late-June for one day per week until the end of September, defense officials said.

The notice period initially was scheduled to start last week but was delayed to give the Pentagon time to analyze the spending measure passed by Congress, which funded the government through the end of the fiscal year.

Hagel said the measure gave the Pentagon some relief by allocating the department's funding to accounts where it was most needed. But the measure left in place more than $40 billion in budget cuts that the Pentagon must implement by September 30.

The cuts, included in a 2011 law aimed at reducing the government's trillion dollar deficits and controlling a growing national debt, went into effect earlier this month after Congress and the White House failed to reach a compromise on alternative spending reductions.

Hagel said even with the new allocations, the department would face a $22 billion shortfall in its operations and maintenance account, which is used to pay most civilian workers, train troopers and fund base maintenance as well as cover the cost of the war in Afghanistan.

"We're going to have to deal with that reality, and that means we're going to have to prioritize and make some cuts and do what we've got to do," Hagel said, adding that base maintenance and training for troops not deploying to Afghanistan would be cut sharply.

General Martin Dempsey, the chairman of the Joint Chiefs of Staff, noted that the Pentagon would be halfway through its fiscal year on Monday but would have spent 80 percent of its operating funds by then. He said spending less on training would inevitably have an impact on the readiness of troops to fight.

"We don't yet have a satisfactory solution to that shortfall, and we're doing everything we can to stretch our readiness," Dempsey said. "We'll have to trade at some level and to some degree our future readiness for current operations."

He urged Congress to give the Pentagon greater flexibility to undertake "unpopular but unavoidable institutional reforms" that will be needed if the budget cuts continue, as currently scheduled, at pace of $50 billion per year for nine more years.

Lawmakers have been resistant to closing bases in their home districts, cutting programs that may result in job losses, increasing fees on military healthcare and holding the line on wage increases.

Defense analysts have identified many of those factors as reasons the Pentagon's internal costs have been rising at an unsustainable pace over the past decade. They say the Pentagon's current budget crisis makes it imperative to address those costs, a point Dempsey underscored.

"We can't afford excess equipment. We can't afford excess facilities. We have to reform how we buy weapons and services. We have to reduce redundancy. And we've got to change at some level our compensation structure," he said.

Under the 2011 Budget Control Act, the Pentagon faces another $50 billion a year in cuts annually for the next nine years. Those cuts are in addition to $487 billion in reductions the department began implementing last year as part of the law.

(Additional reporting by Phil Stewart; Editing by Vicki Allen and Paul Simao)

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