Department of Defense Background Briefing on Civilian Furloughs from the Pentagon

MODERATOR: So thank you for joining us this afternoon.

As you know, the secretary has made a decision with respect to furloughs, which he announced just about an hour ago. But we thought that you may have some additional questions about how the department came to this decision and how the furloughs will be implemented.

And so, we wanted to give you an opportunity to be able to talk to some of our senior subject matter experts on this.

It is a background briefing, so we have provided the bona fides for each of our senior officials here, but I guess for question purposes, we have senior official one and senior official two, if you want to direct it to a particular individual, or you can ask for either one of them to answer it.

Obviously, by their titles there, they come -- they have different expertises within the department.

And our plan is we -- you -- I think most of you have gotten the secretary's statement on this, and probably watched what he said to the department employees. So it's our plan, really, just to get right into questions and take care of the business that you need to take care of and then get out of here.

So, with that, Lita why don't you start us off then, and we'll go to Courtney and then to Tony, and we'll see where we go from there.

Q: Senior Defense Official Number One, the secretary alluded to this briefly during this town hall, about next -- this fiscal year 14. Can you clear up a little bit about, there's a 1 percent raise for civilians, apparently, in that, but would sequestration -- how -- what does the outlook for next year look like, considering sequestration and --

SENIOR DEFENSE OFFICIAL: I wish I knew. I honestly don't. There's a wide range of possibilities. We could get a budget agreement, a broad one, in which case I think we'd have a decent shot at appropriation near the president's budget level.

Both the House and Senate budget resolutions, these things they set -- you're familiar with them -- were at the president's level for fiscal 14.

At the other extreme, I guess the process could stay broken and we could end up on a continuing resolution at the sequester levels.

As far as the pay raise, sequester, doesn't -- you can't actually affect raises per se in sequestration. So if Congress were to approve that 1 percent raise, people would get it. Whether they will or not, I don't know. We proposed a raise of 1 percent for both military and civilian in fiscal year 14, but we also proposed a 0.5 percent raise in 13 and that's not going to happen.

Q: Would you -- (inaudible) -- two things. First off, do you know the total number yet of how many civilians this will include, with all the exemptions that are now included? And then, can you give us a sense of the decision-making behind making this an across-the-board furlough for all civilians despite the fact that several of the services said that they may not have to, that they could find the money?

It seems -- I'm not -- I'm certainly not a budget expert, but it seems like it's relatively unprecedented to say, "Well, you know, Navy and Marine Corps, you don't have to do this, but we're going to make you do it anyway." And so can you tell us a little bit about the decision-making, please?

SENIOR DEFENSE OFFICIAL: Sure. There's about 800,000 paid -- civilians paid by the Department of Defense. About 120,000 will be exempt, so it's not really across the board. There are some categories of exemptions. And I should add, there are some issues yet to be resolved with regard to intelligence personnel that could increase that 120,000, but right now it's about 15 percent.

In terms of the decision, and specifically like the Navy and some agencies, in any organization this broad, this complex, you're going to have organizations with differing budgetary situations. And some may have been in a situation where they could do less furloughs.

It was our judgment that we wanted to minimize adverse effects on mission across the entire department. And so what we will do to the extent we're permitted by law is, except for those who are excepted, we will furlough the remainder of our civilians and then move money around to try to minimize adverse effects on readiness. And we will do probably some of that in this reprogramming that hasn't made it up to the Hill yet, but I hope will soon. And we may look at other options as well.

Q: I don't understand what -- when you say "minimize adverse effects on readiness," how does increasing the number of civilians to be furloughed minimize -- the impact -- (inaudible)?

SENIOR DEFENSE OFFICIAL: Well, if we -- if the Navy has the funds, say, to avoid furloughs, and now they furlough, we may be able to move some money into the other services that have more problems. And the Army and the Navy definitely need to furlough, and they're the ones that have made the big cuts in training and readiness -- the Army, Navy. The Air Force, I should say, has stopped flying in 12 squadrons. Army has canceled its combat training rotation for the most part, et cetera.

Q: -- (inaudible) -- money that would, if they were furloughing civilians in the Navy and Marine Corps, some of that money that will be saved from the furloughs will now go to the Army -- (inaudible)?

SENIOR DEFENSE OFFICIAL: Right, or we may just end up doing a little less for the Navy, and the reprogramming is probably the way we do it.

Q: Can you reconcile the figures on total number of civilians? From the podium a number of times, officials have stated that it's about 750,000 who would be eligible. You just said 800,000.

SENIOR DEFENSE OFFICIAL: The 800,000 includes foreign national employees. There are about 50,000 of them. So it depends -- foreign national employees are in the 800,000, so the 750,000 would exclude foreign national employees.

Q: But for purposes of clear reporting, it's 750,000 minus about 120,000.

SENIOR DEFENSE OFFICIAL: No, actually it's 800,000 minus 120,000 because we've exempted the foreign national employees. You're looking at me -- so if it's 750,000, it would be less 70,000, if I'm doing the math right.

So, all right?

Q: -- (inaudible) -- really a figure of 750,000 -- (inaudible).

SENIOR DEFENSE OFFICIAL: And, you know, you can define it in lots of different ways. And you could logically exclude foreign nationals. They're not U.S. citizens, obviously. But they are -- some of them are paid by the department and so we normally include them in our totals.

Q: I have a second question. The appropriations bill requests a report to Congress in section 807 -- 8007, laying out the effects of sequestration for baseline purposes, for reprogramming purposes. Where does that stand? And will that spell out for the industry who cares how their particular programs will be cut by sequestration?

SENIOR DEFENSE OFFICIAL: Yeah, it should. I mean, we need to do -- (inaudible) -- 14 -- I think I've got that right -- Senior Defense Official One isn't entirely sure of this answer so I'll get back to you if I'm wrong. But I believe that it's the baseline report that we do before. And it's almost done. You can imagine that it is a little trickier to do this year, but it is almost done.

And if I'm wrong about that, give me a chance to work through -- (inaudible) -- and I'll correct it.

Q: Thank you.

MODERATOR: Let's -- let's finish the first row before we move to the second row. So we'll go to Luis and then we'll go over here, and then we'll hit the second row. I think we'll get everybody that has questions.

Q: So just to clarify, every single service is now gonna have furloughs? And were the levels of civilians adjusted within each one? I mean, which one comes off getting better?

SENIOR DEFENSE OFFICIAL: Well, I don't know the answer to that, actually. Yes, they'll all have some furloughs for sure. I don't know who would have the highest percentage exemptions. It -- it -- I'm just not sure. I need to check that.

We didn't really think about it in those terms, frankly.

Q: But the Navy proposal was basically we can do without the furloughs. Now they will have to carry out these furloughs, that's right?

SENIOR DEFENSE OFFICIAL: Correct. Now we are excluding their shipyard workers. These are the people that work in public shipyards and do nuclear maintenance. And we did that for mission reasons. It's a very long planning process. And there're -- there're -- a very long period for maintenance. Very little ability to catch up, and we're dealing with submarines and carriers, which are small in number but high in value. And so on mission grounds we decided that we would exempt shipyard workers.

MODERATOR: Go over here to the right.

Q: Thanks. I want to make sure that I understand the numbers correctly. When I added up the table that's in this memo, comes out to about 68,000 workers. That includes 11,000 DODEA [Department of Defense Education Activity] employees. Are they considered exemptions or are they semi exempt, or --

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: They are considered semi exempt. There was a group of DODEA employees that will be exempt, and then the teachers and the faculty will be furloughed for a total of five days at the beginning of next school year.

Our commitment to -- to our service men and women who have children in these schools is that they will get a accredited school year. Summer school will be held, and then the beginning of next school year we will work with five furlough days.

Q: So follow-up. -- (inaudible) -- out of the 68,000 -- that was my rough calculation -- and the 50,000 foreign nationals, is that where you get the 120,000 --

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: Sounds about right to me.

SENIOR DEFENSE OFFICIAL: Adds up. I haven't done that calculation either, although the nice gentleman who did all these numbers is in -- (inaudible). So he gave me the 120,000 and I think it's right.

MODERATOR: -- (inaudible) -- on the first row? If not we'll move -- let's just go from my right to left. So go ahead.

Q: Senior Defense Official Two -- I guess, either of you -- you just mentioned five furlough days, as I understand it, for teachers.

SENIOR DEFENSE OFFICIAL: For DODEA.

Q: Right.

Aside from the number of people to be furloughed, are -- is -- are the -- is the length of time of each particular furlough different or is it the same? And if it's different, what's the range of difference -- you know, one day to 14 days to -- I mean, do you know the parameters?

SENIOR DEFENSE OFFICIAL: The -- the going in proposition is that the majority of our employees who will be furloughed will be furloughed up to 11 days. And that's what the secretary's letter said. DODEA is a special category because of having very specific rules for educating and making sure that they have an accredited school year.

They're, I think -- I need your clarification on this. I think PFPA [Pentagon Force Protection Agency], the Pentagon police, might be furloughed a little differently --

SENIOR DEFENSE OFFICIAL: I'm not sure.

SENIOR DEFENSE OFFICIAL: Yeah. So I can get back to you on that. But the going-in proposition is 11 days.

SENIOR DEFENSE OFFICIAL: Yeah, for the great majority here at 11.

SENIOR DEFENSE OFFICIAL: Yeah, for 11.

Q: -- (inaudible) -- said up to 11 days. Does that mean it might be one day or two days?

SENIOR DEFENSE OFFICIAL: No, I think that -- what I'm saying is that right now our employees will be furloughed for 11 days.

SENIOR DEFENSE OFFICIAL: Remember, Secretary Hagel did say that if we can and our budget permits, at the end of the year we may stop a bit early. And, therefore, the up to 11. It could be a little bit less than 11.

Q: What's DODEA?

SENIOR DEFENSE OFFICIAL: I'm sorry. The Department of Defense Education Activity.

SENIOR DEFENSE OFFICIAL: Come on, speak Pentagon. (Laughter.)

(CROSSTALK)

Q: -- eight years here.

SENIOR DEFENSE OFFICIAL: Eight years. Well, I don't know.

If it makes you feel better, I forget them.

Q: Will you guys be providing any help with some of your furloughed employees, in terms of financial management, understanding how to prepare for this?

SENIOR DEFENSE OFFICIAL: We have a whole system of financial management that they -- that the employees can certainly work through. And, in fact, it was just recently that we had a very large financial management fair here in the Pentagon for them.

But there are resources on how to manage your money that are provided through our department.

Q: But nothing special to this furlough situation?

SENIOR DEFENSE OFFICIAL: No, it's not -- whatever we have will certainly take care of that financial management arena.

Q: I have a couple questions. One, first for second Senior Defense Official Two. What's the anticipated impact on the department's operations because of these furloughs?

SENIOR DEFENSE OFFICIAL: Well, I think that the anticipated impact is -- can clearly be the morale of our employees. I will tell you that we value every single civilian employee that -- that works in the Department of Defense. And 86 percent of them work outside of the National Capital Region, and they all add value to the mission that we do as a total force. And they're clearly part of that total force.

But when an individual loses 20 percent of their pay, which, that's what will happen when we furlough, that has to impact them, clearly, financially and clearly morale-wise.

I believe that they will continue to perform in an admirable manner. But I'm sure that there will be some morale impact.

SENIOR DEFENSE OFFICIAL: I'd like to add to that. I mean, these people aren't doing PowerPoint slides in the Pentagon. I mean, they're mostly outside of the Pentagon. As (inaudible) said, they fix our ships, our tanks, our planes. They staff our hospitals. They're teachers in our schools.

Eighty percent of the financial managers in the department are civilians. And it's probably similar to that for contracting.

We're going to have problems in terms of getting money obligated, in close-out, personnel staffs to handle furloughs. We're going to delay maintenance. I think we will seriously adversely affect the productivity in almost all areas -- support areas of the Department of Defense.

This is a -- it's not something we wanted to do.

I hope -- I hope that's clear from the secretary's memo, but I'd like to underscore it.

Q: -- (inaudible) -- the 20 percent figure that you just cited?

SENIOR DEFENSE OFFICIAL: What?

Q: 20 percent of their pay?

SENIOR DEFENSE OFFICIAL: Well, if they're furloughed one day a week every week, that's 20 percent of their paycheck.

Q: How does that tie in with the 11 days? I'm sorry.

SENIOR DEFENSE OFFICIAL: One day a week, it will begin on July 8th. And so one day a week, they'll lose 20 percent of their pay -- of their weekly pay, right.

Q: I understand that, but I thought you said 11 furlough days for the entire fiscal year.

SENIOR DEFENSE OFFICIAL: Sure. And during those -- during those weeks when they're furloughed, each week they'll lose 20 percent.

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: It's not the whole year.

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: Yeah, right.

(CROSSTALK)

Q: And do you anticipate any impact -- are you seeing any impact on attrition? I mean, are people retiring, voluntarily separating, at this point? Do you anticipate any?

SENIOR DEFENSE OFFICIAL: Right now, we don't see a major impact on that, of people retiring. I'm sure that people will retire, but we haven't seen a push towards that.

SENIOR DEFENSE OFFICIAL: I might give you an anecdotal. We had one individual that left my organization and said it was because of this, but I think he would have retired at some point fairly soon. So I wouldn't extrapolate; 7.8 percent unemployment, or whatever it is right now, does create an environment where there aren't a lot of jobs out there.

Q: Can you go back to what happens on the beginning of October, assuming you have a straight CR [continuing resolution] that -- then we just end sequester. What's the anticipated impact on DOD's budget? And what are you doing at this point to prepare for it? Is there a possibility furloughs could continue in FY [fiscal year] 14?

SENIOR DEFENSE OFFICIAL: Well, in terms -- it would be about a $52 billion cut below our request if we remain at sequester levels. So it will be serious. Secretary Hagel has directed the strategic choices and management review, the SCMR as we call it, and it is looking at the kinds of choices we will have to make.

As Secretary Hagel said today, we can't rule out furloughs, but we're sure going to do our darndest to avoid them. And this time, we will have more time to prepare and we are thinking actively about how, if we have to, we would accommodate that. So, as I said, I think we'll do everything we can to avoid them.

Q: And lastly, on the shipyard exemption, I'm already hearing complaints that these are politically motivated; that members of Congress who represent those shipyards were very vocal in defense of them. How do you respond to that?

SENIOR DEFENSE OFFICIAL: Well, there will be lots of members of Congress who will oppose other ones, too. But it was based on mission grounds. I mean, we're talking about overhauls that -- that last months, sometimes more than a year. They are planned well in advance. Had we delayed them, we would have -- we have very little ability to make it up. These are highly technical. We're talking about nuclear safety. All these workers do nuclear maintenance. So that we -- we couldn't just bring in other people to make it up when we had more funds. They wouldn't have the training.

And so we were really talking about seriously adversely affecting our ability to deploy carriers and submarines. And we made a decision that that was too serious an adverse effect on mission.

(CROSSTALK)

Q: -- (inaudible) -- follow up on one of those last ones, actually. (inaudible) -- the thinking that furloughs are some potential possibility in 14. Is that a change? Because a senior defense official, who may or may not be in this room, has said before that you just would not do them in 14. You'd probably do RIFs [reductions in force] or other kinds of -- (inaudible).

SENIOR DEFENSE OFFICIAL: Well, that was probably senior defense official one, speaking with his heart, not necessarily his head. I sure hope we don't, personally, but I understand we can't know the future fully. But I'll underscore what Secretary Hagel said just a few minutes ago. We're going to do our darndest to avoid it.

Q: Then quickly on the safety of life and property exemptions, the Department of Navy has far and away the most in that category -- 7,500. Nobody else is even close. The next closest is 900 in the Air Force and there's a big gap behind them. Why are there so many in the DON [Department of Navy]?

SENIOR DEFENSE OFFICIAL: We've got a lot of -- I think there were shipyard issues. I'm trying to remember now. This is a couple months ago we did this.

I believe there were in -- in nuclear safety and ship issues, but I'd -- I think I better get back to you with a better answer because I'm not -- I'm not tracking fully. Let me get back to you.

Q: Let's go here and then we'll work the third and fourth row.

Q: I just have one question. Are there -- there are rules against civilian employees working other jobs, like, let's say they wanted to work one day a week. Aren't there -- can you describe what those rules are or --

(CROSSTALK)

Q: -- if you're still working for the government, so even though they're off that day, they're still under those rules, right? So what's the --

SENIOR DEFENSE OFFICIAL: They are still government employees. Absolutely. Even though that they are furloughed for that one day. And OPM [Office of Personnel Management] has specific rules in place, and they are the Web site about what they are.

There is -- there is a -- a waiver, if you will, for additional employment, that the employee would need to follow, should they want to -- to go through that process.

Q: -- (inaudible) --

SENIOR DEFENSE OFFICIAL: I would have get back to you. But it -- we follow -- they are not DOD [Department of Defense] rules, they are OPM rules.

MODERATOR: You guys in the back of the room. I saw a few hands. Go ahead.

Q: -- (inaudible) -- the memo, but when do the letters go out?

SENIOR DEFENSE OFFICIAL: They go out between the 28th of May and the 5th of June.

Q: And those receiving them have seven days to reply. Does that mean that they can -- they can make an argument, you know, don't -- don't furlough me, furlough somebody else? What?

SENIOR DEFENSE OFFICIAL: They can respond. First, they can respond to the designated -- their designated official in that seven days with justification of why they should be potentially in the exempt category.

The designated official will review all of that justification and make a decision.

Q: Who sends the letters? Who signs the letters? Who do they go out from?

SENIOR DEFENSE OFFICIAL: It's a designated official, which is a lower level, I'll use the term "commander." They're not all commanders.

Q: Can you just -- can you describe, what do the letters actually say?

SENIOR DEFENSE OFFICIAL: The letters are very specific. They say that you will be -- we're proposing a furlough for X amount of days, starting at X -- at a certain time, which would be on 8 July. And they're addressed to each individual employee.

So it's not a -- it's a -- it's a template letter. But each individual employee gets their own specific letter.

MODERATOR: Let's go over here and then back and then back.

Q: When it comes to the actual choosing of a day, do the employees get some say in what day they get off? And at the same time, as you -- you as an agency, I mean, can we expect that 20 percent of the 680,000 will be gone on any given day, starting July 8th?

Like how are you -- how are you managing having enough people that are on?

SENIOR DEFENSE OFFICIAL: For example, let me give you an example of commissaries. Commissaries more than likely will be closed one day a week. They will, more than likely, select one day throughout all the commissary system. And they will do that because that is -- everybody will know when that day is. They can plan their shopping around that particular day. And they could limit the deliveries on that particular day.

So that would be a reason that commissaries would close on one particular day.

The hospitals, the school systems, potentially the depots, will be judged by their personal supervisor on which day several employees could potentially be furloughed. So we won't close a hospital. We won't close the depot. We'll keep things running, but the day will be negotiated by the individual super -- or designated official.

Q: How much money do you think you're going to save if you keep all 11 days -- furlough 11 days? How much money is that?

SENIOR DEFENSE OFFICIAL: $1.8 billion for the 11 days, with the exceptions that we're planning now.

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: Yes, "billion" with a "b."

Q: Secretary Hagel left open the possibility of reducing this further. What would have to happen to make that happen this year, short of sequestration being averted?

SENIOR DEFENSE OFFICIAL: Well, first, no large, unanticipated costs would be very nice. The United States Congress approving the majority, if not all of the reprogramming that I hope we'll send to them within a few days. And then we're going to just have to put our heads together and try to scoop up every dollar we can toward the end.

I mean, it's a decentralized organization and we deal, especially with operations and maintenance dollars, and those are the major ones affected here. And so our commands pass it out to their bases. They're executing it. We're going to have to work closely with them toward the end of the year to see where they are and whether or not we can make this happen.

But I'm counting on the incentives. After all, they're the employers of many of these civilians, so I'm hoping, and I think they will work with us and we'll see what we can do.

Q: You mentioned that the requirement to have all the services implement some level of furlough is to achieve larger savings. How do you prioritize the distribution of those savings? In other words, is it readiness? How do you prioritize?

SENIOR DEFENSE OFFICIAL: Well, first I want to make clear that the overall goal is to minimize adverse effects on missions. And I state it that way because we are devastating the readiness of this military right now, but we want to minimize that.

Subject to meeting that goal, consistency and fairness was something we considered. So as those decisions were made, you know, if a service has more readiness problems than another one, we might -- we probably wouldn't take money from them. We'd just reprogram money less into their -- their particular account. And I think you'll see some of that as we send this reprogramming forward.

So the goal is to meet that mission, minimizing adverse effects, particularly readiness. We've already made the cuts we believe we can. In facilities maintenance, we've essentially stopped it except for safety of life and property. We've cut back on base operating costs. We have hiring freezes, not across the board, but many of them are in effect.

I mean, we've done a lot of those tasks. It's really now down to training and maintenance. It's actually more maintenance at the moment. We've made about as many training cuts as we can and still meet needs in Afghanistan and deployments. So we're really now down to further cuts would come out of maintenance, which buys us problems in fiscal 14. It means we won't have the weapons systems ready to deploy.

So, we'll use the criteria minimizing those aspects.

(CROSSTALK)

MODERATOR: -- (inaudible) -- want to make sure everyone that had a question, had a chance to ask them. We'll see if we've got a few more -- (inaudible).

Q: Thanks. (inaudible) -- the employees who get furloughed -- (inaudible) -- write a letter stating why they shouldn't be furloughed. Is financial hardship a reason that they might be considered?

SENIOR DEFENSE OFFICIAL: No, it's truly not, unfortunately. You know, this is a very, very tough decision, and we understand that it will create financial hardships across the board. But that is not the -- a sure reason for -- for exempting from furlough.

Q: So what would be some of the reasons that would?

SENIOR DEFENSE OFFICIAL: Boy, I really -- you know, at the top of my head -- I don't know -- (inaudible) -- if you can help me out here, but I really can't -- can't think of a -- of a reason right now.

I think the individual supervisor -- or the individual designated official would have to review what the employee submits to -- to weigh that against what he or she needs to do mission-wise in order to accomplish that mission.

SENIOR DEFENSE OFFICIAL: And I suppose there could be a circumstance that where a person had a mission-critical aspect that we just couldn't recognize from -- from here, and that -- that a local commander might take that into account.

And, indeed, if you read the memo, they have some very small authority to do some furlough exemptions on their own.

Let me just say, Senior Defense Official One would like to say, this conversation is kind of bloodless. And I understand we're trying to answer your questions. But I want to repeat what you may have heard me say before, this is one of the most distasteful tasks I've had in more than 30 years of government service.

I mean, we are -- we depend on these people to -- to do all the things I mentioned before. And many of them work for me -- not many of them, but a small numbers work for me. And I -- I just -- I find it very distasteful. I mean, I just want to -- Senior Official One would like to be on record as not being bloodless.

And now, I'll go back to being the -- (inaudible). (Laughter.)

SENIOR DEFENSE OFFICIAL: But Senior Official Two would echo what you said, that it's a -- it's a very painful process. And it -- it wasn't made lightly; it was made with a lot of pain and anguish.

MODERATOR: All right. -- (inaudible) -- Let's take a couple real quick ones, if we have --

Q: Just a quick question. You mentioned at the beginning some possible, down-the-road changes, something at DIA. Is that -- (inaudible) -- intelligence, or --

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: We need to work out with the national intelligence folks exactly what furloughs the people funded by the national intelligence program, if any, have been. And they were not included in the 120,000 estimate.

Q: Right. I thought -- I guess I thought I'd seen something where those in the MIP [Military Intelligence Program] group would have furloughs and those in NIP [National Intelligence Program] would not. Is that --

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: What the memo says is those in NIP, N-I-P, would be determined by the director of national intelligence. And I don't know -- I mean I think he's -- he's made pretty clear where he's heading, but I don't know if he's formally said it. And I thought, heck, ask them, so that we can adjust our numbers.

Q: Okay. So that's the part you're saying is not sure. But anyone -- are there exemptions in -- within the military?

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: I don't think there are more. I mean, there may be a few of these onesies and twosies. And, you know, as they go back out and -- I don't -- but I don't think there are going to be large changes.

I mean, we want to give -- we don't want to run this with a 6,000-mile screwdriver if we can avoid it. We really want our commanders to have some latitude. But we will -- I also don't expect them to come back and say I want 5,000 more exemptions. So there better be a heck of a good reason.

(CROSSTALK)

Q: -- (inaudible) -- at one point -- (inaudible) -- a lot of the members of Congress and public are going to say, "Why the hell don't you cut out an F-35 or a littoral combat ship or ground combat vehicle, hardware instead of people?"

This is not a lot of money for this department. It's kind of staggeringly low amount. And yet it's causing all this pain -- (inaudible). And I empathize with that.

SENIOR DEFENSE OFFICIAL: Well, first, we wouldn't have the authority to do that, Tony, I mean, because this sequestration is by account. And so, I have to get it out of the O&M [Operations and Management ]account.

And I could only reprogram, but I'm using every dime -- almost every dime in transfer authority I have, so I wouldn't be able to take anymore out of investment.

And, second, I mean the problem is we've already made so many cuts. We've cut out almost all facilities maintenance. We've stopped flying at 12 combat-coded squadrons. We've cut out all training rotations, except for deploying units at -- at Irwin and Polk.

We've done -- and -- and a whole lot of otherextras. I read our weekly report and it just -- dozens of exercises we're stopping. We've stopped most ceremonial everything pretty much.

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: So we've already done all these things. If we were gonna get that $1.8 billion -- I know it doesn't sound like much -- in a three-month period or even the six that we have left, we would have had to go after more maintenance or further shutdowns of units. And I think Secretary Hagel decided, and I believe it was the right decision, that that isn't something we ought to do -- would go too far.

Q: (off mic) this is -- (inaudible) -- didn't have discretion to cut across from different accounts. You had to --

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: Well, it certainly didn't help. I mean, I would have preferred to have more transfer authority. We asked for it, and it just didn't happen and it's not going to happen. So it certainly didn't help.

Q: The number of days -- said 11. All things being perfect toward the end of the year, whether there're any fluctuations -- (inaudible) -- can the number fluctuate above 11 or you're only talking about fluctuations below --

SENIOR DEFENSE OFFICIAL: No.

(CROSSTALK)

SENIOR DEFENSE OFFICIAL: Below.

SENIOR DEFENSE OFFICIAL: It's up to 11.

Q: So eleven is the top line --

SENIOR DEFENSE OFFICIAL: Right.

Q: Thanks.

MODERATOR: The last question today.

Q: And to follow up on Tony's question about the relatively small amount of money comparatively -- compared to the amount of the sequester, is there -- I was talking to one union official who saw this as a politically driven decision; that DOD hopes that now people on the Hill will respond by canceling the sequester or mitigating the impact. Do you help with that? And is -- was that a motive?

SENIOR DEFENSE OFFICIAL: That doesn't seem like it's gonna happen to me. I mean, I'd sure like them to, but I'm not anticipating it.

And, you know, I can tell you, it was not politically motivated. I was in on these meetings. We were saying, "All right, what are we gonna do? How much more maintenance are we gonna cut? What are we gonna cut? Are we gonna go after aviation maintenance? Are we gonna start cutting base ops by closing airfields?"

And we just felt that those steps which we would have had to take to get that $1.8 billion, given everything else we've done, would have had serious adverse affects on our mission, and that's why we made this decision.

MODERATOR: Okay, I want to thank you all for coming today. We have taken a couple of questions. The press office will have the answers to the taken questions this afternoon. So -- (inaudible) -- right here as well as -- (inaudible) -- are tag-teaming this in the press office. So on the taken questions if you want to check back with them they'll have them for you.

Thanks very much.