Press Briefing on the Secretary of Defense's Interpretation of the Pay Our Military Act

            WHITMAN:  So thanks for all -- for joining us this afternoon. As George is indicating, the Secretary announced today the plan to return many of our furloughed DOD civilian employees.  There he made a statement which I think all of you have.  We've also provided to you some implementing guidance that we've issued to the department, and today we have to speak to you our comptroller, Mr. Bob Hale, as well as from our general counsel, Paul Koffsky to talk you through some of the questions that you might have.  Before we start taking questions though, Mr. Hale will open up with a brief overview of what we've done today and then we will start to take your questions.

 

            HALE:  OK, Bryan, thank you.

 

            I want to discuss the guidance for implementation of the Pay Our Military Act, POMA.  POMA has a lot of aspects.  I'll mention a couple that aren't the focus of my discussion today, I'll focus only on DOD employees; it covers the Coast Guard.  POMA allows us to provide pay allowances for military personnel, so we are going to be able to pay our military on a timely basis the next payday, October 15 and future ones and it allows us to provide pay and allowances for contractors and we're working on this one in terms of -- of guidance. 

 

            What I will do today is focus on POMA as it relates to civilians, which of course, is what Secretary Hagel issued today in a determination statement.

 

            POMA allows us to pay -- provide pay and allowances for civilians who provide support for members of the Armed Forces.  We can pay these people in a timely fashion and so our paydays for them will -- will be on time and we can recall from furlough most DOD civilians.  It requires, as you know, a Secretary of Defense determination of who qualifies which is what he issued this afternoon.

 

            When we got POMA, the law was enacted about a week ago, we immediately began working with the Department of Justice on how to implement it and the department expressed the opinion that the law does not permit a blanket recall of the -- of all DOD civilians. 

 

            The Department of Justice did say that we could undertake a careful review of civilians who support members of the Armed Forces and determine who to recall.

 

Needless to say, this is a difficult process and a time consuming one, but we now have agreed to guidance which the Secretary issued in his determination today.  Under our current reading of the law, the standard for civilians who provide support to members of the Armed Forces requires that qualifying civilians focus on the morale, well-being, capabilities and readiness of military members that occurs during a lapse of appropriations.  And with this in mind, we've established some categories of civilians.

 

            First there are excepted civilians, the ones who are already working right now, actually, with military operations, safety, life and property.  They'll be working now and under POMA we can pay them in a timely manner, their October 11 payday will be on time and in full.

 

            We will recall a category of civilians who provide ongoing support to military members on an ongoing basis, health care, family programs, (inaudible) maintenance, and commissaries.

 

            We'll also recall a second category of civilians who's work, if interrupted by the lapse for a substantial period would cause future problems for military members.  Falling in this category, acquisition program oversight, contract logistics, financial management, supply chain management.

 

            Finally, there is a category that we will not recall from furlough.  They do essential and important work and I want to underscore that, but it is less directly related to military members or in a couple of cases, it's not covered by POMA.  Areas here include CIO staff functions but not IT and cyber functions, legislative and public affairs functions but not internal public affairs communications, the DCO or Deputy Chief Management Officer functions, auditors and related functions.  And some we cannot recall because they're not covered by the Act, in particular any people in DOD that -- who work in sort of non-DOD activities and we do some work on a reimbursable basis for other agencies.

 

            Let me say again, that -- that those on this list that we're not going to recall from furlough do critical functions.  I mean what they do is important but because of the letter of the law and the advice from the Department of Justice, we had to identify those with less direct effect on military members. 

 

            I'd also note that the Retroactive Pay Act, appears headed toward enactment in the Congress, I've been so busy, I haven't found out what the Senate did, but the House passed it 407 to 0 and the President has said he would sign it.  So everyone, if this act is passed, everyone, even if they remain on furlough, will eventually be paid.  Those who remain on furlough will not be paid until we have an appropriation.

 

            And I'd offer one final note of caution about this recall, we have authority to recall most of our civilians and provide them pay and allowances.  We don't have authority to enter into obligations for supplies, parts, fuel, et cetera unless it is for an excepted activity, again, one tied to a military operation or safety of life and property.  So as our people come back to work, they'll need to be careful that they do not order supplies and material for non-excepted activities.

 

            And I think this underscores the point that although this is very important and we're glad we're getting most of our employees back, we haven't solved all the problems associated with a lapse of appropriation by any means and we still very much hope that Congress will act quickly to end this government shutdown and the lapse of appropriations.

 

            And with that, let me stop and I should say one more thing, we have begun the process of (inaudible) we hope to move very quickly.  I just got off a meeting with many of our members in the services and our defense agencies and we hope we get a lot of our civilians back very quickly within the next couple of days if we possibly can.

 

            So with that, let me stop and say I will be glad to try and answer your questions and would invite Paul Koffsky to help me.So, Bryan

 

            WHITMAN:   we do have kind of an open line situation, so I'll try to recognize folks when you come up on the Net.

 

            Q:  Bob Burns here.

 

            WHITMAN:  :  OK, Associated Press, Bob Burns, go ahead.

 

            Q:  Mr. Hale, thanks.

 

            I've got a couple of just really basic questions. When you say most civilian employees who are on furlough will be returned to work, first of all, how many actually are on furlough now as we speak and can you give us at least a ballpark figure of how many people we're talking about?  And also, we're not talking about, if I'm not mistaken, you said we're not talking about contractors, we're talking only about government civilian employees?

 

            HALE:  Yes, and we're talking about government civilian employees -- DOD civilian employees, I should say.

 

            We have today about roughly -- roughly about 350,000 DOD employees on furlough.  I don't know exactly how many people we'll bring back yet.  I (inaudible) services that provide, my guess is that we'll bring most of them back but no more than a few tens of thousands will remain on furlough, and it may be substantially less than that.  But I just can't know that until we give the services kind of a day to work through the guidance and -- and exactly who would come back.

 

            Does that answer your questions (inaudible).

 

            Q:  And any of those individuals come back immediately, like today?

 

            HALE:  No, it won't be today.  I mean we have to let the services look at this guidance.  I hope that we can get a substantial number back by Monday but again, we -- we've got to give the services time enough to identify the folks who are coming back and notify them.  So Monday and it could be -- certainly I -- I think we'll get started on Monday and we'll get them as soon thereafter as we can.

 

            Q:  Thank you.

 

            Q:  Can -- can you comment on how this would affect potential layoffs and defense contractors who have had to potentially, idle in place because of the lack of inspectors?

 

            HALE:  Right.  I think -- I think you understand, maybe you don't.  I mean it's -- for -- for contracts with money obligated before the lapse, we have authority to continue the contract (inaudible) supervision as available and to pay the contractors.  But we were required to furlough the inspectors.  We will be bringing those inspectors back under POMA, I hope soon and therefore, we will be able to restart the inspections and it'll take a little while to get going but I believe that will allow us -- we'll also bring back the people that process the vouchers, and we already have on board our people that actually do the payments.  So I believe that we will be able to restart the payments reasonably quickly.

 

            Q:  Can I get a question in, Bryan?  This is Tom Bowman with NPR.

 

            WHITMAN:  All right Tom.

 

            Q:  Yeah.

 

            Mr. Hale, as you know, James Clapper of the DNI said that roughly 70 percent or so of civilian employees in the intelligence community have been furloughed.  What about the DOD agencies?  You know, defense intelligence agencies for example.  Do we expect all those civilians to come back to work with -- with this announcement?

 

            HALE:  I think many of them will. I mean this is a judgment.  Intelligence was in that category, remember, I mentioned the one of -- if the lapse -- if not having them during the lapse of appropriations causes serious future problems, so they are people that we can recall and I -- and -- and until we see the judgments made by the agencies involved, I won't know for sure but I think many of them will come back.  The DOD employees will come back.  Understand, there are some employees in the intelligence community who are not DOD employees, they're (inaudible) --

 

            Q:  Yeah exactly.

 

            HALE:            -- will not affect them.

 

            Q:  And also, jumping on Bob's question, too, about 350,000 furloughed, can you give us a rough ballpark on the percentage you expect to bring back?  Is it 90 percent, 95 percent?  Just rough estimate.

 

            HALE:  You know, I think it'll be in the 90's but I'm -- I'm reluctant to give very precise -- comptrollers are, you know, they're compulsive and a bit anal, and I like to have the numbers before I give them to you and I don't yet.  So, I think it will be in the 90s, in terms of percentage that we bring back.

 

            Q:  OK, that's helpful.  Thank you.

 

            Q:  This is still Phil Stewart (ph).  Can you hear me?

 

            HALE:  Go ahead, Phil (ph).

 

            Q:  I just -- to double check -- 350,000 is less than 400,000 a lot of us are using.  Can you explain what the difference was?  I think we all thought it was 400,000.

 

            HALE:  You (ph) have about 750,000 DOD paid personnel.  We furloughed about 47 percent -- that's a -- I know the 400,000 is out there, and I think we were trying to (inaudible).

 

            I think the 350,000 is a more accurate assessment right now.

 

            Q:  And may I ask a follow-up question?

 

            HALE:  Go ahead, Phil (ph).

 

            (CROSSTALK)

 

            Q:  I'm going to.  Just a quick one -- it just came to mind.

 

            Are we talking about DOD civilian employees globally or only in the United States, and is it not just in the Pentagon area -- the D.C. area?

 

            HALE:  Oh no, it's globally.

 

            Q:  Globally.

 

            HALE:  Yeah.  Eighty-six percent of our civilians are outside the Washington metropolitan areas, so most of them that are affected are outside of D.C.

 

            But -- and it will affect them worldwide.

 

            Q:  Thank you.

 

            Q:  It's Thom Shanker, mind if I hop  in here?

 

            WHITMAN:  (No ?), you're (good ?), Thom.  (inaudible)

 

            (CROSSTALK)

 

            Q:  Yeah, (inaudible).

 

            Quick question – (do ?) we know (the ?) -- you mentioned the category of civilians that will not be returning.  Could you elaborate a little bit more on who they are and what that stipulation was?

 

            HALE:  Right.  I got these in my notes somewhere, (I'm ?) (inaudible).

 

            There's several categories that will not be recalled unless they've already been excepted, and some of these categories would be there.

 

            CIO staff functions, but not cyber and I.T. support at the bases; legislative and public affairs functions, but not internal public affairs communications; FEG management officer functions; auditor and related functions, and work done in support of non-DOD activities.

 

            And I do want to say one more time -- it's not that we don't value the services provided by these groups; we got to have them. But the ruling by the Department of Justice is that the (POMA ?) Act would not allow a blanket recall of DOD civilians, and so we went through the process this -- assess some groups as being less directly related to -- to readiness.

 

            But they still are, in the long run.  I think -- if -- if I'm not conveying this, I want to be real blunt.  This is a very hurtful decision or painful for us, because we're a team and we're kind of having to split up the team.

 

            And the only good news is everybody's going to get paid now, assuming this act goes through.

 

            WHITMAN:  Stand back for a second; we'll take Thom Shanker next.  Hang on, Thom.

 

            Q:  While we're waiting, I've been verified to get in line for a question.

 

            WHITMAN:  Yeah -- OK, first Mr. (inaudible).

 

            CROSSTALK

           

            HALE:  I -- I -- I think I misstated -- legislative and public affairs functions would not be recalled except for those involving internal public affairs communications, and there will be quite a number of those.

 

            I'm sorry; I think I may have misspoken.

 

            WHITMAN:  We'll go now to Thom Shanker, New York Times and then to Kevin Baron.

 

            Q:  Thanks, Bryan. Thanks, Mr. Hale.

 

            Since our stories were posted online after the initial release, I've gotten dozens of e-mails from people working in other branches of the government who are saying, "What about us?  Why has the defense secretary worked with the Justice Department to get all these people have to work but not other branches of the government?"

 

            Just curious what -- what you might say to them.

 

            HALE:  Well, I would say to them that the law doesn't cover them.

 

            And, you know, if I had my way, for -- frankly, as a citizen, it would have.  But, if I had my way, we wouldn't have ever had a lapse of appropriations.

 

            But the law covers DOD employees and those employees of the Department of Homeland Security who support the Coast Guard, and that's it.

 

            So, unfortunately, there's no legal basis for employees in other agencies or outside of DOD and DHS.

 

            Q:  Thanks.

 

            Q:  Hi, it's Barb (ph), from the (inaudible) English (ph).

 

            I know that, Mr. Hale, that you talked about this last week, but could you talk about the impact of the partial shutdown on planning for another round of sequestration and -- and on trying to work on the FY '15 budget?

 

            HALE:  Well, it's pretty much come to a stop, frankly.  Now, that may change as we -- excuse me -- as we get people back.

 

            But at the moment, we have stopped, essentially everything except financial management and planning activities in connect with excepted activities like Afghanistan and military operations.

 

            So, the planning functions stop.  Now, that may change as we -- as we get these folks back.  But, it is very disruptive to that planning process; it's not something you can start and stop easily.

 

            WHITMAN:  Kevin Baron, I think we had you in the queue.

 

            Q:  Thanks.  I'm -- I was going to ask, actually, that the -- the two things about the public affairs offices (ph) internally and externally, so that means that -- you -- you know, what does that mean, that the Pentagon channel  is running but, you know, (doors ?) to your office is not?

 

            Can we get a little more clarity to that?  And also, if you guys  could -- could give an example -- what -- what was down, during this last week?

 

            You know, (my ?) – (secretary ?) I know didn't return my e-mails, but -- how does this affect real military operations?

 

            Are there some examples that you guys know in -- in mind?  I really (inaudible) you to make these changes.

 

            HALE:  Well, let me take a shot at the overall one, and I'll ask either George, or maybe Bryan, I guess, because it's hard to heard George, I gather, to comment on what's going on in the public affairs world.

 

            A number of things are happening that are bad.  I mean, obviously, the big one is going to be, for the most part, fixed.  And then we had 350,000 people on furlough -- or, potential part of it being (ph) these (POMA ?) and (directed ?) are not being paid.

 

            And I (mean ?) to think seriously damaged moral.  And we won't get rid of all of that.

 

            I mean, you can -- you know, we've got pay freezes and sequester furloughs and now this one -- we've seriously damaged civilian morale.  And this'll be a start back, but it's not the end.

 

            We've also had to stop some training activities, especially those that were not closely related to military operations, both in -- in all of the services.  So, it's damaging our readiness, which is already, frankly, been damaged by sequestration in fiscal '13.

 

            We have some heart-rending situations -- that we are not allowed, by law, to pay death gratuities.  They are not a (paid ?) allowance, and unfortunately, that -- we will still be unable to pay them, due to (POMA ?), or even after (POMA ?).

 

            We've had a number of people die recently and we -- we will be able to pay them, but not until the lapse of appropriation ends.

 

            We're trying to be helpful through aid societies and others to the -- the family members who are involved in these tragic circumstances.  But unfortunately, we don't have the legal authority to make those payments.

 

            Those are some examples of the kind of broad and some more specific effects -- so, let me ask -- Bryan, are you going to comment on this one?

 

            WHITMAN:  Let me see -- I'll defer to George, if he's still on the line.  Otherwise, I'll try to take a stab at that.

 

            OK, I -- I guess I'll take a stab at it.

 

            Well, not to make any decisions for my boss, who will take this guidance and apply it to our own organizations to include the Defense Media Activity -- generally speaking, I think that you characterized it probably correctly.

 

            Those (focus areas ?) -- activities  that are internally oriented, focused on providing communications to our forces, whether it be Armed Forces, radio/television network, the activities of Pentagon Channel, those -- the Armed Forces press service, those type of things, by and large, the activity that takes place that sends media activity will  now -- those civilians that were furloughed will now, in all likelihood, with some exceptions, be brought back to duty.

 

            With respect to OSBPA, you're also correct that this particular (format ?) at this point in time would not allow us to return civilians to public affairs activities such as the press office.  But those will be determinations that George Little will have to make as he applies this guidance to his own organization as well as the field activity.

 

            HALE:  Let me ask you that (inaudible) said, if you wanted to see all of our civilian workers back, and I certainly share that; I know you will do everything we can to make that happen within the law.

 

            Q:  Hi, this is Bill (Inaudible) "News Journal" from Delaware.

 

            (UNKNOWN):  I heard Bill; so go ahead, Bill.

 

            Q:  Yes, thanks very much, Bryan.

 

            I just wanted to make it -- be clear that this action does not -- does not provide for any retroactive pay; people would be paid as of the day they went back to work and would not be paid for worth that they've lost.  But the bill before the Senate now would, if that task would take care of that, is that correct?

 

            HALE:  Well, that's true for (POMA ?), but separate legislation providing retroactive pay passed the House 407 to nothing this morning.  And like I say, I haven't had much time to breathe today.  I think the Senate will take it up sometime today.  It may already have done so, I don't know.

 

            And the president has issued a statement that he strongly supports the legislation and will sign it.  So I think there's a pretty good chance that we will, by the end of the day, have a legislation that would provide for retroactive pay.  But it -- (POMA ?) does not.  This legislation, the other one would.

 

            Q:  OK, thank you.  And just follow up for next week, we're looking at -- I mean, right now the -- where the language says next week, it doesn't say specific day like Monday.  That will just be up to individual commands and bases to (inaudible) as soon as that can get things rolling and get (inaudible) and so forth?  Be more specific on that, please.

 

            HALE:  I think that's a fair statement.  We're going to try to do it just as quickly as we can.  And I think you will see a number back on Monday, as to how many, please don't ask me (inaudible), because I don't know.  And then we'll do it as quickly thereafter as we can.

 

            I mean, these people want to get back to work and we want them back at work.

 

            Q:  And lastly, this will be the -- we (inaudible) commissary workers back to work, for instance, that along with others that have been mentioned here, those will be actually open and open for business?  Folks can shop at commissaries on bases sometime next week?

 

            HALE:  Yes, I think that's right.  Once we get the workers back, then we will be able to open the commissaries.

 

            (CROSSTALK)

 

            Q:  (Inaudible) question?

 

            Q:  Will anything like hazard pay and (inaudible) special pay like these monthly, yearly installments of (inaudible) bonuses?

 

            HALE:  I believe they are covered as a -- as an allowance and therefore will be payable.  We will be able to pay them.  This is like reenlistment bonds.

 

            WHITMAN:  I heard a couple people trying to get in, but I did hear CNN. CNN, go ahead.

 

            Q:  We -- yes, we -- I had a question.  Do you have any examples of any of these civilians that have had to come in to work unpaid?  Last week, when we saw the example of the Capitol shooting, where all these furloughed (inaudible) police were having to step into action.

 

            Have we had any kind of examples like that happen?

 

            HALE:  Well, we've had -- if I'm understanding you correctly, I know there were a number of civilians called back for the tropical storm that's threatening the -- guess it's the Gulf Coast.  And so, yes, we've been calling back some as specific demands arose.  I can't -- I don't know of any others specifically. 

 

            But those -- that -- those come to my mind.  There's apparently a number of -- fairly large number that we've called back in that case.

 

            (UNKNOWN):  About 25 --

 

            HALE:  About (inaudible).

 

            Q:  Have they -- have they come back to work without pay when they were called?  Or there was -- there was -- they knew that they were going to get paid?

 

            HALE:  (Inaudible) POMA they would have come back and they would not -- we would not have been able to pay them until we got appropriation.  Now we will be able to pay them in a timely fashion.

 

            (CROSSTALK)

 

            Q:  (Inaudible) news radio.

 

            WHITMAN:  (Inaudible) caught the last part of that, News Radio, go ahead.

 

            Q:  Yes, hi, Jared (Zerbi ?) from Federal News Radio.

 

            Just a quick payroll question.  My understanding was that defast was good to go basically until their working capital fund ran dry.

 

            Do we have any idea when that would happen?

 

            Or does (POMA ?) make that issue go away anyway?

 

            HALE:  Well, they've probably got about two weeks.  And then they would run dry.

 

            At that point it will be only excepted people and the -- yes, (POMA ?) will affect it at a minimum, I think, (POMA ?) will leave us able to keep on all of our pay personnel.  And I think -- I'm going to have to think about one of my tasks, working with (PPASS ?), who else in (PPASS ?).  And we haven't gotten to that point.  We've got about two weeks.  And I sure hope it's over by then.

 

            (CROSSTALK)

 

            Q:  (Inaudible) from CCTV.  Can I ask a question about how this impact policy (staff  ?), especially on the Asia Pacific?

 

            WHITMAN:  (Inaudible) policy staff.

 

            HALE:  The policy staff?

 

            Well, there's nothing in the -- well, we don't recall list that this policy staff.  So I think you will see most of our policy staff brought back under this as we implement (inaudible).

 

            Q:  Hi, this is Ben Bonds with the labor union.  The question specifically is in regards to National Guard technicians and the (inaudible) National Guard.  Can you comment on whether the 52,000 National Guard technicians (inaudible) exception here for are going to be brought back and maybe comment also on the reserve force as well?

 

            HALE:  So the dual status technicians are federal civilians, and they are covered under (POMA ?).  It will be a decision of their commanders whether they're brought back.  My guess is that most or maybe all of them will be brought back to work as we implement (POMA ?).

 

            Let me just say, there is one area that we're -- we did not make a change and that is in active duty drills by the Guard and reserve components, it's the weekend drills, if you will.  Those are not affected by (POMA ?) and so we're under the old rules there. 

 

            Those drills can only take place if they're on direct support of an excepted activity in the military operation or safety of life kind of thing like being ready to go to Afghanistan.  And even if they put the date place, we can't pay those drilling reserves until the shutdown ends, so we get an appropriation.

 

            Over.

 

            Q:  OK.  And – but in regards to the technician that say that (inaudible) bureau.

 

            WHITMAN:  Can you repeat the question again, please?

 

            Q:  In regards to the technician forces, (civilians ?)dual status and non-dual status specifically, are you saying that their coming back is up to National Guard bureau or the individual states?

 

            HALE:  Hold on just a second.

 

            WHITMAN:  (Inaudible), do I think it would be the recommendation of chief National Guard bureau to the Army or the Air Force (inaudible) --

 

            HALE:  So the DOD civilians -- and I think we will need to get a recommendation from the Guard bureau and then ultimately I think the services who are holders of funds are going to have to make the decision.  I think you're going to see most of them all back.  But I don't want to -- don't want to say that definitively until we see what the decisions or recommendations from the Guard bureau and the -- and the decisions made by the services.

 

            Q:  Thank you.

 

            Q:  (Jennifer Ladd ?) from Stars and Stripes. Just a quick question.

 

            How does this work for the civilians?  Do all civilians who are furloughed right now need to go back on Monday and find out if they're going to be able to back to work?  Or will they be notified by their command?

 

            (CROSSTALK)

 

            HALE:  We're trying to work through, and it's a difficult process because we've (inaudible) don't have BlackBerry devices and those that do, we've told not to use. 

 

            So we're not in direct communication with them.  I think what we will do is issue statements, saying unless you're in one of the categories that -- where we can't recall you, you should report back to work on Monday or in a few days if you're asked to earlier. 

 

            For those in those categories, and they need to talk to their supervisor about whether there'd be some selective recalls.  And we'll have to work through that next week.  But I believe that's the approach we'll take to try to get people back to work starting Monday.  But it's going to take a few days. 

 

            We're not going to be fully back even of the groups that are going to be recalled I think by Monday morning.

 

            But we'll do it just as quickly as we can.  I mean, we want them back.

 

            WHITMAN:  Got time for one or two more (inaudible).

 

            Or not.

 

            Going once, going twice.

 

            Q:  Hi, it's (Ron Short ?) again.  Hey, how are you?

 

            Very quickly, to follow up on what I was asking before about the impact on the long-term budget planning for DOD -- and Bryan, you might want to jump in on this, how does this affect the department's long-term ability to defend U.S. security and foreign policy interests? 

 

            I mean, I can't imagine that you're not overwhelmingly distracted and that you're not able to think about reassessing where resources ought to go as we come into a post-war period.

 

            HALE:  Absolutely.  I mean, we are -- we are distracted by this.  I mean, we have to implement it and carry out the law.  But it is consuming -- I can't give you a number -- but I'm sure just thousands of hours of time and all of mine, I might add. 

 

            And so it is preventing us from doing more useful exercises.  It is a colossal waste of time.  And very frustrating to all of us.  So I'll repeat what I said before. We very much hope that Congress acts to end this lapse of appropriations and does so soon.

 

            WHITMAN:  With that, that's a good place to bring this to a close.  I want to thank everybody for joining us late on a Saturday afternoon.  You can always continue to follow up with the press office on questions that you might have. We've got (inaudible) 24 hours a day, and we'll try and address any issues that might still be out there that you need to get some answers to.

 

            So, thank you again for attending this, and we'll sign off now.

 

            WHITMAN:  So thanks for all -- for joining us this afternoon. As George is indicating, the Secretary announced today the plan to return many of our furloughed DOD civilian employees.  There he made a statement which I think all of you have.  We've also provided to you some implementing guidance that we've issued to the department, and today we have to speak to you our comptroller, Mr. Bob Hale, as well as from our general counsel, Paul Koffsky to talk you through some of the questions that you might have.  Before we start taking questions though, Mr. Hale will open up with a brief overview of what we've done today and then we will start to take your questions.

 

            HALE:  OK, Bryan, thank you.

 

            I want to discuss the guidance for implementation of the Pay Our Military Act, POMA.  POMA has a lot of aspects.  I'll mention a couple that aren't the focus of my discussion today, I'll focus only on DOD employees; it covers the Coast Guard.  POMA allows us to provide pay allowances for military personnel, so we are going to be able to pay our military on a timely basis the next payday, October 15 and future ones and it allows us to provide pay and allowances for contractors and we're working on this one in terms of -- of guidance. 

 

            What I will do today is focus on POMA as it relates to civilians, which of course, is what Secretary Hagel issued today in a determination statement.

 

            POMA allows us to pay -- provide pay and allowances for civilians who provide support for members of the Armed Forces.  We can pay these people in a timely fashion and so our paydays for them will -- will be on time and we can recall from furlough most DOD civilians.  It requires, as you know, a Secretary of Defense determination of who qualifies which is what he issued this afternoon.

 

            When we got POMA, the law was enacted about a week ago, we immediately began working with the Department of Justice on how to implement it and the department expressed the opinion that the law does not permit a blanket recall of the -- of all DOD civilians. 

 

            The Department of Justice did say that we could undertake a careful review of civilians who support members of the Armed Forces and determine who to recall.

 

Needless to say, this is a difficult process and a time consuming one, but we now have agreed to guidance which the Secretary issued in his determination today.  Under our current reading of the law, the standard for civilians who provide support to members of the Armed Forces requires that qualifying civilians focus on the morale, well-being, capabilities and readiness of military members that occurs during a lapse of appropriations.  And with this in mind, we've established some categories of civilians.

 

            First there are excepted civilians, the ones who are already working right now, actually, with military operations, safety, life and property.  They'll be working now and under POMA we can pay them in a timely manner, their October 11 payday will be on time and in full.

 

            We will recall a category of civilians who provide ongoing support to military members on an ongoing basis, health care, family programs, (inaudible) maintenance, and commissaries.

 

            We'll also recall a second category of civilians who's work, if interrupted by the lapse for a substantial period would cause future problems for military members.  Falling in this category, acquisition program oversight, contract logistics, financial management, supply chain management.

 

            Finally, there is a category that we will not recall from furlough.  They do essential and important work and I want to underscore that, but it is less directly related to military members or in a couple of cases, it's not covered by POMA.  Areas here include CIO staff functions but not IT and cyber functions, legislative and public affairs functions but not internal public affairs communications, the DCO or Deputy Chief Management Officer functions, auditors and related functions.  And some we cannot recall because they're not covered by the Act, in particular any people in DOD that -- who work in sort of non-DOD activities and we do some work on a reimbursable basis for other agencies.

 

            Let me say again, that -- that those on this list that we're not going to recall from furlough do critical functions.  I mean what they do is important but because of the letter of the law and the advice from the Department of Justice, we had to identify those with less direct effect on military members. 

 

            I'd also note that the Retroactive Pay Act, appears headed toward enactment in the Congress, I've been so busy, I haven't found out what the Senate did, but the House passed it 407 to 0 and the President has said he would sign it.  So everyone, if this act is passed, everyone, even if they remain on furlough, will eventually be paid.  Those who remain on furlough will not be paid until we have an appropriation.

 

            And I'd offer one final note of caution about this recall, we have authority to recall most of our civilians and provide them pay and allowances.  We don't have authority to enter into obligations for supplies, parts, fuel, et cetera unless it is for an excepted activity, again, one tied to a military operation or safety of life and property.  So as our people come back to work, they'll need to be careful that they do not order supplies and material for non-excepted activities.

 

            And I think this underscores the point that although this is very important and we're glad we're getting most of our employees back, we haven't solved all the problems associated with a lapse of appropriation by any means and we still very much hope that Congress will act quickly to end this government shutdown and the lapse of appropriations.

 

            And with that, let me stop and I should say one more thing, we have begun the process of (inaudible) we hope to move very quickly.  I just got off a meeting with many of our members in the services and our defense agencies and we hope we get a lot of our civilians back very quickly within the next couple of days if we possibly can.

 

            So with that, let me stop and say I will be glad to try and answer your questions and would invite Paul Koffsky to help me.So, Bryan

 

            WHITMAN:   we do have kind of an open line situation, so I'll try to recognize folks when you come up on the Net.

 

            Q:  Bob Burns here.

 

            WHITMAN:  :  OK, Associated Press, Bob Burns, go ahead.

 

            Q:  Mr. Hale, thanks.

 

            I've got a couple of just really basic questions. When you say most civilian employees who are on furlough will be returned to work, first of all, how many actually are on furlough now as we speak and can you give us at least a ballpark figure of how many people we're talking about?  And also, we're not talking about, if I'm not mistaken, you said we're not talking about contractors, we're talking only about government civilian employees?

 

            HALE:  Yes, and we're talking about government civilian employees -- DOD civilian employees, I should say.

 

            We have today about roughly -- roughly about 350,000 DOD employees on furlough.  I don't know exactly how many people we'll bring back yet.  I (inaudible) services that provide, my guess is that we'll bring most of them back but no more than a few tens of thousands will remain on furlough, and it may be substantially less than that.  But I just can't know that until we give the services kind of a day to work through the guidance and -- and exactly who would come back.

 

            Does that answer your questions (inaudible).

 

            Q:  And any of those individuals come back immediately, like today?

 

            HALE:  No, it won't be today.  I mean we have to let the services look at this guidance.  I hope that we can get a substantial number back by Monday but again, we -- we've got to give the services time enough to identify the folks who are coming back and notify them.  So Monday and it could be -- certainly I -- I think we'll get started on Monday and we'll get them as soon thereafter as we can.

 

            Q:  Thank you.

 

            Q:  Can -- can you comment on how this would affect potential layoffs and defense contractors who have had to potentially, idle in place because of the lack of inspectors?

 

            HALE:  Right.  I think -- I think you understand, maybe you don't.  I mean it's -- for -- for contracts with money obligated before the lapse, we have authority to continue the contract (inaudible) supervision as available and to pay the contractors.  But we were required to furlough the inspectors.  We will be bringing those inspectors back under POMA, I hope soon and therefore, we will be able to restart the inspections and it'll take a little while to get going but I believe that will allow us -- we'll also bring back the people that process the vouchers, and we already have on board our people that actually do the payments.  So I believe that we will be able to restart the payments reasonably quickly.

 

            Q:  Can I get a question in, Bryan?  This is Tom Bowman with NPR.

 

            WHITMAN:  All right Tom.

 

            Q:  Yeah.

 

            Mr. Hale, as you know, James Clapper of the DNI said that roughly 70 percent or so of civilian employees in the intelligence community have been furloughed.  What about the DOD agencies?  You know, defense intelligence agencies for example.  Do we expect all those civilians to come back to work with -- with this announcement?

 

            HALE:  I think many of them will. I mean this is a judgment.  Intelligence was in that category, remember, I mentioned the one of -- if the lapse -- if not having them during the lapse of appropriations causes serious future problems, so they are people that we can recall and I -- and -- and until we see the judgments made by the agencies involved, I won't know for sure but I think many of them will come back.  The DOD employees will come back.  Understand, there are some employees in the intelligence community who are not DOD employees, they're (inaudible) --

 

            Q:  Yeah exactly.

 

            HALE:            -- will not affect them.

 

            Q:  And also, jumping on Bob's question, too, about 350,000 furloughed, can you give us a rough ballpark on the percentage you expect to bring back?  Is it 90 percent, 95 percent?  Just rough estimate.

 

            HALE:  You know, I think it'll be in the 90's but I'm -- I'm reluctant to give very precise -- comptrollers are, you know, they're compulsive and a bit anal, and I like to have the numbers before I give them to you and I don't yet.  So, I think it will be in the 90s, in terms of percentage that we bring back.

 

            Q:  OK, that's helpful.  Thank you.

 

            Q:  This is still Phil Stewart (ph).  Can you hear me?

 

            HALE:  Go ahead, Phil (ph).

 

            Q:  I just -- to double check -- 350,000 is less than 400,000 a lot of us are using.  Can you explain what the difference was?  I think we all thought it was 400,000.

 

            HALE:  You (ph) have about 750,000 DOD paid personnel.  We furloughed about 47 percent -- that's a -- I know the 400,000 is out there, and I think we were trying to (inaudible).

 

            I think the 350,000 is a more accurate assessment right now.

 

            Q:  And may I ask a follow-up question?

 

            HALE:  Go ahead, Phil (ph).

 

            (CROSSTALK)

 

            Q:  I'm going to.  Just a quick one -- it just came to mind.

 

            Are we talking about DOD civilian employees globally or only in the United States, and is it not just in the Pentagon area -- the D.C. area?

 

            HALE:  Oh no, it's globally.

 

            Q:  Globally.

 

            HALE:  Yeah.  Eighty-six percent of our civilians are outside the Washington metropolitan areas, so most of them that are affected are outside of D.C.

 

            But -- and it will affect them worldwide.

 

            Q:  Thank you.

 

            Q:  It's Thom Shanker, mind if I hop  in here?

 

            WHITMAN:  (No ?), you're (good ?), Thom.  (inaudible)

 

            (CROSSTALK)

 

            Q:  Yeah, (inaudible).

 

            Quick question – (do ?) we know (the ?) -- you mentioned the category of civilians that will not be returning.  Could you elaborate a little bit more on who they are and what that stipulation was?

 

            HALE:  Right.  I got these in my notes somewhere, (I'm ?) (inaudible).

 

            There's several categories that will not be recalled unless they've already been excepted, and some of these categories would be there.

 

            CIO staff functions, but not cyber and I.T. support at the bases; legislative and public affairs functions, but not internal public affairs communications; FEG management officer functions; auditor and related functions, and work done in support of non-DOD activities.

 

            And I do want to say one more time -- it's not that we don't value the services provided by these groups; we got to have them. But the ruling by the Department of Justice is that the (POMA ?) Act would not allow a blanket recall of DOD civilians, and so we went through the process this -- assess some groups as being less directly related to -- to readiness.

 

            But they still are, in the long run.  I think -- if -- if I'm not conveying this, I want to be real blunt.  This is a very hurtful decision or painful for us, because we're a team and we're kind of having to split up the team.

 

            And the only good news is everybody's going to get paid now, assuming this act goes through.

 

            WHITMAN:  Stand back for a second; we'll take Thom Shanker next.  Hang on, Thom.

 

            Q:  While we're waiting, I've been verified to get in line for a question.

 

            WHITMAN:  Yeah -- OK, first Mr. (inaudible).

 

            CROSSTALK

 

           

            HALE:  I -- I -- I think I misstated -- legislative and public affairs functions would not be recalled except for those involving internal public affairs communications, and there will be quite a number of those.

 

            I'm sorry; I think I may have misspoken.

 

            WHITMAN:  We'll go now to Thom Shanker, New York Times and then to Kevin Baron.

 

            Q:  Thanks, Bryan. Thanks, Mr. Hale.

 

            Since our stories were posted online after the initial release, I've gotten dozens of e-mails from people working in other branches of the government who are saying, "What about us?  Why has the defense secretary worked with the Justice Department to get all these people have to work but not other branches of the government?"

 

            Just curious what -- what you might say to them.

 

            HALE:  Well, I would say to them that the law doesn't cover them.

            And, you know, if I had my way, for -- frankly, as a citizen, it would have.  But, if I had my way, we wouldn't have ever had a lapse of appropriations.

            But the law covers DOD employees and those employees of the Department of Homeland Security who support the Coast Guard, and that's it.

            So, unfortunately, there's no legal basis for employees in other agencies or outside of DOD and DHS.

            Q:  Thanks.

            Q:  Hi, it's Barb (ph), from the (inaudible) English (ph).

            I know that, Mr. Hale, that you talked about this last week, but could you talk about the impact of the partial shutdown on planning for another round of sequestration and -- and on trying to work on the FY '15 budget?

            HALE:  Well, it's pretty much come to a stop, frankly.  Now, that may change as we -- excuse me -- as we get people back.

            But at the moment, we have stopped, essentially everything except financial management and planning activities in connect with excepted activities like Afghanistan and military operations.

            So, the planning functions stop.  Now, that may change as we -- as we get these folks back.  But, it is very disruptive to that planning process; it's not something you can start and stop easily.

            WHITMAN:  Kevin Baron, I think we had you in the queue.

            Q:  Thanks.  I'm -- I was going to ask, actually, that the -- the two things about the public affairs offices (ph) internally and externally, so that means that -- you -- you know, what does that mean, that the Pentagon channel  is running but, you know, (doors ?) to your office is not?

            Can we get a little more clarity to that?  And also, if you guys  could -- could give an example -- what -- what was down, during this last week?

            You know, (my ?) – (secretary ?) I know didn't return my e-mails, but -- how does this affect real military operations?

            Are there some examples that you guys know in -- in mind?  I really (inaudible) you to make these changes.

            HALE:  Well, let me take a shot at the overall one, and I'll ask either George, or maybe Bryan, I guess, because it's hard to heard George, I gather, to comment on what's going on in the public affairs world.

            A number of things are happening that are bad.  I mean, obviously, the big one is going to be, for the most part, fixed.  And then we had 350,000 people on furlough -- or, potential part of it being (ph) these (POMA ?) and (directed ?) are not being paid.

            And I (mean ?) to think seriously damaged moral.  And we won't get rid of all of that.

            I mean, you can -- you know, we've got pay freezes and sequester furloughs and now this one -- we've seriously damaged civilian morale.  And this'll be a start back, but it's not the end.

            We've also had to stop some training activities, especially those that were not closely related to military operations, both in -- in all of the services.  So, it's damaging our readiness, which is already, frankly, been damaged by sequestration in fiscal '13.

            We have some heart-rending situations -- that we are not allowed, by law, to pay death gratuities.  They are not a (paid ?) allowance, and unfortunately, that -- we will still be unable to pay them, due to (POMA ?), or even after (POMA ?).

            We've had a number of people die recently and we -- we will be able to pay them, but not until the lapse of appropriation ends.

            We're trying to be helpful through aid societies and others to the -- the family members who are involved in these tragic circumstances.  But unfortunately, we don't have the legal authority to make those payments.

            Those are some examples of the kind of broad and some more specific effects -- so, let me ask -- Bryan, are you going to comment on this one?

            WHITMAN:  Let me see -- I'll defer to George, if he's still on the line.  Otherwise, I'll try to take a stab at that.

            OK, I -- I guess I'll take a stab at it.

            Well, not to make any decisions for my boss, who will take this guidance and apply it to our own organizations to include the Defense Media Activity -- generally speaking, I think that you characterized it probably correctly.

            Those (focus areas ?) -- activities  that are internally oriented, focused on providing communications to our forces, whether it be Armed Forces, radio/television network, the activities of Pentagon Channel, those -- the Armed Forces press service, those type of things, by and large, the activity that takes place that sends media activity will  now -- those civilians that were furloughed will now, in all likelihood, with some exceptions, be brought back to duty.

            With respect to OSBPA, you're also correct that this particular (format ?) at this point in time would not allow us to return civilians to public affairs activities such as the press office.  But those will be determinations that George Little will have to make as he applies this guidance to his own organization as well as the field activity.

            HALE:  Let me ask you that (inaudible) said, if you wanted to see all of our civilian workers back, and I certainly share that; I know you will do everything we can to make that happen within the law.

            Q:  Hi, this is Bill (Inaudible) "News Journal" from Delaware.

            (UNKNOWN):  I heard Bill; so go ahead, Bill.

            Q:  Yes, thanks very much, Bryan.

            I just wanted to make it -- be clear that this action does not -- does not provide for any retroactive pay; people would be paid as of the day they went back to work and would not be paid for worth that they've lost.  But the bill before the Senate now would, if that task would take care of that, is that correct?

            HALE:  Well, that's true for (POMA ?), but separate legislation providing retroactive pay passed the House 407 to nothing this morning.  And like I say, I haven't had much time to breathe today.  I think the Senate will take it up sometime today.  It may already have done so, I don't know.

            And the president has issued a statement that he strongly supports the legislation and will sign it.  So I think there's a pretty good chance that we will, by the end of the day, have a legislation that would provide for retroactive pay.  But it -- (POMA ?) does not.  This legislation, the other one would.

            Q:  OK, thank you.  And just follow up for next week, we're looking at -- I mean, right now the -- where the language says next week, it doesn't say specific day like Monday.  That will just be up to individual commands and bases to (inaudible) as soon as that can get things rolling and get (inaudible) and so forth?  Be more specific on that, please.

            HALE:  I think that's a fair statement.  We're going to try to do it just as quickly as we can.  And I think you will see a number back on Monday, as to how many, please don't ask me (inaudible), because I don't know.  And then we'll do it as quickly thereafter as we can.

            I mean, these people want to get back to work and we want them back at work.

            Q:  And lastly, this will be the -- we (inaudible) commissary workers back to work, for instance, that along with others that have been mentioned here, those will be actually open and open for business?  Folks can shop at commissaries on bases sometime next week?

            HALE:  Yes, I think that's right.  Once we get the workers back, then we will be able to open the commissaries.

            (CROSSTALK)

            Q:  (Inaudible) question?

            Q:  Will anything like hazard pay and (inaudible) special pay like these monthly, yearly installments of (inaudible) bonuses?

            HALE:  I believe they are covered as a -- as an allowance and therefore will be payable.  We will be able to pay them.  This is like reenlistment bonds.

            WHITMAN:  I heard a couple people trying to get in, but I did hear CNN. CNN, go ahead.

            Q:  We -- yes, we -- I had a question.  Do you have any examples of any of these civilians that have had to come in to work unpaid?  Last week, when we saw the example of the Capitol shooting, where all these furloughed (inaudible) police were having to step into action.

            Have we had any kind of examples like that happen?

            HALE:  Well, we've had -- if I'm understanding you correctly, I know there were a number of civilians called back for the tropical storm that's threatening the -- guess it's the Gulf Coast.  And so, yes, we've been calling back some as specific demands arose.  I can't -- I don't know of any others specifically. 

            But those -- that -- those come to my mind.  There's apparently a number of -- fairly large number that we've called back in that case.

            (UNKNOWN):  About 25 --

            HALE:  About (inaudible).

            Q:  Have they -- have they come back to work without pay when they were called?  Or there was -- there was -- they knew that they were going to get paid?

            HALE:  (Inaudible) POMA they would have come back and they would not -- we would not have been able to pay them until we got appropriation.  Now we will be able to pay them in a timely fashion.

            (CROSSTALK)

            Q:  (Inaudible) news radio.

            WHITMAN:  (Inaudible) caught the last part of that, News Radio, go ahead.

            Q:  Yes, hi, Jared (Zerbi ?) from Federal News Radio.

            Just a quick payroll question.  My understanding was that defast was good to go basically until their working capital fund ran dry.

            Do we have any idea when that would happen?

            Or does (POMA ?) make that issue go away anyway?

            HALE:  Well, they've probably got about two weeks.  And then they would run dry.

            At that point it will be only excepted people and the -- yes, (POMA ?) will affect it at a minimum, I think, (POMA ?) will leave us able to keep on all of our pay personnel.  And I think -- I'm going to have to think about one of my tasks, working with (PPASS ?), who else in (PPASS ?).  And we haven't gotten to that point.  We've got about two weeks.  And I sure hope it's over by then.

            (CROSSTALK)

            Q:  (Inaudible) from CCTV.  Can I ask a question about how this impact policy (staff  ?), especially on the Asia Pacific?

            WHITMAN:  (Inaudible) policy staff.

            HALE:  The policy staff?

            Well, there's nothing in the -- well, we don't recall list that this policy staff.  So I think you will see most of our policy staff brought back under this as we implement (inaudible).

            Q:  Hi, this is Ben Bonds with the labor union.  The question specifically is in regards to National Guard technicians and the (inaudible) National Guard.  Can you comment on whether the 52,000 National Guard technicians (inaudible) exception here for are going to be brought back and maybe comment also on the reserve force as well?

            HALE:  So the dual status technicians are federal civilians, and they are covered under (POMA ?).  It will be a decision of their commanders whether they're brought back.  My guess is that most or maybe all of them will be brought back to work as we implement (POMA ?).

            Let me just say, there is one area that we're -- we did not make a change and that is in active duty drills by the Guard and reserve components, it's the weekend drills, if you will.  Those are not affected by (POMA ?) and so we're under the old rules there. 

            Those drills can only take place if they're on direct support of an excepted activity in the military operation or safety of life kind of thing like being ready to go to Afghanistan.  And even if they put the date place, we can't pay those drilling reserves until the shutdown ends, so we get an appropriation.

            Over.

            Q:  OK.  And – but in regards to the technician that say that (inaudible) bureau.

            WHITMAN:  Can you repeat the question again, please?

            Q:  In regards to the technician forces, (civilians ?)dual status and non-dual status specifically, are you saying that their coming back is up to National Guard bureau or the individual states?

            HALE:  Hold on just a second.

            WHITMAN:  (Inaudible), do I think it would be the recommendation of chief National Guard bureau to the Army or the Air Force (inaudible) --

            HALE:  So the DOD civilians -- and I think we will need to get a recommendation from the Guard bureau and then ultimately I think the services who are holders of funds are going to have to make the decision.  I think you're going to see most of them all back.  But I don't want to -- don't want to say that definitively until we see what the decisions or recommendations from the Guard bureau and the -- and the decisions made by the services.

            Q:  Thank you.

            Q:  (Jennifer Ladd ?) from Stars and Stripes. Just a quick question.

            How does this work for the civilians?  Do all civilians who are furloughed right now need to go back on Monday and find out if they're going to be able to back to work?  Or will they be notified by their command?

            (CROSSTALK)

            HALE:  We're trying to work through, and it's a difficult process because we've (inaudible) don't have BlackBerry devices and those that do, we've told not to use. 

            So we're not in direct communication with them.  I think what we will do is issue statements, saying unless you're in one of the categories that -- where we can't recall you, you should report back to work on Monday or in a few days if you're asked to earlier. 

            For those in those categories, and they need to talk to their supervisor about whether there'd be some selective recalls.  And we'll have to work through that next week.  But I believe that's the approach we'll take to try to get people back to work starting Monday.  But it's going to take a few days. 

            We're not going to be fully back even of the groups that are going to be recalled I think by Monday morning.

            But we'll do it just as quickly as we can.  I mean, we want them back.

            WHITMAN:  Got time for one or two more (inaudible).

            Or not.

            Going once, going twice.

            Q:  Hi, it's (Ron Short ?) again.  Hey, how are you?

            Very quickly, to follow up on what I was asking before about the impact on the long-term budget planning for DOD -- and Bryan, you might want to jump in on this, how does this affect the department's long-term ability to defend U.S. security and foreign policy interests? 

            I mean, I can't imagine that you're not overwhelmingly distracted and that you're not able to think about reassessing where resources ought to go as we come into a post-war period.

            HALE:  Absolutely.  I mean, we are -- we are distracted by this.  I mean, we have to implement it and carry out the law.  But it is consuming -- I can't give you a number -- but I'm sure just thousands of hours of time and all of mine, I might add. 

            And so it is preventing us from doing more useful exercises.  It is a colossal waste of time.  And very frustrating to all of us.  So I'll repeat what I said before. We very much hope that Congress acts to end this lapse of appropriations and does so soon.

            WHITMAN:  With that, that's a good place to bring this to a close.  I want to thank everybody for joining us late on a Saturday afternoon.  You can always continue to follow up with the press office on questions that you might have. We've got (inaudible) 24 hours a day, and we'll try and address any issues that might still be out there that you need to get some answers to.

            So, thank you again for attending this, and we'll sign off now.