THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, May 16, 1996 TAG: 9605160386
SECTION: FRONT PAGE: A8 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
DATELINE: WASHINGTON LENGTH: Medium: 75 lines
Defying a veto threat from the White House, House Republicans - and a substantial contingent of Democrats - on Wednesday advanced a $267 billion defense spending plan for 1997. The bill includes new weapons and social initiatives the president says are unacceptable.
The 272-153 vote came after surprisingly little debate, with most of the controversy coming over provisions to ban military service by homosexuals, force the discharge of members with the AIDS virus and stop the sale of sexually explicit material at military bases.
The bill includes some $12 billion more than Clinton requested, roughly half of it for weapons not in his budget. Among those are an attack submarine that will be built at Newport News Shipbuilding beginning in 1999. The Senate takes up a similar bill next week.
The House bill includes a plan by two Hampton Roads congressmen, Democrat Norman Sisisky and Republican Herbert H. Bateman, to shut down a $72 billion Pentagon fund generated by the purchase of supplies and repairs to ships, airplanes and other equipment.
The Defense Business Operating Fund, created in 1991, is a `` slush fund'' the Pentagon has tapped repeatedly to pay for unexpected operations, Sisisky charged in a speech May 7. The fund may have lost track of up to $5 billion, he charged, citing a General Accounting Office study.
DBOF has been a longtime target of congressional critics of the military's financial management. The Sisisky-Bateman proposal would terminate the fund in October 1998 but would give the Pentagon until October 1997 to develop an alternative plan to manage the Defense Department's industrial, commercial and support activities.
Basically, DBOF works like this: A military command that needs equipment repaired - a Navy command that wants a ship overhauled for example - arranges to have the work done at a military depot. In the case of a ship, the job might go to Norfolk Naval Shipyard.
Like a private yard, the Navy-owned shipyard would do the work for a negotiated price, billing the ship's command. The command would draw on its annual appropriation to pay for the work, sending the money to DBOF. The shipyard would draw funds from DBOF to pay its workers and expenses.
Before DBOF, the various services had several such funds. DBOF consolidated them and was supposed to save taxpayers money by merging financial management operations and forcing military commands to pay closer attention to the actual cost of repairs and maintenance.
But critics charge that by consolidating the funds, DBOF created a massive cash pool that the Pentagon tapped whenever it was short of funds in other areas. That left DBOF short of funds needed to pay its suppliers, like the shipyard; to close the gap, the fund's managers have been billing military commands for work scheduled but not yet actually performed.
Reforms last year, including a move to give each service more control of its operations within DBOF, were supposed to have solved many of DBOF's problems.
But Sisisky, whose district includes part of western Tidewater, ran out of patience this spring after receiving reports that the Navy might furlough shipyard and aircraft depot workers for several days each month. The reason: cash shortages were keeping DBOF from paying the yards and depots.
The furloughs never occurred, but the suggestion they might was enough to set Sisisky on a mission to abolish DBOF. After discussions with Bateman, who as head of the readiness subcommittee of the House National Security Committee provided a key link to Republicans, the pair agreed on their amendment to force the Pentagon to create an alternative to the fund.
Though most congressional attention has focused on DBOF's relationship with the military's maintenance depots, a source said Wednesday that Bateman has asked the GAO, Congress' financial watchdog agency, to study the fund's handling of accounts for military labs and weapons stations like the Navy's Yorktown Naval Weapons Station and the Naval Surface Warfare Center at Dahlgren.
KEYWORDS: MILITARY BUDGET DEFENSE BUDGET by CNB