23 January 2014

Pentagon Wants to Cut Commissary Budget by $1 Billion | RallyPoint.com


By Amy Bushatz
Copyright 2014 Military.com

The Defense Department is discussing a $1 billion cut over the next three years to the commissary’s budget in a move that could lead to a widespread closure of stores, Pentagon and industry officials said.

Word of the pending cut comes two months after news that the Pentagon’s top financial advisor ordered the Defense Commissary Agency (DeCA) to produce a plan to close most stateside commissaries should the need arise.

The commissary agency currently operates 247 stores worldwide. Under the requested closure plan, all but 24 rural stores stateside and stores located outside the continental U.S. would close.

DeCA currently receives $1.4 billion annually in tax payer funding. The potential Defense Department cut would reduce the agency’s budget over three years until it stood at $400 million fiscal 2017, sources confirmed to Military.com.

Starting with the 2015 budget, Congress would be forced to either find funding elsewhere and give the Defense Department more than its requested commissary budget, or allow officials to make sweeping changes to the commissary system, including potential closures.

"If DeCA's budget is cut to such a magnitude, it would ultimately require DeCA to close stores or change the way it delivers the commissary benefit," a source with knowledge of the proposed cuts told Military.com. "But those options would mean military families would have to pay more for their groceries, significantly reducing the non-pay compensation benefit provided through the commissaries. Once again, military families are being forced to sacrifice their hard-earned money to achieve deficit reductions by having their benefits reduced or eliminated."

Pentagon leaders are under pressure to find savings throughout military spending following the passage of sequestration and the association $500 billion cut to the defense budget over the next decade. Military officials have said all DoD agencies will be reviewed in order to cut costs to include family programs.

DeCA’s $1.4 billion annual budget funds employee salaries, keeps the lights on in stores and pays for food to be shipped to overseas locations.  A congressionally mandated five percent surcharge on all commissary sales pays for other operation costs such as construction and building maintenance.

A recent grocery store study by DeCA found that using the commissary saves shoppers an average of 30.5 percent annually when compared to other stores off base.

The cuts will be incremental and will appear first in the department’s 2015 budget request, expected to be released next month. The full $1 billion cut would not be included in the request until 2017, sources said.

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