WASHINGTON — The Defense Department is reportedly discussing a $1 billion cut over the next three years to the commissaries budget, which could lead to a widespread closure of stateside stores.
With the budget tightening, the Pentagon’s comptroller ordered the Defense Commissary Agency to produce a plan to close most stateside commissaries.
According to a report on Military.com, the plan would close all but 24 rural stores stateside, while overseas stores would remain open.
The military services are reviewing the plan, according to a food industry official.
The commissary agency, which operates 247 stores worldwide, receives $1.4 billion annually in taxpayer funding. The potential Defense Department cut would reduce the agency’s budget over three years until it stood at $400 million for fiscal 2017, Military.com reported.
Starting with the 2015 budget, Congress would be forced to 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.”
DeCA’s $1.4 billion annual budget funds employee salaries, utilities and pays for food to be shipped overseas. A congressionally mandated 5 percent surcharge on all commissary sales pays for other operation costs such as construction and building maintenance.
A recent study by DeCA found that using the commissary saves shoppers an average of 30.5 percent annually when compared to other stores off base.
Cuts would be incremental and would appear 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 told Military.com.
The White House and the Office of Management and Budget need to approve the fiscal 2015 budget, and it’s unclear how such a plan would fare in discussions there. In August at Camp Pendleton, Calif., President Barack Obama told Marines that closing commissaries is “not how a great nation should be treating its military and military families.”
At a November hearing of the House armed services subcommittee on military personnel, its chairman, Rep. Joe Wilson, R-S.C., asked DeCA Director Joseph Jeu about a directive that the agency got from defense leaders in February ordering an independent study on cutting commissary costs up to 28 percent.
“Due to sequestration,” Jeu said, “the department is reviewing all of its programs and nothing, including commissaries, is off the table.”
In the hearing, Jeu declined to discuss the directive or study. But another witness did: Thomas T. Gordy, president of the Armed Forces Marketing Council, which represents brokers doing business with military stores.
Gordy testified that his group was encouraged over the summer to hear that the department was considering cuts for DeCA lower than 28 percent.
“However,” he said, “in recent weeks we understand the Joint Staff has asked DeCA to look at cutting its budget 33 to 66 percent.”
DOD would only confirm that in an effort to save money, all options are on the table.
“We have not finalized our 2015 budget submission,” said Joy Crabaugh, a spokeswoman for the personnel and readiness office of the assistant secretary of defense, “so we do not speak to any predecisional assessments or evaluations. As we face a continued fiscally constrained environment, we’re looking at all options for cost-cutting and money saving … All options are on the table, but we cannot speak to any of those that we’re looking at until we finalize our decision and submit our budget.”