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House bill calls for $100 million 'efficiency' cut in commissary budget

May. 5, 2014 - 05:26PM   |  
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Although House lawmakers are resisting — for now — the Pentagon’s call to slash the annual commissary operating budget by two-thirds over three years, the House Armed Services Committee appears comfortable with a more modest budget cut next year.

According to a preview of legislative provisions that the committee will consider on May 7 in drafting its version of the 2015 defense authorization bill, lawmakers will approve a cut of $100 million in the commissary budget next year.

That is half of what the Pentagon had proposed in the first year of a three-year plan that would bring the annual commissary budget down from about $1.4 billion to just $400 million.

It is not immediately clear what impact a $100 million reduction would have on commissary operations, although a fact sheet provided by the committee indicates that Rep. Howard “Buck” McKeon, R-Calif., committee chairman, expects that budget cut would be offset by unspecified “efficiencies.”

McKeon “rejects cuts to compensation programs that result in increased out-of-pocket costs for military families,” according to the fact sheet, which then went on to say that McKeon, a former retail entrepreneur, “understands that efficiencies can be made that reduce the cost of the program without increasing prices.”

The committee’s version of the 2015 defense authorization bill would require the Defense Department to consult with outside experts to in retail grocery sales to find ways to save money. Among other issues, the review would consider the impact of such changes as allowing commissaries to sell private-label products, and the sensitivity of customers to paying higher prices.

DoD officials have acknowledged that their much more far-reaching proposal would shrink the current commissary savings compared to average off-base grocery prices to about 10 percent from its current 30 percent. At the far end of that proposal, the remaining $400 million in annual funding would be used to operate only stores that are overseas and in remote areas.

According to the legislative preview, House lawmakers would increase the authorization for commissaries to just over $1.2 billion, instead of the $1.1 billion requested by DoD. That includes a modest reduction in funding that the commissary system is absorbing in the current fiscal year.

House lawmakers so far have not agreed to the changes in law that DoD requested as part of its proposal that would allow officials to raise prices in commissaries and to sell private-label brands as ways to make up the difference in the loss of taxpayer dollars in the budget.

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