Defense Committees Appear Open to Eliminating Support for Commissaries

Defense officials may be disappointed that the conference report for the fiscal 2016 defense authorization bill rejects the administration’s proposal to slash federal funding for commissaries in the near-term, but a provision added in the House-Senate conference requiring the department to draw up a plan for eliminating taxpayer support for military grocery stores and exchanges indicates that lawmakers may be closer to embracing the cost-cutting reform than previously believed.

The report, which calls for the Pentagon to craft a comprehensive plan for achieving “budget neutrality” for commissary and exchange benefits by the end of fiscal 2018, is primarily directed at military grocery stores since only 3 percent of the budget for exchanges is supplied by Congress.

The ultimate goal of the House and Senate Armed Services committees is to operate the stores without any taxpayer funding, a House staff member told Military Times.

DOD had proposed slashing the Defense Commissary Agency’s budget by $322 million in FY 2016 — out of a total allocation of $1.4 billion — and $1 billion in FY 2017, but lawmakers restored much of that funding for FY 2016. The Pentagon’s proposed cuts would have been accommodated by reducing days of operation and operating hours, laying off staff and closing some stores.

Far-reaching changes likely wouldn’t be carried out immediately, as the committees described a plan for conducting a pilot program for five years, with the potential to extend the test to 10 years, according to the story. The report would be required to address possible consequences, including:

  • merging business processes for commissaries and exchanges;
  • privatizing commissary and exchange systems, in whole or in part;
  • the willingness of major commercial grocery retailers to provide discounts to eligible military customers; and
  • closures of commissaries that are in close proximity or in places where commercial alternatives through major grocery retailers are available.

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