Lawmakers have agreed to cut commissary funding by $100 million next year compared with this year, according to a new agreement on a compromise defense authorization bill.
Defense officials had proposed cutting $200 million from the Defense Commissary Agency budget that funds about 245 stores on military installations around the world, part of a three-year plan that would bring the annual commissary budget down from about $1.3 billion to $400 million.
They acknowledged that the plan would shrink the commissary savings compared with average off-base grocery prices to about 10 percent from the current 30 percent, with shoppers having to cover the difference out of pocket.
But by law, commissaries must sell products at cost, and there is no authorization in the new bill that would allow commissaries to raise prices to pay for operations.
A fact sheet accompanying the compromise bill, approved by conferees on the House and Senate Armed Services committees, noted that as a former retail entrepreneur, House Armed Services Committee Chairman Rep. Buck McKeon, R-Calif., “understands that efficiencies can be made that reduce the cost of the program without increasing prices.”
“It’s a little early to tell what the impact will be,” said Mike Hayden, director of government relations for the Military Officers Association of America, though he issued an early warning on lawmakers’ reference to “efficiencies.”
“Efficiency, to me, is providing the same amount of service at lower costs,” Hayden said, adding that his concern is that the commissary agency will cut back on personnel, reducing operating hours or lengthening checkout lines for customers.
Lawmakers also agreed to require a study of the commissary system in conjunction with an independent organization familiar with retail grocery analysis. The study would examine the effects of using variable pricing in commissary stores to increase prices and help fund store operations; implementing a program to stock more “private label” products; and converting the commissary system into a nonappropriated fund organization, among other things.
That review would be due to Congress by Sept. 1.
The defense bill is expected to be passed by the House this week and considered by the Senate next week. The White House has threatened a veto on unrelated topics in the bill, but has not followed through on similar threats in recent years.