'You can’t spit on my face and tell me it’s raining!': Sen Kennedy explodes at Army Corps official

Key Concepts

• Fund Reallocation: The movement of $1.4 billion in federal funds to Everglades restoration projects.
• Aged Funds: Unobligated federal appropriations, totaling $46 billion, some of which are over 10 years old.
• Budget Transparency: A proposed shift in the FY27 budget to separate labor/salary costs from project-specific delivery costs.
• Project Deauthorization: The process of identifying and terminating inactive or stagnant projects that have not received funding or activity for decades.
• USACE (U.S. Army Corps of Engineers): The federal agency responsible for civil works, infrastructure, and environmental restoration.

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1. Reallocation of Funds to the Everglades

Secretary of the Army, Mr. Tel, confirmed that he personally authorized the movement of $1.4 billion to Everglades restoration projects.

• Justification: The Secretary cited legal flexibility granted by Congress, which allows the Army to reallocate funds from past acts (such as the Infrastructure and Jobs Creation Act, BBA18, and DRSA).
• Controversy: Senator Kennedy questioned the source of these funds, specifically asking if they were diverted from critical Louisiana projects (Westshore, Lake Pontchartrain, etc.). While the Secretary denied taking money from those specific projects, he acknowledged that the funds were "aged" and redirected from projects that lacked the ability to execute.
• Key Argument: The Secretary argued that when funds sit idle for years, they should be applied to projects that can "save lives and protect critical ecosystem restoration projects."

2. Budgetary Reform: Salaries and Expenses

The Secretary proposed a structural change in the FY27 budget to bifurcate labor costs from project delivery costs.

• The Problem: Currently, labor costs are "co-mingled" within project budgets. This creates a perverse incentive where district commanders may keep projects alive—even if they are not progressing—simply to maintain a revenue stream for district staff salaries.
• The Solution: By creating a distinct "Salaries and Expenses" line item, the Corps aims to build a "brick firewall" between administrative costs and project execution.
• Goal: To force transparency and shift the focus of commanders and the workforce toward project delivery rather than district sustainment.

3. Management of "Aged Funds" and Project Inventory

A significant portion of the hearing focused on the inefficiency of the Corps' financial and project management systems.

• Unobligated Funds: The Corps currently holds $46 billion in unobligated funds, with $15 billion of that being over 10 years old.
• Root Causes: The Secretary explained that many projects were deemed "shovel ready" in the past, but subsequent studies, negotiations with local partners, or changing community interests caused them to stall.
• Project Inventory: The Secretary admitted that the Corps does not currently know the exact number of authorized projects, estimating the figure to be closer to 10,000. The agency has hired personnel specifically to audit and identify projects that should be recommended for deauthorization under WRDA (Water Resources Development Act) provisions.

4. Notable Statements and Perspectives

• Senator Kennedy’s Critique: The Senator expressed frustration with the lack of transparency, stating, "You can't spit in my face and tell me it's raining." He argued that the Secretary’s decision to move $1.4 billion was likely influenced by external pressure, despite the Secretary’s testimony that it was an independent decision.
• The "Cardboard Firewall": The Secretary described the current administrative separation of funds as a "cardboard firewall" that is easily bypassed, whereas the proposed budget change would act as a "brick firewall" to ensure fiscal accountability.
• Accountability: The Secretary admitted that the failure to execute $46 billion in appropriated funds is "a disgrace" and that the agency is working to understand every "color of money" currently on their books.

Synthesis and Conclusion

The hearing highlighted a significant disconnect between the legislative branch and the U.S. Army Corps of Engineers regarding fiscal management. The primary takeaways are:

1. Systemic Inefficiency: The Corps is struggling with a massive backlog of $46 billion in stagnant funds and an unknown number of authorized projects, some of which have been inactive for decades.
2. Incentive Misalignment: The current budgeting process incentivizes the preservation of "zombie" projects to fund district salaries, a practice the leadership is now attempting to dismantle through budget bifurcation.
3. Transparency Demands: Congress is demanding greater clarity on how labor costs are attributed to specific projects, signaling a move toward stricter oversight of the Corps' internal accounting practices.