Congress has not appropriated funds for the Pentagon for 2013. Instead, it passed a continuing resolution that temporarily extends Pentagon funding until late March at 2012 levels.

“The continuing resolution under which we’re operating has more money in the investment account and less money in operations and maintenance and we don’t have transfer authority to move it,” Dempsey said. “So our operations and maintenance is deteriorating because of the misalignment of funding in the continuing resolution.”

Dempsey is due to testify on the impact of sequestration at a hearing next week before the Senate Armed Services Committee.

“What we’ve got to make clear to the Congress next week (is) that it’s not just about sequestration. We’re trying to absorb the $487 billion Budget Control Act, we’re trying to absorb the challenges that were imposed on us by the continuing resolution and we’re anticipating absorbing sequestration,” Dempsey said.