RICHMOND - Lost amid the controversy over next year's proposed funding cuts for the chemical neutralization plant at Blue Grass Army Depot is this: The Pentagon already has on hand more than enough money to keep work going for the next couple of years.

However, a budget analysis by the Chemical Weapons Work-ing Group shows that the Pentagon has impounded more than $400 million that Congress appropriated for neutralization plants in Madison County and Pueblo, Colo.

Officials haven't explained why the money has been impounded. But the move by the Pentagon to redirect it usurps Congress's role as the decision-making body for military spending, said Craig Williams, director of the Berea-based watchdog organization.

U.S. Sens. Wayne Allard, R-Colo., and Ken Salazar, D-Colo., appear to agree. Last week they called on the Pentagon to release funds and begin construction in Pueblo.

"It is unconscionable to me that the Department of Defense wants to delay this project when the Congress has provided ample funding during the past two appropriations cycles," Allard said in a statement.

Pentagon spokeswoman Sandra Burr did not respond to e-mailed questions yesterday.

The Blue Grass plant will use some of the technology that has been developed for Pueblo. But the Pentagon ordered a halt to design work in November 2003. The design staff for Pueblo has been cut from about 400 people to 140, said John Schlatter, a spokesman for the contractor, Bechtel Pueblo.

Last month, the company canceled seven procurements for construction contracts in Colorado.

In Kentucky, Bechtel Parsons Blue Grass has halted construction work and hiring while the budget problem is sorted out.

Bechtel Parsons is contracted to build and operate the $2 billion neutralization plant at the depot. It was proposed as part of a nationwide effort to destroy the nation's 31,500 tons of aging chemical weapons by April 2012, a deadline set by an international treaty.

More than 500 tons of nerve and mustard agent are stored at the depot, a few miles southeast of downtown Richmond.

The hundreds of millions impounded by the Pentagon includes $70 million that the federal agency which oversees the Blue Grass and Pueblo projects has received but cannot spend.

Michael Parker, program manager for that agency, called Assembled Chemical Weapons Alternatives, did not return a phone call seeking comment.

The two ACWA plants were thought to be in line to receive $250 million in the next fiscal year -- and even that would have been far below the $400 million needed to carry out a Pentagon directive to accelerate destruction of the weapons.

Instead, President Bush's budget proposed that ACWA receive $31 million for the two plants next year.

The budget cut is unprecedented for Kentucky, but Pueblo has been there before. Last year its budget was cut from $151.7 million to $4.8 million. Allard succeeded in getting $50 million added back, but that money has been frozen as well.

Of the $147 million cut from the Pueblo budget, $69 million went to solve problems at the nation's four active incineration sites, including a July 2002 mustard-agent leak at Deseret in Utah. Two plants needed more money because they could not attract enough qualified workers, according to budget documents sent to U.S. House and Senate committees.

An additional $30 million went to Edgewood Chemical Activity, a neutralization site in Aberdeen, Md. Most of the rest went to improve monitoring and other safety measures at incineration sites.

Allard and Salazar have asked Michael Wynne, an acting undersecretary of defense, to release the money already appropriated so the early phases of construction at Pueblo can be completed. Kentucky officials hope U.S. Sen. Mitch McCon-nell, a member of the Senate Appropriations Committee, will be able to restore funding for Blue Grass.

The Army is studying options such as building smaller, cheaper plants or transporting weapons to incinerator sites. The study of transportation alternatives will be completed next month.

In the meantime, there's no reason to halt construction of roads, utilities and support buildings, Williams said -- if you're going to keep your promise to build a neutralization plant.

"The real agenda," he suggested, "is to not build anything at these two sites."15