2014 Pentagon Budget: Strategic Reshaping?

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2014 Pentagon Budget: Strategic Reshaping?

The Obama administration’s FY2014 budget requests $526 billion in Pentagon spending, $51 billion above the budget cap of $475 billion foreseen under sequestration. Observers from business, the military and the Hill expect that further reductions from the requested level in Pentagon spending are coming whether through sequester or part of a sequester replacement. In the coming months, Congress will have to make strategic choices about how to trim down Pentagon spending.  The challenge it faces is to work with the Pentagon to implement the cost-saving reforms and reductions military leaders are calling for – many of which have been judged too politically problematic in the past – and at the same time setting strategic priorities to guide investments. This task is manageable, as Pentagon and outside experts say top national security priorities can be secured with sizable overall reductions to Pentagon spending. As always, however, this depends upon Congress putting leadership on tough issues over politics.

Pentagon leadership urges calm about reductions, noting even sequestration-level reductions still leaves U.S. outspending much of the world combined. Speaking at CSIS this week, Deputy Secretary of Defense Ash Carter said, “I’m more accustomed to listening to people question why the U.S. spends more on defense than the next 16 largest militaries in the world combined. This statistic is true and won’t change much in coming years.  It’s also worth noting that most of the rest of the money that the world spends on defense is spent by countries that are allies and friends of the United States.  These levels of defense spending are a reflection of the amount of responsibility that the U.S. and its friends and allies share for providing peace and security….If the drastic cuts that began with sequester this year were extended for a decade, U.S. defense spending would be cut somewhere around ten percentage points.” [Ashton Carter, 4/8/13]

Even capabilities that are seen by outsiders as highly resource intensive can remain funded during the Pentagon’s drawdown.  For example, Carter also said this week: “we have the resources to accomplish the rebalance [to Asia].  Some who wish to question the rebalance to the Asia-Pacific theater point to the current, seemingly endless debate in Washington about the U.S. budget, and wonder whether all this can be accomplished… None of these political scenarios changes the math I described earlier: the U.S. defense rebalance to the Asia-Pacific is not in jeopardy.”

Likewise, the Pentagon’s Air-Sea battle office commented on prospects of the controversial Air-Sea Battle concept for adapting how the U.S. Air Force and Navy work together to project power despite the increasing sophistication of foreign militaries – criticized for its “heavy bill” – in a resource-scarce environment: “Air-Sea Battle is a set of agreed-upon ideas and actions to create the joint force needed for operations in contested and denied environments and what that force needs to be able to do.  Having smaller budget authority does not change the validity of [Air-Sea Battle’s] ideas and actions for force development, although it may slow [Air-Sea Battle’s] implementation.” [Ashton Carter, 4/8/13. DoD Buzz, 4/5/13]

 “Structural reforms” in the Pentagon are needed to save funds for priorities, keep our promises to service members, and rein in skyrocketing costs. A number of areas in the Pentagon are growing at unsustainable rates. In his first major speech as Secretary of Defense, Chuck Hagel explained, “In many respects, the biggest long-term fiscal challenge facing the Department is not the flat or declining top-line budget, it is the growing imbalance in where that money is being spent internally. Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel, and develop replacements for aging weapons platforms will eventually crowd out spending on procurement, operations and readiness – the budget categories that enable the military to be and stay prepared.” [Secretary Chuck Hagel, 4/13/13]

Todd Harrison of the Center for Strategic and Budgetary Analysis adds, “To slow the rate of growth and prevent personnel and O&M accounts from crowding out other areas of the budget, DoD needs to make a number of structural reforms”:

Personnel: “For example, to slow the growth in military personnel costs DoD will need to make fundamental reforms to its compensation system. Instead of continuing to propose changes in military benefits that are all cuts with no improvements—an approach Congress has rejected repeatedly—DoD should propose a package of reforms that cut benefits undervalued by service members and reinvest some of the savings into forms of compensation that are more highly valued.”

Operations and maintenance: “Likewise, to reduce operations and maintenance costs, DoD should re-examine the size and structure of its civilian workforce and begin the process of closing excess bases and facilities—two of the major components driving O&M costs…When the new fiscal year begins on October 1, DoD will still have more civilian employees than it can afford under the BCA caps and will need to begin the painful work of initiating a reduction-in-force (RIF) process to reduce the size of the civilian workforce in a thoughtful manner. Likewise, as spending and the number of personnel decline in the coming years, DoD will be left with an even greater level of excess infrastructure. While the Department proposed two rounds of base closures in its previous budget request, such a proposal should also allocate funding for the upfront costs associated with closing and transferring facilities.” [Todd Harrison, 4/5/13]

Congressional leadership is needed: Harrison adds, “None of these long-term structural issues can be resolved by DoD alone. Without the support and flexibility it needs from Congress, DoD can make little progress on these critical issues.” This budget is expected to follow past budgets from both Republican and Democratic administrations in proposing smaller pay increases, new rounds of base closures, health care reforms, and cuts to outdated or ineffective weapons systems. Congress will have to find the political courage to accept some or all of these proposals. [Todd Harrison, 4/5/13]

What We’re Reading

The leader of the al-Nusra Front, one of the main jihadist groups fighting in Syria, pledged allegiance to the leader of al-Qaeda, Ayman al-Zawahiri.

The Gulf state of Qatar said it will buy $3 billion of Egyptian bonds to help the country’s crisis-hit economy recover.

Japan and Taiwan signed a deal allowing Taiwan to fish near a group of disputed islands, prompting China to express “extreme concerns.”

A general election will be held in Malaysia on May 5, the Election Commission said, in what is seen as a major test for Prime Minister Najib Razak’s ruling coalition.

South Korea raised its alert level to “vital threat” amid indications that North Korea is preparing for a medium-range missile test.

Cuba turned over to the U.S. a fugitive couple accused of abducting their children.

Tens of thousands of Colombians in several Colombian cities marched to support the current peace talks with left-wing rebels from the FARC.

Five Indian peacekeepers escorting a UN convoy in South Sudan were killed in an ambush by rebels.

An aide to Libya’s Prime Minister Ali Zeidan has been freed after being kidnapped nine days ago.

Russian MPs gave initial approval to a controversial anti-blasphemy law with tougher jail terms or fines for anyone found guilty of offending religious feelings.

Commentary of the Day

Emilian Papadopoulos and Eli Sugarman offer suggestions on how the U.S. can improve cyber security.

Michael Dobbs explains what the Cuban Missile Crisis can teach the U.S. about North Korea.

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