News Column

Pentagon Budget Takes Fire From All Sides

April 10, 2013
Pentagon

In President Barack Obama's 2014 budget request, political peace breaks out in Washington, and Pentagon funding rides high.

Now, back to reality.

The Pentagon on Wednesday unveiled details of Obama's belated $527 billion base defense budget for next fiscal year. But lawmakers on the left and right savaged the document for days leading up to the public unveiling, seeing the spending guidelines as little more than a fiscal fantasy.

Experts noted that the proposed budget:

* Ignores deep sequestration cuts mandated by federal law, which if left unchanged, would slash almost $52 billion -- nearly 10 percent -- from the numbers issued Wednesday.

* Lacks any real look at war spending for 2014, instead penciling in the request from last year as a placeholder.

* Includes another round of domestic base closings and increases in health care fees for military retirees -- both political nonstarters on Capitol Hill.

On Wednesday, Defense Secretary Chuck Hagel backed up the White House decision to effectively ignore the automatic cuts imposed by sequestration, presenting a base defense budget that added about $1 billion to the president's 2013 request.

"The President's budget request offers a comprehensive deficit reduction plan that would permit Congress to eliminate sequestration," Hagel said. "That plan averts what would otherwise be another significant reduction in the defense budget -- some $52 billion in fiscal year 2014 alone and $500 billion over a decade. Instead it calls for an additional $150 billion in savings over 10 years."

But if sequestration is not repealed, a comprehensive study of Pentagon strategies and spending Hagel recently ordered is looking for ways to deal with larger cuts while still defending the country, he said.

"We have to plan for budgets... not unmindful of sequestration and what's coming down the road if nothing is done," he said. "We are planning for every eventuality."

According to the Pentagon, "the President's budget includes balanced deficit reduction proposals that are more than sufficient to allow Congress to replace and repeal the sequester-related reductions required by the Budget Control Act of 2011."

Deep ideological divisions in Congress have prevented accord on budget cutting for more than two years, with Republicans insisting on cuts to federal entitlements and nonmilitary spending, while Democrats have pushed for tax increases to raise revenues.

Meanwhile, the Pentagon and the White House are not doing their job of creating a realistic defense budget, analysts said.

"They're in denial about 2014," said Todd Harrison, a budget researcher with the nonpartisan Center for Strategic and Budgetary Assessments.

Travis Sharp, an analyst writing for the Center for New American Security, a Washington think tank with close links to the Obama administration, called the defense budget request "a placebo, a placeholder with no effect."

Obama's tactic of ignoring automatic spending cuts won't forestall major fiscal bleeding for the DOD, which in turn will affect U.S. strategy, he wrote.

In the budget request, the Pentagon said it would continue to implement the defense strategy announced last year, downplaying Middle Eastern stability operations and shifting military emphasis to Asia.

"To date, policymakers have emphasized the operational consequences of budget cuts: the training hours lost and weapons upgrades deferred," Sharpe said. "Yet, the strategic consequences for U.S. credibility are potentially much more serious."

In past years, the president's budget proposal has been at least a starting point for lawmakers to build their own defense appropriations priorities. But with uncertainty surrounding even current fiscal year military spending, the projected Pentagon numbers may not even be worth that.

This year, a major component of the budget -- Overseas Contingencies Operations funds, or OCO -- remains in limbo. Because deliberations on troop levels in Afghanistan continued through February, the DOD said Wednesday, that the OCO funds could not be calculated in time to include in the budget request. In fiscal 2013, OCO comprised nearly 15 percent of the budget. A separate request will be filed with Congress within weeks, the department said.

The base budget request includes a 1 percent pay raise for troops -- the lowest annual raise in the history of the all-volunteer force. The 2014 request also includes housing and subsistence allowance increases of 4.2 percent and 3.4 percent respectively. It proposes a new fee for Tricare-for-Life enrollees, which would rise to 2 percent of gross retired pay within five years, and marginally raises other fees and copays. Enrollees in Tricare Standard and Tricare extra would also begin paying enrollment fees, starting at $70 for individuals and $140 for families next year, and rising to $125 and $250, respectively, in five years.

DOD will spend 170.2 billion -- about one-third of the 2014 budget request -- on personnel costs in 2014, Hagel noted.

"Current fiscal realities demand that we make tough decisions that have been deferred in the past," he said. "The longer we put this off, the harder it is going to be, particularly given the uncertainty that still exists about future levels of defense spending."

The budget also includes proposals to delay building new Army Apache helicopters, expected to save $1.7 billion and reduce support for the Joint Strike Fighter. But it provides funding for 41 new Navy and Marine vessels, including 14 Littoral Combat Ships, nine Virginia-class subs and nine Arleigh Burke-class destroyers, as well as significantly increased funding for cybersecurity.

In all, the request would trim military spending by up to $150 billion over the next decade.

But that's still spending far above the level mandated under sequestration, a series of government spending cuts imposed by Congress two years ago to help trim the federal deficit. Under those rules, the defense budget is capped around $475 billion, and cuts over the next nine years would total $450 billion.

The federal budget proposed by the White House would repeal sequestration and replace it with $1.8 trillion in deficit reduction measures, including tax increases, loophole closings, health savings and $100 billion in new defense cuts.

But Republican opposition remains steadfast; last month, House Republicans voted in favor of an alternative budget plan that would give the Pentagon $560.2 billion in base funding for fiscal 2014, replacing the defense cuts with no new taxes and a host of social service reductions.

Even before the full White House budget proposal was released, House Speaker John Boehner said the plan "moves further and further in the wrong direction" and said he would not support the tax increases.

House Armed Services Committee Chairman Buck McKeon, R-Calif., on Wednesday criticized Obama for requesting too little for the Pentagon while it deals with instability in Africa and the Middle East and nuclear threats from North Korea.

"Now, with no assessment of strategic impact, the President has proposed yet another arbitrary cut of $120 billion from the military," McKeon wrote.

Harrison said he has little optimism that lawmakers will be able to find middle ground before the start of next fiscal year and avoid another round of mandated budget cuts. And that could mean more furloughs, more program interruptions and more panic when sequestration sets in again in fiscal 2014.

"This is the exact same debate we have been having," he said. "We've just been moving from one crisis to the next."

Proposals within those budget numbers are just as problematic. Service officials are pushing for base closure rounds in 2015 and 2017 as a long-term cost-savings plan. But lawmakers from the left and right soundly rejected that idea when it was floated last year, saying it's too costly in the short-term and too unpopular to gain public support.

Stars and Stripes reporter Jennifer Hlad contributed to this report.

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