Friday, September 14, 2012

9/13/12 RD Bulletin: Congress Set to Pass 6-month CR as McCain Considers Offering Sequester Delay Amdt.

 
Highlights
 
PDA Perspective: In a recent op-ed published on TIME’s national blog, Charles Knight argues that instead of debating whether or not to allow sequestration to take effect on January 2, 2013, Congress and the White House should instead be considering how to enact sequestration-level savings in the defense budget over the long-term in ways that the armed forces can readily accommodate. 
 
News: Senate Armed Services Committee Ranking Member John McCain (R-AZ) is considering offering an amendment to the current Continuing Resolution that would delay sequestration by three months in order to provide lawmakers additional time to work out a larger compromise to negate the automatic spending reductions.
 
Polling: The Chicago Institute on Global Affairs has released the results of a recent survey which found that 68 percent of respondents support defense spending reductions, up from 58 percent in 2010. 
State of Play
 
Legislative: Today, the House will consider a six-month Continuing Resolution (CR) to keep the government funded past the end of the fiscal year on September 30, 2012.  While CRs typically maintain current levels of government funding, the CR under consideration would actually increase total discretionary spending to $1.047 trillion – the maximum amount authorized by last year’s Budget Control Act – which represents a 0.6 percent increase over current spending levels.  Since this CR would last for half of Fiscal Year 2013, it is highly likely that Congress will simply pass another CR in the spring to finalize Fiscal Year 2013 appropriations.  (For CBO analysis of the new CR, click here.) 
 
The Continuing Resolution would provide the Pentagon with $88.5 billion in Overseas Contingency Operations (OCO) funding – the administration’s full-year war funding request.  It also would allocate increased funding for nuclear weapons modernization, a key priority for Congressional Republicans.  However, the CR will thwart efforts by the Pentagon to secure multi-year procurement contracts for the V-22 Osprey, the DDG-51 destroyer, and the CH-47 Chinook.  The CR also neglects to provide additional funding for high-priority aircraft carrier maintenance and nuclear refueling.  Additionally, the CR will prevent the Pentagon from retiring Air Force aircraft and from transferring aircraft from the Air National Guard or Reserve to the active duty force.  Several of the aforementioned policy provisions were included in the CR because Senate Majority Leader Harry Reid (D-NV) has declined to take up the annual defense authorization act before the November election, causing appropriators to include the policy provisions in the six-month spending bill. 
 
The House this week is also considering a measure, sponsored by Representative Allen West (R-FL), which would nullify the forthcoming sequestration of defense funds, scheduled to take effect on January 2, 2013, and replace it with unspecified savings elsewhere in the federal budget.  The measure would lower the Fiscal Year 2013 discretionary spending cap to amount authorized under the House Republican budget plan, and it would require the President to submit a plan to Congress to replace the FY13 sequester with other forms of savings.  The White House has already issued a strongly worded veto threat over West’s bill, H.R. 6365, the National Security and Job Protection Act. 
 
This week, the credit rating agency Moody’s Investors Service said it would downgrade the U.S. government debt rating if Congress and the White House cannot commit to achieving significant deficit reduction over the long-term.  Moody’s said that the only way the United States could maintain its current rating is if it achieves federal savings comparable to sequestration while ensuring that the U.S. economy can rebound from its current slump. 
 
Meanwhile, Senate Armed Services Committee Ranking Member, Senator John McCain (R-AZ), is continuing his efforts to rally support in the Senate for a delay of sequestration.  His latest goal is to delay sequestration by three months in order to provide lawmakers additional time to reach a compromise to replace the automatic spending reductions.  McCain says he may try to offer the measure as an amendment to the Continuing Resolution, which the Senate will soon consider.  However, Congressional leadership is trying to fast-track the CR, which must originate in the House.  As a result, any amendments adopted by the Senate would send the CR back to the House for agreement.  Since the Senate will likely consider the CR as its last measure of business before recessing again, Senate Majority Leader Harry Reid (D-NV) may try to discourage his colleagues from offering or adopting amendments. 
 
Despite McCain’s recent initiative, senate members of the bipartisan group, dubbed the “Gang of Eight,” which has been working to develop a compromise to avert sequestration, are pessimistic that a deal can be worked out to nullify the automatic cuts before the November election.  However, the Gang of Eight is currently working to develop a $5 trillion deficit reduction plan, and may put forth a $109 billion “down payment” to prevent the first year of sequestration in FY13.  One of the members of the Gang of Eight, Senate Majority Whip Dick Durbin (D-IL) is now advocating a six-month delay in sequestration – ostensibly to allow the group to further develop its comprehensive, long-term savings plan.   
 
In July, Senator McCain, along with six other senators, wrote to thirteen major defense contractors requesting information on the impact of sequestration to their business operations.  This week, McCain’s office released the responses from the contractors, three of which say they are definitely planning on sending out advanced layoff notices to employees before the November election.  The remaining ten contractors say they are unsure whether they will send out pink slips or have decided not to. 
 
Executive: The Defense Acquisition Board met this past Friday to discuss developmental issues in the F-35 Joint Strike Fighter program.  According to Reuters, the Board declined to approve a comprehensive operational testing plan for the JSF due to concerns regarding developmental problems with the aircraft’s high-tech helmet.  Reuters reports that “the project has run into problems with night vision, delays in displaying data, jitter under certain conditions, and more recently, a green glow at the visor's edges and problems with alignment.  Lockheed Martin has brought in an alternate contractor, BAE Systems, to work on a substitute helmet in case the VSI helmet does not meet its deadlines.”
 
Before Congress broke for its annual August recess, it enacted the Sequestration Transparency Act, which required the White House to detail how it would implement sequestration and report back to Congress by September 7, 2012.  However, the administration’s spokesperson Jay Carney says the White House was unable to meet that deadline due to the complex nature of sequestration.  The report is now expected to be delivered to Congress this week.  The Pentagon, for its part, says that it has delivered all of the relevant information to the Office of Management and Budget, and that it was not the cause for the report’s delay. 
 
Separately, the Pentagon’s chief acquisition officer, Frank Kendall, told defense company executives at the annual ComDef symposium that, “If you want to know what will happen to your program, look at how much money you expect to have in your budget next year and cut 11 percent.”  However, his insight seems to have done little to mollify concerns by defense industry executives who are still clamoring for additional details.  Deputy Defense Secretary Ashton Carter is scheduled to meet with the Aerospace Industries Association on September 18 to further discuss the impact and potential implementation of sequestration. 
 
The National Research Council released a report this week entitled Making Sense of Ballistic Missile Defense: An Assessment of Concepts and Systems for U.S. Boost-Phase Missile Defense in Comparison to Other Alternatives, which examines the United States’ current missile defense posture.  The report’s primary recommendation is that the United States install a third interceptor site on the East Coast, either in upstate New York or Maine, to guard against a theoretical Iranian missile strike.  The United States currently has two interceptor sites located in Alaska and California to prevent a strike from North Korea.  The version of the National Defense Authorization Act that passed the House earlier this year, but has not received consideration in the Senate, would call on the Pentagon to develop an East Coast interceptor site.  The NRC report also recommended discontinuing investments in boost-phase missile defense, which aims to shoot down missiles soon after they are launched.
 
Project on Defense Alternatives Perspective
 
This week, Defense News published an article by John T. Bennett, in which he analyzes the Democratic Party platform to find evidence of potential additional defense reductions if President Barack Obama is re-elected.  He writes that “the Democrats’ platform also lacks specifics on which weapon systems Obama might pursue or cut in a second term.  But it signals Obama is keen for more of the latter.”   Meanwhile it seems that politicians at all levels will play to the fear of sequestration and the “fiscal cliff” for all they are worth in election maneuvering without doing much of anything to resolve the budgetary imbroglio.  The lame duck session and the first months of the New Year should be interesting with budgetary progress dependent on the composition of which party is in the White House and controls the two houses of Congress.  Right now uncertainty reigns.
 
What we can be fairly certain of is that there is little possibility of a “grand bargain” on the budget in the next year without further significant savings in the Pentagon budget.  The likelihood of finding a combination of domestic discretionary cuts, entitlement reforms, and tax increases that will deliver significant deficit reduction and pass political muster is extremely low.  The Pentagon will have to be in the mix.  The Project on Defense Alternatives is preparing a strategically-based proposal that would yield $15 billion in defense savings in FY13, $28 billion in FY14, and $42 billion in FY15.  Even if some lawmakers are hesitant to support these spending levels during an election year, it is time that other leaders start building support for this and similar proposals that advocate more reasonable levels of Pentagon spending.
 
Polling
 
The Chicago Institute on Global Affairs has released a summary of the results of a recent survey it commissioned which examined Americans’ attitudes toward foreign policy and defense.  The survey found that Americans increasingly support requiring the Defense Department to contribute to deficit reduction efforts along with other federal agencies.  Specifically, the survey found that 68 percent of respondents support defense spending reductions, up from 58 percent in 2010.  Thirty-two percent of respondents do not support defense spending reductions.
 
 
News and Commentary
 
In a recent op-ed, the co-director of the Project on Defense Alternatives, Charles Knight, argues that instead of debating whether or not to allow sequestration to take effect on January 2, 2013, Congress and the White House should instead be considering how to enact sequestration-level savings in the defense budget in ways that the armed forces can readily accommodate.  Concludes Knight, “As many families around the country tighten their belts and learn to live with smaller household budgets, they expect the Pentagon to do the same. The Reasonable Defense plan demonstrates how carefully conceived changes to the Pentagon budget can be consistent with economic recovery and also provide ample military capacity to protect America and our core commitments abroad.”  (8/24/12)
 
President Obama and Secretary of Defense Panetta are determined to take another look at last year’s strategic guidance, Colin Clark reports.  Clark consulted with CSBA’s Andrew Krepinevich who elucidated on the Pentagon’s hazy admonition: “What we have is a strategic guidance; we don’t have a strategy.” Krepinevich also noted the counter-intuitiveness of performing a strategy review while there is still not a distinct conception of what the defense budget will actually look like. Clark concludes: “Put together the possibilities: phantom efficiencies; Asia pivot; carrier groups at sea more often for longer tours; and add sequestration and you've got an interesting brew.” (9/10/12)
 
The Center for American Progress’ Larry Korb gives four key reasons why “the United States can afford defense cuts, without undermining national security.” Korb argues that thirteen years of military build-up, the relatively small-scale of prospective cuts, Pentagon fund management, and a lack of major global threats have put the United States in a position to safely make defense cuts.  (9/9/12)
 
Stimson Center: Striking the Deal
With Congress set to enact a six-month Continuing Resolution, focus in Washington has turned to the lame-duck session of Congress, during which lawmakers will have to tackle the two highly contentious issues of expiring Bush-era tax cuts as well as looming sequestration cuts.  The Stimson Center’s Russell Rumbaugh analyzes how Democrats may use expiration of tax cuts for the wealthy as leverage against Republicans who are concerned about sequestration’s impact on U.S. national security.  Writes Rumbaugh, “Sequester of defense spending is so scary a prospect that it may help resolve the more fundamental question of whether to extend tax cuts for the wealthiest Americans or not.”  (9/7/12)
 
Foreign Policy: Bipartisan Bloat
The Cato Institute’s Chris Preble critiques the Republican Party’s support of the defense budget as a jobs program, writing, “The party that opposes nearly all other forms of federal spending happily embraces the military variety.” Preble lambasts defense spending as “an expensive and counterproductive form of foreign aid” that allows dependent countries to “funnel even more money toward their bloated welfare systems.”  As formally poor, weak allies have grown stronger, and enemies have faded, Preble argues it is time for the United States to recede from some global commitments and force regional allies to bear some of the burden. (9/5/12)
 
Contrary to his reputation as a rational “numbers guy”, GOP Vice-Presidential candidate Rep. Paul Ryan’s proposed defense budget is an inexplicably partisan maneuver, writes Laicie Olson. She cites Ryan’s “Path to Prosperity” budget blueprint as slashing other federal agency budgets like USAID and the State Department in order to protect the Pentagon budget. Olson concludes: “Ryan’s plan for the future is really no plan at all.” (8/30/12)
 
William Hartung examines the discord within the GOP over defense spending. Specifically citing Paul Ryan’s initial support for the Obama administration’s approach, Hartung notes his subsequent shift in his “Path to Prosperity.” Though he notes that it’s likely too late in the season, Hartung remarks that it would be both “refreshing and responsible” for Republicans to have a serious debate as to what defense spending means. (8/28/12)
 
Inconsistencies in their more general budgetary plan aside, Romney and Ryan’s treatment of defense spending is “bizarre”, Carol Giacomo suggests. She notes that the 4 percent of GDP base for defense spending proposed by Romney is not only incredibly expensive, but “there’s no sense that this money would produce a more effective security strategy.” “After a decade of unchecked spending growth, the Pentagon can prudently absorb significant reductions at a time when the country is under economic stress”, Giacomo concludes. (8/25/12)
 
Bob Cox examines individual experiences with the F-22 following a recent Air Force investigation of its safety record. Disturbing and enduring symptoms have allegedly developed in F-22 pilots, including “a chronic cough, impaired motor skills, loss of concentration and an inability to recall words and facts, as well as lethargy and ‘crushing headaches.’” Systems suspected include the air filtration, pressurized air in the cockpit, or toxic substances leeching into the air supplies from stealth coatings or other chemicals in the aircraft systems. There is also concern over the highly oxygenated air, up to 93 percent, the pilots breathe that some experts say is excessive except in the highest g-force maneuvers. (8/25/12)
 
 
Reports
 
 
 
 
Congressional Budget Office: Monthly Budget Review (9/10/12)
 
 
Congressional Research Service: Defense: FY2013 Authorization and Appropriations (9/5/12)
 
 
Congressional Research Service: The War Powers Resolution: After Thirty-Eight Years (9/5/12)
 
Congressional Research Service: Worker Adjustment and Retraining Notification (WARN) Act (9/4/12) 
 
Chicago Council on Global Affairs: Findings from the 2012 Chicago Council Survey of American Public Opinion (September, 2012)
 
Royal United Services Institute: Taliban Perspectives on Reconciliation (September, 2012)
 
 
 
 
Congressional Research Service: Conventional Arms Transfers to Developing Nations, 2004-2011 (8/24/12)
 
Department of Defense Deputy Inspector General for Intelligence and Special Program Assessment: Assessment of Security Within the Department of Defense - Security Policy (7/17/12)
 
Department of Defense Science Board: Task Force Report: The Role of Autonomy in DoD Systems (July, 2012)   
 
Congressional Research Service: Government Procurement in Times of Fiscal Uncertainty (4/6/12)
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