Thursday, January 31, 2013

1/31/13 RD Bulletin: Rep. Ryan and DoD's Carter Agree: Sequestration Is Going to Happen

News: The Project on Defense Alternatives, a long-time advocate of Pentagon reform, is joining the Center for International Policy as part of its growing Common Defense Campaign.
News: Appearing on Meet the Press this weekend, former vice-presidential candidate Paul Ryan said that sequestration of defense funds is probably “going to happen,” since both political parties cannot agree on ways to replace the automatic cuts. 
News: Inside Defense reports that the “Office of Management and Budget has issued key budget guidance to the Pentagon, advancing the Defense Department's efforts to finalize its fiscal year 2014 budget plans.”

State of Play
Leading headlines this week, former vice-presidential candidate and current House Budget Chairman Paul Ryan (R-WI) took to Meet the Press to defend the GOP’s stance on spending cuts and austerity.  Following up on similar comments recently made by House Speaker John Boehner (R-OH), Ryan indicated that sequestration is “going to happen,” because “Democrats have rejected [the GOP’s] efforts to replace those cuts with others and have offered no alternatives.”  Since passage of the Budget Control Act in 2011, Republicans have been warning of the calamitous effects of sequestration cuts to the military, but now seem resigned to the automatic cuts.  Ryan further noted that those whom castigate deep cuts to government spending as “savage,” are doing a “disservice to the quality of debate we’re trying to have.”  During the interview, Ryan also indicated that Republicans were open to another six-month Continuing Resolution until the broader outlines of a long-term budget deal can be reached. 
Opinion in Washington seems to be split as to whether Republicans are being sincere in their proclamation that sequestration is going to occur.  Some, like Max Hoffman of DoD Buzz, believe that by delaying the vote on the debt limit, attention will now turn intensely to sequestration and the potential impact it could have on the economy thereby increasing the chance that Congress will again delay the automatic cuts.   Other analysts believe that both parties have exhausted their negotiating positions and will allow sequestration to take effect simply because the alternatives are politically unpalatable.  National Journal reports that “For Republicans, the automatic, across-the-board spending cuts are an increasingly palatable option among deficit hounds, even if it means opposing their party's defense hawks, who staunchly oppose the deep cuts to military spending. Democrats, on the other hand, would prefer to replace some of the spending cuts with new revenues -- an approach that is a nonstarter with Republicans. And Democrats refuse to entertain the Republican preference of replacing the military decreases with cuts to other programs.”  Meanwhile, Politico’s David Rogers argues that Republicans are willing to let sequestration occur as “payback to President Barack Obama for humiliating them over taxes.” 
Senator Patty Murray (D-WA), who recently assumed control of the Senate Budget Committee, issued a statement responding to Republican demands that the sequester be replaced with deeper cuts to domestic discretionary or mandatory spending, saying that cuts to domestic programs must be matched with equal cuts to the Pentagon.  “Should Republicans insist on additional cuts to this small slice of the overall budget, defense should contribute at least as much as nondefense. This equal sharing of the burden of discretionary spending reductions has been a key element of every bipartisan deficit reduction proposal, including Simpson-Bowles.”
Seeing no other choice but sequestration, Republicans are increasingly joining ranks behind the automatic cuts.  Senator Bob Corker (R-TN) recently remarked that, “I certainly do not want the sequester to go away. Or at least, let me put it this way, the amount of reductions that are in sequester I do not want to go away,” while Senator Jeff Flake (R-AZ) proclaimed, “The only thing worse than the sequester is no sequester. We have got to hit those budget targets.... If we can do it another way, fine, but if not, we’ve got to have that hammer.” 
While recent analysis has centered on the notion that Congress must eliminate the Fiscal Year 2013 sequester in its entirety with commensurate cuts elsewhere or increased federal revenues, Congress and the White House still have the option of simply punting the automatic cuts again or allowing them to take effect for a few months before negating them later in the fiscal year.  Talking Points Memo’s Brian Buetler writes, “Perhaps the parties can’t agree on a complete sequester replacement. But they can pay it down for a few months with popular cuts and revenue raisers.”
Defense consultant Jim McAleese tells Morning Defense that he expects sequestration to last three months until the debt limit suspension expires on May 19.  In an interview with AOL Defense, House Armed Services Committee member Mac Thornberry (R-TX) agreed that sequestration would likely take hold before Congress will nullify it.  The Project on Defense Alternatives’ own Charles Knight writes that Republicans “main objective is to use the pain of sequester to force Democrats into accepting reductions in the public social and health security accounts.  To achieve this end they are willing to let the Pentagon take a temporary hit.  They believe it will be temporary.” 
Despite disagreement in Congress over how to proceed with sequestration, the Pentagon seems to acknowledge the likelihood of it now occurring is strong.  The Pentagon’s number two, Ashton Carter, recently said “From what I hear, I have to conclude that it is more likely than unlikely that we’ll actually have to do this. We are serious about being ready.”  As a result, the armed services continue to release details on how they would respond to forecasted funding shortfalls resulting from another six-month Continuing Resolution as well as sequestration. 
Last week, it was reported that the Navy faces an approximately $10 billion shortfall if Congress maintains FY12 funding levels and allows sequestration to occur.  Subsequent instructions from the Chief of Naval Operations Admiral Jonathan Greenert list a number of ways that the service will attempt to shore up short-term funding: fleet commanders will have to cut third- and fourth-quarter ship maintenance; carrier strike groups and amphibious readiness groups may be prevented from engaging in “non-deployed operations;” overhauls on 30 of the service’s 187 surface ships will be cut; ten percent of shipyard workers will be terminated; base modernization and ship maintenance will be deferred; funding for the Blue Angel demonstration squad will be reduced; and funding for the hospital ship, USNS Comfort, will be eliminated.  (For additional details on the Navy’s planned reductions, click hereSpecial Operations Command also expects an approximately $1 billion shortfall as a result of flat-lined appropriations. 
Short of nullifying sequestration or providing a full-year military appropriations bill, Admiral Greenert would like Congress to provide the services with reprogramming authority in order to shift funds between accounts and prioritize funding shortfalls.  Senator Jim Inhofe (R-OK), the new ranking member on the Senate Armed Services Committee, is drafting legislation that would provide the Pentagon with authority to reprogram funding cuts where it sees fit.  The services may also seek an exemption from prohibitions contained in the current Continuing Resolution that prevent the Pentagon from initiating new programs. 
Not to be outdone, the Army has now also detailed the budget woes that it faces over the coming year: Army Chief of Staff General Ray Odierno recently explained that the Army’s share of sequestration for Fiscal Year 2013 would be $6 billion in cuts.  Because the current Continuing Resolution funds the Army at FY12 levels, the service is also facing a $6 billion shortfall in its operations and maintenance budget as well as a $4 billion shortfall in OCO funding. 
All told, the Army expects to face a $17-19 billion reduction in expected funding levels for Fiscal Year 2013 if Congress does not provide a full-year appropriations bill or fails to prevent sequestration.  Chief amongst Odierno’s concerns is that the service could “quickly go to extremely low levels of readiness in the next six months” and potentially even over the next two fiscal years. 
As a result of the budget impasse, the services’ fixed-contract procurement programs, including the CH-47 Chinook and the KC-46 aerial refueling tanker, are especially vulnerable to cancellation or renegotiation.  The Army recently announced that it was delaying development of and reforming the Ground Combat Vehicle program in order to yield savings.  Another cost-saving measure that the Pentagon is contemplating is the furlough of its approximately 800,000-strong civilian workforce.  The Associated Press’ Robert Burns reports that, “Deputy Defense Secretary Ashton Carter told a small group of reporters Friday that the furloughed employees would lose one day of work per week for the remainder of the budget year, which ends in September,” for projected savings of approximately $5 billion. 
Former Republican Senator Chuck Hagel (R-NE) is testifying before Congress today on his nomination to succeed Leon Panetta as Secretary of Defense.  In prewritten answers submitted to the armed services committees, Hagel agreed with his predecessor that sequestration cuts to the military would be “devastating,” would disrupt nearly 2,500 procurement programs, and result in reduced buys and increased prices for weapons systems.  Hagel also sounded the alarm against enacting another six-month Continuing Resolution, saying it would put the department in a “straightjacket,” while spending money on “last year’s priorities, not this year’s.”
The Pew Research Center has released the results of a new poll which demonstrates Americans changing attitudes with respect to the military and deficit reduction.  The results show that Republicans and Independents have grown increasingly concerned about the federal deficit.  In 2013, 84 percent of Republicans and 71 percent of Independents said that addressing the deficit was their top priority, up from 65 percent for Republicans and 68 percent for Independents in 1994.  The percentage of Democrats who are concerned about the deficit grew from 61 percent in 1994 to only 67 percent in 2013. 
In 2013, 31 percent of Democrats said that strengthening the military was their top priority, while 58 percent of Republicans agreed.  For Republicans, this is less of a priority than it was in 2001, when 63 percent of them listed strengthening the military as their top priority.  The poll was conducted by interviewers at the Princeton Data Source from January 9-13, 2013 using a national sample of 1,502 adults. 
In a separate poll conducted by Princeton Data Source and commissioned by Reason-Rupe, respondents were asked on which programs the federal government spends too much money.  Twenty-one percent of respondents, the largest plurality, selected defense, military, and wars; while 17 percent of respondents chose government salaries and campaigns; and 13 percent of respondents chose welfare and social programs.
Project on Defense Alternatives Perspective
Congressional leaders, the Pentagon, and a few senior Republican hawks in the Senate are prepared to put President Obama in a classic squeeze:  What’s their game?
As reported by Bloomberg, Republican leaders in Congress may let the sequester of discretionary accounts, including the Pentagon’s, go into effect on March 1: “Last year, Boehner, of Ohio, warned that the cuts would ‘hollow our military,’ and Ryan, of Wisconsin, said they would ‘undercut’ critical government operations. Now, Boehner said he has support in his conference for the sequester, and Ryan said last weekend on NBC that it ‘is going to happen.’”  Their main objective is to use the pain of sequester to force Democrats into accepting reductions in the public social and health security accounts.  To achieve this end they are willing to let the Pentagon take a temporary hit.  They believe it will be temporary.
The Pentagon is ‘preparing’ for this eventuality in ways that are fundamentally unsustainable by planning furloughs, suspending nonessential travel, imposing hiring freezes, reducing depot maintenance activity, cutting base operating expenses, and the like.  What the Pentagon is not doing is making significant adjustments to their force posture which could maintain strong security at lower levels of spending.  And they show no inclination to take the lead on such adjustments.  The Pentagon’s game is keep all cuts temporary… they still expect to get back on a growth path.
Finally, Senators McCain and Graham continue their persistent refrain warning of impending ‘hollowing,’ even ‘destruction,’ of the armed forces if the Pentagon’s budget is cut.  McCain has been playing the ‘hollow military’ card since the 1990s, often with considerable success.
President Obama needs to break out of this squeeze by announcing some modest Pentagon posture changes and budget cuts for FY14.  As Gordon Adams has argued, “We will go deeper. We have always gone deeper after a war.”  
The budget reduction for the coming fiscal year should be on the order of $25 billion and the adjustments should include bringing several more Army brigades home from Europe together with accelerated end strength reductions for the Army and Marine Corps, planning to reduce strategic nuclear forces, demobilizing a wing of fighter jets from the active component of the Air Force, and reducing the size and frequency of Navy forward patrols and scaling back new ship buying accordingly.  Obama should also announce that his new Secretary of Defense will be charged with coordinating a careful and orderly drawdown of the forces on the order of 15 to 20 percent over the remainder of the decade. 
The squeeze play that is now underway will force a temporary yet poorly-implemented drawdown at the Pentagon and make President Obama appear to be an ineffective and irresponsible Commander in Chief. To avoid this he must move now to set forth the vision and reasoning for a decisive drawdown which will sustain a top notch military with a lighter and smaller global footprint.  That is the best strategy for America…and the best play for the White House.

News and Commentary
“As it begins its second term, the Obama administration faces a number of key nuclear and budget decisions left over from its first term that will have profound consequences for U.S. national security. If confirmed, Secretary of Defense Hagel would be a key player in formulating and implementing those choices. While it remains to be seen how vigorously the Obama administration will pursue nuclear threat reduction over the next four years, Hagel's past writings and affiliations suggest that he would strongly support reshaping U.S. nuclear strategy and spending to address today's threats and the budget crunch. Indeed, few Americans, including secretaries of defense, have thought as seriously about the appropriate role of nuclear weapons as Chuck Hagel.”  (1/30/13)
“For more than a decade, Congress and the Pentagon have lavished money on the nation's 1.3 million active-duty troops and their families. Salaries and benefits soared far above civilian compensation, military bases and housing were refurbished, support services like day care, family counseling and on-base college courses were expanded. Now comes the reckoning. These personnel costs, necessary and warranted for those bearing the burden of war, are threatening to wreck the military, squeezing the accounts meant to fix or replace gear worn from a decade of war, for research and development, and for new missions in, say, Africa.  So stubbornly are personnel costs rising that at the current rate of increase, they would consume the entire defense budget by the year 2039, leaving well-paid troops standing around with their tanks, ships and airplanes rusting and out of gas.” (1/30/13)
Mercatus Center: A Comprehensive Look at Defense Spending, FY 2012 - Veronique de Rugy
“How much are we actually spending on national security and defense–related programs? A whole lot more than you think. This chart puts into perspective the amount of spending that is not being accounted for in widely cited figures by the Pentagon (DOD) and the Office of Management and Budget (OMB). Using data calculated by Winslow Wheeler of the Project on Government Oversight, line items from other areas of the federal budget relevant to defense and security issues are added to the FY 2012 base. The findings suggest that reported defense spending figures underestimate the overall cost of defense and national security programs by up to $400 billion in FY 2012.”  (1/29/13)
The New Yorker: How much military is enough?Jill Lepore
“The United States spends more on defense than all the other nations of the world combined. Between 1998 and 2011, military spending doubled, reaching more than seven hundred billion dollars a year—more, in adjusted dollars, than at any time since the Allies were fighting the Axis. The 2011 Budget Control Act, which raised the debt ceiling and created both the fiscal cliff and a Joint Select Committee on Deficit Reduction, which was supposed to find a way to steer clear of it, required four hundred and eighty-seven billion dollars in cuts to military spending, spread over the next ten years. The cliff-fall mandates an additional defense-budget reduction of fifty-five billion dollars annually. None of these cuts have gone into effect. McKeon has been maneuvering to hold the line.” (1/28/13)
Foreign Policy: Is America Training Too Many Foreign Armies?John Norris
“Since 1985, the United States has sponsored approximately 156 Malian military officers and non-commissioned officers at U.S. professional military schools and given them training focused on professionalizing the military forces. Over the past three years, this funding has reached at least roughly $400,000 annually, and it is possible U.S. intelligence agencies have also funneled in support as well. Sadly, Mali is hardly an isolated case of U.S. military assistance programs operating with dangerously little oversight and lacking a compelling central rationale… In looking at the patterns of U.S. military assistance the question is not who gets American military aid, but who doesn't. In 2012 the United States delivered bilateral security assistance to 134 countries -- meaning that every country on Earth had about a 75 percent chance of receiving U.S. military aid. Once you weed out places like North Korea and Vatican City, you are pretty much assured of receiving military aid no matter how large or small your country, no matter how democratic or despotic your regime, no matter how lofty or minimal your GDP.”  (1/28/13)
Stars and Stripes: DOD urged to stop ignoring 'full cost' of personnelTom Philpott
“This time last year the Air Force unveiled a plan to cut Air National Guard strength by 5100 members along with more than 200 Guard aircraft, touting this as a reasonable efficiency, in part because Guard squadrons cost more to operate than active duty squadrons. That argument was dead wrong, says Maj. Gen. Arnold L. Punaro, a retired Marine Corps reservist and chairman of the Reserve Forces Policy Board.  In a new report, the advisory board he leads urges the Department of Defense to stop ignoring the true and increasingly “unsustainable” costs of active duty forces.”  (1/27/13)
“Installations and communities bracing for pending troop cuts and a major reshuffling of the Army’s brigade combat teams should not expect to lose more than 8,000 military and civilian personnel, according to a recent report. The report, which assessed the environmental impact of adding or cutting troops from various Army posts, looked at 21 installations that would likely experience population changes and studied scenarios ranging from cutting 8,000 military personnel to adding 3,000.”  (1/26/13)
“Amid Pentagon pontification about sequestration cuts to defense spending and their supposed deleterious impact on national security, it turns out that the department of defense has no clue at all about its own fiscal outlook. The Pentagon is crying wolf on a sequestration deal without even knowing how many sheep are at pasture. Take a look. This month, the U.S. Government Accountability Office (GAO) -- the independent, non-partisan "congressional watchdog" that investigates how the federal government spends taxpayer dollars -- was unable to audit the department of defense or the department of homeland security. The majority of the 24 other agencies were auditable, but neither defense nor homeland security were among them. Curious.”  (1/24/13)
“It’s old, and likely thoroughly forgotten now, but last summer the Washington Post ran an excellent article on the U.S. military‘s ‘pivot’ toward Asia, its origins, and its budget implications. It presented some meaningful background on where the pivot came from, and how it so quickly became dogma in Washington as the decade-long ground wars receded in the national rear-view mirror. Beyond that, Greg Jaffe’s article last August offers a good explanation for Secretary of Defense Leon Panetta’s hysteria about defense budget cuts, and a useful criterion to assess Panetta’s nominated replacement, former Senator Chuck Hagel.”  (1/23/13)
U.S. News and World Report: Start Cutting Government Spending With the Defense Budget – Ryan Alexander
“As we look ahead to the many fiscal milestones Congress will face in the coming months, it is worth spending a few minutes thinking about the largest portion of our discretionary budget: defense. At more than $600 billion annually, national security takes up more than half of U.S. discretionary spending and outstrips the cost of all entitlement programs save Social Security. So as we think about how to reduce future deficits and make responsible decisions about reducing wasteful spending throughout government, the defense budget is a great place to start.”  (1/16/13)
Congressional Research Service: Department of Defense Food Procurement: Background andStatus (1/24/13)
Congressional Research Service: Maritime Territorial Disputes in East Asia: Issues for Congress (1/23/13)
Congressional Research Service: Algeria: Current Issues (1/18/13)
Office of the Director of National Intelligence: FY 2013 Congressional Budget Justification (February, 2012)
Office of the Director of National Intelligence: FY 2009 Congressional Budget Justification (February, 2008)