Thursday, February 7, 2013

2/7/13 RD Bulletin: Progressive Reps. Offer Targeted DoD Cuts to Replace Sequester

News: This week, Representative Keith Ellison (D-MN), co-chair of the Congressional Progressive Caucus, introduced H.R. 505, the Balancing Act, which would replace the entire sequester with revenue increases and specific reductions to the Pentagon budget. 
News: A group of conservative-leaning think tanks, led by Taxpayers for Common Sense, has written Congress urging it to enact $50-100 billion in annual defense spending reductions over the next decade. 
PDA Perspective: Given the fiscal condition of the country, the Pentagon won’t be able to keep its current level of spending unless Congress and the White House get the American taxpayer to pay for it.  Otherwise the Pentagon needs to prepare to work with less resources and adjust its global posture and ambitions accordingly.

State of Play
For several weeks now, prominent leadership as well as rank-and-file Republicans have professed their resignation to allow sequestration to take effect – if only for a few months – because the alternatives proposed by the President and Congressional Democrats call for increases in federal revenue and taxes.  Republicans seem willing to bet that the American public will loathe the automatic spending cuts and ultimately blame the President and his party if they occur.  Picking up on this tactic, President Barack Obama called on Congress this week to enact a second short-term delay in sequestration in order to provide lawmakers with additional time to reach a long-term budget deal. 
In his speech, the President called for a small package of revenue-raisers and spending cuts that could pay for a few months delay in sequestration, similar to the measure that was passed on New Year’s Day of this year.  Republicans were quick to slam the President’s proposal and blame him for creating the sequester in the first place.  A group of Senate and House Armed Services Committee members are reintroducing a plan to replace the remaining Fiscal Year 2013 sequester with cuts to the federal workforce, though that idea is considered a non-starter with Senate Democrats.  According to the New York Times, Senate Democrats will soon offer their own plan to delay sequestration by closing corporate tax loopholes and eliminating other preferences in the tax code. 
With the White House and Congressional leaders seemingly stuck on ways to replace sequestration, members of the Congressional Progressive Caucus, led by Representative Keith Ellison (D-MN), introduced H.R. 505, the Balancing Act, to replace the automatic across-the-board cuts with targeted reductions to the Pentagon budget as well as new forms of federal revenue.  The defense portion of the legislation would reduce procurement of the Virginia-class submarine, reduce Marine Corps and Army end strength by four percent, relocate additional U.S. troops from Europe and Asia, enact reductions to the nuclear arsenal and related strategic systems, eliminate one U.S. aircraft carrier, reduce the number of planned F-35 buys, end production of the V-22 Osprey, and reduce the number of flag officers and generals.  In total, the defense recommendations outlined in the Balancing Act would save approximately $278 billion over the next decade. 
For several weeks now, the Pentagon has been bemoaning the prospects of another six-month Continuing Resolution (CR), which would set the Fiscal Year 2013 defense budget at Fiscal Year 2012 spending levels.  Although the Pentagon has been operating under a CR since September of last year, Politico’s David Rogers reports that the department has been spending at a faster pace than the CR allows on operations and maintenance: “To keep the peace last September, the administration advised the services to continue ‘normal spending and operations.’ The question now is whether that ‘normal’ became a higher fiscal 2013 rate for the first quarter — ending Jan. 1 — of the fiscal year.” 
At a briefing last month, Defense Secretary Leon Panetta noted that a full-year Continuing Resolution would leave the defense department with an $11 billion shortfall in its operations and maintenance budget.  Panetta’s estimate does not include the potential impact of sequestration, which is scheduled to take effect at the beginning of March.  Commenting on the Pentagon’s funding shortfalls, American University professor Gordon Adams remarks that it “seems a bit irresponsible to spend when you know the money will not be there. Or is this a bizarre form of hostage-taking: if you don't do what I want, I will shoot myself... Now, of course, we are being treated to round two of the ‘shoot myself’ scenario, with dire, and highly vocal threats that we are headed for a readiness crisis of grand proportions.”  Because of the budget morass, beginning on February 15, the Navy will begin cancelling scheduled maintenance on 23 combatant vessels. 
In a new briefing presentation provided to Congress, the Air Force says that under sequestration it will be forced to cut flying hours by eighteen percent, cut weapons systems sustainment funding by eighteen percent, and furlough portions of its approximately 180,000-strong civilian workforce.  Although the Air Force seems resigned to accepting another six-month Continuing Resolution (CR), the service would like the CR to reflect the funding levels included in the service’s FY13 budget request as well as an exemption to the prohibition on beginning new programs.  In a separate briefing presentation provided by the Army, the service says it will also have to begin furloughing employees if sequestration occurs.  Even under a furlough scenario, the Army may not have enough funding to pay the remainder of its civilian workforce unless Congress provides reprograming authority.   
According to Defense News, the Pentagon has been asked to submit detailed plans to the White House by February 8 outlining how it will enact sequestration.  This follows the January 28 issuance of passback guidance from the Office of Management and Budget that directed the Pentagon to cut $5.8 billion from its Fiscal Year 2014 budget request.  That budget request, which is typically issued in early February, has been delayed by as much as one month.  Besides the general budget uncertainty resulting from sequestration, sources say the White House is delaying the budget release because of difficulty in determining how much funding to request for the war in Afghanistan since sequestration also applies to the OCO account.  In its FY14 budget submission, the Pentagon will propose constraining the annual pay increase typically provided to service members. 
Meanwhile, the Senate Armed Services Committee has scheduled a hearing for February 12 to receive testimony from the services chiefs and other senior Pentagon officials on the implementation of sequestration.  This same panel will testify before the House Appropriations subcommittee on defense on February 26.  Next week, the Pentagon plans on requesting from Congress authorization to begin furloughing civilian employees should sequestration occur.
The Navy has confirmed what many defense analysts in Washington already suspected: the service is lowering its combatant fleet minimum size requirement from 313 vessels to 306 vessels.  The original 313-fleet minimum was identified in 2005, and reconfirmed in 2010, however as a result of the new strategic guidance and the introduction of the Littoral Combat Ship (LCS) into service, the Navy is lowering that target by seven vessels, which includes reducing planned procurement of the LCS from 55 to 52 vessels.  An unnamed Capitol Hill source told the Navy Times that “this comes at a time when we have to start asking whether any plan in the 300-plus range is going to be viable in the budget. This could be the last gasp of the 300-something-ship plan, before the Navy, if it has to work under a lower top line, changes it to something clearly below 300.”  Republicans have accused the White House of aiming for a total fleet size of around 250 ships
Last week, the Department of Commerce Bureau of Economic Analysis reported that the U.S. economy shrunk at an annual pace of 0.1 percent in the fourth quarter of 2012.  The Bureau pointed out that federal outlays fell by fifteen percent during the same time period, including a large dip in defense outlays.  Some point to this as evidence that austerity initiatives could harm the United States’ economic recovery.  However, professor Gordon Adams points out that federal outlays typically drop during the fourth quarter as government agencies rush to spend appropriated funds before the end of the fiscal year: “Every third quarter of the calendar year (which is the last quarter of the federal fiscal year) defense consumption goes up. Obligating and spending resources at the end of a fiscal year is a way of ensuring the services can get them spent and that they can justify the next year's budget to Congress: we really needed that money; don't take it back or cut us next year. Then, in the first quarter of the next fiscal year (which is the fourth quarter of the calendar year) defense spending slides from the leap upward in the previous quarter.”  While the recent fourth quarter dip in outlays may be a normal byproduct of federal budgeting, additional reductions in defense outlays are expected as the wars in Iraq and Afghanistan wind down and as the Pentagon continues to undergo a post-conflict builddown. 
A group of conservative-leaning think tanks, led by Taxpayers for Common Sense, has written members of Congress urging them to find $50-100 billion in savings from the Pentagon budget over the next ten years. The group writes, “We believe renewed attempts in Congress to derail discussions about meaningful changes to Pentagon spending will harm both the development of a coherent defense strategy and the sustainability of the federal balance sheet.” 
The Senate Armed Services Committee is launching an investigation into the $1 billion Expeditionary Combat Support System program following its cancellation in November. The program, referred to by the Air Force’s top uniformed acquisition official as “a large, complex program with nebulous requirements,” has been cited as an example of poor program management within the service. The investigation follows a December 6 letter from Senators Carl Levin (D-MI) and John McCain (R-AZ) calling the program “one of the most egregious examples of mismanagement in recent memory.”
Beginning in 2009, the Navy introduced a new recruiting slogan in which the service described itself as ‘America’s Navy: A global force for good.’  Rasmussen Reports recently tested this message through a survey of one thousand likely voters conducted from January 31 through February 1, 2013.  Seventy percent of respondents believe the Navy’s “primary mission is to protect and defend the United States,” while only twenty percent of likely voters see the Navy as a global force for good.
Project on Defense Alternatives Perspective
Worried about growing Republican acceptance of additional defense reductions on the near horizon,  House Armed Services Committee Chairman Buck McKeon (R-CA.) recently told Politico,  “…the people don’t all see the whole big picture and don’t understand that if you totally eliminated the Defense Department, totally eliminated federal spending on education, on transportation, on parks, on everything that we vote on, if you eliminate all discretionary budgets, we’d still be running a deficit of a half-trillion dollars a year.”   This is not a new calculation; it is a standard argument of those who wish to shift the focus of conversation to cutting earned benefit programs like Social Security and Medicare.
The problem for McKeon and other defense hawks is that if there is a big piece of government that has more support from the American people than the military, it is Social Security and Medicare.  If the Pentagon is going to keep the huge resources it acquired during the last decade, it now must have its bill paid for by the American taxpayer.  And the political will for that is simply not there.  President Obama would like to have more revenue, in part to pay the Pentagon’s bills.  But most Republicans are adamant about holding the line at the tax increase included in the New Year’s Day fiscal cliff agreement.  That amount of revenue is about enough to pay the interest on the Pentagon’s credit card.
Gordon Adams noted this week that the Pentagon has been spending at rates above the amount authorized in the current Continuing Resolution.  Adams writes, “Apparently, the Pentagon ‘bet on the come,’ assuming sequestration would not happen, and has merrily been funding operations (training, exercising, equipment maintenance, fuel purchases, services contracts, and, yes, operations in Afghanistan) as if the FY 2013 budget request were real.”
As long as the Pentagon lives in denial of its fiscal situation, it does a disservice to the nation and the armed forces.  An affordable military is going to mean changing America’s global military footprint in some significant ways.  It will take much more than a ‘pivot’ to Asia.  That’s no more than a little fancy footwork.

News and Commentary
Washington Post: Can we cut deficits without killing the recovery?Robert Samuelson
“At the core of Washington’s exasperating budget debate lies a confusing disconnect. On the one hand, we’re urged to reduce huge and endless budget deficits, which are said to threaten a future financial crisis. The Congressional Budget Office’s latest projections — released this week — envision $7 trillion worth of deficits over the next decade, a figure that could, under plausible circumstances, grow to exceed $9 trillion. On the other hand, we’re cautioned against doing too much deficit reduction too quickly because steep spending cuts or tax increases might undermine the weak economic recovery. In effect, we’re instructed both to reduce the deficits and not to reduce them. The contradiction is one reason the budget debate perplexes and paralyzes Americans. We are getting a lot of conflicting advice. Can the different goals be reconciled? The answer is ‘yes’ — at least on paper, though perhaps not in the real world.”  (2/6/13)
Foreign Policy: What Flournoy got wrong about the budget- Gordon Adams
“Former Undersecretary of Defense Michèle Flournoy weighed in Tuesday on the debate over the defense budget. While her comments are useful, her recommendations would not really help the Pentagon deal with reductions that could be 20 percent below the spending levels it had projected for the next 10 years. The problem is that to cut defense, you need to actually cut defense -- including things Flournoy says should be untouchable.”
Poughkeepsie Journal: To cut the deficit, reform the PentagonBill Hartung
“As Congress and the White House scramble to come up with a deficit reduction plan that will stave off across-the-board spending cuts before their self-imposed March 1 deadline, one area is ripe for reductions: The Pentagon. As former Senator Chuck Hagel, President Barack Obama’s nominee for secretary of defense, has noted, the Department of Defense budget suffers from 'bloat' that can and should be reduced as part of any plan to reshape our military to address 21st century threats. Bloat takes many forms, from shoddy bookkeeping to spending on troops and weapons systems that we no longer need.”  (2/1/13)
CNN Money: U.S. can afford $500 billion in (smart) defense cutsLawrence Korb and Max Hoffman
“Intelligent reductions would force the Pentagon's leaders to make the hard choices they avoided as the non-war, or baseline, defense budget doubled after the attacks on Sept. 11, 2001. Smart spending cuts could also be part of a legislative deal to reduce the federal deficit, which our military leaders argue is the greatest threat to our national security. Additionally, stopping the growth of defense spending would signal to our allies, particularly those in Europe who are cutting their defense budgets, that they must shoulder their share of the burden. These reductions can be accomplished by reducing our nuclear weapons to 1,000 deployed warheads; cutting the size of the Army and Marine Corps to Sept. 11 levels; allowing the Navy to purchase more F/A-18 Super Hornets instead of the F-35 Joint Strike Fighter; cutting aircraft carriers to 9 from 11; and reducing the number of troops in Europe to 40,000 from 80,000.”  (2/1/13)
“Putative secretary of defense Chuck Hagel had his baptism-by-fire yesterday at the Senate Armed Services Committee. It was all theater. One of its most striking features was the absence of almost any serious attention to the challenge he will actually face if he is confirmed: the management of a defense drawdown… There was no discussion of the challenge of getting the costs of weapons procurement under control… There was no discussion of how to restrain compensation and benefits costs at the Pentagon. There was precious little interest in the programs that deal with the transition of veterans and returning soldiers. Aside from (rightly) honoring Hagel for his service in Vietnam, the people in the military were not a central focus. And there was virtually no attention at all paid to the critical, long-term management challenge posed by the explosive growth of the Pentagon's ‘back office.’ The administrative part of the military bureaucracy has roughly doubled in cost per troop over the past 15 years.”  (2/1/13)
Washington Times: No immunity for smart Defense cutsDavid Williams
“If former Sen. Chuck Hagel becomes the next secretary of defense, he will have quite a job on his hands. One of the most pressing issues facing the Department of Defense is the scheduled sequestration. The impending sequestration is the fault of Republicans and Democrats in Congress, and President Obama and the next secretary of defense need to identify smart spending cuts. The good news is that there have been many ideas for cutting spending at the Pentagon that won’t threaten national defense.”  (1/31/13)
National Interest: Budgetary Misnomers and the Cost of DefensePaul Pillar
“As budgetary battles proceed with competing rhetorical salvos about what parts of government spending are unreasonably large, or are most out of control, or are the “real” reason for burgeoning deficits (actually, every part of the budgetary equation, on both the expenditure and the revenue sides, is just as real as every other part), one welcomes the occasional breath of fresh semantic air on the subject. Veronique de Rugy of the Mercatus Center at George Mason University, using data compiled by Winslow Wheeler of the Project on Government Oversight, observes that the figures usually adduced to present spending on ‘defense’ or ‘national security’ understate by a long shot actual federal spending that is appropriately put under such labels. The figure most often cited is the ‘base’ budget of the Department of Defense, which was $535 billion for FY2012. But military and defense expenditures go well beyond that, including such things as the development of nuclear weapons, which is done in the Department of Energy, or training of foreign military forces, which come under the international affairs section of the federal budget. Add in all those other things and the total is more like $930 billion rather than $535 billion. And that's just current expenditures, not taking into account follow-on effects such as additional interest to be paid on the national debt.”  (1/31/13)
“One year ago, the White House and the Department of Defense announced a change in emphasis for U.S. national security thinking from a strategy focused on stability and counterinsurgency operations in the Greater Middle East to one more concerned with East Asia and the Pacific region. Some observers argue that future constraints on defense spending will make such a shift unaffordable. On the contrary, a good dose of fiscal austerity may be just what the department needs to firm up its new strategy and undertake the force changes that will be needed to align with it.” (1/19/13)
“Despite a decade of costly and indecisive warfare and mounting fiscal pressures, the long-standing consensus among American policymakers about U.S. grand strategy has remained remarkably intact. As the presidential campaign made clear, Republicans and Democrats may quibble over foreign policy at the margins, but they agree on the big picture: that the United States should dominate the world militarily, economically, and politically, as it has since the final years of the Cold War, a strategy of liberal hegemony. The country, they hold, needs to preserve its massive lead in the global balance of power, consolidate its economic preeminence, enlarge the community of market democracies, and maintain its outsized influence in the international institutions it helped create.”  (January/February, 2013)
Congressional Budget Office: Military Retirement—February 2013 Baseline (2/5/13)
Congressional Budget Office: The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (2/5/13)
Congressional Budget Office: Macroeconomic Effects of Alternative Budgetary Paths (2/5/13)
Open Society Justice Initiative: Globalizing Torture: CIA Secret Detention and Extraordinary Rendition (February, 2013) 
CIA Center for the Study of Intelligence: President Nixon and the Role of Intelligence in the 1973 Arab-Israeli War (1/30/13)