Highlights
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.
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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.”
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Polling
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.
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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.
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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 Pentagon – Bill 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 cuts– Lawrence 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)
Foreign Policy: Why didn’t senators ask Hagel the question that matters?– Gordon Adams
“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 cuts– David 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 Defense – Paul 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)
The Diplomat: Yes, America Can Rebalance to Asia With a Smaller Military – Cindy Williams
“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)
Foreign Affairs: Pull Back: The Case for a Less Activist Foreign Policy– Barry Posen
“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)
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Reports
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)
Congressional Research Service: Joint Light Tactical Vehicle (JLTV): Background and Issues for Congress (2/4/13)
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)
