Thursday, April 25, 2013

4/25/13 RD Bulletin: Bowing to Pressure From Levin, Reid Set to Offer Short-term Sequester Patch

 
Highlights
 
News: Newly released shipbuilding documents show that the Navy does not plan on fielding 300 ships until 2019. 
 
News: Bowing to pressure from senior Democrats like SASC Chair Carl Levin (D-MI), Majority Leader Harry Reid (D-NV) plans on bringing to the Floor legislation that would replace five months’ worth of sequester cuts with projected savings from ending the war in Afghanistan. 
 
News: Despite persistent calls from lawmakers of both parties to withdrawal additional U.S. troops from Europe, General Martin Dempsey indicated this week that he would not support further reductions. 
 


State of Play
 
The armed services continue to bemoan a serious shortfall in operations and maintenance funding, characterized as a ‘readiness gap,’ resulting from the onset of sequestration.  Earlier this month, the Air Force announced that one-third of its active duty warplanes will be grounded between now and the end of the fiscal year.  Defense News reports that the service has been forced to cut its budget for flying hours by $591 million while Inside Defense recently noted that the service has to pay an unexpected $700 million fuel bill.  The Navy and Marine Corps are also facing similar readiness gaps.  In order to help mitigate some of the impact that sequestration is having on O&M accounts, the Pentagon is currently preparing a $7.5 billion reprogramming request. 
 
Still, of all the services, the Army seems to be feeling the readiness crisis the worst – compounded by increased costs of war fighting in Afghanistan as well as the pinch of sequestration.  Appearing before the Senate Armed Services Committee this week, the Army Chief of Staff, Ray Odierno, announced that the service will require at least three additional years of supplemental war funding in order to refurbish and recapitalize equipment and land assets worn down by a decade of war fighting.  Odierno further explained that the service had not planned on using base budget funds to reset its equipment coming back from Afghanistan, and thus cannot afford refurbishments without additional supplemental funds. 
 
The Pentagon is still in the process of developing its Fiscal Year 2014 war funding request, though Secretary of Defense Chuck Hagel believes it will come in close to what the administration requested last year: roughly $88 billion. However, Defense News’ Paul McLeary points out that it “remains to be seen how much stomach Congress and the White House will have to spend billions more once the shooting stops.” 
 
During the hearing, Odierno reiterated his past stance that the Army will be required to cut an additional 100,000 troops from its roster should sequestration hold.  Still, the service has not requested authority for additional personnel reductions in its latest budget request. 
 
Majority Leader Harry Reid plans to bring to the Senate Floor legislation (S. 788) that would delay current sequestration cuts by five months by replacing the spending reductions with projected savings from ending the war in Afghanistan.  Due to the manner in which the Congressional Budget Office accounts for war spending, the Pentagon technically saved $81 billion in 2013 by ramping down war activities in Afghanistan.  As a result, Reid will try to use a portion of those savings to delay the sequester, but may encounter stiff opposition from Republicans who have chastised the move as budget gimmickry.  Senate Armed Services Committee ranking member Sen. James Inhofe (R-OK) quickly derided Reid's plans as “budget cowardice.” Though the White House has for months said that the president will not support any replacement of sequestration that does not include new federal revenues, it has now signaled its support of Reid’s new temporary sequester replacement. 
 
Perhaps highlighted by Reid’s less-than-serious approach to averting sequestration is the fact that Congress still has shown little interest in modifying or spreading out the sequester cuts currently being implemented. If the overall amount of long-term sequester cuts can’t be avoided, Pentagon leaders are now pushing Congress to delay the spending reductions so that the armed services have more time to implement them. 
 
During Odierno’s recent appearance on the Hill, he asserted that the services could better accommodate sequestration cuts if they were “back-loaded” into later years.  This line of thinking resembles the budget proposal put forth by the Project on Defense Alternatives, in which sequestration-levels savings are achieved in a more gradual manner over the next decade – providing the armed services with additional time to enact and plan the cuts in ways that avoid institutional disruption. 
 
While traveling overseas this week, Chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, told reporters that he believes U.S. troop reductions in places like Europe have gone far enough in spite of persistent calls from lawmakers in both parties to reduce military deployments to allied countries and close foreign bases.  “We have pared that back as far as we reasonably can and still have the influence that we do. I don’t think you will see dramatic changes in our forward situation,” Dempsey noted.  The Chairman also disputed the findings of a Senate Armed Services Committee report that found the United States is increasingly picking up the tab for overseas bases in allied countries like Japan and South Korea.  In a recent paper, analysts from the Project on Defense Alternatives and Cato Institute recommended doubling the administration’s planned troop redeployment from Europe and enacting a commensurate reduction in end strength. 
 
Despite Dempsey’s comments, the head of U.S. armed forces in Europe, Admiral James Stavridis, chastised European allies’ declining investment in their militaries, writing, “American taxpayers will begin to feel that the European Allies and partners are ‘getting a free ride.’”  Stravridis further pointed out that the United States provides seventy-three percent of NATO funding, which the admiral characterized as “unbalanced” and “unsustainable.” 
 
Recent data tables provided by the Navy in advance of the release of its 30-year shipbuilding plan, show that the service does not expect to reach a 300-vessel fleet until 2019.  Even after 2019, the Navy’s fleet will again drop below 300 vessels for a number of years.  In last year’s budget request, the Navy proposed retiring nine warships – seven cruisers and two amphibious landing vessels – but Congress rebuffed the services’ cost-cutting measure, and in the most recent National Defense Authorization Act, prohibited the Navy from retiring the vessels.  According to the recent data tables, the Navy is again gearing up to mothball nine vessels ahead of schedule in Fiscal Year 2015.  Because of these proposed early retirements, the Navy projects that its fleet will fall from 283 ships today, down to 270 ships in FY15.  Like most of the FY14 budget documents, the Navy’s shipbuilding plan’s release has been delayed this year. 
 
Scant details are beginning to emerge around the Air Force’s semi-secret effort to develop a next-generation long-range strike bomber, for which the Pentagon requested a slight uptick in funding in Fiscal Year 2014. Speaking to reporters at the Defense Writers Group breakfast, Air Force Secretary Michael Donley noted that the service is still one or two more years away from making a down-select in the acquisition process.  National Defense’s Stew Magnuson reports that “The Air Force wants a flexible bomber than can be used for other purposes such as communications, intelligence, reconnaissance and surveillance, electronic warfare and with different weapon systems other than nuclear. The bomber’s first iterations will be manned, but the Air Force may move toward optionally manned as the program moves forward building 80 to 100 aircraft.”  Donley characterized the program as one of the top long-term funding priorities of the service.
 

 
News and Commentary
 
“The Obama administration's 2014 defense budget, with its proposal to cut $460m from nuclear non-proliferation activities and use that money to pay for new features on its B61 tactical nuclear bombs, has sparked heated debate. Is the modernization desperately needed or irrelevant goldplating? Is the administration undercutting its own non-proliferation agenda for domestic politics, or making a smart investment in the deterrent of the future? Unfortunately, by and large, these are the wrong questions. The right questions are these: how do those bombs fit into US national security strategy; and wherever it is that they fit, is their cost proportionate to their benefits?”  (4/24/13)
 
“It was clear from the first day of the Budget Control Act that if sequestration happened, most of the defense budget would be exempt or touched only slowly. And the most vulnerable part of the defense budget had the greatest flexibility to adjust to a lower level. Pay and benefits for military personnel -- a third of the defense budget -- would be exempt, waived by the president under the law. Contractors found out that the dollars already committed to their contracts would be untouched. Once DOD reassured them that they did not need to send WARN Act layoff notices to their workforce (and that any legal costs incurred by not doing so would be allowable costs under their contracts), the industry stepped back and became mute.” (4/23/13)
 
Foreign Policy: Think Again: Austerity – Anders Aslund
“In the current global financial crisis, austerity has become a term of abuse -- one that connotes unnecessary pain and suffering on the part of already-hurting citizens. But that couldn't be further from the truth. What austerity actually means is ‘measures to reduce a budget deficit’ or responsible fiscal policy. And that's hardly the only misconception that has clouded our economic thinking of late. Although you'd never know it, the so-called global financial crisis is really a public debt crisis -- and the countries that have reigned in their spending are now growing briskly while the profligate founder.”   (4/23/13)
 
New York Times: Shrinking Europe Military Spending Stirs Concern – Steven Erlanger
“Alarmed by years of cuts to military spending, the NATO secretary general, Anders Fogh Rasmussen, issued a dire public warning to European nations, noting that together they had slashed $45 billion, or the equivalent of Germany’s entire military budget, endangering the alliance’s viability, its mission and its relationship with the United States. That was two years ago. Since then, with the Afghan war winding down and pressure from the European Union to limit budget deficits, Europe has only cut deeper. Now, as President Obama wrestles with his own huge budget deficit and military costs, the responsibility for keeping NATO afloat has fallen disproportionately onto the United States, an especially untenable situation as priorities shift to Asia.”  (4/22/13)   
     
“The Congressional Progressive Caucus, which I co-chair, introduced the Back to Work Budget in February... We bring our troops home from Afghanistan and return the Pentagon budget to its 2006 level. We don’t cut from military personnel wages. Pensions and benefits, including Tricare, are untouched. The big savings come from reducing needless outsourcing and preventing excessive payments to third parties, which often create the biggest cost overruns.”  (4/22/13)
 
Huffington Post: Why We Should Reduce the Defense Budget – Bob Burnett
“According to a report by the National Intelligence Council, Global Trends 2030, 17 years from now the world will be remarkably different: ‘There will not be any hegemonic power... China alone will probably have the largest economy.’ Why can't the U.S. plan for this and reduce our defense expenditures?”  (4/19/13)
 
“If military personnel costs continue increasing at the rate they did over the past decade — and if the overall defense budget grows only with inflation — these costs will consume the entire defense budget by 2039, leaving no funding for equipment, training, bases or other necessities. This is not a prediction of what will actually happen, but a clear indicator that the current path cannot be sustained.”  (4/19/13)
 
TIME Battleland: No [Strategic] Reservations – Mark Thompson
“Ever since the post-9/11 wars put pressure on the U.S. Army for more troops, its reserve forces have effectively become part of the operational Army, and not confined to their traditional role as a so-called ‘strategic reserve.’ Now that the post-9/11 wars are almost finished, should the Army Reserve and Army National Guard go back to being a strategic reserve? In other words, put back on the shelf and confined largely to training and dealing with natural disasters? Common sense might suggest that should happen. But that would make you a taxpayer instead of a reserve general.”  (4/19/13)
 
Foreign Affairs: Why the U.S. Army Needs Missiles – Jim Thomas
“Since the 1990s, the United States' rivals have dramatically increased their capacity to deny Washington the ability to project military power into critical regions. To date, the air force and the navy have led the U.S. response. But the army should also contribute to this effort, most critically with land-based missile forces that can defend U.S. allies and hinder adversaries from projecting power themselves. The army should thus shift its focus away from traditional ground expeditionary forces -- mechanized armor, infantry, and short-range artillery -- and toward land-based missile systems stationed in critical regions. By doing so, it can retain its relevance in U.S. defense strategy.”  (April 2013) 
 
 
Reports
 
 
 
 
 
 
Congressional Research Service: U.S.-EU Cooperation Against Terrorism (4/22/13)
 
 
 
Congressional Research Service: The FY2014 State and Foreign Operations Budget Request (4/18/13)
 
 
 
 
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