Archive for the ‘News Analyses’ Category

US withdrawal from Afghanistan: the plan for 2012, 2013, and 2014

C.J. Radin. The Long War Journal, 18 March 2012.
http://defensealt.org/GJ8zo8

Excerpt:

In June 2011, President Obama announced that the US would begin withdrawing military forces from Afghanistan and transferring responsibility for security to the Afghan National Security Forces (ANSF). The US goal is to be substantially out of Afghanistan by 2014, with ANSF responsible for the entire country.

The plan for 2013 is currently being developed. The final version will be presented for approval at the NATO summit in Chicago in May. While still incomplete, portions of the plan have been disclosed or can be deduced. According to The Guardian, Obama described the next phase of the transition as follows: “This includes shifting to a support role next year, in 2013, in advance of Afghans taking full responsibility for security in 2014. We’re going to complete this mission, and we’re going to do it responsibly.”

The most significant element of the plan is that US and ISAF forces will stop conducting combat operations in late 2013. The ANSF will then be responsible for executing all combat operations in Afghanistan.

Despite War Drums, Experts Insist Iran Nuclear Deal Possible

Jim Lobe. AntiWar.com, 25 February 2012.
http://defensealt.org/yRw693

Excerpt:

Despite the IAEA’s apparent lack of progress, Iran’s acceptance last week of a long-standing request from EU foreign policy chief Catherine Ashton on behalf of the P5+1 to resume negotiations, stalled for over a year, makes it likely that a new round of talks will take place in late March or April, probably in Istanbul…Anticipation of those talks, as well as the rapid escalation of tensions over the last two months, particularly between Israel and Iran, has provoked a flurry of proposals to revive the dormant diplomatic track, if only to calm a situation threatening to spin out of control.

How Much Austerity in New Pentagon Budget?

Project on Defense Alternatives, 13 February 2012. Measured against recent spending levels, the new ten-year plan for Defense base budget spending shows only modest savings. One table. http://defensealt.org/GXMlQO

Likely Change in FYDP Very Modest

Project on Defense Alternatives Budget Brief, 28 April 2011.

The Obama Administration to date has made three successive Pentagon budget requests: FY10, FY11, and FY12. Each has looked ten years into the future.

On 13 April, the President offered a new proposal and framework — a revision to achieve greater deficit reduction. It looks forward 12 years. How do all these compare?

In order to compare the President’s successive plans, we must stretch the earlier ones out to the new horizon set in his April 13 speech, which is 2023. Reviewing the budget requests shows that in each case the projections for the “out years” — the tail-end years — have been generated by the application of a simple inflator. We can adopt these inflators to stretch all the requests out to 2023. Of course, the result must be regarded as only an estimate of the administration’s intent.

The difference between the FY11 and FY12 plans for the 10-year period 2012-2021 is around $240 billion. Stretch it out two more years and the difference grows to about $400 billion. This shows that the differences among the plans (when measured in “then year” dollars) really begin to accumulate as we go further and further into the future.

Keeping in mind that Congress must consider and pass the budget year by year, any series of budget projections going out twelve years, spanning three Presidential terms and differing economic conditions, must be judged distinctly uncertain.

Below are the total budget figures (in “then year” dollars) for the President’s successive plans. Each plan is also weighed as a percentage of the earliest one (i.e. FY10):

    FY10 plan for 2012-2023: 7543 billion = 100%
    FY11 plan for 2012-2023: 7947 billion = 105%
    FY12 plan for 2012-2023: 7512 billion = 99%
    New (April 13) proposal for 2012-23: 7112 billion = 94%

The most consequential years for national policy are the next five: 2012-2016, which constitute the FYDP. The President’s successive requests for these years are more firm and we needn’t do any estimating to derive them. All the Administration budget requests have been explicit about these years. And reviewing the successive requests for 2012-2016 shows that the difference among them is not as substantial:

    FY10 plan for 2012-2016: 2878 billion = 100%
    FY11 plan for 2012-2016: 2995 billion = 104%
    FY12 plan for 2012-2016: 2919 billion = 101%

We don’t yet know what the President’s April 13 proposal will imply for the 2012-2016 period. It’s a fair bet, though, that he will want to reinstate his earlier request to DoD that $150 billion be “saved” in the near future and not just the $78 billion pledged earlier this year by Secretary Gates. That would produce the following:

    New plan for 2012-2016: 2845 billion = 99%

If this proves true, the rollback in planned spending for the five years that matter most will be modest, verging on insignificant.

News Analysis: Obama’s Proposed $400 billion Security Spending Cut

On Wednesday April 13th 2001, President Obama announced an initiative to roll back planned security spending by $400 billion over the next 12 years. The nature of these “savings” is not yet clear. Nor is it clear how much will be subtracted from the Pentagon’s spending plans.

Nonetheless, Secretary Gates and the Chiefs are not pleased and have begun to make noise about risks to security. Apparently, they were not briefed on the proposal until Tuesday.

Part of the initiative is to begin a “fundamental review of America’s missions, capabilities, and our role in a changing world.” What and how much is subtracted from the Pentagon will depend on this review. Notably, the United States just completed a Quadrennial Defense Review last year. What the President proposes is some sort of “second look.” The President, Secretary Gates, and the service chiefs will be the prime movers of this process. How deep their “second look” will go is unclear. And it seems battle lines are already being drawn.

At a press conference on Wednesday, Pentagon spokesperson Geoff Morrell said the review would likely affect the 2013 budget. It will not be ready by June, when congressional debate of the 2012 budget commences.

How open will the review process be? We don’t yet know. But the experience of recent defense reviews is not encouraging. Still we should welcome this first step and strive to open up the process. The need for a rethinking our defense strategy and posture was emphasized in the 2010 report of the Sustainable Defense Task Force:

[I]n order to ensure significant savings, we must change how we produce military power and the ways in which we put it to use. Significant savings may depend on our willingness to:

    Rethink our national security commitments and goals to ensure they focus clearly on what concerns us the most;
    Reset our national security strategy so that it reflects a cost-effective balance among the security instruments at our disposal and uses those instruments in cost-effective ways; and
    Reform our system of producing defense assets so it.

News links on President Obama’s proposed rollback in planned security spending, his call for a strategic review, and the Pentagon’s reaction:

DOD: Finding More Savings In Defense Budget Means Nixing Missions. Christopher J. Castelli. Inside Defense, 13 April 2011.

Obama Calls for Sweeping Review of U.S. Military Strategy. Sandra Erwin. National Defense, 13 April 2011.

Pentagon warns on big defense cuts. Missy Ryan and Jim Wolf. Reuters, 13 April 2011.

Defence chief warns against planned cuts. Daniel Dombey and James Politi. Financial Times, 14 April 2011.

Events frequently overtake long-term Pentagon planning. Megan Scully. Government Executive, 14 April 2011.

Obama: “saving $400 billion” “again”?

Editor’s Commentary

13 April 2011 (revised and updated 16 April 2011)

In President Obama’s April 13th “deficit speech” he says:

Just as we must find more savings in domestic programs, we must do the same in defense. Over the last two years, Secretary Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again.

What might “do that again” mean?

Actually contribute $400 billion from projected Pentagon budgets to deficit reduction?

That would require the Pentagon to take in and spend $400 billion less. But it is very difficult to identify much actual contribution to deficit reduction in the first $400 billion in Pentagon savings President Obama refers to and believes can be repeated.

Let’s take a quick look at the components of that first $400 billion working backward through time.

This past January Secretary Gates announced $78 billion in cuts over five years. In February when the President’s FY12 budget appeared all but $70 billion of this as regards deficit reduction evaporated. $68 billion was consumed by the special Overseas Contingency Operations (war) budgeting as the FY11 projected placeholder of $50 billion was replaced by the FY12 real OCO budget of $118 billion. Another $2 billion in the savings appears to have simply vanished in the five year budget projections, perhaps due to those pesky “rounding errors” that plague Pentagon budgets.

In 2010 Secretary Gates announced $100 billion in “efficiency” savings. He was quite forthright at the time, saying that he was keeping all the savings within the Pentagon to pay for other requirements. So we can’t legitimately count those toward deficit reduction, and presumably the President did not count those toward the $400 billion that has been saved.

So that leaves about $322 billion in Pentagon savings the White House needs to account for.

In testimony before the Senate Armed Services Committee on 17 February 2011 Secretary Gates said:

…over the last two defense budgets submitted by President Obama, we have curtailed or canceled troubled or excess programs that would have cost more than $330 billion if seen through to completion.

Connecting this to President Obama’s speech Defense News reports (13 April 2011) that:

Of the $400 billion already saved, $330 billion is supposed to come from Gates’ cuts to weapons programs – for example the cancellation of the Army’s Future Combat Systems program and the Air Force’s Next-Generation Bomber, both of which Gates terminated in the 2010 budget. However, those two programs have been replaced: The Army is developing the Ground Combat Vehicle, and the Air Force has launched a scaled-back bomber program.

“Supposed” and “However” are the key words in the preceding paragraph. To be real savings that contribute in any meaningful way to deficit reduction the the program cancellations would have to lead to a declining Pentagon budget topline… and not be replaced by some other expenditure.

Gordon Adams of the Stimson Center assesses the $330 billion savings claim in a 5 November 2010 post this way:

Gates has not cut $330 billion from defense. When he announced hardware cuts, he said the out-year savings were estimated at $330 billion, but he didn’t cut a nickel from the projected defense budgets; he wants, as he has clearly said, to use those savings for other investments, not give them back to the taxpayer. And the figure is way too big, anyway, because he terminated the F-22 and the C-17 cargo plane when neither one of them was in the long-term budget (he has been trying to let both programs arrive at a normal death, as planned, and Congress keeps getting in the way.) It is even more too big because his savings figure did not net out the alternative investments he proposed for the same missions, like replacing the terminated Future Combat Systems (FCS) vehicle with a new Army vehicle R&D program. So a big kerfuffle over a non-number, but no big cut in defense here.

To date the Pentagon or OMB have not produced any accounting of these supposed savings from Secretary Gates’ program cancellations which indicate where they come out of the topline. Meanwhile it would be wise to substantially discount their value when thinking about overall Federal spending.

What we know for sure is that Pentagon budgets continue to rise despite the “savings.” The Pentagon and the Administration might argue that the Pentagon budget would have grown faster if Secretary Gates had not made those “courageous” program cuts. Possibly. But that “would have been” is simply not the same as actually contributing to deficit reduction which requires real cuts in the topline of the Pentagon budget.

In terms of cutting the topline of the Pentagon budget, when we remove the long-awaited reductions in war costs, we can count just $8 billion that Secretary Gates has given up to deficit reduction in the five year defense plan (FYDP) through FY16.

Looking out ten years there are more savings in the President’s projections. My colleague Carl Conetta finds $164 billion less Pentagon spending in the overlapping four “out years” (FY17-20) when comparing the President’s FY11 and Fy12 budget submissions.

We might speculate that this is where we realize some of Secretary Gates’ $330 billion in savings, but it would be only speculation…

So far no one in the Administration has demonstrated in sufficient detail how the Pentagon will contribute much of anything toward reducing the Federal deficit, rounding errors notwithstanding.

Under-budgeted Afghan War Spending to Swallow All Pentagon “budget savings” and more

Budget Memo by Charles Knight. 14 February 2011.

For several years now White House budget projections have included a “placeholder for outyear overseas contingency operations” most of which are accounted for by the wars in Iraq and Afghanistan. This placeholder number has been and remains $50 billion. Every year actual OCO (overseas contingency operations) spending turns out to be several times that number. FY11’s OCO is $159 billion and FY12’s is $118 billion.

Adjusting for the effect of the new OCO for FY12, the $68 billion budgeted above the placeholder of $50 billion eats up most of the $78 billion in Pentagon cuts that Secretary Gates offered up in January to fiscal responsibility (only $76 billion actually shows up in the 14 February budget release.) The remaining $8 billion (and much more) will go to the war budgets when reality collides with placeholder projections.

On 14 February Pentagon Comptroller Hale confirmed that the $50 billion placeholders for FY13 and beyond was the “best we can do.” Others make an attempt to be more realistic. The high tech industry association called Tech America annually projects DoD budgets for ten years out. In their 2010 projection they estimate that OCO spending will be $102 billion in FY13, $69 billion in FY14 and $57billion in FY15. When we subtract the $50 billion placeholder for each of those years and total the remainder we find that the Pentagon is likely to spend $78 billion more in the years FY13 through FY15 than in the White House budget projections.

In sum, not only does the President’s FY12 budget plan give an exemption to the Pentagon from contributing anything substantial to deficit reduction, but the likely cost of the war in Afghanistan will push up the national debt substantially higher than the White House budget projections.