Posts Tagged ‘Budget’

Reset Defense Bulletin: Small Changes for the Army and Navy

PDA Review
from 20 Janaury 2014 Reset Defense Bulletin

In the last issue of the Reset Defense Bulletin we reported that the Pentagon will likely pass up one of the best options for greater strategic efficiency — that is relying more on a strong and capable strategic reserve for large and medium scale wars.

The size of the Total Army has been declining and will be down by about 100,000 this decade. However, the relative size of the active and reserve components has not yet been decided. Sydney Freedberg in Breaking Defense reports of the National Guard leadership complaining of being cut 10% t0 315,000 while the active component Army is hoping to remain as close to 490,000 as they can. Reportedly many in the Army expect there will be a further 8% reduction (to 450,000) in the active component before the end of the decade. By way of comparison the study Reasonable Defense from the Project on Defense Alternatives calls for 420,000 in the active component and 325,000 in the Guard.

In a sign that the Pentagon may face up to a small part of their fiscal reality, Bloomberg reports that the Navy will order 32 rather than 52 Littoral Combat Ships (LCS).

Navy experts Eric Labs of CBO and Ronald O’Rourke of CRS have long caste doubt the affordability of the Navy’s 30 year shipbuilding plan. Indeed, in an odd budgetary gambit, the Navy has lobbied to get the $90-100 billion cost of replacing their aging ballistic missile subs paid from some Pentagon treasury outside Navy’s regular shipbuilding budget (Frank Oliveri of Roll Call and Ronald O’Rourke of the Congressional Research Service offer details.) Christopher Preble and Matt Fay suggest that the Navy buy the SSBN[X] with funds saved from eliminating or curtailing the Air Force’s ICBM and Bomber legs of the strategic nuclear posture.

Now it looks like a small portion of the Navy shipbuilding budget deficit will be paid for by producing fewer than planned of the over-budget and under-performing LCS.

Coincidentally, a Defense News editorial praises the flexibility and affordability of frigates, calling particular attention to Denmark’s Iver Huitfeldt-class frigates as “long-range, efficient but highly flexible ships that come equipped with considerable capabilities.” Perhaps the Navy will now replace some retiring frigates with modern frigates proven by allied navies, instead of the much more expensive LCS.

Frigate_Iver_Huitfeldt

Danish Ivar Huitfeldt Class Frigate

There has been several calls for disbanding the Air Force (Carroll, Farley) and for folding its roles and missions back into the other services. This is surely a ‘non-starter’ with a White House that has been consistently reluctant to take on anything held very dear by the Pentagon brass or their supporters in Congress. However, radical proposals such as this one will sometimes open space for discussion of other changes to strategic ambitions and to now calcified service roles and missions — which too often excessively and wastefully overlap. One such area is the strategic triad, jeaslously protected by the Navy and Air Force.

Reuters reports that the Pentagon is considering additional educational and financial incentives for Air Force officers who guard and operate the nation’s ICBM force. There have been a number of recent incidents of misbehavior which has to be worrisome given the extraordinary responsibility these service members have to prevent an unintentional nuclear war. “The scandals are raising questions about how to keep up morale of the force in the post-Cold War era…” Is it possible that the mission of maintaining such a large nuclear arsenal no longer makes good sense to those who are closest to it?

In a related piece Walter Pincus reports:

An unpublished Rand Corporation study done between December 2012 and February 2013 found that those in the nuclear missile force ‘have low job satisfaction and often feel job-related burnout.’

Pincus then laments:

Despite problems among the U.S. strategic nuclear force personnel, questions about the role of nuclear deterrence in the age of growing cyber and terrorist threats, and current budgetary pressures in defense spending, Hagel did not propose that the Obama administration would seek to reduce further the new START level of deployed warheads, cut the number of stockpiled warheads or eliminate one leg of the triad.

Winslow Wheeler has contributed a good analysis and comment on how national security spending fared in the ‘Omnibus’ spending bill that just passed through Congress. Wheeler sums it up this way:

The bill attempts to build a bridge to a future time when higher defense budgets are politically feasible. In the meantime, the congressional appropriators will use gimmicks and dodges to keep spending higher while appearing to be lower.

Defense News provides a summary of how appropriators added more than $5 billion to Overseas Contingency Operations funding to cover procurement and other items that didn’t get funded in the base budget. As a consequence of this maneuver, ‘war spending’ is actually rising in the year that the Afghan war is supposed to end.

There are links to all the literature cited above in the 20 Janaury 2014 Reset Defense Bulletin.

“Omnibus” Information and Commentary: What Did the Appropriators Really Do to Defense Spending?

by Winslow T. Wheeler
16 January 2014

Summary of Findings:

In the so-called “war-related,” Overseas Contingency Operations (OCO) account of the 2014 Omnibus, there is a DOD program spending increase of $10.8 billion above what President Obama requested. This has been misreported as a “$5 billion” increase. The OCO account should be re-titled the War Pretext Slush Fund.

In the “base” portion of DOD spending, up to $7 billion is un- or poorly justified, arbitrary across-the-board cuts, most of them directed against O&M spending, which can only have a negative impact on military readiness. Moreover, these kinds of a-t-b cuts are precisely the sort of thing DOD and Congress vociferously criticized in the sequestration process.

There are also $10.7 billion in mostly specific programmatic cuts in Procurement and R&D portions of the bill, but it is possible that their primary effect will be to simply defer, if not increase, future costs.

Overall, the DOD section of the Omnibus should not be seen as an effort by Congress to return defense spending to lower, let alone pre-war, levels. Instead, it can be seen as a rear guard action by high defense spending advocates in Congress to keep the Pentagon budget as high as possible.

Discussion and Analysis:

This week by large bipartisan majorities, the House and Senate are passing HR 3547, the Consolidated Appropriations Act of 2014 (better known as the “Omnibus”). It appropriates discretionary spending for diverse agencies of the federal government for the balance of fiscal 2014. Division C of the bill contains funding for the Pentagon, not including military construction which is in a separate part of the bill. The bill text is accompanied by a “Joint Explanatory Statement” (JES) that contains more useful details-but which does not explain nearly as much as it should.

Some in Congress, the press and think tanks exult that we are witnessing a return to “regular order” after the chaos of Congress’ dysfunctional government shutdowns followed by giving most agencies “continuing resolutions,” which hold spending for individual programs mostly to the previous year’s spending level, no matter how impracticable that might be. While the House and Senate may have been able to get past the dysfunction of refusing to enact appropriations bills, the actual contents of the Department of Defense (DOD) portions of the Omnibus reveal that a much dysfunction remains.

The dysfunction simply comes in a different form: that of deceptive, arbitrary and misleading budget activities. These behaviors mask actual spending levels in DOD, and they can incur even larger future costs while pretending to promote economy. They constitute an effort to keep Pentagon spending as high as possible, now and in the future, even if some proclaim that DOD spending is plummeting downward, even dangerously.

To explain, some background and analysis are required.

Based on the available data from the Congressional Budget Office, we know the following:

· National Defense spending in the Pentagon and related agencies (the so-called 050 budget function) was $518 billion in 2013.

· Equivalent spending in the new “Omnibus” for 2014 is $520.5.

· Add to these amounts the money for the wars in Afghanistan and elsewhere. $82 billion was provided in 050 accounts for 2013. $79.4 billion was requested by President Obama for 2014, but this is being increased by Congress to $85.2 billion, an apparent “plus-up” of $5.8 billion (which is sometimes misreported as $5 billion).

· Thus, the total amount for 2013 was $600 billion; the total amount for 2014 is $605.7 billion.

Some in the press report this increase as a decrease. Eager to pretend the Pentagon is under some sort of austerity regime, they compare the $605.7 billion for 2014 as a huge cut from Obama’s original 2014 request of $640 billion. However, that request that was dead on arrival in Congress, and it constitutes only a cooperative “baseline” for politically driven comparison purposes. According to a budget analyst frequently consulted by the Washington press, the widely respected Todd Harrison at the Center for Budgetary and Strategic Assessments, defense spending at the newly decided 2014 level exceeds every defense budget during the Cold War, including the wars in Korea and Vietnam, with the only exception being the very peak of the Ronald Reagan era. To call $605.7 billion for defense in 2014 anything but a historic high (especially in the absence of an existential threat from the Soviet Union) disregards almost 70 years of post-World War Two defense budget history.

Others look at a different defense budget baseline that might have been: the $498 billion for the non-war parts of defense spending that the sequestration process from the Budget Control Act of 2011 would have imposed. They assert the $520.5 for National Defense in the Omnibus is a huge, $22.5 billion, increase. While they too are making comparisons to spending levels that never occurred, they are far more accurate than those proclaiming Pentagon budgetary Armageddon. The reason is the deceptive practices by congressional appropriators in the Omnibus.

WAR-PRETEXT SLUSH FUND

By parsing through the documents that the Appropriations Committees released this week on their Omnibus, especially the JES, it is apparent that the plus-up they gave to DOD in the war-related portions of the DOD budget is far larger than the $5.8 billion that is apparent from the math (comparing the $79.4 billion request to the $85.2 billion appropriation).

To explain, note first that the appropriators took a few billion dollars out of the OCO fund. They removed $1.7 billion out of the amounts requested for military personnel. They also nixed a request of $3.1 billion for something called the Afghanistan Security Forces Fund and the Afghanistan Infrastructure Fund, declaring the need in the former “greatly overstated.” They also cut the notoriously ineffective Joint Improvised Explosive Device Defeat Fund by $130 million; they reduced a classified program by $58 million, and they made other smaller miscellaneous cuts. It all totals something just over $5 billion.

Then they added: $50 million for MRAP vehicle modifications, $90 million for a new CV-22 Osprey, and then came two mother loads. $9.3 billion was added for the various Operation and Maintenance (O&M) accounts of the military services, and $1 billion was added for equipment for the National Guard and Reserves. There were also various small miscellaneous adds.

In sum, the House and Senate appropriators cut Obama’s OCO account by over $5 billion, and then they added $5.8 billion to the requested amount. The full plus-up for DOD in the OCO fund is $10.8 billion, more than double the “$5 billion” reported by the some in the press.

The two biggest additions have little to do with “war-related” activities, however. Every bit of the $9.3 billion added for O&M in the OCO account was transferred from the “base” (non-war) parts of the bill. The appropriations committees were simply transferring money from the “base” accounts to the OCO accounts.

Because the Budget Control Act of 2011 and subsequent congressional budget deals put a cap on 2014 “base” Pentagon spending, the appropriators were simply creating a hole there into which they could pour more money (more on this later). They had reason to do this because the past budget deals put no cap whatsoever on the OCO accounts: in budget-gimmick terms; it’s all free (uncapped) money.

It is a loophole quite consciously created by the congressional budget negotiators, and it is not new. The basic gimmick is decades old, and today’s appropriators are using it to the hilt, surely motivated by the assertion that DOD suffers from “austerity.” Routine peacetime O&M money magically becomes “emergency” and “war-related,” and it all happens to be unconstrained under existing budget rules. That the purpose for which the money is used does not change one iota is immaterial.

The pretext is even clearer in the $1 billion fund created for equipment for the National Guard and Reserves. The added hardware in this account includes aircraft countermeasures and equipment to face an enemy that has no air defense, chemical and biological warfare equipment for a theater that includes no chem-bio warfare, new AESA radars for aircraft that will not need it in Afghanistan, forklifts and even “high-density storage cabinets.” So much for “war-related.” This perennial plus-up, usually added to the base portions of defense bills, is put in the OCO fund simply because money there does not count under budget caps, pure and simple.

The OCO account is not an emergency war fund; it is and should be known as a War-Pretext Slush Fund.

(The Congressional Research Service used to report almost annually on war spending, pointing out previous transgressions against the belief that it was for emergency, war needs only; however, those reports stopped coming out a few years ago, and we remain in the dark about what other portions in the OCO account don’t belong there.)

BASE BUDGET LEGERDEMAIN

This sort of gaming continues in the “base” parts of the DOD portions of the “Omnibus” appropriations bill.

In addition to the $9.3 billion promiscuously transferred to the so-called “war-related” account, there are many other cuts in the “base” bill. Some of them are actual program reductions: for example, the various procurement and R&D accounts for the F-35 program were cut by a grand total of $1.1 billion-a not inconsiderable amount.

But there are some shady reductions as well. Section 8109 declares a savings of $380 million due to “favorable foreign [currency] exchange rates.” An old and tired gimmick, the appropriators are pretending they can predict exchange rates out to September 2014 with great precision. If you have a financial adviser who claims he can do that, fire him; it is pure speculation.

The appropriators also declare a savings of $866.5 million due to “excess cash balances in Department of Defense Working Capital Funds.” These are accounts to pay internal and contractor bills; the money is not excess forever; they simply don’t need it right now, they think. The need for the money is not going away; it is simply being deferred. There is no real, lasting savings; they are mostly kicking the can to future years.

There are also $527 million in “undistributed” unobligated balances. “Undistributed” means they don’t know what program to apply them to; they’re usually guessing or using a computer model (which is not much better) to take away these funds that simply have not yet been spent-but for which there is usually a plan to do so.

There are $2.7 billion in reductions labeled “Program Adjustment to Non-NIP Only.” Nowhere are these explained in what is euphemistically titled the Omnibus’ “Joint Explanatory Statement,” but presumably “NIP” refers to National Intelligence Programs that are surreptitiously funded in the classified portions of the bill.

There are still more. Under the labels “underexecution,” “excess to requirement,” “overestimation,” and “overestimate,” more is cut. They appear to amount to $2.5 billion.

In addition to the transfer of $9.3 billion in O&M spending to the OCO account, all these cuts calculate to $7.0 billion.

Whether they are the result of detailed oversight work or of arbitrarily imposed budget targets we can only guess. They are rarely explained with any meaningful details; frequently they are not explained at all. Just where to cut is not specified; they are in effect across the board hits against all programs. They are precisely the kind of arbitrary cuts that DOD and Members of Congress complained so vociferously about in the Budget Control Act.

This behavior is also decades old. The actions are taken to help meet budget targets or to create holes into which the appropriators can pour other money for favored, specific programs. In fact, they serve both purposes.

Moreover, programs that can’t absorb the across-the-board hit (or don’t want to) will simply add back the money in future budgets. Program activities may simply be deferred to future years, which makes them not cuts but postponements. We may see the money again in the future, even if the specific re-emergence is invisible to us.

It is important to note the arbitrary cuts are mostly directed at the O&M budget. O&M funds a wide variety of activities, most prominently military training, equipment maintenance, and peacetime operations. These activities are the heart and core of military readiness-the ability to fight effectively and efficiently and to save our troops lives at the expense of the enemy’s. The appropriators across-the-board cuts in the O&M account will necessarily reduce spending for this military readiness, even if the rhetoric surrounding the bill proclaims they are not doing that. Under sequestration, DOD savaged these accounts and only partially restored them. Now Congress is hitting them up as well, even if it is saying it is not.

ACQUISITION

In the Procurement and R&D budgets there are hundreds of individual and specific programmatic cuts–not the arbitrary swipes the appropriators take at the O&M budget.

Overall, Procurement is cut $6.2 billion (6.2 percent) and R&D is cut $4.5 billion (6.7 percent) from Obama’s request.

A spokesman for the appropriators boasted to the press that they were able to avoid terminating programs and instead took relatively small reductions across many programs. This was to be good news, but it is not necessarily. Many of those actions can mean that production rates or research tempos will be cut back, or other elements of programs will simply be deferred to future years; these can also mean not just deferments of spending but cost increases-if production rates are made less efficient, for example.

In the past, such budget reductions have meant some efficiency in some programs. However, the prevailing atmosphere in DOD and Congress seems to be to endure a period of “austerity” (in truth, it is not) pending future restoration of higher spending levels. That is not a mentality that fosters efficiency. If we were confident that current DOD management knew how to get more out of less, or even wanted to do, we could be more optimistic.

EARMARKS

The Senate Appropriations Committee did not report any earmarks in its original version of the bill, and the House Appropriations Committee explicitly reported “Neither the bill nor the report contains any congressional earmarks, limited tax benefits, or limited tariff benefits as defined in Clause 9 of rule XXI.” Perhaps there are none that qualify under the Senate’s and House’s carefully circumscribed definition of earmarks, but there are plenty in the Omnibus. In fact, the JES is quite careful to point out that there are “congressional special interest items” in the bill, and they are to be treated with special care should DOD attempt to alter them. The tables for the R&D accounts show scores of them, and the Defense Health Program specifically lists 26 of them. Moreover, various procurement adds, such as for F-18s and Virginia class submarines, have all the hallmarks of earmarks, and yet they escape identity as such. Perhaps the chairmen of the two Defense Subcommittees of the House and Senate Appropriations Committees, Congressman Rodney Frelinghuysen (R-NJ) and Senator Richard Durbin (D-IL), should be asked what circumvention of the so-called earmark ban is being used to permit these “congressional special interest items.”

THE FULL TALLY

In the so-called “war-related,” OCO account of the 2014 Omnibus, there is a DOD program spending increase of $10.8 billion above what President Obama requested.

In the “base” portion of DOD spending, up to $7 billion is un- or poorly justified, arbitrary across-the-board cuts, most of them directed against O&M spending, which can only have a negative impact on military readiness.

There are also $10.7 billion in mostly specific programmatic cuts in Procurement and R&D portions of the bill, but it is possible that their primary effect will be to simply defer, if not increase, future costs.

Overall, the DOD section of the Omnibus should not be seen as an effort by Congress to return defense spending to lower, let alone pre-war, levels. Instead, it can be seen as a rear guard action by high defense spending advocates in Congress to keep the Pentagon budget as high as possible. The bill attempts to build a bridge to a future time when higher defense budgets are politically feasible. In the meantime, the congressional appropriators will use gimmicks and dodges to keep spending higher while appearing to be lower.

Donald C. F. Daniel on Strategic Adjustment and the Benefits of Sequester

August 2013

The adverse consequences of hangings and budgetary cutbacks preoccupy those who face them. There may be no silver lining for those about to die, but there can be for those who must live with less. Cutbacks can force evaluation of priorities and the slimming of organizations whose bloat clouds institutional concentration and hampers agility. The DoD is one such organization: it has too many cooks concocting too many broths that either should be the responsibility of other elements of the US government or of no elements at all. Thus, the sequester can be a blessing.

The DoD is like most organizations; if leaders do not have to make hard choices, they will avoid doing so. Even the hard-nosed Donald Rumsfeld, a man with his own settled views, signed off on Quadrennial Defense Reviews that were criticized for their failure to provide the guidance necessary to choose between this or that entity, program, or provider of services. But such guidance would probably have been superfluous; budgets after all were rising dramatically and (over)matching the increases in demands levied on the DoD. The people asking the DoD to do more were understandably not interested in giving it less to do it with.

Secretary Gates struck the right tone when he did three things. One was to “re-balance” priorities to concentrate on the ongoing wars at the expense of preparing for wars against a future regional hegemon. A second was to cancel hugely expensive programs that were over budget and overdue. A third was to argue for a “whole of government” approach when evaluating who should do what to secure US national interests. He believed that the DoD had taken on or been assigned too many functions which were better suited to State Department, the Agency for International Development, and other civilian agencies. He even did something that many saw as an unnatural act for a department head: recommend to Congress that it re-program DoD moneys to the State Department so that State could better carry out the nation-building that the DoD had been doing.

Gates’ third initiative was the most important. How much of a blessing the sequester will be depends on how well our nation’s leaders (and not just the DoD’s) undertake to prioritize what they want for this country and to specify which department or agency is best fitted to carry it out. Those discussions have remained muted or in the background for too long, and that reality lessens the ultimate utility of the continuous stream of DoD budgetary studies, proposals, and commentaries coming out of the DoD, the Congress, think tanks, talking heads, and pundits. When national security experts (including former JCS Chairman Mullin) tell us that our most important national security priority is to get our economic house in order and that our greatest security threat is our debt, we should acknowledge that the defense budget is more tail than dog.

Too many Americans are not used to thinking that way. The Cold War conditioned many of today’s older Americans in particular (many of whom hold the reins of power) to overvalue the military instrument and to readily accept debt to pay for it—in other words to prioritize military needs over economic considerations. (Indeed, Vice President Cheney went so far as to argue that the Reagan years proved that debt did not matter.) Containment was the overarching national strategy that provided the framework for deciding on the priority to be allocated to the politico-diplomatic, economic, military, public outreach, aid, covert action and other ways to defend and advance US interest. But even then how to choose among these choices was not obvious. It hardly ever is. The original author of containment, George Kennan, was unhappy with the overemphasis (in his mind) on the military dimension of containment as advocated by Paul Nitze, Kennan’s successor as director of the State Department’s Policy Planning Staff. After the onset of the Korean War, Nitze’s conception largely dominated thinking through the end of the Cold War even when some Presidents—Dwight Eisenhower, Richard Nixon (with heavy input from Henry Kissinger), and Jimmy Carter (up to the Afghan invasion)—sought to push back.

It was not until the Bush (43) Doctrine of preventive war (supplemented with democracy promotion) that the US had a grand strategy comparable to containment. Depending on one’s point of view, the Doctrine provided the ex ante rationale or the ex post rationalization for the strategically-disastrous Iraq War, but there was no confusion as to the centrality of the military instrument and the need to raise the DoD’s budget accordingly.

We are in a new era, and the sequester is nicely setting the scene to re-evaluate what we are about and how we should go about it. From a top-down perspective, we need for our national leaders to explicitly call for a national discussion. At the top of the agenda is the question: What are my country’s requirements? Reminiscent of Walter Russell Mead’s framework, should we give priority to a Jeffersonian emphasis on internal development and well-being? A Hamiltonian priority on international economic engagement? A Wilsonian priority on instilling American values abroad? A Jacksonian priority on the autarchic preservation of American honor and the achievement of military victory? What is the priority among them? How will we meet them? What ways—economic, politico-diplomatic, military, covert, etc—make the best sense and what are the priorities among them? Each way implies the generation and maintenance of resources and prioritizing among them. Generating resources in turn implies generating the capital to pay for them. In the best of all possible worlds, the capital would be there to allow the process to be top down only from requirements to resources, but that circumstance is rare and there must always be a bottom-up perspective: how much can I afford and how much must I trim my requirements? How much must I scale back on the ways on which I will rely? Which will be favored and within them which resources will I buy and to what extent? What bets will I place when making those choices? Where can I skimp in the purchase of resources in the hope that I will not regret it later? Alternatively how many contingencies—ranging from threats to domestic economic wellbeing to threats to our external influence—am I committing myself to respond to in the hope that I will never have to respond to too many at the same time? Indeed, how much is my commitment stance in any area more bluff than real, more hope than readiness?

The sequester provides an opportunity we should not forego.

Donald C. F. Daniel teaches security studies at Georgetown University. Previously he was Special Assistant to the Chairman of the National Intelligence Council and prior to that he held the Milton E. Miles Chair of International Relations at the US Naval War College, Newport, RI, where he also chaired the Strategic Research Department in the College’s Center for Naval Warfare Studies.

Larry Wilkerson on Strategic Adjustment

July 2013

I was there (special asst to CJCS Powell) when we implemented the reductions to establish the Base Force and, further, when Les Aspin and Bill Clinton implemented even further cuts (resulting in the need, later, to use contractors massively in order to fight two wars simultaneously and thus avoid end strength limitations imposed by the very Congress that approved those cuts and authorized those two wars–or, actually, three wars if we count the backdrop war, the so-called GWOT–and to enrich men like Richard Cheney). Those were interesting times and very insightful as to what composes such situations in terms of the White House, the bureaucracy–civilian and military–and the national security decision-making process.

Today, my approach is that of the IPS/CAP report for 2013. The first step is to acknowledge that we spend $1.2T or more now annually on the national security account. That is State (150 account), VA, DOD, DOE (nuclear weapons), 17 intelligence bodies, and Homeland Security Dept. While GDP–particularly our anemic GDP–is an atrocious measure of almost anything and certainly for national security spending, such a holistic approach demonstrates a 7-8% of GDP expenditure rather than the 3-5% so often cited. That’s a hell of a lot of money by any measure.

Once this holistic approach to national security is the rule–and it has to be if one is going to make sense of what the nation is doing–then the first requirement is to balance appropriately the overall accounts in accordance with the nation’s strategic approach to the world. Since the best and only sensible strategic approach is to lead with soft rather than hard power, one realizes immediately how out of balance is the national security budget. This is true whether one is a balance of power theorist or otherwise; unless of course one’s objective is to destroy the empire through bankruptcy.

When even a rough re-balancing is accomplished within the accounts listed above, it becomes immediately clear that we can reduce the national security budget by somewhere between three-quarters of a trillion and a trillion dollars over the next decade, or done wisely year by year, between $60-100B per year, starting with FY 2014.

The essential details of these reductions should be accomplished in accordance with the nature of the threats we envision and the resultant capabilities we believe required to meet those threats. The White House, not DOD, should lead these efforts. DOD, as the major user of funds, should have a strong voice, but that voice should be conditioned by the overall strategy devised in the White House.

Will anything remotely resembling this happen? Probably not. We are led by amateurs, in all branches of government. I see not a strategic–or even an adult and wise–mind among them.

Col. Lawrence Wilkerson (US Army, ret.) had a distinguished career in the U.S. Army, was special assistant to CJCS Colin Powell and was Chief of Staff during Powell’s term as Secretary of State.

Matthew Leatherman on Strategic Adjustment

July 2013

One of the Pentagon’s earliest and catchiest bumper-stickers for the automatic cuts of sequestration came from then-Secretary Leon Panetta during the first week of January 2012. If that cut arrived – as it did – the Pentagon would “probably have to throw that [strategy] out the window and start over.”

Eighteen months have come and gone with steady, uncomfortable murmuring about strategy but no definitive change. Most recent is Secretary Hagel’s July letter to the Senate Armed Services Committee. This tension is a reminder that politics drive budgets, not just strategy.

Top-line budget request decisions belong to the White House and, like Congress’ defense committees, it has its own political reasons for not acknowledging sequestration. Even if the Pentagon wanted to submit plans for matching strategy to sequestration-level spending, it likely couldn’t – the political system will not accommodate that conversation right now. So strategy stays where it is, sure to adjust because of the size of the cuts but not yet adjusted.

This is less concerning than it might sound.

A rudimentary description of strategy would be that it is a statement of goals, an ordering of those goals by priority, and a cut line demarcating how far down the list the US can afford to go. When less money is available, the cut line moves up and fewer goals are financed. The priority order of these goals should not change, however. Priority #1 always gets bought and, in accounts as large as the Pentagon’s, priorities much further down the list are just as safe.

Under any resource circumstance, though, there comes a point at which the money goes no further. This can become a problem if things falling off the list are essential for national defense, if the priorities are ordered unwisely, or if the cuts aren’t made according to the list. Today’s problem isn’t the first – our national defense doesn’t hinge on the savings margins at play – and the second issue is subjective. Instead our consensus problem is that cuts aren’t being made according to the list.

Sequestration is the obvious example. Applying a formulaic cut across-the-board isn’t strategic. But it’s not the only example. Secretary Hagel’s letter forewarned that “cuts of that magnitude” place “at much greater risk the country’s ability to meet our current national security commitments,” overlooking that strategy-driven drawdowns aren’t about holding current commitments constant and accepting risk everywhere. To the contrary, they’re about raising the bar so that goals our strategy prioritizes are unaffected and goals that barely snuck into earlier budgets fall away.

The Budget Control Act and the dynamic it has fostered between Congress and the White House are about the politics of taxes and entitlement spending, not defense. Even the most astute, realistic strategy won’t change that, and various political pressures aren’t permitting adjustment of any kind. But the way ahead is much clearer than Panetta’s “throw it out the window” statement suggests, or even General Dempsey’s more recent comment about a “redo.” Once Congress and the White House make a decision on handling sequester and the federal debt ceiling, the Pentagon can give us a clearer sense of how it prioritizes goals from the 2012 strategic guidance and which of the lowest will fall away.

Matthew Leatherman is resident fellow at the International Affairs Council of North Carolina and former budget analyst at the Stimson Center, Washington, DC.

Reasonable Defense: A Sustainable Approach to Securing the Nation

(printable PDF version) (summary) (appendix of tables and charts) by Carl Conetta, Project on Defense Alternatives Briefing Report, 14 November 2012. Provides a detailed strategic argument for the re-balancing of investments in the instruments of national power and offers a new force posture and Pentagon budget appropriate to strategic conditions.  Main report includes 9 tables.  Appendix has 18 additional tables and charts addressing personnel, force structure, and budgets.

USA and Allies Outspend Military Rivals by Four-to-One: America Carries Heavy Defense Burden for Allies

Carl Conetta. PDA Briefing Memo #55, 18 July 2012.
http://www.comw.org/pda/fulltext/120717-US-world-military-spending.pdf

Efforts to cull savings from the US defense budget for purposes of deficit reduction have been stymied by Pentagon claims that any significant cut might have “devastating” or even catastrophic” effects. However, a review of global defense spending data by the Project on Defense Alternatives shows that America and its allies outspend potential rivals by a margin of four-to-one.

Moreover, according to the PDA review, the United States carries much more than its share of the allied defense burden, as measured by percentage of Gross Domestic Product allocated to defense. Together, the United States and its close allies worldwide spent $1.23 trillion on their armed forces in 2010 – more than 68% of the global total. But had the burden been shared equally among the allies based on GDP, the United States could have reduced its military spending by one-third (33%), including spending for war. This proportion substantially exceeds the Pentagon budget cuts mandated under the sequestration provisions of the Budget Control Act.

global military shares

Myths vs. Realities of Pentagon Spending

Stephen Miles and William D. Hartung. Center for International Policy Fact Sheet, 17 July 2012.
http://defensealt.org/NB2hfR

Pentagon_Budget_Fact_Sheet_

Excerpt:

Nearly all of the purported “cuts” to the Pentagon’s budget are actually reductions in the rate of growth, rather than true cuts in funding levels. In reality, even if sequestration is fully enacted as planned under the 2011 Budget Control Act, the Pentagon’s base budget would only return to 2006 levels (adjusted for inflation), which at the time was among the highest levels of spending since World War II.

The Pentagon has asked for $525 billion in funding for fiscal year 2013 — a reduction of only $6 billion from the current year. The Pentagon budget would then resume its upward climb, rising to $567 billion in 2017. As former Assistant Secretary of Defense Lawrence J. Korb has noted, “even when adjusted for inflation, Panetta’s reductions halt the growth in the Pentagon’s budget, but they do not bring the budget down much from its current level.” And while Congress has yet to enact funding for fiscal year 2013, it appears ready to increase the Pentagon’s budget, replacing the Defense Department’s extremely modest reductions with another year of growth.

Current reductions must also be measured against the unprecedented growth in Pentagon spending over the past 13 years. Since 1998, the Pentagon’s base budget has grown by 54% (adjusted for inflation). Moreover, with the country turning the page on a long decade of war in Iraq and Afghanistan, the planned reductions represent a historically small drawdown when compared with those following the end of Korea, Vietnam, and the Cold War.