2014 DoD budget a step toward ‘grand bargain’ | Federal Times


WASHINGTON — The Obama administration’s 2014 Pentagon budget request ignores sequestration. Experts call it a purely political document. It’s going nowhere — and that’s the plan.

The White House last week unveiled a $526.6 billion Pentagon spending request that proposes funding levels for weapon programs, research and development efforts, accounts used to pay for overseas operations, and myriad other things.

But, like every other component of President Barack Obama’s $3.8 trillion budget blueprint, it is mostly about one thing: Constructing the foundation for a “grand bargain” fiscal deal with Senate Republicans.

The 2014 Defense Department spending plan is part of a larger political mosaic that Michael Linden of the Center for American Progress says makes Obama’s budget proposal “unlike any previous presidential budget request in recent history.”

Obama proposes a sweeping mix of spending cuts, entitlement program reforms and tax hikes that would replace $1 trillion in automatic defense and domestic cuts.

That makes the 2014 Pentagon spending request “really just an incremental budget,” House Appropriations defense subcommittee member Rep. Jim Moran, D-Va., told Defense News.

“It’s always year by year,” the House Armed Services Committee (HASC) chairman, Rep. Howard “Buck” McKeon, R-Calif., said in a brief interview. “But especially right now.”

Moran, other lawmakers and analysts said they expect the fiscal 2015 Pentagon budget plan will be more important to the defense sector. That’s because the next plan will be shaped by the results — or lack thereof — of the grand bargain talks, as well as the findings of new Defense Secretary Chuck Hagel’s strategic review.

“The 2015 budget becomes more important,” said Gordon Adams, who oversaw defense budgeting for the Clinton administration. “For defense, 2015 is now the key exercise.”

To that end, the Center for Strategic and International Studies dubbed 2014 “another lost year” for the

Pentagon and the U.S. defense business sector.

‘Pre-emptive’ Strike

Linden and some lawmakers cast the Obama budget as a negotiating tool, a major departure from past White House spending blueprints.

“It is not a statement of the president’s vision for the federal budget. It does not represent what he thinks is the best course of action for spending, taxation and broader federal fiscal policy,” Linden said. “It is not, in short, his preferred budget plan. Rather, for the first time ever, it is a pre-emptive compromise budget.”

The HASC ranking member, Rep. Adam Smith, D-Wash., put it more succinctly: “The president’s budget proposal represents a responsible attempt to forge a grand bargain on the budget.”

Conservative Republicans take exception to whether Obama’s budget proposals are “responsible.” But they agree the plan is all about the pursuit of a grand bargain.

“It’s absolutely a political document,” said Mackenzie Eaglen, a former Senate GOP aide now with the American Enterprise Institute. “It’s designed to further negotiations between the two [political] parties … as the debate heats up this summer.”

Adams agreed, saying, “Budgets are always about politics — but this is even more of a political document.”

Obama on April 10 said his administration opted to propose a plan to turn off sequestration because the across-the-board cuts it mandates are “foolish” and “reckless.” The first batch of automatic cuts, he added, “are already hurting the economy.”

For the Pentagon, the Obama proposal would reduce the roughly $450 billion the Pentagon still owes under sequestration over the next nine years to $120 billion in more cuts.

And it would delay those proposed cuts until 2019. That’s an old Washington budgeting trick that means Obama essentially is giving lawmakers five budget cycles — including several after he has left office — in which to get rid of the cuts.

The Gamble

The Obama administration’s decision to prevent agencies from planning for sequestration always was a gamble. The 2014 budget plan is, analysts say, a doubling down on that gamble.

If the political roll of the dice fails, the Pentagon, along with the other national security agencies and other federal departments, would face another sequestration cut. And that would come on top of whatever 2014 Pentagon appropriations bill Congress might pass by Oct. 1.

Some defense sources and GOP lawmakers are critical of the Obama White House for opting for the non-planning gamble, saying it makes the already chaotic sequestration era even more chaotic.

Yet even the critics hope the gamble pays off with a grand bargain that turns off the defense sequester cuts.

So what are the odds the president will sign such a bill this summer or fall? “It’s possible. We’re all looking for the deal,” one member of the Senate Armed Services Committee and Budget Committee, Sen. Tim Kaine, D-Va., told Defense News. “The amount of bipartisan discussion that’s going on [in] the Senate right now is positive. … And it’s clear that a grand bargain has to originate in the Senate.”

Adams set the odds at “less than 50-50.”

He added, somewhat ominously, that what he most expects Congress and Obama to agree to is “another future fiscal-cliff setting,” rather than agreeing on a definitive deficit-reduction plan that ends the era of lurching from crisis to crisis.

‘Dead Right’

Sen. Bob Corker of Tennessee, one of more than a dozen Senate Republicans Obama has been courting in pursuit of a grand bargain, told Defense News that whatever the two sides are able to come up with needs to be in place by the time Congress leaves for its August recess.

“I think the next four months are really important because of the momentum that we have,” Corker said. “I think we have to get some kind of agreement in that time to get a real plan in place this year.”

Adams, a veteran of many Washington budgetary and fiscal fights, called Corker’s timing prediction “dead right.”

For Obama, the 2014 budget cycle might be his final try to claim partial ownership for replacing the much-maligned sequestration cuts with a bipartisan deficit-reduction plan.

But that doesn’t mean the full $500 billion decade-spanning reduction in planned defense spending is here to stay.

“The [2011] Budget Control Act isn’t enshrined in the Constitution and it wasn’t brought down from the mountaintop by Moses,” said Loren Thompson, with the Lexington Institute. “It is just a law, subject to change whenever the parties can agree.”

And it might take Obama’s departure from the national stage to create such an agreement. After all, as the Senate Majority whip, Sen. Richard Durbin, D-Ill., told Defense News in February about Republicans’ opposition to Obama’s proposals: “It’s always about the president.”

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