Determining DOD Spending for FY ’14 Could Be Repeat of Current Year | Association of Defense Communities

The Obama administration’s decision to deliver a fiscal 2014 budget request that ignores the $52 billion sequester cut slated to be imposed on defense spending next year leaves it uncertain how the department’s new budget will be determined.

The best case scenario is that Congress and the White House reach a long-term deficit reduction agreement — perhaps as part of the negotiations needed to lift the nation’s debt ceiling before the end of the summer — that replaces the automatic spending cuts. But few defense analysts are holding out hope for a grand bargain that accomplishes that goal.

Barring some sort of deal, defense spending will take a $50-plus billion hit in FY 2014, with DOD allocating the cuts, as has been the case this year, or lawmakers allocating them as part of the appropriations process. Last week, Senate Appropriations Chair Barbara Mikulski (D-Md.) said her committee would set discretionary spending levels at pre-sequester levels and ignore $91 billion in government-wide spending reductions slated for next year.

That move likely sets up a confrontation with House Republicans over FY 2014 spending, reported CQ.

In an interview Friday, Howard “Buck” McKeon (R-Calif.), chairman of the House Armed Services Committee, said that Republicans and Democrats are so far apart in their budget priorities that DOD probably won’t be able to sidestep the sequester.

Many analysts are looking for a repeat of FY 2013, in which the Pentagon was forced to scramble to apportion automatic spending cuts after the fiscal year already was under way. Defense Secretary Chuck Hagel has ordered senior officials to prepare a “strategic choices and management review” to plan for the deeper spending cuts that threaten the budget. That assessment, though, is not expected to be finished until the end of May and, as a result, may not be completed in time to influence the FY 2014 budget process.

More likely, the review — led by Deputy Defense Secretary Ash Carter and Joint Chiefs of Staff Chairman Gen. Martin Dempsey — will support the department’s effort to conduct the Quadrennial Defense Review (QDR), according to CQ.

“This is the kickoff to the QDR and the 2015 budget,” said Gordon Adams, a defense analyst at the Stimson Center. “I think they just decided to punt on this budget.”

via Determining DOD Spending for FY ’14 Could Be Repeat of Current Year | Association of Defense Communities.