By Marcus Weisgerber
A top Pentagon official does not forsee Congress reversing federal budget caps when lawmakers return to Washington for a lame-duck session following next week’s midterm elections, regardless of the results.
Instead, Defense Department Comptroller Mike McCord sees the need to raise the debt ceiling next spring as the next potential deadline for Congress and the White House to strike a short or long-term budget deal.
“I don’t think many people at the senior levels of DOD expect that we’re going to have instant enlightenment no matter what happens next week,” McCord said Tuesday at a conference sponsored by the non-partisan TechAmerica Foundation. “We don’t really expect that there’s going to be some kind of a budget deal. It doesn’t seem that likely in the lame duck session.”
A week from Election Day, polls indicate that Republicans have the momentum to capture the Senate, which is currently controlled by Democrats.
Making his first public speech since becoming comptroller in late June after Bob Hale retired, McCord said Pentagon officials are focusing more on the debt ceiling expiration next spring as “a more likely” time when Congress could inject some longer-term budget guidance.
“We see that as maybe a little more likely to provide some insight than just the results of the election,” he said.
McCord predicted the Pentagon’s spending outlook to remain “cloudy [or] partly cloudy.” The Budget Control Act of 2011 set strict federal spending caps that began in 2013, slashing the Pentagon’s planned budget hundreds of billions of dollars over a 10-year period. Lawmakers and the White House struck a two-year deal late last year, reducing the severity of those cuts in 2014 and 2015. But, the cuts, also known as sequestration, return in 2016 without a budget deal in Congress.
Pentagon leaders say that they will be forced to shrink the size of the military, both people and platforms, if the cuts are not reversed. Further complicating matters is that Congress has rejected most of the Pentagon’s proposals it says will save it money, including retiring weapons, closing bases and reforming military compensation.
The Pentagon’s has not budgeted to the spending caps in its long-term spending plan exceeding the limits by $115 billion between 2016 and 2019.
“We’re very concerned about dropping down below the levels that we have asked for,” McCord said.
DOD says it will need to cut tens of thousands of soldiers from the Army ranks and retire entire fleets of aircraft if its budget gets slashed to the sequestration levels.
TechAmerica, in its annual defense spending forecast, said the Obama administration’s planned Pentagon spending levels for 2016 and 2017 “will not survive.” Instead it predicts defense spending will fall $235 billion below projections between fiscal year 2016 and 2025.
Still, the report projects “a modest recovery in the top-line of defense spending.” It also predicts that congressional efforts to exempt only defense from federal budget caps will not succeed, a point echoed by McCord.
“I think that’s kind of like a wishful thinking scenario rather than a realistic one,” he said. “It could happen, but we’re not counting on it.”
TechAmerica predicts that Pentagon spending on new weapons and research and development—a figure of much interest to defense companies—will remain flat in 2016 and 2017 at around $153 billion each year before starting to slowly increase in 2018 to accommodate an uptick in DOD weapons projects, including the Lockheed Martin F-35 Joint Strike Fighter, Navy Ohio-Class submarine replacement (SSBN-X), Boeing KC-46 tanker and a new Air Force long-range, stealth bomber.
In the short-term, McCord pushed for Congress to pass a 2015 defense spending bill.
“We really need Congress to give us a funding bill,” he said. “We in DOD don’t live in yesterday’s world. We live in today’s world. We have to react to today’s events. We have adversaries today who are clever and adaptive, like ISIL among others.”
Until recent years, DOD has historically not had to operate under a continuing resolution for long periods of time. If Congress does not pass a dedicated spending measure, it typically passes a continuing resolution, which restricts spending at levels set the previous year. It also prevents DOD from starting new projects or even ending old ones it wants to stop. But in the last four years, the Pentagon has been funded twice by six-month continuing resolutions.
The continuing resolution passed at the end of September expires on Dec. 11, leaving Congress short on time to address the budget after they return on Nov. 12.
“What I do worry about is … that we’re looking at a new normal,” McCord said.