By Sandra I. Erwin
The Pentagon’s budget request for next fiscal year has been slammed for being awkward, confusing and in violation of the law.
Pundits’ sneering aside, the only opinions that matter to the Defense Department are those of congressional members who might be on the fence about giving the Pentagon more money than it is allowed under current law.
At stake are $141 billion that the Pentagon insists it needs over and above the budget caps set by Congress. The administration is asking for an additional $26 billion in 2015 and $115 billion between 2016 and 2019. The extra funds, the Pentagon claims, will avert steep cuts to ground and naval forces.
The Pentagon is no slouch when it comes to selling budget proposals to Congress, but garnering support for this year’s spending plan will be a tough, if not impossible, uphill climb.
A major problem for the Pentagon is that its budget plan lacks a friendly constituency. It is offensive to fiscal hawks because it breaches spending caps that Congress imposed in 2011 to curb the federal deficit. The budget request — which reduces the size of the Army and Marine Corps considerably and eliminates politically popular programs — has infuriated pro-defense Republicans who blast the Obama administration for protecting domestic programs at the expense of the military.
Even though the Pentagon’s budget consumes the largest share of government discretionary spending, it amounts to less than 20 percent of all federal outlays. With no political appetite to cut mandatory programs such as Medicare and Social Security, the discretionary piece of the budget is the only viable target for deficit hawks.
“Even if GOP members could agree with every item on the administration’s proposed wish list, they don’t want the government to borrow more money and they don’t want to raise taxes,” defense industry consultant Loren Thompson wrote. Republicans have supported compromises that provided partial relief from the caps in 2013, 2014 and 2015, Thompson noted, but what the administration is proposing would cut spending reductions in half for 2015, and pursue similar relief in later years. “Thus if taxes don’t increase, deficits will.”
Defense officials know they are in a vulnerable position. They have sought to make a case that the funding authorized by the Budget Control Act is not enough to keep a military force large enough to meet current commitments.
Pentagon leaders insist that this year’s congressionally mandated military strategy, the Quadrennial Defense Review, proves their point. The strategy is the first since the QDR was enshrined into law in 1997 that gives up on the idea that the military can fight two major wars simultaneously in different parts of the world. It does call for the armed forces to be prepared to fight and win one major conflict, while engaging in smaller scale operations elsewhere.
To fulfill missions laid out in the QDR, defense officials contend, the Army should not fall below 440,000 active-duty soldiers, the Marine Corps should stay at 182,000, and the Navy needs 11 aircraft carrier groups.
The administration warned that if the BCA spending limits are enforced in fiscal year 2016, the Army would go down to 420,000 soldiers by 2019, the Marine Corps to 175,000 and the Navy to 10 carriers.
“The proposed budget involves lots of change to meet the drop required by the post-sequester Bipartisan Budget Act,” said Russell Rumbaugh, defense budget analyst at the Stimson Center. “This year’s president’s budget reopens the ‘more or less’ conversation by arguing — including in the QDR — that the statutory levels for defense are not enough.” The Bipartisan Budget Act capped defense spending for fiscal year 2015 at $495.6 billion. The Pentagon’s request complied with that top line, although it is asking for a $26 billion special “investment” fund.
The big decisions about the size of the force are being punted to 2016. The Defense Department said it budgeted to current law, but is looking for Congress to “fix it” next year to avert the force reductions. The Pentagon is gambling that Congress will find these cuts unacceptable.
“If we get a signal from Congress that they’ll budget at higher levels, we would go back into the 2016 budget, and reorient funding to enable us to fund the Army at 450,000 and the Navy at 11 carriers,” said Christine E. Wormuth, deputy undersecretary of defense for strategy, plans, and force development.
Persuading Congress to undo the law will take some doing. “I’m not sure we have a silver bullet in that area,” Wormuth said March 10 at the Center for Strategic and International Studies. “We will try to continue the conversations we’ve had,” she said. The hope is that Congress will take cues from the Quadrennial Defense Review, which cautions that the military will have to pare back its commitments because of reduced budgets. “The QDR amplifies the points we’ve been trying to make,” said Wormuth.
Members of Congress keep asking Defense officials to show them “what sequestration really does,” she said. “I think we’re making progress to make clear what the consequences are.”
Analysts do not see the political winds blowing in the Pentagon’s favor. In the larger fiscal picture, the Pentagon is asking for more money that would have to be offset by cuts to domestic programs or by increasing taxes. None of these scenarios stands a chance, said Gordon Adams, a former White House budget official and currently a professor at American University.
“The Pentagon request is unreal,” he said. “Congress will not amend the Budget Control Act. I don’t know anybody who thinks Congress is going to renegotiate the BCA caps this year. It’s not going to happen.”
But the Pentagon cannot be blamed for asking, Adams acknowledged, as Congress is deeply divided over spending issues.
“Members of Congress are having it both ways,” he said. Defense hawks see Russian President Vladimir Putin flexing muscle in Ukraine as evidence of U.S. weakness caused by cuts to military spending. Lawmakers, at the same time, are calling for fiscal discipline.
Adams faults the Pentagon for building parallel budgets — one that exceeds the mandatory caps and one that is BCA-compliant — in hopes that Congress will approve the larger amount. This sets up the military services for more disruption and churn, he said. “The programmers are adding things to the budget based on the $115 billion plus-up request and then, if they don’t get the resources, they have to start stripping things out of the budget.”
Douglas Berenson, industry analyst at The Avascent Group, believes the Pentagon will benefit from the political climate. Since the defense budget peaked in 2010 at about $689 billion (including war costs), it has been a more gradual downturn — to $582 billion in 2014 — than many people feared, he said.
There is a growing consensus that $500 billion a year is reasonable for defense, whereas three years ago — when deficit-reduction fever engulfed Washington — many experts predicted military spending would plunge to $450 billion.
“Despite the push for sequestration, there is not a high level of political appetite for a really sharp drawdown in defense spending,” Berenson said March 6.
The administration is banking on Congress finding a way to give the Pentagon more money without having to change the law, he suggested. “On Capitol Hill, they are trying to have their cake and eat it too,” said Berenson. “There is dismay that the administration is walking away from spending levels that are enshrined in law. But at the same time there are clear indications that the kind of trades forced by these spending levels are unacceptable.”
That said, the Defense Department budget request is certainly “awkward,” Berenson added. “Breaking caps in an election year is going to be very difficult.”
A more likely outcome is that members of Congress will find ways to fund their preferred programs by shifting money around within the base budget, or will add them to the war budget, known as “overseas contingency operations,” or OCO. “Shoving some money into OCO might be tolerable,” said Berenson. “Congress is going to be uncomfortable with a significant decline in the size of the force, and there will be pushback to rapid reductions in ground troops and ships,” especially in the wake of the Ukraine crisis, he said. “The OCO budget will be a safety valve.”
Berenson predicts the Pentagon will be more successful than it was in the past in making the case that sequestration is damaging. “I think the Defense Department has allies on the Hill and its argument is gaining strength since a couple of years ago.”
Wormuth, the deputy undersecretary of defense, said the Pentagon is well aware that sequester is the law, but is convinced that Congress should reconsider it. “We are trying to articulate that we believe we need more resources to execute the strategy. We need more than is allowed under the law,” she said. “We did not believe that accepting those sequestration levels is right for the country.”
Some analysts suggest the Pentagon did not help its cause with the Quadrennial Defense Review. The QDR calls for the military to do “everything,” and does not set priorities, said Clark A. Murdock, senior adviser at CSIS. “We have to make more hard choices about what not to do” with reduced spending, he said. The Defense Department has made a “good enough case” that sequestration weakens the military, said Murdock. “But does Congress see it? No.” His advice to the Pentagon is to “wait until the next election.”
Defense officials have not been politically savvy in their dealings with Congress since the Budget Control Act ended the era of big military spending, said Stephanie Sanok Kostro, a senior fellow at CSIS. “The Defense Department hasn’t made enduring relationships with key members on the Hill, or worked with them on understanding their perspective,” she said. “They’re now trying to build relationships. But not all members are equally on board with Defense Department logic,” Sanok Kostro noted. “A lack of credibility and lack of relationships really damage their case.”
Much of this debate ultimately is pointless until Congress settles larger questions about discretionary and entitlement spending, said David J. Berteau, senior vice president of CSIS. “This is not a binary discussion on how much we should spend on national security,” he said. “The broader question is how much government do we want and need, and how do we pay for it?” Nobody should expect these questions to be answered this year, even after the mid-term elections, said Berteau.
Retired Army Lt. Gen. Bob Durbin, who participated in the 2006 and 2010 defense strategy reviews, said the 2014 QDR gives the Pentagon the ammunition it needs to secure increased funding. “Even for a resilient institution like the Defense Department, there’s a certain point where you cannot keep the same performance with less resources,” said Durbin, who is now senior vice president of Exelis. His company and other Pentagon contractors, he said, are encouraged by the administration’s decision to push for more defense money. This budget request, however, is a clear signal to military contractors that the “readiness at any cost mentality in the building is long gone,” Durbin said. “Now, it’s all about the affordable solution.”