Obama Shifts the Goalposts on the Pentagon Budget
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Obama Shifts the Goalposts on the Pentagon Budget

iStockphoto/The Fiscal Times

The White House’s Pentagon 2014 budget request ignores sequestration and long-term spending cuts, back-loading hundreds of billions of dollars of savings years down the line. 

Defense Secretary Chuck Hagel said the DOD and the White House designed its budget to cut defense spending by $100 billion in the next decade, as opposed to the $500 billion mandated by law. He said these savings would be accomplished by reducing redundancies, eliminating 50,000 civilian workers, reducing healthcare and retirement costs, and slowing salary growth.

Hagel said the plan gives the Pentagon "time … to achieve these longer-term savings, without disproportionate harm to modernization and readiness." He put the onus on Congress to come to an agreement with the White House that eliminates the Budget Control Act and with it, the sequestration and other cuts over the next decade.

“We’re taking significant cuts this fiscal year. We have an opportunity to get beyond that and find a budget resolution from Congress and the president that will allow us some new flexibility,” he said. “We’re living in a world of complete uncertainty.”

The problem with the spending plan – which is larger than this year’s $524 billion budget and does not include an unspecified amount of conditional war spending - is it probably won’t happen. It assumes that Republicans and Democrats are capable of achieving a grand bargain. But the rhetoric from both sides yesterday makes that idea close to impossible.

“The outlook for a grand bargain this year is as elusive and dubious as previous attempts. That increases the irrelevance of Obama’s 2014 defense budget request. Worse, it may actually hurt the larger fiscal debate once it heats back up this summer with the need for another debt ceiling increase,” wrote Mackenzie Eaglen, a fellow at the American Enterprise Institute.

Because the sequestration and the long-term spending cuts are still the law, only Congress can act to overturn them. So by introducing a budget that claims to be able to cut only $100 billion from the Pentagon as opposed to $500 billion, the White House is now able to blame Republicans for refusing to compromise on larger spending decreases.

At the same time, the White House budget plan allows the Pentagon to believe that sequestration is not a reality. According to Eaglen, this further delays the planning necessary to deal with the cuts when they ultimately do occur.

“By resetting the baseline, sequestration allows those who would arbitrarily cut the defense budget further to claim it is growing. This flies in the face of senior military leaders’ claims that budget cuts are hurting the force, harming readiness, and potentially hollowing out the security strategy,” she wrote.

Under the White House plan, 5 to 6 percent, or about 50,000, civilian jobs would be eliminated in the coming years. Pentagon comptroller Robert Hale said it was not clear whether these jobs would be eliminated by attrition or firing, but added that the White House plan was better than the automatic spending cuts.

“Our civilians are going to be devastated by sequestration,” Hale said at an afternoon briefing.

In addition, salary increases would slow to one percent in 2014, compared to 1.8 percent this year. TRICARE fees will also increase, although soldiers and military retirees will still pay much less than they would in the private sector.

The Pentagon has also planned another round of base closings, known as the Base Realignment and Closing (BRAC), in 2015. These processes are extremely unpopular with lawmakers, who fight to keep a DOD presence in their districts and states.

Hagel also said that the Pentagon planned to “eliminate or restructure those programs that are performing poorly,” but did not specify what those programs would be.

Conditional spending on the war in Afghanistan, or spending beyond what is covered in the budget, is left open-ended until “final policy decisions about the pace of [the Afghanistan] drawdown” are made. DOD officials who briefed the media this afternoon said it’s not yet clear what these costs would be, and that they anticipated they would be higher than expected.