The Pentagon’s baseline budget could dip to $415 billion in coming years, with as little as $62 billion in annual authorized procurement, while the active military force shrinks to about 1 million uniformed personnel, according to analyst Todd Harrison of the Center for Strategic and Budgetary Assessments.
Harrison provided Washington reporters an outlook Oct. 24 on the effects of the 2011 Budget Control Act (BCA) and its annual threat of automatic, widespread sequestration cuts in fiscal 2014 and beyond. While he did not necessarily see each of the outcomes as probable, when looking at historical trends and accounting for how the 2011 law is written, Harrison said the nadirs in defense spending and capability were nonetheless plausible.
Indeed, one of the unintended consequences of the law and sequestrations is the turnabout that will occur in the ratio ofprocurement to research, development, testing and evaluation (RDT&E), according to Harrison’s report, “Chaos and Uncertainty: the Fiscal 2014 Defense Budget and Beyond.” Since fiscal 1955 the ratio has averaged 2.1, meaning the Pentagon was spending more than $2 in procurement for every $1 of RDT&E. While the actual figure has vacillated and dropped over the decades, it never got below a fiscal 2006 nadir of 1.1. But under decade-long spending caps mandated by the BCA, that ratio will drop below 1.0.
“For the first time in modern history, [the Pentagon] would be spending more on developing new technologies and systems than procuring equipment,” Harrison says in a report on sequestration in fiscal 2014 and beyond.
The day before, leading generals, admirals and civilian officials were testifying to Congress and in public about the so-called “procurement holiday” on the horizon under the 2011 law.
In a hearing before a House Armed Services subcommittee Oct. 23, top acquisition officials from the Air Force, Army,and Navy noted how the next round of sequestration, slated to begin Jan. 15, will demand the Air Force cull four or five of 19 planned Joint Strike Fighters, while the Marines cut an F-35B and the Navy cuts an F-35C.
That came two days after the Army chief of staff spoke at the annual Association of the U.S. Army conference of damage to about 485 acquisition programs. “Some we will have to cancel,” said Gen. Raymond Odierno. “Ground Combat Vehicle, name your favorite acquisition developmental program, it’ll probably be affected.”
Harrison said historical trends point to a low in annual authorized defense procurement of just $62 billion. As the years go on and cuts to once-planned procurements mount, it could devastate many programs as they find the new economics of reduced purchases or the subsequent lack of military capability due to smaller numbers — or both — not to be worthwhile. The Joint Chiefs have warned about the risks of having a smaller military with regard to capabilities, especially compared with existing national security strategy and expectations (Aerospace DAILY, Sept. 26).
For his part, Harrison warned that the defense industrial base could go to an arsenal model where there is a quasi-state company providing niche production capability, like for shipbuilding or tactical fighters. Looking forward, he said, there could be “a lot of broken glass on the floor” unless the BCA is changed.