If last year’s budget was tough on the U.S. defense establishment, the coming year’s is likely to be just as trying.
The budget for fiscal 2013 was only recently solidified by Congress. President Barack Obama’s fiscal 2014 budget request is two months behind schedule, while lawmakers are nowhere close to an agreement on how to reconcile their own big-picture spending issues.
That leaves the Pentagon stuck with a $46 billion cut this year and facing a similar reduction next year unless Congress finds a way to cope with longstanding differences over taxes and entitlements. Early reports indicate that soon-to-be presented budget plans for fiscal 2014 will not take those reductions into account.
The situation has Washington defense analysts in agreement on a couple of things: the military is in the midst of a cyclical downturn in defense spending, and the outlook for navigating it well is grim.
For starters, budget cuts driven either by the penalty known as sequestration or a possible agreement to avert it are already prompting a review of the president’s 2012 shift in strategy that pivoted the attention of the U.S. military from Europe to Asia.
That review is due in late May, and Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, is already adjusting the nation’s expectations. “We’ll need to relook at our assumptions, and we’ll need to adjust our ambitions to match our abilities,” Dempsey said during a recent speech at the Center for Strategic and International Studies.
The review, called the “Strategic Choices and Management Review,” is supposed to inform next year’s Quadrennial Defense Review and the fiscal 2015 budget, says Todd Harrison of the Center for Strategic and Budgetary Assessments.
If the review contradicts what is released in the Obama administration’s planned budget request to Congress expected in April, it might render the budget request obsolete, Harrison says. The budget will be based on the 2012 strategy and is not likely to align with the new strategic choices review.
On top of that, the fiscal 2014 request for defense may be $50 billion more than spending levels prescribed by the law that put sequestration into effect. “Which means it is arguably irrelevant anyway unless the budget caps are raised,” Harrison says.
Sequestration represents close to an 8% cut in the Pentagon’s budget for fiscal 2013. To manage the spending cuts, Defense Secretary Chuck Hagel will require the president’s support to break the historic balance of spending among the services and rein in spending on military pay, benefits and compensation, says Gordon Adams, a professor at American University and a former official at the Office of Management and Budget who helped manage defense cuts in the 1990s. “If the first guideline [for the strategic review] isn’t, ‘Give me options for limited budgets,’ he will be making a big mistake,” Adams said during a March 26 event sponsored by the Project on Defense Alternatives.
Without setting priorities, acquisition dollars and military force structure will be reduced, while the Pentagon bureaucracy will protect itself, Adams says.
And that means major programs such as theJoint Strike Fighter – the Pentagon’s costliest weapon program – will receive “the contradictory direction of stretch and shrink” by reducing the number of purchases per year as well as the size of the overall fleet. That will keep the JSF alive, in contrast to programs in the other 60% of the acquisition budget that have less visibility, Adams says.