After slamming defense financial planning for "chaos and uncertainty" in October, Center for Strategic and Budgetary Assessments fiscal expert Todd Harrison is willing to give the new budget some credit for greater realism. In a Monday preview briefing - conducted by phone in a snow-paralyzed city - Harrison noted a "slow convergence" between successive post-sequester budgets submitted by the Pentagon and the limits imposed by the Budget Control Act (BCA) that defined the sequester.
The planned budget now exceeds BCA limits by $115 billion over the next five years, most of that being in the FY16-19 period, which is better than previous years. "The convergence is hard to see because it is so slow", Harrison says, but it is there. So far, too, Congress has shown willingness to relax BCA limits, promising to close the gap further.
However, some risk areas remain. The Pentagon is counting on an extra $26 billion from a new government-wide "opportunity, growth and security initiative", but that is "unlikely to stay together", Harrison says, because it is a package that includes new revenues. A bigger problem, however, is the continued transfer of budget expenses into the sequester-proof overseas contingency operations (OCO) "war budget", a trend that CSBA identified in last October's report. The Pentagon and Congress have been "complicit" in this process, Harrison says: "It's logical, when your base budget is capped and you don't want to make hard decisions."
But the more that expenses are moved into OCO, the more the risk of pain if the OCO budget goes away abruptly, which is very possible if the U.S. and Afghan governments do not reach a bilateral agreement on security.
Harrison slams the popular line that the budget will reduce the Army to "pre-WW2 levels" as "irrelevant". More to the point, he says, the planned cuts will leave the Army with up to 450,000 troops versus its pre-2001 strength of 481,000, and leave the Marine Corps above its pre-2001 end-strength.
Defense Secretary Chuck Hagel's pre-budget-day release left two main programs in question, Harrison says: Hagel did not specifically mention any reductions or delays in F-35 Joint Strike Fighter procurement, but did not say that there would not be any, and did not directly say whether the Navy would be able to fund the refueling and complex overhaul for the aircraft carrier George Washington. "We'll have to look at the out-year budgets and see if the funding is there."