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New budget deal still leaves big DoD funding gap

Dec. 11, 2013 - 06:00AM   |  
Aircraft assigned to Carrier Air Wing (CVW) 11 perform a fly-by Dec. 7 for sailors and their family members on a tiger cruise aboard the aircraft carrier USS Nimitz (CVN 68). A proposed budget deal is good news for the Pentagon yet that money is not eliminating the long-term threat of the spending caps.
Aircraft assigned to Carrier Air Wing (CVW) 11 perform a fly-by Dec. 7 for sailors and their family members on a tiger cruise aboard the aircraft carrier USS Nimitz (CVN 68). A proposed budget deal is good news for the Pentagon yet that money is not eliminating the long-term threat of the spending caps. (MCS Seaman Aiyana S. Paschal / Navy)
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Capitol Hill’s budget deal is good news for the Pentagon.

But it is unlikely to eliminate the need to set in motion long-term money-saving measures such as reducing troop levels, delaying weapons programs and making controversial cuts to military pay and benefits.

The bulk of the $22 billion windfall that the Defense Department would get under the latest budget deal would go to training and readiness, allowing planes to fly, ships to steam and troops to conduct large-scale training exercises.

“What this means is that the Pentagon will probably not have to cut readiness substantially,” said Todd Harrison, a defense budget expert with the Center for Strategic and Budgetary Assessments, a think tank in Washington.

Yet that money is not eliminating the long-term threat of the spending caps known as sequestration, which may include big cuts to the size of the active-duty Army, a reduction in the size of the Navy’s carrier fleet and slashing the number of Air Force squadrons. Other proposals include closing military bases, reducing the military retirement package and canceling future weapons procurement.

When Defense Secretary Chuck Hagel rolled out those gloomy budget scenarios this summer following his so-called Strategic Choices and Management Review, he acknowledged that those proposed changes were not going to meet the full spending reductions required under the sequestration.

“Every scenario of the review examined showed shortfalls in the early years of $30 billion to $35 billion,” Hagel told reporters on July 31.

In other words, the Pentagon has never put forward a plan that was going to entirely account for the sequestration cuts. “The options that we teed up, totaled ... in those first couple of years only $15 billion to $20 billion,” a senior defense official said in late July.

DoD’s default plan was to take that money out of the readiness accounts, Harrison said. Many cost cutting measures that make sense in the long run take years to show a substantial savings, such as changes to military compensation, closing under-used military bases or eliminating costly weapons programs.

The latest budget agreement from Capitol Hill, which on Wednesday had not been passed into law, would provide additional defense money only for this year and next year.

In short, the latest budget math looks like this: The Pentagon initially requested about $527 billion for this current fiscal year. But the spending caps known as sequestration were going to slash that by about $52 billion, or down to about $475 billion.

Now, the current budget deal could restore about $22 billion for the current year. But that additional money will not be enough to cover the “$30 billion to $35 billion” shortfall that Hagel described.

So any sense of relief inside the Pentagon may be short lived as it appears that some more limited readiness reductions may still be needed. And all of those controversial proposals that could fundamentally shrink the military’s size will remain on the table.

“This should help quite a bit in terms of readiness, but the bottom line is it doesn’t solve the underlying budget challenges facing the department,” Harrison said.

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