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So Many Defense Budgets; So Little Clear Direction

Posted by Mackenzie Eaglen on

The US Capitol seen from the Newseum this morning during a US Naval Institute conference.

After two weeks of covering the 2015 defense budget, I can assure you it is confusing. Every budget includes fudges, silliness and an enormous amount of information. They are hard to make sense of and often their import doesn’t become clear for a year or two. But this budget may be the most complex one I’ve ever seen, positively bulging with fudges and silliness (e.g. OGSI, the “Opportunity, Growth, and Security Initiative”). Mackenzie Eaglen, defense expert at the American Enterprise Institute and a member of the Breaking Defense Board of Contributors, tries to clear some of the fog and discovers things are so murky that Congress will find it almost impossible to make rational, useful decisions about a proposal that will leave America’s military still unsure of what it will look like in two years. Read on. — The Editor.

This is the most confusing defense budget submission in recent times. It will not help Pentagon leaders achieve the goal they seek, which is for Congress and the White House to pass a new law softening the effects of sequestration for the remainder of the decade.

While the mandatory budget cuts known as sequestration are part of the problem, good old fashioned politics loom large as well. All the parties — whether at the Pentagon, White House or Capitol Hill — are acting as rational actors in trying to avoid blame; the problem is few of their interests strategically align. So the military is left in limbo and unable, again, to plan for the long term. Instead, the services must try to simply manage the immediate mess while still cleaning up from recent year’s indecision, constantly-shifting priorities and reduced funding.

The irony of this is that the murk will only prompt more questions from the very politicians charged with providing and maintaining the Armed Forces, even though the Pentagon tried to provide answers about the continuing consequences of sequestration. The difficult task of being able to discern what is in and what is out of the President’s military budget, what is a priority and what is not, means Pentagon leaders will muddle through another year. They will miss the bigger opportunities, breakthrough and political “buy in” that come with clear-eyed awareness, unity, purpose and direction. Congress, meanwhile, will continue to fight for individual programs and one-off projects without regard for the bigger picture because they will be hard pressed to make heads or tails of it with this budget.


Hybrid Defense Budget Only Partially Reflects Sequestration

Depending on who is talking, the defense budget meets current spending caps set into law, breaks the caps, or both. The defense budget technically meets spending caps in 2015. Unless, that is, you include President Obama’s additional defense budget request for $26 billion in his Opportunity, Growth and Security Initiative (OGSI).

In addition to this so-called “investment fund” for security and other priorities — but in the same spirit — the President’s budget adds $115 billion in spending over the five-year future years defense plan (FYDP), which is why the defense budget breaks spending caps from 2016 through 2019.

There really are two defense budgets woven together into one document for Congress (once the five-year plan eventually makes it over to the Hill). And that does not even include the war spending known as Overseas Contingency Operations (OCO).

But only parts of each budget — one accounting for full sequestration and the other assuming Congress provides more money above the spending caps to the tune of $115 billion total — made it into the  hybrid version that is now the public request.

As acting Deputy Defense Secretary Christine Fox said at AEI recently, “there are actually multiple budgets embedded in this submission.” Inside the two-in-one defense budget is only a “description” of a fully sequestered military. This is intended to be illustrative, barring a few select cases where long lead time is required to execute a result of sequestration, such as reducing ground forces endstrength even further. But as Ms. Fox noted, the draft budget plans that account for full sequestration will not be submitted at budget level detail to Congress.

Instead of clearly presenting two budgets side-by-side for comparison, the jumbled defense budget tried the fiscal equivalent of mixing wet and dry ingredients and expecting a baked cake to result. The result is a budget that hopes for additional money from Congress, while including the damaging effects of continued sequestration sprinkled throughout, both in case that extra funding does not materialize and in the hope of putting political pressure on policymakers to act.


Two-in-One Defense Budget Further Muddies the Water

The problem is that Congress does not know which budget is which. Here are a few examples of the confusion this engenders. It is unclear whether the decision to retire an aircraft carrier under sequestration would be reversed if Congress provides additional funding at the President’s budget level of an extra $115 billion.

Presumably the Army would not fall to 420,000 active duty soldiers in the President’s five-year plan because the extra $115 billion is already assumed in the out-years. But, depending on who you talk to, it does.

Nonetheless the extra dollars assumed in the FYDP contradict Comptroller Hale, who recently said that if Congress gives an indication they will provide more money than current law demands, then Pentagon leaders “will end the Army drawdown at about fiscal ’17 and leave them at 440,000 – 450,000.” Mr. Hale continued, noting that this extra money would also allow the Pentagon to avoid decommissioning the USS George Washington and “leave the carrier fleet at 11.”

We know that the 2015 budget is essentially a holding pattern. Next year is when major decisions will have to be made whether to continue to draw down the Army and Marine Corps or to begin decommissioning the Washington, for example.

Then there are the other results of sequestration that will take place but are not included in the defense budget request. Examples include divesting the entire KC-10 tanker fleet, retiring all of the new RQ-4 Global Hawk Block 40 Remotely-Piloted Aircraft, and reducing investment in tactical aircraft like the F-35A, the KC-46A tanker, as well as intra-theater airlift like the MC-130J.


Still Another Defense Funding Request To Consider 

Clearly, the 2015 budget request is full of moving parts. There is the base budget in 2015 plus the “investment fund”. Over the Pentagon’s five-year budget, the President requests another $115 billion above the sequestration caps from 2016 through 2019. Then there is the forthcoming war budget for operations in Afghanistan. This is separate from sequestration and outside the spending caps agreed to and modified by Congress.

Believe it or not, that’s not all. Last up is the newly-resurrected Unfunded Requirements Lists, which is separate from the OGSI. House Armed Services Committee Chairman Buck McKeon recently requested, and Secretary of Defense Chuck Hagel agreed, to allow the services and combatant commanders to again submit these so-called wish lists to Congress.

A key example of a program that did not make it into the President’s budget or the OGSI — but one that will earn a spot on the unfunded priorities list — is the Navy’s EA-18G electronic attack aircraft. [A Navy official has told us the service’s wish list includes 22 Growlers — the editors.]

So you’ve got all those clusters of money and no one is really sure which trumps which.

Another open question is whether the items in these packages have been vetted as legitimate requirements or whether they are simply “really-nice-to-haves.”


Confusion Reigns So Pentagon Unlikely To Get What It Needs

A major challenge for lawmakers will be determining what is truly worthy of additional defense dollars. Since many programs are increasingly funded at the expense of other items as the defense budget contracts, this matters.

If current budget drafts for 2016 are the “tale of two futures,” as one Army official put it, only one will materialize. That is a future that looks just like the recent, and unfortunate, past.

Congress is not likely to pass a defense spending bill before the start of the fiscal year and the mid-term elections. That means the Pentagon will operate under another Continuing Resolution without any signal from the Hill about what might happen with sequestration in 2016.

All the consequences of sequestration that demand advance planning will likely have to move forward without resolution or clarity on future toplines. Once the ball gets rolling, it will be hard to reverse or unwind many of the decisions — including cutting the Army and Marine Corps active duty forces too deeply.

The end result of all this will be action in the wrong places and inaction on bold initiatives that are needed now more than ever. The other consequence will be, as Frank Kendall, undersecretary for acquisition, technology and logistics — said recently: “…We don’t know where we’re going, which compounds the problem.”

After the dust settles from another tumultuous budget year, America’s military still will not know where it is going.

What do you think?