The Pentagon’s budget promises savings without cuts

On Monday the White House released its proposed budget for next year, fiscal year 2012. The Pentagon is asking for a $553 billion base budget, a slight increase from the $549 billion estimated budget this year (budget overview can be found here). On top of that is a request for $118 billion for Overseas Contingency Operations, which basically means the wars in Iraq and Afghanistan. That number is down from an estimated $159 billion this current year.

The one interesting note in the budget is the pooling of civilian and military funds for OCO. $126 billion is sought for the wars in Iraq and Afghanistan, though the military will continue to get the most money and responsibility with $118 billion in OCO funding. This move, according to Spencer Ackerman over at Danger Room, is meant to shield the civilian efforts in Iraq and Afghanistan from the “red pens of skeptical House Republicans, who’ve called for big cuts in civilian foreign assistance.” In addition, the White House is asking for $8.7 billion in supplemental funding for State and USAID so “that they can take on increased roles in Iraq, Afghanistan, and Pakistan.” With defense spending still a difficult subject for many Republicans, State Department and USAID funding look increasingly vulnerable in the spending fight ratcheting up on the Hill. As such, the Obama administration is wisely shielding the important civilian aspect of the OCO. If the QDDR actually shows results, civilian foreign policy could actually be saved from the budgetary slaughterhouse.

Outside of the OCO, Secretary of Defense Robert Gates continues his hunt for inefficiencies by promising large savings that will produce little to no cuts in actual defense spending. The key features of the baseline budget were known in advance, as Secretary of Defense Robert Gates last month proactively announced the cancellations of the Marine Corps. amphibious landing vehicle the Expeditionary Fighting Vehicle (EFV) and the SLAMRAAM surface-to air-missile and the non-line-of-sight launch system. In addition, the Pentagon will cut down its work force.

The cuts, along with other changes in the budget, are meant to show Gates’ new aggressive approach on defense spending:

“Although not subject to the President’s freeze on non-security discretionary spending, DOD is undertaking a series of management efficiency and acquisition reforms that will produce a net of $78 billion in savings over the years 2012 through 2016 compared to the previous DOD topline funding levels. Cost-cutting measures include the consolidation of several Air Force operation centers, reduced Army construction costs, and the Navy’s use of multi-year procurement strategies.”

Gates also plans to reform acquisitions and eliminate unneeded weapons systems. The problem, however, is that these proposed savings will not discipline the budget. According to Gordon Adams, the defense budget will continue to increase through fiscal year 2014, only going flat in fiscal years 2015 and 2016 – though what happens then remains highly uncertain. The number itself, $78 billion, is also a myth. As Adams points out,

“Six billion don’t happen until 2015 and 2015, the mythical budget years, when DOD says the Army and the Marines will start to roll back part of the 92,000 person increase that happened over the last decade.  Four billion comes from stretching out the schedule for the F-35 fighter, which could easily not happen. $12.5 billion comes from pocketing the White House decision to freeze civilian pay for the next three years, credit for a decision the Pentagon did not make.  $41.5 billion comes from “efficiencies” in what are called “defense-wide,” a mystery the Secretary has yet to unravel. And $14 billion is a truly “magic” number. It comes from revising downward DOD’s estimates of future inflation, a hardy, perennial argument between DOD and OMB (DOD estimates high; OMB estimates low; DOD seems to have “caved” to the OMB position in this budget, finding mythical savings it could give back to the White House).”

Secretary Gates has played to confuse. He has talked about fiscal discipline and tightening the Pentagon’s belt, but most of the savings he has proposed are supposed to go straight back into the budget. As the budget overview states: “Up to $100 billion in efficiency savings will then be reinvested in higher priorities within DOD.” This includes: “the development or purchase of unmanned intelligence, surveillance, and reconnaissance assets; more ships; a new ground combat vehicle; the Advanced Extremely High Frequency satellite; and the stealthy F-35 Joint Strike Fighter.” The Navy is getting a big piece of the $100 billion pie, with the go-ahead for new F/A-18E/F Super Hornets, a next-generation jammer, and extra funding for its X-47 killer drone.

It is doubtful that any of the savings proposed by Gates will have any meaningful effect on reducing the deficit. The numbers are too small, and as Adams points out, not quite realistic. Any real reductions in defense spending will remain an even more remote possibility. The Pentagon’s infrastructure is too rigid for significant reductions to happen, and nothing from the budget request or the recent “National Military Strategy” review indicate that the military has begun prioritizing threats. Imposing fiscal discipline without a new grand strategy and realistic reassessment of the threats facing the United States is practically impossible.

Update: We don’t usually look at the State Department side of U.S. foreign policy (due to a lack of knowledge, not interest), but Foreign Policy‘s Josh Rogin has gone through the budget request for State. It includes cuts in foreign assistance to several countries, with resources focused on countries with strategic importance, such as Israel, Pakistan, and other allies.

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