Bloomberg News

Pentagon’s Gamble on Getting More Money Not a Sure Bet (1)

March 20, 2014

The Pentagon is betting that Congress will roll back $35 billion in automatic defense cuts scheduled to begin in fiscal 2016.

That may prove wishful thinking, with little consensus among lawmakers over eliminating the looming defense cuts that were part of the across-the-board reductions, known as sequestration, embedded in the 2011 agreement to lift the federal debt limit.

“I hope there is nobody naive enough to believe that we can just end it for defense,” Dick Durbin, the Senate’s second-ranking Democrat and chairman of the Appropriations Defense Subcommittee, said of sequestration in an interview. “It’s going to be ended for both defense and non-defense if it’s going to work.”

A congressional budget agreement reached in December, P.L. 113-067, partially eased the cuts for the current year, fiscal 2014, as well as the coming fiscal year, which begins this October and for which appropriators are now developing spending plans.

With the deeper spending reductions set to resume in succeeding years, Defense Secretary Chuck Hagel and Pentagon planners are lobbying Congress to head off such cuts to military forces and equipment.

The 2016 fiscal year “will be a critical inflection point,” Acting Deputy Secretary of Defense Christine Fox wrote March 5 in a memo to all military service chiefs. “We will look for a signal from Congress that sequestration will not be imposed in FY 2016.”

Ukraine Crisis

The crisis in relations between the U.S. and Russia over Ukraine may produce public support for more defense spending, said Oklahoma Republican Tom Cole, a member of the House Appropriations Defense Subcommittee.

“People begin to see the consequences to lowering our military profile,” Cole said in an interview.

If sequestration isn’t replaced in 2016, the Pentagon will be forced to reduce its proposed $535.1 billion request for fiscal 2016 to about $500 billion. That’s on top of the $37 billion in defense cuts for fiscal 2013 and $25 billion for the current fiscal year. About $45 billion is to be trimmed in the fiscal 2015 request from the $541 billion projected last year.

The bipartisan support for the current two-year budget plan may not hold in future negotiations, when previous differences in how spending should be allocated could resurface.

Non-Defense Cuts

Nita Lowey, the ranking Democrat on the House Appropriations Committee, said she opposed continuation of sequestration for both defense and domestic programs. The New York lawmaker said cuts to defense are “very damaging to preparedness, and cuts to the National Institutes of Health, among other areas, in the non-defense part of the budget would be a disaster,” she said in an interview. “I would hope that thoughtful Republicans would prevent that from happening.”

Rodney Frelinghuysen, who leads the House Appropriations Defense subcommittee, said he would like to see the sequester, “undone, absolutely.”

“We’ll show the critical mass of people on our side of the aisle that regular order is better than continuing resolutions and the sequester,” the New Jersey Republican said in an interview.

Some Republicans want to increase defense spending at the expense of domestic programs, while others aligned with small-government groups such as the Tea Party back keeping sequestration in place to ensure federal spending is reduced.

Sacred Cows

“Sequestration should be used as a tool for us to get actual spending cuts,” Representative Raul Labrador, an Idaho Republican backed by the Tea Party, said in an interview. “Everybody has to put their sacred cows on the table.”

Republican Senator Ted Cruz of Texas, also a Tea Party favorite, said that “unsustainable debt” is one of the greatest “national security threats.”

“We should address our national defense needs but do so in combination with responsible fiscal restraint on the non-defense side,” Cruz said in an interview.

Popular defense programs and personnel would be hit if sequestration isn’t rolled back by Congress. The Pentagon says it would have to cut the number of aircraft carriers to 10 from 11 and adjust the number of helicopters and fighter jets such as F/A-18 E/F Super Hornets made by Chicago-based Boeing Co. (BA:US) and possibly F-35 Joint Strike Fighters made by Bethesda, Maryland-based Lockheed Martin Corp. (LMT:US)

Paring Forces

Instead of the currently planned reduction to about 450,000 troops by 2019, the active Army would have to pare its force to 420,000. The Marine Corps would have to be prepared to reduce personnel to 175,000 from an initial reduction to 182,000, the Pentagon says.

Pentagon officials say they would like an answer sooner rather than later about Congress’s intentions on sequestration.

“The sooner that we can get a firm indication that sequestration will no longer remain the law of the land, the better, but I can’t sit here” and “put a date on the calendar and say we have to have it by April 1st or May 15th,” Rear Admiral John Kirby, a Defense Department spokesman, said.

Early 2015

For the Pentagon to devise a budget request for the fiscal year that starts Oct. 1, 2015, that avoids the automatic cuts, Congress and President Barack Obama would have to reach an agreement by early next year.

With the midterm elections in November, Congress is unlikely to handle controversial budget issues this year.

House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, plans to submit a budget blueprint for fiscal 2015 that would increase defense spending while keeping the $1.04 trillion cap agreed to in last year’s deal. That would mean cuts in domestic spending, which would almost certainly be rejected in the Democratic-controlled Senate.

Republicans hope to win a Senate majority in November, which they say could lead to more support for boosting defense funding.

“We might have some more willing partners across the way,” Mac Thornberry, a Texas Republican and vice chairman of the House Armed Services Committee, said in an interview.

If Republicans win both chambers of Congress in 2014, “defense really is going to be a Republican priority,” Republican Cole said. “It’s achievable.”

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net Bennett Roth, Larry Liebert, Robin Meszoly


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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $123.06 USD
    • -0.14
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  • LMT
    (Lockheed Martin Corp)
    • $170.0 USD
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