Now that it appears cuts to US defense spending won’t be removed any time soon, analysts are urging the Defense Department to start making critical strategic choices to live within its means. But while such tough decisions are increasingly necessary to ward off looming financial challenges, such as sharp increases in personnel costs, the analysts expect little to change/.../
The major problem confronting DoD? Increases in the costs of benefits for personnel are devouring an ever-growing percentage of the budget. Trying to reform these benefits has always been politically sensitive because of fear in Congress that it might appear to be abandoning the troops.
Even when some minor changes are made, such as the COLA savings in the budget deal, the reaction is violent. Veterans groups are fervently campaigning to reverse the move, and most believe Congress soon will change course.
“What’s ugly is that this is a further setback in this discussion when Congress walks away from it, and they will walk away from it,” said Mackenzie Eaglen, a fellow at the American Enterprise Institute.
In addition to the difficulty in tackling one of DoD’s major structural problems, there is a false perception the budget deal “saved” defense, she said. It has convinced some that bigger changes aren’t needed, even though the deal did nothing to change the upcoming low point for spending.
“What this is going to do is that when Secretary Hagel submits his ’15 budget and it has a lot of the same worn-out proposals to rein in some of those overhead costs, Congress is going to take a pass because they’re going to say, ‘Hey, we just passed this budget and it fixes your problem,” Eaglen said. “Similarly, DoD is going to have to punt on any kind of creative destruction, rethinking the military of the future.”
The Pentagon’s resistance to planning for reduced spending levels isn’t new, as the same budget optimism showed up during the last downturn.
“In the previous downturn, which really started in ’86, you could see that the Pentagon was still submitting budget requests that assumed the budget was going to keep going up like it had been, and it was several years after the budget had been declining before they finally realized, oh yeah, the budget is actually going to go down, and even then they didn’t plan for it,” said Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments.
That optimism, likely unrealistic, hasn’t shown any signs of abating/.../