Despite the concerns about the budget law's caps, defense spending could go lower still. That's the message of the Center for Strategic and Budgetary Assessment's Todd Harrison in a new report, "Chaos and Uncertainty: The FY 2014 Defense Budget and Beyond." Harrison writes that the budget caps may be "more of a ceiling than a floor in the coming years." He sketches what he calls a worst-case but still plausible scenario of the currently unfolding drawdown going deeper than the law now stipulates but just as deep as past U.S. postwar drawdowns have gone, particularly in certain key areas such as personnel and procurement. The details are in the document, but the upshot is this: defense spending could decline more than the 34 percent (compared to the fiscal 2010 baseline) that the budget control law lays out; instead, it could drop as much as 51 percent in real terms. The administration's best choice, Harrison argues, is to accept the prospect that lower--maybe much lower--budgets may be coming and to plan accordingly. The alternative, he says, is to let the reductions arise in an ad hoc way (See "Quote of the Day" below). But the Pentagon and defense advocates in Congress have instead chosen to push for the most they can get and have found themselves adjusting on the fly--not strategically--to the reined-in fiscal reality. Not only are budget requests and spending and authorizing bills not reflecting the likely downturn in spending (even to the budget control act level) but also there is not even official planning for the leaner budget scenarios. Harrison points out that the Pentagon's worst-case of three possible budget assumptions in this year's Strategic Choices and Management Review was, in fact, the current budget caps/.../
From "Chaos and Uncertainty," the new report from CSBA's Harrison: "The 2014 Quadrennial Defense Review (QDR) and the FY 2015 budget request are an opportunity for the Defense Department to address the rapidly evolving budgetary and strategic situation. If the Department plans for the reduced budget caps in its FY 2015 request and uses the QDR as an opportunity to revise its strategic guidance according to these more realistic budget constraints, it will give DoD greater say in how cuts are implemented in the future. To be sure, this approach is not without risks. Proposing cuts makes it difficult to also argue against the cuts, and the specific cuts proposed are likely to meet stiff political resistance regardless of how they tie into a broader strategy. But the risk of inaction--continuing to propose unrealistic budgets that do not account for the cuts required by law--is arguably worse. As the past year has shown, the Pentagon’s failure to plan for sequestration and its repeated warnings of the consequences did not prevent the cuts from taking place—it only served to limit the number of options available once sequestration went into effect. The Department now has a window of opportunity, albeit a small one, to revise its budget and strategic guidance to fit within more realistic resource constraints. In these uncertain and chaotic times, a strategic choice deferred can quickly become a choice denied."