The defense establishment is staring into a “fog bank” as it tries to tackle the major problems with affording the force and the weapons the Defense Department needs over the next decade, a top defense budget analyst warned Friday.
Budget expert Todd Harrison of the Center for Strategic and Budgetary Assessments told reporters that political gridlock in Congress and wishful thinking inside the Pentagon mean that even as the capital begins to accept that it must clear some high hurdles over the coming years, there’s no way to know if it actually can.
“We’ve still got this fog bank of uncertainty out there that really prevents defense managers from planning,” Harrison said, describing a Pentagon forced to spend much of its time “scuttling from crisis to crisis.”
Next week’s release of DoD’s fiscal year 2014 budget request won’t help, given that it does not reflect the budget caps imposed by sequestration, which hit March 1. The Pentagon is expected to ask Congress for some $51 billion that, by law, it cannot get. Unless Congress voids sequestration — which neither Harrison nor Hill defense advocates think will happen — the law mandates that the Defense Department cannot spend more than about $475 billion in fiscal '14. So even if lawmakers did pass next week’s expected $526 billion spending request, the Office of Management and Budget would be forced to sequester the difference.
Not that Harrison expects Congress to pass a budget — he warned that another debt ceiling fight this summer and then the expiration of the current temporary spending measure on Oct. 1 present two near-term roadblocks for the Pentagon, each of which could result in further budget cuts.
And it will all play out as the departments of the Army, Air Force and Navy — which includes the Marine Corps — prepare their fiscal 2015 budget requests, which are due to Defense Secretary Chuck Hagel around August. If this year plays out as chaotically as the earlier crises over the fiscal cliff and sequestration, Harrison warned, the services might not even know how much money they actually have available in order to plan intelligently for the next fiscal year.
Harrison laid some blame at the feet of the Pentagon and, indirectly, the White House, which chose not to plan ahead for sequestration and did not prepare a fallback 2014 budget reflecting the spending caps.
Defense officials insisted for months that OMB had not instructed them to plan for sequestration — but they made a political gamble as well, worrying that if they showed they could absorb the roughly $500 billion in restrictions over the coming decade, that might make the cuts more likely to take effect.
The bottom line, Harrison argued, is that the Pentagon must seize as much control as it can of costs and overhead on the assumption that Congress will not be of much help in the near term. That means defense officials must offer to cut their own workforces, do their own consolidation and generally demonstrate they are willing to make their own tough choices, he said.
If the Pentagon and Congress cannot get the present trends in the defense budget under control, most of the money the department gets will go to pay for personnel, benefits, health care and only some operations and maintenance, Harrison warned. DoD’s share of the cost of a single uniformed service member has grown from about $70,000 per year in 2001 to $110,000 this year, he said. Personnel costs now represent about 36 percent of the defense budget, a figure that will grow to 46 percent by fiscal year 2021, when sequestration ends.
A total of 86 percent of the Pentagon’s budget will go to its personnel and operations and maintenance accounts in fiscal 2021, Harrison said — leaving an ever-smaller share of the pie for research, development and acquisition. Although Harrison said he thinks Hagel understands the problem, citing his speech this week at National Defense University, Harrison said the true test will be whether the Pentagon and Congress can actually act.
“If you don’t start this now, you’re never going to get ahead of the curve,” he said.