Inside the Pentagon
Fiscal year 2011 war spending requests submitted to the Office of the Secretary of Defense by the military services are billions of dollars larger than expected, which is raising eyebrows and drawing scrutiny at the Defense Department, Inside the Pentagon has learned.
Earlier this year, the Obama administration halted the Bush administration’s practice of using emergency supplemental spending requests to fund the wars in Iraq and Afghanistan. Instead, the Obama White House submitted a $130 billion overseas contingency operations (OCO) package to Congress with its FY-10 budget request. The White House also laid down a $50 billion OCO placeholder for FY-11 and in each following year.
Now, as the Pentagon weighs the FY-11 base budget and OCO requests submitted by the services on Aug. 14, it is finding the services’ FY-11 OCO requests are larger than expected. Instead of a “substantial” decrease tied to the drawdown in Iraq, the OCO total is “roughly flat” compared with FY-10, a Pentagon official said, noting it is only a bit under the FY-10 level. Deputy Defense Secretary Bill Lynn is slated to mull the matter Friday, the official said.
The services argue they have good reasons to justify their proposals, said Pentagon and service officials. The Navy OCO request involves a lot of flying hours tied to requests from U.S. Central Command that have greatly exceeded programmed levels of funding. The Army has to pay all of its reset costs while covering maintenance costs that will continue for a while during the Iraq drawdown, the Pentagon official said. In addition to service funds, the OCO includes billions of dollars in DOD-wide accounts for items such technologies designed to counter improvised bombs.
Meanwhile, defense budget observers outside the department tell ITP it is unrealistic to expect war costs to drop to $50 billion in FY-11, particularly given the likelihood that Gen. Stanley McChrystal, the top U.S. commander in Afghanistan, will ask the administration to send more U.S. troops there.
“On the military side, everybody is saying this [situation in Afghanistan] is . . . not solid and we’re going to need more forces in order for it to be more solid,” a former government budget official said. The $50 billion placeholder preceded policy decisions and was not informed by those decisions. DOD did not anticipate the FY-11 OCO total would come down that far from FY-10, but did expect a major reduction, the Pentagon official said.
In the weeks to come, DOD will mull whether the services shifted any costs out of the FY-11 base budgets and into the OCO plan in order to balance their budgets, the Pentagon official said. In other words, DOD will determine if the services moved operations and maintenance resources that should have been in the base into the OCO in order to keep more of other things in the base. It is not yet known if that has happened, but DOD will work through the fall to figure it out, the official said.
Every dollar in the OCO package must be justified to the White House’s Office of Management and Budget, so there will be a lot of scrutiny, the official said. If the services put any money into their OCO request that should not be there, the Pentagon must find out and make room for it in the base. If the entire OCO request is justifiable then DOD is in pretty good shape, the official opined. But if there are things in there that will not pass muster, DOD has a problem; the more of that there is, the bigger the problem. Unfortunately, the official said, until DOD does quite a bit more work it will not know if a problem exists -- and if there is one, how big it is.
DOD will only get in trouble if things the services put into the OCO get rejected by OMB, forcing the Pentagon to find room for these items in the base budget, the official said. The services maintain the OCO requests are fully supportable while the Office of the Secretary of Defense has not yet formed its opinion.
This fall, DOD will also mull to what degree the services’ FY-11 budget proposals comply with the Guidance for the Development of the Force that Defense Secretary Robert Gates approved July 30. Based on what they submitted, the services can make a case they have complied, the official said. Especially on the low end they did what they were supposed to do, the official added, noting there is certainly no “train wreck.” The services moved in the right direction; the only question is whether they moved the right distance.
Gates plans to summon the combatant commanders to DOD in September for a Defense Senior Leadership Conference to let them weigh in before DOD makes trade-offs in the program review, sources said.
The Pentagon official downplayed the possibility of major budget cuts in the FY-11 cycle, noting the big kills were made in the FY-10 budget process. -- Christopher J. Castelli
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