Inside Pentagon
The topline of the fiscal year 2011 defense budget is bound to rise relative to FY-10 if the White House decides to implement the recommendations of the top commander in Afghanistan, Gen. Stanley McChrystal, according to the head Republican on the Senate Armed Services Committee, but some lawmakers and analysts still forecast declining defense budgets in the long term.
In a brief Nov. 17 interview with Inside the Pentagon, Sen. John McCain (R-AZ) said the Pentagon’s FY-11 topline figure will depend “partially on what the president announces in the strategy for Afghanistan.” To the extent the White House opts to support McChrystal’s recommendations, McCain said he would have no problem with the Defense Department’s FY-11 topline rising above FY-10 levels.
The Office of Management and Budget’s topline for the Pentagon’s FY-10 base budget submission was $534 billion. Last month, ITP reported that a DOD official expressed optimism that OMB would provide DOD topline relief in FY-11 in the form of several billion dollars more than the $542 billion base-budget FY-11 DOD topline figure that OMB proposed months ago (ITP, Oct. 29, p1). That decision is now expected this week, Pentagon sources said.
Without topline relief in FY-11, the Pentagon would likely have to eat into other programs to pay the costs at issue, but would probably not resort to killing entire programs, Pentagon sources said. Last month, the official predicted DOD would end up receiving about $8 billion in relief above the $542 billion figure, though DOD was pitching a range of relief options to the White House, some seeking as much as $16 billion.
Defense officials are mulling alternatives in the FY-11 budget process while awaiting a decision. In addition to the base budget, there is the overseas contingency operations account that covers war costs. Discussions about the FY-11 base budget and the FY-11 OCO account are going on in parallel.
McCain said it is hard for him to judge what DOD’s FY-11 topline should be because the White House has not yet spelled out “what our commitment is” in Afghanistan.
“But if [President Obama] carries out Gen. McChrystal’s recommendations then clearly it is going to be higher,” McCain added. The strategy is “going to dictate the budget,” he said. He opined that Democrats would not object to a higher FY-11 DOD topline if the White House deemed it necessary. Noting the president is “extremely eloquent,” McCain said he is confident the president would be able to make such a case to the American people.
Sen. Carl Levin (D-MI), the chairman of the Senate Armed Services Committee, has voiced opposition to sending additional troops to Afghanistan. Sen. Jack Reed (D-RI), who also sits on the panel, has said some number of additional combat troops in Afghanistan could be useful, but has also said increasing the defense budget would be difficult.
In testimony provided yesterday to the House Armed Services Committee, the Congressional Budget Office said its base projection of DOD’s current plans -- excluding overseas contingency operations in Iraq, Afghanistan and elsewhere -- would average about $567 billion (in constant 2010 dollars) annually from 2011 to 2028. That amount is about 6 percent more than the $534 billion in total obligational authority requested by the administration in its regular FY-10 budget. CBO provided similar testimony last month to the House Budget Committee.
Reed and David Berteau of the Center for Strategic and International Studies see a coming crunch for the defense budget. Berteau argued yesterday before the House Armed Services Committee that the trend of increasing defense budgets is unlikely to end in FY-11, but it will end and both Capitol Hill and the Pentagon are unprepared for the change.
“We all know that this run of increases will end and that defense budgets will come down,” Berteau writes in his testimony. “I don’t think it will be in FY 2011, but it will occur soon thereafter. Whether defense budgets start coming down next year or the year after is not what’s important. What’s important is that neither Congress nor the Defense Department is ready to deal with declining defense budgets.”
The ongoing Quadrennial Defense Review is likely to provide too little guidance about how much risk is acceptable and how to allocate that risk to different threats, he said.
The only solution is for DOD to define and articulate its force requirements, pay for what it can to meet those requirements, lay out the shortfalls and the long-term program in the future years defense plan, and propose that to Congress in the FY-11 budget and the associated outyears, Berteau testified.
“There is no shortcut to this process, and there is no easy fix,” he writes. “We either have to provide the resources needed to meet force structure and requirements, adjust the overall size of the force, constrain the requirements for their use, or live with more risk than we want. Regardless of which path we choose, we need to revitalize the tools of a fiscally disciplined Defense Program, program review, and FYDP. There is no other real solution.”
Reed predicted major pressure on the defense budget at an Oct. 28 breakfast in Washington.
“I think it’s going to be difficult to increase the defense budget and I think that the overall economy is suffering so much that a lot of our efforts have to be directed towards economic recovery here in the United States,” Reed said. “And then . . . we will start seeing growth and then the big issue is falling unemployment. We’ll be in a situation where we then have to turn our attention to deficit reduction because of economic considerations worldwide and the liability of our economic recovery.”
A Pentagon official told ITP that regardless of whether OMB provides topline relief in FY-11, there is incentive for the White House to take a harder line in the outyears to reduce the deficit.
Looking ahead, there is a domestic crisis that is requiring significant unexpected resources and once that is fixed the country will have the tough challenge and opportunity to fix the deficit, Reed said.
“So the bottom line is that there’s going to be significant pressure on defense budgets going forward,” Reed said. “I don’t think there’s going to be that much relief on the personnel front given the demands in Afghanistan. And so the likely path is first you delay programs and platforms that you don’t think are absolutely essential, and in combination with that you typically reduce the number of platforms you buy. You make other savings, but they’re very painful adjustments that DOD has to face.” -- Christopher J. Castelli
PENTAGON-25-46-10
Inside the Pentagon -- 11/19/2009