Inside Defense
Nov. 19, 2009 -- The Defense Department budget is being squeezed by revised economic assumptions that will decrease the purchasing power of the Pentagon's allowance, and the military services are awaiting the latest guidance from the Office of the Secretary of Defense on how these changes will impact modernization and maintenance accounts.
The White House Office of Management and Budget this spring directed the Pentagon to draft a fiscal year 2011 budget – not including war costs --- that was $541.8 billion, a slight increase over the FY-10 budget request of $534 billion.
In June, however, Pentagon sources say OMB issued revised guidance based on the mid-session review directing the Pentagon to adjust inflation rates for all accounts except those dealing with fuel and personnel pay.
This guidance decreased the Pentagon's purchasing power, a point underscored in a briefing yesterday on a draft FY-11 Defense Department spending plan presented by Robert Hale, the DOD comptroller to senior uniformed and civilian resource managers, according to Pentagon officials.
The services are awaiting a a final “issue paper” from the Office of the Secretary of Defense on inflation assumptions between fiscal years 2011 and 2015 that will be used to fine tune allocations across their entire budget.
This spring, Gates told Congress the Pentagon requires at least 2 percent real growth -- a hike that with inflation could be as much as 4 percent.
A formal appeal to the White House, should Gates elect to seek more money for the Defense Department, would likely take place this month, according to Pentagon sources.
After Thanksgiving, the Pentagon expects to receive the “passback” memo from the White House Office of Management and Budget, which lays out exactly how much the Obama administration plans to allocate for defense in FY-11.
Matthew Goldberg, a defense analyst at the Congressional Budget Office, estimated last month that current Pentagon plan requires 6 percent more than its current base budget of $534 billion. -- Jason Sherman
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