The US Capitol seen from the Newseum this morning during a US Naval Institute conference.

After two weeks of covering the 2015 defense budget, I can assure you it is confusing. Every budget includes fudges, silliness and an enormous amount of information. They are hard to make sense of and often their import doesn’t become clear for a year or two. But this budget may be the most complex one I’ve ever seen, positively bulging with fudges and silliness (e.g. OGSI, the “Opportunity, Growth, and Security Initiative”). Mackenzie Eaglen, defense expert at the American Enterprise Institute and a member of the Breaking Defense Board of Contributors, tries to clear some of the fog and discovers things are so murky that Congress will find it almost impossible to make rational, useful decisions about a proposal that will leave America’s military still unsure of what it will look like in two years. Read on. — The Editor.

This is the most confusing defense budget submission in recent times. It will not help Pentagon leaders achieve the goal they seek, which is for Congress and the White House to pass a new law softening the effects of sequestration for the remainder of the decade.

While the mandatory budget cuts known as sequestration are part of the problem, good old fashioned politics loom large as well. All the parties — whether at the Pentagon, White House or Capitol Hill – are acting as rational actors in trying to avoid blame; the problem is few of their interests strategically align. So the military is left in limbo and unable, again, to plan for the long term. Instead, the services must try to simply manage the immediate mess while still cleaning up from recent year’s indecision, constantly-shifting priorities and reduced funding.

The irony of this is that the murk will only prompt more questions from the very politicians charged with providing and maintaining the Armed Forces, even though the Pentagon tried to provide answers about the continuing consequences of sequestration. The difficult task of being able to discern what is in and what is out of the President’s military budget, what is a priority and what is not, means Pentagon leaders will muddle through another year. They will miss the bigger opportunities, breakthrough and political “buy in” that come with clear-eyed awareness, unity, purpose and direction. Congress, meanwhile, will continue to fight for individual programs and one-off projects without regard for the bigger picture because they will be hard pressed to make heads or tails of it with this budget.

 

Hybrid Defense Budget Only Partially Reflects Sequestration

Depending on who is talking, the defense budget meets current spending caps set into law, breaks the caps, or both. The defense budget technically meets spending caps in 2015. Unless, that is, you include President Obama’s additional defense budget request for $26 billion in his Opportunity, Growth and Security Initiative (OGSI).

In addition to this so-called “investment fund” for security and other priorities — but in the same spirit — the President’s budget adds $115 billion in spending over the five-year future years defense plan (FYDP), which is why the defense budget breaks spending caps from 2016 through 2019.

There really are two defense budgets woven together into one document for Congress (once the five-year plan eventually makes it over to the Hill). And that does not even include the war spending known as Overseas Contingency Operations (OCO).

But only parts of each budget — one accounting for full sequestration and the other assuming Congress provides more money above the spending caps to the tune of $115 billion total — made it into the  hybrid version that is now the public request.

As acting Deputy Defense Secretary Christine Fox said at AEI recently, “there are actually multiple budgets embedded in this submission.” Inside the two-in-one defense budget is only a “description” of a fully sequestered military. This is intended to be illustrative, barring a few select cases where long lead time is required to execute a result of sequestration, such as reducing ground forces endstrength even further. But as Ms. Fox noted, the draft budget plans that account for full sequestration will not be submitted at budget level detail to Congress.

Instead of clearly presenting two budgets side-by-side for comparison, the jumbled defense budget tried the fiscal equivalent of mixing wet and dry ingredients and expecting a baked cake to result. The result is a budget that hopes for additional money from Congress, while including the damaging effects of continued sequestration sprinkled throughout, both in case that extra funding does not materialize and in the hope of putting political pressure on policymakers to act.

 

Two-in-One Defense Budget Further Muddies the Water

The problem is that Congress does not know which budget is which. Here are a few examples of the confusion this engenders. It is unclear whether the decision to retire an aircraft carrier under sequestration would be reversed if Congress provides additional funding at the President’s budget level of an extra $115 billion.

Presumably the Army would not fall to 420,000 active duty soldiers in the President’s five-year plan because the extra $115 billion is already assumed in the out-years. But, depending on who you talk to, it does.

Nonetheless the extra dollars assumed in the FYDP contradict Comptroller Hale, who recently said that if Congress gives an indication they will provide more money than current law demands, then Pentagon leaders “will end the Army drawdown at about fiscal ’17 and leave them at 440,000 – 450,000.” Mr. Hale continued, noting that this extra money would also allow the Pentagon to avoid decommissioning the USS George Washington and “leave the carrier fleet at 11.”

We know that the 2015 budget is essentially a holding pattern. Next year is when major decisions will have to be made whether to continue to draw down the Army and Marine Corps or to begin decommissioning the Washington, for example.

Then there are the other results of sequestration that will take place but are not included in the defense budget request. Examples include divesting the entire KC-10 tanker fleet, retiring all of the new RQ-4 Global Hawk Block 40 Remotely-Piloted Aircraft, and reducing investment in tactical aircraft like the F-35A, the KC-46A tanker, as well as intra-theater airlift like the MC-130J.

 

Still Another Defense Funding Request To Consider 

Clearly, the 2015 budget request is full of moving parts. There is the base budget in 2015 plus the “investment fund”. Over the Pentagon’s five-year budget, the President requests another $115 billion above the sequestration caps from 2016 through 2019. Then there is the forthcoming war budget for operations in Afghanistan. This is separate from sequestration and outside the spending caps agreed to and modified by Congress.

Believe it or not, that’s not all. Last up is the newly-resurrected Unfunded Requirements Lists, which is separate from the OGSI. House Armed Services Committee Chairman Buck McKeon recently requested, and Secretary of Defense Chuck Hagel agreed, to allow the services and combatant commanders to again submit these so-called wish lists to Congress.

A key example of a program that did not make it into the President’s budget or the OGSI — but one that will earn a spot on the unfunded priorities list — is the Navy’s EA-18G electronic attack aircraft. [A Navy official has told us the service's wish list includes 22 Growlers -- the editors.]

So you’ve got all those clusters of money and no one is really sure which trumps which.

Another open question is whether the items in these packages have been vetted as legitimate requirements or whether they are simply “really-nice-to-haves.”

 

Confusion Reigns So Pentagon Unlikely To Get What It Needs

A major challenge for lawmakers will be determining what is truly worthy of additional defense dollars. Since many programs are increasingly funded at the expense of other items as the defense budget contracts, this matters.

If current budget drafts for 2016 are the “tale of two futures,” as one Army official put it, only one will materialize. That is a future that looks just like the recent, and unfortunate, past.

Congress is not likely to pass a defense spending bill before the start of the fiscal year and the mid-term elections. That means the Pentagon will operate under another Continuing Resolution without any signal from the Hill about what might happen with sequestration in 2016.

All the consequences of sequestration that demand advance planning will likely have to move forward without resolution or clarity on future toplines. Once the ball gets rolling, it will be hard to reverse or unwind many of the decisions — including cutting the Army and Marine Corps active duty forces too deeply.

The end result of all this will be action in the wrong places and inaction on bold initiatives that are needed now more than ever. The other consequence will be, as Frank Kendall, undersecretary for acquisition, technology and logistics — said recently: “…We don’t know where we’re going, which compounds the problem.”

After the dust settles from another tumultuous budget year, America’s military still will not know where it is going.

Comments

  • Gary Church

    I see if for what it is; a way to lay off a couple hundred thousand enlisted and not take any blame or lose any votes. It is all an incredibly complicated smokescreen to preserve spending on corporate welfare junk-for-votes weapons while quietly sacrificing those inconvenient people that are the real military; the enlisted ranks.

    That is what is going to happen because the officers are not going, the toys are not going to get cancelled because then the defense industry would lose money and the politicians would lose campaign contributions and votes because of lost jobs. But just getting rid of these people would lay blame somewhere and would also cost votes so it is all going to be done under the guise of chaos and obfuscation. Completely Byzantine in nature and we know what happened to the Byzantine empire.

  • Kuya

    March 13, 2014 From Pogo:

    Total U.S. National Security Spending, 2014-2015 $1 trillion!

    (All figures are $billions; Then-Year$)

    (Sources: Table 28-1 from Analytical Perspectives and Homeland Security Appendix in 2015 OMB Budget)

    National
    Security
    Program

    2014
    as
    Enacted

    2015
    as
    Requested

    Comments

    DOD Base Budget
    (Discretionary)
    496.0
    495.6
    The “base” budget purportedly contains all routine, peacetime
    expenses; however, DOD and Congress have loaded tens of billions of such
    “base” spending into the Overseas Contingency Operations fund for
    declared wartime expenses. See below.

    DOD Base Budget
    (Mandatory)
    5.7
    6.2
    DOD often does not count this “mandatory” spending in its budget
    presentations to the public; however, being for military retirement and
    other DOD-only spending, it is as much a part of the DOD budget as
    military pay and acquisition.

    DOD Base Budget
    (Total)
    501.7
    501.8
    “Total” spending is discretionary and mandatory combined.

    Overseas Contingency Operations (OCO)
    85.2
    79.4
    The $85.2 billion in 2014 contains at least $30 billion in “base” budget spending; read here and here.
    The $79.4 billion for 2015 is a “place holder” pending a decision on
    the actual amount to be requested, which may take months. The ultimate
    2015 OCO request may be smaller, but that is not certain–given past
    behavior.

    DOD Subtotal (TOTAL)
    586.9
    581.2

    DOE / Nuclear (Total)
    18.6
    19.4
    For nuclear weapons activities.

    “Defense-related activities” (Total)
    8.2
    36.0
    This spending is usually just for international FBI activities,
    Selective Service, the National Defense Stockpile and other
    miscellaneous defense-related activities. For 2015 OMB added a $27.7
    billion “Opportunity, Growth and Security Initiative” that includes
    readiness and “wish list” DOD spending—the latter described here.

    National Defense (Total)
    613.6
    636.6
    This is the OMB budget function “National Defense” (also known as “050”) which is sometimes confused as Pentagon-only spending.

    Military Retirement Costs Not Scored to DOD
    35.8
    37.8
    This category shows funds paid by the Treasury for military
    retirement programs, minus interest and contributions from the DOD
    military personnel budget. The data for the amounts shown here are in
    functions 600, 900 and 950. As DOD-unique spending they should be displayed as part of the DOD budget, but they are not by either DOD or OMB.

    DOD Retiree Health Care Fund Costs
    1.1
    0.1
    Shown are nets costs to the Treasury for this DOD health care program. See functions 550 and 950. As DOD-unique spending, they should be displayed as part of the DOD budget, but they are not by either DOD or OMB.

    Veterans Affairs (Total)
    151.3
    161.2
    These costs are projected to increase to $238.1 billion in 2024 as
    the human costs of the wars in Iraq and Afghanistan continue to grow.

    International Affairs (Total)
    38.5
    39.0
    The amount for the International Affairs budget function (150) do
    not include its share of the yet to be determined request for OCO
    funding in this budget function for 2015.

    Homeland Security (Total)
    51.0
    52.1
    Includes Homeland Security spending in DHS for federal agencies not shown on this table (thereby excluding DOD, DOE, State and VA).

    Share of Interest on the Debt
    76.3
    82.7
    Total On-Budget Federal Budget Authority is $2.9 trillion in 2014 and $3.2 trillion in 2015. Total gross interest paid on Treasury debt is $254.3 billion in 2014 and $285.3 billion in 2015. The calculable shares of defense-related spending relative to the federal totals are 30% in 2014 and 29% in 2015.

    Grand Total
    967.9
    1,009.5

    • Alexis Elizabeth Drob

      Why didn’t you just write a novel??

      • Gary Church

        Yeah, I hate it when people post huge tables like that.

        • Ozzie

          Yes, I hate facts too, especially when they prove the Pentagon and major media lie and greatly underestimate national security spending.

          • Gary Church

            Sorry, Ozzie, I am here for the discourse, not spreadsheets. Maybe you could condense those numbers and explain them so they don’t take up multiple pages? Or you can just be snarky to those of us too lazy to figure it out ourselves. Either way.

  • Don Bacon

    “If you don’t know where you’re going, any road’ll take you there”

    What is the military budget supposed to do?
    The National Security Strategy, a Pentagon product, is a mish-mash of global dominance bromides which are clearly not doable, nor should they be.

    The result is a lack of clarity at the Pentagon as to what the national security priorities are, and what is the best way to meet them.

    The Pentagon needs guidance from above, and then it might concoct a budget plan that might work.

    Guidance from above on national strategy should come from a functional chief executive, guided by Congress. It should basically be a collegial product of the National Security Council, not the Pentagon, considering military and political factors.

    But the US has a chief executive who has never succeeded at anything, at any level, so that’s out.
    Therefore there is indecision.

    • Gary Church

      He did get elected. You are an insulter. Otherwise I like your posts. But you need to work on that. Really.

      • Gary Church

        Actually most of your posts are not just good, they are outstanding. Excellent. But……you need to control your dark side. I am done now.

        • Don Bacon

          This is not a focus group this is a blog.
          Deal with it.

      • Don Bacon

        The fact that Obama was elected says nothing about his capabilities or his character, both of which are lacking in him.

        • Gary Church

          He was so much the lesser of two evils that it made him out of gold, the second time even more than the first. Get ready for Hillary because she will probably be platinum.